Optimism for Chinese firms is increasing. As they’re making money, they also face different issues. The CKGSB Business Conditions Index posted a mark of 60.8 in November, up from October’s 58.5. This shows that for the survey’s sample firms, of which the majority is relatively successful in China, the next six months are viewed with increased optimism. The CKGSB BCI comprises four sub-indices. Of these, corporate sales fell slightly from 75.4 to 74.0, while corporate profits rose from 57.4 to 61.8. The fact that both of these indices are both well above the confidence threshold of 50 shows that company prospects are improving.
Over 120 million Chinese went abroad and spent over $104.5 billion in 2015 and more are projected for 2016. But for young Chinese people, their spending isn’t all about shopping in tax-free shops. As Leo Lin Song, chief of staff of TripAdvisor says, Chinese travelers are becoming more sophisticated: they’re reaching to further places and want to have more distinct cultural experience and not afraid to explore the unknown. Yet compared to western travelers, Chinese tourists are still special. They like to read pictures and need clear guidance—and that’s where TripAdvisor chips in.
A common challenge faced by Western tech giants like WeWork and Airbnb: in China there are locally made equivalents already. Yet China is a market hard to ignore. Six years after its founding, WeWork entered the Chinese market and is trying to adapt. Localization happens in every detail, from office design to the hiring of team members. but how will the company win the already very fierce competition among the co-working spaces in China? With a more global network, or a more experienced team in the shared-office? How will it deal with the Chinese government?
When talking about gender equality, people think of blue-collar workers in the garment industry in Bangladesh or women in China’s factories. However, in the white-collar professional world at the other end of the spectrum, inequality exists and it has an enormous impact on individual lives and entire economies. Women in China are now half of the educated workforce, but play a disproportionately small role in management. How does this happen? What should we do to make changes? Ripa Rashid, Executive Vice President of the Center for Talent Innovation, discusses women in emerging markets with CKGSB Knowledge, and gives her original observations and answers.
Although the quality of ‘made in China’ products has not been fully recognized in foreign markets, ‘made in China’ apps have made their way in the Google and Apple app stores. Chinese tech firms, under intense domestic market competition, are seeking new ways out of China. India, Brazil and Russia—emerging economies with young smartphones users—have become their new battleground. More mature firms have also begun to try to compete in developed markets in the US and Europe, where there is better infrastructure and users are willing to pay for premium services. But in these developed markets, Chinese tech firms face more challenges.
Inspired by the unicorn WeWork in the US, Chinese entrepreneurs have been starting their own co-working spaces. And renting a spot in a co-working space has become a popular option for startups. At the end of 2015, there were over 16,000 of these co-working spaces in China. Are they being formed because of real customer demand or just inflated by a startup bubble? Can they really save cost? What’s their future? How do they differ from US co-working spaces? Read our interview with Mao Daqing, CEO of URwork, the largest co-working space in China in terms of scale, to find the answers.
Central banking is not enough. While monetary policy did much to recover from the global financial crisis, its instruments have been largely exhausted and rendered ineffective. Low interest rates and quantitative easing may have kept the engine spinning, but are not pillars of sustainable economic policy. In China, there might still be scope for more monetary easing, but Mohamed El-Erian, chief economic advisor at financial services group Allianz and formerly at the helm of investment firm PIMCO, warns that, ‘‘China needs to avoid the trap that the advanced countries have fallen into, namely that of excessive prolonged reliance on central banks.’’
Wang Jianlin, Wanda’s CEO, the richest man in Asia once said, “Our goal is to make Wanda a brand like Walmart or IBM or Google, a brand known by everyone in the world, a brand from China.” Dalian Wanda, with assets of over $96 billion, has grown from a property company to a large conglomerate, and has its fingers in many pies: from real estate and retail to sports and entertainment. It is also leading a world-wide buying spree, acquiring top assets such as AMC Theatres, Legendary Pictures, World Triathlon Corporation, and Infront Sports & Media. While trying hard to diversify its business, real estate still takes the largest portion in its revenue structure. But how stable is Wanda empire’s future?
China’s corporate debt is rising fast, and is estimated to be between 145% and 170% of GDP, which is “very high by any measure,” according to the IMF. In most countries this would herald a wave of bankruptcies and be considered a lead indicator for an imminent correction. But in China, analysts are not so sure because the government has a high level of control and a low tolerance for slow growth. People also believe there will not be an imminent financial crisis because the government is the ultimate underwriter.
Chinese companies are buying football clubs and investing in sports companies all over the world, despite the fact that many of them had zero experience in sports before. Some investors think it’s a good opportunity to invest in the world-class sports assets when many of them are undervalued and cash-thirsty amid sluggish economic growth in Europe. But for Chinese buyers, there are both political and economic factors at play. The Chinese authority supports the buying, hoping that these overseas sports resources will help boost the domestic industry. But will they bring real changes and improve the performance of China’s national football team?