Note 10 - Long-term Investments

9 Months Ended

Sep. 30, 2016

Notes to Financial Statements

Equity Method Investments and Joint Ventures Disclosure [Text Block]

10. Long-term investments

	September 30, 2016			December 31, 2015
	US$(’000)			US$(’000)
	(Unaudited)
Equity method investments:
Investment in equity method investees		737			778
Advance to equity method investees		78			80
Impairment on equity method investments		(815	)		(838	)
Total equity method investments		-			20
Cost method investments:
Investment in cost method investees		1,550			1,113
Total long-term investments		1,550			1,133

Equity method investments

As of December 31, 2015, the Company beneficially owned 23.18% and 25.5% equity interest in Shenzhen Mingshan and Zhao Shang Ke Hubei, respectively. Based on the facts of the significant decline in level of business activities during 2015, insufficient amount of working capital and the lack of commitment from majority shareholders, these two investment affiliates had become dormant and the possibility of the business recovery is remote. As a result, the Company reduced the carrying value of these investments to zero as of December 31, 2015.

In 2015, the Company co-incorporated ChinaNet Korea with three unaffiliated individuals and obtained 40% of the equity interest in ChinaNet Korea. During the first fiscal quarter of 2016, the Company and other investors of ChinaNet Korea deregistered the entity and re-incorporated it with new investors involved. The Company invested US$7,500 and obtained 15% of the equity interest in ChinaNet Korea through the re-incorporation, which is now accounted for under cost method of accounting (See table below). ChinaNet Korea has not conducted any business activities.

Cost method investments

As of September 30, 2016, the Company beneficially owned a 19% equity interest in ChinaNet Chuang Tou and Guohua Shiji, respectively, a 15% equity interest in ChinaNet Korea and a 10% equity interest in Chuangshi Meiwei and Beijing Saturday, respectively. The Company accounts for these investments under cost method of accounting. The following table summarizes the movement of the investments in cost method investees for the nine months ended September 30, 2016:

	ChinaNet Korea		Beijing Saturday		Chuangshi Meiwei			Guohua Shiji		ChinaNet Chuang Tou			Total
	US$(’000)		US$(’000)		US$(’000)			US$(’000)		US$(’000)			US$(’000)
Balance as of December 31, 2015 (audited)		-		17		154			3		939			1,113
Investments during the year		8		-		-			26		434			468
Exchange translation adjustment		-		-		(4	)		-		(27	)		(31	)
Balance as of September 30, 2016 (Unaudited)		8		17		150			29		1,346			1,550