From Shenzhen Daily
“ZHONG SHANSHAN is a private billionaire who’s rarely quoted in the press.
Now, after an improbable career spanning journalism, mushroom farming and health care, he’s become Asia’s richest person, eclipsing India’s Mukesh Ambani and a group of Chinese tech titans.
Zhong’s net worth surged US$70.9 billion last year to US$77.8 billion, making him the 11th-richest person on the planet, according to the Bloomberg Billionaires Index.
Zhong’s business interests aren’t entwined with other rich families such as the property tycoons, which is why he’s known locally as the “Lone Wolf.”
He owes his success to two unrelated fields. He took vaccine maker Beijing Wantai Biological Pharmacy Enterprise Co. public in April, then months later Nongfu Spring Co., a maker of bottled water, became one of Hong Kong’s hottest listings. Nongfu shares have jumped 155 percent since their debut, and Wantai’s are up more than 2000 percent. (SD-Agencies)”
The United Kingdom and Turkey signed a free trade agreement that took effect on January 1 – the day that the UK formally departed the European Union. The deal will protect existing preferential tariff rates for both sides in a trade relationship exceeding $20 billion. The deal is particularly important for Turkey given its significant exports to the United Kingdom – its second largest export destination. All told, Turkey exported some $11.2 billion worth of goods to the UK.
Here are Turkey’s top 5 export destinations (2019), according to an examination of IMF figures
- Germany – $16.6 Billion
- United Kingdom – $11.2 Billion
- Iraq – $10.2 Billion
- Italy – $9.7 Billion
- United States – $8.9 Billion
As for the UK, Turkey is also an important export destination, though much lower in rankings of overall exports. The UK’s total exports of $6.41 billion to Turkey rank it in the top twenty, though far from the top five.
Here are the United Kingdom’s top 5 export destinations
- United States – $72.8 Billion
- Germany – $46.5 Billion
- France – $31.2 Billion
- Netherlands – $30.5 Billion
- China – $30.1 Billion
18. Turkey – $6.4 Billion
From Rabat to Riyadh, and from Alexandria to Abu Dhabi, China has emerged as a major geo-economic player in the Middle East and North Africa region, and the money trail gives us clues to Beijing’s broader thinking on the region.
I was delighted to work with the Hoover Institution of Stanford University, who published this paper I wrote. You can find a link to the paper on Hoover’s site here, or you can go directly to the PDF of the paper here.
In the paper, through charts and text, I highlight the following
The 1993 Inflection Point
The $20 Billion-Plus Club
Where is China Investing and Winning Contracts?
The Crude Truth: Regional Export Dependence on China
A Comparison of MENA Exports to China vs Exports to the US
The Free-Rider Issue
GCC Diplomatic Contacts with China
China’s Top Ten Oil Suppliers in 2020
President Xi and the 1+2+3 Strategy
The UAE Trade Hub
Egypt and Oman Debts Rising
China’s Iran Strategy
The Future of China in MENA
By Afshin Molavi
At the nexus of geopolitics and markets in the emerging world
Our lead story this week is China’e economy: Is the recovery real, and what does it mean for the global economy?
We also look at protests rocking Nigeria, the #MilkTeaAlliance between Hong Kong and Thai protestors, and the storm in India over Bangladesh surpassing the South Asian giant in per capita GDP.
- Is China’s Economic Recovery Real?
Official Chinese statistics note that GDP expanded by 4.9% in the third quarter, “putting China back toward its precoronavirus trajectory,” as the Wall Street Journal reports. The IMF says China’s economy is set to expand by 1.9% in 2020, the only major global economy that will see an expansion in a world with balance sheets bleeding red. China benefits from being, in a sense, first in and first out of the coronavirus pandemic, and both factory production and consumption are up sharply.
Most reports from China suggest that the recovery has been driven first by a recovery in factory output in the second quarter as Beijing ramped up its industrial machine to deliver a wide range of goods demanded by the global economy, from medical equipment to hand sanitizers and home office equipment, followed by a consumer recovery in the third quarter as more Chinese ventured out of varying degrees of lockdown. This consumer recovery, in many ways, tells a more important story than China’s official numbers — long a source of (justifiable) skepticism.
