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What global investors can learn from China’s new economic governance

Adam Layaan Kurik Riza



Several global investors appear to have recently observed a “turn” in China’s economic governance.

Aside from multiple antitrust probes and data security audits of the country’s major internet firms, officials have put stringent rules on the off-campus tutoring industry and enhanced food safety assessments of prominent food brands.

Investors are wondering if China’s policy stance is changing as a result of the comprehensive rules inside the industries. How will the regulatory changes affect the capital market and China’s economic structure in the long run?

Global financial services analysts recognized the regulatory procedures as part of China’s long-term attempts to make growth more sustainable and inclusive, which are expected to bring benefits to the regulated sectors and the broader economy in the end.

In preparation for the commencement of China’s new five-year plan period in 2021, authorities have increased regulatory monitoring in a number of areas.

The country’s highest market regulator pledged in April to increase anti-trust law enforcement, imposing record fines on the country’s digital juggernaut Alibaba and beginning anti-monopoly investigations against internet giant Meituan.

Off-campus tutoring enterprises were put on hold in July when central authorities issued guidelines restricting financing for the for-profit off-campus training organizations in an effort to alleviate student burdens.

Market authorities in the country have also increased their crackdowns on food safety infractions, conducting on-the-spot inspections of a number of popular food brand chain stores and pushing rectifications from the concerned firms.

“The regulatory actions should be placed within the broader framework of China’s economic transition,” said Robin Xing, Morgan Stanley’s top China economist.

For example, the anti-monopoly legislation gave focus to issues such as the over-concentration of market power in a few IT behemoths, which might erode profit margins of small and medium-sized businesses, he added.

“The latest policy suggested a greater emphasis on social fairness, which will promote a healthier economic structure, more stable growth, and happier lifestyles for the people,” Wang Peng, an analyst with Hangzhou-based Yongan Futures, said.

According to Shi Jialong, Nomura’s head of China internet and new media research, the regulatory moves on China’s internet sector are a signal to enable the main platforms to divert their resources and energies away from excessive rivalry and into research on advanced technologies.

“We believe the internet business, which is famed for its tenacity,” Shi said, “should be able to adjust to the environment and sustain healthy growth.”

For a long time, the emphasis has been on quality rather than speed of development. Since the concept of “high-quality development” was introduced at the 19th Communist Party of China National Congress in 2017, China has been reorganizing its economy in order to make growth more sustainable and inclusive.

Financial risks have been mitigated, absolute poverty has been eliminated, and environmental contamination has been addressed. Meanwhile, the government has prioritized the strengthening of reforms on all fronts in order to promote a new development paradigm.

The latest Central Committee for Financial and Economic Affairs meeting, joined by the country’s top authorities, emphasized high-quality growth while emphasizing “shared prosperity” in its quest.

“If you go back, you’ll see that all of the policies can be traced back to the development ideology expressed in public publications,” Wang explained.

“Some folks missed the signs or didn’t fully comprehend it,” he explained.

For example, socioeconomic fairness has long been a policy objective, according to Wang.

With a GDP expansion of 12.7 percent in the first half of this year, China is on course to fulfill its 2021 growth objective of “over 6 percent.”

“This means the country has left enough room to promote measures that are critical to long-term development,” said Victoria Mio, Fidelity International’s director of Asian Equities.

According to Mio, the laws are beneficial to the long-term growth of the Chinese economy and capital market.

Fidelity International, which is bullish on the possibilities of the Chinese market, has sought to establish a wholly owned fund management company. In August, China’s top securities regulator authorized the proposal.

Furthermore, other global asset management behemoths are rapidly turning bullish on China. In an interview on August with the Financial Times, an investment strategist at BlackRock’s research team advised investors to increase their exposure to Chinese markets.

According to Wang, there are several reasons for investors to remain bullish on Chinese assets.

According to Wang, China’s bond yield is among the highest in major nations, but its stock market valuation is lower than in most developed economies, indicating the long-term investment worth of China’s assets.

“It’s impossible to remain confident in China and its assets,” he remarked.


UNCHR has urged the international community to continue engaging with the Taliban





Filippo Grandi, the United Nations High Commissioner for Refugees (UNHCR), stated today that the international community should continue to engage with the Afghan Taliban.

On a news conference Friday during his tour to Pakistan, the UN official stated that the UNHCR is working with the temporary Taliban administration in Afghanistan on humanitarian issues and urged the rest of the world to do the same.

