China Economy Forum

[JSCh]

Public Release: 21-Mar-2017
China's economic growth could help other developing countries
Taylor & Francis Group

Research published today examines China's recent successful economic growth and how this could be applied to help other developing countries grow their economies.

The research from the journal Area Development and Policy, published by Taylor & Francis with the Regional Studies Association, shows that while other countries' reforms in the 1980s and 1990s subsequently failed, China managed to achieve unprecedented economic growth. This means there is a potential for similar growth if other developing countries develop their economies according to their comparative advantages, as China did.

The study also outlines how it was possible for China to achieve a prolonged period of growth, the price that has been paid for success, if and how this can be maintained, and the implications for other developing countries who wish to achieve similar growth.

Author and former Chief Economist of the World Bank Justin Yifu Lin said, "It is the strategy for development and transition that determines success or failure in a developing country."

A key reason for China's success was the pragmatic approach adopted, along with the advantage of backwardness, where developing countries benefit from imitating technologies and industries from high-income countries, which involves lower costs and fewer risks. Before 1979, China had chosen not to benefit from this advantage. The desire to rapidly build a strong national defense system and advanced capital-intensive modern industry meant it was necessary to do the innovation itself in a country lacking capital but with abundant labor.

The research suggests there is potential for other developing countries to grow continuously for a prolonged period of time, but to achieve this it is necessary to do two things. The first is to develop the country's economic strength according to its comparative advantages. The second is not to immediately expose uncompetitive domestic industries to international competition. It is important for developing countries to learn from one another instead of using theories generated from developed countries because of the differences between developed and developing countries.

Despite the successes of China's economic growth, Lin identifies that there remain drawbacks including corruption, environmental degradation and increased income disparities between the rich and poor.

The question remains as to whether China can maintain dynamic growth in the coming decades. There is potential for continued growth but recent figures show decelerated growth in comparison to previous years. Lin argues that the deceleration is mainly due to external and cyclical factors, and is confident that China is on track to join the world's high-income countries.


China's economic growth could help other developing countries | EurekAlert! Science News

Justin Yifu Lin, "The rise of China and its implications for economics and other developing countries", Area Development and Policy (2017), DOI: 10.1080/23792949.2017.1298971

 

[Keel]

China's Geely doubles earnings as Volvo tech boosts sales

• Posted 22 Mar 2017 12:35
  
• Updated 22 Mar 2017 13:55

FILE PHOTO: Employees work along a Geely Automobile Corporation assembly line in Cixi, Zhejiang province June 21, 2012. REUTERS/Carlos Barria/File Photo

• Long seen as a no-frills brand, Geely has transformed itself into an automaker with up-market aspirations, using its Volvo research-and-development advantage to climb the sales table in the world's largest auto market where it ranks around seventh
  • Come next year, Geely plans its next phase of expansion as it aims to become China's first automaker to market its own brand - new Volvo collaboration Lynk & Co - in developed markets, beginning with Europe and the United States.
    
    Entering major markets with an unknown Chinese brand is an expensive risk, analysts say, but investors are unperturbed: Geely's share price has trebled over the past 12 months.
    
    "It's a total turnaround story," said a fund manager at a Taiwan-based investment firm that bought a significant amount of Geely stock last year.
    
    "Before it was just a normal domestic brand, but after several new product launches it successfully elevated its brand image," said the person who was not authorized to speak publicly on the firm's investments and so declined to be identified.
    
    Geely's China sales grew 50 percent last year to 766,000 vehicles, powered by the GC9 and Boyue, as well as small cars featuring Volvo technology. It aims to top 1 million this year, though could sell far more depending on market conditions, a Geely official with direct knowledge of the matter told Reuters.
    
    For 2016, net profit more than doubled to 5.1 billion yuan (US$741 million), its strongest growth since 2008. The figure is set to rise 37 percent to 7 billion yuan in 2017, showed a Reuters poll of analyst estimates prior to Geely's Wednesday filing.
    
