What's New

Munich Security Conference - Pence accuses Iran of sponsoring terrorism

Live TV interview with Press TV on 16 February, 2019 

How to deal with the Venezuela situation in UN Security Council

Live TV interview on RT of 12 February, 2019

India's Budget 1 February 2019

My two live TV interviews on 1 February with WION, India's leading commercial TV station. 

First instalment (scroll to time counters to 02:00 and 17:46 for my appearances) 

Second instalment (scroll to time counter 05:26 onwards) 

 

 

China's busy year in the Arctic

A report in The Diplomat of 30 January, 2019 points out that "as an Arctic stakeholder, China’s position has evolved from being a “passive rule-follower” to becoming a regional “rule-maker.” Since release of its Arctic White Paper in January, 2018, China has steadily moved to becoming a "near Arctic state", as an "indispensable force in Arctic affairs".

Administratively, the Chinese Arctic and Antarctic Administration (CAA) is now placed directly under the new Ministry of Natural Resources (MNR), aided by its Department of Maritime Economy and Strategic Planning and the Department of International Cooperation. 

China mounted its ninth Arctic expedition in 2018, laying down an expanding network of scientific monitoring devices across the Arctic. In September, China launched its first domestically-built state-of-the-art icebreaker, Xuelong 2. A tender for the construction of a nuclear-powered icebreaker was issued last summer. In October, the China-Iceland Arctic Science Observatory was opened in northern Iceland. In December, the “Arctic Environment Satellite and Numerical Weather Forecasting” project was launched, slated to “deepen China’s participation in the governance of the Arctic, and help build the Polar Silk Road." 

The Russian Yamal LNG project remains the centerpiece of China’s nascent Polar Silk Road, carrying Russian LNG to a Chinese port. This will be served by a fleet of 15 polar-capable LNG carriers, of which six have been delivered. 

The global economy's second sun

According to the above-titled report in the Financial Times (Aphaville) dated 29 January, 2019, using proprietory algorithms, Stephen Jen and Joana Freire of Eurizon SLJ Asset Management find that the global influence of China's economy is as powerful as those of the United States and the European Union combined. 

The above finding tallies with Arvind Subramanian's earlier work Eclipse - Living in the Shadow of China's Economic Dominance, Petersen Institute for International Economics, Washington DC, September 2011. The book finds that more currencies move in tandem with the renminbi, the Chinese currency, than with the US dollar. 

McKinsey Global Institute- Value chains, China included, have become less trade dependent and more digitally driven

A MGI Report released in January 2019 -  Globalization in transition: The future of trade and value chains - points out the following- 

Global value chains are undergoing five structural shifts 

• Goods-producing value chains have grown less trade-intensive
• Services play a growing and undervalued role in global value chains
• Trade based on labor-cost arbitrage is declining in some value chains
• Global value chains are growing more knowledge-intensive
• Value chains are becoming more regional and less global

There is a sea change in the geography of global demand

• Emerging markets will consume almost two-thirds of the world’s manufactured goods by 2025, with products such as cars, building products, and machinery leading the way. By 2030, developing countries are projected to account for more than half of all global consumption. These nations continue to deepen their participation in global flows of goods, services, finance, people, and data
• More of what gets made in China is now sold in China. By 2030, China is projected to account for 12 cents of every $1 of worldwide urban consumption. This trend is contributing to the decline in trade intensity. China exported 17% of what it produced in 2007. By 2017, the share of exports was down to 9%. This is on a par with the share in the United States but is far lower than the shares in Germany (34 %), South Korea (28%), and Japan (14 %). Exports from advanced economies to China has increased from 3% in 1995 to 12% by 2017.
• The rise of domestic supply chains in China and other emerging economies has decreased global trade intensity.

Digital platforms, logistics technologies, and data-processing advances will continue to reduce cross-border transaction costs and enable all types of flows.

• Automation and additive manufacturing change production processes and the relative importance of inputs
• New goods and services enabled by technology will impact trade flows

Given the shifts in value chains, companies need to reevaluate their strategies for operating globally.

