julian chang – china's new economy

7/28/2019 Julian Chang China's New Economy

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Julian Chang

November 28, 2012


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What to look for in Chinas next

five years

Key Priorities from the 18th Party Congress

1. Combat rampant corruption;

2. Address the environmental degradationand consequent social dissatisfaction;

3. Transition to domestic and consumption-driven growth.


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Domestic Trends

Geographical and industrialtransformation:

east and mfg to west/lower tier and

services/retail

Chinas demographics

an aging population will cause the proportion ofnon-earners to soar in the coming yearscombined with gender imbalance:


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Economic Development Regions

Premier Wen 3.5.04

State Council 2003/09

Where it all started

Premier Zhu, 2000


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Rise of the cities In the next two

decades, Chinas

urbanization is

expected to

boost domestic

demand by $4.5trillion.


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Where have all the girls gone?

Pink is bad; red is

worse and dark

red is worst.


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Demographic implications

unmarried men appear to suffer greater

health risks than their married counterparts;

old-age support for that rising cohort?


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BUT,


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Future Confidence

Life will be better for my children, 83% vs. 65%

in India, 21% in US, 13 in Germany (from a

BCG survey 2012)

Household Consumption spending will be

35% of GDP


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33%/43% fordiscretionary spending

37%/37%

ChineseConsumers are

even moreconfident in firsttier cities.
http://www.chinadaily.com.cn/business/2012-08/13/content_15671118_2.htmhttp://www.chinadaily.com.cn/business/2012-08/13/content_15671118_2.htm


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Necessity is the Mother of Invention

Innovation target 3.3 per 10,000 people in 12th

Five Year Plan

R & D 2.2% of GDP by 2015 (would equal US$160 B in 2011)

Booz & Co. Global Innovation 1000 list 2011

47 Chinese companies

40 in 2010

23 in 2009

15 in 2008


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Opportunities in Challenges

Green technologies

Elder Care

Services: hospitality and travel Food safety

Education

Financing


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Outward Investment


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Why CODI ?

Annual surpluses

Diversify foreign-exchange reserves;

increasingly uncertain market at home, whereprofit growth has slowed;

Beijing's ongoing banking overhauls shrinking

lending margins.


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Global CODI today


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US deals a/o Q3 2012

Investment by Type(in $millions)

Greenfield: 389 deals

/ $3,575 Acquisitions: 204

deals / $19,050

Investment by OwnershipGovernment: 149 deals / $12,609

Private: 444 deals / $10,016


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Industry Number of Deals USD millions

Aero, Auto & Transport 60 deals $1,541

Consumer Products 80 $441

Electronics and IT 142 $3,357

Finance & Bus. Services 55 $348

Fossil Fuels & Chemicals 45 $8,277

Health, Bio & Pharma 38 $591

Hospitality & Real Estate 21 $3,849

Industrial Machinery 67 $3,051

Logistics 18 $23

Metals and Minerals 22 $419

Renewable Energy 45 $729


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The other big headline


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Canaries

How to keep on top ofit all, besides usuals,

like data on electricity

demand, monthlyinventories, trade

figures, etc.

Provincial leadership

(6th Gen)


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julian chang – china's new economy

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