    Geely shares were down 1.2 percent in early afternoon trading after the earnings release.
    
    OVERSEAS GAMBLE
    
    To be sure, growth has come at a cost. Geely and parent Zhejiang Geely Holding Group Co Ltd have spent 10 billion yuan on R&D in each of the past three to four years, or about 15 percent of current revenue, said spokesman Victor Yang.
    
    That compared with 2 billion yuan in 2015 at domestic rival BYD Co Ltd , showed Thomson Reuters data.
    
    But Geely's domestic growth spurts could lessen as expansion in China's overall passenger car market slows following the reduction of subsidies for small-engine vehicles, adding impetus to any international push.
    
    "The current focus of our work is firstly the pace of development in China and increasing our share of the Chinese auto market, then next we can focus our work abroad," Geely Chairman Li Shufu told reporters in Beijing earlier this month.
    
    But entering markets where the brand is unknown is a gamble, and it could take years to gain traction, said James Chao, Asia-Pacific chief of consultancy IHS Markit Automotive.
    
    As there is plenty of room for growth in China, however, there is no need to be concerned about the move abroad, said fund managers at two investment firms that hold Geely stock.
    
    "If they do well abroad it's a bonus, and if they don't then it's not a big reason to worry," one of the managers said.
    
    (Reporting by Jake Spring and Norihiko Shirouzu; Editing by Adam Jourdan and Christopher Cushing)
    
    
    

 

[Bussard Ramjet]

China's Geely doubles earnings as Volvo tech boosts sales

• Posted 22 Mar 2017 12:35
  
• Updated 22 Mar 2017 13:55

FILE PHOTO: Employees work along a Geely Automobile Corporation assembly line in Cixi, Zhejiang province June 21, 2012. REUTERS/Carlos Barria/File Photo

• Long seen as a no-frills brand, Geely has transformed itself into an automaker with up-market aspirations, using its Volvo research-and-development advantage to climb the sales table in the world's largest auto market where it ranks around seventh
  • Come next year, Geely plans its next phase of expansion as it aims to become China's first automaker to market its own brand - new Volvo collaboration Lynk & Co - in developed markets, beginning with Europe and the United States.
    
    Entering major markets with an unknown Chinese brand is an expensive risk, analysts say, but investors are unperturbed: Geely's share price has trebled over the past 12 months.
    
    "It's a total turnaround story," said a fund manager at a Taiwan-based investment firm that bought a significant amount of Geely stock last year.
    
    "Before it was just a normal domestic brand, but after several new product launches it successfully elevated its brand image," said the person who was not authorized to speak publicly on the firm's investments and so declined to be identified.
    
    Geely's China sales grew 50 percent last year to 766,000 vehicles, powered by the GC9 and Boyue, as well as small cars featuring Volvo technology. It aims to top 1 million this year, though could sell far more depending on market conditions, a Geely official with direct knowledge of the matter told Reuters.
    
    For 2016, net profit more than doubled to 5.1 billion yuan (US$741 million), its strongest growth since 2008. The figure is set to rise 37 percent to 7 billion yuan in 2017, showed a Reuters poll of analyst estimates prior to Geely's Wednesday filing.
    
    Geely shares were down 1.2 percent in early afternoon trading after the earnings release.
    
    OVERSEAS GAMBLE
    
    To be sure, growth has come at a cost. Geely and parent Zhejiang Geely Holding Group Co Ltd have spent 10 billion yuan on R&D in each of the past three to four years, or about 15 percent of current revenue, said spokesman Victor Yang.
    
    That compared with 2 billion yuan in 2015 at domestic rival BYD Co Ltd , showed Thomson Reuters data.
    
    But Geely's domestic growth spurts could lessen as expansion in China's overall passenger car market slows following the reduction of subsidies for small-engine vehicles, adding impetus to any international push.
    
