In June, Apple registered an entity in the Shanghai free-trade zone named Apple Technology Service Ltd., according to reports from state-owned media cited by the Wall Street Journal. Sources told The Wall Street Journal that although no timeline or launch-date has been set yet, it’s likely that the entity, which already has $13.4 million in capital from Apple’s Singaporean arm, was formed to bring Apple Pay to the country.

China is a mature market for mobile payments. Consumers regularly use mobile wallets for everyday purchases like groceries and taxi rides. Alipay, Alibaba’s digital wallet, counts 400 million registered users, 80% of whom are on mobile. Tenpay, a mobile wallet run by messaging giant Tencent, counts another high number of users.

China’s payments ecosystem is unique. There are two factors in particular that could pose some new challenges for Apple with regards to mobile wallets:

• Apple is a little late to the game in China. In the US, Apple Pay was one of the first mobile wallets with a clear shot at achieving serious buy-in from necessary stakeholders. The already-developed market in China could make it harder for Apple to attract new customers, since it would have to make a case for many users to abandon platforms that they’re already familiar with.
• China has strict regulations surrounding payments. In February, Apple clashed with UnionPay over regulatory concerns related to Apple Pay and the NFC technology required for merchants to accept it, according to Motley Fool.

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But Apple’s 2015 success in China makes Apple Pay a logical next step:

• Growth: Apple’s Q3 earnings report cited that 27% of the company’s $49.6 billion revenue came from China, according to Engadget. That’s nearly double the percentage from one year ago. 
• Market share: Apple's iOS controlled 20.1% of China's installed base of smartphones at the end of Q2 2015, marking a 7 percentage-point increase from Q2 2014. 

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• UK P2P lending might consolidate
• First Data acquires e-commerce startup
• Economist proposes state-back digital currency in the UK

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The Chinese market is one of the biggest for industrial robots because of its enormous size. The Chinese manufacturing sector employed nearly 100 million people during 2009, according to the US Bureau of Labor Statistics. In comparison, the US manufacturing sector employed 14.2 million people that year.

And as many of China’s biggest manufacturers look to automate more of their factory work, demand for industrial robots will increase. For example, Foxconn, an electronics assembler and Apple's supplier, employs 1 million people in its factories, but its CEO Terry Gou said earlier this year that the company plans to automate 70% of its assembly line work with robots over the next three years. Gou explained that as wages rise in China, the next generation of Chinese workers will look for better work outside of the manufacturing sector, leading to labor shortages at Foxconn’s factories. So robots will have to take on a bigger role in the assembly line.

Many of those robots deployed on Chinese factory floors will be foreign-made though, according to Reuters. Despite government efforts to push the country’s robotics industry forward, foreign robot manufacturers still have a significant lead in the market for manufacturing robots in China. Foreign companies built 41,000 of the 56,000 industrial robots currently deployed in China, according to statistics from the International Federation of Robotics cited by Reuters.

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 Many foreign robot makers in Europe, Japan, and elsewhere hold a significant technological advantage over Chinese robotics firms. The Chinese government has provided subsidies for hundreds of new robotics startups in China, but these startups are struggling to compete with foreign robotics companies that have simply been around longer, and have more well-developed technology and supply chains.

Domestic robotics companies in China hope to catch up technologically with their foreign competitors over the next few years. But Chinese manufacturers like Foxconn are already demanding industrial robots, so foreign competitors will likely enjoy fast growth in China as the domestic robotics industry tries to catch up. BI Intelligence expects that more than 250,000 industrial robots will be shipped globally next year.

 Here are other stories you need to know from today's IoT INSIDER:

• Internet access lags in developing world
• IoT driving more semiconductor consolidation

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If Barack Obama signs a landmark cyberspace agreement with visiting Chinese President Xi Jinping this week in Washington, D.C., it will be hailed as evidence that Beijing and Washington can forge an adult, working relationship on a critical security issue.

In reality, the very need to negotiate such a pact reveals the failure of America’s decades-long China policy and the inability of the U.S. government to understand China’s evolving threat to U.S. interests.

Step back from any discussion of the specifics of such an agreement. Consider instead the state of relations that must hold between two nations for their top leadership to even contemplate a pact that, in the words of the New York Times, would embrace “a commitment by each country that it will not be the first to use cyber weapons to cripple other’s critical infrastructure during peacetime …” Not wartime, mind you, but peacetime. Why should such an issue even need to be addressed between two nations that had any type of working relationship based on trust?

Note, too, the implications of the above formulation. First, there apparently exists a need to ensure that one country does not try to cripple the vital infrastructure of one of its largest trade partners. Why would two nations without possibly irreconcilable differences, or at the least a trust deficit of epic proportions, even be contemplating such a move, and therefore have to try and prevent it?

Secondly, a sweeping pact of this kind avoiding mutually assured economic destruction would not, apparently, prevent the manifold cyber aggression already practiced by China against the United States, such as the theft of tens of millions of Americans’ personal identification and the siphoning off of billions of dollars of industrial secrets. This agreement, both startling in its apocalyptic nature and toothless in the face of actual cyber theft and mischief, is the worst of both worlds. 

The foreign policy establishment and Beltway punditocracy will undoubtedly spin this as a victory for diplomacy, shared interests, and responsible statesmanship. They will assure the public that such an agreement is just a beginning, an innovative and farsighted approach to responding to a vital threat that barely existed a decade ago. That may well be so. Yet why should such a vital threat even exist today?

The only answer is the failure of America’s China policy. For a full generation, since Nixon’s opening to China in the 1970s (and some would argue long before that), the United States has held a remarkably steady position vis-à-vis China: We have done everything in our power to help it become a great power and to integrate it into the global economy and political world. As generations of Westerners have done, Americans have viewed China as a market of dreams and a potential geopolitical partner equal to none. 

Be it through trade policy (which has benefited the American consumer as much as the Chinese exporter and skilled worker) or political initiatives such as China’s entry into the United Nations and World Trade Organization, or the more recent Strategic and Economic Dialogue. Repeated Chinese transgressions of global rules in both economics and the security realms have been consistently ignored by successive U.S. administrations in the name of amity and commerce.

The result? A China that feels no compunctions about rampant spying on American private business and citizens. A China that increases its military budget every year for a quarter-century, building weapons designed specifically to attack U.S. forces. A China that bullies and coerces neighbors over disputed maritime territory and builds islands to extend its power projection capabilities. And yet the U.S. president continues to act as though it is business as usual with a China whose troubling behavior grows commensurate with its objective strength.

