CER July 2014

A failure to clean up dirty land could threaten urbanization

JULY 2014 VOL. 25, NO. 7

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Q&A: Matthew Crabbe on how to read Chinese economic data

Chasing the cloud B ED USI UC NE AT SS IO N

Microsoft and Amazon battle it out 中经评论：营销大趋势

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THE HOUSE VIEW Published monthly since 1990 Publisher China Economic Review Publishing Editor Oliver Pearce Staff Writer Don Weinland Chinese Editor Liu Chen Associate Editor Skye Sun Contributors Greg Isaacson, Sunny Oh, Tom Nunlist Interns Kangning Chen, Sean Lee, Ryan Kilpatrick, Colleen Howe Art Director Jason Wong Editor at Large Graham Earnshaw Associate Publisher Gareth Powell Director of Sales and Marketing Ralph Wang Account Manager Jerry Cheng

04 SOULLESS HOMES | Chinese culture all but forgotten in the rush to urbanize

MONTH IN REVIEW 06 NEWS BRIEF | The biggest China news stories in June

Q&A AND COLUMNS 08 LIES, DAMNED LIES AND CHINESE STATISTICS | Understanding the Chinese economy requires a healthy dose of skepticism of all and any data coming from the government

10 DON’T OVERESTIMATE EUROPE’S DIVISIONS | Europe’s economic crises make it look weak to the Chinese but Beijing should not underestimate how united the 27-nation bloc actually is

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12 FORESEEING TROUBLE | Foreign brands shouldn’t wait for a

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crisis to starting thinking about crisis communications Jingdong Mall and Alibaba shows that Chinese companies can develop into world leading businesses

COVER STORY 16 GRAND DREAMS | Can foreign companies crack the Chinese cloud computing market?

ECONOMICS & POLICY 24 GROUND WASH | With almost 20% of its arable land contaminated China can’t afford to look the other way, but the country is struggling to put the incentives in place to start cleaning up

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27 SELLING THE STATE | China shuffles the deckchairs of state

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29 CASTING LIGHT ON SHADOWS | Stringent regulations to curb informal lending could end up hurting the economy

THE HOUSE VIE W

Soulless homes Chinese culture all but forgotten in the rush to urbanize

T

ang dynasty poet He Zhizhang returned from a long sojourn abroad balding and as a stranger to his children. A contemporary poet in China might lament a homecoming strange, disorienting, even alien.

“Where is your memory? You will one day return to your hometown without recognizing anything. How do you call this place your hometown?”

Qiao Runling, a deputy director at the National Development and Reform Commission, said in April at a real estate forum in Shanghai.

Qiao wasn’t reciting poetry, but his comment captures the problem with urbanization in China today.

The framework planners have used during the past 30 years to build cities has been overly simplistic, void of creativity and without consideration for local culture. The same drab style of concrete and steel has risen in hundreds of urban centers. The results are wide boulevards that bisect tall apartment blocks for as far as the eye can see. Even the street names are interchangeable between cities.

“Most cities look alike. Most cities have similar buildings,” Qiao said. “If you walk around China, we see more and more similarities rather than differences.”

From a random street corner in any given medium-sized city, distinguishing it from the next one can be a difficult task.

Perhaps the most devastating aspect of this dull urban expansion is the lack of demand for it. Planners have drawn up master designs for their cities with little regard for who might come to live in them. At a talk at the European Chamber of Commerce last month, Paul Procee, lead urban specialist at the World Bank, drew a picture of how Chinese cities were shaping up without heed to market forces.

“The government builds these 10 roads next to each other, perfectly

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China Economic Review | July 2014

squared with humongous apartment buildings in between,” Procee said.

Yet, at the same time, “on the fringes [of the cities] you see these informal three-story buildings coming up in a completely random way, and the government is not really paying attention to that.”

“What is being built in lots of these small counties are buildings that are for the middle class. And you really wonder, who are going to be the ones occupying this?”