As pointed out by David Dodwell in the South China Moring Post, Trump’s tariffs are targeting yesterday’s challenges, not today’s.  

Next year, US expected to lose top spot to China as world's largest economy, to be overtaken by India as no.2 by 2030

According to a Standard Chartered Bank report (10 January, 2019), the United States will lose its top spot as the world's largest economy as early as next year and will fall behind India by 2030. By then, China's economy is expected to be double the US economy, while India's will be one and a half times larger. Japan, and Germany, in that order, are forecast to trail behind Russia to no. 9 and 10 while the United Kingdom is slated to drop out of the top ten.

Asia will account for roughly 35% of global GDP, up from 20% in 2010, while seven of the world's 10 largest economies will be Asian. Click here A pictorial illustration is here. View this photo

Another global tipping point already happens as reported at the Brookings Institution (27 September, 2018). Over half of the world is now middle class or wealthier. By 2030, the middle-class markets in China and India ($14.1 trillion and $12.3 trillion respectively) will be drawing close to the U.S. middle-class market at that time of $15.9 trillion. Click here While in terms of per capita GDP, both China and India will remain miles behind the United States and other Western countries, in terms of aggregate standards of living, Asia and other emerging markets are fast catching up. 

In terms of aggregate economic power, size matters. GDP per capita hardly counts. For example, according to the International Monetary Fund, Macao is expected to surpass Qatar in 2020 with the highest GDP per capita on a purchasing power parity basis. Click here

In any case, save America's enduring military and dollar dominance, the above tipping points are expected to tilt the world's economic and geopolitical gravitas towards Asia, particularly China and India. An "Asian Century" appears to be just around the corner. 

National Plan for structural re-alignment of industries in North East, East, Central, and West regions, November 2018

The above National Plan (2018 国家产业调整布局) is a detailed guide for the re-alignment of exisitng and new industries between various provinces, cities, prefectures and counties in the North East, East, Central and West regions. It aims at the orderly phasing-out, upgrading and regional, provincial, and locational postioning of exisitng and new industries, including new materials, new energies, digital and information technologies, intelligent manufacturing, aerospace, transportation, shipping, pharmaceuticals, food and other consumer products, as well as a variety of light industries. 

Somewhat reminiscent of a planned economy, the above Plan is a good example of how China's reformed development model manages to achieve rapid growth by combing national planning, state direction, the private sector, and free market dynamics. 

As between various provinces and localities, competition is very keen. Competition with foreign enterprises both in China and overseas is expected to redouble following current trade war accommodations and adjustments

As for the perceived fatal flaw of State-Owned Enterprises predominance, let's not forget that the private sector in China remains very much alive and kicking. All it takes is a stroll along some of the many busy shopping and recreational districts throughout China. Indeed, as part of a relief package in response to the trade war, a substantial Mid-Term Lending Facility (TMLF) is designed to support the private sector. Click here (PowerPoint presentation Slide 11).

Singapore is a shining example of how state-backed conglomerates can co-exist synergistically with a vibrant private sector. (China's Crisis of Success, William Overholt, Cambridge University Press, 2018, pp. 246-7). Although the author doesn't think that this could apply to China on account of Singapore's much smaller size, there is no convincing argument why size alone would make this inapplicable.  

Download 2018 国家产业调整布局  

China to step up its basic research

China ranks second in the world in number of scientific papers produced, and is the world's second-most-cited source, behind only the United States. However, a popular criticism of China's technological advancement is that the country falls far short in basic research. All the achievements being trumpeted about, such as quantum satellite launch and the probe landing on the far side of the moon, are largely the fruits of applied research. This is exemplified by the dearth of Chinese Nobel laureates in pure science. This critical deficiency is an important barrier to China's advancement as a great power.

The nettle is finally being grasped. China is launching a Science Plan 2021-35, with a road map to beef up the nation's basic research capabilities and governing ecosystem. Early details are contained in a China Daily article of 11 January, 2016. 