No sane observer wants conflict to break out between China and the United States. Yet, surely historians in decades to come will wonder how Washington so consistently misread Chinese leaders and their goals. One might think that by the time the need for a cyberspace peace treaty was recognized, that U.S. policy toward China would also be seen as having failed.

The recognition of such a failure does not automatically point the way forward. Yet it should warn us not to continue along our current path. Not only will our cybersecurity pact with China not be worth the paper it is written on, it may go down in history as the Kellogg-Briand Pact of the 21^st century: a noble gesture that optimistically ignored reality and trusted in the goodwill of those whose actions undermined the security we sought to protect in the first place. 

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The latest gauge on Chinese factory activity has just been released, and it’s missed expectations.

The Caixin-Markit Flash manufacturing purchasing managers index (PMI), a gauge on activity levels among small to medium-sized Chinese firms, fell to 47.0 in September, below the 47.3 level of August and forecasts for an increase to 47.5.

The reading is the lowest level seen since March 2009.

A reading of 50 is deemed neutral, meaning overall activity levels are neither expanding nor contracting.

Fitting with the incredibly weak headline reading, the internals of the report were equally unimpressive.

Output, new orders, new export orders, and employment all contracted at a faster pace than August while order backlogs expanded at a slower pace. Stocks of finished goods was the only component to register a faster expansion that what was seen in August, suggesting customer demand remains weak.

Indicative of intensifying deflationary pressures, input and output prices also declined at a faster pace.

The table below of the surveys subcomponents makes for ugly reading.

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Chinese President Xi Jinping arrives in Seattle on Tuesday for the first part of a week-long state visit to the United States.

Later in the week, Xi will meet with President Barack Obama at the White House. But first, he’ll meet with the CEOs of America’s top companies.

There’s a reason the Chinese president is putting money before politics this week.

"This is a signal to the American political establishment that these may be American companies, but they know where their bread is buttered right now, and it’s China," says James McGregor, head of APCO Worldwide's Greater China office and author of One Billion Customers.

Apple is a good example. In 2009, the company made just 2 percent of its revenue from China. Today, a quarter of the company's global revenue — more than $46 billion — comes from its business in China. That’s why Apple's Tim Cook will be among a group of CEOs who will meet president Xi Jinping in Seattle.

But there will be a lot of forced smiles around the table. "It puts a lot of American CEOs in a difficult position because they’re almost like supplicants," says Shaun Rein, author of The End of Cheap China. "They’re all flying to Seattle to meet with president Xi as if he’s an emperor, and it’s clear that he’s going to dictate to them what opportunities exist for them in China."

Rein says the business environment for U.S. tech companies in China is the worst he’s seen in 20 years, and the Obama administration has done little to improve the situation. But that may change later this week, when the presidents of the world’s two largest economies meet face-to-face.

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NOW WATCH: How you sit at work can have a huge impact on your health

In what seems like a story ripped straight from the pages of an Isaac Asimov novel, a recently deceased Chinese woman named Du Hong just had her brain cryogenically frozen in hopes that, in the future, the technology to bring her back to life will be created.

No joke.

Hong, a science fiction author herself, paid upwards of $120k to have her brain sent from China to Scottsdale, Arizona to undergo a freezing procedure at the Alcor Life Extension Foundation. 

Her idea is that while modern tech doesn’t allow for the reanimation of her brain today, inevitable advancements in cryonics will one day bring her back to life.

Before passing away last May from pancreatic cancer, the 61-year-old Du decided she wanted to allow her brain to be the subject of experiments after her death. Though it took some time before the team at Alcor actually conducted the procedure, doctors in Beijing prepped Du’s brain after her official time of death on May 30.

Despite the Alcor Life Extension Foundation agreeing to freeze Du’s brain, the organization made it clear that it wouldn’t be the one to actually attempt to bring Du back to life in the future.

An accomplished children’s author and science fiction editor, Du Hong discovered cryonics while receiving treatment for her pancreatic cancer. Having penned a cryonics-themed book titled The Three-Body Problem, Du never realized the practice of cryonics could be an actual real life solution. While undergoing treatment, Du discovered Alcor — with the help of her son-in-law, Lu Chen — and was able to determine just how likely it was for her to cryogenically freeze her brain. Frequent visits with members of Alcor aided in her decision to have it sent there upon her death.

“Mother said that whether [cryonics] would be able to find a breakthrough in the next 50 years remained a mystery,” Lu Chen tells People’s Daily Online, “but that she did not mind her remains being used for experiments.”

Now that Du’s brain is officially cryogenically frozen, her family has no choice but to wait idly by while technology plays catch up. Though the popular professional opinionis that bringing someone back to life using cryonics is utterly impossible anytime soon, Du’s family remains pleasantly optimistic. This optimism was displayed by a short social media post by Du’s daughter, Zhang Siyao, shortly after her death, which simply read, “Mum, let’s meet in the future.”

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NOW WATCH: These dresses respond to the Earth’s magnetic field — and you won’t see them anywhere near fashion week

In explaining the decision to hold interest rates steady this past week, Federal Reserve Chair Janet Yellen made no secret of the concern she and her policymaking colleagues have about China’s growth.

“The outlook abroad appears to have become more uncertain of late, and heightened concerns about growth in China and other emerging market economies have led to notable volatility in financial markets,” Yellen said at her Thursday press conference.

“Given the significant economic and financial interconnections between the United States and the rest of the world, the situation abroad bears close watching.”

Yellen said she and her colleagues are focused on overseas risks that could spill over and affect the U.S. economy. Those same concerns roiled financial markets starting in August, pushing investors to dump their shares.

While Yellen may have good reason to monitor the situation closely, analysts say U.S. investors may be overreacting to developments in Beijing, as U.S. companies have very little direct exposure to China. Only 31 companies in the S&P 500 index generate 10 percent or more of their revenue from the world's second biggest economy, according to an August list compiled by Bank of America Merrill Lynch. All S&P 500 companies, on average, derive just 2 percent of their revenue comes from China, according to Goldman Sachs.

"For China's direct impact on both the U.S. economy and corporations, it's hard to find a strong reason to get real worried," says Bill Stone, chief investment strategist for PNC Bank. U.S. exports to China totaled a mere $165 billion last year, less than 1 percent of GDP.

As for China's troubles, recent economic data indicate GDP is growing only 3 to 5 percent rather than the 7 percent rate that the government claims, economists say. Weak growth led authorities to devalue the yuan Aug. 11, and it has dropped 2.5 percent against the dollar since then.

