Wednesday, 11 December 2013

Road map for financial reform by Zhou Xiaochuan

This article is the first part of an excerpted translation from Chinese of a speech by Zhou Xiaochuan, Governor of the People's Bank of China, China's central bank, published in China Daily on December 11, 2013.

In a move to push for improving China's modern market system, the Third Plenary Session of the 18th Central Committee of the Communist Party of China has drawn up a road map for comprehensive and deepened reforms.
As the core of a modern economy, the financial sector is at the heart of China's socialist market system. To do a better job in the financial sector in the future, the country should firmly hold on to the essential principle that the financial sector should serve the real economy, adhere to the reform direction that the market dominates the distribution of financial resources, and stick to a development concept that prioritizes coordination between innovation and oversight.
In line with the plenum's mapped program, we need to comprehensively push for reforms, opening-up and development, and accelerate the establishment of a safe, sound and modern financial market system with a broader range of services, a reasonable structure and greater efficiency.

Wednesday, 4 December 2013

Waste management policy will take time

Article by Ken Davies in China Daily, Hong Kong edition on December 4, 2013

Editor's note: This is the first of a series of articles exploring policies to address Hong Kong's waste management challenges.

People in Hong Kong are impatient with the government’s policy on waste management.

This, as Christine Loh, Under Secretary for the Environment recently explained to me, is because they expect everything to happen at once, while the various initiatives taken by the government will take time to implement.

Transforming life through music in Hong Kong

Article by Ken Davies in China Daily, Hong Kong edition on November 22, 2013

The Greeks were right — children need to be educated in music so they can learn to live in harmony with others. This principle is starting to be applied here in Hong Kong.

Sunday, 17 November 2013

CCPCC Reform Decision

The Decision on Major Issues Concerning Comprehensively Deepening Reforms was adopted at the close of the Third Plenary Session of the 18th CPC Central Committee on Tuesday 12 November 2013. The following is an abridged version of the full text of the document as published in China Daily on Saturday 16 November 2013:

Friday, 15 November 2013

3rd Plenum Communiqué 中国共产党第十八届中央委员会第三次全体会议公报 (English/中文)

(Passed at the 3rd Plenum of the 18th Congress of the Chinese Communist Party on 12 November 2013)
The 3rd Plenary Meeting of the 18th Congress of the Chinese Communist Party was held in Beijing from 9 to 12 November.
This Plenary Meeting was attended by 204 Central Committee members and 169 alternate Central Committee members. The Central Discipline Inspection Committee Standing Committee members and responsible comrades from relevant sides attended the meeting as non-voting delegates. A number of grass-roots comrades and expert scholars from among the representatives at the 18th Party Congress also attended as non-voting delegates.

Wednesday, 13 November 2013

Hong Kong should join the OECD

Article in China Daily, Hong Kong Edition on November 11, 2013 by Ken Davies.

Hong Kong can benefit from joining the Organisation for Economic Co-operation and Development (OECD), the world’s leading forum for sharing experience on all areas of policy apart from defense and national security.

Thursday, 19 September 2013

Distorted view of China overlooks its many positive achievements

by Chandran Nair

[This article appeared in the South China Morning Post on September 11, 2013.]

The cover of a recent issue of The Economist featured a Chinese dragon encircling the globe, covering it in smoke and flame. The title read "The world's worst polluter." It was a bold cover typical of The Economist, but it betrayed deep-rooted ideological biases and did its readers a great disservice.
It was, in too many ways, what has become the quintessential "China story" - one that emphasises the nation's huge and growing impact on the world but chooses only to highlight its negative aspects - from environmental and foreign policy issues to investment in Africa, it would seem Beijing can't do anything right.

Friday, 13 September 2013

China Outlook

I am now writing short articles on the Chinese economy for China Outlook, a new forward-looking magazine focusing on China. There is no byline for any article.

The lead story all this week has been on China's banks: Dysfunctional banking system fails the innovators.

The new lead story from today is: China's slowdown is structural, not cyclical.