In many of China’s more than 600 official cities, the answer could be no one. The middle classes already dwell in apartment buildings. Many of them will upgrade to bigger cities, particularly the first-tier cites.

But for the county-level cities, where urbanization is currently focused, there are limited buyers for these flats. Such real estate isn’t priced for migrant workers, the heart of China’s urbanization process, Procee says. That’s why a market for informal housing on the outskirts of town is booming.

This model for urbanization is broken. In fact, from the perspective of many economists, the Chinese government never had it quite right.

Policymakers for decades have called urbanization the driving force of growth in the Chinese economy.

This theory casts migrant workers – once they have made the leap from village to metropolis – as urban consumers who will buy cars and apartments upon arrival.

The Chinese government has it backwards, however. Towns cannot be built from scratch and the masses expected just to flock there; emerging urban areas need to demonstrate growth, innovation and develop new industries to attract a steady stream of people looking for work. For each migrant that enters a city, healthcare and education should be made available. Local governments must also

provide subsidized housing. All of this is a huge cost to the state.

“Urbanization, in other words, is a consequence of rising wealth and can accommodate it,” Michael Pettis, an economics professor at Peking University, wrote in his blog last year. “It is not a cause of rising wealth.”

Ignoring the real source of demand for housing and confusing the drivers of urbanization have produced China’s infamous “ghost cities” – new, sprawling urban areas with few residents.

This stubborn central planning is also rendering the bulk of Chinese cities cultural wastelands.

Where, then, is the real demand?

And where is the real China among the myriad of faceless cities? The answer could be one and the same, says Qiao at the NDRC. As China continues to urbanize, local governments and property developers must start taking into account local culture. Traditional Chinese painting and poetry often depicts quaint river towns with a slow, leisurely pace of life.

Such art might romanticize the notion of a peaceful lifestyle, but Qiao says the Chinese people yearn for a more culturally enriched experience.

Small towns, ones that reflect the local culture and history of the region they are based in, could be the future of urbanization in China.

The past 30 years has been spent wiping these places off the map. The small river towns that have survived are more akin to tourist attractions than living spaces.

“Actually, conventional urbanization is the elimination of local culture.

That is a very harsh statement,” Qiao said. “Chinese people have demand for peaceful lifestyles. They want this kind of residential environment but the market cannot provide it now. So the next step is building peaceful, small towns. This will be the next step in urbanization and a new opportunity.”

NEWS ROUNDUP

MONTH IN REVIEW China’s exports gained 7% in May from a year earlier, Bloomberg reported, citing a statement by China customs. The gain, which surpassed analysts’ median estimate of 6.7% in a Bloomberg News survey, helped to cushion a slowdown in China’s economy amid a 1.6% fall in imports – a drop that was not forecast by any economists in a survey that had a median projection for a 6% gain. The trade surplus widened to US$35.92 billion. Stronger exports may convince Chinese leaders that a bigger stimulus package for the economy isn’t necessary.

ten quarters ago. The slowdown hurt hiring and wages, and interest rates offered by shadow lenders fell below those offered by banks. For the first time since the survey began, no sector showed improvement compared with the previous quarter.

Chinese Premier Li Keqiang is confident that China will meet its annual growth target of 7.5% for 2014, Reuters reported. Writing in Britain’s The Times newspaper on the eve of his visit to London, Li said slowing growth in the world’s second-largest economy was normal and not a problem. “China’s economy needs to grow at a proper rate, expected to be around 7.5% this year,” Li wrote. “It is slower than the past, but normal.”

Li also wrote that the Chinese government was ready to adjust policy to make sure it does hit the target.