The sectors that are heavily exposed to China include technology; industrials, such as machinery and equipment makers; and consumer discretionary. The top companies when it comes to China exposure include gaming powerhouse Wynn Resorts, which earns 70 percent of its revenue in China; chipmaker Qualcomm, which garners 50 percent of its revenue there; and jet manufacturer Boeing at 12 percent. Apple generates 17 percent of its revenue in China, though in recent quarters that figure has risen above 25 percent. Consumer products giant Procter & Gamble gets 7 percent of its sales in China. "There are companies that will be affected," says Peter Chung, an equity strategist for Wells Fargo Securities. The biggest of those, like Apple and Boeing, could have an outsized impact on the S&P 500 index, which is weighted according to the market capitalization of its components.

But in general, U.S. companies are less connected to China than those in much of the rest of the world. For example, the portion of European corporate revenue coming from China is about twice as high as that for U.S. companies, according to HSBC. "The U.S. can be pretty self-contained," Stone says.

China will have a bigger impact on U.S. companies and stocks indirectly than directly, some analysts say. For example, China's sluggish demand has helped send commodity price indices to 16-year lows. With "U.S. corporate profits very tied to commodity prices," that's a big problem, says Dan Suzuki, senior U.S. equities strategist for Bank of America Merrill Lynch. "There are a lot of commodity producers and suppliers of equipment to those producers in the S&P 500," he notes.

Moreover, the yuan's devaluation could lead to currency declines against the dollar elsewhere in the world, Suzuki says. That would make U.S. exports more expensive in those countries and lessen the dollar value of the revenue earned by U.S. corporations in those countries.

A bigger issue for U.S. stocks than corporate exposure to China is the plunge of Chinese stocks, Chung says. The Shanghai Stock Exchange Composite Index has dropped 40 percent since June 12. "Because China is a large player, investors are concerned with the plunge. It limits the exposure to risk that investors are willing to take," he says. That risk includes holding U.S. stocks.

But China's difficulties won't curb U.S. companies' enthusiasm for expanding their business there, analysts say. "China is shifting from an investment-led economy to a consumer-led economy," says Ben Laidler, global equity strategist at HSBC. "That opens up opportunities for U.S. corporations."

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NOW WATCH: Forget work-life balance and focus on inner balance

China’s stock market regulator has found evidence that the nation’s largest brokerage firm, CITIC Securities, engaged in insider trading connected to the government’s rescue of the stock market.

According to Bloomberg, people familiar with the investigation say a preliminary investigation by the CRSC concluded that CITIC used advance knowledge of government-orchestrated stock purchases to execute trades that benefited the firm.

The allegations, known as front-running, sees a firm or individual place trades to benefit from favourable market movements based on information not known by the broader market.

The investigation, having first come to light two weeks ago, has seen seven CITIC Securities executives, including the firm’s president Cheng Boming, come under investigation for offences including alleged insider trading, according to reports in Chinese state-run media.

CITIC is a member of China’s so-called “national team,” a group of government-backed entities encompassing brokerages, pension funds and insurers, that were tasked by the government to help underpin the nation’s stock market following a savage two-month, 40% decline in value.

A spokeswoman from CITIC told Bloomberg that the company hadn’t received any formal notification regarding the nature of the investigation, and the CSRC is yet to respond to requests for further information regarding the investigation.

In early trade on Wednesday, shares in CITIC Ltd listed in Hong Kong have fallen by 2.49% to 14.08 Hong Kong dollars.

You can read more here.

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SHENZHEN, China (AP) — In China's factories, the robots are rising.

For decades, manufacturers employed waves of young migrant workers from China's countryside to work at countless factories in coastal provinces, churning out cheap toys, clothing and electronics that helped power the country's economic ascent.

Now, factories are rapidly replacing those workers with automation, a pivot that's encouraged by rising wages and new official directives aimed at helping the country move away from low-cost manufacturing as the supply of young, pliant workers shrinks.

It's part of a broader overhaul of the economy as China seeks to vault into the ranks of wealthy nations. But it comes as the country's growth slows amid tepid global demand that's adding pressure on tens of thousands of manufacturers.

With costs rising and profits shrinking, Chinese manufacturers "will all need to face the fact that only by successfully transitioning from the current labor-oriented mode to more automated manufacturing will they be able to survive in the next few years," said Jan Zhang, an automation expert at IHS Technology in Shanghai.

Shenzhen Rapoo Technology Co. is among the companies at ground zero of this transformation. At its factory in the southern Chinese industrial boomtown of Shenzhen, orange robot arms work alongside human operators assembling computer mice and keyboards.

"What we are doing here is a revolution" in Chinese manufacturing, said Pboll Deng, Rapoo's deputy general manager.

The company began its push into automation five years ago. Rapoo installed 80 robots made by Sweden's ABB Ltd. to assemble mice, keyboards and their sub-components. The robots allowed the company to save $1.6 million each year and trim its workforce to less than 1,000 from a peak of more than 3,000 in 2010.

Such upgrading underscores the grand plans China's communist leaders have for industrial robotics. President Xi Jinping called in a speech last year for a "robot revolution" in a nod to automation's vital role in raising productivity.

Authorities have announced measures such as subsidies and tax incentives over the past three years to encourage industrial automation as well as development of a homegrown robotics industry.

Some provinces have set up their own "Man for Machine" programs aimed at replacing workers with robots.

Guangdong, a manufacturing heartland in southern China, said in March it would invest 943 billion yuan ($148 billion) to encourage nearly 2,000 large manufacturers to buy robots, the official Xinhua news agency reported. Guangzhou, the provincial capital, aims to have 80 percent of manufacturing automated by 2020.

A relentless surge in wages is adding impetus to the automation revolution. China relied on a seemingly endless supply of cheap labor for decades to power its economic expansion. That equation is changing as the country's working age population stops growing and more Chinese graduate from university, resulting in a dwindling supply of unskilled workers, annual double-digit percentage increases in the minimum wage and rising labor unrest.

Deng said Rapoo's wage bill rising 15-20 percent a year was one big factor driving its use of robots.

"Frontline workers, their turnover rate is really high. More and people are unwilling to do repetitive jobs. So these two issues put the manufacturing industry in China under huge pressure," he said.

China's auto industry was the trailblazer for automation, but other industries are rapidly adopting the technology as robots become smaller, cheaper and easier to use. It now only takes on average 1.3 years for an industrial robot in China to pay back its investment, down from 11.8 years in 2008, according to Goldman Sachs.

