Chinese Economics Thread

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stibyssip

New Member
TechFin: Jack Ma coins term to set Alipay’s goal to give emerging markets access to capital

Jack Ma, founder of the world’s largest e-commerce platform, has coined a new phrase to define the mission of Alipay to help more young people, small companies and poor nations gain access to capital, advocating a concept of “techfin” to turn the trendy “fintech” on its head.

“Fintech takes the original financial system and improves its technology,” said Ma during Friday’s China Conference organised by the South China Morning Post. “TechFin is to rebuild the system with technology. What we want to do is to solve the problem of a lack of inclusiveness.”

Ant Financial Services Group, backed by Ma’s Alibaba Group Holdings, would rather strive to provide equitable payment systems and access to capital for emerging economies like India, the Philippines and Malaysia, instead of focusing on competing in developed markets like Europe and the United States, he said.

The Alipay service, which boasts 450 million registered users, has its largest market in China, where it runs third-party payments and e-wallet services.

Ant Financial last September invested US$680 million in Indian e-wallet company Paytm in its first significant foreign expansion efforts as it sought to expand its digital financial services abroad.

In November, Ant Financial partnered with Thailand’s fintech firm Ascend Money, which also runs a digital wallet service. Under the agreement, Ant Financial will assist Ascend Money to grow its online and offline payments and financial services ecosystem.

While Ant Financial has formed partnerships to expand in other Asian markets, the company has yet to launch its digital wallet services into Europe or the Americas. Instead, it partners with merchants globally to allow Chinese tourists to pay for purchases via the Alipay app, with aims to partner 1 million offline merchants over the next three years.


But Ma emphasised that Alipay is still zoning in on servicing developing countries first, because “everyone should have a bank account.”

“It’s not a business model competition ... Getting a business model is simple if you really solve a big problem and create value,” he added. “In India, we have over 150 million users who can run mobile payments within 20 months. This is something we feel proud of.”

Alibaba owns the South China Morning Post

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stibyssip

New Member
stibyssip said:
TechFin: Jack Ma coins term to set Alipay’s goal to give emerging markets access to capital...
Alibaba owns the South China Morning Post
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Over the next decade fintech is sure to change banking forever. I see a lot of people being put out of their finance jobs, but hopefully this will make access to capital easier, fairer, and more transparent.

Also, just found out Alibaba owns Hong Kong's SCMP. After the scandal around Beijing's supposed muzzling of the newspaper a while back, this is welcome news. Maybe I'm naive but I trust SCMP under the stewardship of Jack Ma and Alibaba. I think he is more liberal minded and open to new ideas than the bureaucrats in Beijing, while his interests and loyalties are firmly planted in China as a nation rather than any political entity or faction. Alibaba due to its size and influence as one of China's flagship multinationals, has more leverage than most compared to the Chinese government. I think Beijing knows that Alibaba's interests are aligned with maintaining the political status quo, but also recognizes that Jack Ma is guided by lofty ideals and will (and can) stand up for what it takes to make the country strong, united, and free.

Compared to the state media management apparatus (which could stifle critical voices) and localized management (which could start agitating against national interests in favour of regional ones), the acquisition of SCMP by Alibaba is the best outcome I could have imagined.
 
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taxiya

Brigadier
Registered Member
I like to follow something to the end because very often the reality is revealed after people have lost interest after the initial hype. Here is the latest development of Aixtron deal.

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The German company has been trying to return to profit and take back leadership of the global market for LED chip-making equipment from U.S. rival Veeco Instruments (
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According to Aixtron's most recent annual financial report, Veeco held a 53 percent share of the market for the equipment, used to make LEDs, in 2014, while Aixtron had 41 percent.
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It seems the real reason is US government trying to help American company to gain market share by crashing the rival, in this case the Germans got their head shot through and the bullet landed at the Chinese. Kill Aixtron all together if Veeco can not get to buy it due to the Chinese offer being better.

Technical background discussion from BBS
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.
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Translation
poster 白垩纪
  • China is developing (same machine), but maybe "furnace", "auto valves" and "air/gas piping" are not satisfactory.
  • Maybe soon key engineers will be working in China.
  • The (type) 55 machine of Aixtron can produce more uniformed crystalline layers than (type) 45 machine of Veeco in one batche.
  • Veeco also want buy (Aixtron's) CVD department.
  • If (Aixtron) bankrupts China could acquire the tech with even lower cost. (I believe he meant through hiring the key engineers.)
  • (I) used both machines from aixtron and veeco, aixtron's disadvantage compared with veeco is the lesser uniformity between batches. Aixtron machine has to be (recalibrated) adjusted through menu between batches. Not as convenient as veeco (but not affecting quality).
poster aqw
  • In MOCVD industry, Aixtron is not the top. Shower-head (a component of the machine?) is a copy from Thomas Swan (Another brand in the same industry?).
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The two posters seem to be professionals in the industry. They listed pros and cons of three brands. Their points supports my earlier conclusion that Aixtron is a good to have, but not a must to have.

