A McKinsey report of July 2014 shows that China's internet economy at 4.4% % of 2013 GDP ranks fifth in the world, ahead of the United States (4.3%), France (4.2%) and Germany (4.2%) but behind the United Kingdom (6.7%), Korea (5.9%), Japan (5.6%), and Sweden (5.0%).
China has 632 million internet users, compared with 277 million in the United States. However, China's smart phone penetration is 54% (US 69%), social netwodrking penetration 60% (US 73%), enterprise cloud adotpion 21% (US up to 63%), and SME adoption only at 20-25% (US up to 85%).
So far, China's internet has been largely consumer rather than enterprise driven. The Report shows that internet adoption will have huge potential in six sectors -
Consumer electronics - connected devices, digital media
Chemicals - demand forecasting and production planning, customized systems, Internet of Things, precision farming
Financial Services- non-performing loans, marketing and customer services
Real Estate- material sourcing and sales marketing
Healthcare- remote diagnosis and e-commerce of across-the-counter treatment and pharmaceuticals
In particular, there is much room for adoption by SMEs.
When fully utilized, enterprise-driven internet adoption is forecast to contribute up to 22% of GDP and productivity growth by 2025, according to the McKinsey Report. It is expected to generate 46 million new jobs, more than enough to offset any job losses due to enhanced efficiency, and will be a key driver for the country's trajectory towards greater innovation, productivity and consumption.
TV interview with Between the Lines on Channel NewAsia, Singapore's leading English-language TV channel, broadcast on 2 July, the day following a massive public demonstration in the streets of Hong Kong on the 17th anniversary of the return of Hong Kong to China as a Special Adminstrative Region.
To view, press "View my playlist". My appearance is in the second part of the show.
For reference, please visit an article in the Financial Times dated 8 July 2014 by Liu Xiaoming, China's Ambassador to Britain, explaining why Hong Kong's political reform must conform with the Basic Law, Hong Kong's mini-constitution.
While the two sides of One Country Two Systems have become more and more intertwined economically, the hearts and minds of Hong Kong's younger generation remain more estranged from, than returned to, the motherland. That was my take at an interview on CCTV English based in Beijing aired on 2 July, 2014.
My TV interview on Talk Show with TDM (Teledifusão de Macau), a Macao goverment-sponsored TV station. Broadcast on 26 June, 2014, this half-hour one-on-one show explored the foreign relations implications of a Rising China and the potential conflicts over the East and South China Seas.
A detailed Reuters Special Report dated 23 May 2014 alleges that according to its sources, China’s leadership believes Zhou Yongkang, China’s former domestic security chief, was making a move to grab power during the 2012 leadership transition.
Considering the amount of detail, Reuters sources must have deliberately leaked the maze of Zhou's corrupt network and political intrique to the Western media possibly in preparation for a formal trial of tbe biggest tiger in modern times threatening the very stability or even survival of the Communist Party of China (CPC).
By most accounts, the corruption investigations of Zhou Yongkang seem to be nearing the finale, widely expected to be unveiled in coming months.
For background to the Zhou Yongkang case and its intricate links to the Bo Xilai affair, please visit my earlier analysis "The curious case of Bo Xilai (Part II)" dated 12 April, 2012 here It now seems that my prognosis more than two years ago is now finally being substantiated.
The huge energy deal enables Russia to supply 38 billion cubic metres (bcm) of gas to China each year for 30 years under a contract valued in excess of US$400 billion overall. See a report of the South China Morning Post here
Before the deal was signed at the eleventh hour on 21 May, my live TV interview with RT on 20 May tried to pinpoint some of the geopolitical considerations involved on both sides and their impact on the world order.
Further to my research paper "The Ascent of the RMB, the Chinese currency" dated Decemebr, 2013, a latest update is provided in a report by ASIFMA (Asia Securities Industry & Financial Markets Association) dated May, 2014.
This report outlines various routes whereby the RMB is rapidly attaining the position as a global currency for trade settlements. As the world's premier commodities consumer, China is well poised to have more energy contracts denominated in RMB. More and more of China's large number of trading partners are beginning to hold some RMB as a "de facto" reserve currency, even as the Chinese currency is not fully convertible.
Following reforms introduced at the 18th Party Congress Third Plenum, more liberalization of China's financial system is on track. This is now being accelerated by such schemes as the Shanghai Experimental Free Trade Zone, the China-Hong Kong Mutual Fund Recognition scheme and Shanghai-Hong Kong Stock Connect pilot program.
By 2020, it is expected that the RMB capital account will have become basically fully open. While the greenback will still be the dominant international reserve currency, the RMB will have come close to being another international currency like the euro, the British Pound or the Japanese yen.