LSESU ACS Asia Careers Journal Lent 2017 by LSESU ACS

CONTENTS

WHO ARE WE?

3 | Who Are We?

Bridging the gap between resource, opportunity, and talent.

4 | Editor’s Note

We are the only society on campus devoted to providing university students with insights into different career prospects in Asia.

8 | Are Major Financial Markets Safer Post-crisis Due to Regulatory Changes? - Japan Chen Weiheng 13 | Regulating Corporate Social Responsibility in Singapore and Malaysia Following the 2008 Crisis Jie Lin Nai 20 | IPO Landscape: What Options Are There for Chinese Companies? Calvin Koo 25 | South Korea and the Asian “Puppet” Serene Au 31 | Women in the Judiciary: Should More Be Done? Yen Siang Pang 36 | Private Banking in the Asia Pacific - The Big Opportunity of Our Time Chen Weiheng 43 | Malaysia’s Brain Drain Crisis - When Will Talent Stop Leaving? Serene Au 49 | Is China Hong Kong’s Future? Elton Wen 53 | Nintendo Equity Research Report - 7974 JP Equity Calvin Koo 57 | China and Trump Tiffany Chan 59 | Credits

We serve as a platform for our members to explore career prospects in the fields of Banking, Law, Accountancy, Asset Management, Consultancy and Alternative careers. By organising recruitment talks, firm visits, internship panels and skills workshops, we strive to serve as the perfect channel for respective firms to recruit from our pool of high calibre members from one of the most prestigious universities. The banking, business, China B&B and law divisions of ACS host events within LSE regularly throughout the year to prepare students for the job application process. Our Asia Careers Journal and Asia Careers Blog, which are managed by our research and marketing divisions, also help keep our readers up to date with the latest global economic and legal issues. Flagship Events ACS hosts the following flagship events annually over the summer: • Asia Exposure Hong Kong • Asia Exposure Beijing • Legal Insight Hong Kong • Springboard Singapore • Asia Careers Journal • Book Sale

EDITOR’S NOTE W

hat a year it has been. Looking back to the middle of 2016, we have encountered a number of remarkable global events since then. The unexpected Brexit outcome, the unexpected election of Donald Trump to the US presidency, the (un)expected North Korean nuclear provocations. All these headlines are intersected with continuous reminders that equity markets are at record highs, and unemployment (and inflation) are still at lows. In other parts of the world, conflicts in the Middle East continue to fester, political and commercial intrigue grips Latin America, Europe heaves a sigh of political relief while Asia soldiers on, albeit with uncertainty in its step. We at the LSESU Asia Careers Society, while having a broad, global perspective, will focus on Asia, the world’s next growth driver, and bring you a series of insights into issues which resonate across the financial, economic, business and legal landscapes in the region. From the courtroom to the stock exchange, from Malaysia to Japan, and from Trump to, well, just about everything and everyone else, the capable Research team at LSESU ACS have got the hottest (and sometimes overlooked) issues covered. The theme of this year’s issue of the Asia Careers Journal is “Where are we going?” In a world gripped by events which rock an already unsteady trajectory, that seems to be a valid question. However, that is only the first step towards understanding all that is going on. An arguably more important question to ask after that will be that of “How do we get there?” Dysfunctional politics, especially in the US, is proving to be an impediment to growth, as JPMorgan Chase & Co. CEO Jamie Dimon so emphatically put as “stupid s***”. In Europe, while the politics have steadied, the impending debacle of Brexit casts a shadow over the region, as a lack of political leadership in Britain stalls its progress. Over in Asia, the wildcard of North Korea is upending geopolitical stability in the region, raising the very real prospect of the world’s worst military conflict since World War II. Putting the focus lens on Asia, China is seeing a looming debt problem and possible slowdown on the horizon, while its consumer and technology sectors remain bright spots in the economy and powerful engines of future growth. India is looking to power past China as the world’s next growth engine. Japan still seems stuck in a quagmire of low inflation and slow growth, though some signs of life are stirring in some sectors of the economy. South Korea faces a very real nuclear threat just tens of miles north of its capital. Some Southeast Asian nations are experiencing political uncertainties, but the growth potential in markets such as Indonesia are immense. Hong Kong and Singapore soldier on as the key financial cities in the region, with dark clouds looming over a possible reversal in global asset markets and the increasing dominance of China over the regional landscape, which could potentially curtail potential for continued growth and dominance in Asia’s financial industry. Taking the focus to finance, there is a pervasive fear that the 8-year bull market will end soon, and that investors should take profit, but there is also the fear of losing out on the markets’

continued march upwards. The Fed may unwind its balance sheet and normalize rates, which could result in a moment of reckoning for financial markets worldwide, while currency distortions are likely to occur as central bank policies diverge between the US and the rest of the world in Europe and Japan. Markets will continue to react in the presence of Middle Eastern tensions (oil) and North Korean provocations (gold), while the spectre of block-chain technology, cryptocurrencies and Fintech disruptors look to upset the financial industry itself in a real and powerful way. That is not to mention the tremendous impact that technology in general will have on every aspect of our lives. It is an exhilarating time to be in touch with the markets and the events that drive them, and to continue observing and making sense of all that has happened and will happen in the world in the near and medium-term future. There is also a tremendous amount of resources available to everyone through the society, the school, online or simply all around you. Networking events, online guides, the news, fellow students and seniors all form a comprehensive, varied and helpful array of assistance to guide you in your career search and development. Understanding the world, the intricacies of its various regions and industries, and even departments within the most desirable organisations to work for, will all help to form a complex but ultimately clear and focused picture of your career and how you will develop for it. At LSESU ACS, we look to be an integral part of that journey. The Research team have provided, and will be providing a series of insights into the financial markets, as well as other key political and legal events with an Asian focus to navigate today’s unique market environment for readers, and guide you in your important interviews and conversations with fellow students and friends. The LSESU Asia Careers Society is also proud to have hosted and conducted a number of events for our members, including our flagship Asia Exposure in China and Hong Kong, Springboard Singapore, Legal Insight and a number of workshops and panels covering various industries and opportunities for interests of all types. While you may be in London, you are never too far from Asia. Throughout the chaos of dysfunctional politics and disastrous hurricanes, and the parabolas of nuclear missiles and financial markets, we hope that we are able to provide some guidance, at least for ourselves, on where we, and the rest of the world, are going. An exciting year lies ahead, and we hope to play some part in guiding you along the way. My research team and I are proud to present you the Asia Careers Journal 2017. Thank you for your support, and happy reading!

Best regards,

Chen Weiheng BSc Economics and Economic History Editor-in-Chief

LSESU ACS Asia Careers Journal against US-led efforts at stricter financial regulation via the Basel Committee, such as standard risk-weighted capital models, higher capital requirements and leverage ratio rules.4 In Japan’s case, there is little doubt its financial markets are safer post-crisis due to ongoing regulatory improvements, but long-term risks from the economy and the effects of policy remain.

Are Major Financial Markets Safer Post-crisis Due to Regulatory Changes? - Japan CHEN WEIHENG

apan is an interesting case study in the realm of finance and economics. It is at the forefront of problems plaguing developed economies today, with slow growth, low inflation and an ageing population. It is also arguably leading the developed world in unconventional policy prescriptions, with massive asset-purchasing programmes enacted by the Bank of Japan (BoJ), negative interest rates, and even rumours of “helicopter money”.1 Despite 1 Dulaney, C. (2016): Japanese ‘Helicopter Money’ Prospect Has Yen Traders on Edge. The Wall Street Journal.

Japan’s “lost decade”, which many extend to include two decades since the bursting of its asset price bubble in 1991, its financial markets are some of the largest, most liquid and systematically important in the world, with about twothirds of trading on the Tokyo Stock Exchange (TSE) being conducted by foreign parties.2 The market capitalisation of the TSE recently surpassed its previous high of 590.09 trillion yen in December 1989, and are trading at around 16 times earnings compared to

60 times during the previous peak, reflecting better market fundamentals.3 Japan’s experiences during the 1990s crisis have prompted regulatory reforms which strengthened its markets and institutions, and its minimal exposure to toxic US securities which led to the 2008 financial crisis limited the impact on its financial sector. Nevertheless, it has since implemented regulations to further enhance the safety of its financial institutions. In an intriguing contrast, Japanese regulators are pushing back

2 Hunt, J. (2016): Foreign investors net buyers of Japan shares for first time in 2016. Reuters.

3 Sano, H. (2016): Japan stock market cap hits record, exceeds 1989 peak. Reuters.

ahead of schedule.6 Japan’s primary financial regulator is the Financial Services Agency (FSA), with the BoJ playing an important role in examining commercial banks to maintain systemic financial stability. The government, led by Prime Minister Shinzo Abe’s efforts, has also taken steps to improve corporate governance. Most notably, it ensured that nearly all leading companies have independent The 2008 financial crisis had directors, resulting in an a relatively muted impact increase in their return-onon Japan’s financial sector, equity from 5.8% in 2012 to causing a loss of around $149b 8.2% in 2014.7 compared to $2700b for the US as estimated by the IMF.5 The Basel III capital requirements ghosts of the 1990s ensured are imposed only on 16 major that bank capital was adequate, internationally-active banks the originate-to-distribute in Japan, ensuring systemic model was not widely adopted safety while allowing regional and subprime products and banks to continue essential excessive securitization was domestic lending to boost rare. In addition, executive compensation, often blamed 6 Harada, K., Hoshi, T., Imai, M., Koibuchi, for dangerous risk-taking S., Yasuda, A. (2014) “Japan’s financial regulatory responses to the global financial crisis” in Journal of by the banking sector, was Financial Economic Policy, Vol. 7, No. 1, pp. 51-67. Three-piece dream suit. (2015) The not closely linked to short- 7 Economist. term corporate performance, limiting the amount of risk taken by Japanese banks. Those safeguards can be additionally attributed to Japan’s early adoption of Basel II regulatory standards. Since the crisis, Basel III rules are being implemented on or

economic growth. The FSA, while stopping short of imposing its own stress tests on banks like the Federal Reserve and Bank of England, are increasing regulatory oversight by scrutinizing the banks’ internal stress tests more closely, such as analysing international risks like oil prices and emerging market exposure,8 in addition to FX settlement risks in accordance with Basel III guidelines.9 While not as strict as their western counterparts, the FSA emphasizes the importance of not being too supervisory or intrusive and it recognises the heterogeneity of individual banks. In 2013, Japan also enhanced its Deposit Insurance Corporation (DIC) Act, a legal procedure to handle illiquid or insolvent banks, to include systemic non-bank financial

8 Japan’s financial regulator to scrutinize banks’ stress tests. (2016) The Japan Times. 9 Taniguchi, T., Allan, G. (2016) Japan Regulator Said to Survey Banks on Currency Settlement Risk. Bloomberg.

