It’s a comeback story worthy of a Hollywood blockbuster. Three years ago, China’s once all-powerful liquor maker Kweichow Moutai looked to be on the ropes. President Xi Jinping’s anti-corruption campaign had dealt a vicious blow to the country’s most famous spirit brand—for years a staple on every government banquet table—and the company’s profits and share price had taken a hammering. By January 2014, Moutai’s shares were worth just over RMB 119 ($18.31) per share—a fall of 50% in 14 months. With no end to the crackdown in sight, some questioned whether the legendary distiller would ever recover.
As the world’s most populous country, China should have the potential to become the world’s most profitable music market, yet it is far away from that—China was the 12th largest market in 2016, with $202 million in revenue compared to the US’s No.1 ranking of $5.3 billion. But there are important differences in the way music is consumed that may give China a business edge. Led by internet firms like Tencent, China has adjusted to the digital future of music more quickly, with a whopping 96% of music revenue from digital releases and 75% of that number coming from streaming sales.
China has been involved in Africa for decades, with total investments reaching $3.5 trillion by the end of 2015, nearly seven times the 2007 amount. Over 10,000 Chinese firms are operating there, handling 12% of Africa’s industrial production. Now, in addition to the traditional large construction projects, Chinese firms are also getting involved in retail markets like smartphone and home appliances. As China’s momentum in Africa has picked up, so too has the need to expand beyond economic involvement. A key event happened in July 2017, when China dispatched military personnel to set up its first overseas base in Djibouti, the small but strategically-placed country on the Gulf of Aden.
Like its whole economy, China’s auto market grew at breakneck pace in the 2000s, and while it is slowing down, it still contains enormous potential in terms of both raw sales and innovation as China shifts toward electric. The Chinese government is actively promoting new-energy vehicles, offering subsidies that amount to about 23% of the price of a vehicle. And consumers, many of whom no longer consider car ownership as a status symbol, are more willing to buy electric cars. Yet despite favorable policies and growing market demand, there are challenges ahead: lack of power stations, fragmented manufacturing of power batteries and insufficient innovation.
When talking about the Chinese wine market, most Westerners think of baijiu, a strong alcoholic beverage made from grain. But young Chinese have now developed their taste for various non-Chinese wines—red, white and sparkling—and wine can be found at parties, banquets and even dinners serving strongly-flavored Chinese foods, such as hotpot. Claudia Masüger, a businesswoman from Switzerland who has been importing wines to China for over a decade, says the Chinese are becoming more sophisticated in their taste for wine, caring not just for wines, but for pairing food with the right variety of wine. Furthermore, the market for western wine in China is even larger than imagined.
Chinese tech giant Tencent surpassed Facebook in market value this November, and is the first Asian company worth more than $500 million. Unlike Facebook, which earns 97% of its revenue from advertising, online advertising only represents 16.9% of Tencent’s revenue, according to the company’s Q3 2017 report–lagging behind domestic competitors like Alibaba in terms of ads gain. Determined now to gain a larger slice of the digital advertising market, Tencent focuses on improving targeting and algorithms to intensify ads on its ubiquitous platform WeChat while not undermining the user experience, as well as leveraging opportunities in the company’s other products and services, including mobile games.
What does it mean to have a mind? What is the nature of intelligence? Such questions have motivated Brian Christian, a computer scientist who holds a philosophy degree. He has been studying the gaps and overlaps between humans and machines, and investigated dehumanized communication as a result of increasing machine interactions in his bestseller The Most Human Human. In his second book, Algorithms to Live By, co-authored with cognitive scientist Tom Griffiths, he says that computer science actually gives us a way of thinking in new terms about what it means to be rational.
Are smartphones making us smarter? Bosses are especially concerned about this at the workplace because people check their phones as often as 150 times a day–meaning we may be distracted more than 50% of the time at work and have lower productivity. However, our devices are good for relationship building, and having a good friend at work tends to extend an employee’s stay at a job. In addition, smartphone use helps ensure that the workday never really ends and work time can extend into evenings and weekends. This could be both good and bad news because long hours can translate into lower productivity and, eventually, illness.
In the summer of 2017, MSCI finally agreed to include China mainland stocks in its global benchmark equities indices. The decision means Chinese stocks will become a must-have part of many investor’s portfolios. Indeed, it’s a big opportunity for foreign investors, but the risk management is tricky in many regards. For one thing, speculative mom-pop retail investors have been dominating the Chinese stock market and for another, the state-owned firms have intervened in the trading market to a worrying degree. How will the market change and what can investors expect from this volatile yet promising market?
How do big multinational companies innovate? According to Kapil Kane, Director of Innovation at Intel China, there are three ways: partnership, acquisition and in-house development. The problem with the last of these is that in-house R&D laboratories may be good at invention but not at innovation—that is, finding new uses for, or making improvements to, existing products and processes. Kane aims to fix this at Intel China with his Ideas2Reality (I2R), a startup program nested inside Intel’s China operation that encourages employees to submit ideas, which are vetted, incubated and accelerated using the same principles used by leading Silicon Valley accelerators like Y Combinator.