Chinese Economics Thread

[Jura The idiot]

now I read
China’s car-hailing giant Didi faces fierce rivalry
2018-05-12 13:22 GMT+8

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After merging with Uber’s China business in 2016, Didi Chuxing has become China’s undisputed ride-hailing giant. Now the road is much bumpier as new players and competitors have emerged. One of the newest players is Meituan-Dianping, China’s leading online lifestyle platform.

While Didi offers more options at different prices, including express, taxi, luxury and premier cars, Meituan offers only taxi and express cars. For express cars, the two platforms charge passengers similar prices for an equivalent distance.

The real benefit is for drivers right now, as a new car-hailing platform always means lower commission fees.

Mr. Yu, a Meituan driver, told CGTN that he can make about 800 yuan a day if he drives for about 10 hours on Meituan. It is much more than he earned before on Didi, because Meituan does not charge commission for the first three months, meaning drivers can keep all of their earnings.

After the first three months, drivers will be charged 8-percent commission fees, which is lower than the 20 percent charged by Didi.

After a one-week rollout that waived its drivers’ commission fees in Shanghai, Meituan declared that it had acquired a third of the city’s market share.

Lu Weijia, the PR director of Meituan’s car-hailing business, told CGTN that Meituan doesn’t advocate the strategy of engaging in a price war. They hope all companies can do business in a fair market. And Meituan doesn’t focus only on its car-hailing service, Lu claimed, but is hoping to enable an easy transition from car-hailing to food, restaurant and movies within the app, offering a great experience for consumers.

In addition to Meituan, the vast market potential is attracting new players to jump on the bandwagon, including Ctrip, China's leading online travel service provider, and Gaode map, a location and navigation service provider.

At its latest news briefing in late April, the Ministry of Transport warned that car-hailing platforms should stop over-subsidization and prevent illegal operations.

Wu Chungeng, the spokesman from the Ministry of Transport, said that previous market experience has shown that over-subsidization and a price war is not sustainable. These strategies will cost too much for companies and harm consumer interests. At the same time, it will lead to many fake orders and illegal rides, which will seriously affect the market environment.

Transport officials say they will intensify investigations and punish those who violate regulations.

Consumers are welcoming these platforms as they have more commuting options. But with more options on the table come more expectations.

Ms. Yu, a heavy user of car-hailing apps, told CGTN that what she cares most are lower price, shorter waiting time and safer experience.

 

[Jura The idiot]

now I read
Chinese game live-streaming site Huya makes NYSE debut
Xinhua | 2018-05-12 07:03:22

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Huya, a Chinese live-streaming platform for video games and e-sports, rang the New York Stock Exchange (NYSE) opening bell on Friday in celebration of its initial public offering (IPO).

Huya, trading under the ticker symbol of "HUYA", priced its IPO of 15,000,000 American depository shares (ADSs), at 12.00 U.S. dollars per ADS for a total offering size of approximately 180 million dollars, assuming the underwriters do not exercise their option to purchase additional ADSs.

Credit Suisse, Goldman Sachs (Asia) and UBS investment bank are the joint book runners on the deal.

Dong Rongjie, CEO of Huya, told Xinhua on Friday that the IPO on the NYSE marks a brand-new development stage for the company.

"I think the move will help us expand the market overseas and inspire our team to develop more innovative products as well," he said.

Huya started trading at 15.50 dollars per share on Friday, climbing 29.17 percent from its pricing, and was traded at 16.30 dollars apiece around midday.

Dong noted that the money raised will be used in further investing in live-streaming game and e-sports.

Huya reported net revenue of about 336 million U.S. dollars in 2017, driven mainly by live-streaming services and advertising.

The company said that by the end of last year, it had average monthly active users of over 86 million, with each mobile user spending about 99 minutes on average on the platform each day.

China has become the world's largest games market in terms of revenues and gamers, according to consultancy Frost & Sullivan Research. The country is also home to the world's largest active user base of live streaming, according to Huya's filing.

 

[Dolcevita]

Good summary of Premier Li Keqiang visit to Japan. For the benefit of both nations.