It’s hard to quibble, however, with what Western and other multinationals are saying: China is back. U.S-based Domino’s Pizza had a very strong quarter in China, with CEO Richard Allison calling it “a terrific success story in 2020,” as quoted in the Wall Street Journal. “While we’ve had some slowdown in some of our markets around the world, China is definitely not one of them,” he added.
Domino’s Pizza is not alone. Other companies that have reported strong consumer demand in China include the global sports brand Nike, the luxury goods brand LVMH Moet Hennessy Louis Vuitton SE, the US-based carmaker General Motors, the athletic clothing company Lulu Lemon, the spice and condiment maker McCormick and Co, and the German carmaker Daimler. All of this likely means that companies like Walmart Inc, with ambitious growth plans across China, will steam ahead as planned, including quadrupling its Sam’s Club chain of stores over the next eight years from 100 today, and growing its already existing 400 Walmart stores that sell groceries. And Tesla announced – in a statement via Tencent’s WeChat messaging service — that it will begin exporting Model 3 cars made in its Shanghai factory to Europe beginning this month.
In addition to US and international consumer companies reporting robust sales and production news from China, stock exchanges in Shanghai and Shenzhen have been on an initial public offering (IPO) hot streak. So far this year, they have hosted more than $47.5 billion in offerings, a 27% of global IPO totals, the Wall Street Journal reported. This IPO pipeline will grow even more dramatically when Alibaba’s financial services arm, Ant Group Co, issues its own offering, set to be among the biggest the world has ever seen.
The Numbers: Shanghai Stock Exchange Composite Index YTD growth: +8.6%
2. #TheMilkTeaAlliance and Thailand’s Protest Movement
If you follow Southeast Asian politics on Twitter, you would have seen a curious hashtag around Thailand’s protest movement challenging the rule of former general and head of the ruling junta and current Prime Minister Prayut Chan-o-cha and the Thai monarchy. It’s known as #TheMilkTeaAlliance, a loose grouping of pro-democracy activists in Hong Kong, Taiwan, and Thailand, who borrowed a unifying cultural force — their mutual love of milk tea — to unite them around a unifying political force: their desire for greater democracy, freedom, and human rights.
It’s catchy slogan for an important movement. I remember that feeling of buzz I first got when I gulped my first taste of Hong Kong Milk Tea a few years ago — a bright, robust tea mingled with sweet condensed milk. Different versions of milk tea are also popular in Thailand, Taiwan, and other parts of the world. In fact, I would argue that you could create a “Milk Tea Region” investing strategy that would span from South Asia to the Arabian peninsula to parts of Southeast and East Asia – some of the fastest growing economies in the world.
To learn more about the #TheMilkTeaAlliance, you can check out this useful explainer video by DW News.
Thailand’s protests have certainly rocked the country and stocks have hit six month lows this week, while the country’s equities have been among the worst performers in Asia. Reuters reports that the country has seen record equity outflows this year, and the protestors are taking a page out of the Hong Kong protestors playbook, following the “Be Water” mantra and fluidly moving in and out of police view.
Reuters has a good round-up of what’s happening in markets.
The Numbers: Stock Exchange of Thailand SET Index YTD Return: -23.8%
Via Reuters: Asia stock indexes and currencies at 0655 GMT 22 October COUNTRY FX RIC FX DAILY % FX YTD % INDEX STOCKS DAILY % STOCKS YTD % Japan -0.02 +3.85 -0.70 -0.77 China -0.21 +4.49 -0.35 8.63 India -0.05 -3.05 -0.34 -2.23 Indonesia -0.27 -5.26 -0.26 -19.31 Malaysia -0.14 -1.40 -0.03 -6.09 Philippines -0.08 +4.33 1.05 -18.82 S.Korea -0.09 +2.07 -0.67 7.16 Singapore -0.15 -0.86 -0.03 -21.66 Taiwan +0.88 +5.12 0.31 7.67 Thailand -0.29 -4.32 0.44 -22.66
Bottom line: The protesters aim to be fluid, but so is the situation and the protests may slow, but will reappear over the next few months. Thailand is set for a rocky ride the rest of the year and into the next.