4 Taniguchi, T., Flynn, W.F., Brush, S. (2016): Bank-Capital Battle Makes Japan, EU Allies Against U.S. Push. Bloomberg. 5 Yamamoto, I. (2015) “An assessment of the Japanese financial services sector”. International Labor Organization, p. 3.

LSESU ACS Asia Careers Journal institutions.10 This ensures that a swift response mechanism to calm markets is in place, in case of a major non-bank institution failure which characterised the 2008 crisis. For individual investors, the FSA is piling scrutiny onto layered-funds, which are complex, risky, high-fee investment products sold by large brokerages and banks. Instead of dictating the rules for such funds, the regulator is going ‘light-touch’ by encouraging the industry to shape its own guidance for selling those products.11 With the rise of Fintech, regulators are also keeping up with the latest developments in the field. The Securities and Exchange Surveillance Commission (SESC) is querying high-frequency traders on their order and 10 Harada, K., Hoshi, T., Imai, M., Koibuchi, S., Yasuda, A., “Japan’s financial regulatory responses”, pp. 51-67. 11 Japan’s financial regulator warns of ‘problematic’ investment vehicles. (2016) The Japan Times.

trading data as well as dark pools to prepare for regulatory action.12 The Diet enacted a bill this year to regulate virtual currency exchange operators, recognising the asset-values of virtual currencies, and easing restrictions on investment into non-financial businesses by banks, which should support Fintech services.13 Already, Mitsubishi-UFJ, Japan’s largest bank, is investing into Coinbase, a Bitcoin services provider,14 and plans to issue its own “MUFG coin” virtual currency in 2017, a world first.15 Under the auspices of an active, engaged and supportive regulator rising from the collapse of the Mt. Gox Bitcoin exchange in 2014, new financial technologies have great potential to take off in Japan to the benefit of 12 Nakamura, Y. (2016) Japan’s Financial Watchdog Queries Brokerages on HFT, Dark Pools. Bloomberg. 13 Diet OKs bill to regulate virtual currency exchanges (2016) The Japan Times. 14 Fukase, A. (2016) Mitsubishi UFJ Financial to Invest in Bitcoin Venture Coinbase. The Wall Street Journal. 15 Oda, M. (2016) Mitsubishi UFJ bank plans virtual currency in autumn 2017. The Asahi Shimbun.

investors and lenders who can be assured of their safety and security. Despite the increased regulatory oversight of financial markets, danger signs are abound which could unsettle investors in the medium to long-term. The BoJ’s purchases of ETFs as part of its easing programme amount to 1.6% of the total capitalization of listed companies in Japan. This can cause prices to detach from fundamentals and result in the BoJ being the largest shareholders in several firms.16 This has the potential to undermine efforts to improve Japan’s spotty corporate governance record. In the long-term, markets could be destabilized when the BoJ exits at the end of its intervention. This risk is further heightened by the BoJ’s doubled purchases of equity funds to the tune of 6 trillion

16 Nakamura, Y., Kitanaka, A. (2016) The Tokyo Whale Is Quietly Buying Up Huge Stakes in Japan Inc. Bloomberg.

LSESU ACS Asia Careers Journal yen this July.17 The BoJ’s negative interest-rate policy is also hurting banks’ lending profits and can spur riskier investments and lending. Returning to corporate governance, Japan also lacks solid fair-disclosure rules and enforcement, though the Securities Dealers Association (JSDA) has introduced guidelines to tackle such information leaks.18 Further maturity and sophistication of such regulations and stricter enforcement are needed to prevent price distortions and ensure fair markets. In examining Japan’s financial regulation since the crisis, it can be concluded that they tend to be on the lighter end of the spectrum, which is understandable given the initially lower levels of risk courtesy of its own domestic crisis, and the need to allow banks more room to lend to 17 Harding, R. (2016) Bank of Japan plays for time with weak stimulus. Financial Times. 18 Wilson, T., Emoto, E., Croft, A. (2016) Japan’s securities industry moves to tackle material information leaks. Channel News Asia

spur the stagnant economy, such as via the SME Financing Smoothing Act to encourage loan restructuring for SMEs.19 The relatively lax approach by Japanese regulators, while appropriate, could result in greater instability during the next major financial crisis. Some western financial institutions are retaliating against what is perceived as unfairly harsh regulations. Japan’s regulators seem to have found a sweet spot. Former FSA Commissioner Takafumi Sato advocates the right balance between crisis management and reform, and said that “financial regulators should be reminded that tightening regulation is not a goal in itself; it is rather a means to ensure that the financial system plays its indispensable role of supporting the broader economy.”20 The merits of the different regulatory

approaches will, unfortunately, remain to be seen until the arrival of the next true test for international markets and financial institutions.

19 Harada, K., Hoshi, T., Imai, M., Koibuchi, S., Yasuda, A., “Japan’s financial regulatory responses”, pp. 51-67. 20 Sato, T. “Global Financial Crisis: Japan’s Experience and Policy Response”. Asia Economic Policy Conference. Federal Reserve Bank of San Francisco, Santa Barbara, CA, United States. (2009)

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ollowing the global financial crisis, many Southeast Asian (SEA) countries went into recession, to the extent that many were tradedependent countries. Many countries responded to the financial crisis by putting in place strict regulations, in an effort to prevent and shield itself from another crisis of similar magnitudes. What this article will propose is that an

encouragement of corporate social responsibility (CSR) through regulatory frameworks might be the way forward.

are still bleeding.1 While the causes of the financial crisis remain hotly debated today, the general emerging sentiment from the crisis is a need for The Global Financial Crisis greater and more effective regulation of companies. What The global financial crisis, many could agree on was that with its magnitude and speed the impact of the crisis across of impact, took the world by the globe was shocking for the surprise. Indeed, the wounds ‘manifestation of the abuse of from the 2008 financial crisis 1 John Authers, ‘Wounds from the 2008 financial crisis are still bleeding’

LSESU ACS Asia Careers Journal trust’.2 The earth-shattering impacts of the global financial crisis saw the return of the state as a ‘regulator, customer, competitor and investor.’3 Following the crisis, governments quickly resumed roles as ‘regulators of firm behaviour and market structure, investors in both firms and large capital projects, roles reduced and abandoned over the last three decades.’4 This has led to an evolution of the relationship between firms and civil society. Indeed, the collapse of financial markets all over the globe has begun to ‘shift the public narrative about the place of regulation and of ethics in controlling business practice.’ This can be seen by how an overwhelming majority of the American public believed that ‘stricter enforcement and stronger regulations on businesses, particularly in the financial sector, to prevent future abuses’ is the most effective means to recover from the economic crisis.5

prevent another crisis of such a Before the term CSR was scale to occur. popularised, corporations were already practicing Concept of CSR in Singapore philanthropic initiatives.9 and Malaysia Indeed, while the concept of CSR might be relatively new Before diving into a detailed in Asia, the practices and discussion on CSR in Singapore activities that CSR consists of and Malaysia, it must be noted are not new ideas. However, that there is no one fixed the debate in Asia focuses definition of CSR. A broad on philanthropy, voluntary definition of CSR is concerned action and new business with ‘the relationship models, instead of regulation between global corporations, and legal compliance.10 This governments of countries is different from the Westernand individual citizens.’6 It led CSR discourse, which is manifested as a business encourages new management approach that contributes to and strategic philosophy for sustainable development by companies. Moreover, in the delivering economic, social case of Malaysia, an important and environmental benefits divergence on the discourse for all stakeholders.7 It usually on CSR is in the importance of refers to a wide spectrum cultural matters in influencing of activities, ranging from its approach to CSR. philanthropy, legal compliance, self-regulation and most Factors Influencing CSR recently, new business models responding to social needs.8 Cultural Influences

While the idea of corporations’ responsibility to give back to the communities and societies has been longstanding in Asia, This calls for an encouragement it manifests in vastly different of responsibility beyond ways from those seen in companies’ private aim of the West. Traditionally, CSR profit-maximisation, especially in Singapore and Malaysia in the form of CSR, in order to responds to social and environmental concerns.

In the case of Malaysia, the significance of cultural influences forms the basis of CSR. Cultural influences on ideas of ‘obligation’ and ‘responsibility’ are significant in the Asian context.11 This can be seen in Malaysia with the concept of ‘gotong royong’ (joint/ shared responsibility)

2 Eugene KB Tan, ‘Corporate social responsibility as corporate soft law: mainstreaming ethical and responsible conduct in corporate governance’ (2013) 31 Singapore Law Review 227, 244 3 Alison Kemper and Roger L. Martin, ‘After the fall: The global financial crisis as a test of corporate social responsibility theories’ (2010) 7(4) European Management Review 229 4 ibid 230 5 ibid 236

9 Ramon V. del Rosario Sr., ‘Corporate Social Responsibility In Southeast Asia: An Eight Country Analysis’ (Asian Institute of Management 2011) 10 Bindu Sharma, ‘Contextualising CSR in Asia: Corporate Social Responsibility in Asian economies’ [2013] Lien Centre for Social Innovation Reports 16 11 ibid 22

6 David Crowther and Guler Aras, Corporate Social Responsibility (David Crowther, Guler Aras & Ventus Publishing 2008) 10 7 ‘Corporate social responsibility (Csr) definition from financial times lexicon’ 8 Bindu Sharma, ‘Contextualising CSR in Asia: Corporate Social Responsibility in Asian economies’ [2013] Lien Centre for Social Innovation Reports 9

