Abenomics 2.0 – economic reforms in continuity

On Sunday the 22nd of October new parliamentary elections have been held in Japan. Prime Minister Shinzo Abe called for a snap election that he and his party (Liberal Democratic Party –LDP) largely won.
As happened in 2014, early elections gave LDP and its alley the opportunity to secure the 2/3 majority in the House of Representatives (that in truth they already had). Political conditions were in fact extremely favourable for Abe: a weak opposition; the Nord Korea threat; the delicate Japanese economy. Despite his growing unpopularity, the victory makes the PM stronger, and gieves him the magical number needed to amend the pacifist constitution.
abe japan bisAbe has been elected as PM for the first time in 2006. His short government was oriented in budget stability and expenditure cuts. In 2007 a series of political issues forced him to step down: the defeat at the House of Councillors elections; the suicide of one of his minister for agriculture due to his involvement in a case of corruption; and the resignations of the following agriculture minister for other judicial problems.
He has been again elected PM in 2012 when he leaded his party to a consistent victory. His second government is the occasion to implement the so called Abenomics: a systematic series of economic reforms based on 3 “arrows”: expansive monetary policy (quantitative easing); expansive fiscal policy; structural long-term reforms to encourage private investments.
In this context, the consumption tax rising has been and still is an issue of debate. The government first implemented an increase from 5% to 8%, aiming to a further rising to 10% in 2015; then, in 2014, announced the 10% consumption tax will be implemented in 2017. Months later, Abe decided to dissolve the House of Representatives. New political scandals involving ex members of his cabinet, a deadlocked parliament, and an unprepared opposition convinced him in finding a new legitimacy for his reforms.
The 2014 victory allowed Abe to continue in his program: his third cabinet announced a new phase of Abenomics, and 3 new arrows: promotion of economic growth; child-rearing assistance to push up the low birth rate; and social security measures to increase nursing facilities for the elderly.
This year, Abe has failed again in rising the consumption tax, and delayed the implementation of the measure. After his confirmation as head of government, he should have no problem in doing so in 2019 (the new deadline).
With a strong hold of the parliament, Abe will be able to comfortably continue his reforms, with the complicity of the Bank of Japan. Actually, the BoJ governor Haruhiko Kuroda, who strongly supported Abenomics, will be confirmed to his position by his main sponsor: Abe himself.

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Save incidents, the new cabinet will govern the country until next elections, scheduled in autumn 2021. In this term, it will face important events such the 2020 Tokyo Olympic Games, and the preparation of the 2025 Expo, which Osaka is a candidate for. Two important opportunity for Abe’s cabinet, as well as foreign and local investors.

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Beyond Pilot-Reforms in China: controlled development for Cross Border E-Commerce. The awareness of being economy – model during XIX CCP Congress.

In 2013 Chinese government created the first Free Trade Zone, an area under special regulations aimed to test new type of legislation in the field of international trade and investments. In 4 years the FTZs became 11, with the last 7 approved only in March 2017: Liaoning, Zhejiang, Henan, Hubei, Chongqing, Sichuan e Shaanxi. Each FTZ has its focus: e.g. Chongqing will be related to One Belt, One Road project; Fujian FTZ focuses on trade with Taiwan; Henan on international transport and logistics.

Shanghai FTZ is the example of the success of these districts: almost 48.000 corporates are present in its area. 81 decided to establish their regional headquarters here. According to Shanghai City Commission, since the creation of the Zone high-tech, finance, and research and development sectors have sensibly increased.

A new Negative List on investments in FTZs has been decided in June 2016. The list specifies the industries where investments by foreign companies are prohibited or restricted. In order to invest in some of these sectors enterprises were needed to acquire special approval or enter in a joint venture with a Chinese partner. In the new list 27 special administrative measures have been removed: of these 10 relate to manufacturing, 4 to finance. Overall, the new negative list reduces restrictions in over 20 sectors, including railway transport equipment, pharmaceuticals, road transport, insurance, accounting and audit, and other commercial services. Foreign investors will no longer be forced to enter into a JV when engaging in rail transport equipment or civilian satellite manufacturing.

FTZs offer a significant opportunity to e-commerce: on goods traded online the Chinese government applied a parcel tax: a substitute of conventional custom duties that in many cases resulted to be cheaper. Until April 2016, depending of the product, there were 4 levels of taxation (10%, 20%, 30%, 50%). Moreover, products with a taxable value of less than 50 RMB were tax-free.

