CKGSB Knowledge - China Business and Economy Winter 2018

CKGSB Knowledge is an English language business publication focused on China. It features original articles on business and economy in China, the evolution of “Made in China”, policy issues, the rise of Chinese companies, the emergence of Chinese multinationals, and foreign multinationals’ strategy and operations in China. It also features interviews with influential thought leaders and CEOs, both Chinese and global, on trending topics. CKGSB Knowledge provides a unique vantage point from which to discover the latest general and China-specific business trends. It also provides a matrix to understand how emerging markets are transforming the global business landscape.

United States
Cheung Kong Graduate School of Business
€ 1,86(Incl. btw)
€ 5,22(Incl. btw)
4 Edities

in deze editie

3 min
decision time

Over the past few months, a catchphrase from the hit HBO drama Game of Thrones seems to have been on everyone’s lips in China. Investors, analysts and reporters have been lining up to tell the world that “winter is coming” to the Chinese market. Several factors have contributed to this gloomy sentiment. More businesses are struggling to access credit following a deleveraging drive in the financial sector. A sell-off in the stock markets has exacerbated many firms’ difficulties. Meanwhile, the trade war with the United States is making life tough for exporters. All of this means that Beijing faces some big challenges in 2019. But how worried should we really be about the health of the economy? In this issue, we dig deeper into the issues driving recent headlines, and in many…

11 min
saving is the new spending

Gu Anzhong looks wistful as he stares at a sleek BMW sedan at China’s first-ever import expo in Shanghai. The 52-year old management consultant had pined for the same model—with a price approaching RMB 1 million ($144,000)—as a second car to go with the purchase of a new villa on the outskirts of Shanghai, but rising bills scotched the plan. “Cash flow is tighter since my family bought our second home. Two mortgages mean we have to be more careful,” says Gu. “It’s fine. Frugality never hurt anybody.” Gu is hardly alone when it comes to watching his spending. Across the country, the talk is about cutting back in big ways and small—from cooking at home instead of eating out, to getting around by bicycle rather than taxis. At a busy KFC restaurant…

10 min
codependent partners

The rapid deterioration in relations between China and the United States over the past 12 months has left many scratching their heads and wondering how we got here. Stephen S. Roach is not one of those people. A former Chief Economist of Morgan Stanley, Chairman of Morgan Stanley Asia and currently Senior Fellow at Yale University’s Jackson Institute for Global Affairs, Roach has been watching the development of Chinese-US relations closely for more than three decades. For him, a tariff war between the world’s two largest economies was as predictable as it is harmful. In his 2014 book, Unbalanced: The Codependency of America and China, Roach warned that growing bipartisan anger toward Beijing in Washington was making “the unthinkable Bad Dream” of a Sino-US trade war a real possibility. The reason did…

10 min
stuck in the middle

As the Sino-US trade war heated up in the fall, the International Monetary Fund warned that the entire global economy would suffer if things got serious. But the group that has felt the effects most severely so far is the one that the United States is ostensibly trying to help: the many multinational companies doing business in China. Apart from reducing the bulging bilateral trade deficit of the US, the Trump administration’s main justification for launching the trade war has been to force China to improve its treatment of foreign firms. Businesses continually complain of inadequate intellectual property protection, forced technology transfers and heavy subsidies for state-owned domestic competitors. “The end goal of the US is to press China to abide by its World Trade Organization commitments and accept the norms of…

11 min
the view from beijing

President Xi Jinping set a hard tone for China’s intensifying trade war with the United States back in June when he met with a high-powered group of American and European executives in Beijing. The US had just threatened to impose tariffs on $200 billion of Chinese goods, and the Chinese leader warned his foreign guests that this action would have consequences. “In the West, you have the notion that if somebody hits you on the cheek, you turn the other cheek,” Xi reportedly told the assembled CEOs. “In our culture, we push back.” The message Xi was sending was clear. After decades of hiding its strength and biding its time, Beijing had decided to go toe-to-toe with Washington on issues it considered central to its interests. In the months since, many analysts have…

9 min
banking on beijing

Mao Zedong is once said to have remarked: “Everything under heaven is in great disorder; the situation is excellent.” This famous quip could easily describe the state of play in China for global banking giant UBS. Last year, headwinds from the China-United States trade war buffeted most foreign businesses, while large parts of the Chinese financial sector struggled to cope with the fallout from a major crackdown on risky lending practices. Yet, both these disruptions brought unexpected benefits for the Swiss bank, according to Eugene Qian, head of the group’s operations in China. Beijing has reacted to US pressure by fast-tracking reforms to open up the financial market, enabling UBS to become the first foreign bank to receive approval to take a controlling stake in its China securities joint venture in December.…