LSESU ACS Asia Careers Journal resulting in the formation of impromptu groups to perform tasks for the maintenance and welfare of the village community, spanning from patrolling the neighbourhood to preparing feasts for social celebrations. This term has now been adopted into many Malaysian firms, including Genting Group.12 Moreover, as a Muslim majority country, the main form of giving, Zakat, is one of the five pillars of Islam. Charitable giving is hence a way of life.13

has been a significant factor in economy dependent on trade, promoting CSR. the economic development drove Singapore businesses Government Presence and the government to be cognisant of the growing CSR On the other hand, as a movement in the Western country driven by pragmatism industrialised world. This has rather than by a specific led to the government being culture or religion, CSR in described as the ‘agendaSingapore has been shaped setter and agenda-manager by the ‘ubiquitous presence of of CSR’14, adopting a tripartite the government in all sectors.’ approach involving the Following its separation employees, employers and from the Malayan federation, the government. These are and against the context of represented by the National limited natural resources and Trades Union Congress, small size, CSR was mainly the Singapore National As such, it can be seen that the driven by the same energy Employers Federation and concept of CSR remains in line of pragmatism that has led the government respectively. with the ethos of Malaysia, and economic growth in Singapore. Instead of a ground-up In order to attract business movement like that observed 12 Genting Group, (2009) and grow as an economy, in Malaysia, CSR was explicitly 13 Bindu Sharma, ‘Contextualising CSR has been primarily in Asia: Corporate Social Responsibility in Asian CSR economies’ [2013] Lien Centre for Social Innovation economically-driven. As an 14 Reports 152 ibid 188

LSESU ACS Asia Careers Journal introduced in the form of the National Tripartite Initiative on CSR. This was created with the aim to ‘play a pivotal role in defining the direction and landscape of CSR in Singapore’.15 Thus, despite being countries of great geographical proximity, both Singapore and Malaysia are influenced by different factors in the growth of CSR, with culture playing a greater role in promoting CSR in Malaysia. On the other hand, Singapore’s move towards CSR could be seen as one responding to the growing importance of CSR globally, with the government taking on the role of promoter and practitioner.16 Current Regulations While CSR legislation and frameworks exist in areas of labour, environment, corporate governance, and social development (amongst other areas), the enforcement of such legal responsibilities have arguably been weak. This can be attributed to the lack of developed legal infrastructure, and the lack of political will in enforcing these regulations.17

15 Eugene KB Tan, ‘Corporate social responsibility as corporate soft law: mainstreaming ethical and responsible conduct in corporate governance’ (2013) 31 Singapore Law Review 188 16 ibid 185 17 country by country, pg 21

LSESU ACS Asia Careers Journal

Singapore In the legislative space, the Singaporean government has succeeded in putting in place a set of comprehensive regulations that have ‘established high standards of responsible business 18 practices’. An existing example is the 2012 Code of Corporate Governance, which encourages Singaporelisted companies to enhance shareholder value through good corporate governance. This is done through a complyor-explain requirement, allowing market participants to play a more active role in promoting good corporate governance.19 However, the response to current CSR schemes could be described as ‘lukewarm at best’,20 with regulatory frameworks remaining noncompulsory instead of mandatory laws. Singapore maintains a ‘distinctively nonlegalistic ethos’ in relation to CSR,21 with non-compliance with the 2012 Code of Corporate Governance not being an offence but rather merely subjected to civil penalties. Indeed, only 18 Wayne Visser and others, The world guide to CSR a country-by-country analysis of corporate sustainability and responsibility (Greenleaf Publishing 2009) 359 19 ibid 20 Eugene KB Tan, ‘Corporate social responsibility as corporate soft law: mainstreaming ethical and responsible conduct in corporate governance’ (2013) 31 Singapore Law Review 21 ibid 185

71% of companies listed in Singapore had conducted reporting on matters related to sustainability, falling well below neighbouring countries such as Malaysia. The lag behind Singapore’s ASEAN counterparts have been attributed to the fact that it is ‘not mandatory for them to communicate sustainability, unlike Indonesia, Malaysia and Thailand’.22 Indeed, it can be suggested that CSR in Singapore has so far been limited to corporate 22 Wong Wei Han and hermes, ‘Singapore firms ‘lag behind in sustainability reporting’’ (21 July 2016)

philanthropy and volunteerism, with little focus on introducing regulatory frameworks and business approaches. Yet, there has arguably been a move towards introducing greater regulatory frameworks based on a comply-or-explain regime, especially with regard to the SGX’s Guide To Sustainability Reporting for Listed Companies, a mode of reporting CSR activities in companies. The SGX has also stated its expectation for sustainability to become an accepted operating principle in companies. Recently, a

consultation exercise was conducted to look into introducing new requirements including a comply-or-explain regime in 2017.23 Indeed, moving beyond voluntary guidelines is expected to be ‘a boost to promulgate and root the practice of sustainability reporting’.24 Malaysia

an ambitious development plan set out by then-Prime Minister Mahathir Mohamed. While not articulated in the modern day terminology of CSR, the underlying sentiment of Vision 2020 clearly calls for the adoption of the tenets of CSR.25 Indeed, since the 1997 Asian Financial Crisis, the government has been the main driver in pushing the CSR agenda.

In Malaysia, the encouragement of CSR has largely been The encouragement of CSR based on the Vision 2020, 23 ibid 24 ibid

25 Bindu Sharma, ‘Contextualising CSR in Asia: Corporate Social Responsibility in Asian economies’ [2013] Lien Centre for Social Innovation Reports 151

LSESU ACS Asia Careers Journal has manifested in the form of policies and regulatory frameworks. For example, Bursa Malaysia is the front line regulatory body that governs all PLCs in Malaysia. The organisation has made it compulsory for all PLCs to disclose its CSR activities in its annual reports, one of the first in Asia.26 The government has also established a CSR fund, with an initial sum of USD15 million to jointly finance selected CSR projects.27 CSR reporting is also growing development in Malaysia. The Kuala Lumpur Stock exchange has required publicly listed companies to disclose information that has the potential to influence the financial performance of a company. However, there is still no requirement for companies to disclose their CSR activities. The Malaysian Accounting Standards Board has also incorporated a new standard that makes explicit reference to environmental reports and value-added statements in encouraging companies “to present additional information if management believes they will assist users in making economic decisions.”28

26 UNICEF, ‘Corporate Social Responsibility Policies In Malaysia’ (2009) 19 27 Wayne Visser and others, The world guide to CSR a country-by-country analysis of corporate sustainability and responsibility (Greenleaf Publishing 2009) 254 28 Ramon V. del Rosario Sr., ‘Corporate Social Responsibility In Southeast Asia: An Eight Country Analysis’ (Asian Institute of Management 2011) 29

However, CSR awareness amongst companies in 29 Malaysia remains low. Rather than a lack of frameworks to encourage CSR, the main problems that Malaysia faces are that of support from the private sector. Local Malaysian firms are primarily focused on philanthropic activities as prescribed by law. Malaysian companies focus more on following religious beliefs as opposed to social responsibility.30

This has made it necessary for local businesses to be aware of the global CSR movement. Moreover, there seems to be a common move towards introducing regulatory frameworks in Singapore and Malaysia. This should be welcomed by both countries, in an effort to promote a sustainable economy and further encourage economic development.

Moving Forward Therefore, it can be observed that in both countries, there is great economic imperative for encouraging CSR. In particular, there is great impetus for Malaysia to encourage CSR, to the extent that it is a supply chain to Westernbased multinationals. The increasing emphasis on the anti-sweatshop movement, from the global consumer boycott of Nike for denying responsibility for abusive labour practices in the 1990s, we can see that society has become more adept at holding companies accountable for activities. For Singapore, as a trade-dependent country, there is a need for companies to remain business-friendly. 29 Bala Ramasamy and Hung Woan Ting, ‘A comparative analysis of corporate social responsibility awareness’ (2004) 2004(13) Journal of Corporate Citizenship 121 30 Ramon V. del Rosario Sr., ‘Corporate Social Responsibility In Southeast Asia: An Eight Country Analysis’ (Asian Institute of Management 2011)30

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IPO Landscape: What Options Are There for Chinese Companies? CALVIN KOO

ublic fund raising plays an important role in determining the success of a startup venture. After all, an initial public offering (IPO) at the exchange proves to have the most efficient way for companies to obtain longterm funding in developed economies. As many aspiring young individuals are looking to join the investment banking industry as a corporate advisor, it is necessary to understand better the competitive edges each stock exchange possesses in order to shortlist

the best options for clients. Currently in Asia, ventures will sufficient capital requirements would usually consider Hong Kong, Singapore or United States as their final destinations. This article aims to give readers some ideas on the comparables of these exchanges. Hong Kong For Chinese companies, Hong Kong comes as the most attractive destination for

overseas fundraising activities. Thanks to Hong Kong’s special relationship with China and unique regulatory framework, Hong Kong remains as one of the most popular destination for IPOs. As of the end of March 2017, Hong Kong ranks fourth worldwide and second in Asia in terms of total market capitalization of all listed companies.1 The Hong Kong market benefits from the comparative 1

Sources from HKEX

In terms of capitalization, Hong Kong’s still behind NASDAQ and NYSE in terms of absolute value. As of up to date, HKEX’s total capitalization is 1/30 of NYSE and 1/4 of NASDAQ. If we consider convert this with P/E valuation metrics, Hong Kong will has an average of 13x Regulatory Regime: as compared to 30x in NYSE.3 Hong Kong’s robust regulatory This implies that compared framework follows the to the US, Hong Kong’s traditional English common fundraising activities are still law legal system, and relatively small compared to international standards such other developed economies. as the International Financial Reporting Standards “IFRS”. Hong Kong’s market has These are proved on par relatively low liquidity for with other major developed stocks as compared to other economies. exchanges. The turnover rate on the HKEX is only about 55%, Geographical: to which if you compare with Hong Kong has the same time NASDAQ and other developed zone as Beijing, the capital economies’ stock exchanges of China. Together with the (300% for NASDAQ and 70% connected transportation for NYSE on average), implies framework, this is particularly that investors are less willing useful for business activities in to trade very frequently.4 It terms of location. also means for issuers this Diversity in Fund Raising: Apart from traditional IPO, listed companies allows different ways of fundraising to achieve objectives, for example Reverse Takeover (RTO)2

3 4

Data from stealjobs.com Sources from HKEX

is not the most efficient market for fundraising if they considering long-term funding opportunities. There is also a lack of variety. The Main Board and Growth Enterprise Market (GEM)’s listing requirements are suitable for companies from traditional industrial backgrounds with standard corporate governance structures. However, New Economy Companies and dual-class listing shares (the voting rights issue, in simplicity) remain as a concern for Hong Kong’s market authorities. Many tech startups and sharing economy companies belonging to these categories are out of reach from investors, especially from the Fintech and biotech industries in China. United States Being the largest economy in the world, the United States facilitates a business environment in which

However, one must consider the possible shortcomings of 2 This is a merger mechanism for private companies to become publically traded with IPO process. For private companies in China, this is a preferred method to get listed quickly.

