China Economy Forum

[onebyone]

Alibaba CEO Jack Ma says China is shifting from exporting to importing and China is going to to be the world’s largest consumption place and that engine is going to drive the world economy.

Ma said this during Gateway ’17, the e-commerce giant’s biggest public event in the US, where he addressed 3,000 small business owners and urged them not only to import from China, but also to sell to China.

Back in January, Ma even told President Donald Trump that within five years Alibaba could create 1 million US jobs for small businesses that sell goods to Chinese consumers.

Looking at China’s balance of trade there do not seem to be any indications that China is shifting to become a net importer.

China middle class is growing and by 2030-2040 China’s middle class should fully materialize.

https://www.nextbigfuture.com/2017/...-consumption-driver-of-the-world-economy.html

 

[Bussard Ramjet]

China confronts its Lehman moment
Clay Chandler
1:09 AM ET
China's leaders are often praised for their steady management of the economy. But it is increasingly clear that they are haunted by the specter of a Lehman-style financial collapse.

On Thursday, we learned from a flurry of reports
Wall Street Journal, Financial Times and Bloomberg) that the China Banking Regulatory Commission has ordered the nation's largest lenders to conduct a sweeping reassessment of their exposure to four high-flying financial conglomerates: Anbang Insurance Group, HNA Group, Fosun International and Dalian Wanda Group.


The focus of the reviews, according to the reports, is to determine whether debts held by the four firms pose a "systemic risk" to China's financial system. News of the probes sent a chill through markets.

The composition of the CBRC's corporate "Gang of Four" speaks volumes. The companies are among China’s most flamboyant overseas acquirers. Together they have purchased nearly $57 billion worth of foreign assets over the past five years, more than 15% of total overseas investments by Chinese firms, according to Dealogic.

Anbang (whose chairman mysteriously disappeared this month and is presumed in the custody of Chinese graft inspectors) swallowed the Waldorf Astoria in 2014. HNA has secured a 10% stake in Deutsche Bank and and a 25% stake in the Hilton Hotel Group. Dalian Wanda Group snapped up AMC Entertainment Holdings, the world’s largest cinema operator, then bought Hollywood's Legendary Entertainment for $2.6 billion. Fosun owns Club Mediterranee and Cirque du Soleil.

The four conglomerates originated in different sectors, but their underlying business model is the same: cultivate powerful allies in the Communist Party; use those relationships to win regulatory and property concessions; gather investment from friends, family and other proxies of party elites into a murky, unregulated private holding company; borrow heavily from state-owed banks and other sources to finance prodigious growth plans; invest as aggressively as possible in stock and property overseas as a hedge against slower growth in China and the risk of a weaker Chinese currency.

The model afforded founders and their privileged backers an efficient way to exploit contradictions in China's capital control policies. Beijing remains unwilling to let the renminbi trade freely on global currency markets. At the same time, though, party leaders have declared that Chinese companies must "go global" and compete with Western multinationals.

For the past decade, large corporations like Anbang, HNA, Fosun and Wanda were permitted—and even encouraged—to invest billions overseas. As long as they stayed in the good graces of the party elite and could plausibly portray their investments as being in the national interest, regulators mostly turned a blind eye to who owned what, what they were buying and how they were funding their expansion.

No more. As China's growth show signs of cooling and the Communist Party prepares for its all-important 19th Congress, a cadre of reformers led by CBRC chairman Guo Shuqing is warning that these swashbuckling global buyers aren't national champions but lightning rods for financial risk.


In April, Beijing finally moved to clean up the cowboy culture of China's insurance industry, sacking the nation's top insurance regulator and restricting the ability of insurers like Anbang and Fosun to finance speculative global acquisitions by selling short-term, high-yield universal life insurance products at home.

But regulators have been slower to deal with soaring corporate debts levels. The Gang of Four is highly leveraged. The fact that their parent companies are unlisted means they have few disclosure requirements. But it also means they face higher borrowing costs. Many have put up their own shares or stock of companies they own as collateral for their loans and are increasingly copying the convoluted fund-raising strategies employed by American hedge funds and private equity firms in financing their global expansion drives. Should the value of those stocks fall, the companies could find themselves obliged to sell off shares to meet margin calls.

