Archive for Uncategorized
Alibaba founder Jack Ma has a brutal theory of how America went wrong over the past 30 years
DAVOS, Switzerland — Alibaba founder Jack Ma thinks America went wrong over the past 30 years by focusing too much on war and Wall Street. Speaking at the World Economic Forum on Wednesday, Ma was asked about globalisation and the reaction to it represented by the election of Donald Trump as US president.
He responded that back when Thomas Friedman published “The World Is Flat” in 2005, globalisation looked like “a perfect strategy” for the US: “We just want the technology, and the IP, and the brand, and we’ll leave the other jobs” to other countries like Mexico and China, he said.
“American international companies made millions and millions of dollars from globalisation,” Ma said.
As an example of just how much was available, Ma said, “When I graduated from university I tried to buy a beeper, and it cost me $250. My pay at the time was $10 a month.”
“IBM, Microsoft,” he added, “the profit they made was larger than the top four banks in China put together … But where did the money go?”
At the same time, the US spent a lot of money on foreign conflicts. “In the past 30 years, America had 13 wars spending $2 trillion … no matter how good your strategy is you’re supposed to spend money on your own people,” Ma said. “The money goes to Wall Street. Then what happened? Year 2008 wiped out $19.2 trillion in US income … What if the money was spent on the Midwest of the United States?”
“The other countries steal jobs from you guys — that is your strategy. You did not distribute the money in the proper way.”
Elsewhere during his talk, Ma said his favourite film was “Forrest Gump” because he saw something of Alibaba in Gump’s shrimp boat. Ma quoted Gump as saying “Nobody makes money catching whales — people make money catching shrimps.”
“That’s how we make money” at Alibaba, he said.
He also revealed that he wanted to retire early: “I don’t want to die in my office,” he said. “I want to die on the beaches.”
China is now out selling the United States vehicle market by
almost 2 to 1. (28m vs17m)
More importantly, due to restrictions, China manufactures 98% of the
vehicles sold in their domestic market while the U.S. only manufacturers
roughly half of the vehicles sold in the country.
Volkswagen said this week that it sold 3.98 million vehicles in China
General Motors delivered a record 3.87 million vehicles in China in 2016.
Ford also set a company record for China sales in 2016 with 1.27 million
vehicles, up 14 percent from the previous year.
THE National Bureau of Statistics yesterday revised the size of China’s economy in 2015 to 68.91 trillion yuan (US$9.9 trillion), up 354.6 billion yuan from its preliminary figure.
Economic growth for 2015 stayed at 6.9 percent, according to a bureau’s statement on its website.
The value of the primary industry was revised down to 6.09 trillion yuan in 2015, with the growth rate remaining at 3.9 percent.
The value of the secondary industry was revised up to 28.2 trillion yuan, a rise of 148 billion yuan on the preliminary figure, with annual growth revised up to 6.2 percent from 6.1 percent.
The value of the tertiary sector was revised up to 34.62 trillion yuan, with growth reaching 8.2 percent.
CHINA’S foreign exchange reserves fell to near six-year lows in December, but held just above the critical US$3 trillion level.
China’s reserves shrank by US$41 billion in December, slightly less than feared but the sixth straight month of declines, data showed on Saturday, after a week in which Beijing moved aggressively to punish those betting against the yuan and make it harder for money to get out of the country.
Analysts had forecast a drop of US$51 billion.
For the year as a whole, China’s reserves fell nearly US$320 billion to US$3.011 trillion, on top of a record drop of US$513 billion in 2015.
China’s vast foreign exchange reserves, the largest in the world, slipped to US$3.011 trillion at the end of December, the State Administration of Foreign Exchange said on its website.
Reserves had slipped by US$46 billion in October and nearly US$70 billion in November, falling to levels last seen more than five years ago.
The central bank’s efforts to stabilize the yuan is the major reason for China’s falling foreign exchange reserve, the forex watchdog said Saturday.
The People’s Bank of China’s forex market operations, price fluctuations of the forex reserve’s investment assets and exchange rate against the dollar have influenced China’s forex reserves, according to a statement released by SAFE.
The yuan is now trading at its lowest level in eight years against the dollar after dropping about 7 percent in the space of a year, as China sells greenbacks to support its currency.
At the same time, a persistently sluggish domestic economy is encouraging a flight of funds in search of more remunerative investments abroad.
Ford Motor Co. says it is dropping its plan to build a $1.6-billion US plant
in Mexico, a plan criticized by Donald Trump during last year’s presidential
primary campaign. Ford also announced it plans to invest about $700 million
in a Michigan factory that will build high-tech autonomous and electric vehicles.
The 1994 NAFTA trade agreement, pushed by both American political parties was a
sell-out of American workers. What was sold as creating jobs across the entire region
was a major cause behind the end of 70,000 factories in the United States.