Now, retail goods purchased online will be treated as imported goods, subject to import tariff, import VAT and consumption tax. An interim import tariff rate of 0% will be applied to cross-border e-commerce retail goods within the personal limit of RMB 2,000 for a single transaction and a cumulative yearly personal transaction limit of RMB 20,000. Transactions above the personal limit will be levied as general trade items (refunds of tax paid and adjustments to the annual personal limit are possible for returned goods).

But for deals above the cap, consumers will get no tax discounts and will also need to pay customs tariffs.

The import tax rates have been divided into 3 categories and adjusted: Category I – 15% tax rate – includes books, video games, computers, digital cameras, gold and silver, food and beverages and toys. Category II – 30% tax rate – includes sporting goods, textiles, some electrical appliances and goods not included in Categories I and III. Category III – 60% tax rate – includes alcohol and tobacco, valuable accessories, golf balls and clubs, luxury watches and cosmetics. This means that custom duties now affect e-commerce too.

The changes will mean a tax increase for some cross-border e-commerce retail imports, with low price cosmetics (under RMB100 in value) being the most affected (likely increase of around 47%). Conversely, high price cosmetics are likely to actually decrease in import costs (likely decrease of around 3%). The same trend exists in clothing, electronics, watches and bikes – items below RMB250 are likely to increase by around 11.9% and items above RMB250 likely to decrease by around 8.1%. There will also be minor changes to commodities such as baby formula and skincare products.

The new policy aims to level competition between online platforms and traditional brick and mortar import stores, and it is in no way to be seen as a protectionist measure used by the Chinese government. On the contrary, it demonstrates the maturity of the Chinese model and chinese market more oriented on creating good way for quality products with good structured system, more and more open to the world, that the government updates to make it more efficient and well controlled as part of international business environment with awareness of leading role.

China-Abroad

The move also comes as China is stepping up efforts to boost domestic consumption, especially for quality, high-end items. The government said last month it will open 19 new duty-free shops across the country to meet consumer’s growing appetite for high-quality overseas products.

The recent speech of Xi Jinping at the opening of XIX Congress of the Communist Party of China is quite clear on this point: “No country can retreat to their own island, we live in a shared world and face a shared destiny,” he said alluding to the choices of Trump administration.

The Chinese government frequently make use of pilot or experimental legislation. Once a new policy has been tested and evaluated then it is simply corrected. The parcel tax is no exception: it will no more benefits certain goods, but trade in FTZ will continue to be facilitated. The Cross-border E-commerce Retail Import Commodity List is a demonstration: it can be defined as a White List containing a vast number of goods that will be free from submission of license to the customs, the inspection and quarantine supervision. This will shorten delivery time.

The introduction of a clearer and more certain tax rate structure will be helpful in removing one of the major obstacles impairing long term development of the industry, and large enterprises previously holding back due to the immature and unsustainable tax system can now make medium and long term decisions in relation to development of an e-commerce business in China.

This is an optimal time for enterprises with the goal of engaging in cross-border e-commerce trade to begin market research and specific planning.

Companies desiring to invest in China should look very closely at the new opportunities offered by Chinese Model, because the Asian country is no longer merely the place where to invest in low-cost labour: according to a 2016 Euromonitor International research Chinese labour costs in manufacturing are now almost equal to those of Portuguese ad Greek workers (who are considered among the least salaried in Europe). The Pudong Innovation Research Institute of Shanghai has confirmed the analysis, certifying in 2016 an increase of 9% in labour cost. The increase is stronger in centre-western provinces where salaries are still lower in respect of the rest of the country, while cities like Beijing and Shanghai register a 10% rise.

FTA as tool for EU to strengthen cooperation with Asia

Free trade agreements (FTA) are international treaties that two or more State negotiate in order to strengthen their commercial relations, making export easier and cheaper.

These agreements are important because even if a very huge number of Countries is today member of WTO (World Trade Organization) and so subject to its regulations, there are still means and ways to protect market form foreign imports. We talk about tariffs as well as non-tariff barriers, e.g. standard regulations and quantitative restrictions (quotas).

With a FTA States can eliminate or reduce barriers to trade between them: this gives companies an easier access to a new market and the opportunity to reduce export costs.

FTA and the European Union

Articles 207 and 218 of the Treaty on the Functioning of the European Union (TFEU) give European institutions competence on dealing with international commerce and so FTA. Member States cannot conclude such agreements by their own.

