Emerging Markets Monitor Weekly – October 25

Emerging Markets Monitor Weekly – October 25

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.

  1. 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
    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%








Legendary Samsung Chairman Dies, Leaving Legacy of Innovation

Legendary Samsung Chairman Dies, Leaving Legacy of Innovation

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.

Despite Tensions, Mainland China Vital to Taiwan’s Exporters

Despite Tensions, Mainland China Vital to Taiwan’s Exporters

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

Country/Region Exports
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%)



The Top Ten Cars Sold in China and Made in China

The Top Ten Cars Sold in China and Made in China

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)

Model 2019 2018 Change Share 2019
1 Volkswagen 3,100,498 3,129,743 -0,9% 14,6%
2 Honda 1,553,086 1,452,441 6,9% 7,3%
3 Toyota 1,409,198 1,295,002 8,8% 6,6%
4 Geely 1.220.832 1,387,258 -12,0% 5,7%
5 Nissan 1,174,030 1,177,705 -0,3% 5,5%
6 Buick 871,506 1,057,452 -17,6% 4,1%
7 Changan 787,878 851,361 -7,5% 3,7%
8 Haval 769,454 766,062 0,4% 3,6%
9 Hyundai 685,738 790,746 -13,3% 3,2%
10 Audi 620,001 620,300 0,0% 2,9%


Source from: https://carsalesbase.com/china-car-sales-analysis-2019-brands

– 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

Chinese, International Students Vital to U.S Universities: Top Ten Lists

Chinese, International Students Vital to U.S Universities: Top Ten Lists

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
China 369,548 $14,913,000,000
India 202,014 $8,137,000,000
South Korea 52,250 $2,191,000,000
Saudi Arabia 37,080 $1,751,000,000
Canada 26,122 $1,126,000,000
Vietnam 24,392 $999,000,000
Taiwan 23,369 $902,000,000
Japan 18,105 $656,000,000
Brazil 16,059 $558,000,000
Mexico 15,299 $627,000,000

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
California 161,693 $6,818,109,371
New York 124,277 $5,311,151,048
Texas 81,893 $2,212,543,705
Massachusetts 71,098 $3,213,960,406
Illinois 53,724 $1,946,536,716
Pennsylvania 51,818 $2,069,365,940
Florida 45,957 $1,585,311,560
Ohio 37,314 $1,277,034,932
Michigan 33,236 $1,193,677,673
Indiana 29,083 $985,429,644

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.


Top Ten US State Economies vs. Global Economies

Top Ten US State Economies vs. Global Economies

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)


Top Ten Most Populous Cities – Then, Now, and the Future

Top Ten Most Populous Cities – Then, Now, and the Future

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


    1. Tokyo, Japan                    37.4 Million
    2. Delhi, India                       29.3 Million
    3. Shanghai, China              26.3 Million
    4. Sao Paulo, Brazil             21.8 Million
    5. Mexico City, Mexico         21.6 Million
    6. Cairo, Egypt                     20.4 Million
    7. Dhaka, Bangladesh         20.2 Million
    8. Mumbai, India                  20.1 Million
    9. Beijing, China                  20 Million
    10. Osaka, Japan                  19.2 Million


The Top Ten Most Populous Cities – 2035 (Forecast)


    1. Jakarta, Indonesia              38 Million
    2. Tokyo, Japan                      37.8 Million
    3. Chongqing, China              32.2 Million
    4. Dhaka, Bangladesh            31.2 Million
    5. Shanghai, China                 25.3 Million
    6. Karachi, Pakistan               24.8 Million
    7. Kinshasa, DRC                   24.7 Million
    8. Lagos, Nigeria                    24.2 Million
    9. Mexico City, Mexico           23.5 Million
    10. Mumbai, India                    23.1 Million


The Top Ten Most Populous Cities – 1950


    1. New York, USA                   12.3 Million
    2. Tokyo, Japan                      11.2 Million
    3. London, UK                        8.3 Million
    4. Osaka, Japan                     7 Million
    5. Paris, France                      6.2 Million
    6. Moscow, SU                       5.3 Million
    7. Buenos Aires, Argentina    5.1 Million
    8. Chicago, USA                     4.9 Million
    9. Kolkata, India –                   4.6 Million
    10. Shanghai, China –              4.2 Million

Sources: United Nations, Oxford Economics.