3. Nigeria protests
Nigerians have seemingly had enough with police brutality — and their grievances seem to be growing. In protests that erupted in Lagos on October 5 and have spread to almost half of the country’s 36 states, Nigerians have been calling for a disbanding of a special police force unit widely believed to be involved in corruption, torture, and extrajudicial killings. Their protest demands have grown wider, calling out Nigerian leaders for widely perceived corruption and mismanagement that is seen as fueling the country’s rapid economic decline, including a whopping 55% rate of unemployed and underemployed.
At least 56 people have been killed in the protests. These three pieces, in Bloomberg, Quartz Africa, and African Business offer a good round-up of the story.
From a Reuters story:
“The unrest, unprecedented since the 1999 return to civilian rule, is the most serious political crisis confronting President Muhammadu Buhari, a former military ruler elected in 2015. Curfews have been imposed on millions of people in recent days in response to violence and looting in parts of the country.
Violence, particularly in the commercial capital Lagos, escalated after demonstrators were shot on Tuesday night in the city’s Lekki district during a round-the-clock curfew.”
The Numbers: The Nigerian Stock Exchange All Share Index YTD Return: +6.41%
By Afshin Molavi
“Change everything, except your wife and children.” Those words by Samsung Chairman Lee Kun-hee, uttered in 1993 at a low point in the company’s history, have become enshrined in the lore of the South Korean conglomerate that has become a global icon and one of the world’s leading smartphone players. Over the next two decades and a half, the “change everything” mantra came to represent a relentless drive for innovation, driving Samsung to the top ranks of consumer technology companies, infrastructure, and construction companies. It was a long road from the small trading company founded in 1938 by Lee’s father. At his death, Lee Kun-hee was South Korea’s richest person, with an estimated net worth exceeding $20 billion.
This story from TechCrunch offers a good round-up of the legacy of Samsung and Lee Kun-hee. An excerpt below
The story of Samsung is deeply intertwined with the history of its home country, which is sometimes dubbed “The Republic of Samsung.” Lee, the son of Samsung founder Lee Byung-chul, came to power in the late 1980s just as South Korea transitioned from dictatorship to democracy with the political handover from military strongman Chun Doo-hwan to Roh Tae-woo. Under his management, Samsung spearheaded initiatives across a number of areas in electronics, including semiconductors, memory chips, displays, and other components that are the backbone of today’s digital devices.
Lee navigated the challenging economic troubles of the 1990s, including the 1998 Asian financial crisis, which saw a near collapse of the economies of South Korea and several other so-called Asian Tigers, as well as the Dot-Com bubble, which saw the collapse of internet stocks globally.
Coming out of those challenging years, Lee invested in and is probably most famous today for building up the conglomerate’s Galaxy consumer smartphone line, which evolved Samsung from an industrial powerhouse to a worldwide consumer brand. Samsung Electronics, which is just one of a spider web of Samsung companies, is today worth approximately $350 billion, making it among the most valuable companies in the world.
For the full story, see here
And for a round-up of stories in the Korean media, head over to the New Silk Road Monitor Newspaper Room, and scroll down to the Korea section.
By Yukai Jiao
Nearly six decades ago, in the year 1964, the New York Times ran a story with a simple headline: “Taiwan Success Story.”
Even as far back as the early 1960s, Taiwan was widely acknowledged as a rising economic star in Asia, and eventually emerged as one of Asia’s four “Economic Tigers” — including Hong Kong, Singapore, and South Korea – that made waves throughout the 1970s and 80s as major exporters and thriving economies.
Taiwan, like the other Asian tigers, was highly dependent on exports, and today it is a major producer of semiconductors, machinery, plastics, and medical apparatus. In fact, electrical machinery accounts for nearly half of all those goods.