白垩纪 also suggested the same thing that I said, key engineer of Aixtron ends up working in China.

The possible role of veeco being Obama's real motivation of blocking the deal demonstrated once again my other long held opinion that even heavy weight like Germany is under the dominance of U.S. who will not blink to kill her "ally" to defend her dominance. Another example after the Plaza Accord to cripple Japan in the 1980s.
 
S

stibyssip

New Member
t2contra said:
@ stibyssip
SCMP's reports on China's technological innovations do tend to be too optimistic. Be warned!
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I think that is partially a reflection of Alibaba's editorial influence. This article in particular is not only clearly pro-China but (understandably) pro-Alibaba. I know this whole "techfin" thing is just Jack Ma's buzzword, but at the very least it shows the high level of importance he envisions for fintech's role in the future economy; a correct vision in my opinion.
taxiya said:
The possible role of veeco being Obama's real motivation of blocking the deal demonstrated once again my other long held opinion that even heavy weight like Germany is under the dominance of U.S. who will not blink to kill her "ally" to defend her dominance. Another example after the Plaza Accord to cripple Japan in the 1980s.
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It's no secret that the US will use every piece of leverage it has to stay on top. Someone like Veeco will probably end up acquiring Aixtron's US based assets at a discount, while China will surely try to get ahold of some of their talent and IP.
 
broadsword

broadsword

Brigadier
stibyssip said:
I think that is partially a reflection of Alibaba's editorial influence. This article in particular is not only clearly pro-China but (understandably) pro-Alibaba. I know this whole "techfin" thing is just Jack Ma's buzzword, but at the very least it shows the high level of importance he envisions for fintech's role in the future economy; a correct vision in my opinion.
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China innovations are not well reported by the Chinese media. Even the Chinese Academy of Sciences do not report all their own developments. Some are reported by the West and then there are some innovations that are not practicable like the overhead bus.
 
Jura The idiot

Jura The idiot

General
while looking for the SCS news now
https://www.sinodefenceforum.com/chinas-scs-strategy-thread.t3118/page-393#post-429219
I noticed about "supply-side structural reform" (the first time I've heard of it) in Yearender-Xinhua Insight: From plans to progress: the first year of China's supply-side reform
A year ago, "supply-side structural reform" was just a buzzword among Chinese economists and government officials. However, solid progress this year has proved it is more than a slogan.

The revival of Huaibei Mining Group is a case in point.

Located in central China's Anhui Province, the nearly 60-year-old company had been struggling in a glutted coal industry for years, suffering huge losses and unable to cover workers' salaries. But reform measures have brought it new hope.

Following official guidelines, Huaibei Mining shut down inefficient mines, introduced advanced techniques and helped with the re-employment of excess staff elsewhere. These changes, adopted across the mining industry, were part of a nationwide production capacity cut that has started to rejuvenate the sector.

In the first ten months, the company raked in 260 million yuan (around 37 million U.S. dollars) in profits -- a sharp contrast with the 1.64 billion yuan in losses during the same period of 2015.

"The overcapacity reduction is actually an opportunity for us," Huaibei Mining chairman Kong Xiangxi said, adding that transformation is the only way out for businesses trapped in sluggish heavy industries.

Huaibei Mining is typical of traditional companies in China searching for a new start amid the country's economic overhaul. From steel smelting to equipment manufacturing, industries plagued by overcapacity and lagging technology are gradually recovering.

Major economic indicators illustrated the trend.

China's factory-gate inflation in November stood at its highest since late 2011, and the official manufacturing Purchasing Managers' Index came in at 51.7, rising for a third straight month. China's aggregate industrial profits rose 8.6 percent year on year in the first 10 months, with the growth rate at a record high since August 2014.

"The reform brightened market expectations and built business confidence," said Wang Yiming, deputy director of the Development Research Center of the State Council, adding that economic growth has remained within a reasonable range and the conditions exist for the economy to level up from the slowdown.

China's policymakers started to press ahead with reforms on the supply side at the end of 2015 in hopes of solving economic structural problems and fostering new growth drivers, as demand-side support, such as investment stimulus, had become less effective.

Shi Hongxiu, a professor of economics at the Chinese Academy of Governance, described the reform as "an innovation in macro economic regulation." Economic development should not only rely on short-term demand policies, but also turn to long-term restructuring for sustainable momentum, Shi said.

Throughout the year, China closed outdated steel mills and coal mines, reduced unsold homes in small- and medium-sized cities, brought down corporate debt levels, rolled out more tax breaks for businesses, and fixed weak links in the economy.

"The supply-side structural reform will improve China's growth potential and then inject vitality into the global economy," said Wei Shangjin, a professor at Columbia University.

However, across-the-board reform is no easy task, and challenges have continued to pop up during the process.

Unexpected home price spikes in the first nine months, partly due to the housing inventory reduction, pushed up residential leverage and swelled asset bubbles. The downsizing of the steel and coal sectors led to shrinking supply and shored up short-term prices, which in return impeded further reform moves. The closure of "zombie companies" caused risks from unemployed workers and unresolved debts.

