In China, branding and politics get in each others way - Shaun Rein

Shaun Rein

When brands enter China, they not only have to figure out what their demanding customers want but also have a good look at politics, argues business analyst Shaun Rein, author of The War for China's Wallet: Profiting from the New World Order, in a wide-ranging interview at Knowledge CKGSB.

Knowledge CKGSB:

Q. One of the key arguments in your book, The War for China’s Wallet, is that Chinese consumers can be mobilized to reward or punish brands based on a country’s relationship with China. The most striking example recently has been South Korea. How worried should brands be about this trend? 

A. Brands need to be very worried. They need to understand the geo-political situation better now than at any time before. Five, ten years ago, you basically had to understand: what did the Chinese consumer want, what types of products or services, what’s the right marketing communications strategy? But now, it’s very clear that China is using its economic wallet and its muscle to reward and punish other countries—and, increasingly, companies—to ensure that they adhere to its political wants. 

Q. What practical measures can brands take to protect themselves from this? 

A. It’s not easy, frankly. I think there are a couple of things. They can, first and foremost, show from the very beginning that they’re friends of China. In the book, I used the example of Yum! Brands— KFC. They have always shown the everyday Chinese people that they respect the culture, respect the people. And they have done it by creating egg-and-milk food programs for poor schoolchildren throughout the country. That’s really important, because when there was South China Sea tension a year ago, sales in some parts of China for KFC dropped dramatically. But they rebounded after a month or two, because at the end of the day, the consumer realized KFC is a friend of China, and that’s a really important thing. 

Secondly, you probably need to join associations. No single company can push back against the Chinese government, so you need to form blocks of 20, 100, 200 companies. Then, if one of them gets attacked, they can unify together and say: ‘Hey, wait a minute. This is not this company’s problem, this might be a government issue, don’t punish us.’ 

Q. How can brands from countries that generally enjoy a positive image among Chinese consumers take advantage of this without making themselves vulnerable? 

A. It’s tough. I think iconic brands that represent a country are dangerous. It’s better to be affiliated, but not too representative. For example, Costa Coffee customers don’t always know it’s British. 

Right now, Harrods is doing fabulously well, because for Chinese, when they go [to London], it’s a destination. If you go to the UK, you have to shop at Harrods. The risk though, for Harrods especially, is that if there ever is tension between China and the UK, Harrods will be the first thing to get hit. Costa Coffee won’t be. It’s Toyota, it’s KFC, it’s Starbucks, it’s Apple… It’s good to show you’re from a certain country, but it’s also not good to emphasize it too much. 

Q. Is there a chance this approach will become less effective if used too often? 

A. That’s a great question. I think Chinese consumers don’t view it as propaganda, but rather as pride in the country. I think it’s a strategy that they can employ over the next 10-20 years, and it’s not going to make a difference. Even when we interview Chinese who were educated abroad and they come back, they still get really worked up. 

The bigger risk is: will China go too far and cause too much worry for other governments, to the extent that that they do band together and they push back? Maybe they don’t band together in ASEAN, but maybe they band together in TPP. There are all these new organizations that are popping up. China needs to worry about that, that they don’t oversell their economic power.

More at Knowledge CKGSB. 

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 branding experts at the China Speakers Bureau? Do check out this list. 
 

How state and religion are intertwined in China - Ian Johnson

Ian Johnson

In China power and religion are intertwined, argues journalist Ian Johnson, author of The Souls of China: The Return of Religion After Mao and you cannot understand China without knowing its religion. At the UC San Diego School of Global Policy and Strategy, he explains how religion moved from apparently irrelevant to crucial in today's China. Why religion is not going away, as many intellectuals have thought.

Ian Johnson 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 other stories by Ian Johnson? Do check out this list.

Western fashion brands fail on China's millennials - Shaun Rein

China's millennials are increasingly defining the country's consumer space, and Western fashion brands fail to appeal to them, says business analyst Shaun Rein, author of The War for China's Wallet: Profiting from the New World Order, to the South China Morning Post. Brands like Marks&Spencer failed because they focused on the middle-class, he says.