LSESU ACS Asia Careers Journal

LSESU ACS Asia Careers Journal As mentioned above, US stocks exchanges have the highest average turnover rate on average, which allows better liquidity for short term investments. With a strong entrepreneurship culture in the US, issuers have the ability to raise funds quickly.

entrepreneurship thrives. International hot money and different institutional funds (i.e. venture capital, special private equity funds, hedge funds with different strategies… you name it) host their own areas of expertise to attract international investors. The major exchanges here incorporate more than half of the entire world’s trading volume and liquidity. A simple comparison can show the differences between Asia’s market and that of the US: the Shenzhen’s stock exchange daily trading volume is equivalent to one US blue chip company stock’s trading volume (e.g. Microsoft).5 Advantages with United States: Varieties in Corporate financing activities: From Over The Counter Bulletin Board (OTCBB) to the traditional NYSE, United States offers enough financing 5

Extracted from Investorcn.com

options for companies to obtain funding quickly. OTCBB has the simplest listing requirement in the world, which compared to other Start-ups boards (e.g. GEM as mentioned above), it is more compelling for retail investors. For companies, it’s also more fair-valued for companies to be listed, especially with Reverse Takeover mechanisms. For RTOs especially, it takes about 3 months to get listed as compared to a year in Asian markets.

Transparent regulatory structure: The US is well-known for its leading authority with regulatory frameworks. High level corporate governance transparency and tight authorities allow companies to boost up their corporate images, culture and gain confidences from institutional investors in long-term fundraising activities. Best turnover rate in the world with high market capitalization:

Challenges remain for issuers though. It is a different investing environment in China and the US. China consists of more than 80% of retail investors as compared to a similarly high level of institutional investors in developed economies.6 For Chinese companies, to gain attention from institutional investors in the US is usually very difficult. Also, crossborder activities involve a lot of different jurisdictions and legal problems, especially with taxation and language issues. All of these contribute to make the listing process difficult. Singapore Singapore’s political and economic stability provides opportunities for international fund raising activities. Wellknown for its international asset management activities, Singapore has an international funds network of over 800 funds, with a rapid growth of 20% per annum on the total value of assets. Therefore, under the 6 Institutional investors includes all kinds of mutual funds, pension funds, hedge funds, and specific asset management firms.

rapid instability of the macro environment, Singapore still hosts an attractive destination for foreign companies with its flexible listing requirements. With more than 40% of foreign companies in the total market cap as compared to 20-30% for Hong Kong, Singapore is one of the forefront exchanges in the Asia market landscape.

could imply more effective cost control for listing and lays out for better implementations of corporate strategies postlisting.

Another attraction for companies to be listed in Singapore would be the efficient listing process. Singapore’s low taxation scheme is on par with Bermuda and the British Virgin Islands (BVI), which allows company to set up directly in Singapore. This implies that in the listing process, it loses out some of the unnecessary transactional regulatory terms and helps out with preparation of legal documents for vetting processes. For issuers, the streamlining of the IPO process 23

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South Korea and the Asian “Puppet” SERENE AU

he firm decision of South Korea’s Constitutional Court to impeach President Park Geun Hye effectively sounded the death knell of the country’s first democratically elected woman leader’s term.1 Park, embroiled in a political scandal that unravelled in late October 2016, was accused of releasing strictly confidential papers to Choi Soon-sil. Choi exploited 1 Griffiths, J. (2017): South Korea presidential scandal: What you need to know. CNN.

Park’s position to coerce the Chaebols (large family-owned conglomerates),2 such as 3 Samsung and Hyundai, to hand over millions of dollars to her own organisations.

image of the ineffectuality of women in politics and has potentially glaring economic repercussions. In addition, with the new President due to be elected by 9 May, there is profuse uncertainty behind The significance of Park’s South Korea’s future relations impeachment should not with China and neighbouring be underestimated given North Korea.4 its important implications. It subliminally conveys an Where do women stand in politics? 2 Cho, M. (2015): The chaebols: The rise of South Korea’s mighty conglomerates. Cnet. 3 Baker, N., Burnip, L. (2017): What is the South Korea corruption scandal, what happened to President Park Geun-hye and who is Choi Soon-sil? The Sun.

4 Chandran, N. (2017): South Korea may get friendly with its nuclear-armed neighbour. CNBC.

LSESU ACS Asia Careers Journal The election of Park as South Korea’s first female President was seen as a momentous and symbolic moment for female leadership in politics and government. Park won the highest share of the votes by a candidate since the inception of free and fair elections back in 1987, where she received 51.6% of the total ballots.5 However in the unravelling of the 2016 South Korean political scandal, according to Gallup Korea, Park’s approval rating plummeted to a shocking 4% - the lowest rating recorded in the country’s history.6 According to Raissa TatadHazell’s analysis, the deputy regional director for Asia at the non-partisan, non-profit National Democratic Institute for International Affairs in Washington, the political scandal could “make it harder for the next woman who tries to go for that office” 7 Clinton’s defeat in the US presidential election last year triggered even greater discussion about the issue of gender equality and female representation in politics. Anne Phillips, professor of political science at the London School of Economics, highlighted that, while there 5 Harlan, C. (2012): Park Geun-hye wins South Korea’s presidential election. The Washington Post. 6 Author unknown (2016): Choi-gate: South Korean president’s approval rating tanks at 4%. The Guardian. 7 Cohn, L. (2016): Women Already Have It Bad in South Korean Politics. The President’s Impeachment Would Make Things Worse. Fortune.

has been a “normalization of female leadership across the political spectrum” in the U.K., there remains the “perception of the equation of ‘politician’ with ‘male’”.8 Intuitively, the impeachment of Park is important as it subconsciously perpetuates the image of female incompetence and inadequacy in government, which could be extrapolated and used for other situations such as women in the workplace. It is of great significance to note that more than 60 countries have had female heads of government, but only a third have had more than one woman leader. In order to normalise female leadership, in an extremely patriarchal society such as South Korea, it is the election of the second woman which plays a larger role in cementing the position 8 McDonald, A. (2016): Forget a Woman as President. America Needs Two. Bloomberg.

LSESU ACS Asia Careers Journal

of women in government and politics. Park’s impeachment could possibly worsen gender inequality, not only in South Korea but also in other Asian countries.

thousands of the South Korean population disillusioned and angry.

South Korea - the battered or everstrong Asian Tiger?

Park’s impeachment also has striking consequences in terms of the relations between South Korea and its neighbours China and North Korea. It is very likely that the next administration to come into power will embrace a new North Korea policy, according to the Congressional Research Service (the US Congress’ think tank), that could come into conflict with Park’s policies when she was in office.

South Korea has been praised as one of the four Asian Tigers, having experienced a “Miracle on the Han River”. The “Miracle on the Han River” refers to the country’s rapid economic growth and industrial development that allowed its economy to achieve remarkable economic success, as seen in the table below. As soon as the political scandal (refer Choi Soon-sil gate) made the front page of the news, another layer of uncertainty and an apprehensive mood blanketed the international arena. It is important to note that the South Korean economy

Political and trade relations with China and North Korea

had already been experiencing protracted stagnant growth prior to the political crisis that befell the country. This can be seen through the KOSPI, the country’s main stock index, which had begun to decrease since early October 2016 and was likely aggravated by the scandal. However, following the Constitutional Court’s approval of a parliamentary decision in late 2016 to remove President Park from office, South Korean equities have since seen a slight increase, where the KOSPI Index closed at 2,097.35.9 Rajiv Biswas, the Asia Pacific chief economist at IHS Markit, speculates that the impeachment of Park could trigger “near-term political uncertainty and the likely further escalation of economic risks facing South Korea”. In

contrast,

Choon

Hoon

9 Sile, A.W. (2017): South Korean stocks up after President Park’s impeachment ruling. CNBC.

Park, Kathleen Oh and Eddie Cheung at Standard Chartered believe that the South Korean economy could potentially reverse its pattern of slow growth to date. This stems from the bulk of the political uncertainty being removed and the confirmation of a presidential election slated to take place in May. Kai Wei Ang and Hao Zhu at Commerzbank believe that Park’s impeachment raised public confidence and provided a stabilising effect on markets. 10Hypothetically, had Park not been impeached, it is possible that the “Emergency Citizen Action for the Park Geun-hye Administration’s 11 Resignation” could have turned out more militant and aggressive. It would have also further destabilised financial markets and left hundreds of

The likely shift from a conservative to liberal government will lead to a different approach being taken with regards to North Korea. Park advocated for the disintegration of the North Korean regime, attacked the regime’s appalling

10 Lockett, H. (2017): Economists react to South Korean president’s impeachment. Financial Times. 11 Author unknown (2016): One Million South Koreans to Take the Streets to Oust Park Geun-hye and Ruling Party. Zoom in Korea.

