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?’
Tag: China Insights Series
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.
While the pandemic reveals the dangers of overreliance on a single nation’s production facilities, Washington is calling on American MNCs to shift supply chains away from China. However, the economic relationship between the world’s top two economic powers is complex and a rushed decoupling could sink the global economy to unprecedented depths. Instead, both nations should carefully consider how to effectively diversify the risk of economic overdependence while continuing to maintain healthy trade relations.
2020 is certain to be an arduous year for VCs around the globe; however, investors in China will emerge from the pandemic with a unique opportunity to invest in innovative companies at a discount. While China’s capital winter and coronavirus outbreak have shuttered the doors of countless startups, those resilient enough to have survived are likely to be positioned well to extend their industry influence and consolidate market positions.
China introduced the ‘One Belt, One Road’ (OBOR) initiative to foster a Chinese-driven international trade initiative focused on regional economic collaboration. While the West may be concerned about the geopolitical undertone of OBOR, certain Western policies are instead spurring global participation in the initiative. Italy and Iran are two such examples, with restrictive economic policies from the West driving them to seek alternative sources of funding.
China plans to drive global demand for the RMB by introducing a PBOC-backed digital currency into OBOR and other Chinese-driven global trade initiatives to lubricate cross border trade. While a digital RMB and China’s recent market reforms alone may not be enough to drive demand for the currency to levels that can eventually challenge USD supremacy, the strategy represents the PBOC’s methodical approach to RMB internationalization.
China is pursuing top foreign talent and investment to strengthen its fintech industry. The industry offers easy access to capital and supportive regulation that provide substantial market potential for ambitious market entrants. Despite cultural barriers and distinct consumer preferences, foreign startups with a proper China strategy can receive many of the same incentives and opportunities for success as domestic competitors.
As Chinese factories open their doors, American buyers close theirs. Amid the backdrop of waning foreign demand, Beijing has introduced several critical trade-friendly policies intended to support the resumption of ordinary Chinese operations. Once the coronavirus outbreak subsides and global demand recovers, China may be the only viable trading partner left standing.
While the Phase One trade deal marks a milestone in the US-China Trade War, it will likely disappoint foreign businesses seeking improvements in intellectual property rights protections and enhanced market access in China. Regardless, there were a few positive points of progress in the Phase One trade deal that pave the way to address improvements on additional securities and protections for American businesses abroad in a subsequent ‘Phase Two’ agreement.