Future articles will cover such topics as the rebalancing of China's economy and productivity growth in China.

China Outlook is here.

Saturday, 7 September 2013

China's Economy: No Hard Landing

余永定:中国金融存在脆弱性 应加强短期跨境资本管理

中新社北京9月5日电 (记者 陈康亮)中国社科院世界经济研究所所长余永定5日在京表示,中国目前的金融体系存在一定的脆弱性,应加强短期跨境资本管理。


Five years of the 2008 Labor Contract Law

The World Bank has published a report on the implementation of China's Labor Contract Law, which came into force on January 1, 2008 after unprecedented public consultation that sparked a lively debate in which employers sought to weaken the law.

The report indicates general satisfaction with the way the law has been put into practice. Survey results show that nearly half of workers in the sample were happy with it, though an almost equally large number felt only  "so so". Over 90% of employers felt the implementation of the law was "strict" or "very strict". Differences in perceptions between urban resident and migrant workers were smaller than expected.

The complete report is available for download here.

Sunday, 18 August 2013



Sunday, 30 June 2013

China's rich travelers

It is no longer surprising that there are a lot of rich people in China. There are now 8,100 CNY billionaires in the country, 600 more than in 2012, including 2,700 identified by Hurun Research Institute, the key research institute that documents the wealth and spending habit's of China's richest. Hurun estimates that 5,400 have been missed, i.e. they represent "hidden" wealth. There are 600 individuals with USD1 billion or more in assets, 263 of them identified and 340 "hidden".

This is the background to Hurun's June 2013 report on The Chinese Luxury Traveler, summarized and linked below. What does this wealth of information mean for China and for the rest of the world? I try to answer these questions, briefly. You are welcome to add your comments and experiences.

Wednesday, 12 June 2013

think ASIA think HONG KONG

June 11, 2013, New York Hilton Midtown.

Jack So, Chairman of Hong Kong Trade Development Council.
Photo © Ken Davies 2013.

CY Leung, Chief Executive of Hong Kong.
Photo © Ken Davies 2013.

Ronnie Chan, Chairman, Hang Lung Properties.
Photo © Ken Davies 2013.

Marjorie Yang, Chairman, Esquel Group.
Photo © Ken Davies 2013.

Four of the opening speakers at this large-scale event. Please excuse the quality: all were taken from near the back of the main ballroom, so at a great distance from the subjects, with a pocket digital camera.

Saturday, 1 June 2013

Will China's economy avoid the doldrums?

Ken Davies

OECD Observer May 31, 2013

Will China’s growth slowdown last and what does it mean for the rest of us?

The gradual US recovery is still not strong enough to pull up the rest of the world economy. Abenomics has not yet worked its magic in Japan, if it ever will. And Europe is clearly out for the count. So can China be the new engine of the world economy?

Friday, 24 May 2013

Ken Davies' "China Investment Policy: An Update" published by OECD

The Organisation for Economic Co-operation and Development (OECD) has just published China Investment Policy: an Update in the series OECD Working Papers on International Investment by Ken Davies.

Here is a brief summary of the Update and a link you can click on to download the complete book as a free PDF.

Friday, 17 May 2013

Coming soon: My report on China's investment policies

The Organisation for Economic Co-operation and Development (OECD) is about to publish an update on China's inward and outward investment policies. This will be in the form of a Working Paper under my authorship. This continues the series of three Investment Policies of China that I wrote and published from 2003 to 2008.

What was in those Reviews? What will be in the forthcoming update?

Wednesday, 15 May 2013

中国对外投资:一个新兴的政策框架 (主要资料汇编)



Chinese Outward Investment: a documentary compilation

The International Institute for Sustainable Development (IISD) recently published Chinese Outward Investment: An emerging policy framework, a compilation of 80 official texts, dating from January 2000 to January 2012, that document the evolution of China's policy towards outward investment. This book is a repository of primary materials, intended for use as a reference by researchers and analysts. While such documents are mostly retrievable on official Chinese government websites, they are not all in the same place and some are only available in Chinese, so the editors, Nathalie Bernasconi-Osterwalder,  Lise Johnson and Jianping Zhang, have performed a valuable service by collecting them in one place and supplying English translations.