LSESU ACS Asia Careers Journal and an increased willingness to unilaterally concede in a political sense.16 Therefore it is possible that South Korea will place less of an emphasis on its relations with the US, diverting its attention to its bilateral trade ties with China and North Korea respectively. Given that THAAD sparked a Chinese economic retaliation and that a “sanctions-only” policy arguably drove North Korea to increasingly rely on China, Moon’s more anti-THAAD and pro-North position could potentially culminate in increased economic cooperation and trade with China and North Korea. With US President Trump’s accusation that “North Korea is behaving very badly. They have been “playing” the United States for years. China has done little to help!”17, it is likely that the liberal position of the next South Korean administration would not bode well for USSouth Korea relations.

human rights record and the dissolution of the Kaesong Industrial Complex (KIC)12 after Pyongyang tested nuclear weapons for the fourth time in January 2016.13 The KIC was motivated by the desire to assist North Korea’s economic reform and to encourage peace between the two Koreas. However, the KIC instead provided Kim Jongun, the North Korean leader, with a channel to source the regime’s nuclear and ballistic missile programmes. This is supported by the claim made by Hong Yong-pyo, the South Korean unification minister, that North Korea earned £355m14 from the KIC.

criticism of the US for its pressure on North Korea. The MPK is South Korea’s main opposition party, securing the parliamentary majority in elections in April 2016.15 Park had endorsed the US Terminal High Altitude Area Defense (THAAD) anti-missile system in line with US interests but extremely unpopular with China. The MPK adopts a hard-line stance against the US THAAD anti-missile system, as the party believes that China and the US should not be given the opportunity to engage in a confrontation on the Korean Peninsula. What lies ahead of South Korea? Moon Jae-in, as leader of the MPK, would likely be Park’s impeachment comes The opposition parties, such less amenable and willing to at a time of acute political as the Minjoo Party of Korea comply with the US’ objectives. and economic uncertainty as (MPK), are notable for their Instead, should Moon win tensions with North Korea and presidency, it is expected that China escalate. Whether South 12 Author unknown (2016): What is the he would direct South Korean Kaesong Industrial Complex? BBC. policy so that it sees greater 16 13 Roy, D. (2017): South Korea’s Incoming Jin, H., Pearson, J. (2017): South Korea President Could Be Headed for a Clash With Trump. dialogue with North Korea liberals likely to win power, may bring softer North Fortune. 14 McCurry, J. (2016): Seoul shuts down joint North-South Korea industrial complex. The Guardian.

15 Author unknown (2016): South Korea elections: President Park’s party loses majority. BBC.

LSESU ACS Asia Careers Journal Korea will be able to shoulder understand the country’s the economic challenges position on several important that it already faces, such as issues of interest. its crisis in the shipbuilding industry, will depend on the direction and policies of the next administration. With the KOSPI Index continuing on its upward trajectory, the poor representation of women in politics and the dynamics of the relations between South Korea and the US, China and North Korea, it is uncertain how South Korea will exactly develop in a cultural, political and economic sense. Only following the upcoming election of the country’s next president will the international arena be able to better

Korea stance. Reuters. 17 Park, J., Pearson, J. (2017): U.S. policy of “strategic patience” with North Korea over Tillerson. Reuters.

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YEN SIANG PANG

n August 2016, Justice Judith Prakash was appointed as a Judge of Appeal of the Supreme Court, making her the first woman to be appointed a permanent judge of the Singapore Court of Appeal. This also makes her the only female Judge of Appeal. Looking further into to the composition of the Supreme Court, there are only 2 female Justices out of a panel of 16. Comparing this to a basis of 51% of the Singapore population being females, that the Supreme Court has a lower female representation is arguably cause for concern. Against this context, is

greater representation in the with men. This is a means of Singapore judiciary desirable? securing public confidence,2 and prevents the emergence of Why do we want more constitutional issues if aspects female representation in the of governance are largely judiciary? matters of male governance. Symbolic Arguments

Practical Arguments

The presence of women judges arguably increases the democratic legitimacy of the judiciary.1 To the extent that the general population reflects a rough percentage of 51% females, women should be represented on the judiciary at least in equal numbers

Importantly, it can be argued that women judges are likely to have more empathy with women litigants and witnesses, including victims of crime. In the UK, the lack of women judges has been felt in the environment and nature of court proceedings,

1 Rosemary Hunter, ‘More Than Just A Different Face? Judicial Diversity And DecisionMaking’ (2015) 68 Current Legal Problems.

2 Kate Malleson, ‘Justifying Gender Equality On The Bench: Why Difference Won’t Do’ (2003) 11 Feminist Legal Studies.

LSESU ACS Asia Careers Journal with examples such as judicial statements telling a woman that ‘when she had dried her tears, she would have had to look for new employment and count herself lucky to find it.’3 As such, women judges may provide a better courtroom experience for these participants in the justice system, where gender bias by others in the courtroom is not tolerated. Such negative experiences of gender bias in the courtroom have also been experienced in Singapore, with the recent incident in August 2016 of a lawyer who focused on molest victim’s breast size.4 While the lawyer was rapped by District Judge Shawn Ho, one cannot help but wonder if an increased presence of women in the judiciary would help to 3 Amir Hussain, ‘Lawyer Who Focused On Molest Victim’s Breast Size Rapped By Judge’ The Straits Times (2016) 4 Amir Hussain, ‘Lawyer Who Focused On Molest Victim’s Breast Size Rapped By Judge’ The Straits Times (2016)

foster an environment where bench by women judges’. such remarks and actions are With the predominance of simply not tolerated. male judges, judgments can tend to be based on male Substantive Arguments life experience. Eventually, homogeneity then becomes Women judges will arguably mistaken for neutrality. As bring a gendered sensibility argued by Rackley, it lies in to the process of decision- an understanding that the making, thus altering the perspectives and experiences outcomes of cases. To the of women judges as women extent that all judges bring necessarily inform their their life experience to the judgments and that ‘the process of judging, and that experience of leading those women’s life experiences are lives should be just as much very different from men’s, part of the background and the inclusion of women’s experience which shapes experiences will make law the law as the experience of more representative of the leading men’s lives has been variety of human experience. for centuries’.5 This has been corroborated in the US, in a survey conducted Caveats in 1993, in which 74% of women judges agreed with the Yet, it could also be argued statement that ‘women have that it is simply inconsequential certain unique perspectives if there were more women and life experiences, different judges in Singapore’s judiciary, from those of men that ought to the extent that judges are to be represented on the guided by the common law judicial ideology instead of by gender. Whatever a judge’s background or beliefs may be, they are trumped by a deeply acculturated set of norms and traditions of judicial decisionmaking to which all judges tend to adhere, for example separation of powers, limited judicial role, adherence to precedent, incrementalism, etc. Judges are also seen to be impartial, with the oath which requires that judges do justice 5 Brenda Hale, ‘Equality And The Judiciary: Why Should We Want More Women Judges?’ [2001] Public Law.

LSESU ACS Asia Careers Journal

to all manner of people without ‘fear or favour, affection or illwill’. Moreover, there is an invidiousness of difference, in which exhibiting difference of any kind is inimical to the judicial role. Indeed, there have been studies of women and other non-traditional judges who demonstrated their unwillingness to step out of line, as they feel the need to distance themselves from any notion of difference in order to establish their judicial authority and to be taken seriously by their peers and the judicial hierarchy. According to Baroness Hale, ‘women do not want to claim that they look at things differently from men,

partly because this would be manifestly inaccurate in many cases and partly because it would make them less qualified to be judges.’6 As such, even a feminist judge, who might be expected to take a more robust approach to the issue of difference, may find it impossible to insert a different perspective because the disciplinary techniques through which lawyers and judges are constituted induce and enforce conformity to established legal norms. Further criticisms about representation in the judiciary being a futile effort includes the argument that even if the bench were to increase 6 ibid

diversity and more judges were drawn from less elite social backgrounds, the nature of the job will always result in judges being unrepresentative in descriptive terms of the population at large.7 Judges will almost always be drawn from amongst successful graduates, given the rigour expected of the profession. How Singapore Fares While female representation in the judiciary and the legal profession in general is arguably still lacking, to completely deny progress in achieving greater equality in 7 Kate Malleson, ‘Justifying Gender Equality On The Bench: Why Difference Won’t Do’ (2003) 11 Feminist Legal Studies.

LSESU ACS Asia Careers Journal representation would also be thus require greater work and inaccurate. Most importantly, in effort towards achieving such terms of university enrolment, a goal. the National University of Singapore (NUS) has seen a higher percentage of female students to male students enrolled in the Faculty of Law. 8 Yet this trend has not been reflected in the judiciary, with the composition of judges still dominated by men. Here, a multitude of factors can be attributed to such a trend, considering the demands of the profession against prevalent expectations of women, and other factors. In this case, against the advantages of greater female representation in the judiciary, Singapore will

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8 Malathi Das, ‘Gender In Justice - Women In The Law In Singapore’.

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LSESU ACS Asia Careers Journal with private banks. In the US or Europe 70–80% of these consumers are accessing private banking services, whereas in APAC, private banks have only captured 10– 20% of the potential HNWI market — a major opportunity for growth.1 A Different Dynamic

Private Banking in the Asia Pacific - The Big Opportunity of Our Time CHEN WEIHENG

ithin our immediate environment, investment banking, sales and trading and asset management are some of the key professional development areas that we consider, and opportunities are abound in these exciting careers. However, one area of financial careers which may tend to be overlooked is wealth management or private banking, where an unprecedented era of new

opportunity awaits in one of more than USD$1 million in the most dynamic regions in investable assets. Between the world, Asia. 2007 and 2012, Asian HNWIs expanded their wealth at a The Asia-Pacific region is CAGR of 4.9%, surpassing the at the centre of the world’s 1.6% CAGR of North America fastest growing and soon-to- and the 0.5% CAGR of Europe. be largest wealth markets. It By 2018, the region is expected is the highest growth region to make up more than onefor private banks and is soon third of global wealth, with expected to overtake North its private wealth forecast to America as the largest market reach USD$76.9 trillion. APAC for High Net Worth Individuals is notable for the proportion of (HNWIs) — customers with wealth of HNWIs not currently

of this entrepreneurial customer segment. HNWIs are demanding tailored advisory services, alternative investments and a multichannel experience. Unlike European or US HNWIs, where a large proportion of assets still originates from inherited or professional wealth, Asia’s private banking customers are often entrepreneurs, who are focused on building their businesses. These individuals have a higher tolerance for risk than traditional banking customers — and high expectations of returns. Given they always have the alternative option of investing in their own enterprises, where they may be used to getting more than 10% returns and potential leverage, they are unlikely to be satisfied with traditional investment products.3

The Asian private banking industry, however, is made up of very different dynamics when compared with the traditional world of Swiss private banking, which is distinguished by strong bank-client relationships developed over generations and ”capital preservation” client expectations. In Asia, the source of client wealth is often first-generation and entrepreneurial. It is a fragmented market, characterised by intense competition between wealth APAC also had the highest managers who typically focus on short-term results, such as 3 EY: Rethinking Private Banking in Asiatop line increases and growing Pacific assets under management (AUM), rather than sustained profitability.2

percentage of clients with relationships at more than five wealth management firms. 15% of private banking clients in the region dealt with more than five banks, and 29% of APAC’s ultra-high net worth clients had relationships with more than five. This also has a negative impact on profitability. While ensuring that everyone gets a slice of the pie, Asian clients’ tendency to bank with several institutions is one of the reasons that the market’s margins are so low.4 Local vs International During the last three decades, private banking businesses have evolved, branching into three basic models5: 1) Integrated banks These are part supported by

of and universal

4 Financial Times: Asian private banks target next generation of super-rich 5 EY: Rethinking Private Banking in AsiaPacific

With the growing APAC wealth market seeded by an unusually high proportion of self-made, first-time HNWIs, private banks must adapt to meet the broader product and higher service expectations 1 EY: Rethinking Private Banking in AsiaPacific 2 A.T. Kearney: Asian Private Banking – Today’s Boiling Frog?

