Monday, October 16, 2017

Xi Jinping's China dream: a more assertive role - Ian Johnson

Ian Johnson
China's leadership is gathering this week in Beijing to prepare another five-year plan, and affirm president Xi Jinping for another five-year term. Journalist Ian Johnson looks for the New York Times at the new role China is playing in the world. "His China could become a model for digitally driven authoritarianism around the world."

Ian Johnson:
For foreigners, this means getting used to a China that is stronger and more assertive — but possibly more brittle — than in the past. If Mr. Xi is successful, his China could become a model for digitally driven authoritarianism around the world, while failure could force a reconsideration of the wisdom of trying to force-march a country to modernity. 
China’s new role is hard to miss in foreign affairs. For decades, Washington has been urging China to get more involved in the world. Usually this meant asking China to help solve international crises — to become a “stakeholder,” in foreign policy jargon. But to many people’s surprise, after years of playing a mostly passive role in world affairs, China has taken a forceful approach.
Beijing has moved aggressively to enforce historically dubious claims to international waters and islands far from its shores, building reefs into islands and making the bizarre assertion that the economic zones around them are Chinese waters — arguments contrary to any independent interpretation of international law. 
China has also begun pulling small countries on its periphery into its orbit through a lavish infrastructure plan called the “One Belt, One Road” initiative, in the process propping up regimes that are sliding away from democracy in Thailand, Myanmar and Cambodia. 
These ambitious policies to dominate the region are paralleled by tough measures at home. For five years, Mr. Xi has led a fierce campaign against corruption, which arguably was the biggest threat to the party’s long-term ability to rule. But he’s also leveraged this crackdown to sideline political rivals, admitting as much last year when he said that high-ranking officials arrested for corruption had been engaging in “political conspiracies.”
Much more in the New York Times.

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One Belt, One Road: too big to succeed? - Sara Hsu

Sara Hsu
China's close to one trillion US dollar investment program One Belt, One Road (OBOR) is facing serious pitfalls that could stop it from succeeding, writes financial analyst Sara Hsu in the Huffington Post. Insufficient due diligence is just one of a range of potential barriers, she writes.

Sara Hsu:
The question, though, is if it will succeed. There appears to be insufficient due diligence in some cases, which carries political and financial risks. For example, work on the Colombo port project in Sri Lanka and a high-speed rail plan in Indonesia stalled due to local opposition. In other areas, like Gwadar in Pakistan, security is a major concern.
Projects funded by the Asian Infrastructure Investment Bank are more likely to be carefully weighed in terms of risk. By contrast, projects financed by the China Development Bank or the Export and Import Bank of China may undergo standard examination but, as part of an array of projects on the table, may be short-changed in full analysis and oversight. AIIB has provided $1.73 billion for nine Belt and Road projects. The overall figure for projects in the planning or implementation stages is $900 billion. 
The vast majority of funding for Belt and Road projects comes from the Export and Import Bank of China, China Development Bank and China’s commercial banks. China’s policy banks are overbooked: in 2015 alone, the China Development Bank said it had reserved $890 billion for over 900 projects. What is more, the Export-Import Bank of China stated at the beginning of 2016 that it had funded over 1,000 projects. How can these large development banks plan and oversee that many projects?
More in the Huffington Post.

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How WeChat started to promote WeBank - Matthew Brennan

Matthew Brennan
E-commerce expert Matthew Brennan discovered how WeChat silently started to promote Tencent's WeBank, a potentially major move in pushing internet banking ahead of the traditional banks in China, he writes on his website China Channel. The old banks will have to run for their money.

Matthew Brennan:
A few days ago a small but potentially important new change on WeChat was quietly released without any official announcement (to date). There’s now finally a way to get around WeChat Pay’s yearly balance transaction limit and it seems that this is now WeChat’s first serious move to promote WeBank, which makes it a big deal... 
WeChat Pay currently has a yearly user balance transaction limit of 200,000 RMB (roughly 30,000 USD). For power WeChat Pay users and small businesses alike, this limit has caused some pain. Yet in the past few days, it seems a small but potentially important new change on WeChat was released without any fanfare.. 
This new move is just one of the recent ways that WeChat Pay is trying to make up ground with Alipay in terms of providing mobile financial products and services by leveraging WeBank. Another big one is WeChat’s Lingqiantong 零钱通 feature which allows users to earn daily interest on the balance left in their WeChat wallet, a very similar feature to Alipay’s massively successful Yu’e bao 余额宝.... 
Bye, bye traditional banks. We don’t need you anymore. WeChat and Alipay control the relationship with the customer. They find smart ways to incentivize users to open up accounts at their own internet banks and link those up instead.
More at the China Channel.