The South China Morning Post:

The London-based retailer struggled to make a mark in China’s high-street fashion scene, despite a growing retail market in China and a fondness from consumers towards many other traditional British brands. 

“One of their problems is they tried to sell to a middle-class consumer by creating middle-class brand positioning,” says Shaun Rein, managing director of China Market Research and author of The War for China’s Wallet: Profiting from the New World Order. “Most brands that do that in China fail.” 

Marks&Spencer failed to cater to consumer tastes by offering styles that were too “middle class, suburban, UK housewife”, Rein says. Sizes for Asian body types were also not considered. Meanwhile, at locations such as Marks & Spencer’s brick and mortar stores in Beijing and Shanghai, Chinese consumers could go right next door to H&M to shop the youthful and more on-trend styles that reflect one of China’s biggest emerging markets: millennials. 

Another problem for Marks & Spencer is how Chinese shoppers perceive value. Rein says Chinese consumer behaviour is defined by what he calls the “CMR Hour Glass Shopping Model”, meaning they shop both at the top and the bottom of the spending scale. 

“Anything that’s not great value – it doesn’t give them prestige, it doesn’t give them status, it’s not an aspiration – is something that Chinese don’t want unless it’s dirt cheap,” he says. “So they’ll go out and buy very expensive lipstick but they’ll buy the cheapest garbage bags because they don’t want to spend money on garbage bags. 

“Things in the middle like Marks & Spencer or Macy’s just sort of die because their products are not cheap, but they’re not good enough value either.”... 

Macy’s, meanwhile, is still in China in a partnership to sell through Tmall that started in 2015, even though it has been struggling with brand positioning and product assortment and had to cut short its first attempt at launching an online point of sale in 2012. 

“It is a great retailer in the US, but the name had no resonance here,” Rein says of Macy’s. “And it was selling Ralph Lauren – but you can buy Ralph Lauren directly here, either online or in stores, so what’s the point of going to Macy’s for Ralph Lauren?”

Marketing and advertising are also critical for a company’s long-term success, Rein says, and he thinks many brands can do a lot better. 

“They go to the same five celebrities too often,” he says. “They all go to Jackie Chan, to Zhang Ziyi, to Angelababy, so the problem is you have these guys that are representing 10 or 20 different companies, but consumers don’t know who they’re representing any more. They might affiliate them with one brand and one brand only.”

More at the South China Morning Post.

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 branding experts at the China Speakers Bureau? Do check out this list.

China's International deals shrank in 2017 - Rupert Hoogewerf

Rupert Hoogewerf

Overseas mergers and acquisitions by Chinese companies went down in value over 2017, says a report by Hurun. Especially the real estate and energy industries went down, says Hurun chief researcher Rupert Hoogewerf to Global Times. Retail, technology and manufacturing did relatively well.

Global Times:

In 2017, M&A deals by Chinese companies fell 1.7 percent year-on-year to 400, said the report. 

Among these deals, 312 disclosed the amount of investment, which was 960 billion yuan ($152.11 billion), down 28 percent year-on-year. The value of the top 100 M&A deals slumped 37 percent to 880 billion yuan. 

The manufacturing industry had the largest number of M&A deals in 2017, followed by technology, retail, energy, mineral, public services, medical, financial services and property, the report noted. 

Compared with 2016, the energy and real estate sectors had the biggest declines in transaction numbers, while manufacturing, technology and retail had the largest gains, Rupert Hoogewerf, chairman and chief researcher of the Hurun Report, was quoted as saying in the report. 

The largest deal involved a consortium led by property developer Vanke, Bank of China Group Investment and venture capital firms Hopu Investment and Hillhouse Capital Group, which acquired 78 percent of Singapore-based logistics company GLP Group for 104 billion yuan. 