Containing the contagion could prove a tricky business. Here's hoping that in trying to head off China's Lehman moment, China's policymakers don't hasten its arrival.

http://fortune.com/2017/06/25/china-confronts-its-lehman-moment/

 

[Bussard Ramjet]

http://www.scmp.com/news/china/poli...it-report-reveals-chinas-economic-fault-lines

 

[Han Patriot]

http://www.scmp.com/news/china/poli...it-report-reveals-chinas-economic-fault-lines

I used to think you have some substance, but you are just another troll. Btw, when are you having that debate on quantum science again? LOL

 

[onebyone]

China continues to have an economy that is growing at about 6 to 6.5% over the next three years and about 5-6% for a few years afterward. China’s middle and affluent classes continue to grow. This has and will continue to see a growing insurance and financial market. China is shifting from family and village support to insurance and other developed approaches.

China’s health and life insurance markets will more than double by 2030. It will likely double by about 2026 from 2017 levels.

The Chinese insurance market has grown at a furious pace in recent years. Between 2000 and 2014, the industry grew about 1,200% in size as measured by written premiums.

China’s top for insurance companies are:

1. China Life maintains a substantial nationwide service network, with nearly 750,000 dedicated agents and more than 60,000 service outlets. In 2015, China Life’s customer base approached a combined 200 million people in individual and group life insurance policies, long-term health insurance policies and annuities. China Life has 70% government ownership.

2. Ping An employs more than 225,000 full-time employees and partners with more than 625,000 sales agents across China. In 2015, Ping an had 89 million customers across its business units. In 2017, China’s Ping An Insurance Group ranks first among insurers in Forbes global 2000, moving up from overall spot #20 last year to #16 on this year’s list. Over the 12 months to April 7, when Global 2000 data was locked in, Ping An generated $106.6 billion in revenue, $9.5 billion in profits and its market capitalization stood at $100.8 billion. The tech-driven company boasted of 131 million customers at year-end 2016, up 20% from the beginning of the year, with nearly a quarter of the newcomers coming in online.

and health care-technology investments in the $10 million to $30 million range.

The insurer has long focused on technology as the backbone of its business, backing companies like Chinese online lender Lufax and developing mobile health apps such as Good Doctor, through which users can consult physicians.

Ping An “is going to be a data business,” Mr. Larsen said, noting that the company has 20,000 tech developers and platforms that run on blockchain and research in voice and facial recognition.

In 1994, Morgan Stanley and Goldman Sachs had bought into Ping An, but that the percentage ownership has changed. The various ownership has stayed financially sophisticated.

3. China Pacific Insurance Group is an integrated insurance provider offering property and casualty insurance, life insurance and reinsurance products, as well as asset management and investment services. The company counts more than 300,000 agents across its businesses and serves about 80 million customers across the country.

4. People’s Insurance Company of China Group was established in 1949. Today, its subsidiaries count more than 300 million customers in property and casualty insurance, life insurance, health insurance, and real estate.

https://www.nextbigfuture.com/2017/07/future-china-insurance-market-to-2030.html

 

[Jlaw]

Insurance industry is a fraud . Ponzi scheme reinvented.

 

[powastick]

Yep, no incentive to make medicine cheap when companies will claim to the max. Biggest defaulters are the poor.

 

[cirr]

Don't tell me we will be back growing 7% plus in a couple of years when the rebalancing and restructuring of the economy is done.

Growth set to reach 6.8 to 6.9%

2017-07-06 08:37

China Daily Editor: Wang Fan

A worker at a steel plant in Dalian, Liaoning province. (Photo by Liu Debin/For China Daily)

National Bureau of Statistics official sees fast expansion in H1

China's economic growth could reach 6.8 or 6.9 percent in the first half of this year, a senior national statistics bureau official said on Wednesday.

"China is expected to achieve relatively fast GDP growth of 6.8 or 6.9 percent in the first half of this year," said Pan Jiancheng, deputy head of the China Economic Monitoring & Analysis Bureau of Statistics, which is affiliated to the National Bureau of Statistics.

China's growth was "better than expected and more optimized in structure" in the first six months, featuring improving indicators, increasing jobs, stable prices and a sound balance of international payments, Pan told the Chinese-language Securities Times newspaper.

He said industrial output growth was on the rise and consumption has become a major pillar of growth, indicating that the economy's inherent growth momentum is strengthening.