Like many of the early Asian tigers, the bulk of Taiwan’s exports went to the Western world, chiefly the United States, but also Japan. However, with the rise of mainland China from the early 1980s to today as a major locus of the global economy (and global demand for goods), Taiwan’s exports have gradually followed that shift.
Today, Taiwan exports more than $90 billion worth of goods to mainland China – more than double its exports to the United States. China accounts for nearly 28% of all of Taiwan’s exports. When we add Hong Kong to the mix, it accounts for more than 40% of Taiwan’s exports. Despite political tensions that often plague Taiwan’s relations with mainland China, one thing remains clear: China is a vital market for Taiwanese goods.
Here are the Top Ten export markets for Taiwanese goods.
Taiwan – Top Ten Exports to Country/Region – 2019
|1.China (Mainland)||$91.9 billion (27.9% of Taiwan’s total exports)|
|2.United States||$46.3 billion (14.1%)|
|3.China (Hong Kong)||$40.4 billion (12.3%)|
|4.Japan||$23.3 billion (7.1%)|
|5.Singapore||$18.2 billion (5.5%)|
|6.South Korea||$16.9 billion (5.1%)|
|7.Vietnam||$10.8 billion (3.3%)|
|8.Malaysia||$9.4 billion (2.9%)|
|9.Germany||$6.5 billion (2%)|
|10.Philippines||$6.2 billion (1.9%)|
By Oliver Yan
Tesla Inc., the world’s leading electric car brand, announced this week that it will begin exporting its Model 3 cars made in China to Europe later this month. The announcement captured global headlines as it would mark the first time Tesla would export from its Shanghai-based facility – its first factory outside of the United States.
“We hope to serve global customers as a global factory,” Tesla’s Shanghai-based manufacturing director, Song Gang, said, according to a Bloomberg report. “The export of China-built Tesla models is a key step in the global layout.”
Of course, Tesla is not alone. Many of the world’s leading carmakers manufacture automobiles in China. Not only is China’s manufacturing prowess and infrastructure a boost, it also helps to be close to the largest markets for cars in the world. In the year 2019, Chinese buyers purchased 25.76 million cars, solidifying the country’s position as the world’s largest auto market.
China is also the largest supplier of automobiles worldwide, with both domestic and foreign brands made in China. While sales slowed in 2019 and certainly through 2020 due to the Covid-19 slowdown, China’s auto market potential remains immense.
Below are the Top 10 domestically made automobile brands sold in China. Of the top 5 brands, only one is Chinese-owned. The German company, Volkswagen, tops the list with more than 3 million units sold in 2019. It is headed for similar top billing in 2020, with 1.59 million vehicles sold in the first six months of 2020 according to Automotive News Europe.
Top 10 Automobile Brands Sold in China (domestically made)
– Crossovers and SUVs now hold a record 43.6% share of the Chinese passenger car market .compared to 49.7% for sedans.
– The share of foreign brands increased for the third consecutive year to 61.2%, the highest it has been since 2015 and up 2.6 percentage points in 2018.
– Japanese brands hit their highest share in China since 2011 at 21.7% and both US brands and South-Korean brands their lowest shares in China since 2004 at 9% and 4.6% respectively.
– Volkswagen is still China’s bestselling brand, and because of its onslaught of crossover launches in the last two years, it manages to keep its sales virtually stable and this improves its market share to 14.6%.
– China had about 250 million cars by the end of June 2019, according to the Ministry of Public Security
By Pinxian Du
More than one million international students live and study in college towns and universities across the United States. In the academic year 2018-19, Chinese students ranked number one, accounting for more than ⅓ of that total. Chinese students have held the top spot since the 2009/10 academic year. The U.S remains the number one higher education destination, accounting for more than one in five foreign students worldwide.
International students are attracted to the wide range of high-quality higher education institutions in the United States. Meanwhile, the universities and college towns prize international students for the diversity they bring, as well as the hard currency they pour into tuition and living expenses. All told, international students contributed $45 billion to the US economy in 2018-19, according to the U.S. Department of Commerce.