The US was still the hottest destination for Chinese investors in 2017, with 16 investments. But the number of M&A deals fell 14 compared with 2016, according to the report. The report said that the Belt and Road initiative has offered new opportunities for Chinese companies. In 2017, the transaction volume of M&A deals in countries and regions along the Belt and Road routes surged 25 percent year-on-year to 240 billion yuan. By 2030, investment is estimated to reach 30 trillion yuan.

More in the Global Times

Rupert Hoogewerf 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.

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China's carefully measured response to Trump's trade war - Arthur Kroeber

Arthur Kroeber

Unlike the bully-like approach of Donald Trump, China has sent a carefully calibrated messages, trying to avoid a devastating trade war, says renowned economist Arthur Kroeber, author of China's Economy: What Everyone Needs to Know® to the South China Morning Post and the Washington Post. China has more cards up its sleeves, he suggests.

The Washington Post:

Hours after Trump’s announcement, China’s Commerce Ministry gave the first indication of potential targets for retaliation, which it linked to Trump’s earlier move to impose tariffs on steel and aluminum imports. 

It said it has compiled a list of 120 products worth nearly $1 billion, including fresh fruit and wine, upon which it would impose a 15 percent tariff if the two countries fail to resolve their trade differences “within a stipulated time.” It added that a 25 percent tariff on other goods, including pork and aluminum, could be imposed “after further evaluating the impact of U.S. measures on China.” 

Arthur Kroeber, managing director of Gavekal Dragonomics, said Beijing was sending a “carefully calibrated” message that it will stand up to Trump, while trying not to escalate the spat into a confrontation that could seriously threaten the global trading system. “The larger part of China’s strategy, though, is to position itself as the good guy in the global economy, protecting the rules of the game from Trump’s lawless attacks,” he said.

The South China Morning Post:

Arthur Kroeber, research head and co-founder of Gavekal Dragonomics, said China surely has “an equally specific, but longer”, list of targets ready to go when Washington finally unveils its Section 301 tariff list. 

“The strength of this response was carefully calibrated to send a clear message that Beijing will stand up to the US, but will not try to escalate the spat into a confrontation that could seriously threaten the global trading system,” Kroeber said.

More in the South Morning Post and the Washington Post. Arthur Kroeber 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 strategic experts at the China Speakers Bureau? Do check out this list.

How startups can avoid Facebook and Google - William Bao Bean

William Bao Bean

Startups are mostly at the mercy of quasi-monopolies like Facebook, Google, Tencent or Alibaba. William Bao Bean, managing director of Shanghai-based SOSV tells in this elevator talk how his no.1 accelerator helps them to avoid spending money on those giants to get access to an audience, creating a win-win situation.

William Bao Bean 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 innovation at the China Speakers Bureau? Do check out this list.

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Engagement with China is the only way forward - Kaiser Kuo

Kaiser Kuo

China veteran Kaiser Kuo looks back at the ups and down in the relationship between China and the US. Engagement is the only way forward, he says. Despite turns in the wrong direction, "not all the gains (of the past) have by any means been erased, he says at SupChina.

Kaiser Kuo:

Writing about this now, in the year 2018, and just a week or so after the state constitution was amended to remove term limits, it’s hard perhaps to remember what things looked like in the mid-2000s, before the decidedly illiberal turn that most China-watchers would date to roughly 2009. But at that time, a fair-minded assessment of political liberalization in China (again, by a standard that didn’t look at full democratization as the sine qua non of “political reform”) would have concluded that engagement had indeed moved China in the desired direction. 

China had become substantially more deliberative and participatory. Civil society (if we use NGOs as a proxy for its health) was looking quite robust. The public sphere, which had simply never existed in China prior to the advent of the internet, was doing well. Internet censorship, especially compared with the years after 2013, was not nearly as severe. Many new media outlets — sure, ultimately state-controlled but operated mainly on market principles, and featuring quite aggressive investigative reporting — were flourishing. Rule of law, especially in the commercial sphere and in such areas as intellectual property protection, made significant gains in this period. Experiments in village-level democratic elections were under way in many provinces. 

