Wednesday, September 02, 2015

Bankers win, retailers lose in Hong Kong - Wei Gu

Wei Gu
Wei Gu
The recent financial turmoil has different effects on different industries, notes Wei Gu, wealth editor of the Wall Street Journal in Hong Kong. While sales have dropped in retail, as mainland shoppers drop out, bankers are extremely busy helping mainland customers to change a devaluating Yuan into other currencies.

Wei Gu is a speaker at the China Speakers Bureau. Do you need her at your meeting or conference? Do get in touch or fill in our speakers´ request form.

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Tuesday, September 01, 2015

What consumer markets will be hit? - Tom Doctoroff

Tom Doctoroff
Tom Doctoroff
Marketing guru Tom Doctoroff overlooks the consumer battlefield after recent stirs in the financial markets. Middle-class consumers have a wait-and-see attitude and might only resume buying by 2016, he tells CNBC. But lower tier markets will remain robust. Brand should focus now on their digital future, he advises.

Tom Doctoroff is a speaker at the China Speakers Bureau. Do you need him at your meeting or conference? 

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Monday, August 31, 2015

China´s troublesome transition into a new economy - Arthur Kroeber

Arthur Kroeber
Arthur Kroeber
While the word ´recession´ is seldom used in China, many industries and region are facing rough times, now the country´s economy is in the middle of a transition into a new economy, tells economist Arthur Kroeber at NPR.

NPR:
The stakes are high — not just for China, but for the rest of the world. Economic growth is slowing in China in a way it hasn't in a long time. 
"I think you have to be honest and say there are big chunks of the economy that are in recession right now," says Arthur Kroeber, head of research at Gavekal Dragonomics, a Beijing-based economics research firm. 
That word – "recession" – is one you almost never hear in China. The impact on China's coalfields and rust belt is already painful, Kroeber says, and will only get worse. "That will create unemployment problems," he warns. "It will create bankruptcy problems. It will create nonperforming loan problems." 
China is shifting away, he says, from an economy built on things like investment in infrastructure and housing. 
"The big deal has been that China, for years, was just in this incredible housing boom," he says. "And every year, they were building more units than the year before. Basically, what happened was that people said, 'Oh, well, we're going to go up forever.' So people built too many steel plants and too many cement plants and too much of everything. And then it stopped growing." 
Faced with falling demand and too much capacity, coal mines have shut down in western China. In the country's northeastern rust belt, Kroeber says, "Instead of the steel plant closing down, they will cut back production. They'll put their workers on one- to two-day-a-week shifts." 
That is all part of a punishing – if inevitable — path to a new economy.... 
The government next needs to begin laying off millions from state-owned industries, including moribund steel mills in the northeast, Kroeber says. Keeping them open keeps people employed, but otherwise they are drag on the economy. 
Kroeber is not certain that officials – who traditionally fear economic unrest – are prepared to that. But the costs of failing to do so could be dire. 
"We could wind up in a situation like essentially what Japan was in the '90s, where they never do it and China winds up growing at a very slow rate — and all these stories of China taking over the world go away," he says.
More at NPR.

Arthur Kroeber 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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Trouble at China´s labor market - Victor Shih

Victor Shih
Victor Shih
Graduates have this year a hard time to find good jobs, even in a labor market that shows huge shortages in other parts. High quality jobs are hard to get in China, tells associate professor Victor Shih in the New York Times.

The New York Times:
Among the most worried are university graduates. This year, nearly 7.5 million people graduated from universities in China, a 3 percent increase over last year. 
“The difficulty of finding employment in 2015 is still relatively high,” said Zhang Feng, director of the career center of the Ministry of Education, according to an article on the ministry’s news site. “Both the central and local economies’ growth rates have entered the ‘new normal.’” 
Victor Shih, a political economist at the University of California, San Diego, said the slowdown exacerbated worrisome trends in the job market. 
“Highly paid professional jobs have been scarce for several years now,” he said, “and many young graduates have depended on their parents’ connections to obtain entry positions in the government or state-owned enterprises. The current downturn will hit graduates without strong connections or specialized skills.”
More in the New York Times.

Victor Shih 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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Why Chinese find Sydney property cheap - Shaun Rein

Shaun Rein
Shaun Rein
The observation might be shocking for Australians, but many Chinese find Sydney real estate cheap. Shanghai-based business analyst Shaun Rein explains why in the Daily Reckoning.

