Some introverts dread small talk and trying to get to know strangers. But like it or not, networking is necessary. Research has found that regions with higher numbers of contacts per capita were more resilient to economic shocks during the Great Recession. Today, as we embrace all the advances in communication–with more online discussion and less face time–questions over the efficiency of online networking are being raised. Yet the trend is irreversible, and what we need to do is find out a useful role for this new way of networking .
Fifteen years ago, pet ownership was seen as a pastime enjoyed only by the rich, but today more and more Chinese families are hosting fluffy friends. In China, 73.2% of pet owners fall into the 20–35-year-old category, meaning the vast majority of pet owners are not retired people who have spare time, but the young professionals who tend to be more generous on spending money on their pets—for their food, toy and spiritual needs. China’s pet economy is growing like never before, and the trend will only continue.
As people imagine the future of transportation, the first thing they think of is driverless cars. There are still many questions to consider, however, and not just at the level of personal safety. How will transportation networks adapt? What about laws and regulations? What will be the impact on logistics and employment? Many technology firms and automakers have had their prototypes, but none which could be commercialized for public use. Wu Gansha, a veteran engineer and former director of Intel Labs China, suggests a rapid way to commercialize driverless cars. He claims that the car produced by his startup will commercialize in two years.
Despite the periodic ferocity of China bears in recent years, Matthews Asia Investment Strategist Andy Rothman–who has been investing in consumer-facing companies in China for over 20 years–often refers to China as having the greatest consumer story. According to Rothman, this is not only because the real income (adjusted for inflation) in urban China has gone up by 120%, but also because Chinese people themselves are pretty optimistic about their futures. However, he also notes that one needs to be realistic: over the next ten years, real income growth is not going to be 130% and retail sales growth will continue to decelerate.
For most of human history, integrating a new generation into society has been pretty straightforward: The youngsters were shown what needed to be done, they did it as well as they could (or faced serious consequences if they didn’t), and, over time, earned a place for themselves in society. But things are different now. Executives all over the world have reported that they have difficulty not only managing this new generation but even understanding them. These young employees, their managers say, are responding differently from prior generations to everything, from assignments to incentives. Can managers cope with a new generation?
Some people think Chinese people and enterprises have not formed the habit of giving. Is it true? Although it is the world’s second largest economy and has the second largest number of billionaires, China ranks 144th out of 145 countries on the 2015 CAF World Giving Index, which measures engagement in charity and willingness to help strangers. It is also reported that China’s top 100 philanthropists gave $3.2 billion—which is less than the amount given by just the top three givers in America. But despite the disappointing numbers, there are reasons to believe philanthropy is on the rise, with an awakening of social awareness and increasingly new ways to give.
If you think ‘Made in China’ is always associated with cheap and low quality goods, think again. DJI—the first choice for any drone fan—is headquartered in Shenzhen and dominates 70% of the consumer drone market globally; Huawei, the telecommunication company that developed its first branded smartphone only five years ago, has already become the third largest player in the sector with a 9.4% market share worldwide, behind Samsung and Apple. In this interview, Doreen Wang, author of the BrandZ Top 30 Chinese Global Brand Builders report, makes sense of China’s “glocalized” brands and the bumpy roads they may face in the future.
While e-commerce giants like Amazon and Alibaba continue to rise, many physical-store retailers are dying off. MINISO is a rare exception, however. Founded in 2013 by Chinese entrepreneur Ye Guofu and Japanese designer Miyake Junya, MINISO has exploded into an emerging business empire with 1,800 stores in 40 countries, delivering an eclectic collection of affordable, curated goods, challenging the physical retail naysayers. What is the key to MINISO’s success? Through careful consideration of the customer and a unique aesthetic, it manages to do what online stores cannot: Deliver an experience.
At the enormous Pacific Department Store on Shanghai’s Huaihai Road, barriers block the street entrances and windows are shuttered. The store, which was one of the largest on one of the city’s busiest shopping streets for nearly two decades, closed in January. The shell of the store now sits incongruously opposite the K11 mall, which has been thriving ever since implementing a smart re-think of the shopping mall concept a couple of years ago. The lesson of the different fates of these two shopping centers is clear—adapt or die. Retail is not declining in China, it’s just changing.
