Do you like to work in a café like Starbucks or do you prefer staying in your cubical at the office? Today, fewer people are working in traditional offices, as most administrative work is either being automated or outsourced to cheaper markets, reducing the need for the in-house typing pools and IT services that once took up a lot of room. Young professionals, instead of being assigned to a desk, like to choose where they sit and work. The ideal place should be comfortable, with an open, cozy coffee-shop style. A boss-less office space is becoming increasingly popular.
China’s One Belt, One Road initiative is the fusion of two development schemes—the land-based Silk Road Economic Belt, and the 21st Century Maritime Silk Road. Together they comprise infrastructure between 65 countries containing 63% of the world population, more than 35% of global merchandise trade, and 30% of global GDP. To date about $ 150 billion in investment has been committed.
China’s digital economy is booming and creating more employment opportunities, the number of jobs created from this sector is far more than jobs that will be eliminated by technology in future. Alibaba, the e-commerce giant which has expanded into cloud computing, financial technology and media and entertainment, could account for as many as 29.4% job opportunities in China’s digital economy by 2035. In this edition of China Data, we bring you data about China’s domestic debt, clean energy, debt-for-equity swaps and more.
Seven years ago, around 70% of passengers in US-China air trips were American. But today, more than 50% of travelers are Chinese. Flying used to be a luxury mode for travel in China, but now is for the masses. Data shows that by 2029 China will overtake the US as the world’s largest passenger market. The increasing passenger demand has not only brought Chinese airlines big successes in the past decade but also some real challenges like lengthy delays and poor service. In fact, Chinese airlines are struggling to keep up with growth in demand, and compared to foreign counterparts, they are not as global nor as profitable as they should be.
The Spring 2017 issue of CKGSB Knowledge is out! It has articles and interviews like: COVER STORY: Made in China, For China: The Middle Kingdom seeks to replace foreign manufactures with domestically-produced goods CHINA DATA: From stats on ring roads and the car market, to bitcoin and bailouts, the numbers you need to know SNAPSHOT: The New Silk Roads: ‘One Belt […]
Chinese industrial economy still faces severe problem of overcapacity, according to the latest CKGSB survey of over 2,000 industrial firms nationwide. The survey, led by CKGSB Professor Gan Jie, shows a significant rise in product prices in the fourth quarter of 2016, posing worrying signs of inflation. The investment confidence also remains low: only 1% of the firms considered it a “good” time to make fixed investments, a mere 2% made expansionary investments and 9% of firms made fixed investments. However, given the government’s commitment, the BSI team remains optimistic about the long-term outlook of the Chinese economy.
Just a few years ago, China was a major obstacle to a global agreement on climate change. But the attitude of the government has changed, to the delight of all. But it will take more than good will to clean up and it will be a long time before the smog lifts. In this sense, the idea that China will be a ‘Green Leader’ anytime soon says more about how far they have to go than how far they have come. Yet in recognizing the problems and directing investments towards new technologies, China has stumbled upon a realistic expectation of leadership in the energy technologies of the low-carbon future.
Thirty years ago, there was such nationalist angst in the United States over Japanese buyouts of American companies that Hollywood even made a movie about it. In Ron Howard’s 1986 comedy Gung Ho, the fictional Assan Motors Corporation swoops in to buy an idled auto plant in a desperate Pennsylvania company town. The film was a comedy and of course ended with cooperation prevailing and the plant being saved. There is an obvious parallel with the situation today with the US agonizing over Chinese investments in a remarkably similar way to how it worried about Japanese takeovers in the 1980s.
The Chinese internet industry has developed at an amazing speed with a number of tech firms becoming “unicorns” worldwide. A major force behind those fast-growing companies and young CEOs is the venture capital firms who play a crucial role in spotting and supporting innovative models. Over the past 10 years, VC has evolved from a non-mainstream form of finance to one of the hottest areas in the Middle Kingdom. Ramon Zeng, with a number of successful investments in “unicorns”, talks about his observation of the industry and what the next big trend will be.
Huawei is one of only a few Chinese companies that has become truly global, deriving more revenue abroad than at home. Long a telecom equipment provider, Huawei shifted its focus to consumer devices and took only five years to become the second most profitable Android smartphone maker and the third largest in terms of production. How did the company manage to do that, given that the smartphone industry is highly competitive? And smartphones are only the highest-profile part of the sprawling telecom giant. With over 170,000 employees across the globe, what is the company’s management system like and what could we learn from Huawei’s model?