WE’LL GROW: Ahead of a vist to London in June Premier Li Keqiang said China would meet its 7.5% GDP target

Credit: Alex Segre

Economy

Credit: Sarah Al-Sayegh

Finance

China’s economic development slowed further this quarter as capital spending showed weakness and fewer companies applied for credit, Bloomberg reported, citing a quarterly report by China Beige Book International. Fewer than half of businesses reported higher investment, the smallest proportion and sharpest drop since the survey began

China needs to make the yuan more flexible to cope with rising capital flows, Reuters reported, citing Ma Jun, the chief economist at the central bank’s research bureau. Ma said that capital inflows into China’s bond market could increase as domestic bond yields are higher relative to overseas markets and that as China’s capital account is already partially open, there could be “a substantial increase” in outbound foreign direct investment if China further loosens its grip on capital flows. As part of its ambitions to turn the yuan into a global currency, China plans to free up its capital account though authorities have said some restrictions will be kept in place.

Direct trading of the yuan and pound started in the UK in mid-June as London stole a march on European rivals seeking to deal in the world’s second-largest trade currency after the US dollar, Bloomberg reported.

While four other nations had already signed such accords with China, the UK’s deal made it the first European country to do so. London has been competing with cities including Frankfurt to become Europe’s offshore yuan hub. China is seeking to strengthen commercial relations with European countries.

CHINA BY NUMBERS Ratio of vacant homes in China’s urban areas in 2013, a survey showed

1 in 5 06

China Economic Review | July 2014

134 Number of environmental courts set up local governments

Size of stake Alibaba Group is buying in Guangzhou Evergrande Football Club

$2.06bn

50%

Value of China South City’s investment in e-commerce push with Tencent

NEWS ROUNDUP

The People’s Bank of China has suspended the launch of the country’s first asset-backed security, South China Morning Post reported. Ping An Bank filed an application in May to sell a credit-backed product worth RMB2.8 billion (US$481 million) to the Shanghai stock exchange, which operates under the China Securities Regulatory Commission, without informing PBOC. PBOC insisted the suspension was in compliance with government directives, as institutions are required to file ABS issuance plans to the central bank before listing. Market observers said the power struggle among regulators is a major obstacle to reforming China’s finance industry.

Politics and society

US-China cooperation on cybercrime has stalled since the US indictment of Chinese officials on hacking charges, while Chinese hacking efforts have continued unabated, Reuters reported, citing comments from a senior US security official. In May, the Justice Department charged five Chinese military members with hacking US companies to steal trade secrets, prompting Beijing to sus-

$239m Value of debt issued

by Trina Solar

China plans to build a school on the disputed Paracel Islands, BBC News reported, without citing a source. The move would boost China’s presence in waters also claimed by Taiwan and Vietnam. China calls the island Yongxing and has been building up a settlement there for the last two years.

The school is expected to serve just 40 children, whose parents all work on the tiny island. In May, Chinese and Vietnamese ships clashed over a drilling rig that China has placed near the islands. Beijing claims a U-shaped swathe of the South China Sea.

ufactured by Chinese-based Dalian Alps Electronics, Reuters reported.

The switch was used in nearly 3.4 million Chevrolet Impala and Monte Carlo, Buick LaCrosse and Lucerne, and Cadillac DeVille and DTS cars that were recalled on June 16, marking the second time this year an auto manufacturer has discovered a problem with a China-made part. In February, British car maker Aston Martin recalled most of its sports cars built since 2007 after discovering a Chinese sub-supplier was using counterfeit plastic.

Credit: US Army Africa

Credit: Eights|ϝሷ

pend a Sino-US working group on cyber issues including money laundering, child pornography and drug trafficking. The indictments, the first criminal hacking charge the US has filed against specific foreign officials, strained US-China commercial relations and created troubles for US technology companies in China.

Business

Chinese telecoms equipment maker Huawei Technologies plans to add 5,500 employees in Europe over the next five years, Bloomberg reported, citing Chief Strategy Marketing Officer William Xu. Shenzhenbased Huawei now has about 7,700 employees in Europe. The company is adding workers as it competes for business in the region against rivals including Alcatel-Lucent and Ericsson. Huawei has said it is focusing investment on countries where it has been accepted, after lingering suspicions in the US that its gear may give Chinese intelligence services the opportunity to tamper with networks for spying.