Andrew's January 2019 Newsletter

(My quarterly Newsletter goes out to some 7,000 professional contacts worldwide. The following is my January 2019 issue. Back numbers may be accessed under What's New on this website) 

May I first wish you a Merry Holiday Season and a marvellous New Year!

As we enter into 2019, the world order's tectonic plates are mightily shifting. Beginning with a trade war, the United States is now pushing back against China on multiple fronts. This is unprecedented since the end of the Mao era. The battle ground extends from next-generation mobile technology (5G), Uighurs human rights, access to Tibet, to a space arms race. The trade war seriously disrupts global production and value chains, hurting global growth, while the intense rivalry worries allies, forcing them to hedge their bets. 

 

Meanwhile, Yellow Vests and other similar citizen protests burn like sporadic wild fires, part of an inward-looking, anti-globalization, anti--elite, populist groundswell. We are at the historical juncture where the world's richest 10 multi-billionaires have a combined wealth more than the poorest half of the whole world put together. There is a prevailing sense of haplessness and gross injustice. Piketty's warning in Capitalism in the 21st Century seems to be vindicated. 

 

On a broader front, embroiled in national crises of one form or another, many countries seem less focussed on how the earth is heating up faster than expected, due to renewed jumps in carbon emissions. The twist in the tale is that while the United States has ditched the hard-won Paris Agreement on Climate Change, China, the world's worst polluter for decades, seems to be leading the world in upholding the Agreement by exceeding  declared targets. 

 

Hopefully, the following may offer you enjoyable holiday-season browsing with some fresh insight or perspective.

 

The Huawei saga

China arrests two Canadians - any connection with the Huawei saga? (Live interview with Press TV) 

Why is China's biggest technology company being targeted? (TV panel discussion on Inside Story with Aljazeera) 

Beijing's reaction to arrest in Canada of Huawei's CFO (Live interview with ABC (Australian Broadcasting Corporation) 

China-America tensions heat up: Huawei CFO faces extradition to US (Live interview with RT) 

 

US-China trade war and geopolitical rivalry

"China scrambles to sustain its trade truce with America" (An in-depth analysis)

US moderate rhetoric helped Asian markets rebound (Live interview with Press TV) 

The Trade War and Sino-US relations (Radio Hong Kong "Backchat")

US-China Special Report: Intensifying Geopoltical Rivarly will Worsen in 2019, outlasting any trade deal (An Eurasian Group report) 

China-US Trade Relation and Challenges: Past, Present, Future and Policy Options ( A Center for China and Globalization (CCG) analysis) 

IMF urges US, China to de-escalate tensions (Live interview with Press TV) 

How President Trump is helping Beijing in the South China Sea but may open up a new Cold War front on human rights (Opinions from The Washington Post) 

A new Cold War against China may have the opposite effect of what "America First" wants (An in-depth analysis) 

US-China conflict portends reset of world order (Live radio interview with Radio Sputnik of Moscow) 

China's 36,000-character White Paper on US trade war omits reference to an all-out New Cold War (An in-depth analysis) 

Is China losing a new Cold War? (An in-depth analysis)

Chinese media in US required to register as foreign agents (Live TV interview with RT)

Cooperation, not war, is key to mutual prosperity (A re-print of my article in the International Institute of Management (IIM) Journal 2018-19)

Trump's foreign policy is all branding (An opinion from World Politics Review, a New York-based bipartisan publication)

Why Trump's Cold War to contain Beijing is destined to fail (Op-ed in South China Morning Post) 

America's next top villain: Is China lined up to replace Russia as the US' default enemy?  (RT online article) 

US-China trade war may affect Azerbaijan (A perspective in an Azerbaijan journal)  

 

China's Rise

Trade, People, and Money: Understanding China's Unique Capabilities (A Hinrich Foundation analysis)

The Chinese Century is well under way: Many trends that appear global are in fact Chinese (An in-depth analysis) 

 