Companies such as electronics maker TCL Corp. are using robots to produce higher-value goods. At one factory in Shenzhen, TCL uses 978 machines to produce flat screen TV panels. At another TCL plant in Hefei, near Shanghai, steel refrigerator frames are bent into shape before being plucked by a blue Yasakawa robot arm that stacks them in neat rows for further assembly.

Fridges and big washing machines have heavy internal components, so "if you use automated robots to make them, they also let you cut your labor intensity by a lot," said TCL Chairman Tomson Li.

China held the title of world's biggest market for industrial robots for the second straight year in 2014, with sales rising by more than half to 56,000, out of a total of 224,000 sold globally, according to the International Federation of Robotics.

There's plenty more room for explosive sales growth. China has about 30 robots for every 10,000 factory workers compared with 437 in South Korea and 152 in the United States. The global average is 62. Beijing wants China's number to rise to 100 by 2020.

The switch to robots has raised fears that it will contribute to slowing job though there are few signs that's happening yet.

Deng said Rapoo hasn't had to resort to layoffs. Rather, the company is just not replacing workers who quit.

"It's not simply replacing the operation of workers by robot. We do more than that. We are making a robot platform" in which humans and machines work together to make production more flexible, he said.

On a recent tour of Rapoo's factory, Deng pointed out the efficiencies.

As a conveyor belt carried circuit boards out of an industrial soldering machine, a robot arm removed them from metal jigs and placed them on another belt. Human workers typically do this job in other factories, Deng said, but turnover is high because of the heat and repetitiveness.

In a glass-walled room, robots assembled receivers for wireless mice, tasks that were previously done by 26 people, Deng said. Now, one or two humans supervise as a laser automatically fuses shut metal USB plug housings, four at a time, while steps away, robot arms slide the plugs into plastic sleeves.

Automation means "accuracy can still remain very high and there are seldom failures for the robots," said Deng.

Boosting quality also helps China's companies achieve another national goal of shedding their reputation as shoddy, low cost producers to compete with global rivals.

Automation will allow Chinese factories to grab a bigger share of industries where accuracy and precision are crucial, such as aerospace, medical devices and optical components, said Derick Louie, of the Hong Kong Productivity Council.

Makers of toys and other low-profit consumer goods, however, "probably will have to move outside of China due to rising labor costs and environmental taxation," he said.

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China's much-hyped market for vitamins and supplements is facing a steep challenge from traditional remedies from ginseng to deer antler, even as the sector's rise fuels billion-dollar deals and share price surges.

The vitamins market is set to expand five percent a year to $20 billion in 2019, half its pace of growth since 2009.

It's being outstripped by a traditional medicine business that could be worth $40 billion by then - and is growing twice as fast.

That's prompted vitamins firms from direct seller Amway to giant U.S. drugmaker Pfizer Inc to look for inspiration from traditional medicine recipes going back thousands of years to succeed in China's increasingly pivotal healthcare market.

"We've tried to learn the heritage and marry it with modern life sciences," Jia Chen, vice president of Amway's China research and development division, told Reuters.

The firm offers products for memory and liver health drawing on traditional ingredients such as ginseng and liquorice. It recently invested around $13 million in a traditional Chinese medicine research lab in the eastern Chinese city of Wuxi.

"Half of the population still believe in traditional ways and still go to traditional doctors or hospitals. This is a way of life and is passed from generation to generation," she said.

Pfizer broke ground in June on a $95 million facility in eastern China to expand production of its Centrum and Caltrate brands. It's now offering golden-hued gift boxes of vitamins, playing into the trend of giving expensive traditional Chinese medicines as presents.

Traditional remedies are used in China to treat everything from low energy to cancer, making for a business that's broader than Western-style vitamins and health supplements. The industry's ancient roots, along with rising disposable incomes, greater health awareness and supportive government policies, have helped stoke the market further.

It's a potentially lucrative model too, with shoppers willing to splash out for natural ingredients boiled together to create a curative brew. One Shanghai shopper said she had bought a three-month skin treatment for 6,000 yuan ($942).

Leaders of the market for these remedies, like Beijing Tongrentang Co Ltd, have products with snakeskin, dried toad, centipede, scorpion and dandelion to treat swelling, and others with oyster, ginseng and black-bone chicken for menstrual pains.

"At the moment the real money-spinners are deer antler and ginseng," said Yu Qiangmin, 51, a chemist in a traditional medicine store in Shanghai.

Healthy mix?

Some vitamins suppliers say demand from safety-conscious consumers for high-quality imports is robust enough to fuel market growth. Hong Kong-listed Biostime International Holdings announced a billion-dollar deal last week for Australian vitamin maker Swisse Wellness to build on strong Chinese demand.

"Chinese consumers are prepared to pay a premium for our products because they know that those products are quality-checked before they're sent out to China," Christine Holgate, Chief Executive Officer of Australia's Blackmores Ltd, told Reuters in an interview.

Blackmores has seen its shares nearly quadruple in value this year, accelerating after an 83 percent spike in annual profit helped by booming demand in China. The firm has hired Chinese tennis star Li Na to promote its pregnancy supplements and help boost local demand.

Vitamin makers are also looking to lure younger, urban Chinese consumers who are less convinced by traditional methods and willing to mix the old with the new.

Wen Zuolin, 21, a food safety student in Shanghai, has swapped indigo woad root for vitamin tablets which she says are more convenient, taste better - and she knows what's in them. She admits she goes back to traditional cures from time to time.

"Older generations trust traditional Chinese medicines more. Some of us youngsters still trust it too, but the majority prefer Western-style medicines because they have a quicker effect," she said.

In Shanghai, 82-year-old Li Dongmei wasn't yet convinced as she scoured cluttered shelves and old wooden drawers in a downtown medicine shop.

"I'm not sure about how effective it is, but I still take traditional Chinese medicines every day," she said, laden with a haul of two heavy bags of products which can cost hundreds of dollars for a few months' treatment.

"Vitamins, I don't really trust yet."

($1 = 6.3694 Chinese yuan renminbi)

($1 = 1.3904 Australian dollars) 

(Reporting by Adam Jourdan in SHANGHAI, Donny Kwok in HONG KONG, Byron Kaye and Jane Wardell in SYDNEY and SHANGHAI newsroom; Editing by Kenneth Maxwell)

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China's fight against entrenched corruption is not a "House of Cards"-style power struggle, President Xi Jinping said on Tuesday as he began his first state visit to the United States, vowing to press on with his campaign.

Xi has warned that corruption threatens the ruling Communist Party's survival and his three-year anti-graft campaign has brought down scores of senior officials in the party, the government, the military and state-owned enterprises.