    "The current focus of our work is firstly the pace of development in China and increasing our share of the Chinese auto market, then next we can focus our work abroad," Geely Chairman Li Shufu told reporters in Beijing earlier this month.
    
    But entering markets where the brand is unknown is a gamble, and it could take years to gain traction, said James Chao, Asia-Pacific chief of consultancy IHS Markit Automotive.
    
    As there is plenty of room for growth in China, however, there is no need to be concerned about the move abroad, said fund managers at two investment firms that hold Geely stock.
    
    "If they do well abroad it's a bonus, and if they don't then it's not a big reason to worry," one of the managers said.
    
    (Reporting by Jake Spring and Norihiko Shirouzu; Editing by Adam Jourdan and Christopher Cushing)
    
    
    

And remember these are private companies.

While on the other hand, SOEs in car manufacturing, were sitting tight with their hands tight eating honey, without any work. They were given a monopoly by making foreign owned companies to partner with them.

It shows the difference between private and SOEs, when the two most promising Car companies in China, BYD and Geely, are both private.

 

[shadows888]

And remember these are private companies.

While on the other hand, SOEs in car manufacturing, were sitting tight with their hands tight eating honey, without any work. They were given a monopoly by making foreign owned companies to partner with them.

It shows the difference between private and SOEs, when the two most promising Car companies in China, BYD and Geely, are both private.

private and SOE's can co-exist. otherwise you just be like america. everything is private with shitty public transport system because no private company is going to invest in that.

 

[Bussard Ramjet]

private and SOE's can co-exist. otherwise you just be like america. everything is private with shitty public transport system because no private company is going to invest in that.

Wrong. You can have private companies, and invest centrally into projects.

The money to be invested comes from the government. SOEs in fact make it less efficient to implement projects.

Example Singapore, Korea, both of these places have world class infrastructure without large SOEs.

 

[JSCh]

China's Geely opens UK plant for electric London taxis

AFP / CARL COURT
The iconic London cab goes electric with a new factory able to build 20,000 clean taxis a year

Chinese carmaker Geely, owner of the London Taxi Company, opened Wednesday a £300-million UK factory making only electrical versions of the iconic London black cab for use worldwide.

The site in Coventry, central England, "has the capacity to build more than 20,000 vehicles per year... the best ultra-low emission commercial vehicles in the world", LTC said in a statement.

Geely bought LTC four years ago after the British company found itself in serious financial difficulty. Geely owns Volvo and said it will use the Swedish carmaker's technologies and components in its new taxis.

"Today marks the rebirth of the London Taxi Company," said LTC chief executive Chris Gubbey after the creation of more than 1,000 new jobs linked to the plant's opening.

LTC chairman Carl-Peter Forster added that the plant is "the first brand new automotive manufacturing facility in Britain for over a decade, the first dedicated electric vehicle factory in the UK and the first major Chinese investment in UK automotive".

As well as a £300-million ($374-million, 346 million-euros) investment from LTC, the plant has been supported by £16.1 million from the British government.

 

[samsara]

China's ICBC starts renminbi clearing services in Russia

Source: Xinhua | 2017-03-23 05:26:21 | Editor: huaxia

ICBC's deputy governor Hu Hao (L2) and deputy governor of the Central Bank of Russian Federation Dmitry Skobelkin (R2)
attend the opening ceremony in Moscow, Russia, on March 22, 2017. (Xinhua/Bai Xueqi)​

MOSCOW, March 22 (Xinhua) -- Industrial and Commercial Bank of China (ICBC) officially started operating as a Chinese renminbi (CNY) clearing bank in Russia Wednesday, a move set to facilitate the use of the currency and cooperation in various fields between the two countries.

"Under the guidance of the governments and central banks of both countries, ICBC's Moscow branch will effectively fulfill its responsibility and obligation as a renminbi clearing bank by taking further advantage of its leading edge in renminbi businesses, providing customers with safe, high quality and convenient clearing services," said Hu Hao, ICBC's deputy governor, at the opening ceremony.