Technology 

Trade war or not, from AI to blockchain and new energy vehicles, China is on the front row for the Fourth Industrial Revolution (SCMP Op-ed by Edward Tse of Gao Feng Advisory) 

 

G20 and Regional Summits

US-China trade war and long-term rivalry before and post G20 Summit (TV interviews with Aljazeera and RT)

Why APEC meeting failed to reach consensus? (Live interview with Press TV) 

ASEAN Summit discussed RCEP as world's largest trading bloc with implications of possible erosion of dollar dominance (Live TV interview with RT) 

 

Belt and Road  

"2018 was meant to be Xi Jinping’s year. Then China’s Belt and Road unravelled" (An in-depth analysis)

Belt and Road is alive and kicking (A Standard Chartered Bank report) 

 

Human Rights

UN report - Is China holding Uighur Muslims in secret camps?

 

South China Sea

HMS Albion exercised Freedom of Navigation at the Paracels  (Live radio interview with Radio Sputnik of Moscow) 

 

Africa

2018 MEDays Forum, 7-10 November, Tangier - IN THE AGE OF DISRUPTION: FINDING THE NEW PARADIGMS  (An international conference in Tangier) 

A new Africa-China alliance dedicated to free trade, multilateralism and world peace (2018 MEDays Forum, Tangier) 

2018 Forum for China-Africa Cooperation (FOCAC) Beijing Summit, 3-4 September (Live TV interview with TRT World) 

 

Syria

The far-ranging implications of sudden US withrawal from Syria (An in-depth analysis)

 

Military

What the New US Nuclear Posture Means for Northeast Asia (An analysis) 

 

Hong Kong

Hong Kong rejects visa of British journalist (Exclusive radio interview on BBC World Service News Hour)

Controversial West Kowloon highspeed rail opens, linking Hong Kong to Mainland China's 25,000 km high-speed network (Live TV interview with Singapore's Channel NewsAsia) 

 

Appointments for promoting education for Sustainable Development 

 

I have accepted appointments as a Professor of Practice with the Hong Kong Institute of Education for Sustainable Development and as a Certified Sustainable Development Planner (CSDP) of the World Institute of Sustainable Development Planners. Both are affiliated to the United Nations Educational, Scientific and Cultural Organization (UNESCO). I have done so in the hope of raising awareness of sustainable development in Mainland China, especially in less-developed areas, and in countries along China's Belt and Road Initiative. The former as a catalyst for building smart cities and communities and the latter to underpin infrastructural building, economic diversification, and ecological conservation where debt and ecological sustainability is becoming an issue. 

 

For my papers, presentations, analysis, commentaries, interviews etc on related aspects, please access my website under Publications, CHINAwatch and What is New. On the right hand column, scroll all the way down "Recent Posts" to find "Categories". Then click on "Sustainability" or "Sustainable Development". All my past postings on the subject will come up aggregated. 

 

Cheer up and chill out

Casablanca reverie - a music video (A nostalgic visit to Casablanca following the 2018 MEDays Forum)

A repertoire of inspirational music, videos, songs and words, There is also a collection in Chinese.

Cross-border M & A propositions

You are welcome to send me propositions on a no-commitment basis initially. 

Separately, you are welcome to reach out to my son Terence, a Cambridge-educated Prince Phillip Scholar and UK-qualified lawyer-turned-banker. He has over ten years M & A experience in London with Allen & Overy, Deutsche Bank, and Houlihan Lokey. He has been based in Abu Dhabi working on private equity for the past two years. He is about to return to the financial services sector in London. His personal email address is terencehyleung@gmail.com

Consultation services

Please email me at andrewkpleung@gmail.com or text my Hong Kong mobile +852 98198987.  I can also be reached on Skype at andrew.k.p.leung, LinkedIn at andrewleunginternational, Whatsapp at (852) 98198987, WeChat at Andrewkpleung, Facebook at andrewkinpongleung, and Twitter at @Andrewkpleung

Speaking and lecturing invitations

I am open to invitations or proposals for speaking engagements, visiting lectures and tailor-made electives as a visiting/adjunct professor. 