There has been repeated speculation at home and abroad - and sources with ties to the leadership have told Reuters - that the graft crackdown is as much about Xi taking down his enemies as it is about cleaning up the Communist Party.

"Recently, we have cracked down on corruption ... taking out both tigers and flies," Xi said, referring to both high level and low level officials, in a keynote address to 650 business executives and other guests in Seattle.

"This is in line with the people's requirements. There is no power struggle in this. There is no 'House of Cards'," he said, drawing laughter from the crowd.

The U.S. remake of the British political drama "House of Cards" is wildly popular in China, where it is watched on illegal downloads and pirated DVDs.

"If we do not resolve the problem that exists, the people will neither trust nor support us," Xi said. "So we stress, in managing the country, we must also manage the party; the party's governance has to be strict, too."

China last week hailed the return by the United States of one of China's most prominent fugitives wanted for corruption as good progress and a foundation for cooperation.

Chinese officials have long complained that China's anti-corruption fight has been hampered by a reluctance by Western countries to sign extradition treaties.

China does not have extradition treaties with the United States or Canada - the most popular destinations for suspected economic criminals from China.

Xi is due to hold talks with President Barack Obama later in the week, where the issue of corruption suspects who have fled China is expected to come up.

"The Chinese people hope that on this issue we can get support and coordination from the United States, so corrupt elements have no place to hide overseas," Xi said.

The failure by China to secure the return of suspects from the United States has been an irritant in ties. The United States has said it is not averse to cooperating on the issue but China has often failed to produce the kind of evidence of criminality needed under U.S. law to support deportation.

(Writing by Ben Blanchard; Editing by Paul Tait)

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In China's factories, the robots are rising.

For decades, manufacturers employed waves of young migrant workers from China's countryside to work at countless factories in coastal provinces, churning out cheap toys, clothing and electronics that helped power the country's economic ascent.

Now, factories are rapidly replacing those workers with automation, a pivot that's encouraged by rising wages and new official directives aimed at helping the country move away from low-cost manufacturing as the supply of young, pliant workers shrinks.

It's part of a broader overhaul of the economy as China seeks to vault into the ranks of wealthy nations. But it comes as the country's growth slows amid tepid global demand that's adding pressure on tens of thousands of manufacturers.

With costs rising and profits shrinking, Chinese manufacturers "will all need to face the fact that only by successfully transitioning from the current labor-oriented mode to more automated manufacturing will they be able to survive in the next few years," said Jan Zhang, an automation expert at IHS Technology in Shanghai.

Shenzhen Rapoo Technology Co. is among the companies at ground zero of this transformation. At its factory in the southern Chinese industrial boomtown of Shenzhen, orange robot arms work alongside human operators assembling computer mice and keyboards.

"What we are doing here is a revolution" in Chinese manufacturing, said Pboll Deng, Rapoo's deputy general manager.

The company began its push into automation five years ago. Rapoo installed 80 robots made by Sweden's ABB Ltd. to assemble mice, keyboards and their sub-components. The robots allowed the company to save $1.6 million each year and trim its workforce to less than 1,000 from a peak of more than 3,000 in 2010.

Such upgrading underscores the grand plans China's communist leaders have for industrial robotics. President Xi Jinping called in a speech last year for a "robot revolution" in a nod to automation's vital role in raising productivity.

Authorities have announced measures such as subsidies and tax incentives over the past three years to encourage industrial automation as well as development of a homegrown robotics industry.

Some provinces have set up their own "Man for Machine" programs aimed at replacing workers with robots.

Guangdong, a manufacturing heartland in southern China, said in March it would invest 943 billion yuan ($148 billion) to encourage nearly 2,000 large manufacturers to buy robots, the official Xinhua news agency reported. Guangzhou, the provincial capital, aims to have 80 percent of manufacturing automated by 2020.

A relentless surge in wages is adding impetus to the automation revolution. China relied on a seemingly endless supply of cheap labor for decades to power its economic expansion. That equation is changing as the country's working age population stops growing and more Chinese graduate from university, resulting in a dwindling supply of unskilled workers, annual double-digit percentage increases in the minimum wage and rising labor unrest.

Deng said Rapoo's wage bill rising 15-20 percent a year was one big factor driving its use of robots.

"Frontline workers, their turnover rate is really high. More and people are unwilling to do repetitive jobs. So these two issues put the manufacturing industry in China under huge pressure," he said.

China's auto industry was the trailblazer for automation, but other industries are rapidly adopting the technology as robots become smaller, cheaper and easier to use. It now only takes on average 1.3 years for an industrial robot in China to pay back its investment, down from 11.8 years in 2008, according to Goldman Sachs.

Companies such as electronics maker TCL Corp. are using robots to produce higher-value goods. At one factory in Shenzhen, TCL uses 978 machines to produce flat screen TV panels. At another TCL plant in Hefei, near Shanghai, steel refrigerator frames are bent into shape before being plucked by a blue Yasakawa robot arm that stacks them in neat rows for further assembly.

Fridges and big washing machines have heavy internal components, so "if you use automated robots to make them, they also let you cut your labor intensity by a lot," said TCL Chairman Tomson Li.

China held the title of world's biggest market for industrial robots for the second straight year in 2014, with sales rising by more than half to 56,000, out of a total of 224,000 sold globally, according to the International Federation of Robotics.

There's plenty more room for explosive sales growth. China has about 30 robots for every 10,000 factory workers compared with 437 in South Korea and 152 in the United States. The global average is 62. Beijing wants China's number to rise to 100 by 2020.

The switch to robots has raised fears that it will contribute to slowing job though there are few signs that's happening yet.

Deng said Rapoo hasn't had to resort to layoffs. Rather, the company is just not replacing workers who quit.

"It's not simply replacing the operation of workers by robot. We do more than that. We are making a robot platform" in which humans and machines work together to make production more flexible, he said.

On a recent tour of Rapoo's factory, Deng pointed out the efficiencies.

As a conveyor belt carried circuit boards out of an industrial soldering machine, a robot arm removed them from metal jigs and placed them on another belt. Human workers typically do this job in other factories, Deng said, but turnover is high because of the heat and repetitiveness.

In a glass-walled room, robots assembled receivers for wireless mice, tasks that were previously done by 26 people, Deng said. Now, one or two humans supervise as a laser automatically fuses shut metal USB plug housings, four at a time, while steps away, robot arms slide the plugs into plastic sleeves.

Automation means "accuracy can still remain very high and there are seldom failures for the robots," said Deng.