The procedure to approve a FTA may require much time, for negotiations are not easy to carry and the institutional passages in order to conclude a similar treaty are not few. Nevertheless, as we’ll see later, companies that hope to benefit with these agreements need not to wait too much, as the Council may ask for a provisional entry into force.

Let us have a closer look at this procedure. The initiative to start a negotiation is in the hands of the Council, the institution representing the national governments. They authorize the Commission to meet the third party following precise guidelines.

The negotiations are held behind closed doors; however, the Commission must report the European Parliament and the Council on their status and respect directions of the letter.

Once agreement has been reached on a text, it is translated in all the official languages of the European Union. The Council then approves it. Here technical and linguistic changes are possible.

The Council may now decide to let the agreement entry into force provisionally. Before we go on, first we need to clarify the nature of FTAs: according to the provision in them, we speak of EU-only or mixed FTAs. The formers contain regulations in matters where the EU has exclusive competence, while the letters concern also concurrent legislation. EU-only provisions alone can entry into force provisionally (that’s what happened with CETA).

In order to make the entry into force final and complete, the European Parliament (and in case of the ratification of a mixed FTA, also all the national parliaments) must give its consent.

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Opportunities for Europe and its partners

After the 2016 US presidential elections and the protectionist positions of the new administration, global trading is rapidly changing. In January 2017 Donald Trump announced the US withdrawal of TPP, the ambitious agreement aiming to create a very strong commercial cooperation between the United States, Canada, Japan, ASEAN and other Pacific Countries (Mexico, New Zealand, Australia, Chile, Peru, Colombia).

The Transpacific Partnership may never entry into force: without its most important member, the agreement as it has been concluded does not fit the others partners. Japan has additionally declared it is not interested in a modified version of the treaty. “it would be meaningless” said PM Shinzo Abe.

TPP failure may nonetheless become an opportunity for Europe. On one hand, Asian Countries like Vietnam and Japan are particularly interested in finding a new important economic partner; on the other hand, the EU may use FTAs as a tool to strengthen cooperation with Asia also in non-economical fields, in competition with China, that works to maintain its dominance in the area.

Hanoi is currently negotiating a FTA with the European Countries. Reaching an agreement is difficult because of human rights situation in Vietnam, but the country needs a new economic partner: European market is an excellent alternative to China, with whom commercial relation are quite unfair for Vietnam. That’s a perfect example where the EU could use FTAs as a political instrument.

Something similar can be said for Japan. In this case Europeans aim to have access to a market where its high-quality products are very appreciated. The EU-Japan FTA is in an advanced state of negotiation, and by the end of the year a text may be agreed.

Beef Market, new opportunity in Japan. The relaunch of Italian production.

The epidemic of Bovine Spongiform Encephalopathy, better known as BSE or Mad Cow Disease, in the late 1990’s had very devastating effects across the world. From livestock having to be slaughtered but not consumed to humans consuming tainted beef and becoming ill, the consequences were disastrous.

One consequence that lasted long after the disease was believed to have been eliminated was that Japan outlawed the import of European beef in 2001. In 2013, Japan began to ease up on its policy and allowed six European Union members (France, Ireland, the Netherlands, Poland, Denmark and Sweden) to export beef to Japan.

carne100italianaIn 2016, Italy has joined the ranks of EU members able to export beef to Japan. Although, the United States and Australia have dominated the beef market in Japan since the Embargo with Europe, there is still profit to be made by doing business there. In 2015, the EU exported 994,000 Kg of beef for a value of over 3.6 million. Over two thirds of the beef and half of the money came from Poland. Although it was not technically allowed to export beef to Japan, data shows that Italy sold 72,000 Kg of beef to Japan for over 280,000 euros. Italy’s exports averaged 3.90 euros per Kg, slightly higher than the EU average of 3.63. The import tax in Japan for European beef is 38.5%, on par with that of the US but significantly higher than that of Australia. Despite these challenges, Europe can still carve out a niche exporting beef to Japan. In order to export beef to Japan, there are several processes that one must go through.

One of the most important things that must happen is one that is controlled by the governments of the EU and Japan, rather than the exporter. A free trade agreement will be necessary between these two parties to ensure that Europe has a role selling beef in Japan. Time for this to happen is running out and if one is not reached before the Trans-Pacific Partnership is ratified, Europe could be squeezed out of the Japanese beef market.