"Given all the difficulties, reform cannot be completed in one kick, but requires resilience and composure," said Li Yang, a researcher with the Chinese Academy of Social Sciences.

Despite the obstacles, policymakers have decided to carry on with reform.

China will deepen supply-side structural reform in the next year, expanding reform measures to more areas: overhauling the supply-side of agriculture, reviving the real economy and stabilizing the property sector, according to the tone-setting Central Economic Work Conference, which ended Friday.

"Reform will remain a main theme of the country's economic work in the 13th Five-Year Plan period (2016-2020)," said Yang Weimin, deputy head of the Office of the Central Leading Group on Finance and Economic Affairs.

Peng Sen, president of the China Society of Economic Reform, suggested policies should remain market-oriented and let innovation and competition play a bigger role.

HOPES FROM EMERGING INDUSTRIES

Besides the upgrades of traditional heavy industries, the supply-side reform will also support businesses in emerging sectors, ranging from new energy vehicles to Internet technology, to generate fresh economic momentum.

In fact, growth drivers can be as small as a mobile app.

Huochebang, a mobile platform that helps truck drivers find goods to transport, is improving logistics efficiency in China. Launched in 2014, the app is growing rapidly, and 20 million tonnes of goods are matched with transporters via the platform each day.

"We helped reduce the number of empty trucks on the road by 6 percent in China last year, and the total fuel saved each day can power a truck for 10 million km," said Huochebang president Luo Peng.

Analysts said growth businesses like Huochebang are increasingly important to sustain a slowing economy.

The government expects the output of emerging sectors to account for 15 percent of GDP by 2020, up from the current 8 percent.

Supply-side reform generates opportunities for ambitious entrepreneurs and venture investors, said Clark Hu, founding partner of Joynt Capital. Hu's investment in big data, mobile health services and other new business models has brought him lucrative returns.

China's economic growth held steady at 6.7 percent year on year in the first three quarters, with the tertiary industry contributing 52.8 percent of GDP, up from 51.2 percent a year ago.
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source is Xinhua | 2016-12-18 17:43:37
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AssassinsMace

AssassinsMace

Lieutenant General
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It's interesting how since Trump was elected, the media has been warning of the dire consequences of what he was just repeating from what he learned from the media to begin with. His 45% tariff he was going to slap on China... something Senator Chuck Schumer has been trying to pass in the Senate for years and the media was throwing that out there because of an undervalued Yuan. Now you have this article that goes deeper with the truth yet still doesn't tell how most of China exports are foreign corporations that outsource to China and they make all the money not China as it's believed now simply because if it says Made in China, it must be a Chinese product owned by a Chinese company that make all the profits when sold to consumers.
 
F

Franklin

Captain
AssassinsMace said:
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It's interesting how since Trump was elected, the media has been warning of the dire consequences of what he was just repeating from what he learned from the media to begin with. His 45% tariff he was going to slap on China... something Senator Chuck Schumer has been trying to pass in the Senate for years and the media was throwing that out there because of an undervalued Yuan. Now you have this article that goes deeper with the truth yet still doesn't tell how most of China exports are foreign corporations that outsource to China and they make all the money not China as it's believed now simply because if it says Made in China, it must be a Chinese product owned by a Chinese company that make all the profits when sold to consumers.
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China is now rapidly moving up the value chain. China's industries are expanding in the deep rather than in the broad. Instead of making ever larger volumes of iPhones and iPads China is now trying to increase the Chinese content of that iPhone and iPad. And they are doing that with some success as China now is taking away market share from the likes of Japan, Korea, Singapore, Taiwan and others. More of the profits are staying in China these days. That's one of the reasons why income and living standards in China are going up.
 
Blackstone

Blackstone

Brigadier
Franklin said:
China is now rapidly moving up the value chain. China's industries are expanding in the deep rather than in the broad. Instead of making ever larger volumes of iPhones and iPads China is now trying to increase the Chinese content of that iPhone and iPad. And they are doing that with some success as China now is taking away market share from the likes of Japan, Korea, Singapore, Taiwan and others. More of the profits are staying in China these days. That's one of the reasons why income and living standards in China are going up.
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In addition, America's trade deficit vis-a-vis PRC isn't nearly as high as the $500-$600 billion Trump and his advisors parade on mass and social media. That's because under current WTO rules, when China exports goods (and vast majority of the deficit come from goods and not services) to other countries, the entire cost of the goods is assigned to China. In reality, China receives little money for high value goods it exports, items like smart phones. An example I read is out of the approximately $240 of an iPhone, China only gets about $2.40 for assembly and some components, not $240, and yet, China is accorded the entire $240 'credit' for the phone.

The bottom line is if the Trump Administration initiates a trade war with the PRC, his team would be surprised by not only how much less China is actually hurt by the trade war, relative to what Team Trump pontificates, but how the spillover effect would harm US friends and allies too.
 
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