Adidas’s Yeezy sneakers designed by rapper Kanye West have been among the world’s best-selling footwear since they were released in 2015, and a pair of Yeezy Boost 350 V2s retails for up to $1,000 on most e-commerce sites. But on Alibaba’s Taobao site, the world’s largest online marketplace, vendors offer the same pair of sneakers for as little as RMB 300 ($45). That sounds too good to be true, and it is. They are counterfeits.
China’s economy seems to be slowing faster than the government would like, and US trade war tariffs are just one of the issues weighing down overall growth and threatening hopes for a choreographed and gradual deceleration. The last time this happened in 2008, Beijing responded with massive stimulus spending, thereby creating a debt mountain. This time, what should the economic planners do?
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.
On April 1st, 2017, the Chinese government announced the formation of a new special economic and development zone: the Xiong’an New Area. About 60 miles southwest of Beijing, in Hebei province, the area will combine the now relatively rural counties of Rongcheng, Anxin and Xiong. With an expected investment of $583 billion over the next 20 years in infrastructure alone, Xiong’an is set to transform from a largely agricultural and low-tech manufacturing region, into a high-tech, environmentally sustainable modern metropolis. It will also, according to the plan, alleviate some population pressures from Beijing while serving as a destination for some administrative departments, logistics bases and other government offices.
For foreigners, doing business in China is tempting but challenging. Aside from all the difficulties of language, culture and social conventions, the most difficult challenge is understanding local laws and regulations in order to proactively protect your company’s operations and assets. Dan Harris, an attorney at his Seattle-based law firm Harris Bricken, has been helping clients navigate China’s legal landscape for almost 15 years. Since 2006, he has co-authored the China Law Blog, which delivers practical knowledge of Chinese law as it impacts on business. In this interview, Harris discusses legal issues important to companies doing business in China, including compliance, corruption and IP protection.
Over the past year, the housing price in many Chinese cities has doubled. The property industry, which contributed to the economy’s growth, is now ‘hijacking’ China’s economic growth model. Instead of investing in real businesses, individuals and companies are betting on increasing property prices. In this interview, Professor Xu Chenggang talks about the government’s role in real estate regulation, the major challenges of pushing reforms in China and how state-owned enterprises and local governments should roll out these reforms.
On the morning of June 24, 2016, China woke up to witness an unexpected drama unfolding half a world away. The previous day, millions of UK citizens had voted on whether the UK should remain in the European Union, and all opinion polls, betting and market expectations pointed firmly towards ‘Remain.’ But as the early results came in, the startling prospect of Brexit became a reality. Some people think “Brexit has indeed diminished Beijing’s hopes of treating the UK as a strong advocate for China in the EU”, and there are another voices like “The Chinese… have other ways to penetrate the EU market, for example [through] Greece,” and in a sense they are both right. How will China and the UK’s “Golden Relationship” play out in the Post-Brexit era?
China’s desire to become an elite football nation is having an impact on and off the pitch. While the national football team still has no way to comfort their weary fans, the government has unveiled grand visions for the game’s development, exhibiting a desire for international prestige and a more consumption-based economy. Although observers say China Soccer League standards have improved, currently the men’s national team languishes 81st in FIFA’s rankings, below Zambia. In contrast to China’s success in many Olympic sports, where a top-down training model has yielded amazing results, football, as a team sport, is less suited to such a model. There is no quick fix.
China’s economy is facing many problems that are cyclical and also structural. Some economists believe China reached the Lewis Turning Point six years ago, where the growth benefits of rural-to-urban migration dried up and wage costs started to escalate. The growth of the Chinese economy relied very much on its cheap labor—a competitive advantage that has been exhausted. Simply put, “China has come to the end of the period of easy gains in GDP.” It faces two possible paths ahead: the hard road of structural reform and painful consolidation, and the easy road of fiscal and monetary stimulus leading inevitably to further problems along the way.
Doing business in China has never been easy for foreign-owned companies, but Uber has largely managed to avoid conflict by operating as a separate Chinese subsidiary, Uber China, on the mainland. However, Uber China still faces many challenges: competing with Didi, not being profitable, and even worse, its business has always been riding on a government regulation fence. In a market that is as challenging, and competitive as China’s, the answer to winning over China’s smartphone users lies deeper than just competitive pricing or partnerships.