Chinese people love to try new technologies. Over the past year, virtual reality exploded across the country, attracting attention as well as investment from people who see a potential wave of the future: Analysts predict that China’s VR market will be worth $8.5 billion by 2020. But the real-world business of VR, which surged largely on the back of heavy investment, is less solid than it could be. Some people expect the technology to bring revolutionary changes to many industries like gaming, films and shopping but currently a huge portion of the VR market is still for video games and the business model is not yet solidly defined.
On the surface, digital publishing would seem to be at an early stage in China. Observers say that traditional publishers are not pushing e-editions of their books very hard, and until recently, the government, which is still the industry’s dominant shareholder, has not put its weight behind the format. Look more closely, however, it’s clear that a new publishing ecosystem is already taking shape in China, but it’s not the Amazon co-prosperity sphere model. Instead, digital publishing platforms are becoming the dominant channel for young writers.
Debt is a ticking-time bomb for the Chinese economy. In the past three years central government stopped local governments from financing through investment vehicles and set a cap for the issuance of bonds. But new forms of debt continue to be formed. Local officials appear not to care about borrowing more, as long as the money can be used in projects that may translate to political achievements. And with those achievements, officials will be promoted to a higher level–as will the debt burden. A more worrisome thought will be: can those additional government debts and investments support China’s long-term growth?
The rise of e-books and reading on digital devices has changed every part on the publishing production chain, affecting everyone from the editors, to the designers, to the marketing and sales people. Editors are spending more time on acquiring books and less time working on manuscripts. Designers become more flexible and strategic: they need to make sure a book won’t be ignored by skimmers who only glance at thumbnails on websites, and must ensure that texts are well-laid-out for reading on many kinds of mobile devices. But they’re not who need to change most. It’s the marketing and sales people who face an ever-more-challenging job.
Optimism for Chinese firms over the next six months still holds, but the corporate financing environment is getting difficult and the corporate inventory is increasing, according to the CKGSB Business Conditions Index, which registered 61.5 in February, a slight increase on January’s mark of 59.8. For CKGSBʼs sample of successful businesses operating in China, corporate sales index fell slightly from 82.7 to 80.5, while profits rose from 67.0 to 72.2, both are well above the confidence threshold of 50. Yet the other two sub-indices—corporate financing and in inventory—are below 50.
Over the past two years, the Big Five publisher’s share of the e-book market on Amazon has dropped from 43% to roughly 23%. Publishers Weekly’s Apple iBook Bestseller list also includes self-published authors: on the Feb. 17 list, three of the top ten best sellers were self-published. As these numbers suggest, digitalization is not just changing which books reach the market, but how they are put together. For writers, choosing independent publication is no longer the shameful last resort it once was, and for average writers, this path raises the odds of success from nil to slim.
Over the past year, the housing price in many Chinese cities has doubled. The property industry, which contributed to the economy’s growth, is now ‘hijacking’ China’s economic growth model. Instead of investing in real businesses, individuals and companies are betting on increasing property prices. In this interview, Professor Xu Chenggang talks about the government’s role in real estate regulation, the major challenges of pushing reforms in China and how state-owned enterprises and local governments should roll out these reforms.
After incredible growth in recent years, e-commerce in China seems to be slowing down. One reason behind this is the high penetration rate. By 2016, 62% people in Tier 3 and 4 cities were shopping online, while the number in Tier 1 and 2 cities stood at 89%. On the other hand, consumers in China have also changed over time, now the middle class are shifting their money from cheap products to premium services and goods where experience and recognition ties take priority. So does it mean online retail will go gloomy and physical stores may return to the spotlight?
China’s economic growth over the past few decades has impressed the world. But the world’s second largest economy now faces a difficult transformation: from relying on exports and investments to developing domestic demand. That’s not easy. Government-led stimulus is only a temporary solution and only looked reasonable in the first few years after the recent global financial crisis. In fact, the main problem facing the Chinese economy has been the weak demand in domestic market which manifested clearly in 2006, and became more obvious when growth slowed down.
Digitalization has changed book reading, book production and book marketing, and it may ultimately even change the nature of books. Amazon’s Kindle e-reader sold out in 5.5 hours after it was first released in November 2007 and remained out of stock until April 2008. All over the world, a similar shift has been underway—slower in markets where bookstores and book sales are regulated, such as France and Germany; faster in more open markets, such as China, where more than 2 million digital book titles are now available and nearly half of all books sold are sold online. Yet surprisingly, most book buyers still end up with print books.