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North Korea launches missile over Japan

My live TV interview with RT on 29 August, 2017

Chinese luxury market trends 2017

China's "new normal" of slower growth and continuing anti-corruption campaign notwithstanding, its luxury market continues to surge ahead, thanks to its exploding affluent middle-class. Click here This is sustained by rapid transformation from export dependency to consumer explosion, underpinned by robust economic fundamentals. 

In an earlier report (2011), McKinsey expected that the very wealthy (over RMB 10 million in household income or assets) and the wealthy (RMB 300,000 to 10 million range) would account for 70% of China's luxury goods consumption in 2015. In a 2013 report, the consultancy estimated that by 2022, China's urban households would comprise 63% upper middle class (2010 real annual income of US$16,000 - $34,000) and above. The affluent are becoming a majority. 

According to study of 29 May, 2017 by Bain & Co., a consultancy, China's luxury consumption is increasingly driven by diversification, extending to a wider range of categories, including luxury cars, fine arts, fine foods, cruises, hospitality, wellness, and educational services, not necessarily limited to the ultra-expensive. 

Over three-quarters of China's luxury goods consists of watches, cosmetics, bags and jewelry. Most are driven by shopping overseas. This is due to price differentials, confidence in authenticity, and combined tourism experience. Now, thanks to narrowing pricing policies, lower RMB exchange rates and taste diversification, some overseas luxury consumption is returning to the home market. (Financial Times and South China Morning Post). If this trend continues, massive business opportunities will be created for much greater sales of luxury foreign brands in China, if consumer protection confidence can be sufficiently safeguarded. 

I have incorporated the above trends into the following PowerPoint presentation. 

Download Chinese luxury market trends 2017 - A synopsis (PowerPoint presentation) 

More details and analyses can be found in the following reports -

Download McKinsey Report August 2017 - Chinese Luxury Consumers -1-trillion-renminbi opportunity

Download Deloitte Report - Global Powers of Luxury Goods 2017

  

 

US and South Korea hold military drills amid threats from Pyongyang

My exclusive live TV interview with RT on 21 August, 2017

A new era of China global influence - media and films, droves, electric cars and the "i-can" generation

China is re-doubling her efforts in going-global. It's not just the Belt and Road Initiative (BRI)

It's now mobile games, cinemas, film-making and distribution, worldwide. Witness the latest mobile game expansion to the U.S. and Europe of Tencent Holdings (of WeChat fame), China's largest internet media company. Or, notwithstanding recent regulatory clamp-down on "grey rhinos" (large and obvious but often neglected threats), the creation of a film empire by the Wanda Group - constructing a movie metropolis of the east in Qingdao and a global film distribution network at once partnering with and challenging Hollywood. 

As the West-dominated world order is rapidly changing, the above symbolizes efforts to realize the China Dream of global renaissance. What appears to be emerging is a new narrative of "Rise, Fall and Re-emergence as a Global Power". China's global influence was at its height from 1100-1800, ending with the emergence of Western imperialism driven by the First Industrial Revolution.

China, learning from history, is embracing the Fourth Industrial Revolution with a vengeance. It's early days yet. However, for a start, a Shenzhen company DJI has become the world's largest drove manufacturer and has bigger plans for the future. A battle for global dominance in the battery market for future electric cars is raging. According to the Financial Times, "as carmakers invest more heavily in electric vehicles, the lithium-ion battery will be a key technology for at least the next decade, creating a market Goldman Sachs estimates will be worth $40bn by 2025 and dominated by China". (Electric cars: China’s battle for the battery market, 5 March 2017).

Added to the above is China's so-called "i-can" generation, armed with the wealth of the baby boomers and the tech savvy of the millennials. According to Helen Wong, Chief Executive, Greater China, at HSBC, "they number more than 400 million people, or ­almost a third of China’s population and more than the working populations of the US and Western Europe combined. This new generation is expected to drive 65% of consumption growth in China until 2020, when they will make up around 53% of total consumption spending, up from 45 % in 2016. ...... In the long term, this new, modern Chinese consumer of the “i-can” generation will transform China into a more digital and consumer-driven economy...... And their massive spending power will not just be the backbone of China’s sustainable growth, but the primary engine of global economic stability." Click here

Trade war between China and US would inflict damage to a lot of countries

My live interview with Radio Sputnik of Moscow on 15 August, 2017. 

My interview also features in an online article of Sputnik International. 

Is Trump starting a trade war with China in the midst of the North Korean crisis?

My live interview with Radio Sputnik of Moscow on 12 August, 2017. 

"Talk is over" over North Korea? - How the crisis can be diffused.

I proffered my views at an exclusive live TV interview with RT on 3 August, 2017.  

For a Chinese perspective on Kim's paranoia, Madam Fu Ying's May 2017 Strategic Paper  written for the John L Thornton China Centre of the Brookings Institution is instructive.

What has come to pass now is a sad repetition of an increasingly unstable cycle of mutual mistrust and escalating confrontation between North Korea and the US, driving all parties to the brink. However, what has not been clearly grasped is what drives the supposedly mad Kim to such lengths. He is hell-bent on acquiring a credible nuclear insurance policy to ensure survival against a continual US hidden agenda of regime change. He is unlikely to trust mere words of assurances from the United States, his arch-enemy, especially from a capricious Donald Trump.

There is now increasing talk of a military option. A US preemptive strike will trigger an immediate catastrophe, beginning with Seoul, which is cannon fodder for thousands of heavy artillery just across the border. Subsequent escalation, which is likely, will pull the major military powers, including China and Russia, into the fray. Even WW3 cannot be ruled out. 

Let alone a hot missile shoot-out, even a land-based decapitation exercise inside North Korea would lead to uncontrollable consequences. It would involve deployment of substantial numbers of US and South Korean troops inside North Korea, if only to secure the nuclear arsenal and to control any subsequent upheaval. China and Russia are unlikely to sit tight watching the geopolitical landscape in the Korean Peninsula dramatically change to their disadvantage. 

Yes, China has economic levers to bear on North Korea. But causing a massive humanitarian crisis at China's doorstep is not an appealing option. Nor would China want military unification of the Peninsula on American terms. Let's not forget that Russia has also quietly supplying much needed oil to North Korea through Singapore Click here

The Economist (5 August) urges all parties to keep calm to avoid risks of a nuclear war, while proposing more sanctions to contain North Korea. Sadly, this has not worked. It will not stop North Korea perfecting its nuclear ICBM capability, reported by early 2018. The clock is ticking. 

However, if the United States genuinely gives up a hidden agenda of regime change and concentrates only on de-nuclearization, the North Korean crisis may not be insoluble after all, according to Eric X Li's Op-ed in the Washington Post of 5 May. 

Trump should broker a direct deal with Kim in the form of a formal, open, bilateral Non-Aggression Treaty, backed by an immediate program of verifiable de-escalation on both sides predicating on Kim freezing further efforts to develop ICBMs in exchange for easing of sanctions.

Other parties, including China and South Korea, can help with investments to alleviate the economic plight of the North Korean people. Let's not forget that the Viet Cong regime wasn't toppled by war. What has turned Vietnam into an American ally is economics.