Monday, 13 May 2013

America's Chinese Dream

My friend and former OECD colleague John West has kindly shared with us his assessment of the opportunities that China's economy provides for the United States.

The US economy is wobbling slowly forward. Europe is just plain wobbling. And China has moved onto a slower growth path.

But China's role in the global economy is also changing fundamentally, providing America with new growth opportunities, a "Chinese dream".

Wednesday, 1 May 2013

2012-2013 年中国宏观经济报告



2012 年是中国经济从“次萧条”到“复苏重现”的一年。在消费持 续逆势上扬、基础建设投资大幅增长、房地产政策微调带来的“刚需”释放、货 币政策和财政政策的持续放松以及全球市场情绪稳定带来的外需稳定等因素的 作用下,中国宏观经济开始在 2012 年 9 月出现“触底反弹”,并在十八大政治换 届效应、存货周期逆转、消费持续增长、外需小幅回升、投资持续加码等因素的 作用下,重返复苏的轨道。2012 年前 3 季度回落超预期,而第 4 季度复苏幅度 也可能超预期。

Tuesday, 30 April 2013






Monday, 29 April 2013

China now leading action on climate change, says Australian government report

On 29 April 2013 the Australian governments' Climate Commission released a report entitled The Critical Decade: Global Action Building on Climate Change.

The report shows that the world's two largest economies, those of China and the United States, which together produce around 37% of global emissions, are both on track to meet their international commitments to tackle climate change. The two countries have just reached an agreement to co-operate on this. While they can not solve the problem alone, they are acting as important drivers of change. Here are some of the other main findings of the report and a link to the full report:

Sunday, 28 April 2013

USCBC 2013 report: China and the U.S. Economy

The US-China Business Council (USCBC)'s 2013 report China and the U.S. Economy: Advancing a Winning Trade Agenda is further subtitled "What Americans Should Know about the US-China Commercial Relationship.

The report questions pessimistic assumptions about this important economic relationship and advances an action plan that includes working with China on major challenges and also making important improvements in the US economy. It includes a list of the top 10 commercial issues reported by USCBC members in China in 2012. As the USCBC is more familiar with China than many people in Congress, the report strongly rebuts the charge that China's exchange rate is the cause of America's trade deficit and high unemployment and also the complaint that China's ownership of US government debt is a problem. A strong case is made for promoting Chinese investment in the United States to help create jobs there.

Global Reach of China Luxury: a KPMG Study

A report on Global Reach of China Luxury was released by KPMG earlier this year. In mid-2012 KPMG China commissioned market research firm TNS to conduct a survey of Chinese middle class consumers on their spending patterns for luxury brands. TNS received 1,200 qualified responses to the survey. They were based across 24 cities and were between 20 and 44 years of age.

The survey data are complemented by thirteen case study interviews with senior executives of luxury and retail companies, conducted by KPMG China’s Consumer Markets Practice between October and December 2012. 

Major findings of the report:

Tuesday, 23 April 2013

U.S.-China Manufacturing Symposium to be Held in the United States

The first U.S.-China Manufacturing Symposium will be held in November in the United States.  The event, co-sponsored by the Asian Manufacturing Association (AMA) and SoZo Group, follows a collaborative effort between the two organizations at the AMA’s 6th annual conference in Beijing last December, during which SoZo delivered Live Dialog sessions between the Chinese delegates and the U.S. Congress (video). SoZo also produced two highly successful Alabama China Partnership Symposiums, focused on bridging the business and culture gap in recruiting Chinese investment in the U.S..

Saturday, 20 April 2013

Raymond Cheng's presentation to the APBO Conference 2013

Raymond Cheng is the CEO and President of Sozo Group, a sustainable investment advisory company.

Here is his presentation to the Asia/Pacific Business Outlook Conference at USC Marshall School of Business in Los Angeles on April 9, 2013 on Recruiting Chinese Investment: A Roadmap for Developing a Sustainable Relationship.