General Motors announced in a filing with US safety regulators that a defective ignition switch was man-

“Naked” officials caught in Guangdong province

1,000

10

Uganda plans to invite six Chinese companies this month to bid for up to US$8b worth of rail project contracts, Bloomberg reported. “Bidding documents will be ready by July 10 and we are inviting only Chinese companies,” Uganda Works Minister John Byabagambi said. “We shall sign engineering, procurement and construction contracts with the winners.”

The first phase of Uganda’s planned railway construction covers 1,000 kilometers, stretching from the country’s border with Kenya to Rwanda and a town near the border with the Democratic Republic of Congo, Byabagambi said. Work on an extension will take place later.

Number of companies allowed to list on mainland bourses after five-month hiatus

Box office share held by imported movies in first quarter of 2014

60% China Economic Review | July 2014

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Q&A : READING ECONOMIC DATA

Lies, damned lies and Chinese statistics Understanding the Chinese economy requires a healthy dose of skepticism of all and any data coming from the government and a willingness to dig very deep

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iven its sheer size the Chinese economy iis closely scrutinized by tthe world. But a lack of ttransparent economic data makes this job difd fficult, and is a source of much ire among foreign m oobservers. They’re not Matthew Crabbe tthe only ones struggling, however, says Matthew h Crabbe, Asia Pacific research director at consumer insights firm Mintel.

The Chinese government is as much in the dark as anybody when it comes to Chinese numbers. In an interview with China Economic Review, Crabbe, who is also author of the recently published book Myth-Busting China’s Numbers, gives his thoughts on proxy measures for China’s economy and explains why we should pay more attention to consumer data.

There is a lot of skepticism among foreign observers of official Chinese data. It can’t all be unreliable, can it?

I don’t think any statistic is ever entirely accurate; it’s just the best estimate. I think one of the things about China is that it’s growing so fast that the expectation that the data could be accurate in such a situation is probably a false one. And I think the problem China presents is that common western expectation is that if the figures are published, that they therefore must be true. So yes there are problems in the data but it’s by order of degrees.

As with anywhere, there will be slight inaccuracies in gathering data, and of course in China those get amplified as you go up the different levels towards the national picture.

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China Economic Review | July 2014

“I don’t think any statistic is ever entirely accurate; it’s just the best estimate.

I think one of the things about China is that it’s growing so fast that the expectation that the data could be accurate in such a situation is probably a false one ... So yes there are problems in the data” Yes, there are problems with the GDP figures. But I think there are other common assumptions that I hear such as that the Chinese government knows what the real figures are and they don’t like to publish them. I think the Chinese government is as much as in the dark about what the real numbers as anybody else. If you think about it, the Chinese government needs an accurate picture as possible. They need to tax the economy so they can provide social services as a government. But the depth of that coverage remains very thin. It still needs a lot more money. The only way they can pay for that is tax from the economy, but without accurate figures it’s very difficult to do that.

How should we read economic data given regional disparities in reporting numbers?

Well, here are what we think is a common problem. We often look at a figure, and we assume that’s true.

You read the figure, but you don’t investigate it. I think what you have to do is that you have investigate it, and not assume that figure says it what it is.

One of the key things with a statistic is investigating how it was created it, why it was created, what the problems might be, what the definitions are.

Before we agree on these numbers we have to know where they came from.

Investment banks are constantly trying to forecast the country’s growth figures, and in so doing, have relied on an ever-changing array of proxy statistics such as rail freight volume.

What are the most reliable proxy statistics for GDP now?

As the economy shifts away from export manufacturing, more towards domestic consumption, the range of proxies definitely have to shift. Before, statistics on cement, power generation had always been useful. Figures on construction and heavy industrial inputs are proxies for how industry is doing, and just looking at that now, its quite limiting. You need to understand what’s happening in consumer markets. You could look at retailers. I know some investment banks that are looking at the growth of KFC and certain retail companies. That could give you an idea of where the consumer market is going. Household spending indicators that come from the government - the rural and urban household consumptions surveys are quite interesting. These figures might be skewed

Q&A: READING ECONOMIC DATA

but they give you a good indication of trends. Now, you’ve got big data in the form of the trends that are generated by online retail sales, which can be more time-sensitive and more current.