Boosting quality also helps China's companies achieve another national goal of shedding their reputation as shoddy, low cost producers to compete with global rivals.

Automation will allow Chinese factories to grab a bigger share of industries where accuracy and precision are crucial, such as aerospace, medical devices and optical components, said Derick Louie, of the Hong Kong Productivity Council.

Makers of toys and other low-profit consumer goods, however, "probably will have to move outside of China due to rising labor costs and environmental taxation," he said.

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NOW WATCH: The best game of the year is about to get much bigger

Hackers who stole security clearance data on millions of Defense Department and other U.S. government employees got away with about 5.6 million fingerprint records, some 4.5 million more than initially reported, the government said on Wednesday.

During an ongoing analysis of the data breach, the estimated number of people who had fingerprint records stolen rose from 1.1 million to about 5.6 million, the Office of Personnel Management said in a statement.

OPM has estimated a total of 21.5 million people had their Social Security identification numbers and other sensitive information stolen in the hacking incident earlier this spring. The discovery of additional missing fingerprints did not affect that overall total, it said.

U.S. officials have privately blamed the breach on Chinese government hackers, but they have avoided saying so publicly. Officials also have said no evidence has surfaced yet suggesting the stolen data has been abused, though they fear the theft could present counterintelligence problems.

OPM said in its statement the discovery of additional stolen fingerprints came as officials from OPM and the Defense Department were analyzing data affected by the incident.

During that process, officials "identified archived records containing additional fingerprint data not previously analyzed," increasing the estimated number of people who had fingerprint data stolen, the OPM statement said.

OPM downplayed the danger of stolen fingerprint records, saying the ability to misuse the data is currently limited. But it acknowledged the threat could increase over time as technology evolves.

"Therefore, an interagency working group with expertise in this area ... will review the potential ways adversaries could misuse fingerprint data now and in the future," it said.

The group includes members of the intelligence community as well as the FBI, Department of Homeland Security and the Pentagon.

"If, in the future, new means are developed to misuse the fingerprint data, the government will provide additional information to individuals whose fingerprints may have been stolen in this breach," OPM said.

The Defense Department and OPM are working together to begin mailing notifications to the people whose information was stolen, the OPM statement said.

SEE ALSO: Obama's cyber pact with China is evidence of a major US policy failure

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Chinese officials from Hong Kong, Guangdong, and Macau have rounded up over 51,000 drug addicts and suspected members of China's organized crime syndicate, The Triad, according to the South China Morning Post.

The sting, called "Thunderbolt 15," caps a three-month effort to rein in Triad activity.

These roundups have been happening every year since 2000, but last year's operation was put on hold because Occupy Central — a Hong Kong protest movement — was in full swing.

That, combined with Chinese President Xi Jinping's year-plus-long corruption crackdown, has made this year's Thunderbolt 15 sting more important than ever. Usually it only lasts one month. Police raided 7,500 locations in Hong Kong and confiscated loads of drugs and weapons.

Here's the breakdown of who got arrested:

• 11,339 were arrested for various crimes on the mainland.
• 31,651 "drug addicts" were arrested in Guangdong, the Chinese province bordering Macau and Hong Kong.
• 3,977 were arrested in Macau.
• 4,343 people were arrested in Hong Kong.

Here's why this matters. China's economy has slowed down dramatically over the last year. Xi says this is part of the "New Normal" plan to move the economy from one based on investment to one based on consumption.

But observers are starting to posit that the anticorruption campaign is part of what's hurting the economy. This has most certainly been felt in the gambling hub of Macau, where the fear of being seen as ostentatious has kept mainlanders away.

Monthly gross gambling revenues have fallen 30% to 50% from the same time last year.

The Triad has been involved in Macau's gambling business since its inception, which means this Thunderbolt sting is likely to be another shock to the system.

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Last month, Uber announced it had closed a $1.2 billion funding round for its China branch. Now, the company is looking to expand that funding round to as much as $2.5 billion, the Financial Times reports.

To grow in China, the company formally launched a fundraising round on June 22. Four of Uber's 10 biggest cities are now in China, according to an email sent by Uber CEO Travis Kalanick to investors and obtained by the Financial Times earlier this summer.

Uber has been investing heavily in China, and the service is growing there like crazy.

Uber’s service is taking off in China much faster than it did in the United States. Nine months after launching in Chengdu, Uber had 479 times the trips it had in New York after the same amount of time.

And Uber just launched a carpooling service called UberCommute, or "People’s Uber+" in Chengdu, Uber's biggest city in the world. UberCommute matches up riders with drivers going to similar destinations. Lyft introduced a very similar service called Driver Destination back in November.

Uber is putting a lot of money into its Chinese growth. Uber previously raised more than $5 billion in several funding rounds, including a $600 million investment from Chinese search engine company Baidu.

Uber faces competition in China, though. 

Last week, Didi Kuaidi — Uber's biggest competitor in China — and Lyft, Uber's biggest US rival, announced the two companies were teaming up to take on Uber.

The strategic partnership will let the companies share technology, product development, and local resources, and when US users of Lyft go to China (or when Didi users come visit the US), they'll be able to pay in their native currency on each app.

Now that Lyft has teamed up with Didi, the two companies seem better suited to take on Uber. Didi recently closed a $3 billion round of venture capital funding, and it's valued at $15 billion, so it's well-equipped financially — in total, Didi Kuaidi has amassed a $4 billion war chest of venture capital funding. 

Didi Kuaidi was created in February when competing apps Didi Dache and Kuaidi Dache merged to cut the costs of competing with each other — and more importantly, with Uber. Didi's finances have also come into question. The company is losing buckets of money,according to leaked financial documents surfaced by the Financial Times.

We have reached out to Uber for comment and will update this post when we hear back.

SEE ALSO: There’s a global alliance forming to stop Uber’s world domination

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We've heard about all kinds of people losing their jobs to robots — from cab drivers to bartenders— but almost any repetitive job can be replaced by a robot.

One fantastically tasty example of this is the Noodlebot, which was originally patented under the name Chef Cui by its inventor Cui Runguan.

Noodblebot burst onto the scene back in 2012, but we just discovered him and we couldn't resist sharing.

Noodlebot is cheap, uncomplicated, and according to some restaurant owners, actually "better than human chefs."

He cuts a specific kind of noodle called dao xiao mian, or "knife cut noodles,"according to a CNN post from 2012.

Traditionally, a chef makes and kneads the wheat-based dough by hand, then holds the dough in one hand and cuts with the other.