Perhaps most critically, international students created or supported nearly 460,000 jobs during the 2018/19 academic year, according to NAFSA, the association of international educators.
So, where do the other two-thirds of international students come from? And where are they studying? These three Top Ten lists offer a breakdown of the countries of origin of international students, and the states and the universities that host most of them.
|The top 10 countries of origin of international students in US (2018/19)|
|Name of Country||# of students from that country in 2018/19||the amount of expenditure students spent in 2018/19|
Source: IIE, Open Door Program Report
- In the academic year of 2018/19, the total number of international students in the United States increased by 0.05%, but the growth of new international student enrollment decreased by 0.9%.
- In the academic year 2018/19, 52% of the total amount of international students hailed from from China and India.
- In 2005, the late King Abdullah Bin Abdulaziz Al Saud of Saudi Arabia launched the King Abdullah Scholarship Program (KASP), and supported 90% (approximately 200,000) of Saudi students studying abroad, including full tuition, insurance, living expenses, and annual airfare. After the program, the group of Saudi Arabia students in US witnessed dramatic growth by increasing 128.7% in the following year (2006/07).
- Since 2001, the population of international students enrolled in higher education courses away from their home of origin has increased from 2.1 million to 5.3 million. However, the percentage of these students studying in the US has dropped from 28% to 21%.
- In the last 10 years, international student enrollment in the US saw extraordinary increases from developing and growing economies in the world, including:
- Vietnam, with a 90% increase in students between 2009 and 2019
- Brazil, with an 83% increase in students between 2009 and 2019
- Nigeria, with a 114% increase in students between 2009 and 2019
- Bangladesh, with a 205% increase in students between 2009 and 2019
|Top 10 states that have the most international students (2018/19)|
|Name of State||# of international students that state hosted||the economic benefits the state received|
Source: IIE, Open Door Program Report
- In 2019, education ranks 4th among US service sector exports.
- International students created or supported nearly 460,000 jobs during the 2018/19 school year. In California, the state which hosted the most international students in 2018/19, approximately 2,900 jobs directly supported as a result of international student enrollment and 5,800 jobs were indirectly supported.
- 1 out of 3 international students studies in CA, NY, of TX.
- Between 2016 and 2019, the impact on the US economy from declining international student enrollment was estimated to be -$11.8 billion, affecting nearly 65,000 jobs.
|Top 10 universities hosting the most international students (2018/19)|
|Name of university||Institution type||Location||# of international students enrolled|
|New York University||private||New York City, NY||19,605|
|University of Southern California||private||Los Angeles, CA||16,340|
|Northeastern University||private||Boston, MA||16,075|
|Columbia University||private||New York City, NY||15,897|
|University of Illinois, Urbana-Champaign||public||Urbana-Champaign, IL||13,497|
|Arizona State University||public||Tempe, AZ||13,324|
|University of California, Los Angeles||public||Los Angeles, CA||11,942|
|Purdue University||public||West Lafayette, IN||10,943|
|University of California, San Diego||public||San Diego, CA||10,652|
|Boston University||private||Boston, MA||10,598|
Source: IIE, Open Door Program Report
- Though there are more than 4,000 colleges and universities in the U.S. – depending on how those institutions are counted – 70% of international students tend to study at only about 200 schools; those students are primarily concentrated in Texas, California and New York.
- Foreign students who made up 12% of the total student population contributed nearly 30% of total tuition revenue at public universities.
- International students pay nearly twice as much in tuition in the US as native students.
- Open Doors 2019 reports that about 62 percent of all international students receive the majority of their funds from sources outside of the United States, including personal and family sources as well as assistance from their home country governments or universities.
- The expenditure of one international student is 53% directly on higher education, 19% on accommodation, 12% on dining, and 10% on retail.
- International students at community colleges contributed $2.6 billion to the U.S. economy and supported more than 13,970 jobs during the 2018/19 academic year. These economic benefits represent a 3% decrease in dollars contributed, and a 7.8% decrease in jobs created or supported when compared to the previous year.
