Economics/Business Part 5

Two China Tech Giants Join the $300B Club. Who’s Next?

July 20, 2017

  • In May 2017, Alibaba1 and Tencent2 exceeded $300 billion in market capitalization for the first time, placing these two Chinese tech companies in an elite group that, as of June 2017, only counts nine other companies globally among its members3. While this growth is exciting, it also begs the question: having reached such an enormous size, how much room is left for Alibaba and Tencent to grow? Surveying the globe for the next internet technology company with the right characteristics to join the $300B club, we believe that there could be a number of viable candidates in the China internet sector. For example, NetEase11 is a Chinese internet conglomerate that is lesser-known in the United States but is the second largest video game company in China12 (second only to Tencent) and was the seventh largest video game company in the world by revenue in 201613. While its market cap of $39.5 billion14 is about 9 times smaller than that of Alibaba and Tencent, NetEase’s net revenue rose 68% year over year in 201615, and it reached $5.7 billion in total sales in May 201716, only about 4 times less than the two Chinese tech leaders17.

Chinese brands have invaded Indonesia’s fast-growing smartphone market

Jul 20, 2017

  • A new report from IDC shows that smartphones sales in the country accelerated by 13 percent year-on-year during the first quarter of 2017. A total of 7.3 million devices shipped were shipped during the period in Indonesia, which has a population of 263 million. Indonesia has a lot in common with India in that phone sales are being shaped by aggressive Chinese brands entering the country. IDC found that Chinese companies accounted for 31 percent of the marketshare, up from 23 percent a year ago and 12 percent two years ago.

Reporter’s notebook: China’s shedding its copycat image with innovation after innovation

18 Jul 2017

  • China’s shift from a country that copies ideas from the West to a tech and innovation powerhouse is no longer an aspiration — it’s a fact. That was the repeated conclusion last week at one of Asia’s largest tech conferences. “China is changing from the so-called copycat nation to innovation nation,” Jing Ulrich, managing director and vice chairman of APAC at JPMorgan Chase, told audiences at the RISE conference in Hong Kong last week.

Fitch affirms China’s A+ rating with stable outlook

July 13, 2017

  • Fitch Ratings on Friday maintained its A+ rating on China with a stable outlook, citing the strength of the country’s external finances and macroeconomic record. Short-term growth prospects remain favorable, and economic policies have been effective in responding to an array of domestic and external pressures in the past year, Fitch said. In a Reuters poll of 65 economists, China’s economic growth is expected to reach 6.6 percent this year, topping the government’s target of around 6.5 percent.

Taiwan’s Top 100: Chinese brands gain as local tech brands falters

Jul 10, 2017

  • Its neighbour across the straits has far surpassed it by becoming a global economic behemoth and a leader in the in tech and digital space. The scenario can be best represented by homegrown brand HTC, once the poster child of Taiwan’s tech innovation. HTC continued its downward fall from the 129 to 193 this year in the country rankings. Contrast that with Xiaomi which rose from 490 to 148, as well as Huawei which had a dramatical lift from 697 to 340 over these two years. Maggie Tang, managing director, UM Taiwan, said HTC’s downfall was more related to its product quality rather than branding issues. “But we also see Chinese brands such as Oppo increasing its ad spend. It is obvious that Chinese brands are very interested in courting the Taiwanese consumers,” said Tang. To explain the enduring appeal of Chanel among Taiwanese consumers, Barbie Lin, managing director, ADK Taiwan, said the brand has concentrated its strategy on marking its OOH space at the most premium spots around Taipei such as Taipei 101, Jilin Road, Xinyi Road and Zhongxiao Road. “Chanel definitely enjoys a premium position in the eyes of the consumers but overall, it has been well-rounded in its approach. It has also yet to abandon traditional media like TV and magazines,” said Li.

Some 10,000 Chinese companies now operating in Africa, report says

July 10, 2017

  • Chinese companies are increasingly rooted in Africa, with estimated over 10,000 companies operating in the region — a number much bigger than in previously available data, according to a recent report by McKinsey & Company. The U.S. consultancy did fieldwork in eight African countries — Angola, Cote d’Ivoire, Ethiopia, Kenya, Nigeria, South Africa, Tanzania and Zambia — which consisted of interviewing people at Chinese companies. In the eight nations aggregated, the survey found, the number of Chinese-owned companies, totaling 4,821, is 3.7 times the number registered by the Chinese Ministry of Commerce. Extrapolated across the continent, this suggests there could be more than 10,000 Chinese-owned companies operating in Africa today, the report says.

Report: China Tops the World in Employment Performance

July 7, 2017

  • China outperformed other countries in employment, a major factor in the country’s rising competitiveness rating, which has risen to 18 this year, according to the latest yearbook issued by the Lausanne Institute for Management Development (IMD) in Switzerland. The performance gain was attributed to the priority employment has been given as the basis of inclusive growth, said Chinese Premier Li Keqiang at the 2017 Summer Davos Forum in Dalian, Northeast China’s Liaoning province.

China, U.S. Entrepreneurs Dominate World’s Young Billionaires List

July 7, 2017

  • It’s no secret that China’s growing wealth makes it a hub for billionaires, but Hurun’s latest “Global Under 40 & Self Made Rich List” puts it into perspective: according to the report, about 80 percent of the world’s entrepreneur billionaires are from the United States and China. Rupert Hoogewerf, chairman and chief researcher of Hurun Report, said in a statement, “That should be pretty scary for the rest of the world.” Leading the ranks in China at number nine, just behind Snapchat founder Evan Spiegel, is Wang Tao, founder of the world’s biggest drone maker DJI Technology who is also known as Frank Wang. The 37-year-old is worth US$4 billion, and his consumer drones are shipped all over the world.