The stationary robot works much in the same way, but it's faster and more accurate. According to CNN, Noodlebot can slice 150 pieces of noodles a minute, and can be programmed to cut noodles of different widths and lengths.

Noodlebot's knife-wielding arm works like a windshield wiper — slicing noodles in an up and down motion. The cut noodles fire directly into the wok.

The uncut dough sits on a platform in front of the robot. The platform moves up and side to side, allowing the other arm to cut across the dough.

Noodlebot's aim isn't perfect, so it helps to have a more experienced chef standing guard.

Runguan believes Noodlebot will allow entry-level cooks to work on more rewarding tasks in the kitchen.

"Young people don't want to work as chefs slicing noodles because this job is very exhausting," Runguan told Zoomin.TV. "It is a trend that robots will replace men in factories, and it is certainly going to happen in noodle slicing restaurants."

You'd think many restaurant owners would be terrified of Noodlebot. Its menacing unibrow and constantly shifting eyes make it impossible to tell if it'll suddenly turn to you and say "You're next" all while calmly cutting noodles.

Runguan designed the Noodlebot to look like characters from a famous 1960 Japanese show called "Ultraman" at the behest of his son, according to CNN.

"The robot chef can slice noodles better than human chefs and it is much cheaper than a real human chef," Liu Maohu told Zoomin.TV in 2012. "It costs more than [$4700] to hire a chef for a year, but the robot just costs me [$1500]."

And Maohu's customers don't seem to mind. According to Zoomin.TV, one customer said he couldn't tell the difference between the human-made and robot-made noodles, and that Noodlebot's noodles "taste good and look great."

In fact, like many food-making robots, watching Noodlebot is strangely mesmerizing. Noodlebot makes for some pretty awesome pre-dinner entertainment and some customers find him irresistible.

Other manufacturers are now building robots just like Noodlebot. Foxxconn, the same company that assembles iPhones and iPads, got in the noodle-cutting game early in 2015, according to Wall Street Journal. Foxxconn has only built three noodle-cutting robots so far and it doesn't seem to have as much flair as Noodlebot.

Watch Noodlebot in action below.

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NORTH CHARLESTON, S.C. (Reuters) - Republican presidential front-runner Donald Trump bashed Boeing on Wednesday over its plans to open a new facility in China that the company's largest union says could hurt American workers.

Boeing announced on Wednesday a deal to sell China 300 new aircraft. It is also expected to unveil an agreement to open a new facility there that would finish and deliver 737s built at Boeing's factory in Renton, Washington.

"Boeing is going to sell 300 jets to China, but as part of the deal, they're going to set up a massive plant in a big section of China," Trump said during a speech before African-American business leaders in North Charleston, South Carolina.

"That will end up taking a tremendous number of jobs away from the United States," he said.

Trump's comments came on the same day Chinese President Xi Jinping toured Boeing's Everett, Washington, factory. The Chinese leader will also travel to Washington, D.C., later in the week to meet with President Barack Obama.

Boeing has said the new factory in China would not lead to layoffs. But machinist union members said it could still cost them work, and they were expected to protest on Wednesday.

(Editing by Jonathan Oatis)

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China got ugly in 2015.

After a year-plus-long rally of over 150%, the country's stock markets crashed twice — once in June and again in August — giving up all their gains for the year.

Indices for key drivers of the country's economy, like real estate, manufacturing, and exports, started flashing red. September's purchasing managers index hit its worst read since 2009, the depths of the financial crisis.

Last month, the country devalued its currency.

In all this chaos, a key question has been: Why is this happening now?

At a debate at New York City's China Institute on Tuesday, short-seller Jim Chanos of Kynikos Associates — a well-known China bear — explained why.

"What made 2015 a little more important," Chanos said, "was the impact of the Fed interest-rate decision ... The possibility of an RMB [yuan] policy decision in August ... and the government's missteps in handling the stock market run up and drop."

Together, he continued, those issues created a "heady witches' brew of changing perceptions on China."

Now let's break that down.

Right up until just a few weeks before the Federal Reserve's September decision, the entire world of finance and money thought that the central bank might end its financial-crisis-era 0% interest rate policy and raise rates 0.25%.

Markets were bracing themselves. A rate hike would have been a statement of confidence in the US economy. The US dollar strengthened, in part in expectation of a rate hike, while money started flowing out of China at the fastest rate in around a decade.

The yuan is pegged to the dollar, and as the dollar strengthened, so did the yuan. That made Chinese exports more expensive. In August, the government found out that July exports cratered, falling 9% from the same time a year before.

Despite its recognition that the "New Normal" would cause the economy to slow down, it was not ready for a loss of that magnitude. The government decided to devalue the yuan. It has since fallen 4% since then.

The government doesn't want it to fall anymore, though, so it has been using its reserves to prop up the currency. Analysts estimate that it may have burned between $94 billion and $110 billion on this defense in August alone.

Then there is the stock market disaster. The Chinese government decided to encourage citizens to get into the market because it wanted to deploy their savings to capitalize debt-laden companies, especially state-owned enterprises, as they were being restructured in accordance with the "New Normal" plan.

The Chinese people obliged their government and then some. Mainland indices in Shanghai and Shenzen rallied over 150%.

But that was until June 12, when both of them started cratering. The government threw hundreds of millions of dollars at the problem to make it go away. It canceled initial public offerings and new share issues. It went after "malicious" short-sellers in the market.

But then the indices cratered again in August.

The whole process highlighted the Chinese government's inexperience in handling capital markets. Even Goldman Sachs CEO Lloyd Blankfein, a long-term China bull, said the government's reaction was "ham-fisted."

Of course, none of this means China is collapsing tomorrow. Not even Chanos believes that. But it helps explain why 2015 has been such a critical year for China.

"This is going to be a slow-motion unwind," Chanos said Tuesday. "This is not going to be smoking ruins tomorrow."

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PARIS – We've seen at least three articles explaining why the Fed failed to increase interest rates Thursday.

One says Goldman Sachs is calling the shots now.

Another says China has the Fed under its thumb.

Still another claims the Fed is a victim of its own policies and is now stuck in a "doom loop."

All of them are right.

All of the powers that be — including the Fed — want the party to continue. All know that if the Fed starts going around and turning off the lights and unplugging the music, the party is over.

Too much of a good thing

As we tried to understand in our recent book "Hormegeddon: How Too Much of a Good Thing Leads to Disaster," public policies create their own support. When they're big enough and go on for long enough, they become unstoppable.

Yesterday, the Dow rose by 125 points, recovering just under half of Friday's losses.