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Moving to a cash- and cardless society - Andy Mok

Andy Mok
China has all but abolished cash and bank cards, and the rest of the world might be following fast. CBS talks to economist Andy Mok. China had no good working banking system, and moved fast to mobile payment, but the rest of the world might follow soon.

Andy Mok is a speaker at the China Speakers Bureau. Do you need him at your meeting or conference? Do get in touch or fill in our speakers' request form.

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this list. 

Friday, October 13, 2017

China's rich control US$2.6 trillion - Rupert Hoogewerf

Rupert Hoogewerf
China's growth might have reduced, and investing abroad more difficult, but China's annual Hurun rich list has been growing faster than ever, says its chief researcher and founder Rupert Hoogewerf to the South China Morning Post. China's rich now control US$2.6 trillion, he adds.

The South China Morning Post:
There was also substantial change at the top of the rich list. 
Xu Jiayin, chairman of real estate developer Evergrande Group, has emerged as China’s richest man with assets worth US$43 billion. 
Last year’s leader, Wang Jianlin, dropped to fifth after declines in the share price of his embattled Wanda Group saw his family’s net worth slump 28 per cent to US$23 billion. 
“Overall, the Hurun Rich List has grown faster than any year since 2007, with the possible exception of 2015,” said Rupert Hoogewerf, Hurun Report chairman and chief researcher. 
Evergrande is China’s largest property group by sales, and since the start of this year, the price of its shares in Hong Kong has risen by 465 per cent. 
Pony Ma Huateng, founder and chief executive of Tencent took the No 2 spot on the rich list with a net worth of US$37 billion, overtaking Alibaba chief executive Jack Ma at US$30 billion, who ranked third. 
Fourth on the list, and also China’s richest woman, Yang Huiyan, vice-chairman and the largest shareholder of real estate developer Country Garden, saw her wealth triple to US$24 billion. 
Aside from real estate, technology names continued to dominate the wealth rankings with Baidu’s Robin Li, and NetEase’s Ding Lei both making the top 10. 
“China’s entrepreneurs have come a long way. Back in 1999, when I put out the first list, I managed to rank 50 people. Today we have almost that number just from Alibaba,” said Hoogewerf. 
Of the 2,130 individuals with assets above US$300 million, 43 came from Alibaba and its affiliate Ant Financial.
More in the South China Morning Post.

Rupert Hoogewerf is a speaker at the China Speakers Bureau. Do you need him at your meeting or conference? Do get in touch or fill in our speakers' request form.

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Thursday, October 12, 2017

Xu Jiayin of Evergrande, China's latest richest man - Rupert Hoogewerf

Rupert Hoogewerf
The annual Hurun Rich list has identified Xu Jiayin, chairman of the China Evergrande Group as China's richest man, beating more familiar names like Alibaba's Jack Ma and Wang Jianlin of the Wanda Group. Hurun's chairman Rupert Hoogewerf reports more drastic changes, he tells Reuters.

Reuters:
Xu’s reported $43 billion wealth - a gain of around $30 billion against last year - comes on the back of a surge in Evergrande’s shares, up over 450 percent so far this year amid plans to cut debt and focus on profit over scale. 
The Hurun Report, established in 1999, is the leading China-based organization ranking the wealth of the country’s rich and famous, and its list gives a temperature check on the winners and losers in China. 
Growth in China stabilized this year, but while the world’s second largest economy averted a hard landing, some major corporations have buckled under the weight of their debt or been sanctioned by authorities over risky investments overseas. 
Wanda’s Wang - who took top spot for the last two years - dropped to fifth in the list after Wanda sold off much of the firm’s hotel and theme park assets to rivals in July, after coming under regulatory scrutiny over its high leverage. 
Close behind Evergrande’s Xu were China’s top tech titans - Alibaba’s Jack Ma and Tencent Holdings Ltd’s Pony Ma, who has seen his firm’s value rise on the popularity of its WeChat messaging app and its popular online games. 
The list also underlined those who have fallen from grace in corporate China.
Jia Yueting, founder of sprawling conglomerate LeEco that once looked to rival both Tesla Inc and Netflix, dropped to 1,978th place from 31st last year. 
Yang Kai, chairman of embattled Huishan Dairy - 66th last year - dropped off the list entirely as his firm fights off creditors amid billions of dollars of unpaid debt. 
On the up was Wuxi Pharma Tech’s Li Ge and his wife, propelled by China’s push towards drug innovation, Zhang Lei of fast-growing online news portal Toutiao and Li Shufu of carmaker Geely Automobile Holdings Ltd. 
“It has been a good year for manufacturing, cars, education, TMT and healthcare,” Hurun founder Rupert Hoogewerf said. 
While many of those on the 2,000-strong list were members of the National People’s Congress and Chinese People’s Political Consultative Conference, only a few were delegates at the upcoming five-yearly Party Congress that begins next week.
More at Reuters.