Business networking and speaking platform in Hong Kong

As an Advisor to the Denmark-based Executives' Global Network Hong Kong, I welcome your suggestion of a suitable speaker for an EGN event in Hong Kong. This will be entirely at our own cost with acknowledgement of your support, provided that we are not asked to cover any speaking fee, travel or accommodation expenses.

RSS feed and weblinks

My postings are regularly uploaded under my three blogs CHINAwatch, Publications and What is New on www.andrewleunginternationalconsultants.com  A collection of leading China media and research sites can be found under China Links.

Please feel free to save my website on your computer, laptop, tablet, Blackberry, iPhone or iPad as a reference resource. If you wish instant access as soon as my postings appear, just click on “Subscribe to this blog’s feed” under RSS Feed on top of the right-hand column of each blog. Select the appropriate Google feed option. It is free of charge.  

This newsletter is uploaded to my website here. You may save it for reference or reading at leisure and to share it on Facebook, LinkedIn, Whatsapp, Twitter or other social media devices.

Courtesies

I look forward to your guidance, advice, comments, suggestions, and criticisms. You may share the above contents with colleagues or friends. You are also welcome to publish any of them with full attribution. 

If you think that I may add value to your endeavours in any way, please let me know how I may help.  If for any reason you do not wish to receive my emails, just ask me to delete your name from my databank permanently. 

Best personal regards, 

Andrew K.P. Leung, SBS, FRSA

International and Independent China Strategist

www.andrewleunginternationalconsultants.com  

Positions  

Chairman and CEO, Andrew Leung International Consultants and Investments Limited

(Founded in London, now re-incorporated in Hong Kong; name changed from Andrew Leung International Consultants Limited as from 10 July, 2017) 

China Futures Fellow, Berkshire Publishing Group, Massachusetts, USA (2011-13)
Brain Trust member, The Evian Group (global think-tank), Lausanne, Switzerland

Gerson Lehrman Group (Global Experts) Council Member
International Expert, Reuters Insight Community of Experts, Thomson Reuters

Senior Analyst, Wikistrat, a cloud-sourced global strategic consultancy based in Washington D.C.

Senior Consultant, MEC International (a UK-based global strategic energy consultancy) 

Distinguished Contributor, Asymmetric Threats Contingency Alliance (ATCA) (global think-tank)

Professor of Practice, Hong Kong Institute of Education for Sustainable Development (2018-20) 

Certified Sustainable Development Planner, World Institute of Sustainable Development Planners

Fellow of the Royal Society for the Encouragement of Arts, Manufactures and Commerce (FRSA)
Elected Member, Royal Society for Asian Affairs

Think-tank Research Fellow, Beijing Normal University, Zhuhai Campus, PRC (14.4.2017-13.4.2020) 

Advisory Board member, The e-Centre, European Centre for e-Commerce and Internet Law, Vienna 

Honorary Adviser, International Institute of Management (IIM) 

Advisory Board member, The Global Analyst, India

Honorary President, China Hong Kong Economic and Trading International Association (from 28 March, 2016) 

Download 中國香港國際經貿合作協會簡介和組織架構  

Download A brief introduction to the China-Hong Kong Economic and Trading International Association

Global Commercial Agent, Changsha City, China

Hong Kong Advisory Board member, Denmark-based Executive Global Network (EGN)

Visiting Professor, London Metropolitan University Business School 

Governing Council Member, King’s College London, UK (2004-2010)
Advisory Board member, China Policy Institute, Nottingham University, UK (2005 -2010)

Visiting Professor, Sun Yat-sen University Business School, China (2005-10)
Founding Chairman, China Group, Institute of Directors City Branch, London, UK (2006-2010)
Vice Chairman, 48 Group Club, UK (2008-2010)
Committee Member of RSA, London Region, UK (2006-2010)
Included in UK's Who's Who since 2002
Awarded the Silver Bauhinia Star (SBS) in the July 2005 Hong Kong Honours List