China’s Generation Z outspends peers in U.S., UK on luxury good
Jan-29-2019 By : fcccadmin
Members of China’s Generation Z are confident, carefree and spend over USD7,000 a year on luxury goods – even before they turn 21, according to a study by research firm OC&C Strategy Consultants. Spoiled by parents and grandparents for being the only child in their families, these youngsters are living it up compared to their cautious, conservative peers in the West. They are pumped up about the future and not worried about their career prospects or international politics, the study found. “This is a generation that has never known worry, so they spend more and save less,” said Adam Xu, Partner at OC&C based in Shanghai. “We don’t know if they’ll grow up to be successful but we do know that they are already a significant spending force that consumer brands must pivot towards.”
China’s Generation Z did not have to share while growing up and saw only an ever-rising wealth creation. By contrast, their peers in the U.S. and Europe witnessed the 2008 financial crisis and its aftermath, are graduating with historically high student debt, may not earn enough to afford a roof over their heads and are more politically conscious than earlier generations. The survey questioned 15,500 people born in 1998 and after, across nine countries including Brazil, France, Germany, Italy, Poland, Turkey, the UK and the U.S. Almost 2,000 youngsters were from China. Chinese Generation Z accounts for 15% of their household’s spending in the survey compared with 4% in the U.S. and the UK, and although the vast majority are not yet earning a salary, they consume a lot.
In a separate survey last year, the same research firm found that over half of Chinese Generation Z shoppers spent more than CNY50,000 on luxury goods last year, compared to their stingier elders. Only 32% of Millennials spent that much, compared to 34% of Generation X. But the survey has also uncovered two worrying trends: Generation Z is not saving like earlier generations and is willing to take on debt to fund their purchases, the South China Morning Post reports.
China to provide more convenient immigration services
By : fcccadmin
China plans to provide more convenient immigration services, especially after a record number of foreigners entered and exited the country in 2018. Foreigners entered and exited the country more than 95 million times in 2018, up 11.6% year-on-year, according to the National Immigration Administration. China has become a popular destination, particularly for visitors from South Korea, Japan, the United States and Russia, the Administration said. Foreigners entered China more than 100,000 times via 72-hour and 144-hour visa-free stopovers in 2018, an increase of 23.9% year-on-year, it added. The visa-free policy has been introduced in many Chinese cities to attract more foreign visitors.
To provide more convenient immigration services for foreigners, Beijing opened two new centers last week, offering visa, residence permit and permanent residency services. The center in Shijingshan district will better accommodate the needs of foreign talent recruited for the 2022 Winter Olympics in Beijing as its Organizing Committee is based in the district, while the center in Tongzhou district will aid with the development of the area where much of the municipal government has been relocated. The capital has already set up four such centers since March 2016. They require foreigners to fill in online applications before making appointments to save time verifying documents.
China also stipulated harsher punishments for foreigners who illegally enter, live or work in China after the new Exit and Entry Administration Law took effect in July 2013. In 2018, China deported 69,000 foreigners, the China Daily reports.
In Shanghai, new policies require fewer documents from foreigners. The policies exempt those applying for certain visas from providing documents concerning their Chinese hosts if the hosts remain the same from previously granted visas, including in the categories short-term family visits (Q2 visa), short-term private matters (S2 visa), short-term studies (X2 visa), business trips (M or F visa) and talent visas (R visa). As for those applying for permanent residence permits, the new policies have loosened requirements for some of the supporting materials. Shanghai has the largest employed expatriate population – some 215,000 people – among all Chinese cities, accounting for 23.7% of the nation’s total.
China to grant more access to foreign investors
By : fcccadmin
China plans to grant more access to foreign investors in a number of sectors and eliminate joint-venture requirements, including in agriculture, mining, manufacturing, telecommunications, education and medical care, Meng Wei, Spokeswoman of the National Development and Reform Commission (NDRC) said. “The NDRC is working with a number of departments to clear up the restrictions on foreign investment that are not on the negative list. We will make sure that domestic and foreign standards for market access are consistent,” Meng said. Earlier in December, the NDRC published a new negative list that specified industries where investors are restricted from participation. Of the 151 sectors on the list, only four are prohibited and the rest require government approval.