The Daily Reckoning:
There are a lot of things said about Sydney. But have you ever heard anyone describe its real estate as cheap? 
Well, I did last week when I spoke to a consultant and researcher based in China, Shaun Rein. He’s also the author of two books on China. He deals with a lot of wealthy Chinese businessmen. 
And he told me that for them, Sydney is cheap. That’s because real estate prices in Shanghai and Beijing at the top level can hit $20,000 to $30,000 a square metre. Even US$3 million doesn’t get you into the best part of town. 
In the US and Australia it can get you a mansion on the beach. 
Not only is Sydney priced OK for China’s rich, it has a thing that’s pretty rare in the big cities of China these days: blue sky. 
That’s because the pollution in China is so bad it’s toxic. The air in China’s mega cities is so rancid it’s breaking world records. ‘Smog days’ are declared to keep kids from going outside, or to school. 
It’s driving wealthy Chinese buyers to put their families out of harm’s way. That means buying here. And Chinese pollution is a problem, according to Shaun, that will take 10–15 years to solve. 
So don’t expect the money to slow down anytime soon.
More in the Daily Reckoning.

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

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Friday, August 28, 2015

How Xi Jinping let financial regulators run out of control - Victor Shih

Victor Shih
Victor Shih
The central government wrongly used the upswing in stock markets as a proxy for real reforms, says associate professor Victor Shih in the Washington Post. Until those shares came down and created mayhem in China and globally. ""In dictatorships, when things are going well, nobody wants to end the party."

The Washington Post:
“The entire policy establishment was thinking they had found the magic bullet for corporate finance in China and not really thinking about where the money comes from," ... said (Victor Shih, associate professor at the University of California at San Diego’s School of Global Policy and Strategy). 
For Shih, the sorry episode also reflected a more fundamental flaw in China’s system, especially with power so centered in one man. 
"In dictatorships, when things are going well, nobody wants to end the party,” he said. “When anything goes well in China, people can attribute that to the top leader. But it would be very difficult for anyone to come and say, 'Things are not going well; it’s a bubble and it’s about to crash.'" 
"Had power been a bit more decentralized, people would have come to say, 'Lets end the party.' There would be less fear of offending any particular leader." 
Xi’s centralization of power, some experts and foreign business leaders say, has also undercut a strength of the Chinese system — decision-making by consensus, in which policy was implemented only after careful consultation and cautious experimentation. Today, they say, policy seems less considered, more haphazard.
More in the Washington Post.

Victor Shih 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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Crisis has little effect on startups - William Bao Bean

William Bao Bean
William Bao Bean
The recent downturn in the financial markets is not going to have too much impact on the booming scene of startups in China, says ChinaAccelerator managing director William Bao Bean in Tech in Asia. Although the second half of 2015 would have been anyway tougher.

Tech in Asia:
“Fundamentally, I don’t think there’s a huge change that happened,” said SOSV partner and Chinaccelerator managing director William Bao Bean. “The market was overbought and now it’s selling off; it’s a natural correction.” 
William says that he doesn’t see the market crash as directly affecting startups – he sees no connection between the punters who lost their shirts betting on an overly-inflated market and the early-stage venture capitalists fueling China’s startup boom. But he does think things are going to change. “I’ve been telling our companies since the beginning of the year that in the second half it’s probably going to be a bit tougher to raise [funds],” he told Tech in Asia. “In the last year and a half we’ve seen valuations on the angel side quadruple […] so you’ll probably see things slow down a little bit.”
More in Tech in Asia.

William Bao Bean 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, August 27, 2015

For Xi Jinping, the markets are only secondary - Arthur Kroeber

Arthur Kroeber




One of the reasons financial markets went out of control, is because president Xi Jinping is mostly focused on politics and geopolitical ambitions, says political analyst Arthur Kroeber in the Washington Post. 

The Washington Post:
Kroeber, (managing director of Gavekal Dragonomics in Beijing) is also skeptical. While Xi has talked of markets playing a "decisive role" in resource allocation, he has also reaffirmed the “dominant role” of the state sector. His government has reined in excessive credit growth and excessive investment, but it has failed to make good on promises of deregulation and curbing the power of state-owned enterprises, Kroeber wrote in a note to clients. 
“We are increasingly of the view that this mediocre result arises not because a bold and visionary reform program has broken up on the reefs of political opposition, but because the main aims of China’s leader Xi Jinping are political and geo-strategic, while his economic goals are contradictory,” he wrote.
More in the Washington Post.

Arthur Kroeber 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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How the government messed up financial markets - Arthur Kroeber

Arthur Kroeber
Arthur Kroeber
The government has really messed up almost anything they did on the financial markets, says financial analyst Arthur Kroeber on NPR. Internal divisions between different factions did not help to make sound financial decisions.