Engagement with the U.S. was certainly not the only factor in this, but drawing China into global trade regimes, permitting and encouraging more exchange at all levels (in business, in state-to-state, mil-to-mil, people-to-people, etc.) most assuredly did facilitate this progress. Still, credit is due to the Chinese leaders who encouraged this (Deng Xiaoping, Jiang Zemin and Zhu Rongji, Hu Jintao and Wen Jiabao) and, of course, to the ultimately irrepressible internal dynamic. 

In the years since, we’ve tended to focus on how much of this has eroded, how much backsliding we’ve seen. That there has been movement in the “wrong” direction (I happen to think, anyway, that it’s the wrong direction) is not really deniable. But not all the gains have by any means been erased. 

It worries me that right now we’re so quick to condemn proponents of engagement, and to draw the conclusion that China under the CCP is simply doomed to increasingly rigid authoritarianism. There have been chills and tightenings in the past; there’s no reason to assume that this will be substantially different. It may last longer, and it may be more forceful, but how we (the U.S. and other Western powers) react to it will most certainly be one factor in how long it lasts and how deep it goes. 

Engagement remains our wisest general policy predisposition when it comes to China. The alternative is, to me, a reckless and shortsighted path. It may not yield everything we want, but it will move the ball down the field. And it may not feel as good, as Barack Obama once said. Speaking in Oslo after being awarded the Nobel Peace Prize (whatever you may think of the wisdom of that award!), he defended engagement, saying, “I know that engagement with repressive regimes lacks the satisfying purity of indignation.”

More in SubChina. Kaiser Kuo 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 strategy experts at the China Speakers Bureau? Do check out this list.

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How learning English liberated me - Zhang Lijia

Zhang Lijia

Journalist Zhang Lijia, author of Lotus: A Novel on prostitution in China, explains how learning English learned her how to free herself from the constraints of the past when she worked at a factory worker in Nanjing.

Zhang Lijia is a speaker at the China Speakers Bureau. Do you need her at your meeting or conference? Do get in touch or fill in our speakers' request list.

Are you looking for more experts on China's cultural change? Do check out this list. 

Liu He: supporter of Xi's state-driven economic agenda - Arthur Kroeber

Arthur Kroeber

The appointment of Liu He as president Xi Jinping's economic top man has started speculations on his political direction, including a restart of reforms. We should not expect Liu to divert too much from the state-driven economic agenda Xi has already set out in the past few years, says leading economist Arthur Kroeber, author of China's Economy: What Everyone Needs to Know® to the New York Times.

The New York Times:

 Those expecting a sweeping opening of China’s economy are likely to be disappointed, some experts warn. While Mr. Liu is considered an able policymaker, his main mission will be to implement Mr. Xi’s vision of an economy that serves the interest of the party and the Chinese state, and not the other way around. 

Mr. Liu is “a steady pair of hands who has apparently managed many economic issues competently over the past couple of years,” said Arthur Kroeber, managing director of Gavekal Dragonomics, an independent economic research firm. 

But, Mr. Kroeber added, “the direction of economic policy under Xi has become quite clear over the past few years: state capitalism, with a large role for strengthened or consolidated state-owned enterprises, co-optation of private companies to serve state agendas.” 

Mr. Liu’s appointment helps advance a push by Mr. Xi to consolidate the regulatory bodies that oversee the world’s No. 2 economy. This goal was apparent last week, when the congress approved a sweeping reshuffling of government that merged many separate agencies into a smaller number of superministries.

More in the New York Times.

Arthur Kroeber 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 political analysts at the China Speakers Bureau? Do check out this list.

The future of China's millennials - Tom Doctoroff

Tom Doctoroff

A new generation is emerging to set their mark on China. Marketing veteran Tom Doctoroff looks at the relative newcomers, and how they differ from past generations, for state-owned TV station CGTN. "Post-90s are proudly patriotic, they want to see a strong China,” he says.