Data from the Ministry of Commerce (MOFCOM) show foreign investment in high-tech manufacturing has maintained relatively rapid growth. In 2018, foreign direct investment (FDI) in the manufacturing sector grew 20.1% year-on-year, with investment in high-tech manufacturing rising 35.1% year-on-year. The removal of restrictions on foreign investment is expected to be introduced not only in more developed eastern regions such as Shanghai, but also in less developed regions. The government hopes to attract more foreign capital to help Northeast China find a new growth momentum. The artificial intelligence (AI), new materials and high-tech manufacturing sectors will particularly welcome foreign investors. Shenyang, capital of Liaoning province, will establish a government-backed fund and guide more money to support enterprises in the Sino-German Intelligent Equipment Manufacturing Park, the China Daily reports.
China joins WTO talks on USD25 trillion e-commerce market
By : fcccadmin
China will join a group of countries, including the U.S. and the European Union, in negotiating new rules to cover the USD25 trillion e-commerce market. The EU and 47 other members of the World Trade Organization (WTO) have launched the discussions, which – if successful – would establish an international regime for 21st century trade and reduce cross-border hurdles to e-commerce. China resisted joining the talks until last week, when China’s Ambassador to the WTO, Zhang Xiangchen, said China had decided to join the negotiations out of concern over a broader crisis surrounding the WTO, which has been coming under attack from U.S. President Donald Trump’s administration. “The multilateral trading system is in a deep crisis,” Ambassador Zhang said. “Against this backdrop, the launching of e-commerce negotiations will in a significant way help reinvigorate the negotiating function of the WTO, and shore up confidence in the multilateral trading system and economic globalization.” China is likely to register USD5.5 trillion in online sales this year.
U.S. Trade Representative Robert Lighthizer said in a statement that the U.S. is seeking a “ambitious, high-standard agreement that is enforceable and has the same obligations for all participants”. He called the digital economy a “powerful force for global economic growth” that should be guided by market-based rules and lowered barriers. The inclusion of China was important because of its scale and role in the global economy, Cecilia Malmstrom, the EU’s top trade negotiator, said. With China on board, the negotiations will include WTO members accounting for more than 90% of global trade. “It shows that the WTO is still alive and that we can take on board one of the biggest challenges on global trade – e-commerce,” Malmstrom said.
The new rules will seek to reduce barriers that prevent cross-border sales, ban duties on electronic transmissions, ensure the validity of e-contracts and e-signatures and address forced data localization requirements, according to an EU statement. Australian Trade Minister Simon Birmingham said the hope was that some tangible progress could be made in negotiations before a Group of 20 summit in Japan in June and that the negotiations could be wrapped up next year. The WTO is expected to hold the first formal negotiating session in March, the South China Morning Post reports.
Chinese outbound investment plunges, amid souring relationship with the U.S.
By : fcccadmin
China’s outbound investment and construction plunged last year, dropping to USD179.1 billion from USD279.8 billion in 2017 and USD270.9 billion in 2016, according to the China Global Investment Tracker of the Washington-based American Enterprise Institute (AEI). Chinese investors continued to pull back from the United States – investment there fell to USD10.6 billion last year, a 60% drop from the USD24.9 billion in 2017. Chinese investment in the U.S. peaked in 2016 at USD54.1 billion, according to the report. Germany, meanwhile, was the top destination for Chinese investment after carmaker Geely Group bought a USD9 billion stake in Daimler in February.
The decline in outbound investment and construction was more evident in state-owned companies, which initiated fewer investments and signed fewer deals for power construction projects, report author Derek Scissors, a resident scholar with the AEI, said. “Overseas, major investment partners such as Germany are joining the U.S. in being more cautious about Chinese acquisitions,” Scissors said. At home, pressure on capital outflows restricted Beijing’s financial support to state-owned companies for investments and construction projects overseas, the report said.
But President Xi Jinping’s ambitious Belt and Road Initiative (BRI) continues to expand – it now involves 125 countries, almost double the number from when it first launched in 2013. The AEI found that Chinese investment in those countries accounted for 40% of total outbound investment last year, more than double the proportion for 2017, as Chinese invested less in wealthier countries. According to the report, the Middle East was the top destination for new China-backed construction projects last year, led by Egypt and the United Arab Emirates (UAE). By sector, outbound investment went mainly into energy projects, particularly the oil industry, while agriculture and food outpaced technology investments.
Anbang Insurance Group, which once led the acquisition of U.S. companies and properties, is continuing to whittle down its empire. It is exploring the sale of the Manhattan office building that houses its U.S. headquarters, and of its domestic health-insurance arm Hexie Health Insurance to Fujia Group, a Liaoning-based petrochemicals-to-finance group. Anbang bought 717 Fifth Avenue from Blackstone Group in 2015 for USD414 million amid an offshore buying spree that also included Vancouver’s largest office complex and Belgian insurer Fidea.
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