‘ Alibaba File IPO and Chinese Farmers Swap Tractors for Luxury Cars’

#AceFinanceNews – CHINA (BAIGOU) – June 07 – Thousands of miles from Wall Street, where Alibaba Group has filed for a multi-billion-dollar IPO, Chinese farmers are swapping tractors for luxury cars after making fortunes through the Internet giant.

​"All of our business is now on the Internet," said Huang Jianqiao, who grew up in rural poverty but now roars to work in a black Jaguar and flies with his wife on holidays to Paris, thanks to an on-line bag store that he says takes in 30 million yuan (S$6 million) each year.

​He is one of thousands of Chinese farmers who have transformed their lives using on-line retail platforms created by Alibaba.

The group, which dominates China’s e-commerce market, combines aspects of eBay, Amazon, PayPal and other Western tech darlings, and according to analysts an investor frenzy could drive its value as high as US$200 billion (S$249.7 billion) when it goes public in the US later this year.

A world away from the plush boardrooms of New York, towers of cardboard boxes awaiting delivery to cities and villages across China are strewn across the cracked white tiles of Huang’s warehouse in Baigou.

Alibaba was founded in 1999 by former English teacher Jack Ma, who started with a platform for Chinese manufacturers to connect with foreign buyers but launched Taobao in 2003, just in time to tap into Chinese consumers connecting to the Internet and eager to spend their rising salaries.

China’s e-commerce market is now vast – with revenues estimated at US$210 billion in 2012 according to consulting firm McKinsey – and is widely predicted to overtake the United States to become the world’s biggest by the end of this year.

Read More: Malaysian Chronicle


‘ Uber and Lyft in Violation of Virginia Law ‘

#AceNewsServices – Yesterday the Virginia Department of Motor Vehicles issued cease and desist letters to Uber and Lyft, claiming that the companies, which connect passengers to drivers via smartphone apps, are in violation of Virginia law. In the letters, DMV Commissioner Richard Holcomb wrote that Lyft and Uber’s ride-sharing operations “are not ride-sharing arrangements as defined in Virginia law” because drivers receive compensation for their services.

The Arlington County Police Department will be assisting in enforcing existing legislation, although a spokesman said “it will not be a primary focus of our operations.”

In the wake of the cease-and-desist letters, Uber’s East Coast Regional General Manager Rachel Holt said,“We’re still operating as usual throughout D.C., Maryland and Virginia,” and Lyft said in a statement, “We have reviewed state transportation codes and believe we are following the applicable rules. We’ll continue normal operations as we work to make policy progress.”

The Virginia DMV has previously fined Uber and Lyft ($26,000 and $9,000 respectively), however the recent letters say that the DMV will issue civil penalties of up to $1,000 per violation to individual drivers caught breaking Virginia regulations.

The DMV letters are only the latest regulatory and legal hurdle that Uber and Lyft face. I have previously written on this blog about some of those challenges, which are taking place across the country.

Rather than hinder the growth of innovative livery companies that are taking advantage of new technology, lawmakers in Virginia and elsewhere across the country should consider repealing current taxi regulations that restrict innovation, strengthen established market players, and stifle competition.

Uber and Lyft are popular for a reason: they provide a reliable and desired service at prices customers have indicated that they are willing to pay. In a fair and level playing field with fewer regulations, their competitors would have to rely on improving their own services rather than on market-distorting legislation.

I discussed these issues with Caleb Brown on today’s Cato Daily Podcast that you can listen to here: CATO Institute


‘ US Corporations Avoid Taxes With Offshore Tax Havens’

#AceFinanceNews – UNITED STATES – June 07 – Most of the 500 largest US corporations have offices in offshore tax havens around the world, which they use to avoid paying US taxes through "accounting tricks," according to a study released on Thursday.

About 72 percent of Fortune 500 companies had subsidiaries in low-tax jurisdictions in 2013, allowing them to avoid paying about $90 billion in federal income tax, according to Citizens for Tax Justice and the US Public Interest Research Group (PIRG), two left-leaning tax activist groups.

"The loopholes in America’s corporate tax (code) have grown so outrageous that our policy-makers should be embarrassed," said Steve Wamhoff, legislative director at Citizens for Tax Justice, which studies tax policy and often criticizes corporations.