CGTN:

Tom Doctoroff, senior partner at brand and marketing consultancy firm Prophet, refers to the Post-90s generation as being pragmatic “doers.” And there is a reason for why this group of millennials plays stock in the here and now, he says. 

“It’s a double-edged sword, because on one hand they grew up in a period of rising affluence. But they also became adults in a period of economic insecurity, so they don’t have a hundred percent faith that the future is going to be stable.” 

And if this group of millennials ends up taking a role in government? How will they lead? 

Doctoroff says one can take comfort in the fact that the structure of Chinese society is as it has always been, and because of this, millennials respect it and its authority. 

“China is still a Confucian society, the relationship between the individual and society is not fundamentally changing. So nobody’s looking to blow up the system,” he says. 

That said, what this new connected generation can bring to the leadership table is balance, driven from their international experiences, Doctoroff says. He expects this group to bring about further reforms in the service sector, and also hopes that they can bring about a more flexible and responsive government. 

And this is where Chinese millennials differ slightly from that of the West – where millennials there are profoundly individualistic and think they are the basic unit of the society, Doctoroff says. 

“So people are trying to navigate the system here [in China] as opposed to American millennials where they are trying to shape the system so it’s really quite different.”... 

In a nutshell, Doctoroff says the interests of China’s New Era and its new generation of Chinese are aligned, citing the post-90s as an increasingly patriotic generation. 

“I think Chinese patriotism in this New Era is only going to grow, but I also think the Chinese are pragmatic; they don’t want to take over the world,” he says. 

Doctoroff commends the government’s efforts in their focus on innovation and the Internet plus strategy, citing China’s economic development program as something that is already liberating the creative energies of many. 

However, he says that there are too many technological barriers for young Chinese to discover the world and truly engage with it. 

“And I think that this is a mistake because again the millennials, post-90s are proudly patriotic, they want to see a strong China,” he says. 

“I do not think there is a risk that there’s going to be a rebellion, if say, Facebook were available, or if they could read the New York Times via a virtual private network. So I do think it’s time to loosen up a little bit without losing control,” Doctoroff adds. 

That being said, he has a question for this generation of millennials. “How much of this is a life-stage – the fact that they are currently young, relatively free, unmarried – and how much of this is a true generational shift?” 

Doctoroff says he is not entirely certain that this group can keep up with their passion as they enter the next stage of life, for instance getting married and having the burden of caring for a family, as well as the financial burden of owning an apartment. 

“Can you stop the urge to reinterpret convention based on your own passion, as the demands of survival and  living reassert themselves? That, I am not a hundred percent sure,” he says.

More at CGTN.

Tom Doctoroff 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 branding experts at the China Speakers Bureau? Do check out this list.  

Foreign car makers cannot ignore China's self-driving cars - Mark Schaub

China is leading the market of self-driving cars, because its size and the aggressive way the government is paving the road, literally, says Shanghai-based lawyer Mark Schaub to the China Law Insight. But investing in China offers not only huge opportunities, the challenges are equally gargantuan.

Mark Schaub:

China will be too big for international autonomous car suppliers and service providers to ignore. Biggest automotive market, continued strong growth, right infrastructure, ability for government to implement, early adopter consumers, popularity of car sharing and sharing economy, new and innovative companies on the rise all point to China being pivotal to the development of autonomous cars. 

Also as China’s share of the world economy rises and it becomes the largest economy it may well be that for a company to be “global” in the autonomous car sector then you will also need to “win” in China. 

However, it will not be easy for these international companies though – China will be a major opportunity but also a major challenge. 

Time and time again international companies have underestimated the competitiveness of the Chinese market – it can be crowded – both international and home grown Chinese competitors bitterly fight it out. 

In addition as the Chinese economy is now so big even niches are worth fighting over. In addition to business competition international companies will also have to contend with regulatory controls in China and in particular restrictions on foreign investments in specific sectors. 

As the world’s largest auto market China’s number of cars and strong growth makes it a jurisdiction central to business strategy. It may be that if you are not present in China then you may not be able to succeed globally. 