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[Dolcevita]

Now the Thaw. Hakuhodo is largest marketing consulting firm in Japan, This will be a treasure trove for Japanese companies targeting the Chinese Market.

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Baidu lets corporate Japan read Chinese consumers' minds
Internet group's vast trove of data to be mined for insight into huge market
Nikkei staff writers May 14, 2018 05:43 JST

TOKYO --

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, the Google of the Chinese internet, will offer its services to help Japanese companies place online advertisements more effectively and develop products that appeal to inbound tourists.

Baidu's Japanese arm will draw on the group's search engine, used 10 billion times a day, and its network of 17 million consumer monitors, one of China's biggest pools for surveys.

Foreign multinationals looking to do market research in China face difficulty assembling surveys bigger than several hundred thousand participants. Such companies must navigate strict regulations on the Chinese internet as well, further hampering survey efforts. The larger the pool of monitors, the better that marketing teams can target surveys to particular market segments.


Baidu also will partner with Tokyo-based ad agency Hakuhodo to provide marketing support for Japanese companies doing business in China. Hakuhodo possesses 18 years of data on Chinese consumers that will be combined with Baidu's search data to analyze consumer preferences in order to create more effective ads.

Baidu holds a share of over 80% in China's search market, allowing the company to collect an unparalleled amount of data on what Chinese residents shop for online. Hakuhodo's data includes Chinese consumers' brand preferences as well as internet and television habits. Hakuhodo is part of

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.

 

[Jura The idiot]

now I read
China raises minimum standard of basic pensions
Xinhua| 2018-05-14 20:40:59

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China has raised the minimum standard of basic pensions for rural residents and unemployed urbanites, according to the Ministry of Human Resources and Social Security.

The standard was increased to 88 yuan (about 14 U.S. dollars) per person per month from the previous level of 70 yuan, effective on Jan. 1, 2018, the ministry said in a statement.

The adjustment was made in line with income growth, inflation and changes of basic pensions for urban employees, the statement said, quoting a ministry official.

The central government will fully fund the upward adjustment in the mid-west regions and cover half of the expenditure for the raise in the more developed eastern areas.

By the end of 2017, 513 million rural residents and unemployed urban dwellers were covered by the basic pension scheme, with a monthly average payment per person of 125 yuan, according to the statement.

China had seperate pension schemes for rural residents and unemployed urbanites until 2014 when the two schemes were unified as part of efforts to bridge the rural-urban wealth gap.

 

[Jura The idiot]

Apr 28, 2018

now I read
China further opens banking, insurance sectors
2018-04-28 03:00:56

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now
Economic Watch: Wider opening-up a strategic choice for China
Xinhua| 2018-05-14 15:44:19

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Wider opening-up is a strategic choice for China as the country shifts its growth model to pursue high-quality development, experts said.

China recently announced a series of opening-up measures including allowing foreign brokers to hold a majority stake in securities joint ventures.

Following the announcement of the measures, foreign investors are racing to expand their presence, with big names including J.P. Morgan and Nomura applying to set up holding firms in the country.

Attracting foreign investment is very much in line with China's supply-side structural reform, which calls for higher-quality resources, said Yang Changyong, a senior researcher from the Chinese Academy of Macroeconomic Research.

Since China began reform and opening-up four decades ago, foreign investment has created an important boost for economic growth.

Foreign direct investment (FDI) in the Chinese mainland rose 7.9 percent to reach 878 billion yuan (138.6 billion U.S. dollars) in 2017, an all-time high, official data showed.

As China transitions from high-speed growth to high-quality development, the quality of foreign investment should also be improved, Yang said.

The service sector, which accounts for an increasing share of the economy, has much potential for further opening-up, as China could make good use of foreign expertise in areas including healthcare and education, according to Yang.

Easing foreign equity restrictions in manufacturing sectors such as automobiles and aircraft is also in accordance with the country's goal to optimize resource allocation and increase the supply of high-quality goods, he said.

To attract more high-quality investment, China should create a more encouraging environment, with mechanisms such as the negative list approach to be pushed forward, he said.

China has also pledged to enhance the protection of intellectual property rights, a voluntary step taken in accordance with its commitment to the World Trade Organization (WTO) and aimed at improving the socialist market economy, Yang said.