But the bigger picture shows a stock market cut off from reality — pretending to "party on" while desperately trying to ignore that the rest of the revelers have gone home.

A report in the Financial Times on a conversation with hedge fund manager John Burbank of Passport Capital begins:

The world economy is locked on a course toward an emerging markets crisis and a renewed slowdown in the U.S., despite the Federal Reserve's decision last week to hold off on a rise in rates.

China, the world's No. 2 economy, has already seen its stock market lose more than 40% of its value.

Japan, the world's No. 3 economy, was supposed to be doing the funky chicken by now, revived from its funk by Prime Minister Shinzō Abe and a long line of prominent economic advisers, including Paul Krugman.

Under Abe, Japan has done "whatever it takes" to get its economy moving ahead. But whatever it did was not whatever it needed. Instead of racing ahead, Japan seems to be in its own permanent doom loop.

And Europe?

As of last year, at least, the European Union had a larger economy than the US. But now, Europe, too, is in a slump. At least that's what we gathered from listening in on a conversation over dinner last night.

Poor Anne

Listening to your neighbors in a middle-class eatery is not one of the approved methods of economic research, but sometimes it reveals things the statistics don't tell you.

Autumn began yesterday. The trees along the River Seine are beginning to lose their leaves. The first brown and curling leaves in Paris are like the first gray hairs on a beautiful woman — they make her more attractive than ever.

It is raining today. The odor of fall is in our nostrils. The City of Lights can be dark and gloomy in the autumn, but it only makes the warmth inside even more fetching.

"Oh, you know, Anne went to the École Polytechnique," began the woman at the next table while we were eating our filet mignon de porc, referencing one of France's top universities.

The restaurant is one of our favorites, Le Beaujolais, on the Avenue de Suffren in the 16th Arrondissement.

It is not for its food that we like it but for its style. It is old-fashioned, like a bistro from 50 years ago — with rich woodwork, chandeliers, and brass railings that reflect the yellow light.

It was Monday night. Few diners were there. It was easy to eavesdrop.

She continued: "Poor Anne. She is so unhappy. And when she is unhappy she tends to eat too much and gain weight. We thought she would get a good job in Paris.

"For months and months, she lived with us at home ... going to interviews. She was getting depressed. And partly she was depressed because she didn't have a boyfriend. But I told her, 'If you keep eating like that, what do you expect?'

"Finally, after about six months, she answered an ad on the internet for someone to work in San Francisco. Well, you know there ... if you can just walk and talk at the same time ... if you present yourself well, you know, if you dress properly and have a good education, apparently, you don't have any trouble getting a good job.

"Her employer has one of these internet things. I'm not sure what they are doing, but they are worth billions. Three young guys started the business. And they're very happy with Anne.

"And you know, even though she is a little 'heavy,' she's pretty normal for there. She didn't admit it, but I think she has a boyfriend already. And she's only been there a month. I think he's Chinese or something.

"When she first started looking for work overseas, she thought she'd get a job in Brazil ... or maybe even China. But they are both doing worse than France.

"Apparently, it is only the US that is hiring people. And they like hiring foreigners."

SEE ALSO: BILL GROSS TO THE FED: Raise rates now!

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CHICAGO (Reuters) - Wal-Mart Stores Inc is seeking price cuts from suppliers that produce goods in China, saying the retailer should share in the savings generated by China's devaluation of the yuan, people with knowledge of the matter said.

Wal-Mart managers in recent weeks have contacted more than 10,000 suppliers in various countries.

All of them have manufacturing facilities in China, seeking cost cuts of 2 percent to 6 percent on mainly general merchandise including home furnishings, apparel, health and beauty products, appliances, electronics and toys, according to a consultant who advised Wal-Mart on the move and spoke on condition of anonymity to protect his relationship with the retailer.

The company is telling suppliers that they should pass on the savings arising from the yuan devaluation so Wal-Mart can achieve EDLC, or "everyday low cost," its term for the tight cost controls needed to keep prices low for consumers, according to executives at two vendors of durable goods, who also requested anonymity. Both were asked for cuts in the lower half of the 2 percent to 6 percent range. Both said they planned to negotiate a reduction in the proposed cuts.

Wal-Mart spokeswoman Deisha Barnett declined to comment on whether the company was seeking price cuts in China-made goods. With almost $500 billion in annual sales and a globally diversified supply chain, Wal-Mart holds tremendous sway over its vendors, which could risk their business with the retailer by pushing back too hard on its requests to lower costs

The move by the world's largest retailer follows efforts by other retailers to benefit from a cheaper yuan. A senior Toys R Us official told Reuters last month that the company was "engaging" with suppliers about improving terms. Home Depot Inc Chief Financial Officer Carol Tome said they had identified potential cost savings from the currency's decline and would pursue them.

Last month, China devalued its tightly controlled currency in a bid to boost growth and help flagging exports. The nearly 2 percent cut on Aug. 11 was the most significant downward adjustment to the yuan since 1994. The currency is down 2.9 percent versus the dollar so far this year, making exports from the country less expensive when purchased with dollars, the currency most often used in supplier contracts.

Wal-Mart's latest overture to suppliers comes as it seeks to push through broader changes designed to lower its costs through changes to vendor agreements. In June, Wal-Mart began asking all suppliers to pay fees to store inventory in Wal-Mart warehouses and in some cases has sought to extend the time Wal-Mart takes to pay its vendors.

Wal-Mart has been struggling to shore up its profit margins, which have been weighed down by a $1 billion investment announced earlier this year to increase wages for half a million store-level workers and other cost pressures. The company's stock is down 26 percent so far this year.

Barnett said the new vendor agreements are aimed at making its terms more consistent across suppliers, and were part of its efforts to keep prices low at the store.

"It's change at the end of the day and that's not always easy, but we think what is best for our business and ultimately best for our customers," Barnett said.

Several vendors told Reuters they have pushed back, arguing the new terms would increase costs and make it difficult to supply products at the low prices Wal-Mart demands.

Wal-Mart likely will face resistance to the request related to the cheaper yuan as well, suppliers and consultants said.   

Burt Flickinger, managing director of retail consultancy Strategic Resource Group, said he expected retailers in general to seek discounts for goods from China because of the yuan devaluation and excess of production capacity in the country.

In Wal-Mart's case, Flickinger said, the move reflects an effort to get help from suppliers to "fund lower prices" as the retailer grapples with the costs of an increase to a $9-per-hour starting wage and new investments in its ecommerce platform. 

(Editing by David Greising, Peter Henderson and John Pickering)

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