International companies already with a presence in China are deepening their footprint in China to ready themselves for the new opportunities that autonomous vehicles will provide. For many this will involve setting up their first JVs (even if they have had WFOEs for decades in China) or by cooperating with domestic companies that have expertise or licenses in restricted sectors. There will be opportunities for WFOEs but these are unlikely to be the most important or lucrative businesses. Accordingly for many investors success will necessitate working with Chinese partners – whether they be fellow shareholders or cooperative partners.

More details at the China Law Insight.

Mark Schaub 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 managing your China risk at the China Speakers Bureau? Do check out this list.

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China's presidency: why it matters - Ian Johnson

Ian Johnson

China's presidency - now no longer a two-term function - is highly ceremonial, but still matters, writes journalist Ian Johnson, author of The Souls of China: The Return of Religion After Mao at the NY Review of Books. Xi Jinping was already lifetime leader of the Communist Party and of the Central Military Committee.

Ian Johnson:

This isn’t how China wants to portray itself to the world. Instead, it wants to be seen as a modern country able to offer a new model for governing—the “China formula” (zhongguo fang’an). China’s political system might owe much to the Soviet Union, but it sees itself as much more than just a successor to that failed state. 

This desire for normality extends to how one translates the name of the office that Xi can now hold for the rest of his life. The official translation is “president,” but in Chinese it’s zhuxi, or chairman. It sounds strange to speak of someone being “chairman of China”—it sounds so “Chairman Mao”—hence the official translation, “president.” 

These terms matter domestically, too. For twenty-five years, the three titles—head of party, military, and state—have been united under one person. By dropping the term limits on the presidency, Xi can keep a grip on all three without having a head of state (like a king or queen) who only appears at ceremonial occasions. Such a system wouldn’t work in China. Here, more than in many other countries, ceremony is authority. 

Television footage of the stately Xi and his stylish wife meeting and greeting foreign dignitaries is a major reason for his popularity; losing that would harm him politically.

In hindsight, all this makes perfect sense, but I have to admit I was skeptical last autumn when some political analysts suggested that Xi might try to rule past a second term. One reason was that the Chinese political class has fought hard to institutionalize transfers of power. I wondered if Xi would want to risk alienating so many of his peers by taking such a step. 

Another risk is that this puts Xi in the crosshairs if his policies fail. Should the economy fail to make the transition to a more modern, technology-driven model, for example, it will be difficult for Xi to blame his premier, Li Keqiang, because Xi has so completely eclipsed Li in economic policy. Mao and Deng had proxies who took the fall for failed policies. Now, it’s Xi standing alone.

More in the NY Review of Books.

Ian Johnson 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 political analysts at the China Speakers Bureau? Do check out this list.

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Why the central bank might start printing money again - Victor Shih

Victor Shih

We have seen this before, says financial analyst Victor Shih about the efforts by the financial authorities in China to reduce debts. In 2014 they tried the same, and in 2015, 2016 the PBOC, China's central bank, started to print money again. When economic growth comes under a certain level, that will happen again, he tells Bloomberg.

Victor Shih 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 strategic experts at the China Speakers Bureau? Do check out this list.

Trade tensions will wipe away consumers day fears - Shaun Rein

Shaun Rein

Foreign companies would watch in fear media campaigns at China's consumers day in the past. But this Thursday, consumer day will be a backdrop for upcoming months of upcoming tensions, now a trade war is looming, says business analyst Shaun Rein, author of The War for China's Wallet: Profiting from the New World Order to Bloomberg.

Bloomberg:

This year’s installment comes amid a period that has seen geopolitics impact the Chinese operations of many multinationals. Beijing has retaliated against Korean businesses for Seoul’s support of a U.S. missile-defense system, hurting retailer Lotte Shopping Co. Global companies were also singled out in January for mislabeling China’s territories on their websites. And now, companies are facing the prospect of a trade war between Beijing and Washington.

“I do expect more difficulties for American companies in the Chinese media over the coming months, not just on the CCTV day but other times,” said Shaun Rein, the Shanghai-based founder and managing director of China Market Research Group....