Expanding imports, another key policy initiative in the country's opening-up pledge, is the right choice for China as it aligns with the trend of consumption upgrading, according to Li Dawei, a researcher with the Chinese Academy of Macroeconomic Research.

As people's incomes increase, the demand for healthy food, healthcare products, and creative cultural goods is showing rapid growth, and imports in these fields will meet such demands, Li said.

The expansion of imports of production factors including advanced equipment and energy resources will improve the country's production efficiency, Li said.

The implementation of such policies requires multilateral cooperation, according to Li. On one hand, China could further cut import tariffs on goods including automobiles, drugs, and cosmetics in accordance with WTO rules.

On the other hand, countries around the world, especially developed economies, should ease restrictions on high-tech exports to China, so that they can grab a share of the world's most promising market, Li said.

 

[Dolcevita]

Updated analysis of Wuhan Meeting. Non-Western View.

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By

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– May 2, 2018

The anxiety syndrome in the American write-ups on the Wuhan summit is truly tragi-comic. An

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even before the summit between Prime Minister Narendra Modi and Chinese President Xi Jinping that the event was much ado about nothing. The US government-funded

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has now arrived at the same conclusion, after the summit. Why are these American analysts in such tearing hurry to debunk the Wuhan meeting?
It’s geopolitics, stupid! The prestigious Stockholm International Peace Research Institute (SIPRI) released a report today which says amongst other things that India’s defence spending rose by 5.5 per cent to US$63.9 billion in 2017, overtaking that of France as one of the world’s top five military spenders. The report estimates that one of the main motivations behind India’s plans to expand, modernise and enhance the operational capability of its armed forces lies in its tense relations with China.
From the US perspective, the situation is ideal to advance the business interests of America’s vendors of weaponry. Last year, business deals worth $15 billion were chalked up. Any improvement in India-China relations will profoundly hurt American interests. Fueling India-China tensions is a major objective of the US’ regional strategy.
Alas, there are Indians too who are eagerly serving the US interests. A prominent Chinese expert on South Asia recently wrote (in the context of the Wuhan meeting), “Many strategic elites in India are financially backed by the West and hence speak for Western countries.” It is a national shame, but true.
Be that as it may, these guys are missing the plot. Prime Minister Modi’s recent decisions to improve India-China relations, adjust India’s neighborhood policies and to rebalance India’s ties with the major powers are linked to his political agenda. Of course, the good part is that this agenda is also in the national interests.
Take India-China relations. The Voice of America is stupid to assume that the Wuhan meeting was about border tensions. No doubt, it is important that peace and tranquility prevails on the border with China. The Doklam standoff was an eye-opener for the political leadership. Hence the “strategic guidance” to the military issued from Wuhan (which is actually an order from the civilian leadership to the generals) to defuse confrontations during patrols in accordance with existing protocols and mechanisms. The military people may not like it, but that’s how a democracy prioritizes butter over guns.
Clearly, Modi’s top priority is about Chinese investments in India. The drivers of the Indian economy in our establishment played a decisive role in bringing about the strategic shift in the thinking toward China – and in preparing for the Wuhan meeting.
The fact of the matter is that China is already positioning itself as among India’s top investors. In 2017, despite Doklam, China tripled its investment to $2 billion. Bilateral trade touched $84.44 billion in 2017, which is an increase of 18.63% over 2016. (By the way, Indian exports to China went up by 40%.) This year, bilateral trade in the first quarter already hit $22.1 billion, up 15.4% year on year. In April, the two countries signed over 100 trade agreements, worth $2.38 billion, when a Chinese trade delegation visited India.
According to a report in Forbes magazine recently, India is courting Chinese companies to bridge its infrastructure deficit. Last year, China’s Sany Heavy Industry planned an investment of $9.8 billion in India, while Pacific Construction, China Fortune Land Development and Dalian Wanda planned investments of more than $5 billion each. Earlier this year, the China-led Asian Infrastructure Investment Bank approved funding of $1 billion for projects in India.
Meanwhile, Chinese investors have been pouring money into sectors outside the remit of government agencies. In 2015, Alibaba invested $500 million in Snapdeal and $700 million in Paytm. In 2016, Tencent invested $150 million in Hike, a messaging app, and a consortium of Chinese investors paid $900 for media.net. In 2017, Alibaba and Tencent announced or closed deals valued close to $2 billion—Alibaba’s second tranche of $177 million in Paytm, $150 million in Zomato, $100 million in FirstCry and $200 million in Big Basket. Tencent’s investments included $400 million in Ola, $700 million in Flipkart and a second round of investment in Practo. Last year, China’s drug giant Fosun Pharma acquired a 74% controlling stake in India’s Gland Pharma for $1.1 billion. Chinese smartphone makers Xiaomi, Huawei and Oppo all are operating manufacturing plants in India, and have had great successes in Indian market, too.
These plain facts may not be significant enough for our ‘China hands’, but they are a compelling reality for the PMO and North Block. Let me quote from the report in the Forbes magazine:

