Opening of China’s market could serve as future global growth driver: experts

Ray Dalio, founder of investment management firm Bridgewater Associates, noted that there’s a top-down way of setting a mission, and working those …
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DAVOS, Switzerland, Jan. 22 (Xinhua) — The opening of China’s market is likely to increase the competitiveness of the Chinese economy, which could serve as a future driver of global growth, experts attending the ongoing World Economic Forum (WEF) Annual Meeting said Tuesday.

Attending a penal discussion titled “Rethinking Global Financial Risk,” Fang Xinghai, vice chairman of the China Securities Regulatory Commission, said that the Chinese economy may slow down in 2019 but “it won’t be a collapse.”

“China’s vision for the economy is to make it open, large and competitive. It will be a huge opportunity for all companies,” Fang said, adding that declines in overheated sectors, such as real estate and infrastructure, could provide useful correctives for the market.

Saying that opening up is good for China, Fang emphasized that over the last 40 years China has never had a significant financial crisis.

“How has it managed that? We have a very top-down approach to financial risk management. If risks are accumulating the government will step in. There is a lesson that the rest of the world should look at,” he said.

Jin Keyu, professor of economics of the London School of Economics and Political Science, said only two years ago China was considered as a ticking financial bomb, and the slowdown is the consequence of the government’s successful efforts to deleverage.

“These efforts have made China safer, much of this is the deliberate effort of the government,” she said.

Most of the economic experts predicted economic slowdowns in major global markets, including China and the United States, for 2019, but according to Jin, though growth has become more of an issue, the Chinese government is now shifting its focus to revamping growth.

“China has a lot more scope than most countries in this regard,” she said, adding that China’s main challenge is “how to unleash the real potential of the real economy.”

Ray Dalio, founder of investment management firm Bridgewater Associates, noted that there’s a top-down way of setting a mission, and working those things in a top-down way in China that has produced a 20-fold increase in income.

Chairman of the Swiss bank UBS Axel A. Weber said at the discussion that most of the growth seen globally is “generated by China being included in the world economy.”

“The more we can connect stock markets, the more we can bring international investors into the Chinese economy,” he noted.

Though soft but stable growth characterizes the general outlook for 2019, experts attending the discussion noted that a range of serious risks still exist on the periphery, such as a hard Brexit, climate change, and cybersecurity.

Experts at the discussion also predicted that easing monetary policies and fiscal reforms could offset the slowdown, but with interest rates still at post-financial crisis low points, there are questions about how much room central banks have to manoeuvre.

The 2019 annual meeting of WEF kicked off here Tuesday, bringing together more than 3,000 global leaders from politics, government, civil society, academia, arts and culture as well as the media.

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China’s slowdown is world’s slowdown: Ray Dalio

Bridgewater Associates Founder Ray Dalio said a slowdown in China Opens a New Window. will weigh on the U.S. economy. Opens a New Window.

Ray Dalio: Longer term China is making big reforms

Bridgewater Associates founder Ray Dalio on China’s economy and the future of the U.S.-China economic relationship.

Bridgewater Associates Founder Ray Dalio said a slowdown in China will weigh on the U.S. economy.

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“China’s going through two drags on its economy in the short term,” Dalio told FOX Business’ Maria Bartiromo on Monday during an interview at the World Economic Forum in Davos. “It’s dealing with a deleveraging, and deleveraging is a good thing. In other words, it’s controlling and restructuring its debt that slows demand.”


However, that process will dent global growth.

“I think that people have got to realize it’s going to be a negative of all things on growth,” he said. “Europe has a negative growth and the United States is going to have a negative growth environment. I don’t mean absolute negative. I mean slowing of growth in a material way that could be close to between 0 and 2 percent over the next 18 months.”

In addition, Dalio said the U.S. and China trade war will also impact capital flows.


“We have to remember that the other side of the trade deficit is a capital deficit,” he said. “They bought our goods and then at the same time they lent us a lot of money. And I think we should always be mindful that capital issues, capital flows have a very big effect on the world and the economy because they can change things a lot.”

Because of this, Dalio predicts that China will continue to make reforms.

“I do think they will change the mixes of their assets that they’re holding and I think that has implications,” he said.  “I think it particularly has implications as we’re going through the next year or two or three when we have to sell a lot of U.S. dollar denominated debt because we will have larger deficits as a result of the corporate tax cut.”


China is currently the largest foreign holder of U.S. debt.

The U.S. national debt has exceeded $21 trillion, according to the Treasury Department.

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China Digest: Mandra Capital backs Ekuaibao; Baidu arm invests in Qingwei

Existing investors DCM Ventures and Future Capital also participated in the round. Founded in 2014, Ekuaibao is an agile enterprise expense …
January 22, 2019

Mandra Capital has led a $15-million Series B round into Chinese corporate cost management software-as-a-service (SaaS) firm Ekuaibao while Baidu Ventures has invested $14.73 million into Beijing-based AI chip-maker Qingwei.