"Financial regulatory authorities of China and Russia have signed a series of major agreements, which marks a new level of financial cooperation," said Dmitry Skobelkin, deputy governor of the Central Bank of the Russian Federation.

"The launching of renminbi clearing services in Russia will further expand local settlement business and promote financial cooperation between the two countries," the official added.

With the continuous deepening of the Russia-China comprehensive strategic partnership of coordination in recent years, the two countries are now starting to enhance local currency cooperation.

At the end of 2015, the Russian central bank announced the inclusion of the renminbi in its national foreign exchange reserves, making it Russia's officially recognized reserve currency.

During Russian President Vladimir Putin's visit to China in June last year, the central banks of the two countries signed a memorandum of cooperation in starting renminbi clearing services in Russia, just three months before ICBC's Moscow branch was appointed by China's central bank as the clearing house for settling renminbi transactions there.

http://news.xinhuanet.com/english/2017-03/23/c_136149720.htm

 

[Keel]

Alibaba to set up e-commerce hub in Malaysia
Source: Xinhua | 2017-03-22 18:48:21 | Editor: huaxia

Malaysian Prime Minister Najib Razak (3rd L) and Alibaba's executive chairman Jack Ma (4th L) attend a ceremony in Kuala Lumpur, Malaysia, March 22, 2017. China's e-commerce giant Alibaba group on Wednesday announced a plan to set up an e-commerce hub in Malaysia encompassing logistics, cloud-computing and e-financial service to boost trade and e-commerce in the region. (Xinhua/Chong Voon Chung)

Alibaba's executive chairman Jack Ma delivers a speech in Kuala Lumpur, Malaysia, March 22, 2017. China's e-commerce giant Alibaba group on Wednesday announced a plan to set up an e-commerce hub in Malaysia encompassing logistics, cloud-computing and e-financial service to boost trade and e-commerce in the region. (Xinhua/Chong Voon Chung)

http://news.xinhuanet.com/english/2017-03/22/c_136149064.htm

private and SOE's can co-exist. otherwise you just be like america. everything is private with shitty public transport system because no private company is going to invest in that.

I have ignored that indian guy for a long time

BTW, that's the beauty of China's model
Even in usa, there are state run enterprises - like their metro subway:
https://en.wikipedia.org/wiki/New_York_City_Subway

nasa：
https://en.wikipedia.org/wiki/NASA

Tencent 2016 profit up 43 pct to 6 bln USD
Source: Xinhua 2017-03-22 23:49:26
http://news.xinhuanet.com/english/2017-03/22/c_136149407.htm
HONG KONG, March 22 (Xinhua) -- Tencent Holdings Ltd. reported a 43 percent rise in 2016 net profit to 41.1 billion yuan (about 6 billion U.S. dollars), mainly due to solid revenue growth in cloud services and payment, the company said here on Wednesday.

Revenue for the year rose 48 percent to 151.9 billion yuan (22 billion U.S. dollars), according to the annual report released by the company.

The company said revenue growth from cloud services and payment drove a 263 percent surge in revenue to 17.2 billion yuan (2.5 billion U.S. dollars) for its business line outside value-added services and online advertising.

On the other hand, gross margins for cloud services and payment are expected to remain low in the near future, Tencent said, with the segment's cost of revenue standing at a high 84 percent.

"We view mobile payment as infrastructure investment and think it is very worthwhile," Chairman and Chief Executive Officer of Tencent Ma Huateng said at a press conference.

"And for cloud business, we are also in early stage investment, so the cost may remain high in the near term," he said.

In addition, flagship social media app WeChat had 889.3 million monthly active users at the end of 2016, up 27.6 percent from a year ago, Tencent said, adding it plans to add more services within its social platforms this year.

Tencent's share lost 1.6 percent to close at 225.2 HK dollars (about 29 U.S. dollars) Wednesday.