• Seemingly, there’s a shared belief in both countries (India and China) that a position of hostility undermines their interests, and stabilizing relations at a time of global uncertainty will yield economic dividends. India’s competitive edge in information technology, software and medicines, and China’s strengths in manufacturing and infrastructure development make the two sides natural partners…

By the way, it is yet to sink in that the single most far-reaching outcome of the Wuhan meeting could be that India is sidestepping the

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and is moving on to join hands with China in the construction of the so-called Five Nations Railway Corridor connecting Xinjiang with Iran. It is a prestigious

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, which was proposed by President Xi Jinping in 2013. Conceivably, this could be the first step in a long journey. China has shown great interest in developing economic corridors to India across Nepal and Myanmar.
To be sure, Modi travelled to Wuhan with the “big picture”. Read a perspective on the Wuhan summit featured in the CNBC entitled

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.

 

[Dolcevita]

Ex-mayor Bloomberg proposes economic conference for private and public sector leaders from developed and emerging economies to work together on finding “actionable solutions” to challenges from economic inclusion to environmental sustainability


Michael Bloomberg launches China-linked rival to Davos
New Economy Forum focuses on emerging world order in challenge to WEF

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[Jura The idiot]

now I read
China's industrial output expands 7 pct, beating expectations
Xinhua| 2018-05-15 12:40:40

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China's industrial output expanded 7 percent in April, increasing from the 6-percent rise in the previous month, official data showed Tuesday.

The growth was higher than market expectations of around 6.4 percent for the period.

In the first four months, industrial output rose 6.9 percent, compared with the 6.8-percent gain in the first quarter, the National Bureau of Statistics (NBS) said in a statement.

A breakdown of the data showed that the industrial structure continued to improve, with production in high-tech industries and the equipment manufacturing sector expanding by 11.8 percent and 10.3 percent, respectively, last month.

Output of new energy vehicles saw a surge of 82.2 percent year on year during the period, while industrial robot production jumped by 35.4 percent, NBS data showed.

Industrial output, officially called industrial value added, is used to measure the activity of designated large enterprises with annual turnover of at least 20 million yuan (about 3 million U.S. dollars).

 

[Jura The idiot]

now I read
China sees unemployment remain steady in April
Xinhua| 2018-05-15 20:07:37

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China continued to see the job market remain stable in April, with the unemployment rate at a relatively low level, official data showed Tuesday.

The monthly surveyed unemployment rate in urban areas was 4.9 percent in April, down 0.2 percentage points from March and 0.1 percentage points lower than last April, according to the National Bureau of Statistics (NBS).

The urban surveyed unemployment rate in 31 major cities was 4.7 percent, down 0.2 percentage points from March, and down 0.2 percentage points year on year.

"China's job market continued to stabilize and improve in April," said NBS spokesperson Liu Aihua.

Starting from April this year, the NBS has regularly released the monthly surveyed unemployment rate in urban areas to help the government improve macro-control and provide information for formulating employment policies.

The surveyed urban unemployment rate is calculated based on the number of unemployed people who have participated in the employment survey in urban areas, including migrant workers in cities.

The surveyed urban unemployment rate was first introduced in 2014 to better reflect the job market and serve as a supplement to the registered urban unemployment rate compiled by the Ministry of Human Resources and Social Security.