Friday, 19 April 2013

AMCHAM 2012-2013 China Business Report now out

AmCham Shanghai has just published its 2012–2013 China Business Report. The report compiles the results of AmCham Shanghai's annual China Business Climate Survey. First launched in 1999, this year’s report includes responses from a record 420 member companies. The report tracks responses on a wide range of topics including top line business performance, growth expectations, top challenges and trends to watch in 2013.

Download the China Business Report infographic!
This year’s report found that year-on-year U.S. company performance dipped in 2012 for the second year in a row. Challenges like rising costs, domestic competition and a lack of transparency are intensifying. Yet U.S. companies continue to perform strongly and remain committed to the transitioning China market with nearly two-thirds of those surveyed focused on the growing domestic China market.
Other highlights include:
  • The China market is in transition, moving from export and investment led growth to one focused on services and consumption. U.S. companies have largely moved away from the low-cost export model that once drove U.S. business strategies in China. Nearly two-thirds of companies surveyed said they were “in China for China” – there to compete in the growing domestic market.
  • China remains a top investment destination – more than half of U.S. companies surveyed identify China as a top three priority for investment and 21 percent state China is their No. 1 priority. Two-thirds report their 2012 revenue growth in China exceeded that of their operations worldwide.
  • As more and more U.S. companies in China target the Chinese domestic market, 59 percent of survey respondents indicate that they export finished goods or components to China from the U.S. to support their operations in China. This “pulling” of U.S. exports to China by American businesses in China supports production and jobs at home – a trend that has increased over the past three years.
To download a pdf of the Executive Summary of the report, click here.
To download the report infographic, click here.

Thursday, 18 April 2013


l  中国个人资产在600万以上的高净值人群上升速度放缓,比去年上升4%,有280万人;亿万资产以上的高净值人群上升仅2%,有6.45万人。
l  高净值人群中炒房者和职业股民均比去年减少5%。

China Passion Investments White Paper 2013

  • The number of dollar millionaires in China grew 4% year on year to 2.8 million
  • The number of super-rich Chinese, defined as individuals with CNY 100m, grew 2% to 64,500 individuals, the slowest growth in the past four years.

Tuesday, 16 April 2013

China: 2013 Defense White Paper - Official Summary

BEIJING, April 16 (Xinhua) -- A white paper issued Tuesday by the State Council Information Office introduced the fundamental policies and principles followed by the diversified employment of China's armed forces.

中国武装力量的多样化运用 (全文)

    前 言

How the private sector is changing Chinese investment in Africa

Xiaofang Shen*
In August 2012, US Secretary of the State Hilary Clinton offered a thinly veiled criticism of China’s role in Africa, calling upon African countries to guard against those that “come in, take out natural resources, pay off leaders and leave.”[1] The Chinese official news agency, Xinhua, retorted immediately that “Clinton’s implication that China has been extracting Africa’s wealth for itself is utterly wide of the truth.”[2] 

China's foreign debt

China's huge export surpluses and continually high savings:investment ratio have prevented China from becoming dependent on foreign borrowing.

At the end of 2011 (the latest official figure available), total external debt was less than USD 700 billion, compared to foreign-exchange reserves of well over USD 3 trillion.

China's foreign debt in USD billion, 2007-2011
Registered foreign debt240.5260.6267.0337.7445.8
Trade credit148.7129.6161.7211.2249.2
TOTAL FOREIGN DEBT389.2390.2428.7548.9695.0
Short-term debt235.7226.3259.3375.7500.9
% of total0.
Source: State Administration of Foreign Exchange. 
Table © Chinability 2013.

China's GDP up 7.7% in lst quarter of 2013

Report from the National Bureau of Statistics, 15 April 2013, original text
Since the beginning of 2013, faced with the complicated and volatile economic environment at home and abroad, the Central Party Committee and the State Council have committed to the general tone of making progress while ensuring the stability, centered on improving the quality and efficiency of economic growth, continued to carry out the proactive fiscal policy and prudent monetary policy, continuously strengthened and improved macro regulation, speeded up the transformation of governmental functions, and accelerated the transformation and upgrading and restructuring of the industry. As a result, the overall national economy realized steady development.

