Since Deng Xiaoping’s 1979 Reform and Opening Up Policy began, Western brands have faced headwinds entering the Chinese market. Some have succeeded, but there have been many more failures. We’ll take a longer, historically informed view to think about what separates the winners and losers of Western brands trying to make it in the Middle Kingdom.
Category: China Insight Articles
China is leveraging its global leadership in green energy development to engage OBOR nations in overseas green growth initiatives. However, in the shadows of China’s green campaign exists a more calculated game to secure its own economic interests through the not-so-green methods of shrouded fossil fuel infrastructure investment and debt entrapment.
Oil is critical to ensuring China’s growth over the next few decades, and securing it has become a top priority for the nation. By financing multiple OBOR development projects to circumvent key oil supply chains through the Strait of Hormuz and Strait of Malacca shipping lanes, China has chipped away at competing oversight in these regions, allowing it to secure access to resources while strengthening relationships with OBOR partner countries.
The Hong Kong national security law created a series of provisions that restrict the flow of information and suppress the civil unrest within the region. In the short term, this new law has had a profound impact on the business landscape, creating a series of winners which seek to expand their market share in the local marketplace. In the long term, it will reform the technology landscape in Hong Kong for years to come.
Internationally, McDonald’s has long been dominant, but in China, KFC reigns king. KFC has twice as many outlets, with experts having long explained KFC’s dominance through better localization efforts. While this argument holds water, the competitive relationship between the world’s largest fast food chains has also bolstered their mutual success in one of largest and most complex markets in the world.
China is considering a new series of free trade agreements to rebalance trade objectives with its national interests. Two of the largest agreements in history, the RCEP and TPP11, may not only help China expand its economic footprint, but also act as a backdoor should old trade relationships fall apart.
AI technology dominance is playing a larger role in China’s global ambitions. Now, Beijing and tech players alike are seeking to push the industry to the next level through AI Open Source Software – a framework that greatly influences innovation, shapes market norms, and cultivates healthy competition – making it a core component of China’s long-term AI strategy.
China’s cloud computing market, while the second largest in the world, remains a fraction of the size of its US competitor. As Beijing continues to prioritize investment in this sector, China’s tech giants will continue to propel the quickly growing domestic industry outwards into the global stratosphere.
The Curse of the Skyscraper is a theory that claims that skyscrapers are usually a sign of poor investment and an economy careening towards recession. China has over half the world’s skyscrapers, and the central government is beginning to limit the height of buildings in an attempt to avoid the Curse.
In the third article in “The Rise of the Renminbi” series, TCG explores the role of bilateral swap agreements (BSAs) in China’s RMB internationalization ambitions. Despite Beijing’s hopes that the initiative would foster increased RMB-denominated trade, results have been lackluster thus far. Regardless, BSAs may play an increasingly important role in the sustainable offshore circulation of the redback over the long-term.
Recent weeks have highlighted an increased scrutiny from Washington towards US-listed Chinese companies. In May 2020, the US Senate passed legislation requiring foreign companies listed on the NYSE and Nasdaq to open up their books to American regulators. Faced with the reality of increasingly hostile US oversight, many US-listed Chinese companies are actively weighing the costs and benefits of migrating exchanges – and many are settling on Hong Kong.
The ‘Era of Live Streaming E-Commerce’ first blew up in 2019, creating a new industry at the intersection of e-commerce and live streaming. The pandemic has proven to be a major opportunity for this industry, both in terms of attracting new potential consumers and capturing shifting consumption habits. But one question stands: ‘Will it last?’
Today, China eats more crawdads than the rest of the world combined. The story of this crustacean’s journey from Louisiana to China is one of accident, ingenuity and natural market forces. In a time of isolationism and trade wars, it is important to remember the little things that drive the larger economy within a globalized world.
Since 2009, the Chinese government has looked to consumer subsidies to bolster its domestic electric vehicle market. In addition, strong domestic brands and supportive policy have helped the industry to develop into the world’s largest EV consumer market. Initially, Beijing sought to reduce its role in the industry to promote market consolidation and leverage global economies of scale; however, changing tides in sales due to policy reversals and the outbreak are driving policymakers to reconsider their exit plan.
Continuing upon the first article in “The Rise of the Renminbi” series, TCG explores China’s strategic approach to the long journey towards RMB internationalization. China has intertwined its global RMB ambitions with the ‘One Belt, One Road’ initiative, a large-scale infrastructure development plan. By providing funding to economically underdeveloped nations, China aims to lead a strong global trade bloc through which new trade and investment can be facilitated in RMB.