Mandra Capital leads $15m investment in Ekuaibao

Mandra Capital has led a $15 million Series B round into Chinese corporate cost management software-as-a-service (SaaS) provider Ekuaibao, China Money Network reported.

Existing investors DCM Ventures and Future Capital also participated in the round.

Founded in 2014, Ekuaibao is an agile enterprise expense reimbursement and management platform. It covers travel application, travel and expense booking, reimbursing, paying, book-keeping and analytics reporting.

Hong Kong-based Mandra Capital invests in internet, technology, materials, and life science sectors. Recently, the firm led a $16-million Series A in Chronicled Inc, a provider of enterprise blockchain-powered supply chain ecosystems.

Baidu invests in Beijing-Based AI chip-maker Qingwei

Baidu Ventures, the artificial intelligence-focused venture capital unit of Chinese internet search firm Baidu Inc, has co-participated RMB100 million ($14.73 million) in an angel round in artificial intelligence (AI) chip-maker Beijing Qingwei Intelligent Technology in September last year, CMN reported.

Other investors in the round include advertising network operator Focus Media Information Technology, XY Capital, Shenzhen-based Guolong Capital and Hangzhou-based machinery company XIZI United Holding Corporation.

Founded in July 2018, Qingwei Intelligent Technology is a Chinese developer of AI chips with an ultra-low power consumption feature.

Last February, Baidu Ventures led a group of top venture capital investors and industry technologists in the $10-million seed round financing in US-based startup Lightelligence.

The firm reached the first close of its second RMB fund at $317 million. With the latest fundraising, BV’s total assets under management currently stand at around RMB3 billion ($476 million).

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Chinese fintech platform PINTEC raises $103m led by SINA Corp, Mandra Capital

Baidu leads $87m Series D round in smart lock startup YunDing

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China drone maker says staff skimmed millions in parts scam

Earlier this month, Chinese ride-hailing giant Didi Chuxing Technology Co., Ltd., which is backed by Japanese investment giant SoftBank Group Corp.

SHANGHAI–China’s SZ DJI Technology Co., Ltd., the world’s largest maker of consumer drones, said employees inflating the cost of parts for personal gain led to incidents of suspected corruption that may have caused it to suffer a hit of almost 1 billion yuan ($147 million or 16 billion yen) last year.

Privately held DJI said late last week it was “investigating a number of serious cases of corruption at the company leading to losses of more than 1 billion yuan for 2018,” in one of the largest cases of corruption involving a Chinese technology company.

On Monday, it offered some more details about the cases, pinning the blame on staff for inflating costs of parts. It also said in a statement it “did not incur a full year loss in 2018.”

DJI did not respond to further questions about the matter and its earnings.

Founded in 2006, Shenzhen-based DJI is one of a handful of Chinese consumer technology companies to successfully expand overseas, developing North America as its biggest market.

Speaking to Chinese online media outlet The Paper in December, DJI president Luo Zhenhua revealed that the company posted revenue of 18 billion yuan in 2017, 80 percent of which came from outside of China.

According to an internal notice which begun circulating on Chinese social media on Friday, during an overhaul of management procedures DJI discovered that employees in several parts of its supply chain engaged in “corrupt behavior” that caused prices to rise on an average of 20 percent.

Reuters was unable to independently verify the contents of the document, which also said the company fired 45 individuals, most of whom were in research and development as well as procurement.

There has been a spate of cases in recent months in which Chinese tech companies have fired employees citing corruption.

Earlier this month, Chinese ride-hailing giant Didi Chuxing Technology Co., Ltd., which is backed by Japanese investment giant SoftBank Group Corp. and U.S. ride-hailing firm Uber Technologies, announced it had fired over 80 employees as part of a corruption crackdown.

According to Didi the dismissed individuals had primarily engaged in fraud, profiteering or violating information security regulation.

And the president of Alibaba Group Holding Ltd’s video streaming service Youku stepped down and is believed to be talking to Chinese authorities as part of a potential corruption case, the company said in December.

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New Documentary on Chinese Startups Flops at the Cinema as Key Figures Fall From Grace

In fact, quite a few of the business leaders featured in Startups have received funding from Matrix Partners, including Fu Sheng of mobile developer …

As we near Spring Festival, the time has come for Chinese companies to hold year-end parties celebrating the past year’s achievement, to raise a glass and raffle off prizes before employees head home for New Year festivities. But following the January 11 release of a documentary called Startups, quite a few bosses have opted instead to take their employees to the theater as a new kind of team-building event ahead of the arrival of the Year of the Pig.

There might not be anything more encouraging, or even inspiring, for those in startups than seeing how much anxiety, confusion, anger, but also excitement, happiness, and fulfillment other founders have experienced. Yet the film has struggled at the Chinese box office, failing to connect with a wider audience as some of its most prominent protagonists go through very public struggles with their companies.