If NAFTA involved just the companies of the core countries of U.S., Mexico, and
Canada it may have worked. It didn’t work that way, however,as the rest of the globe
including companies from Europe and Asia set-up shop in Mexico and started exporting directly into the U.S. These companies utilize low cost labor in Mexico which is now far
below Chinese wages. By setting up in Mexico, they also utilize a low tax structure avoiding U.S. taxes completely. It has been reported that General Motors alone are exporting 400,000 vehicles back into the United States. That is the thanks the country
gets for completely bailing them out in 2008.
The end result of NAFTA is a MASSIVE boom in Mexican car manufacturing which is
now up to 4m units with 70% of those going back into the United States. No jobs,
no taxes, but you need to bail them out when they fail.
Get ready for a new global power in media. As the U.S. media has been exposed
as totally bought and paid for by the DNC political machine during the 2016
elections, a media vacuum has opened up. Europeans and American s are tired of
left-wing, one-world government backed media.
Media outlets such as RT have created compelling programming, however, the culture
gap for China to do this in the West is much larger. They will need to bring in
foreign producers and on-air talent to develop this project as previous attempts
at this are almost comical with Chinese style news programming but done in English.
SHANGHAI: China Central Television (CCTV), Beijing’s largest and most important
TV network, said it will launch a new global media platform at the stroke of
New Year’s Day to help re-brand China overseas.
The new multilingual media cluster will have six TV channels, a video newsletter
agency and a new media agency and will see the original CCTV News channel renamed
as China Global Television Network, the network said on its website on Friday night.
China has been extending its global influence with “soft power” tactics such as
launching new English language media and auditioning international public relations
firms to tailor its branding strategy.
President Xi Jinping said in February state media must tell China’s story to the
world better and become internationally influential, adding that onshore portals
must follow the party line and promote “positive propaganda as the main theme”.
(Reporting by Engen Tham in Shanghai and Ryan Woo in Beijing; Editing by Eric Meijer)
The China Money Report
China’s Tech companies attracted a record high US$56.1 billion in 2016,
up from US$45.1 billion last year, according to the Tech in Asia Database.
The Chinese Tech Sector is about to do to Tech what Chinese manufacturing
did to the globe. And by that… I mean gobble it all up. Jack Ma continues
his path towards Bond Villain status with no less that 4 of the 10 owned or
funded by the man.
Here are the largest tech investments in 2016
(1) Didi Chuxing – US$7.3 billion
Didi has 300 million users of its taxi, chauffeur and bus services in China.
It works with car owners to offer 14 million rides a day. DiDi was named one
of the World’s 50 Smartest Companies by MIT Technology Review. Investors
include SoftBank, Alibaba,and Apple, which have invested US$1 billion into the
company.The company took out major rival Uber China in 2016 with
a $2 billion dollar acquisition. The new combined company is valued at over
$35 billion USD.
Watch for Didi to go global now, especially in emerging markets in Asia, however,
the company cannot rest even in its home market as there are several other
promising domestic ride hailing companies such as Yidao Yongche, a three-year-old
private car service, that has received an investment that values its business at
the magic $1 billion mark. Many Chinese customers prefer Yidao over DiDi due to
better cars and drivers.
(2) Ant Financial – US$4.5 billion
Chinese Fin Tech company , Ant Financial, does it all as does founder,Jack Ma.
Ant Financial does Mobile payments, micro-loans, wealth management, and online
banking. The company landed US$4.5 billion in a series B round led by Chinese
sovereign wealth fund China Investment Corporation and China Construction Bank.
Ant Financial is best known for Alipay, China’s most popular mobile payment app.
The Chinese fintech company also offers various wealth management products,
micro-loans, and an online bank called MyBank.
(3) Meituan-Dianping – US$3.3 billion
Only 6 years old,the company started as a Groupon clone. At the time, there were
already 800 other companies in China trying to do the same thing. They evolved
their business model,however,very rapidly adding food delivery services, online
ticketing, among other services. The company is now valued at $20 billion USD.
(4) Uber China- US$2 billion
Merged with archrival Didi Chuxing.
(5) Cainiao -US$1.44 billion
Cainiao, the logistics affiliate of Alibaba, Investors include Temasek Holdings
and GIC in Singapore, Malaysia’s Khazanah Nasional, and China’s Primavera Capital.
Notice the Malaysia and Singapore links. This was no doubt an investment to
help build the supply chain from China down through S.E. Asia.
(6) Ele.me – US$1.25 billion
Shanghai-based food delivery startup Ele.me announced a US$1.25 billion boost from
Alibaba and Ant Financial in April. Well-known investors include Sequoia Capital and Tencent.