LSESU ACS Asia Careers Journal banks, such as HSBC, Citi and Standard Chartered, as well as local Asia-Pacific banks, such as DBS, OCBC, Bank of China. 2) Standalone private banks, often with Swiss heritage These funds-focused brands, such as Julius Baer, Credit Suisse and UBS, offer the full suite of private banking products aimed at HNWIs. 3) Broker/dealer This largely US-based investment bank/broker model includes institutions such as Morgan Stanley and Goldman Sachs. It survives on entrenched relationships between dealers and customers. Some international banks are muscling into the action in Asia, while others are stepping back and allowing local players to step into the void. In such a dynamic and evolving industry and region, consolidations

are occurring at a rapid pace. Smaller Western players are selling their operations to local banks, while larger ones are hiring rapidly to keep up with the pace of the region’s growth.

better helps Asian banks avoid costly compliance failings.”7

Some notable acquisitions within private banking the region were UBP’s acquisition of Coutts, Bank of Singapore’s acquisitions of Barclays, LGT’s acquisition of ABN Amro, and DBS’s acquisition of ANZ and Societe Generale. In addition, RBC has put its Asian wealth management business under review for a possible sale.6 Asian banks such as Singapore’s UOB and Bank of Singapore say that their much smaller businesses have a local advantage. They “understand the Asian businessman very well” and “knowing the market

On the other side of the competition, the world’s leading wealth managers are defining their strategies in Asia. UBS, the world’s biggest wealth manager, is hiring aggressively, and particularly in China, where the bank has vowed to double its overall headcount between 2016 and 2021. “Everything we see in Asia is that the strategy we are driving is working and accelerating,” said Credit Suisse chief executive Tidjane Thiam, explaining why he still believed his bank can more than double its APAC wealth management pre-tax profits between 2015 and 2018. Andrew Cohen, JPMorgan’s head of international private banking, says balance sheet

6 Reuters: RBC reviews Asia wealth business for possible sale

7 Financial Times: Asian private banks target next generation of super-rich

LSESU ACS Asia Careers Journal is “critical” for the bank’s Asian business, adding that the fastest growth came from clients “monetising an asset” with its help or dealing with new “situational needs” in fast changing market conditions.8 AUM and headcount growth, along with the increased use of balance sheets to help with the business and personal needs of clients, are some of the defining trends of the industry in the near future. Position of Strengths

Compliance and Technology

Below is a table of rankings of the private banks in Asia, transcribed from Asian Private Banker.9

While wealth managers in other regions have their strategic investment budget focused on revenue growth, those in APAC are still bogged down in regulatory compliance. In the next two to three years, APAC has the highest percentage of firms citing regulatory

8 Ibid 9 Asian Private Banker 2016 League Table

compliance as the primary focus of their strategic budgets at 39%, as compared to European and North American firms at only 11% and 9%, respectively. This highlights the continuing struggle for wealth managers in APAC to comply with regulations that are constantly changing, seize opportunities through various

LSESU ACS Asia Careers Journal

pass-porting schemes and compete to develop innovative wealth products and services that align with customer preferences. Although passporting schemes will facilitate the cross-border marketing of managed funds across participating economies, their immediate impact is to ramp up the cost of compliance. 10 The evolving digital landscape and development of new technologies has also enabled new, non-traditional competitors to emerge, including online investment

platforms and peer-to-peer (P2P) lending. Online trading and brokerage and investment platforms offer HNWIs lowcost, automated solutions for services such as investing, asset allocation and portfolio management. Interest is being driven by recent developments in China, where e-commerce players are partnering with asset management companies to offer fund products online. Alibaba has also launched a wealth management 11 platform. Despite the publicity, only 39% of APAC respondents are aware of

robo-advisors. Chinese clients, who already have a strong preference for advice via mobile and social media, are most aware of these services. Lower levels of awareness exist in places like Japan and Australia, where wealth management is still dominated by banks. In good news for robo-advice providers, 43% of APAC respondents would consider opening a roboadvice account, with the greatest enthusiasm in China.12 In addition, improving digital communications with clients, who increasingly prefer this

10 EY: Could your clients’ needs be your competitive advantage?

11 Pacific

12 EY: Could your clients’ needs be your competitive advantage?

EY: Rethinking Private Banking in Asia-

LSESU ACS Asia Careers Journal and multiple modes mode of In applying for internships or contact, is another key area of full time roles in private banks, evolution for wealth managers. there are some key points to consider: China and the Future 1) Know the landscape: Assets under management This article forms a quick at the top 20 private banks and easy base to build your in Asia grew by 6% in 2016 knowledge of the APAC to reach a record high. region and the industry, but Collectively, they managed understanding the nuances US$1.55 trillion of the region’s in more detail can enhance wealth in 2016, excluding your competitiveness in the mainland China. While a lot application process of the growth is in the Asian region, the most explosive 2) Know the trends: source of it is in mainland Some key trends to understand China. AUM growth excluding and have a view on are industry onshore China was dwarfed consolidation, rapid growth by that of the Chinese banks. of the market (especially in China’s top five private banks China), digital evolution and have increased their AUM by technology such as roboan average annual growth rate advisor, and compliance and of 27% since 2012, while the regulations top five Asian banks excluding onshore China achieved CAGR 3) Know the bank: of just 6.4%. The attractions for It is important to understand international private banks of the type of bank that you are servicing this onshore Chinese applying to. Some local banks wealth are significant, but focus on the smaller client doing so involves a number of segment such as HNW (US$1m challenges, especially the strict to US$5m) while others such controls on capital leaving as the American broker-dealer China.13 As yet, there are banks focus on UHNW (usually no clear contenders in these above $US10m). They also markets. The international use different advisor models, banks will struggle to resonate such as single advisor or multi with local customers in these advisor. Understanding the territories, the local banks have differences between servicing yet to find the right model, and the clients in these different the regulatory component will models is crucial be challenging.14 4) Know the role: Besides investments, it is 13 South China Morning Post: The Changing Shape of Asia’s Private Banking Sector important to understand the 14 EY: Rethinking Private Banking in Asiaother roles of a private bank Pacific

such as wealth transfer, trusts, succession planning, lending and especially in Asia, business advisory and structuring 5) Know the markets: It is key to know the markets across asset classes and have a view on investments. Some common questions that are asked in interviews are how you would invest a certain sum of money, or being given a client scenario and being asked to role play and give wealth planning or investment advice.

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Malaysia’s Brain Drain Crisis - When Will Talent Stop Leaving?

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Agency Code of Practice”1 for been mitigated? No. overseas domestic workers,2 it is no surprise that Malaysians and other non-EU citizens alike Socioeconomic and political are struggling to remain in roots of the problem and/or migrate to the UK. Bumiputeras refer to the Malay In light of May’s minimum wage threshold of “£35,000 Does this mean that the brain majority and other indigenous per annum or the going rate drain crisis in Malaysia has peoples in Malaysia who are accorded special privileges in the relevant UK Border schooling, civil service, 1 U.K. Home Office (2012): Statement in of intent: Changes to tier 1, tier 2 and tier 5 of the politics, businesses, and points based system; overseas domestic workers; and visitors. property purchases as by the alaysia was the lone Southeast Asian country in the list of the top 15 countries of origin of UK immigrants, ranking 14th.

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2 Author unknown (2012): Immigrants “have to earn £35,000” to settle - from 2016. BBC.

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LSESU ACS Asia Careers Journal constitution.3 This label has two main implications: firstly that identities are partitioned on racial lines and secondly that non-bumiputeras are treated as second-class citizens. In an economy driven by racial politics, 72% of Malaysian emigrants relocated in search of better and more equitable education and career 4 opportunities. The fact that 81% of emigrants are Chinese and hence non-Bumiputera highlights the severe racial polarisation within the country due to the New Economic Policy, other Bumiputera affirmative action policies and the 2013 general election, whereby Prime Minister Najib Razak attributed Barisan’s 3 Author unknown (2013): A Never Ending Policy. The Economist. 4 Author unknown (2015): Malaysia: Filling the Skills Gap to Meet the Demands of a Growing Economy. The World Bank.

losses on a “Chinese Tsunami”. the 1MDB corruption scandal5 where more than $1 billion One such affirmative action entered the Prime Minister’s policy is the racial quota in personal bank accounts favour of the ethnic Malays and severe inequality that and other indigenous peoples, perpetuates the Malaysian reserving 70% or more of population contributes to public universities’ places for the anger and restlessness Bumiputeras. This has forced of the public. According to non-Bumiputeras, who would the Human Rights Watch’s have otherwise earned a place 2016 World Report and in said public institutions country-file, the incumbent under a meritocratic system, government has retained to pursue higher education power for approximately in private and/or foreign 60 years through “electoral institutions, such that those manipulation, censorship, who leave the country often intimidation and use of criminal do so permanently. states to punish political opponents… maintaining a The growing disillusionment legislative majority through of ethnic minorities with the gerrymandering”. government is exemplified through the accusations of One of the main sectors of gerrymandering in the 2013 the Malaysian economy that general election. In addition, 5 Author unknown (2016): The Observer view on corruption in Malaysia. The Guardian.