These can be quite useful indicators and proxies as well.

Economists have complained that accurately measuring China’s services economy is close to impossible.

How can we go about measuring it, or at the very least, improve methods of measuring it?

I know the National Bureau of Statistics is staring to try and measure services much more than in the past.

It might take a while to really develop the figures. The way I did it with retail was to do it from the bottom up. And, in the end, I think that’s the only way you can do it. Split services into their component parts and research each one individually, and get the picture from the bottom. Services is different from retail because retail is volume of sales, whereas services is value-added, in terms of the value of human service, so for example you need to look at wages in the different services sectors to get an idea of growth and the relative strength of different services.

By clamping down on corruption at state-owned enterprises the government could be looking for a way to get better information on corporate revenues. Do you think there is some truth to this?

The government has social security net spending duties to fulfill and to be honest the money has not been enough to cover what it really needs to cover. The only way they’re going to get that [money] is if they can get true figures from companies, and particularly state-owned enterprises. A few months ago, the national oil corporation was caught for under-declaring its profits and not paying enough tax.

If flagship state-owned enterprises are avoiding tax, what’s the picture underneath that? Of course, it’s widespread.

That’s a real problem, because this is money that should be going to the government coffers. But the money isn’t there. I think its part of clamping down on this rife tax avoidance.

WE DON’T KNOW IT ALL: Crabbe says that a healthy dose of skepticism should be applied to all numbers on China, not only the official data produced by the National Bureau of Statistics (pictured)

Services are only going to grow and grow. If we have a better measure on that, we’ll have a much better measure on the real economy.

What are the mistakes that foreign companies make when using data to enter or expand in China and how can they try and avoid them?

One of the main mistakes that foreign companies make is reading a figure and believing it. If you really want to operate in China, you’ve really got to know it. It comes back to forensic due diligence into the figures and understanding the granular and the micro markets that you’re dealing with. Ask: What do consumers really want to buy? Not just assuming what people are buying, when that might be because that’s all there is available to buy. It’s about getting that much better understanding and not assuming what you’re told is true.

What are your biggest headaches when developing data on China?

I think it’s just that you have to cover so much. It’s such big numbers. Because it’s such a big country, the margins of error can be amplified greatly. I think that’s the real issue with China, the sheer size of it and the fact that it keeps changing. You can’t go back and assume the figures you had last year were correct. You have to pretty much start from scratch every time, so that you can revise upwards, well, usually upwards. It’s just hard work.

If you could have any complete economic data set, what would it be?

Services are the one grey area that people really need to work on. What do people rent? Who do they hire? What do they spend doing rather than buying? I think there’s a big shift in the consumer market more towards buying experiences rather than buying things.

It’s about quality of life. We think this kind of thing is becoming much more important, it’s how you use your time, your life to your best advantage. It’s “I don’t want to spend hours doing the laundry, I want to have somebody else do it, or have somebody else collect it, wash it, and then send it back to me”.

That’s the kind of thing people want.

It’s that lifestyle efficiency if you like.

What’s your most significant discovery about China data from writing the book?

We all know China has grown big and fast. But I think the one thing that surprised me is the fragility of the economy, still. The fact that there are problems with corruption, a lack of a social security net, a lack of labor mobility, a lack of rule of law in certain aspects of the economy and also the amount of debt there is. In 2012, it was something like 205% of GDP. According to Standard Chartered, in the first quarter of this year total debt amounted to around 250% of GDP. So, it’s getting worse. It’s that fragility that frightens me, and something that continues to concern me.

China Economic Review | July 2014

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Q&A: EUROPE AND CHINA

Stonger together Europe's economic crises make it look weak to the Chinese but Beijing should not underestimate how united the 27-nation bloc actually is

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arely two years ago a severe financial crisis unfolding in Europe saw many Chinese commentators predict the end of the union and its continued decline in the global order. But internal divisions have been exaggerated, says Nicholas Veron, a senior fellow at Bruegel, the EU’s eminent economic think tank.

