By 2045, there will be nearly 350 million people in China aged over 65. The rapidly aging society is the legacy of a huge baby boom that was abruptly halted by the introduction of the one-child policy in 1979. Over the long term, this trend threatens to drag on economic growth. There were five Chinese taxpayers for every senior citizen in 2010; by 2030, there will be just two. But for businesses that stay ahead of the demographic curve, there will be big opportunities—another 200 million new customers. Slowly but surely, digitally-savvy seniors are changing the game for brands in China.
China posted its first overall quarterly current account deficit in 17 years in the second quarter of 2018 as growth in imports continues to outpace exports. Meanwhile, the value of Chinese domestic bonds held by overseas institutions has increased 68% in the past year and that means nearly 6% of Chinese government bonds are now held by foreign investors. Domestically, the number of lawsuits related to online music streaming in China leaped from 20 in 2014 to 535 in 2016 as providers try to enforce exclusive deals with artists. Find out the most important and interesting news here in the China Data section.
More domestic brands appearing on store shelves may indicate that the golden days for foreign brands are slipping away. “Made in China” was once considered a sign of cheapness and low-quality, but the belief now has changed. Chinese consumers now think that Chinese brands are equal to, or even exceed, foreign brands. As buyer confidence grows and domestic quality improves, what can multinational brands do to regain ascendancy?
Over the past five years, the business model of China’s clothing industry has been unraveling. For decades, China’s vast apparel industry competed mainly on price. But with labor, land and raw materials costs rising, environmental regulations tightening and competition becoming ever fiercer, even many of China’s best-known brands have struggled. There has been one exception: HLA. The Jiangsu Province-based menswear label has grown stronger even as competitors shuttered hundreds of outlets. In this interview, Li Lode, Professor of Operations Management at CKGSB and Professor Emeritus at Yale University, explains how HLA’s success has been made possible by smart strategic decisions.
Becoming a movie star isn’t attractive anymore. For many young netizens in China, online stardom is the ultimate dream, not only because online celebrities now earn even more than A-list movie stars, but also they are able to influence hundreds and thousands of people just by go livestreaming, sharing beauty tips and fashion trends and posting their own selfies. Consumer brands and clients are chasing after these online celebrities. Reports say the online celebrity economy by some calculations is worth more than the country’s domestic film industry. How to become an online star? How do they make money? What’s behind the rise of “wanghong culture”?
The first wave of Chinese entrepreneurs are now in their 70s and 80s and it’s time to hand over the family business to their children. But in many cases it may not happen. With greater opportunities and a more international worldview, the younger generation has their own plans. Will this lead China to a business succession crisis?
Forget e-commerce. In today’s China, the smartest businesses are moving the digital revolution into the offline world as the boundaries between online and offline become increasingly blurred. The integration of information technology into our daily lives is allowing companies to apply advanced big data techniques to transform a range of industries previously considered relatively impervious to digital disruption. For businesses across nearly every sector, the key to future success now lies in three areas: data, smart systems and the sharing economy.
As Donald Trump signed the memorandum proposing the introduction of tariffs on $50 billion of Chinese imports on March 22, 2018, the president of the United States quipped, “This is the first of many.” He didn’t go back on his words. No one seems to be a winner, but the trade war goes on and the entire world is paying close attention. Although both sides express willingness to have talks, can the trade war be stopped? What’s the future for US-China relations?
Cities across China are making huge investments in order to transform themselves into world-class innovation hubs. So far, the Pearl River Delta Greater region, led by Shenzhen, Guangzhou and Hong Kong, is the most promising area. Connected by high-speed railways and land bridges, barriers between Hong Kong and mainland have been removed. With Hong Kong as the financial hub, Shenzhen as the innovation center and Guangzhou as the long-term trade harbor, China’s “Greater Bay Area” is taking shape. Will the regional integration create a new innovation engine that China urgently needs?
China’s once-mighty industrial heartland in the Northeast, or Dongbei, has fallen on hard times in recent years. Could the key to its revival lie in the American Rust Belt experience? As happened in the US Rust Belt, firms in Dongbei, almost all state-owned, started to struggle in the 1980s. They have been in decline ever since, leaving local governments with a cluster of problems, including heavy industry pollution and high debt levels, which would be instantly recognizable to policymakers in Gary, Indiana, or Pittsburgh, Pennsylvania. Now that its counterparts in the West have now largely transcended the phase, what can Dongbei learn from the American rust belt’s experience?