Monday, 15 April 2013

China's 2012 economic performance: the official NBS figures

[Long document: lots of charts and tables]
Statistical Communiqué of the People's Republic of China on the 
2012 National Economic and Social Development[1]
National Bureau of Statistics of China
February 22, 2013

In 2012, faced with the complicated and severe international situation and arduous tasks of domestic reform, development and stability, under the firm leadership of the CPC Central Committee and the State Council, the people of all nationalities of China, taking the scientific development as the theme and the transformation of economic development mode as the mainline, following the general tone of making progress while ensuring the stability, carried out the package of plans and policies aiming at strengthening and improving the macro control. As a result, national economic performance maintained steady development, all social undertakings achieved new progress, and a good foundation was laid for the comprehensive construction of a well-off society.

Friday, 12 April 2013

Recent Vale Columbia Center Perspectives on China

China and the United States have been negotiating a bilateral investment treaty (BIT) since June 2008. China has for the past quarter of a century conducted an active investment diplomacy, signing BITs with many countries. The United States has been more circumspect, perhaps because its own model BIT is more demanding than most countries are willing to accept. The US model BIT requires that the host country provide pre-entry, instead of post-entry, national treatment. This means that a country must allows foreign-owned enterprises to establish themselves within its borders (except in sectors that are on a closed list) without prior approval, just like domestic enterprises. This is different from the practice in many other countries. For example, all incoming investments in Australia are screened. China also has its own model BIT, which is not the same as the US model BIT.

Tuesday, 9 April 2013

Ken Davies on RTHK3's Money for Nothing, April 9, 2013

8.18 am - China's view of Japan's easing measures 

Yi Gang, the head of China's foreign-exchange regulator is among the critics of the Bank of Japan's easing program. A weak yen would hurt Chinese exports. But Ken Davies, president of Growing Capacity says China and other countries will benefit if Japanese demand comes back. "If Japan's economy does revive, then it's good for China because Japan is such an important market. A potential effect is that Japan may relocate manufacturing from China to Japan, and Japan becomes much more competitive in other areas such as tourism. In the long run, everyone will benefit if it works. But the question is will it work?"

Wednesday, 3 April 2013


由亚洲制造业协会和美国三叶集团主办的 2013 年中美制造业论坛暨第七届 亚洲制造业论坛年会和第三届阿拉巴马中国论坛将于 11 月在美国南部举行。

Tuesday, 26 March 2013

United States Urged to “Think Asia, Think Hong Kong"

HKTDC’s Largest US Services Promotion Set for June
in New York and Los Angeles

March 26, 2013 – The largest Hong Kong promotion ever to take place in the United States will be held this summer to showcase Hong Kong’s advantages for American companies looking to tap new business opportunities in Asia, particularly on the Chinese mainland.

“Think Asia, Think Hong Kong” will feature symposiums in New York and Los Angeles, June 11 and 14 respectively. Speakers will include CY Leung, Chief Executive of the Hong Kong SAR Government, and more than 60 prominent senior executives from global companies. The event is organised by the Hong Kong Trade Development Council (HKTDC), with support from 14 Hong Kong partners and close to 100 US organisations.

Saturday, 23 March 2013

2013 OECD China Economic Survey

The OECD is currently launching its 2013 China Economic Survey. This is the third survey, the first was published in 2005 and the second in 2010.

This year's survey focuses on five policy areas:

  1. Financial sector reform
  2. Competition and innovation
  3. Inclusive urbanisation
  4. Relations between levels of government
  5. Greening growth
In this post, I give you a candid assessment of this report based on my years of experience at the OECD working directly with the Chinese government. At the bottom I give you a link so you can read the whole report free of charge.

Thursday, 7 February 2013

Wishing everyone a very happy Chinese New Year

Chinese New Year begins on February 10, 2013