Losing Chinese Business Because of 2 Simple Mistakes

This is not an article about the market condition in China but more of a practical reality that I think most people and businesses have not considered. If you read the news you’ll feel the first impediment to business in China is going to be regulations or that your website may be blocked by the GFW (Great Firewall of China). However in practical terms this is something you’ll almost never encounter. There are however 2 simple but huge, crucial and critical mistakes that most businesses make when trying to attract prospective Chinese customers for overseas or cross-border e-Commerce.

#1 Common Mistake That Guarantees No Customers From China Will Ever Reach Your Site
Everyone knows Google has extensive reach in various online services and platforms including search but their reach goes farther in a very harmful way for anyone trying to get Chinese visitors to their website. This issue applies to almost any user in China whether they are a local or foreigner and whether you are hosting in China, Hong Kong or anywhere outside. This problem can only be resolved by an experienced web developer or team and is a mistake MOST developers unknowingly make.

This little mistake comes from the fonts specified in CSS (Cascading Style Sheets) that are used to style and/or layout all websites on the internet. CSS itself is not the problem, but what is the problem is that a lot of designers use “Google Font APIs” from googleapis.com. This is a bad idea in my opinion aside from the main reason which is that you rely on a third outside party to make sure your website loads. If the remotely hosted fonts cannot be loaded due to a change in location or the server goes down, your website will not load. In the case of China on virtually all consumer grade connections “googleapis.com” is blocked, this means the third party font server is as good as down and your website WILL not load in China because of it.

Essentially what this means is that any website using Google Font APIs will not work in China no matter where it is hosted. The solution is to edit your CSS code and use alternative fonts, or to manually download the .ttf and edit your .css files.

#2 Hosting your site outside of Mainland China or Hong Kong is too slow
For those who have ever visited China, loading sites abroad such as in the US or even worse in Europe is a very difficult hit and miss experience. While most sites are actually not blocked by the GFW, a good portion of sites and services are unusable due to poor connectivity between China and a lot of ISPs. This can be solved somewhat with premium bandwidth that we use in China but really the best solution is to host your site in Mainland China or Hong Kong.

For those familiar with China, you will know that you need an ICP license from the Ministry of IT. This is not a problem if you have a presence in China or a friend who can help. But really the only legal way is to get a proper ICP license which means based on your business and not a personal ICP (we have seen these revoked for misuse). To make it short, if you don’t have an ICP in China your site will not work and will be blocked. So hosting your website in China is only an option if you have an ICP license.

The next best thing is Premium bandwidth from Hong Kong with direct China connectivity which is almost as good as being in Mainland China. But note the “Premium Bandwidth” and “Direct China Connectivity” because only some providers have this. Bandwidth is very expensive in Hong Kong and the only way providers can save money is by buying non-premium bandwidth that routes all China traffic through the USA. For cost it makes sense for those providers, but for you the end user and business who wants to have Chinese customers it doesn’t make sense unless you have direct China peering/connectivity. If you have a good connection to China from Hong Kong then users can essentially expect your site to perform as if it’s in Mainland China, in fact most users will probably feel it is located in China because of the low latency and fast response. In Hong Kong there is no requirement for an ICP license so this is really the best method for those who can’t the ICP license in China.

Don’t Lose Out
For companies who have targeted the Chinese market and have attempted to drive traffic to their own website or third party portal if you haven’t received the response you’ve expected the above could very well be why you have no Chinese customers. In another blog post I will show a few technical examples of how to fix it and still use Google Font APIs although the easiest, quickest fix is to stop using them.

Countries where cryptocurrency, coins, tokens and ICOs are banned

There has been a lot of activity lately in the world with governments banning cryptocurrency and ICOs but this should come as no surprise as there has been strongly worded messaging about this for some time.

China bans ICOs and shuts down Exchanges
This had a massive impact on the valuations of coins such as Bitcoin, Litecoin, Etherum, Dash etc.. but things have since recovered since the 2017/09/04 law passed in China but serves as a warning and example of what government intervention can and cannot do.

http://en.people.cn/n3/2017/0904/c90000-9264331.html

Chinese authorities on Monday ordered a ban on Initial Coin Offerings (ICOs), a nascent form of fundraising in which technology start-ups issue their own digital coins, or “tokens”, to investors to access funds as the rapidly expanding market spawned concerns over financial risks.

Starting Monday, ICO activities should be halted, and ICO platforms should not engage in exchange services between fiat currencies, virtual coins and tokens, said a statement from the People’s Bank of China.

