In October, the CKGSB Business Conditions Index (BCI) dropped slightly from the worst reading to date in September, from 41.9 to 41.4. Although not quite as dramatic a decline as the previous month, the deterioration of conditions for doing business in China should not be underestimated. It shows that the majority of sampled companies, some of the most competitive private businesses in China, are pessimistic about their prospects for the next six months.
Sometimes, a major innovation starts at the top of a market and works down—think of Tesla’s electric sports car. Other times, as innovation theorist Clayton Christensen noted in The Innovator’s Dilemma, innovations bubble up from the bottom, beginning with a product that has limited functionality and seems at first like little more than a toy. That second uphill path has been the trajectory of the electric bicycle, which over the past 20 years has become an important mode of personal transportation in China and is now beginning to make inroads in the rest of the world.
What is the most important thing for a startup? Growing your business by focusing on the value to the customer is the answer given by Sean Ellis, founder and CEO of GrowthHackers, a service that helps 200,000 members with their growth strategy. According to Ellis, “growth hacking” is more than a buzzword in Silicon Valley—it’s a marketing strategy with actionable methods that prioritize business growth.
For nearly 50 years, most of the world’s oil has been bought and sold with US dollars. But that may be changing, as the energy exchange center in Shanghai has begun trading a yuan-denominated oil futures contract. Six months after the contract, more 10% of the world’s oil is now traded in yuan. Why are the Shanghai contracts so popular? Will the world enter a petrol-yuan era from petrol-dollar era? How will the situation evolve against the background of trade war between the two largest economies?
Cleaning up China’s poisoned air, water and soil and transforming its industry-dependent economy is a vast task, one that may need an investment of up to 620 billion per year—and government can only directly fund 10-15%. To achieve its ambitions, the government needs to attract investment from the financial sector, private companies, households and international investors. Green finance offers the opportunity and China has rapidly established itself as one of the biggest players in the global green finance movement. But how green are China’s green bonds? Many analysts argue that if you scratch under the Chinese system’s green veneer, it reveals a different color entirely.
Chinese millennials promise to reshape the global tourism industry. Unlike their parents’ generation, who preferred to travel abroad on Chinese-organized tour groups, today’s young Chinese are independent, individualistic and willing to try more adventurous vacations. This shift is opening up huge new opportunities for travel and tourism operators worldwide. They can now advertise directly to China’s 400 million children of the 1980s and 1990s, who often book their next trip online and on impulse. For operators able to target this group, the rewards can be spectacular. Chinese millennials already make more overseas trips than all American tourists combined.
Chinese auto startup Nio just had its $1 billion US initial public offering. While the share price fluctuates, investors ask the same question: will the Shanghai-based upstart supplant Tesla as the world’s top luxury electric car brand? Like Tesla, its cars offer sleek, space-age designs. It also has a flair for marketing stunts: in Nio’s case, setting the fastest lap ever recorded by an electric car at Germany’s Nürburgring. But Nio is offering cutting-edge technology at jaw-dropping prices. Its ES8, priced at RMB 448,000 ($70,000), costs only around half as much as a Tesla Model X does in China.
Americans are fond of saying that football is their true religion, but until recently it was little more than a source of mystery to the rest of the world. When the NFL held its first overseas game, in London in 1983, the organizers found that there were no regulation goalposts or scoreboards in the entire UK. Trying to take the game to China, therefore, sounds at first like a hopeless endeavor. But times are changing. London now hosts four regular-season NFL games per year to sellout crowds. Richard Young, Managing Director of NFL China, thinks that similar growth could soon be taking place in China.
The speed at which China has emerged as a major player in Southeast Asia is stunning. In 2000, total trade in goods between China and the 10 members of the Association of Southeast Asian Nations (ASEAN) was only $40 billion. By 2014, this had leaped to $480 billion, and is forecast to reach $1 trillion by 2020. Southeast Asia has become a strategic market for companies across the whole Chinese economy. Manufacturers are looking to offshore production in order to reduce labor costs, while tech companies are eyeing the region’s 633 million-strong consumer market as a new source of growth.
The era of Deng Xiaoping is over in China. We are now living in a new historical epoch: the era of Xi Jinping. That is the message of The Third Revolution, the new book by renowned China scholar Dr. Elizabeth Economy. This view is far from controversial within China; in fact, it is official party doctrine. But the fact that an academic of Dr. Economy’s standing is calling time on Dengism is significant. Over her career, she has proven a remarkably clear-sighted forecaster of where China is heading. In this interview, she explains why China analysts need to develop a new understanding of China’s development trajectory for the Xi era.