How the humanities, not STEM, can lead Chinese students towards creative innovation

04 July, 2017

  • Elaine Tuttle Hansen is delighted to see bright students in the US from Hong Kong and mainland China choose rigorous non-STEM courses, as the flexible thinking they learn in humanities classes will fuel future creativity. Why am I excited that some of the world’s brightest pre-college students are pursuing rigorous non-STEM courses? Because future global citizens who study the humanities – including language, literature, history and philosophy – will be best prepared for success in a world that increasingly depends on innovation and creativity.

Overseas shoppers sustain Chinese e-commerce boom

July 3, 2017

  • According to a cross-border trade report jointly released by online payment provider Pay-Pal and research firm Ipsos, China rose to be the most popular cross-border e-commerce destination for the first time in 2016, dislodging the United States and the United Kingdom. Up to 21 percent of the 28,000 respondents from 32 countries said they had shopped on Chinese websites last year.

Moody’s thumbs-up gives AIIB global cred

June 30, 2017

  • The Asian Infrastructure Investment Bank earned a top-notch rating from Moody’s Investors Service thanks to factors such as a solid capital base and good management, an endorsement that should give the lender easier access to global bond markets. The Aaa rating with a stable outlook reflects “the strength of AIIB’s governance frameworks, including its policies on risk management, capital adequacy and liquidity,” the U.S.-based ratings agency wrote Thursday. With the highest credit rating, which came just a year and a half after its formation, the Beijing-led bank now stands shoulder to shoulder with more established international institutions such as the World Bank and the Asian Development Bank.

China Is About to Bury Elon Musk in Batteries

June 28, 2017

  • Chinese companies have plans for additional factories with the capacity to pump out more than 120 gigawatt-hours a year by 2021, according to a report published this week by Bloomberg Intelligence. That’s enough to supply batteries for around 1.5 million Tesla Model S vehicles or 13.7 million Toyota Prius Plug-in Hybrids per year, according to Bloomberg New Energy Finance. By comparison, when completed in 2018, Tesla Inc.’s Gigafactory will crank out up to 35 gigawatt-hours of battery cells annually.

Who’s the Tech Copycat Now?

June 26, 2017

  • The U.S. and other countries have seen a flurry of apps that are inspired by Meitu, the Chinese app that pretties up selfie photos. American startups are copying China’s fleets of on-demand bicycle rentals for getting around crowded cities. Apple and Facebook are trying to remold their messaging apps in the image of China’s ubiquitous WeChat. Before there was Tinder for hookups, there was similar dating app Momo in China. Every company that makes drones is following the lead of China’s SZ DJI Technology. The influence of Chinese tech in the world arguably started with telecommunications equipment company Huawei Technologies Co. It branched first into Europe and forced stodgy local rivals such as Sweden’s Ericsson and Alcatel-Lucent of France to cut prices and copy Huawei’s more advanced methods of updating older gear with fresh software. (Some European officials have said Huawei has benefited unfairly from Chinese government subsidies, a claim the company has denied.)

Nine Chinese firms among 50 Smartest Companies 2017


  • Nine Chinese firms have been listed in the prestigious 50 Smartest Companies 2017 released by the MIT Technology Review on Tuesday.

Chinese stocks could attract over $400 billion in flows, BlackRock says

28 Jun 2017

  • Chinese stocks could attract more than $400 billion in inflows once shares are fully included in widely followed MSCI indexes, the world’s largest asset manager BlackRock said on Wednesday.

Indians warm to Xiaomi, Vivo, Oppo, pushing Chinese brands to 51 per cent of market

26 June, 2017

  • Chinese smartphones are conquering India, with Lenovo, Oppo, Vivo and Xiaomi together making up more than half of the country’s sales in the first three months of the year, a tremendous jump from a mere 15 per cent a year earlier, according to a report by India Ratings & Research (Ind-Ra). China’s conquest of India’s market took less than a year, offering a sanctuary for Chinese brands amid razor thin profit margins due to excess competition and saturation at home. First-quarter shipments increased 15 per cent to 29 million smartphones from a year earlier in India, compared with the Chinese market’s tepid 1 per cent growth over the same period, according to data by Counterpoint.

Tesla looks to begin car manufacturing in China

Jun 24, 2017

  • Tesla is interested in opening a factory in China to begin building its all-electric vehicles in the country, the company revealed this week. But before fans of American manufacturing start getting worried, know that this isn’t about Tesla looking for a cheaper workforce or anything like that. Instead the car maker is looking to improve its appeal among buyers by making the vehicles more affordable for the local market.

How Li Ruigang, China’s ‘Rupert Murdoch’, is building a global media empire

23 June, 2017

  • China Media Capital (CMC), mainland China’s most influential media and entertainment investor, is no stranger to overseas investment and has the ambition to build a global business empire. Founded in 2009 by chairman and single largest shareholder Li Ruigang, dubbed China’s Rupert Murdoch, the company is the mainland’s first fund dedicated to media and entertainment investments in China and abroad.

China Has Nine Times More Millionaires than a Decade Ago: Survey


  • The number of high net worth individuals (HNWIs) in China has risen nearly nine times in the last decade, a private survey released on Tuesday showed, as strong growth in the world’s second-largest economy has spurred wealth creation. Chinese with at least 10 million yuan ($1.47 million) of investable assets hit 1.6 million in 2016, up from 180,000 in 2006, according to the 2017 China Private Wealth Report by Bain Consulting and China Merchants Bank. The overall value of the private wealth market increased to 165 trillion yuan in 2016, growing at 21 percent annually in 2014-2016.