The first step that an exporter must take in order to sell beef in Japan is to knock out the many general requirements. These are requirements for many different exports, not just beef. They include Advance Information on Maritime Container Cargo, Manifest for Aircraft, Manifest for Vessels, Inward Declaration for Aircraft, Inward Declaration for Vessels, Customs Import Declaration, Declaration of Dutiable Value, Commercial, Invoice, Packing List, Certificate of Non-Preferential Origin, Proof of Preferential Origin, Air Waybill, Bill of Lading, and Insurance Certificate.

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After those requirements are taken care of, one must then complete the specific requirements. These are requirements that only relate to the beef industry. The first of these is completing the application for the Import Quarantine Certificate for Meat and Meat Products. This is a document that verifies that the meat has been checked out by a veterinarian upon reaching the Japanese border. One must apply for the inspection with the Animal Quarantine Service in Japan. There is no fee and the time it takes to process the application varies.

The next requirement is the Import Permit for Endangered Species Subject to CITES. The completion of this document is required as a result of the Washington Convention on International Trade in Endangered Species of Wild Fauna and Flora (better known as CITES). This is the document that is needed to be able to import a given species into a country. This document must be filled out for a single species and is valid for a certain period of time (up to one year). It is to be submitted to the Ministry of Economy, Trade and Industry (METI), Trade and Economic Cooperation Bureau, Trade Control Department, Office of Trade Licensing for Wild Animals and Plants in Japan.

After obtaining an import permit, the next document that must be completed is the Veterinary Health Certificate for Animal Products. This is a document filled out in the exporting country that confirms that the meat meets the proper health standards. It is required for customs clearance and market access. It is to be sent to the Animal Health Division, Food Safety and Consumer Affairs Bureau, Animal Health Affairs Office under the Ministry of Agriculture, Forestry and Fisheries (MAFF) in Japan.

Finally, there must be a BSE Certificate filled out. This certificate is similar to the previous one in that it is a health check performed in the exporting country. However, this certificate is specific to BSE. It is not always required if the Veterinary Health Certificate for Animal Products provides relevant information. It is to be sent to the same place as Veterinary Health Certificate for Animal Products is sent to.

Exporting beef from Italy to Japan is a new industry that requires many steps in order to complete and the competition is heavy. However, Italian beef can be a good niche market product and it could be worth exploring opportunity in Japan’s beef market. Our consulting company ADM-EA  in cooperation with governmental departments Japan and other technical offices operating in the industry is recently started new services program for beef exporters which we are now operative to provide market’s info  (B2b segment) and procedure’s application for exporting. 

Ing-Dan: Social Commerce’s frontier and The Future of Entrepreneurship

In an age where advanced methods of communication and networking have led to new strategies, such as crowdsourcing and social media, to make entrepreneurship more accessible to everyone, a new medium has made the production side of creating a new product easier for people to access. IngDan is a new company based in China that was founded by Cogobuy CEO Jeffrey Kang. It puts entrepreneurs in touch with manufacturers in China in order to produce the products that they think of. IngDan has recently expanded to Italy, giving more opportunity for Italian entrepreneurs to be able to produce their ideas.

The way IngDan works is simple. A client submits his or her idea on Ing-Dan’s website. The client then works with Ing-Dan to create a prototype. Afterwards, the client is put in touch with manufacturers in China, who then produce many versions of the prototype. The next step is beta testing to find and correct any flaws in the product. Finally, IngDan uses its connection to help distribute the product once it is ready to be sold. 

183762005The company’s partners include, but are not limited to, Lenovo and Intel. Ing-Dan Italy’s CEO is Marco Mistretta. Mistretta has held previous posts as the CEO at ACSI Informatica and Senior Investment Manager at Technico Group Moscow Branch. He has a background in the Internet of Thing and Finance, as well as in international markets.

Some of the projects featured on the Ing Dan Italy company’s website include: B-Phone U-10, a cell phone designed for young children by programming three numbers to corresponding buttons, making the phone easy to use, and Olo, a printer that hooks up to a phone.

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Ing-Dan Italy has participated in many exciting activities lately, including the recent APEC fair in Shenzhen, China. The fair took place July 14-16 and included over 1,000 technology companies, as well as speakers, such as Elon Musk. 