NPR:
"In the stock market case, I think the government was really incompetent on several levels because they were actively promoting something that was really bad economically," says Arthur Kroeber, the head of research at Gavekal Dragonomics, a Beijing-based economics research firm.... 
Kroeber says when stocks went south, the government lost its way. "They first encouraged an irrational bubble," he says. "Then they tried, unreasonably, to protect the market from the consequences of its own excesses. And then, having done that for two months, they kind of gave up." 
When the government devalued China's currency earlier this month, its performance was no better. 
Officials didn't immediately spell out their motives — sparking fears that China's economy was in worse shape than it appeared.... 
Why has the government made missteps this summer and struggled to manage its message? 
For one thing, it's harder and harder to control information in the information age — even in authoritarian China. But there is another reason, 
Kroeber says: Government officials are at odds on how to handle the economy and slowing growth. 
"There is very clearly a deep division within the government about how much structural economic reform needs to be done, and this is not a debate that has been clearly decided from one side or the other," he says. "So when you look at it from the outside, it looks like confusion."
More at NPR.

Arthur Kroeber 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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Wednesday, August 26, 2015

All is well, apart from the stock markets - Shaun Rein

Shaun Rein at CNN
Shaun Rein
China´s central bank decided on Tuesday evening to step in with a few minor measures. Too little, too late to have any effect on the stock markets, tells business analyst Shaun Rein in Money Control. But since the real economy is doing pretty well, he sees little reason for real worry.

Money Control:
Rein: I think we all need to take a step back. So, the equity markets are plummeting, but the real economy is still doing pretty well. So, unless the equity markets continue to present a systemic risk, I do not think the government should launch a major stimulus plan. Unemployment is still pretty strong. The big concern right now that we all have to wonder is A, how much of the profits on the corporate side in China has been due to stock market change in the last six months rather than real process and B, even more importantly how many companies have used their share as collateral for margin financing so that they could invest in the stock market. So, if B is really quite negative, then we have a systemic risk. If B is not as large as a lot of analysts are thinking then the real economy is relatively okay even though it is definitely going to slow dramatically in the next few months or so. 
Latha: But is this not different from what we have heard. We have heard a lot of experts saying that China there is an economic slowdown which was slower than what the world had discounted in the financial markets. That purchase managers’ index (PMI) was what triggered all the selling, not the stock market volatility. The worry is economic, not stock market at least for the world outside. 
Rein: I think a lot of so called experts talk well but they do not provide any proof. So they have been saying that the government makes up the gross domestic product (GDP) numbers but, they do not provide strong analyses to why that is true and they do not comes up with something alternative. It is something like picking up a GDP number out of the hat. So, I just count what most of these so called experts say. If you take a look at it, unemployment is still pretty strong. It is still quite easy to get a job and it is symmetric that people need to look at. It is not GDP, it is not electricity growth, it is really more recent call that are they able to get jobs or not which they are and low income Chinese. 
And they are often able to get jobs quite easily with salary increase of 10-15 percent. If you look at it, university grads this year are asking for about renminbi a month, that is 30 percent more than they did last year. These would be graduates from the top-tier universities in China. So, the economy is bad, do not get me wrong. It is very weak. But you have to detach from the doom based scenarios from a lot of these economists that are literally just pulling numbers out of a hat.
More in Money Control.

Shaun Rein 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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Monday, August 24, 2015

Trend: China going global - William Bao Bean

William Bao Bean
William Bao Bean
The trend for the coming five years is China going global, says William Bao Bean, managing director of Chinaccelerator, the first and longest running startup accelerator program in China in E27. “These innovations are best targeted at other mobile-first markets in Southeast Asia, Eastern Europe and South America, and not US and Western Europe.”

E27:
“The big trend for the next five years is China going global,” said William Bao Bean, Partner of SOS Ventures and Managing Director of Chinaccelerator. 
“China is the largest mobile-first, mobile-only market in the world and much of the mobile innovation in the world is coming out of China,” he added. After all, with cheaper smartphones and mobile tablets being launched into the market every day, consumers are spoilt for choice when it comes to accessing the Internet via portable devices. More people are communicating on their smartphones, rather than on desktop computers. It also means that companies are rethinking their mobile strategy, given that most of their customers have a smart device with them all the time. 
“These innovations are best targeted at other mobile-first markets in Southeast Asia, Eastern Europe and South America, and not US and Western Europe,” said Bean. 
“While we have seen China’s leading Internet players get more aggressive over the last 18 months, you are now seeing Chinese investment funds like CIC and Fosun follow suit, spreading their wings internationally after initially focusing on China investments,” added Bean.
More in E27.

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