Predicting China’s future is hard given its size, history and complexity of population, but it’s easy to share an opinion about the country—anybody can come in and say something about China, whether it’s news media or self-styled pundits. The cost of entry for having a view on China is so low that basically anybody can have one. The ongoing topic is the Chinese economy: bulls and bears have been arguing non-stop about the state of the economy. Damien Ma, Fellow of the Think Tank at the Chicago-based Paulson Institute, talks about how find the true signal in the noise, and discusses the less relevant factors one should dismiss.
Under the banner industrial policy “Made in China 2025”, China seeks to replace the advanced foreign manufactured goods that it has long relied upon with domestically-produced goods. But the effort is spooking the foreign business community, and the plan may not address China’s most genuine needs. Precise details of the implementation of the grand policy are only now beginning to emerge. For Chinese companies, the real long-term impact of the plan is at best unclear. But for foreign companies, although there will be business opportunities in the short-term, the plan as a whole presents big challenges to their future in China.
After Chinese President Xi Jinping took a strong stand in support of globalization, a clear line was drawn between him and US President Donald Trump. But China and the US are not swapping roles, said Martin Wolf, the chief economics commentator at the Financial Times and a long-time observer of the Chinese economy. Wolf suggested that China, despite its rapid growth and maturing economy, remains a developing country and will not take on the mantle that the US has in the post-war era. “People don’t know what the true nature of the so-called ‘Trumponomics’ is,” said Wolf in his interview with us.
Foreign Direct Investment has been an incredibly important catalyst for China’s economic development, bringing in the capital, technology and know-how that made China the world’s factory. But China is no longer so fresh and attractive to foreign investors as return on assets is falling. FDI to China increased 3.9% on the year to RMB 731.8 billion in the first 11 months of 2016—the 2015 expansion was 5.6%. Besides, increasing labor costs have become a heavy burden to foreign enterprises, especially manufacturers, who can cut costs by moving to Southeast Asia.
Chinese companies have been on a buying spree around the globe over the past two years. 2016 witnessed a record level of Chinese outbound mergers and acquisitions (M&A) activity, with 932 deals worth over $220 billion taking place, an increase of 246% compared to 2015, according to PwC China. However, the surge in outbound investments has brought concerns from both Chinese authorities and recipient countries; the latter are becoming more cautious regarding the presence of Chinese capital in large-scale deals in key industries. Affected by such concerns and tighter government scrutiny, the number of M&A deals might not be as numerous in 2017 as in 2016, but the trend will not stop.
Traditional offices are disappearing—some are being redesigned to be beautiful spaces that employees actually want to come to work in and meanwhile, humbler versions of the Silicon Valley spaces are increasingly popular too. This year, about 1 million people will work in a co-working space. In ten years, that number will top 1 billion. The co-working idea reflects the trend that companies keep trying to move more of their balance sheet from fixed to variable costs, and the supply of office-less workers keeps rising. So which vision of the future will win out—the palace or the co-working hive?
Fulfilling his campaign promise, US President Donald Trump took the United States out of the Trans-Pacific Partnership (TPP). With that failure, the spotlight has now fallen on the Regional Comprehensive Economic Partnership (RCEP), a proposed trade deal among 16 countries in the Asia Pacific region which is widely seen as a Chinese initiative and a way of pushing back against US influence in Asia. However, compared to TCC, the RCEP has a much narrower scope and labor, environment, IP, competition policy, issues screaming for attention will not be significantly discussed. Meanwhile, TPP is not completely down without the US: Strong incentives for the TPP or a “TPP-lite” will remain.
Management was never easy—“like herding cats,” as the old joke puts it—but in the old days, the cats were at least in the same alley. Today, management may be more challenging still, as executives must lead an ever-changing stream of employees and independent contractors—who may or may not be in the same building or even in the same city—as they navigate through an ever-changing technological landscape, and deliver on objectives that may also shift. So what are the positive and negative aspects of working remotely? How is the employee mindset and the management style of employers affected?
“Innovation” is difficult, yet the word itself is so overly used that the meaning of it has become hollow. Some people consider being “innovative” as being “lucky.” Yet for Clay Christensen, a business professor at Harvard, innovation is about finding the “jobs that need to be done” in our lives. In this interview with CKGSB Knowledge, he argues that companies should not take the task as akin to gambling. Instead, companies should adopt a more focused, process-oriented approach of finding the “jobs” that customers need to do in their lives, and then create products that make those jobs easier.
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.