 

[samsara]

It's interesting to watch out the increasing role of Malaysia acting as important regional hubs for many enterprises from China to cover their operations, markets and penetration in the South East Asia region.

I think there are some factors that weigh in the choice of Malaysia and not the other SEA countries:
- supportive & favorable policies from MAS govt and close relationship between the two countries
- stability and availability of many infrastructure in MAS as a progressing middle level nation
- positive perception from MAS people in particular the Malay people while the significant population of Chinese ethnic there have the close cultural relationship with the mainland and the Chinese Malaysian are fluent in Chinese language both in written and spoken (no language barrier)... IMO Chinese Malaysian have excellent multilingual skills even better than the Singaporean
- cf. SIN the costs in MAS are significantly lower in all aspects... and I guess MAS gives more favorable treatment to the companies from China compared to the Western-inclined SIN ruling class

Quite interesting to observe the dynamics of such relationship with MAS over many years to come I even wonder whether China will help MAS increase its strategic and economic values of its ports along the Strait of Malacca vis-à-vis the Merlion City the unfolding time will reveal the direction...

 

[shadows888]

Wrong. You can have private companies, and invest centrally into projects.

The money to be invested comes from the government. SOEs in fact make it less efficient to implement projects.

Example Singapore, Korea, both of these places have world class infrastructure without large SOEs.

what, you never heard of Temasek? or chaebols? please indians, just privatize everything, including your healthcare. it will make you #1.

 

[onebyone]

what, you never heard of Temasek? or chaebols? please indians, just privatize everything, including your healthcare. it will make you #1.

https://en.wikipedia.org/wiki/Keiretsu


https://en.wikipedia.org/wiki/Chaebol

http://www.temasek.com.sg/

 

[Dungeness]

And remember these are private companies.

While on the other hand, SOEs in car manufacturing, were sitting tight with their hands tight eating honey, without any work. They were given a monopoly by making foreign owned companies to partner with them.

It shows the difference between private and SOEs, when the two most promising Car companies in China, BYD and Geely, are both private.

The highlighted sentence would be better used to describe Indian Govt. organizations. Chinese SOEs are totally different animals from your understanding. All Chinese military industries are SOEs, and you know what they have achieved.

 

[Bussard Ramjet]

what, you never heard of Temasek? or chaebols? please indians, just privatize everything, including your healthcare. it will make you #1.

Oh I am actually CALLING for temasek like model.

But temasek is successful because it only manages fund, not the business.

I am not calling for whole sale privatization of stuff. Only that their business should be in professional, market oriented hands.

And I have almost never called for the sale of public utilities like electric grids etc.

 

[GS Zhou]

The highlighted sentence would be better used to describe Indian Govt. organizations. Chinese SOEs are totally different animals from your understanding. All Chinese military industries are SOEs, and you know what they have achieved.

No need to debate with this "China expert". He pretends to be an expert that knowing everything of China, but in fact he knows nearly nothing. Here, his blabla about our car industry, is just another example.

In fact, SOE or private company is never the reason for success or failure:
- We have highly capable SOE car makers, like Chang'an, GAC, or SAIC, we also have low-perform SOE car makers, like FAW.
- We have highly capable private car makers, like Geely or BYD, while we also have low-perform private car makers, Hawtai, Lifan or Youngman.

The ownership type alone is NEVER the reason to call a company will be success or not. That's just like to evaluate a person simply by the skin color. I believe we all agree the latter is wrong, or even evil. But why the former is allowed?

 

[Keel]

what, you never heard of Temasek? or chaebols? please indians, just privatize everything, including your healthcare. it will make you #1.

The guy from india is making a mountain out of a molehill always, and now on the economic evils of SOEs. It is so funny yet annoying most of the time.

List of SOEs in the world:

https://en.wikipedia.org/wiki/State-owned_enterprise

SOEs have the merits and demerits