China's GDP expanded at higher-than-expected 6.9 percent year-on-year in the first quarter. The NBS is scheduled to release the second-quarter GDP growth on July 17.

Lian Ping, chief economist of Bank of Communications, predicted on Wednesday that China's second-quarter year-on-year GDP growth may stand at 6.8 percent and gradually ease to 6.7 percent and 6.6 percent in the third and fourth quarter, respectively.

Despite the growth moderation, Lian told an economic forum that there is little possibility that China's economy will suffer a hard landing this year, due to the nation's supportive macroeconomic policies, improved exports, and tightened financial regulation that is set to drive capital into manufacturing and other non-financial sectors.

Pan from the NBS said that growth in the second half of this year may ease due to the higher base of growth in the same period of 2016, possible weakening of the real estate sector and changes in the international trade environment, but there should be no doubt that the country would meet its growth target of "around 6.5 percent" for this year.

Despite its stable growth prospects, China faces some challenges, Pan said.

Although local governments have adopted various price control measures to prevent home prices from continuing to rise in major cities, expectations of further rising prices, especially in smaller cities, remain strong, which has led to increased real estate investment, he said. Since it is mainly financed by bank loans, such investment may raise the level of leverage and increase risks for the financial sector, he warned.

Meanwhile, growth in China's service sector weakened in June, according to the results of a key private survey released on Wednesday.

The Caixin/Markit services purchasing managers index (PMI) dropped to 51.6 in June from 52.8 in May, but remained above the line of 50 that demarcates expansion and contraction.

Pan from the NBS said that China's service sector remains stable at high levels and provides solid support for the country's overall economic stability.

http://www.ecns.cn/business/2017/07-06/264185.shtml

 

[AViet]

Congratulation China.

 

[Raphael]

We are an economic oasis of stability, in a turbulent global economy caught in turmoil. Hope it stays that way.

 

[Jlaw]

I'm willing to accept 4.5% growth if China start war and drive the Indians out of Chinese land. Take some Indian land as compensation for war

 

[cirr]

Electronics exports return to growth

2017-07-07 09:44

Shanghai Daily Editor: Huang Mingrui

China's electronics exports rebounded to an annual growth rate of 12.5 percent in the first five months, compared with a 3.6 percent fall a year earlier, the industry regulator said yesterday.

The manufacture of consumer electronics such as smartphones and TVs maintained steady growth while production of integrated circuits surged more than 25 percent, said the Ministry of Industry and Information Technology.

In the first five months, the growth in electronics manufacturing reached 13.9 percent, up 4.9 percentage points from a year ago. The ministry gave no value for exports and production, only percentages.

"The electronics manufacturing and export sector has become better and healthier, with increased volumes and improved profitability," the ministry said.

China produced 564 million smartphones in the first five months, a 7.5 percent growth year on year.

Huawei, Oppo and Vivo have become top five global smartphone vendors behind Samsung and Apple. They have also expanded overseas, which boosted manufacturing and exports.

Other products such as personal computer sand TV also maintained "steady" growth in the period. The integrated circuit sector soared 25.1 percent from a year earlier.

http://www.ecns.cn/business/2017/07-07/264416.shtml

 

[Bussard Ramjet]

https://www.economist.com/news/asia...ruggle-make-money-out-rare-growth-sector-peak

So we have, tomb and casket services flourishing in Japan.

This happens when the population ages, and starts to decline.

Fresh, revolutionary products are only created when the demand of the young is met.

China is doing a BIG blunder by going on a demographic path similar to Japan.

 

[antonius123]

https://www.economist.com/news/asia...ruggle-make-money-out-rare-growth-sector-peak

So we have, tomb and casket services flourishing in Japan.

This happens when the population ages, and starts to decline.

Fresh, revolutionary products are only created when the demand of the young is met.

China is doing a BIG blunder by going on a demographic path similar to Japan.

Dont forget: Made in China 2025, industries will be driven by robots, AI, and smart manufacturing, where the demand of workforce will drop drastically.

 

[Han Patriot]

Dont forget: Made in China 2025, industries will be driven by robots, AI, and smart manufacturing, where the demand of workforce will drop drastically.

He doesn't see the incoming threat of automation and robotics.