(7) JD Finance- US$1 billion
JD Finance, the consumer finance subsidiary of ecommerce giant JD, completed a
US$1 billion round of series A funding this year, led by Sequoia Capital China,
China Harvest Investments, and China Taiping Insurance. JD Finance competes
with Ant Financial in providing consumer and enterprise demand for credit in
(8) WM Motor- US$1 billion
New electric car maker led by Freeman Shen, a veteran of Geely automotive.
The company managed to secure a US$1 billion series A – a mammoth amount of
funding for an early-stage startup. The company has released photos of a
concept car which have been criticized as photoshopped versions of a Mitsubishi
(9) LeSports – US$1.15 billion
LeSports, the sports entertainment arm of Chinese tech giant LeEco, announced its
series B funding of US$1.15 billion in 2016. The company offers
a combination of events operations, streamed content, and smart devices, and
partners with sports organizations offer event live coverage.
The company has diversified into smartphones, electric cars and numerous other
ventures with the expected result that the company is running out of cash.
(10) Lianjia – US$863 million
Online real estate site Lianjia raked in US$863 million in a series B round led
by private equity fund Huasheng Capital. Chinese tech giants Baidu and Tencent
also participated in the round of investment.
So much for that property crash CNBC and Jim Chanos been talking about since 2005.
SHANGHAI’S real estate investment market concluded with record performance in 2016 with en bloc deals more than doubling in value from a year ago, data released today by global property service provider DTZ/Cushman & Wakefield showed.
Major real estate investment deals, excluding land transactions and confined to property acquisitions worth more than US$10 million each, have exceeded 130 billion yuan (US$18.64 billion) in the city so far this year, compared to 60 billion yuan in 2015.
“Offices, serviced apartments as well as retail malls were the most favored property types among investors over the past year,” said Jim Yip, managing director of investment and advisory services at DTZ/Cushman & Wakefield China. “Notably, domestic buyers played an absolutely dominant role in the local real estate investment market this year with more than 95 percent of the total value being sealed by them, majority of whom are financial and insurance companies.”
Office buildings, mainly comprising of fully-leased office towers in central business districts, old offices or hotels that will be wholly or partly renovated into high-quality offices, as well as office buildings in emerging areas such as the greater Hongqiao area and North Bund, accounted for more than 70 percent of the total deal.
By price, a 20 percent increase from 2015 has been registered in the office investment market, according to DTZ/Cushman & Wakefield data.
MORE sectors will be open to foreign investment, an important stimulus for China’s real economy, the Ministry of Commerce has said.
In 2017, a larger share of capital inflow will be directed to high-end manufacturing, a key part of the real economy, Minister of Commerce Gao Hucheng said at a national commerce work conference, which ended yesterday.
Investment access curbs will be lowered for general manufacturing as well, he added.
Foreign investment will also be tapped to develop a modern service industry, as China gradually opens its finance and telecommunication service sectors, Gao said.
Developing the real economy will be a major feature of China’s efforts to go global next year, with more investment for technical and managerial expertise.
China’s foreign direct investment, excluding investment in the financial sector, is likely to be around 785 billion yuan (US$113 billion) this year, with 70 percent of the inflow going to the service sector, official estimates showed.
To draw more foreign investment, Gao called for the success of free trade zones, which have fewer investment curbs, to be repeated.
– People’s Bank of China has held ratio at 17% since February
– Economists don’t foreast reduction until late next year
China’s requirement for how much cash banks must hold as reserves is “very high” and should be reduced at an “appropriate time,” a senior banking regulator said, according to a media report.
Other financing tools can be used to manage the money supply after easing the required reserve ratio, China Banking Regulatory Commission official Yu Xuejun said at an event in Beijing, Shanghai Securities News reported Wednesday. New monetary tools such as the medium-term lending facility are best used after a cut, not before, Yu was cited as saying.
The People’s Bank of China has held the RRR at 17 percent since February after four cuts last year. It will be decreased to 16.5 percent in the fourth quarter of 2017 then 16 percent in the first quarter of 2018, according to a Dec. 9-15 Bloomberg survey of economists.
The PBOC started to use MLF in 2014 to channel low-cost funds into banks while avoiding conditions that would fuel asset bubbles. It also introduced the pledged supplementary lending tool, which steers cheap credit to state-backed policy lenders such as the China Development Bank to support efforts such as shanty town renovation and water projects.
Lowering the ratio lets banks lend more, which boosts credit expansion. Frequently reducing the ratio can reinforce expectations for monetary easing, which would add to downward pressure on the yuan, the PBOC said in its second quarter monetary policy execution report.
Yu leads a panel with oversight responsibility for major State-owned financial institutions, according to the CBRC’s website.
Things are finally shaping up in the pollution fight in China.