South Korea Bans ICOs

The good news is that while ICOs are banned it does not appear that trading in the currencies themselves is banned.
http://www.nasdaq.com/article/south-koreas-ico-ban-a-reaction-to-serious-concerns-over-cryptocurrency-investment-practices-cm854236

In fact it appears South Korea plans to allow trading but wants more regulation and safeguards:

South Korea Makes it Legal to Transfer Cryptocurrencies Internationally

Singapore

Although not by law, many companies in Singapore dealing in cryptocurrency have had their accounts closed:

https://www.out-law.com/en/articles/2017/september/singapore-banks-closing-accounts-of-cryptocurrency-firms/

Countries subject to strict or promising strict regulations

Nearly every country has taken a similar line where they are making a legal framework and claiming that ICOs are subject to the same laws and rules as IPOs. However this doesn’t appear to have been translated into law. It also doesn’t address the question of how holders on the coins will be impacted but one would guess that in the future they may be subject to capital gains tax and treated like traditional stock investments.

This list of countries includes:
EU, Hong Kong, Canada, Singapore and many other countries around the world.

Hong Kong Regulators Warn ICO Tokens May be Securities Under the Law

SEC: ICO Tokens Like Those of The DAO are Securities Subject to Regulations

Canadian Regulators Say Cryptocurrency ICO/ITO May be Subject to Securities Law

Is the regulation valid, practical and legal?

This is a hard call for me to understand in the sense that these cryptocurrencies are just that, digital currency and currently people are not taxed or penalized for simply exchanging, buying and/or holding different currencies.

It may also be interesting to see what the large exchanges, businesses and users do in response such as unprecedented regulation and laws. It may be that some of the regulations and laws imposed around the world may be found invalid or unenforceable in the end.

What are your thoughts and as always please let me know if I’ve missed any new developments around the laws of cryptocurrency.

2017 and Beyond The Future of Cryptocurrency and Government Financial Regulations

Governments, banks and other large entities have all been murmuring, talking and hinting what the future of cryptocurrency could be or specifically the block chain. They all agree “blockchain” is good, there is no one against it but there has been a lot of confusion about the internet thinking this is equates to government and corporate backing of decentralized cryptocurrencies. I believe this couldn’t be the truth, in fact there have been lots of issues for companies exchanging cyrptocurrency for cold hard cash being unable to wire etc.

The excuse you hear from the big players are concern over fraud, money laundering, etc.. all of which happens in the current fiat monetary system. The true issue behind all the fuss is simply that these decentralized cryptocurrencies allow unhindered free trade around the world regardless of which country you are citizen of and where you are, no one can sanction you or freeze your assets in cryptocurrency. Further, it is of course a huge threat to the current financial system and governments around the world who depend on third party “reserve” banks to print their money. It’s bad news for their monopoly on finance and business transactions worldwide.

Bitcoin Exchanges in China are being shutdown: https://www.usatoday.com/story/money/2017/09/14/china-orders-bitcoin-exchanges-shut-down-report-says/665209001/
Russia says Bitcoin is illegal: https://www.reuters.com/article/us-russia-bitcoin/russian-authorities-say-bitcoin-illegal-idUSBREA1806620140209
Bitfinex sued Wells Fargo for blocking their wires: https://bravenewcoin.com/news/wells-fargo-sued-for-suspending-bitfinex-wire-transfers/
US SEC says they want to regulate coins: https://themerkle.com/sec-may-be-looking-for-ways-to-regulate-the-cryptocurrency-ico-market/
JP Morgan’s CEO Jamie Dimon calls Bitcoin a fraud: https://www.bloomberg.com/news/articles/2017-09-12/jpmorgan-s-ceo-says-he-d-fire-traders-who-bet-on-fraud-bitcoin

The part in China is most significant because the action in China has coincided with drops in value of the major currencies, as well as Chinese users doing a lot of mining and trading in crytocurrency.

When we take some examples above, this is the general consensus among bankers and government worldwide. They all like blockchain and want to make their own currencies that they control and centralize, but they are certainly against the decentralized ones and as new banking, taxation and other government intervention roles out surrounding cryptocurrency it will be very interesting to see where things head.

I personally think the decentralized currency will always exist and it can and will coincide with other mainstream offerings from banks and governments. There will be a place for both just as cash from other countries is traded for other items whether gold, silver or even electronics and oil. Trade will continue but through a different method of settlement and transfer.

One thing is for sure until we see how things break in terms of government regulations and how their own cryptocurrency’s play out, the value of the original decentralized currencies like Bitcoin, Litecoin, Etherum et al will have wild fluctuations as people react to news that threatens these currencies the same way people would read the news about Greece’s debt and haircut on the bonds they sold. In fact many watch the crypto market including the ICO (Initial Coin Offerings) and note they do seem to function as any other traditional market would in terms of news and advancements.

I believe we are seeing a financial revolution, all currency will soon be crypto and physical cash before we know it may all be stop being used.
The only question is how fast does it all happen and how does the difference between centralized banks and decentralized crypto users play out?