Domestic companies will also likely be on edge. Serial acquirers such as Dalian Wanda Group Co. have come under scrutiny as China clamps down on financial risk. Liquor company Kweichow Moutai Co. has been criticized for having a lofty market valuation.

One possible comfort for both foreign and domestic corporations: while CCTV has had a powerful impact on both consumers and companies in the past, its influence may be weakening. Especially after Japanese retailer Muji was cleared of claims after last year’s program accused it of importing foods from areas contaminated by radiation.

“It seems that the power of the CCTV thing has gone down,” Rein said. “Consumers are kind of bored of it. They realize it’s kind of propaganda and very often targets companies that are doing OK.”

More at Bloomberg.

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 political experts at the China Speakers Bureau? Do check out this list.

Stimulus will remain in China's tool box - Victor Shih

Victor Shih

China's government seems eager to control debts, even when it means a mitigation of economic growth. But the financial stimulus will remain a trusted tool in the country's financial toolbox, in case growth drops too far, says financial analyst Victor Shih at the Deutsche Welle.

The Deutsche Welle:

Experts say the Chinese government needs to slow down the pace of infrastructure investment if it wants to resolve the debt problem. But they doubt that the government is willing to push ahead with such a measure. 

"Because it [infrastructure investment] already is a large contributor to growth, slowing investment will substantially reduce growth rates," said Victor Shih, an associate professor of political economy at the University of California in San Diego. "This is not what the leadership wants."... 

Analyst Shih believes that once China's economic growth drops to a certain level, Beijing would again resort to stimulus to boost expansion. "I still think that if growth falls below a certain level, the top leadership will order a stimulus, which involves acceleration in debt growth," said Shih. "That is the only viable tool in China's arsenal if the economy slows too much."

More at the Deutsche Welle. 


Victor Shih 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 financial analysts at the China Speakers Bureau? Do check out this list.  

Reform state-owned companies lagging - Sara Hsu

Sara Hsu

China might have announced drastic reform of its government, state-owned companies are still lagging behind in reforms, argues financial analyst Sara Hsu. Because their access to state funding is unlimited, they keep on creating new debts and have little incentive to improve efficiency, says Sara Hsu at CGTN.

Sara Hsu is a speaker at the China Speakers Bureau. Do you need her at your meeting or conference? Do get in touch or fill in our speakers' request form.

Are you looking for more financial analysts at the China Speakers Bureau? Do check out this list. 

Why big data are not the new oil - Mark Schaub

Mark Schaub

Shanghai-based lawyer Mark Schaub dives further into the legal consequences of self-driving cars. Big data - generated by cars - are not the same as oil, as some argue, he says. Privacy is a key issue, that did not matter to oil, he writes at the China Law Insight.

Mark Schaub:

Everyone is talking about data and how it is like oil. The above quote has been repeated by the Economist, newspapers, titans of industry and world leaders. 

However, data really is not like oil. 

Oil is ultimately a finite and diminishing resource. Its value is linked to scarcity. Oil has one basic use. Data has none of these attributes. Data and its uses expand exponentially. Indeed it is forecast that in the next two years, 40 zettabytes of data will be created – this is data equivalent to 4 million years of HD video. [1] Most crucially consumers of oil do not generally take matters personally. Data on the other hand, inflames consumers’ passion-how do I maintain privacy? Who has access to my data? How will the data be used? 

