Note 8 - Long-term Investments

6 Months Ended

Jun. 30, 2018

Notes to Financial Statements

Equity Method Investments and Joint Ventures Disclosure [Text Block]

8. Long-term investments

	June 30, 2018			December 31, 2017
	US$(’000)			US$(’000)
	(Unaudited)
Equity method investments:
Investment in equity method investees		744			753
Advance to equity method investees		79			80
Impairment on equity method investments		(823	)		(833	)
Total equity method investments		-			-
Cost method investments:
Investment in cost method investees		1,111			1,125
Impairment on cost method investments		(658	)		(207	)
Total cost method investments		453			918
Total long-term investments		453			918

Equity method investments

As of

June 30, 2018

and

December 31, 2017,

the Company beneficially owned

23.18%

and

25.5%

equity interest in Shenzhen Mingshan and Zhao Shang Ke Hubei, respectively. The Company accounts for its investments in these companies under equity method of accounting. Based on the facts of the significant decline in level of business activities from

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.

Cost method investments

As of

June 30, 2018

and

December 31, 2017,

the Company beneficially owned a

19%

equity interest in both ChinaNet Chuang Tou and Guohua Shiji, a

10%

equity interest in both Chuangshi Meiwei and Beijing Saturday, and a

15%

equity interest in ChinaNet Korea. The Company accounts for its investments in these companies under cost method of accounting. The Company adopted ASU

2016

-

01

and chose to measure its cost method investments which do

not

have readily determinable fair values at cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the Company.

As of

December 31, 2017,

the Company had reduced the carrying value of its investments in ChinaNet Korea, Chuangshi Meiwei, Guohua Shiji and Beijing Saturday to zero, due to the business activities of these companies had become dormant. The following table summarizes the movement of the Company’s investment in ChinaNet Chuang Tou for the

six

months ended

June 30, 2018:

	ChinaNet Chuang Tou
	US$(’000)
Balance as of January 1, 2018		918
Impairment on cost method investments		(453	)
Exchange translation adjustment		(12	)
Balance as of June 30, 2018 (Unaudited)		453

The shareholders of ChinaNet Chuang Tou have decided to terminate the operation of this investee company within

2018.

As a result, the Company recognized approximately

US$0.47

million of other-than temporary impairment loss for the

six

months ended

June 30, 2018,

representing the amount expected

not

recoverable. In early

August 2018,

the Company received

RMB3.0

million (approximately

US$0.45

million) cash returned from ChinaNet Chuang Tou. ChinaNet Chuang Tou then became dormant.