These start-ups are; Archon, a Modena based company started by Davide Venturelli that makes software that allows a user to control multiple drones at once (archon.ai), GET, a Rome based company started by Edoardo and Emiliano Parini that provides bracelets that serve as a medium between a person and their smartphone (getwearable.com), Horus, by Saverio Murgia of Milan that helps relay information, such as the location of a crosswalk, to blind people (horus.tech), IOMOTE, by Claudio Carnevali of Rome that helps create mobile applications (openpicus.com), Biotechware, by Alessandro Sappia of Turin that makes it easy to detect a cardiovascular issue (biotechware.com), and Xmetrics, by Andrea Rinaldo of Milan that a swimmer can wear to track his or her performance.

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Mistretta is teaming up with Kang, a Chinese billionaire who founded Cogobuy, a company that sells IC components, and The Comtech Group, that sells electronic components. Kang describes IngDan’s mission as, “To enable an everyday, normal, young entrepreneur to enjoy the resources held by only large companies, is the idea of IngDan. To allow them to make mistakes at a low cost is the biggest help that can be given to young entrepreneurs.” So far, IngDan has facilitated over 4000 successful projects and, with their expansion into Italy, that number to only continue to rise.

I introduced Ing-Dan as content / case history in module of digital marketing and social media communication for business development for Master in International Business in China MIBC of LUM University that recently has taken place as first edition in Milan in cooperation with NIBI – New Institute for International Business of Milan. With my students we classified it as perfect example of Social Commerce: where community of users represents perfect source of skills to produce and sell directly something and it defines a new important trend in chinese netizens behavior: everybody is protagonist in business dynamics. Online community is the only way to make these perspectives a concrete commercial scenario, because they are market.  Cogobuy as leader of electronic components in B2B perspective well supported the creation of online-community of companies that can buy and use components for prototyping. Engineers as fan and project proposers create the perfect environment to make technical discussions really dynamics and with concrete feasibility. Finally the users and followers are potential market for testing sales of neo-products and  they make the companies more aware of the importance of their investment. Ing Dan is  creature of chinese online community’s behavior, where internet represents the only way to do something (not to know something) . Now this vision is also part of western challenge for start ups and Italy is part of the game.

 

Made in Italy: Food & Beverage in Vietnam – Project Hanoi 2016

ADM-EA Consulting is pleased to announce the creation of a group for the food and beverage industry for the Vietnam market with the work program called “Project Hanoi”, which aims to set up integrated services for globalization, as well as training and consulting services for industry sectors with the involvement of institutional and operational partners.

Vietnam Business Project is the first integration of specialized services for the SME segment that includes

-Specialized training on the dynamics of globalization and cross cultural management

-Research and preliminary advice

-Analysis of company profile and entry strategy

-Advice for reconfiguration/product selection,

-Accompaniment for the target market

-Direct matching with importers and operational development of commercial dynamics.

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The group proposed and coordinated with Milan from our consulting practice with the involvement of operational and institutional partners with proven experience in Italy and in Vietnam including AICE Italian Association for Foreign Trade and ICHAM Italian Chamber of Commerce in Vietnam. The specialized training is coordinated by Asian Studies Group Italy in collaboration with the law firm De Masi Taddei Vasoli. The food segment is done by the consolidated partnership with EatHealthy LTD Hanoi, regarding configuration of the trade matching content and operational support to the B2B on site.

 

In its first edition, “Vietnam Business Project – Hanoi” creates a calendar of activities seen in Vietnam Foodexpo 2016 from November 16th to 19th in Ho Chi Minh City along with accompanying opportunities for B2B direct. The following is some information about the services offered by our work with Vietnam Foodexpo (calendar is subject to change and will be updated as frequently as possible);

-From July 4th to September 30th: Presentation of questions of interest and collection of company profiles (full program, only training program, training program + consulting, and complete program are all available for selection at the fair)

-From October 1 to October 14: Preliminary talks with companies and business consulting orientation (with professionals from Italy and Vietnam) and consolidation of assisted trip/mission with B2B in Vietnam

-October 18: Executive Training Day “Vietnam for Italian Food and Beverage Industry”

Dr. Pierantonio Cantoni – International Business Development Manager AICE

Prof. Paolo Cacciato – Scientific Director Asian Studies Group and MD ADM-EA Consulting

Avv. Federico Vasoli – MP de Masi Taddei Vassoli law firm

Dr. Pham Hoang Hai

Executive Director of Italian Chamber of Commerce in Vietnam – Area Coordinator of Italian Chambers of Commerce in Asia

Conf Call/testimonials by importers from Vietnam

-November 2nd and 3rd, Delivery of the schedule of appointments with importers in Vietnam for each participant in the mission.