China’s Undiplomacy: Why the ‘Wolf Warriors’ Fail to Convince

China’s Undiplomacy: Why the ‘Wolf Warriors’ Fail to Convince

Guest Comment – By Oliver Stelling


In September, China’s Foreign Minister embarked on a goodwill tour of Europe. Expectations were high that he would manage to repair strained ties with the bloc. It wasn’t meant to be. His charm offensive fell flat.

Wang made no concessions on Hong Kong or Xinjiang. In Oslo, he cast new doubt on the virus’ origin in China and challenged Norway not to allow the Nobel Committee to award Hong Kong’s protesters. And while in Germany, he warned the Czech Republic that there was a ‘heavy price to pay’ for dispatching a delegation to Taiwan. That ‘heavy price to pay’ has become a common line by Chinese diplomats, never failing to invoke public anger in their host countries and beyond.

Wang’s choice of words was a deliberate show of forcefulness aimed at his domestic audience. As long as China was a rising but still developing economy, such internal messaging bore little consequence for international relations. Now the bar is set higher. China has emerged as a knowledge economy, an incubator for scientific discoveries and technological advances that shape the modern world.

Not since the Cultural Revolution has China’s international image been lower across Europe, Canada, Australia and parts of Asia. Relations with the U.S. have seen the most dramatic decline due to President Trump’s erratic policies, the trade war and hostile rhetoric. However, Beijing’s latest geopolitical moves would have escalated tensions with any U.S. administration.

It remains unclear how all this could fall within the range of acceptable diplomatic outcomes. Even so, the Chinese Communist Party (CCP) keeps picking fights and lashes out against ‘the West’ when faced with pushback. Never mind that most flashpoints are right at China’s doorstep.

The contrast of Beijing’s successful containment of the coronavirus vis-à-vis America’s abject failure in dealing with Covid and multiple other domestic crises gives China an open goal and a great story to tell. It was a triumph that should have dominated the news for months. Instead Beijing’s diplomats chose to parade Trump’s debacles as proof of the waning authority of the West at large.

In some ironic way, the wolf warrior idioms resemble Trumpian projection – the claim of victimhood. Nothing suggests that they are readying to adopt a different style, one that outtrumps Trump and aligns diplomacy with the principles of the Asian Century China helped to create. The tone has become ever more assertive and messaging across internal and external communications remains incoherent.

Chances to convince foreign audiences are slim as the wolf warriors seem unable or unwilling to employ a foreign-targeted language. This has not gone unnoticed by Chinese thinkers. Efforts are underway to craft a more audience-centric, positive and cohesive narrative.

The stated objective of China’s Belt and Road Initiative’s (BRI) is to create a ‘Community of Shared Destiny’. While the BRI’s short term prospects are somewhat uncertain, its primary goal, first expressed by former CCP general secretary Hu Jintao, has become a staple of CCP messaging. It sounds visionary, benign and perfectly in line with China’s advocacy of multilateralism. It certainly has more appeal than Trump’s ‘America First’. All it needs now is content, validation and a clear roadmap.

The Institute for a Community with Shared Future at Communication University of China is working to fill that vacuum. If it manages to develop a cohesive narrative supported by policies that are acceptable to the world, a path to more global collaboration has been staked. What it must not become is a tool to more efficiently spread state propaganda.

There is no issue with China aiming to become the custodian and driver behind that shared future. But it does not own the future. Not even if one buys into Chinese exceptionalism. The often repeated line ‘China’s got five thousand years of history’ captures how China views the past and future in terms of centuries, not decades. The real-life implication is that China deserves special consideration, patience and extra respect.