LSESU ACS Asia Careers Journal sees corruption6 is public procurement, with political connections and ethnicity significantly influencing the outcome of public tenders. Malaysia currently ranks 55th out of 176 countries in the Corruption Perceptions Index 2016,7 with a score of 49 out of 100. Corruption is a substantial factor that pushes Malaysians out of the country. It undermines the decisionmaking process associated with public investment projects and encourages activity in the underground economy as taxpayers are of the opinion that the government will not manage funds in the best interests of the country. Furthermore, corruption acts as a disincentive for innovation and the growth of the privatesector as companies would rather relocate to a country with a more politically stable climate.8

tarnishing the credibility of the authorities and rapidly eroding the legitimacy of the Malaysian government. This has mobilised Malaysians to turn to other countries, such as Singapore, Australia, the Malaysia’s insufficient and United States and the United 9 frustrating career prospects Kingdom. and benefits, lack of opportunities in specific Stakeholders in Malaysia’s fields and the imposition of brain drain crisis luxury taxes contributes to the disenchantment of its people. As of 2000, 46% of dispersed relocated to The shocking corruption Malaysians scandal has generated Singapore, comprising 45% of 10 widespread uncertainty Singapore’s local immigrants. has significant and a sense of betrayal, This consequences on the labour market in Singapore. The 6 GAN Business Anti-Corruption Portal exodus of the Chinese diaspora (2016): Malaysian Corruption Report. 7 Transparency International (2016): Corruption Perceptions Index 2016 - Malaysia 8 Lopez-Claros, A. (2014): Nine Reasons why Corruption is a Destroyer of Human Prosperity. The World Bank.

9 Bennett, A. (2015): Immigration nation: where are Britain’s migrants coming from, and why? 10 Author unknown (2011): Putting the Malaysian diaspora into perspective. Stanford.

to Singapore due to sociopolitical tensions in Malaysia has led to a more competitive labour market as domestic and multinational firms in Singapore are able to employ the ‘best of the best’. However, this has serious implications for the Singaporean locals, in particular the males. Full-time National Service was made compulsory by the late Prime Minister Lee Kuan Yew in 1967 and has continued on to this day, mandating that all Singapore male citizens and permanent residents of 18 years of age serve for a minimum of 2 years. As a result, the competition with high-skilled and educated foreigners who have no National Service liabilities has led to increasing 45

LSESU ACS Asia Careers Journal due to contracts (scholarships/ bonds) which essentially legally binds them to work for a particular company for a certain number of years, with some examples being Bank Negara (the Central Bank of Malaysia) and Maybank. Where should Malaysia go from here?

discontent amongst many talent in line with the needs locals, irrespective of gender, of the country’s economic who believe that foreigners transformation”. are taking away their jobs.11 However, in recent years, there Furthermore, the relaxation has been mixed views on the of red tape surrounding the success of the organisation’s employment of foreign workers initiatives with TalentCorp in Taiwan may work to the Malaysia chief executive officer benefit of both the Malaysian Johan Mahmood Merican diaspora and Taiwanese claiming that “Malaysians 12 government. The shortage abroad… need more of white-collar workers in persuasion to return home Taiwan opens up opportunities given the current economic for Malaysians looking to and political climate”.13 This emigrate, leading to a win-win is reinforced by the fact that, situation. Nonetheless such in 2015, only 5,600 out of the an outcome would be classed 300,000 Malaysians abroad as a loss for the Malaysian applied to go home through government, especially the organisation’s Returning following their attempts to Expert Programme (REP). This retain talent and skilled- reinforces the difficulty and labour via the establishment struggle that the incumbent of TalentCorp in 2011. government faces with TalentCorp’s vision involves retaining its talent pool. It carrying out “initiatives to is often the case that some address the availability of Malaysians only return home 11 Curtis, L. (2014): “Foreigners are taking our jobs” complain Singaporeans. The Telegraph. 12 Hsiao, A. (2015): Cabinet to relax rules on hiring foreign workers. Taipei Times.

13 Author unknown (2015): TalentCorp: Harder to lure Malaysians to come back home with current political, economic climate. The Malay Mail.

The problem is multifaceted in that there are multiple push and pull factors that act as a disincentive for Malaysians to remain in the country and encourage them to emigrate elsewhere. Given that pull factors are out of the control of the Malaysian government, it should and must focus on relieving the socio-economic and political tensions that lead to its human capital flight. A survey conducted in 2008 revealed that 71% of Malaysians were in support of a “merit-based policy” in place of “race-based affirmative action”.

LSESU ACS Asia Careers Journal and sexual orientation for that matter).14 Only through significant structural and institutional changes will the country be able to make the first step in changing the public’s perception of government authorities. In order for Malaysia to leverage and capitalise on its massive pool of talent and human capital and achieve greater efficiency and increased productivity, it will have to reinvigorate its people and steer them to attain their maximum potential.

(before 24 August 2018), the the pervasive economic and incumbent government may political uncertainty that befalls have other priorities on their the country. agenda. Nevertheless the very real and concerning issue of brain drain must be dealt with if the country wants to retain the human capital that will drive it into ‘developed economy’ status. The lack of an effective and genuine program to tackle the problem of human capital flight will have a considerable effect on the tax revenues of the country, impacting the Malaysian economy as a whole by restricting its capability With the 14th Malaysian to respond to both internal general election slated to take and external shocks. It is place within the next two years unfortunate that the prospect of Malaysia becoming the “5th Asian Tiger” remains an 14 Petrova, D. (2012): Affirmative Action versus Equality in Malaysia. Oxford Human Rights almost idealistic image due to Hub.

It is clear that the government has to cease to operate divisive race-based policies to allow Malaysia to make even greater headway in the global economy. This means rewarding hard-work, talent and qualifications, leading to a merit-based system, and shifting policies so that they aid the poorest individuals in Malaysia regardless of their ethnicity (or gender, religion

Is China Hong Kong’s Future? ELTON WEN

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ince the turn of the century, there is no doubt that Hong Kong’s relationship with China has been tumultuous one. The issue and conflict has centered around the notion of autonomy and the possibility of an independent Hong Kong. Since July 2014 when Hong Kong saw its largest demonstration in decades (concerning the legitimacy of the election of their “chief executive”) controversy and disputes between the two countries are still as fierce as ever. With further escalation foreseeable likely, I hope to further explore the concerns and issue surrounding the debate, and to answer the question: whether China is Hong Kong’s future.

History of the Conflict In a nutshell, Hong Kong locals want self-governance. Since the Transfer of Sovereignty in 1997, the term “One country Two systems”, has been the crux of Hong Kong’s de factor constitution, known as the Basic Law. It was supposed to guarantee the city a high degree of autonomy from China and preserve the rights under the British sovereign rule, as displyed by HK’s own education system, immigration policy, judiciary and finances. However, there has been increasing suspicions that China is not honoring this deal as Hong Kongers complain that some erosion to their civil rights have occurred. Activists argue that the Basic Law

allows Hong Kong the right to develop their own democracy and to hold free elections (universal suffrage election of legislative council and the chief executive) yet Beijing insists it has complete jurisdiction and must approve all candidates who stand for the top post. With the younger generation showing itself to be more vocal, even vociferous, in defending Hong Kong rights and identity, they are not backing down and further campaign for the notion of popular sovereignty. So far though, Beijing has yet to cease imposing itself on the city’s affairs. Many fear that the One system two country arrangement, which was meant to last for 50 years, is crumbling and their most basic freedoms beginning to be stripped away.

LSESU ACS Asia Careers Journal Hong Kong Separatism is a have entered the council, movement made in China when only a few years ago such a policy was considered This is the idea that China radical. may have engineered its own predicaments; for many see The rise of an independence their hard-line actions to have movement is a dangerous given birth and accelerated result of China’s inflexibility. a new self- determination After all, more democracy in movement in Hong Kong. Even Hong Kong might encourage in the student-led “umbrella Shanghai or Beijing to revolution” that took place demand the same. If Beijing nearly two years ago, the most can alienate its own citizens radical amongst them did not in a former colony that only advocate full independence returned to the motherland from the mainland. But thanks two decades ago, what hope to Beijing’s defiance, political does it have of exercising “soft meddling, and moves to power” beyond its borders? “punish” the city in the wake of those protests (e.g. Causeway Impact of the Rise of Hong Bay Books disappearance Kong’s Young Politicians. controversy), support for independence has entered The campaigning of the 2016 mainstream politics. Hong Kong Legislative Council election was a strong indicator As a result, legislators driven of growing political polarisation by popular opinion now favour and anger with Beijing, led by eventual independence and a new and young generation

of politicians. Young people in the semi-autonomous territory have become increasingly outspoken since the failure of the Occupy movement to win democratic concessions, and the rise of this more radical group of young politicians signifies a generational shift in attitudes to China. The votes counted in September 2016 was extremely revealing; more than 58 per cent of the territory’s 3.8m electors voted, a record turnout as many were inspired by popular opinion. David Zweig, a professor of social science at the Hong Kong University of Science and Technology, described this deepening rift to be “pretty scary for the mainland because now you have a whole generation of young people who are not patriotic [toward China].” Summarising the mentality of many Hong Kong

LSESU ACS Asia Careers Journal locals: “The more the mainland committee system for the pushes, the more Hong Kong chief executive, it could instil society pushes back.” reforms to make that process more competitive. How will China React? The third option is obviously Richard Bush, the writer of most desirable, but it the book “Hong Kong in the would require the Chinese Shadow of China: Living with Communist Party to implement the Leviathan” puts forward policies contrary to its selfthe idea that Beijing has three interest; possibly a step too main options in response to far. However, it is worth noting Hong Kong’s anti-mainland that a successful solution sentiments: cannot depend on Beijing alone. Bush argues in his book 1) Continue the status quo that democratic transitions The “one country, two systems” work best when progressives will remain unchanged and in the regime work alongside Beijing should continue to moderates in the opposition increase its economic and to negotiate a transition cultural influence in Hong pact. As Hong Kong politics Kong. However, this still does become more polarized, it not confront Hong Kong’s basic will be particularly important problems, and will likely lead for the moderate, radical, and to continued resentment by localist forces within the panHong Kong residents towards democratic camp to find ways the mainland and its policies. to unify.

they take the pragmatic view that they will happen anyway) whilst the other half is opposed.