“The Taliban emphasized a desire for humanitarian assistance to be delivered to the country as soon as possible since, as we see ourselves, things are extremely challenging.”

He stated that Afghanistan has been in severe need of financial assistance and that as time passes, the situation will worsen “Everything is required because the situation is dire. Food, medication, housing, and other basic requirements are required.”

He stated that the UNHCR will be able to expand up humanitarian assistance if it is sufficiently supported and resourced.

“It is critical that the international community establish the required direction (and) methods to maintain Afghanistan’s functioning. If public services, such as health care or education, fail and the state fails to operate, it would cause a much worse disaster than a humanitarian crisis.”

When asked about the fresh wave of internally displaced persons in Afghanistan, he stated that roughly 500,000 people had lately been displaced by violence due to fighting in their communities. There is, however, no migration of refugees into neighboring countries, notably Pakistan.

He praised Pakistan for facilitating humanitarian efforts in Afghanistan, stating that he received some relief trucks from Pakistan during his visit to Afghanistan.

“Whether it is Pakistani or international donations going through here, we will need to use Pakistan to fly people in and out, as usual, Pakistan will play a very crucial role of assistance to the humanitarian activities within Afghanistan, and I am very happy for that.”


Source: Xinhua News Agency

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During the Mid-Autumn Festival holiday, China anticipates 40 million domestic trips

Adam Layaan Kurik Riza



According to the China State Railway Group Co., Ltd., 40 million domestic journeys are expected in China during the four-day travel rush for the Mid-Autumn Festival holiday.

According to the firm, passenger trips are projected to peak on Sunday, the opening day of the three-day Mid-Autumn Festival holiday, with 11 million trips estimated on that day.

The railway passenger flow is likely to return to last year’s levels, according to the business, citing bookings made on, China’s official railway ticket reservation website.

The Mid-Autumn Celebration, which takes place on September 21 this year, is a traditional festival that represents family reunions.

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Global automakers and experts appeal for NEV collaboration

Adam Layaan Kurik Riza



To attain the aim of carbon neutrality, major global automakers and experts have advocated for more extensive collaboration in the field of new energy vehicles (NEVs).

Speaking at the 3rd World New Energy Vehicle Congress (WNEVC), international participants stated that because China is the world’s largest auto market, they are eager to collaborate with Chinese partners to combat climate change and create a more beautiful world.

The three-day event, titled “Comprehensively advancing marketization, accelerating cross-industry integration, and collaboratively achieving carbon neutrality,” was held from September 15 to 17 in Haikou, the capital of south China’s Hainan Province.

British Trade Commissioner for China John Edwards said he urges more Chinese companies to seek collaborative opportunities with the UK and assist develop the battery and new energy vehicle markets.

“China and the United Kingdom both have extensive plans for zero-emission vehicles. I am confident that by exchanging ideas and working together, such as at this event, we can accelerate innovation and create a successful environment for meeting our zero-emission car goals “According to Edwards.

BMW, a business that has been active in the Chinese market for decades, has declared its support for China’s green transformation.

By cooperating with Chinese enterprises, the German manufacturer claimed it will deliver more zero-emission vehicles for the Chinese market and extend the number of public charging stations. BMW is forming partnerships with Chinese digital behemoths to assist startups in technological innovation, according to BMW Chief Development Officer Frank Weber in a video speech.

ZF, a global auto-system supplier, has established roughly 50 manufacturing businesses and four R&D centers in more than 20 Chinese cities.

Holger Klein, a member of ZF Group’s management board, stated that the company will continue to improve its innovation and development capabilities, as well as promote digital manufacturing for the Chinese NEV market, in order to contribute to China’s sustainable development and next-generation mobility.

Noting that China is the world’s largest market for electric vehicles, Hans Georg Engel, senior executive vice president of Daimler Greater China Ltd., stated that the company will establish an R&D center in Beijing with over 1,000 engineers and will continue to invest in China to improve its research capabilities.

Daimler, in particular, will focus on the research and development of electric vehicles and battery technology in order to give personalized goods to Chinese consumers, he added.

According to Liu Yunfeng, vice CEO of Volkswagen Group China, the German carmaker Volkswagen wants to create 17,000 high-power charging sites in China before 2025 and 32,000 by 2030, emphasizing that reaching carbon neutrality takes work from every country around the world.

Carlos Manuel Rodriguez, CEO of the Global Environment Facility, reiterated Liu’s views, urging intense cooperation in terms of technologies and markets to aid the development of the NEV industry in developing nations.


Source: Xinhua News Agency

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