“Somehow we are supposed to believe that China has more history than other places”, writes John Ross in a post for Camphorpress. His core point is that civilizations in other parts of the world precede China and that writing systems in Egypt and Mesopotamia predate Chinese writing by a thousand years. “The world’s first city, Uruk, in modern-day Iraq, dates back seven thousand years. China was first unified in 221 BC, a century after Alexander the Great had created the Hellenistic Empire, and just a few centuries before the zenith of the Roman Empire.”

Chinese history is without doubt long and fascinating. There’s no need to spin it unless the point is to disqualify critics for their alleged lack of knowledge about China. China has a rich history and culture and there is always more to learn, but that works both ways. In any case, this tactic inflicts less self-damage than outright discrediting entire countries.

When Hu Xijin, editor of China’s Global Times compared Australia to ‘gum stuck to the bottom of China’s shoe’, the global backlash was intense. Analysts, academics and global media including The Guardian, New York Times, Asia Times and the BBC concluded that China was denying other countries the respect it demands for itself.

While internal hawks appear to be winning, the wolf warriors seem to overlook that being discredited by Chinese propaganda outlets often serves to bump up one’s credibility. The same applies to China’s ‘Twitter diplomacy’.

 A few years ago Beijing began to encourage diplomats, academics and media elites to use Twitter to engage a broader global audience and retell the China Story. A risky move that exposed many new users’ struggle to master an uncensored platform created to foster dialogue and open debate.

China’s embassy in Sri Lanka underscored that when complaining on Twitter, after its account was temporarily blocked, that it had been denied “freedom of expression”. And just recently, China’s Ambassador to the U.K. tweeted: “If you choose to be not our friend or partner you will have to bear the consequences.”

The list of undiplomatic tweets is long, including one diplomat’s retweets of a Texas woman’s random shower thoughts about the origin of Covid19, and conspiracy theories propagated by globalresearch.ca. – a fringe site that also claims that Osama Bin Laden was not killed by a US Navy SEAL team in 2011 but died in 2001.

The wolf warriors do not always seem to know whose voices matter and which ones are discredited. And if they do but don’t care, the signal this sends is the same: truth, reputation and trustworthiness of sources don’t matter.

While embracing a markedly different tone and style, their narrative is shaped by tropes and clichés from a bygone era. Beijing may think little of ‘intangibles’ such as perceptions. Who needs soft power when you have already proven to possess the vision and ambition to become a global leader in science, technology and more? But that seems out of touch with the shared destiny.

This cannot be in China’s interest and certainly not in the world’s either. If Beijing feels misunderstood and wrongly accused, it must ask itself: ‘Why do they mistrust us so much?’

According to Pew Research’s latest survey, a median of 34% across the 13 countries surveyed believe the U.S. is the world’s leading economic power, while 48% say the same of China. That shows that economically China is on the right trajectory. What remains is the building of trust which depends on a more audience-centric language.

There is a precedent for successfully engaging the world on ‘their terms’ and reaping the benefits – the run up to the 2008 Beijing Olympics. China’s image had never been better. A course correction today would send just the right message ahead of the Communist Party’s upcoming centennial.

The writer is a senior communications specialist, with a particular focus on emerging markets across Asia and the Middle East.

Has the Alibaba Train Left the Station?

Has the Alibaba Train Left the Station?

Is it time to buy Alibaba?

That’s the question posed by the popular investment newsletter, the Motley Fool, published in Yahoo Finance. The author of the piece, Anders Bylund, notes that the NYSE-listed Chinese e-commerce giant “is on a roll” and “the company is crushing Wall Street’s expectations in the COVID-19 lockdown era,” with share prices roaring 64% higher over the last 52 weeks.

So, Bylund asks: Is it too late to jump aboard Alibaba’s skyrocketing bandwagon or is the stock still a buy?”

