After meeting with Chinese President Xi Jinping this year, Donald Trump backtracked and dropped his accusation of China being a currency manipulator. But the issue of currency manipulation is still debatable. The RMB is certainly not a free-floating currency and the controls are complex. China’s central bank sets the daily rate with movements only allowed in a narrow 2% band. This did not change for years, until August 2015 when the central bank reformed a bit by beginning to set the daily RMB rates based on the closing value of the previous day’s interbank forex market. But it’s not considered a major change and the way to achieve a more open currency remains difficult.
Back in 2014, Stephen Hawking warned that people should be careful about artificial intelligence (AI)—the full development of it could spell the end of the human race, he said. Brad Nelson, professor of robotics and intelligent systems at ETH Zürich, is optimistic about the technology’s development. To him, machines and robotics are augmenting instead of replacing the human workforce. In this interview with CKGSB Knowledge, Nelson talks about the state of AI so far, China’s advantages in this industry and, as an engineer, his insights into the relation between humans and machines.
China’s property market was virtually non-existent 25 years ago, but it is now one of the most critical pillars in this country and the source of incredible wealth for many of China’s citizens. Last year property prices in China’s tier one cities made another gravity-defying leap last year. By September, new home prices had jumped 27.8% in Beijing, 32.7% in Shanghai and a meteoric 34.1% in Shenzhen year-on-year. The health of this pillar remains a top concern of the government and citizens alike. But is there a looming crisis? In the near term, the answer seems to be no.
China’s business world is littered with rags-to-riches entrepreneurs—Jack Ma, chairman of Alibaba Group, was an English teacher before starting Alibaba. Not all such magnates are equal, however, and joining Ma in the upper echelons of China’s rich list was Wang Wei, chairman of delivery and logistics company SF Express, who initially started out by lugging packages between Hong Kong and mainland China, operating in a legal gray zone as he did so. But now SF Express has grown to become the most successful logistics company in China. Listed in Shenzhen Stock Exchange in early 2017, the company has many competitive advantages over its counterparts.
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.
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.
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.
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.