-November 7th to 9th, Accompaniment for B2B with Hanoi sector importers in Hotel Melia (scheduled departure on November 5)

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For those who request it during registration, it will be possible to evaluate displacement of Ho Chi Minh City at the trade fair (Vietnam Food Expo 2016) as both an exhibitor and a visitor. We will put you in touch with a manager for the exhibition at the fair.

Vietnam Business Project in the first stage of Project Hanoi Food & Beverage is offered as a whole (along with, training, completion of preliminary consultation meetings with trade matching, importers for B2B, and accompaniment on site including interpreting) at €1500.00. (Additional discount program: 1000 euro for companies that confirm their attendance as early booking in July – 1250,00 euro for companies that confirm in august)

Thanks to the inclusion of the services mentioned in the project activities, supported by the Fund for Specialized Training and Internationalization of C.U.P.I. (Centre for Union of International Perspectives), the union can be fully funded at zero interest in installments from €125.00 monthly rate for 12 months, making the initiative sustainable to any interested party.

(Excluding the flight costs, hotel accommodation, meals and incidental costs for delivering samples. These costs will still be sustained from the interest-free financing offered by the CUPI partner lending institutions)

For inquiries info@adm-ea.com

Apple Pay in China: not on time to fight with TenPay

The official announce came out in Dec 2015 and in few months has become concreteness. Apple is looking forward to don’t lose too much margin in the challenge for offline shopping through mobile systems in the most dynamic scenario for mobile’s payments,  e-commerce and online app designed for mobile users. China is already the second largest market for Apple about sales of devices and the decision to sign agreement with Union Pay’s circuit represents the way that the company must follow to be competitive with important players like Tencent in China.

At the moment Apple already achieved authorization from 18 operators and it seems that more than 80% of chinese credit cards and debit cards in China can be used for digital payment through Apple Pay system.

Apple well knows that chinese perception of mobile -devices is totally different than in US or in other western countries. Chinese way of using mobile is much more integrated with several specific applications according with specific segments of “offline – life”, strongly directed to O2O issues in particular for those concern shopping and entertainment.

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In China approximately 60% of daily expenditures are issued through digital wallet integrated in the mobile device,  an important and huge segment if compared with USA where only 19% of transactions are made with  payments via mobile. Within apps, Apple Pay purchases can be made using an iPhone or iPad that supports NFC, which includes the iPhone 6 and later and the iPad Air 2, iPad mini 3, iPad mini 4, and iPad Pro.

tenpayHonestly I think that Apple Pay is not an “on time’s solution” for via mobile’s payments in China. The decision  has been made to try to keep Apple – lovers and users on the good mood following their loyalty for Apple brand much more than to win the fight with other chinese operators like Alipay and Tenpay (same ideator of wechat).

Wechat got more than 590 million of active daily users and approximately 650 million of registered users in China according with last data statistics published on official bulletins and represents at the moment  the best application for instant messaging. Recently it has integrated e-commerce system based on that we can define “social commerce strategy”. It means sell directly to your followers and friends making your business direct, easy, safe and enthusiastic like the chinese way to sell goods in the “pre-digitalized era – before 2010”.

On this way the instant messaging app makes businesses under direct influence of social media joiners and the businesses viceversa are directed and, why not, directly created by people are close to you, following your pages and products through wechat.

The chinese perception that all in one, all is online and everybody are online is strictly connected with mobile’s usage: the info about offline products are collected through the web via mobile or directly through e-commerces platforms, the word of mouth about brands or styles is boosted through chat, messaging, microblogging, you choose online what you want to buy offline and you made the payment with the same tool you are using to discover and define the shopping you are going to do: the mobile.

Even if Tenpay doesn’t use NFC technology like Applepay they offer an offline payment system that is very easy and quick. It just needs a mobile and a simple code reader. Chinese people lives in wechat-dimension and everybody is used to say “we chat is great cause it’s simple and you don’t need to many app  to do everything” (communicate, search for goods and pay)

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That’s why I think that Apple awareness of the risk on being far away from this “environment” is much more looking forward to consolidate their brand strategy with devices that can pay directly shopping items and being on this way  part of that deep consciousness in chinese people for mobile ias the source to be  connected to the world.