There are clear directions for companies to expect a massive
purge of polluting factories in the New Year. The government will
renew audits on every company and if your not meeting environmental
standards you will be shut down immediately. These audits will take
place from March to September 2017. Expect the steel and chemicals
industries to suffer the most.
In other areas, the government has imposed new levies for pollutant
discharge which could see taxes for pollution raised 10x at the
provincial level. China has of course lot of Carbon Dioxide as they
have plenty of room under current accords to keep building coal plants
at the rate of 1 per week while the Obama administration has negotiated
away energy production in the U.S.
China to levy taxes to fight pollution
CHINA’S top legislature passed a law yesterday that will levy specific
environmental protection taxes on industry for the first time from
January 1, 2018.The law will be key to fighting pollution, said Wang
Jianfan, director of the Ministry of Finance tax policy department.
China has collected a “pollutant discharge fee” since 1979. In 2015, it
collected 17.3 billion yuan (US$2.5 billion) from some 280,000 businesses,
Wang said. However, some local governments exploit loopholes and exempt
enterprises that are otherwise big contributors to fiscal revenue.
For years, regulators have suggested replacing the fee system with a law.
“The new law will reduce interference from government,” Wang told a press
conference. It would also improve taxpayers’ environmental awareness,
forcing companies to upgrade technology and shift to cleaner production.
Under the new law, companies will pay taxes ranging from 350 to 11,200
yuan per month for noise, according to their decibel level. It also set
rates of 1.2 yuan on stipulated quantities of air pollutants, 1.4 yuan
on water pollutants and a range of 5 to 1,000 yuan for each ton of solid
waste.For instance, polluters will pay 1.2 yuan for emission of 0.95 kilograms
of sulfur dioxide and 1.4 yuan for 1 kilogram of chemical oxygen demand.
Carbon dioxide is not included in the levying list. Provincial-level
governments can raise the rates for air and water pollution by up to
10 times after approval by the local legislatures. Lower rates
may also be applicable if emission are less than national standards.
The law only targets enterprises and public institutions that discharge
listed pollutants directly into the environment. Punishment for evasion or
fraud are not specified, but offenders will be held liable in line with the
law on administration of taxation and the environmental law.
With more than a year still to go before the law comes into effect, Wang
said authorities would make preparations including drafting a regulation
for implementation of the law. He said that revenue would all go to local
governments, and would not reduce their capability to spend on environmental
protection. China has not previously imposed any specific environmental taxes,
and the new levy will replace the earlier system of miscellaneous charges
that are regarded as too low to deter polluters.
“The core purpose (of the policy) isn’t to increase taxes, but is to improve
the system, and encourage enterprises to reduce emissions — the more they
emit the more they will pay, and the less they emit the less they will pay,”
Environment Minister Chen Jining said earlier this year. The details of the
new law have been fiercely contested by various national and local bodies,
and the law has been subject to repeated delays. Some government researchers
have also argued that carbon dioxide and other greenhouse gases should be
included in the plans.
It doesn’t matter who is big and who is small…it matters who is getting
bigger and who is getting smaller- Mao Ze Deng
by Isabel Reynolds
Japan Sees Chinese Groups Backing Okinawa Independence Activists
Chinese universities and think tanks are forming ties with Okinawan independence groups in a bid to divide public opinion in Japan, a Japanese government agency said in an annual report. There was no immediate response to a request for comment from China’s foreign ministry. Asia’s two largest economies are in dispute over the ownership of a group of uninhabited islets near Taiwan, known as Senkaku in Japan and Diaoyu in China. Official media in China have also suggested that Beijing should refuse to accept Japanese sovereignty over the main islands of Okinawa, which maintained ties with both countries prior to annexation by Japan in the 19th century.Tensions between Okinawa and mainland Japan have grown in recent years, with many of the 1.4 million residents resenting the burden of hosting the U.S. military. Even so, the independence movement has so far failed to gain momentum. A poll conducted by the Ryukyu Shimpo newspaper in May 2015 found two-thirds favored the status quo, while 21 percent said they wanted more self-determination as a Japanese region and just over 8 percent said they were pro-independence.
Japan is bolstering its own defenses on some of Okinawa’s more remote islands amid tensions with China’s navy and coastguard. Japan’s Maritime Self-Defense Force said Sunday it detected six Chinese ships including the Liaoning aircraft carrier sailing into the Western Pacific near Okinawa — the first time the navy has spotted the Liaoning entering the ocean from the East China Sea.
The intelligence agency also referred in its report to an Aug. 12 opinion piece in China’s Communist Party-affiliated Global Times, which it quoted as saying that China should use the old name Ryukyu to refer to the islands, because calling them Okinawa was tantamount to accepting Japanese sovereignty.