Weblog with daily updates of the news on a frugal, fair and beautiful China, from the perspective of internet entrepreneur, new media advisor and president of the China Speakers Bureau Fons Tuinstra
China’s consumers are still nervous, the economy is weak, but looking good in the longer run, says Shanghai-based business analyst Shaun Rein at CNBC. Consumers are trading down now, but both real estate and infrastructure are not helping the economy, he adds. In the next decade, China’s middle class will grow from 400 to 800 million. Rein saw many of his clients move temporarily to Japan but is sure they will return to China.
Financial expert Victor Shih dives into the 2024 figures at the annual NPC and concludes China cannot roll over debts anymore and finance its budget like it did before. He tells Bloomberg that central state policies have increasingly replaced a market-driven economy.
Financial expert Victor Shih looks at the dilemma China faces as local debts run out of hand, while revenue is dropping, and consumer confidence is low, at a panel discussion at the Ray School of Management at the UC San Diego.
Fast food giant McDonald’s is expanding its footprint in China with one-third of its planned 9,000 new restaurants. China is key for McDonald’s expansion, says Shanghai-based business analyst Shaun Rein in FDIntelligence. “McDonald’s actually has a lot of potential because it’s considered cheap, quick [and] convenient,” says Shaun Rein.
FDIntelligence:
McDonald’s expansion in China comes against a backdrop of a slowing domestic economy and rising geopolitical tensions.
“McDonald’s actually has a lot of potential because it’s considered cheap, quick [and] convenient,” says Shaun Rein, the managing director of China Market Research Group.
While foreign companies must be “cautious about entering China and getting caught up in the geopolitical fight”, Mr Rein adds this does not apply to brands like McDonald’s in “innocuous” sectors.
And yet, McDonald’s was a major symbol of the Western exodus from Russia after its invasion of Ukraine. This begs the question: does the fast food giant worry about the risk of China invading Taiwan?
Mr Rein says that many multinational corporations are reducing their investment into China out of fears over a war over Taiwan. “There would be political pressure to divest Chinese operations in the event of war, but my guess is there would be greater pushback from the business community than there was over Russia.”
Rating agencies have been lowering China’s rating. Renowned economist Arthur Kroeber, author of China’s Economy: What Everyone Needs to Know®, does not see an acute financial problem for the country, but costs for financing its debts will constrain its economic growth, not only for the quarters to come but for the next few years, he tells CNBC.
The equity market is shunning China, and especially Hong Kong, says business analyst Shaun Rein to the Schwab Network. But it is for the wrong reasons, as the economy is still bad, but slowly recovering, he says. Retail sales are going up, employment is improving and FDI is coming back in 2024, so reasons are enough to take those positive signs into account.
China’s economy looks better for 2024, says business analyst Shaun Rein, as multinationals are moving back their investments to China away from other destinations. Both consumer confidence and real estate are still in bad shape, but sentiments are moving in the right direction, he says at CNBC, despite the geopolitical tensions with the US.
After a slow start, after opening up after COVID-19, China’s economy is showing slow signs of recovery this autumn, says Shanghai-based business analyst Ben Cavender in the state-owned China Daily.
China Daily:
According to the most recent data by the National Bureau of Statistics, China’s official manufacturing and nonmanufacturing purchasing managers indexes both improved in September to 50.2 and 51.7, respectively, from 49.7 and 51 in August. The figures were above the 50-point mark that separates contraction from growth.
Ben Cavender, managing director of the China Market Research Group, said the Chinese economy is moving toward stabilization and is starting to show some signs of recovery.
He emphasized that China’s enduring strengths lie in its substantial infrastructure and manufacturing ecosystems, which are not susceptible to rapid decline. “The government’s emphasis on fostering development of new high-tech industries should also help to create avenues of growth for the economy in the coming decade,” he said.
Nevertheless, Cavender pointed out that the country faces significant demographic challenges, necessitating ongoing efforts to address issues related to local government and corporate debt management. “Right now, the name of the game is stability and doing whatever possible to assure consumers and private businesses that spending and investment are not too risky now, as this would unlock the spending we need to see to get back to normal,” he said.
Singapore is going to be the financial center of South-East Asia, driven by China investments, says international investor Jim Rogers at the Wall Street Journal.
