By Bo Zhuang of Trusted Sources
Overhauling state-owned enterprises (SOEs) is key to the Chinese growth story for the next 10 years. But, while the approach being taken by the Xi Jinping leadership acknowledges the need for change, it also stresses the parallel need to strengthen the Communist Party State. This could mean reform will take a rather different form to the assumptions of markets, which have risen on the back of expectations of market-friendly change. Continue reading »
Chopsticks are the ultimate mature technology, unimproved for thousands of years. But now a Chinese internet company has upgraded them to tackle a very modern challenge.
Baidu, the search engine, unveiled yesterday a prototype pair of “smart” chopsticks to form the last line of defence in Chinese diners’ battle against “gutter oil” and other food scares. Continue reading »
As rumours swirl about the design of Apple’s iPhone 6 ahead of its hotly anticipated debut next week, economists have made some more hard-headed – but no less remarkable – predictions about its impact.
Bank of America Merrill Lynch Global Research has estimated that the “expected large scale” of sales of the iPhone 6 will push up GDP in Taiwan by 40 basis points this year, add 1 percentage point a month to China’s export growth for the rest of 2014 and boost Taiwan’s export growth by around 2 percentage points a month between August and October and then 1 percentage point a month until January 2015. Continue reading »
As the global automotive industry continues its recovery there is particularly bright news for investors in OEMs (original-equipment manufacturers – otherwise known as automakers) that are focused on emerging markets.
The global automotive industry has been more successful than most at producing investor value, says the Boston Consulting Group in a recent report, A Comeback in the Making. Component manufacturers posted a median annual total shareholder return (TSR) – a measure of the value a company creates for its shareholders – of 33 per cent between 2009 and 2013, while OEMs produced a TSR of 29 per cent in the same period. Compare this to a 21 per cent TSR for the 26 global industries tracked by BCG.
But it was carmakers focused on emerging markets that were especially successful at pushing up value for shareholders. Continue reading »
By Gordon French, HSBC
China has been the growth story of the past three decades. It has also been largely out of reach for portfolio investors. That is about to change.
Shanghai-Hong Kong Stock Connect opens a new chapter in China’s financial integration with the world, and will in time reshape the dynamics of global investment flows.
Expected to launch in October, Stock Connect will for the first time allow mainland Chinese citizens to invest directly in foreign equities, and give global investors direct access to China’s stock market. Continue reading »
Free-trade champion Mexico is on a reform drive that promises new openness in key sectors of its economy, especially energy. So what is it doing slapping protectionist measures on its shoe industry?
Fighting unfair competition from China, officials say.
The raft of new measures to protect Mexico’s industry – which makes 240m pairs of shoes a year – sounds distinctly off message, especially since President Enrique Peña Nieto has made boosting trade ties with China a priority. (He met his Chinese counterpart three times within six months to forge closer relations.) Continue reading »
By Hayden Briscoe and Hua Cheng, AllianceBernstein
In spite of worries about a collapse in China’s property market, we think that the financial system will navigate the coming credit cycle if banks can buy time to resolve loan problems — and receive government support if needed. Continue reading »
By Hayden Briscoe and Jenny Zeng, AllianceBernstein.
Concerns about a possible collapse in China’s property market continue to grow. However, our research suggests that fundamentals are more robust than many people think. The biggest danger lies in the potential for policy mistakes.
Investors are understandably worried about the headlines coming out of China’s property sector. Sales fell in July after having seemed to stabilize in June. For the first half of this year, sales nationally fell by 6.7% year over year, to Rmb3tn (US$488.4bn). That’s the first time such a steep fall has occurred since 2011. Continue reading »
China’s property slump – which in July was characterised by widespread declines in city real estate prices coupled with falling sales volumes – appears to have carried over into August, data for the first half of the month shows.
Data from 42 large cities monitored by China Confidential, a research service at the Financial Times, shows a 20 per cent year on year decrease in home sales in the first 17 days of August. Unsold inventory in 14 large cities jumped by 48 per cent year on year in the same period, the data shows (see chart). Continue reading »
Nations have negotiated trade agreements in one form or another for centuries. And for centuries economists have undoubtedly been facing the same question: Do trade agreements really matter?
The orthodox answer is obviously that they do. When you lower the barriers to trade goods flow more freely across borders and businesses, consumers and economies as a whole benefit as a result. But HSBC and the Economist Intelligence Unit are out with a new business survey that offers some interesting practical realities. Continue reading »
“Anyone who says that Africa is missing the Millennium Development Goals is missing the point.” You might expect such a tart statement about a canonical organising principle of development policy to come from one of the aid industry’s many curmudgeonly sceptics.
That it came instead from Jan Vandemoortele, a Belgian economist who helped create the United Nations MDGs in the first place, raises questions whether propagating a single set of targets to drive government policy across the entire developing and emerging world is worth doing at all. The “sustainable development goals”, successors to the MDGs, are currently being developed, but the unfortunate signs are that they will be yet more complex and yet less meaningful than the originals.
Continue reading »
By John Zhu, HSBC
China has been a favoured destination for foreign direct investment since its economy opened up more than three decades ago. However, the country’s own investments abroad will soon overtake inflows. This is good for China and the rest of the world: China stands to make better returns on its foreign reserves while generating demand for its exports, while countries in need of investment can tap into a new and fast-growing source of funding.
How China exports its excess savings abroad will be a major theme driving flows into different countries and sectors. Continue reading »
It may never rival porcelain or Peking duck in popularity beyond China’s shores, but the “facekini” is being hailed by domestic newspapers as the country’s latest cultural gift to the world.
The recent publication by a New York-based style magazine, CR Fashion Book, of a photo shoot showing models wearing “pool masks” has prompted the Qingdao Evening News to claim the look as a foreign variation on a familiar theme in the north eastern seaside city.
“As soon as this photo shoot was published, the sharp-eyed among our netizens immediately recognised that this was none other than a ‘knock off’ of our Qingdao old woman’s ‘facekini’,” the newspaper said. Continue reading »
By Paul Hodges of International eChem
China’s July lending level of just Rmb 385bn ($62.6bn) has surprised financial markets, which were expecting an increase in stimulus. But bigger surprises may lie ahead.
The strong link between lending and passenger car sales suggests we may be about to see major changes in the world’s largest car market.
The key to forecasting China’s auto demand since 2008 has been the level of bank lending, as the chart below shows. Continue reading »
By Roy Williams of Vendigital
The latest wave of anti-trust investigations in China – first Qualcomm and now Microsoft and the ongoing criminal investigations involving GSK – is having an unsettling effect on global supply chains across a variety of industry sectors.
But instead of planning an exodus, Western businesses should avoid over reacting and focus on finding new, appropriate strategies that will allow them to stay and profit from doing business in the world’s fastest-growing consumer market.
Of course, any business thinking about shifting operations to China in order to gain access to its developing marketplace should do so with its eyes fully open. Businesses that go there simply seeking to profit from their exposure to the market will be unlikely to find that things run smoothly. Continue reading »