Startups(Chinese name 燃点, “Burning Point”) is directed by Guan Xiu, who previously directed CCTV’s Win in China, a Dragon’s Den-like reality show for Chinese startups that aired over a decade ago and featured Alibaba’s Jack Ma and Lenovo’s Liu Chuanzhi as judges determining which contestants would win venture capital. Following the latest wave of China’s startup boom, Guan spent 14 months capturing representative moments in the work and lives of 14 founders from completely different industries, showing the everyday reality behind these newly-made business stars.

Luo Yonghao, founder of mobile terminal device company Smartisan, has attracted tens of millions of fans since he started pursuing his dream of making his own cellphone, the Smartisan T1, in 2012. Though he had little starting capital, he’s since become a symbol of dream chasers. In Startups, besides giving a humorous speech at a new product release conference, we also see a darker side to his work and fame, as Luo says at different times: “I’ve thought of suicide”; “The anxiety is lifelong”; and, “I hate public speaking.”

Luo Yonghao throwing darts at a target with his own face on it in his office

If you’ve ever visited a big city in China, you’ve probably seen or even ridden a yellow Ofo shared bike (or until their recent troubles, you may have ridden one outside of China). Ofo’s founder and CEO, Dai Wei, then a graduate student at Peking University, founded the company with four other PKU alumni in 2016, raising four rounds of financing in four months. But in Startups, Dai is seen eating a delivered lunch, recounting how hard it is to decide “when we should go fast and when we should slow down.” That statement feels especially timely given Ofo’s problems at present.

Papi Jiang (Jiang Yilei), one of China’s most successful internet celebrities, made her name with a series of phenomenal short videos on Weibo starting in 2015. The following year, she sold her first viral video ad, with a pricetag of 22 million RMB (about 3.2 million USD). Afterwards, she and her partner Yang Ming raised 120 million RMB and founded a multi-channel network called PAPITUBE as an incubator for online influencers, often referred to in China as KOLs or Key Opinion Leaders.

PAPITUBE has signed over 60 content creators active on Weibo, Douyin, and Bilibili. But in Startups, we see Papi Jiang still living in her parents’ old house in Shanghai, saying, “I’m not as rich as people might think,” and “The reason why I started making videos was because I wanted to express myself. But when it comes to a startup, there are so many things that you’re forced to do.”

There are many more such stories throughout the film. Other, less famous characters include Jin Xing, the founder and CEO of the medical cosmetology community and micro-plastic surgery platform SOYOUNG, whose mission is to “let the world be without ugliness,” and An Chuandong, a country boy who graduated from a top college in Beijing and looks to “reverse the unfair situation of people like me” through his startup projects. An comes in for particular criticism in the film from David Zhang (aka Zhang Ying), founding and managing partner of VC firm Matrix Partners China.

In fact, quite a few of the business leaders featured in Startups have received funding from Matrix Partners, including Fu Sheng of mobile developer Cheetah Mobile (the company behind livestreaming app and ubiquitous Android disk cleanup app Clean Master) and Tang Yan of mobile dating app Momo. “American and other foreign startups should feel lucky that they don’t need to compete with Chinese startups,” VC investor Zhang says in the film. “If so, they would be wiped out by Chinese rivals in the end. [Foreign companies] see startups as a competition, whereas Chinese see it as a war.”

Another important interviewee in the documentary is Xu Xiaoping, co-founder of angel investment firm Zhen Fund and the New Oriental Education & Technology Group. He sees “the same flame in every Chinese startup’s eyes,” adding that “building startups is a lifestyle and a mindset.”

After the documentary was released earlier this month, the stories of their subjects have continued to progress in the real world. Some haven’t worked out a successful exit, such as Ofo, which had millions lining up for deposit refunds in December, and Smartisan, which seems to be faltering in its attempt to challenge WeChat’s market dominance.

On January 14, three days after the release of the film, three new social video platforms were released online: Duo Shan (created by ByteDance/Tik Tok), Liao Tian Bao (by Kuairu Tech), and MT (aka Ma Tong, or toilet, by Ringle.AI). All of them are also aimed at dethroning WeChat, but Tencent’s dominant social app blocked QR codes and links for the would be competitors on their platform instantly, showing just how heated and cutthroat the Chinese startup world is at this stage of its development.


A Quick Guide to China’s Competing Short Video Apps

“Within three years, 93% of startup companies fail,” the film states. Be that as it may, more and more young Chinese seem eager to take their ambitions, dreams, and passions into the cruel business world, where everything comes down to money. Startups gives an interesting insight into this fast-moving world, thought it doesn’t seem to be connecting with audiences: the film earned just 80,000USD on its opening day, perhaps due in part to the “fall from grace” of Ofo and Smartisan’s erstwhile rockstar CEOs. The film currently holds a lukewarm 5.9/10 on film rating site Douban.

Nevertheless, as the Chinese economy continues to be a topic dominating conversations around global trade, the millions of startups competing in the Chinese space — and the dark stories underlying their celebrity founders — are an integral part of the bigger picture.

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