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Travel trends for Chinese consumers - Ben Cavender

Ben Cavender
The autumn Golden Week is over and business analyst Ben Cavender looks at the trends among high-spending Chinese travellers. Unique places, convenience and safety top the agenda's of Chinese tourists, he tells in CNBC.

CNBC:
Tailor-made travel services are fast becoming customary among wealthy travelers looking to escape cookie-cutter vacation packages. According to Ctrip, factors that more Chinese tourists are seeking out from their holidays include "avoiding big crowds," "no shopping" and private travel guides. 
When travelers visit places others haven't, they can derive "social cachet," and that's become a trend among the middle class, according to Ben Cavender, a principal at consultancy China Market Research Group. 
"Increasingly, we are seeing well-heeled Chinese travel to hard-to-reach destinations for the bragging rights and WeChat pictures [to] show they've been somewhere exotic," he said... 
Convenience, however, has also been a driver for the increase in domestic travel. As the growth in international flight options has not kept up with growth in demand, purchasing tickets without advanced planning can prove difficult and lead to more interest in alternatives that are less of a hassle, Cavender said. 
Safety concerns also likely played a part in influencing travel decisions among mainland tourists, Cavender added, alluding to incidents that have taken place in Europe and the U.S. in recent quarters.
More in CNBC.

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Wednesday, October 11, 2017

How change damaged the position of Chinese women - Zhang Lijia

Zhang Lijia
China's shift from a planned to a market has lifted millions out of poverty, but for many women the deal has been a bad one, says Beijing-based journalist Zhang Lijia, author of Lotus: A Novel on prostitution in China at Sea Globe.

Sea Globe:
Zhang pointed to figures released by the UN in 2015 that reveal a growing income gap between men and women in post-Mao China. The report found that between 1990 and 2010, average urban income for women as a percentage of that of men had dropped from 77.5% to 67.3%. For women outside the major cities, the figure was as low as 56%. 
“When China shifted from the planned economy to the market economy, women shouldered too much of the burden and cost,” Zhang said. “When the state-owned enterprises laid off workers, women were always the first to be let off. And it is much harder for middle-aged women to find re-employment. 
Zhang also pointed to a resurgence in pre-Maoist values that ascribed strict limits to the role – and value – of women in Chinese society. 
“I think some of the old attitudes towards women, which place women as inferior to men, resurfaced,” she said. “At workplaces, Mao-style gender equality has been replaced by open sexism… Sometimes they refuse to hire women of a child-bearing age or sack them after they become pregnant.”
More at Sea Globe.

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Tuesday, October 10, 2017

Conservative resistance against liberalization of the yuan - Victor Shih

Victor Shih
Retiring central banker Zhou Xiaochuan called this week for the liberalization of China's currency, the Yuan. But conservative forces might find this step from the People's Bank of China (PBOC) a step too far, says financial expert Victor Shih to Bloomberg.

Bloomberg:
While it’s widely expected that Zhou will retire, there are no guarantees as China’s political appointments are often unpredictable. The PBOC chief bucked expectations he would leave back when he was 65. Instead he was promoted, taking on the title of vice chairman of the Chinese People’s Political Consultative Conference, where the retirement age typically is 70. Zhou turns 70 in January. 
“It seems there is a concerted push from within the PBOC to liberalize the capital account and exchange rate a bit while the yuan is relatively strong,” said Victor Shih, a professor at the University of California in San Diego who studies China’s politics and finance. “The conservative views of the higher leadership may stand in the way of significant progress.”
More in Bloomberg.

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China: struggling for its position in the world - Tom Doctoroff

Tom Doctoroff
China gains economic and financial power, but is still struggling to find its place in the world, writes China veteran Tom Doctoroff in the Huffington Post."So China’s road to becoming a “soft” superpower will be long and rocky indeed," he says.