Big data is a focus area for many industries and the auto industry is no exception. However, with the advent of self-driving cars the auto industry will not only be a consumer of data but also a major generator of data. A single self-driving car could generate as much as 100GB of data every second. [2] 

Given that China has 217 million cars and the number increases by nearly 11% each year [3] this means the potential amount of data produced yearly would be far greater than the data held by Google.[4] 

Self-driving cars may not need oil to function (as most will be electric) but they will need data to be on the roads. Self-driving cars will rely on a massive amount of data to flow via various sensors integrated into the vehicles. The vehicle will need to know its precise location, its destination and also be able to keep track of everything while it is on the road.[5] Self-driving cars will also need to learn about their environment and the consumers who use them. The “smarter” self-driving cars can become, the greater the convenience for the users. However, the cars will need increasing amounts of personal data to become smarter and also to incorporate data results into the services.[6] 

Unlike oil the data generated by self-driving cars will not be a simple commodity that will be used for one purpose and consumed. The data generated will have great value to carmakers, mobile operators, insurance companies, restaurants, hotels and any other innumerable numbers of service or product providers that hope to interact with a self-driving car or its user. Google has built a $400 billion business on its knowledge of over one billion[7] users’ internet habits using their search engine for 1.2 trillion searches per year. [8] Imagine how valuable similar insights that are generated by observing billions of consumers’ behavior in cars for extending periods of time every day.  The potential for monetization will be almost limitless.[9] 

Data – great for companies, great for convenience, great for consumer experiences – but not so great for privacy.  Privacy concerns on the part of consumer have greatly increased in recent years with the growth of social media, internet and data hacks. Self-driving cars will amplify concerns and consumers and regulators realize how much data and personal information these vehicles will generate, use and record about users and the surrounding environment. Self-driving cars will be a veritable fleet of data factories. Such mobile surveillance will mean that privacy will be compromised … everywhere. 

As millions of self-driving cars are expected to be on the road within the next few years the issue of balancing the modern concern of privacy and the pressure to not hinder the next great industrial revolution will be increasingly pressing. A balanced regulatory scheme will need to be established to protect privacy on the one hand while still allowing the technology to develop unheeded by excessive government intervention.

Much more at the China Law Insight.

Mark Schaub is a speaker at the China Speakers Bureau. Do you need him at our meeting or conference? Do get in touch or fill in our speakers' request form.

Are you looking for more stories by Mark Schaub? Do check out this list.  

The madness of Trump's Tariff Scheme - Harry Broadman

Harry Broadman

The US announcement of tariffs on steel and aluminum was supposed to be a fit shot in the US-China trade war but left many US allies behind in disarray. Former US official Harry Broadman tries to make sense out of the mess Donald Trump has created, for Forbes.

Harry Broadman:

When President Trump signed an Executive Order on March 11, 2018 that set forth a plan to impose prospectively import tariffs on steel of 25% and on aluminum of 10% for countries exporting those products to the U.S., most of us trade negotiation veterans were startled. Literally. You should be too. 

We were taken aback for two reasons. First, the legal basis on which the Executive Order appealed is arcane and rarely invoked. Second, the mechanics of how the tariffs would be applied—under a dangled threat, where countries would have to belly up to the table one-by-one and seek exclusions from Mr. Trump until the Executive Order becomes effective on March 23, 2018—are unprecedented, set in motion a dynamic that threatens to unravel the multilaterally agreed rules-based world trading system for which the U.S. has been the primary champion for more than 70 years, and plunges an extraordinarily wide swath of industries lying at the core of world economic growth into uncertainty. 

Only Canada and Mexico were provisionally excluded in Trump’s Executive Order—since they are in the midst of a U.S.-forced re-negotiation of the North America Free Trade Agreement (NAFTA). But if the NAFTA renegotiations do not go Mr. Trump’s way, the only two neighboring countries of the U.S. and our 2nd and 3rd largest trading partners, respectively, would also fall under the Trumpian Sword of Damocles. 

Some of the smartest trade policy observers in Washington, Brussels, Tokyo, Beijing, New Delhi, Mexico City, Ottawa and Canberra, among others, are scratching their heads as to why Trump proceeded in this fashion. Actually, the answer can be found in the way the President has conducted his business dealings in the private sector for years. Regrettably, these practices are fundamentally at odds with the rules governing global trade negotiations, which, after all are among sovereign not commercial entities.

More at Forbes and this pdf file.

Harry Broadman 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 strategy experts at the China Speakers Bureau? Do check out this list.

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