By Weiran Yuan
A key feature of the global economy over the last four decades has been the rise of emerging markets, most notably China. The rise of the emerging world has rebalanced the global economic order. Still, despite the rise of new economic powers and a more broadly balanced global economic pie, one thing remains true: The U.S. economy remains a powerful force in the world economy. One way to look at it is by considering the GDP of several U.S. states in comparison to national economies.
When you look at the top ten US economies (by GDP size), you sense the power of the U.S economy. Consider California, for example. If it were a stand-alone country, it would have a GDP that would rank it among G-7 economies. Its economy is roughly the same size as that of the United Kingdom. Or consider Texas, the second-largest economy. It shares something in common with Brazil: the largest economy in South America with rich natural resources. The list goes on.
Below you will see the Top 10 US state economies, expressed in nominal GDP, with their rough equivalent counterpart country.
|GDP in USD||Country/Area equivalent economy (in 2019)|
|1||California||2.78 Trillion||United Kingdom (2.82 tn)|
|2||Texas||1.80 Trillion||Brazil (1.84 tn)|
|3||New York||1.44 Trillion||Spain (1.40 tn)|
|4||Florida||947.41 Billion||Netherlands (902 bn)|
|5||Illinois||775.85 Billion||Saudi Arabia (779 bn)|
|6||Pennsylvania||723.05 Billion||Switzerland (715 bn)|
|7||Ohio||610.49 Billion||Taiwan (586 bn)|
|8||New Jersey||558.65 Billion||Poland (565 bn)|
|9||Georgia||537.27 Billion||Thailand (529 bn)|
|10||Washington||530.82 Billion||Thailand (529 bn)|
By Luming Zhao
Human civilization has been defined by the rise of cities. In fact, the word derives from the Latin term civitas, or “city.”
Throughout history, the great cities of the world have driven economic, political, cultural, and social change. Simply put, our world would not be the same without the rise of cities.
Today, cities account for about 80% of global GDP, and account for some 55% of the world’s population. By the year 2050, according to the UN, more than two-thirds of the world will live in cities.
Cities, like nations, can benefit from population size. When leveraged well, sizable cities can become centers of trade and innovation. On the flip side, populous cities pose immense challenges to governments to provide infrastructure, healthcare, education and other needs.
These Three Top Ten lists of the world’s most populous cities from three different eras (2020, 2035 forecast, and 1950) offer a snapshot of the changing dynamics of our world.
The Top Ten Most Populous Cities – 2020
- Tokyo, Japan 37.4 Million
- Delhi, India 29.3 Million
- Shanghai, China 26.3 Million
- Sao Paulo, Brazil 21.8 Million
- Mexico City, Mexico 21.6 Million
- Cairo, Egypt 20.4 Million
- Dhaka, Bangladesh 20.2 Million
- Mumbai, India 20.1 Million
- Beijing, China 20 Million
- Osaka, Japan 19.2 Million
The Top Ten Most Populous Cities – 2035 (Forecast)
- Jakarta, Indonesia 38 Million
- Tokyo, Japan 37.8 Million
- Chongqing, China 32.2 Million
- Dhaka, Bangladesh 31.2 Million
- Shanghai, China 25.3 Million
- Karachi, Pakistan 24.8 Million
- Kinshasa, DRC 24.7 Million
- Lagos, Nigeria 24.2 Million
- Mexico City, Mexico 23.5 Million
- Mumbai, India 23.1 Million
The Top Ten Most Populous Cities – 1950
- New York, USA 12.3 Million
- Tokyo, Japan 11.2 Million
- London, UK 8.3 Million
- Osaka, Japan 7 Million
- Paris, France 6.2 Million
- Moscow, SU 5.3 Million
- Buenos Aires, Argentina 5.1 Million
- Chicago, USA 4.9 Million
- Kolkata, India – 4.6 Million
- Shanghai, China – 4.2 Million
Sources: United Nations, Oxford Economics.