What is evidently clear though, is that China will not accept the election of a chief executive hostile to Chinese rule and in reality, it is Beijing which wields all the power. What is most likely to happen is that the Chinese government will persist with its proposals, perhaps with minor concessions, and anticipate that the opposition will slowly abate. Although discontent, many Hong Kongers already recognise that there is no 2) Restrict political freedoms The Future of Hong Kong escaping the fact that their and legal order future is inextricably bound up Yet this would seriously The future of Hong Kong is with China; there is simply no directly threaten the Basic Law no doubt indefinite; with the obvious alternative. It is hard implemented by the British politics within the country not to see China becoming the rule. currently a mess and many future of Hong Kong. experiencing a crisis of identity 3) Liberalize the political and a sense of displacement. system to popularly elect leaders All these issues, in a most This would be most amiable complex way, are being played option for Hong Kong since it out in the present arguments would be the first step towards over universal suffrage. Hong stabilizing its governance, but Kong is divided; about half the would be the most surprising if population support China’s such a policy came to fruition. proposals on universal suffrage While it is unlikely Beijing (either because they think they will abandon the nominating are a step forward or because 51

Nintendo Equity Research Report - 7974 JP Equity CALVIN KOO

uy on the limited Investment Thesis expectations of the stock. Although the gaming sector Nintendo is a top manufacturer remains light on stories for of portable and home the year of 2017, Nintendo game consoles, as well as remains as a focus given by the developer of a number the launch of its new home of popular titles, including console, the Nintendo Switch, Mario and Pokémon games in March. Even though the in Japan. Founded in 1947 initial reaction from the market and headquartered at Kyoto, is disappointing, it remains as the company started out an attractive stock for the midmanufacturing playing cards long term perspective once for Western and traditional the sales momentum picks up Japanese games. The revenue from the major titles releases stream is roughly divided into in the third quarter of the year. two major sources: hardware sales (53%) and software (45%) Nintendo Switch: The Hot in fiscal year of 2015. Topic to watch Switch is the latest initiative for Nintendo’s next generation

gaming experiences. It is, essentially, a big gamble for Nintendo to replicate the success of Wii console, which was introduced back in 2006. This new console, in an attempt to unify gameplay at home and on the go, has a special feature of wireless controllers being able to connect with tablets and TVs. Here are some key takeaways of the new console’s features (taken from observation of Bloomberg’s team in Tokyo): • The Joy-Con motion controllers offers a new gaming experience. Working as game controllers and Wiimote-like wands, they’re also packed with sensors and

LSESU ACS Asia Careers Journal vibration feedback. Even though they’re tiny, they are well made. The new anime-like Arms game, which works with the new Joy-Con controllers, feels like the Wii motionbased title we deserved but never got. However, currently these features doesn’t seem to be fully utilized at this stage. The company is expected to further develop these core features with new games such as the launch of fighting sports game which is scheduled to be launched in May. • The transition of between the two modes is seamless. No interruption is observed between switching modes and televisions are able to recognize the game straight away. The only key question here is whether such games exist to make this experience compelling. • The joy-con sticks don’t seem to be as easy to use

when it’s connected with the tablet. Thumb sticks are too short, according to the test player, making the games feel less responsive on sudden movements.

Switch’s attempt to be all things for all gamers could end up making the wrong call for the market. As this is stressed by the management of the teams as a ‘critical’ part for their business strategy in future • Limitation on graphics years, the gamble is simply a is still an inherent problem risk-taking for Nintendo’s stock for the console. Whilst the price. graphics fits well for the small screen, the lack of ability to Another disappointment from render complex graphics on a the market expectation was the big screen makes the console less-than-expected associated loses its edge to compete games titles alongside with the against the other traditional hardware’s launch in March. gaming console such as Many of the announced titles Playstation4 and Xbox One. are simply updated versions This can be highlighted as a of older franchises, which are problem for Nintendo if they simply taken and repackaged are planning to expand to as a launch title for the Switch gamers who are looking for console. Apart from this, graphic experiences. there’re less than 10 thirdparty titles for the initial • Nintendo’s historical launch, making the initial linesuccesses are based on the up at launch less attractive for introduction of a simple a wide range of users. ideas on the core. From Wii’s innovative casual gaming to One argument for a successful NDS’s dual screen experiences, gaming console is the ability to kick start a virtuous cycle for developers to make more games for a growing number of customers. This is not least important for short term sales growth, so we do not have any further upside factors which can drive the growth for the near term. However, positive comments received from game developers such as Ubisoft and EA sports have reflected the potential interests for major titles such as FIFA to be developed in the future. In addition, more than 80 games

LSESU ACS Asia Careers Journal trends, as identified by the user reviews, seems to be the most critical issue for mobile game market. Nintendo’s failed attempt in adjusting gaming difficulties made it hard for the expectations to be sustained and hence strengthened scepticism about the potential smart phone game business in general.

existing gaming experiences.

The qualitative factor would be the major differentiator in mobile gaming market. The officially announced Fire Emblem Heroes (launching February2 on iOS/Android) employs the conventional in-app purchase model, and we expect Animal Crossing (launching by end-March) to For Nintendo to continue in do likewise. We regard both taking a share of the mobile these titles as particularly game market, there are three suited to mobile and expect are under development and gaming trends that one should them to show a stronger focus the majority will be launched consider: on monetization. into the market by 3rd quarter of 2017. In these games also 1) In-game purchases which include Splatoon 2, which is a allow users to have a potential new franchise for the comparative advantage Nintendo games and ARMS, a boxing game that leverages 2) New experiences with distinct the console’s functionality. features (e.g. Pokemon Go) With all that is mentioned above, we expect the sales momentum of the console to be picked up gradually towards the end of the year and therefore the hardware penetration should come into effect by 2018. Nintendo’s mobile market: mature opportunity exists

3) Premium games, migrated by old consoles, which are sold outright. Repeated old franchise titles are dominating the gaming trends right now but we expect a growth of new titles to be compatible with the

game but

Since the introduction of Super Mario Run, launched in November 2016 as an iOS exclusive game, we observed a strong download in the app store but a low monetization rate, hence being left as a disappointment. Playable 55

China and Trump

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TIFFANY CHAN

onald Trump’s victory in the US presidential election has been a shock to many. The world responded to his inauguration in different ways. Germany needs a new economic strategy regarding trade towards Asia, Mexico plans to examine its diplomatic relations again and France refers to it as “a period of uncertainty”, Trump has not been impressing world leaders internationally like US presidents in the past. But China has remained unaffected

on the whole.

bilateral relationship between the two countries that it will not undergo huge structural transformations on the whole despite little changes. On the other hand, Trump posted a video of his daughter singing a Chinese New Year song in Mandarin on Twitter which went viral. Many interpreted it as an implicit message of divergence between Trump’s promises and authentic actions to China.

It is obvious that Trump has blamed China for almost every single thing, ranging from climate change to stealing jobs, as well as threatening China with a 45% tax on imported goods and services. Yet leaders in China stayed prudent and did not take any premature actions. This neutrality in response to the victory of Donald Trump implies the high confidence level in the Chinese government at In

contrast

common

LSESU ACS Asia Careers Journal belief, Donald Trump’s way with words did not trigger much anger, even when his speech includes harmful suggestions like proposed tariffs as aforementioned. Chinese leaders were indeed more displeased by President Obama meeting with Dalai Lama in the past and as seen historically from elections in the United States, rhetoric has had little relation with reality. This can be explained by analysing the benefits and detriments of protectionist measures to the US. The purchasing power of low income American households has been significantly raised due to cheap imports from China. The availability of such products kept US prices at a low and competitive level. An abundance of inexpensive Chinese goods in the US market has led to economic growth, reasonable consumption and it has kept inequality at minimal. If the effect of downward pressure on prices is eliminated, there will be inevitable consequences for the US economy. In addition, employment in the

ACS COMMITTEE 2016-2017 HENRY CHIN President JASON SHU Vice President CHARLOTTE TANG Secretary WEIJIAN CHEN Treasurer

manufacturing industry is unlikely to rise because jobs would go elsewhere in Asia where labour costs are lower when compared to China, such as India and Vietnam. Under Barack Obama’s administration, a strategic approach has been implemented, such as paying close attention to South China Sea disputes. By contrast, it is obvious that Trump will not change much in terms of economic policies. Provided that Trump understands what is best for him and his country, it is apparent that he will not change much in

terms of economic policies. China is one of the biggest purchasers of US Treasuries. It finances US consumption and investment with the possibility of improving the US budget by financing Trump’s proposed large-scale infrastructure projects. Therefore, it is more favourable for Trump to make limited changes to avoid infuriating China and also explains his pledge to put “America first”. Less US involvement in Asia seems absolutely fine for China whilst the fundamental US system limits Trump’s ability to deviate from any foreign-policy. All in all, it is of utmost importance for Chinese leaders to establish a cooperative bilateral relationship with the States instead of worrying about Donald Trump’s preferences. China should take this opportunity to achieve economic growth and development.

PEARL WEE Banking Events Officer XIN RUI NG Business Events Officer ZOE ZHANG China Banking & Business Officer

WEIMIN WANG Deputy China Banking & Business Officer JUSTINE HUNG Law Events Officer VIVIAN CHAN Deputy Law Events Officer

LILLIANA LIU Marketing Officer SOPHIA WANG Deputy Marketing Officer CHEN WEIHENG Research Officer YEN SIANG PANG Deputy Research Officer

EDITORIAL TEAM CONTRIBUTORS SERENE AU EDITOR IN CHIEF CHEN WEIHENG BSc Economics and BSc Mathematics and Economics Economic History k.n.au@lse.ac.uk w.chen29@lse.ac.uk

DEPUTY EDITOR

YEN SIANG PANG BSc Economics

TIFFANY CHAN BSc Economics t.c.f.chan@lse.ac.uk

y.pang1@lse.ac.uk

DESIGN & PRODUCTION

BEATRICE LEUNG LLB Bachelor of Laws

CALVIN KOO BSc Business Mathematics and Statistics

b.a.leung@lse.ac.uk

t.h.koo@lse.ac.uk

YVONNE TSE BSc Acturial Science

JIE LIN NAI LLB Bachelor of Laws

y.y.y.tse@lse.ac.uk

j.l.nai@lse.ac.uk

ELTON WEN BSc Philosophy and Economics e.c.wen@lse.ac.uk

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