Economist Jan 25th 2014

《China Loses Its Allure》

Things getting harder for foreign companies:

  • Government’s restrictions;
  • Competition – local firms joining the fray;
  • Some companies leaving; some struggling;
  • Sino-dependent firms worse than peers;

Challenges ahead:

  • Enhance productivity;
  • Improve governance – Chinese consumers more active;
  • Respond to local tastes.

《Doing It Their Way》

World shaped by china’s rush to consumerism:

  • stated goal;
  • increasing in absolute terms;
  • urbanization;

Sophisticated markets:

  • skewed to expensive;
  • online from the start: heavily reliance on peer reviews
  • brand switching: first – mover becomes old-fashioned;
  • go abroad;
  • creative marketing and advertising.

《In Three Parts》

Chinese economy: three forms of growth – supply, demand, and credit;

  • Supply: demographic turning point;
  • Demand: Not overheating;
  • Credit: in three categories: (1) adds to both supply and demand; (2) add nothing to capacity but to demand; (3) adds little to economic growth;

Chinese pattern of investment remains a worry, but at least enjoys a re-balancing of incomes and production, also the shift in production – more in services than industry.

《Patch-up Job》

Internets giants engage in breathtaking tax gymnastics:

  • France: buzzing with Internet-tax proposals; culture tax;
  • Italy, pass law to curb profit-shifting;
  • Chile: tech giants’ clients are in taxman’s crosshairs.

《Grease-Proof Taper》

  • Fragile five – BRL, INR, IDR, ZAR, TRY; Brazil most overheated, while Turkey and South Africa are running more current-account deficits, and much smaller FX reserves;
  • In 2014, demand commodities likely to remain restrained, affecting AUD and CAD.

《Fighting the system》

  • Lionsgate: lean, bolder, freer to pursue opportunities, keep looking for new franchises.

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