Tom Doctoroff:
Unlike Japan, a cocooned island, China is not apart from the world. Indeed, the country fancies itself the center of the universe, a cultural supernova that sucks in anything in its path. China - as much as civilization as a nation-state - has endured for thousands of years, a feat attributed to natural order. The “idea” of China is, in local people’s eyes, absolute truth. China analyzes, dissects and atomizes the political systems of other nations. It studies Western competitive advantages and applies them to local circumstances. But it is also a country in search of its own Copernican revolution. It remains unable to weave itself through the warp and weft of other societies. 
For example: Other than Huawei, a business-to-business telecommunications company, no Chinese corporation has achieved significant scale in any developed market - Haier’s fifteen percent share of cheap microwaves and mini fridges in the US does not count - due to, among other factors, the inability to balance marketing and sales functions; 
International cuisine is a hit in public settings where middle class Chinese bend over backwards to project an image of cosmopolitan erudition. However, even sophisticated Shanghainese rarely eat foreign foods at home. According to Treasury Wine Estates, only 5% of booming red wine consumption occurs at home; 
Chinese expatriates, particularly men, do not assimilate well. They often return home with a simplistic view that the West “looks down on” them. But reality is subtler. At business schools and in offices, clusters of Chinese retreat into self-effacing, gun-shy cliques reinforcing stereotypes of Chinese men as soft; 
Second- and third generation American Born Chinese struggle to reconcile the imperatives of Chinese heritage - obedience to parents, obsession with “face” - with US individualism. Identity confusion sometimes results in an odd hyper-Americanism; 
Oversees students, acutely aware of the deficiencies of China’s memorization-based education system, nonetheless avoid Western liberal arts like the plague. The most popular majors are still engineering, math and business; 
Starting in 2004, the government opened hundreds of Confucius Institutes to promote inter-cultural “harmony.” Due to a dearth of effective outreach ambassadors, they have ended up as language schools; 
So China’s road to becoming a “soft” superpower will be long and rocky indeed.
Much more in the Huffington Post.

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China joins global rebellion against consumerism - Shaun Rein

Shaun Rein
A growing movement of consumers buy less, but focus on experiences. And, surprisingly, Chinese consumers follow that minimalistic trend, says Shanghai-based business analyst Shaun Rein in Knowledge CKGSB.

Knowledge CKGSB.
Not only are people buying less stuff overall, but a growing subculture is rebelling against consumption altogether. Minimalist bloggers, tidy-up gurus, and tiny-house designers now claim millions of followers. 
Nor is this only a trend in the jaded West. Many Chinese consumers are also getting less interested in buying things, according to Shaun Rein, Managing Director of the China Market Research Group. 
“It is not all about consumption and showing off anymore, especially among younger consumers. They are looking more for quality of life, which is pushing spending toward wellness, entertainment and more spiritual endeavors,” he says. 
Are consumers just taking a breather, or is something more permanent going on?
More in CKGSB.

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Wednesday, October 04, 2017

Facial recognition: the new norm - Matthew Brennan

Matthew Brennan
Social media expert Matthew Brennan gives ten case studies on facial recognition in China at his China Channel. Facial recognition is becoming fast the new norms, and he summarizes a few reasons why the new technology is taking off so fast.

Matthew Brennan:
Chinese people are incredibly accepting of change and like to embrace new things. They expect continual improvement in the technology around them and this new technology is not questioned to the same degree was in the West. 
Although it’s wrong to say Chinese have no concerns about privacy, we can definitely say that the overall level of concern is much lower than in the US or Europe. There are fewer suspicions of where their data is going or how it’s being used. 
Facial recognition technology really hits the sweet spot of two areas that are top priorities for the Chinese government: 
a. It is now the stated goal of the Chinese government to lead the world in AI related technologies by 2030. 
b. The primary need for control of information and society. Ubiquitous facial recognition technology makes it much easier to track individuals. 
A key difference in this area between China and the States is that it is much easier for startups in China to become profitable in this area as many government departments want solutions and have budget to pay.
More at the China Channel.

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Saturday, September 30, 2017

Tencent and Alibaba: China's two internet ecosystems - Matthew Brennan

Matthew Brennan
China is not having one internet apart from the rest of the world, but two, tells internet expert Matthew Brennan. Both Tencent and Alibaba have their own ecosystems, and they do not talk to each other. When dealing with China's internet, you need to deal with both, he tells.

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