Arthur Kroeber discusses recent economic schools on China
Leading economist Arthur Kroeber discusses China’s economic state and looks at the gloomy predictions from other economists. We do not have enough post-COVID-19 data to draw firm conclusions, he argues and goes on to take down three schools of gloom in current economic thinking about China’s future, at the Fairbank Center for Chinese Studies.
China is the only economy that has survived in history several downturns successfully, is the second largest economy, and as the largest country in population, we should focus on it, says Singapore-based super-investor Jim Rogers in an interview with FSC Board Member Andrew Pancholi.
Former China correspondent and author Ian Johnson was forced to leave the country in 2020 and revisited China earlier in 2023 for Foreign Affairs. He found a country in stagnation, that was used to double-digit growth, but lost its economic glamor, the former power base of the Communist Party. Strict government regulations changed China he knew. Also, information on his latest book Sparks: China’s Underground Historians and their Battle for the Future.
Ian Johnson:
In the early months of 2023, some Chinese thinkers were expecting that Chinese President Xi Jinping would be forced to pause or even abandon significant parts of his decadelong march toward centralization. Over the previous year, they had watched the government lurch from crisis to crisis. First, the Chinese Communist Party had stubbornly stuck to its “zero COVID’’ strategy with vast lockdowns of some of China’s biggest cities, even as most other countries had long since ended ineffective hard controls in favor of cutting-edge vaccines. The government’s inflexibility eventually triggered a backlash: in November 2022, antigovernment protests broke out in Chengdu, Guangzhou, Shanghai, and Beijing, an astounding development in Xi’s China. Then, in early December, the government suddenly abandoned zero COVID without vaccinating more of the elderly or stockpiling medicine. Within a few weeks, the virus had run rampant through the population, and although the government has not provided reliable data, many independent experts have concluded that it caused more than one million deaths. Meanwhile, the country had lost much of the dynamic growth that for decades has sustained the party’s hold on power.
Given the multiplying pressures, many Chinese intellectuals assumed that Xi would be forced to loosen his iron grip over the economy and society. Even though he had recently won an unprecedented third term as party general secretary and president and seemed set to rule for life, public mistrust was higher than at any previous point in his decade in power. China’s dominant twentieth-century leaders, Mao Zedong and Deng Xiaoping, had adjusted their approach when they encountered setbacks; surely Xi and his closest advisers would, too. “I was thinking that they would have to change course,” the editor of one of China’s most influential business journals told me in Beijing in May. “Not just the COVID policy but a lot of things, like the policy against private enterprise and [the] harsh treatment of social groups.”
But none of that happened. Although the zero-COVID measures are gone, Beijing has clung to a strategy of accelerating government intervention in Chinese life. Dozens of the young people who protested last fall have been detained and given lengthy prison sentences. Speech is more restricted than ever. Community activities and social groups are strictly regulated and monitored by the authorities. And for foreigners, the arbitrary detention of businesspeople and raids on foreign consulting firms have—for the first time in decades—added a sense of risk to doing business in the country.
Confidence among consumers and investors in China’s economy is at a low and even getting lower in the coming weeks, says business analyst Shaun Rein to CNBC. Even a firm financial stimulus from the government like in the past is not going to work, as shortage of liquidity is not the real problem.
Shaun Rein is a speaker at the China Speakers Bureau. Do you need him at your meeting or conference? Do get in touch or fill in our speakers’ request form.
Are you looking for more experts on consumption at the China Speakers Bureau? Do check out this list.
Former China bull Shaun Rein explains to Ian Bremmer how he changed into a bear during the corona crisis last year. In a wide-ranging exchange of thoughts, he points to the lack of trust and communication between China and the US. And is China moving in the direction of socialism?
Economist Arthur Kroeber is not expecting a significant stimulus of China’s economy as the central government has done in the past. The government is instead hoping the economy will outgrow the current post-Covid-19 dip without massive intervention, he says at CNBC.
China’s economy is not going to recover for the next two years, says renowned investor Jim Rogers to The Deep Dive. For the first time, the country is deeply indebted, faces a global bear market, and has not been able to solve the downturn in its real estate, he tells at the Deep Dive.
Fast food giant McDonald’s is expanding its footprint in China with one-third of its planned 9,000 new restaurants. China is key for McDonald’s expansion, says 
Rating agencies have been lowering China’s rating. 
, does not see an acute financial problem for the country, but costs for financing its debts will constrain its economic growth, not only for the quarters to come but for the next few years, he tells CNBC.
China’s economy looks better for 2024, says 