A few choice cuts from the piece below:

Alibaba’s sales rose 30% year over year to $21.8 billion in August’s first-quarter report. Earnings increased by 15% to $2.10 per share. The results breezed by Wall Street’s consensus estimates, which had pointed to earnings near $1.98 per share on approximately $21.3 billion in top-line revenue.

On the earnings call, CEO Daniel Zhang noted that the COVID-19 pandemic accelerated Alibaba’s business in many ways. Consumers are doing more shopping online and enterprises rely on cloud computing resources like the Alibaba Cloud platform to an unprecedented degree…

Alibaba is expanding its operations outside Chinese borders, including a deep interest in starting direct e-commerce operations in the United States. Political tension between Washington and Beijing is making that ambition difficult to pursue right now but investors should keep this expansionist agenda in mind for the long haul.

In the meantime, there’s a real risk that the Trump administration might take action to obstruct Alibaba’s business on American soil. According to a recent report in the Chinese newspaper Global Times, Chinese analysts worry that the U.S. government might block Alibaba’s semiconductor development efforts and cloud computing services ahead of the election in November…

Buying Alibaba shares is a direct bet on the Chinese economy, in the long run, magnified through the lens of booming e-commerce and cloud computing operations. The stock is also fairly affordable, trading at just 30 times trailing earnings and 25 times forward estimates. That adds up to a solid buy. Some investors might prefer Pinduoduo or JD, but Alibaba offers the best balance between risk and long-term rewards, in my opinion.

For the full piece, go here

The Top Ten Largest Chinese Companies

The Top Ten Largest Chinese Companies

The Fortune magazine Global 500 annual list of the world’s largest companies by revenue has always been a high-profile, headline-grabbing snapshot of global business. This year, however, it’s also a snapshot of our emerging geo-economic order.

For the first time in the three decade history of the list, US companies do not comprise the largest number on the list. That distinction goes to China.

Clifton Leaf, Editor-in-Chief, of Fortune magazine put that into perspective when he wrote, “there were precisely zero Global 500 companies based in mainland China in 1990 when we began our survey. Today there are more giant for-profit enterprises there than anywhere else on earth.” Three of the top five largest companies in the world are Chinese — Sinopec Group, State Grid, and China National Petroleum.

The Fortune 500 Global list includes state-owned enterprises and ranks companies by total revenue. Thus, those tech-heavy companies that top market capitalization lists are not as prominent in the Global 500. In compiling the list, the editors included Hong Kong as part of the mainland China list, but did not include Taiwan.

At final tally, China held 124 spots in the Global 500, while the U.S held 121 spots. In the year 2002, there were 197 U.S-based companies on the list. In 2003, there were only 11 China-based companies in the Fortune Global 500.

It has been a remarkable rise for Chinese enterprises. Here are the Top Ten China-based companies in the Global 500, with their China ranking on the left, total revenues following and their global ranking in parentheses.

Company/China Ranking Revenues in $ (Global Rank)
1.     Sinopec Group $407 Billion (2)
2.     State Grid $384 Billion (3)
3.     China National Petroleum Corp $379 Billion (4)
4.     China State Construction Engineering $206 Billion (18)
5.     Ping An Insurance $184 Billion (21)
6.     Industrial & Commercial Bank $177 Billion (24)
7.     China Construction Bank $159 Billion (30)
8.     Agricultural Bank of China $147 Billion (35)
9.     Bank of China $135 Billion (43)
10.  China Life Insurance $131 Billion (45)

Some other interesting findings from the Fortune Global 500

  • The world’s 500 largest companies generated $33.3 trillion in revenues and $2.1 trillion in profits in 2019. This year’s Fortune Global 500 companies employ 69.9 million people worldwide and are represented by 32 countries.
  • WalMart topped the global list again, with $524 billion in revenues
  • Five Chinese companies entered the Global 500 for the first time – Shanghai Construction Group, Shenzhen Investment Holdings,  Shenghong Holding Group, Shandong Iron and Steel Group, and Shanghai Pharmaceuticals Holding

To explore the Fortune 500 Global list, complete with some excellent interactive maps, go here

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