The Chinese should not underestimate the political and economic unity that still exists on the continent.

Credit: Bundesregierung

Retaliatory tariffs continue to be a problem between the two regions.

Will it continue to be a viable policy tool even when the China is making overtures to a possible bilateral free trade deal with the EU? There are disputes all the time at the WTO. The rules are clear, and the dispute resolution mechanisms are clear. That shouldn’t prevent China

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and other jurisdictions including the EU from negotiating free trade agreements, but if one of the parties doesn’t play by the rules, it’s perfectly normal that the other party should enter into a dispute process. I know that not everybody in China is happy about the rulings of the dispute settlement mechanism within the WTO, but the [fact that] China has decided to submit itself into the WTO, therefore I think it is now part of the established framework, and it certainly shouldn’t prevent China from negotiating other, deeper trade negotiations with other jurisdictions and not only the EU. What is the likelihood of a ChinaEU free trade agreement, considering that the EU has a chronic trade deficit with China?

I don’t think that’s a problem. Obviously, some member states of the

UNITED FRONT: German Chancellor Angela Merkel poses with French President Francois Hollande

China Economic Review | July 2014

EU are more enthusiastic about the China-EU free trade agreement than others. I don’t think that’s primarily linked to the question of the deficit; I think it’s more about general attitudes to globalization. It’s a well-known fact that some countries are more comfortable with globalization than others. To be specific, France and Italy have misgivings about globalization that other member states of the EU don’t necessarily share.

So you have a political process inside the EU that is going to affect the prospect for China-EU trade negotiations. And, of course, it will be affected to a large extent by components in the international landscape, including, not least, whether or not there is the prospect of China participating in agreements such as the TPP [TransPacific Partnership] or not. At this point, there isn’t much chance of such a prospect, but I can imagine scenarios where that would change.

Obviously a China-EU free trade agreement is not a completely straightforward proposition from a political standpoint. It’s a trade agreement more difficult to achieve than Iceland or Switzerland, both of which are outside the EU. As we know, the EU has signed an agreement with [South] Korea. If China is willing to enter the same sort of discipline that its smaller neighbor in the east did, you could imagine, in principle, there would be openness on the side of the EU. The politics is complicated, because the EU is complicated, since there are different member states with different sensitivities.

China appears to play European nations off against each other to prevent collective EU action in trade disputes?

Well, I think you’re right. It’s simple.

When they’re divided, they’re weak; when they’re united, they’re strong. So

Q&A: EUROPE AND CHINA

it’s not a very good idea to play divided in this game, and there is no question, as you said, that China has on a number of issues, not just economic issues but also more diplomatic issues, typically looked at Europe as a collection of countries and felt more comfortable dealing with individual countries, at the risk of sometimes creating the feeling at EU institutions that China was a attempting to undermine the authority of EU institutions. I think that’s a correct description of what we’ve seen in recent years.

What does it mean for the EU that China will become the world’s largest economy, and how should the continent position itself for this eventuality?

China is a very large economy; the US is a very large economy. The fact that China is a bit smaller or a bit bigger than the US in my view is not a big factor. I think what is a big factor is China becoming such a big part of the world economy. But that’s not particularly new.

In fairness, there are people in the EU who haven’t adapted to this reality, who continue to have this very old thinking, looking a bit down at China and feeling a sense that Europe, being part of the West, has a form of economic superiority. I think this is completely outdated, misguided and counterproductive. But it is true that you have that mindset in some corners, I hope backwater corners, in EU institutions. To the extent it still exists is deteriorating rapidly. In a word, China gets a lot of respect from Europe, and properly so.

As China stakes out its own place in the world it sometimes clashes with the international rules established by western nations post-World War II. How can Europe get China to be a more engaged and responsible player in the global system?

My observation is that in the economic area, not talking about the rocks in the South China Sea, China has generally adapted itself to the international framework. It is a member of the WTO and the IMF; it is compliant with Basel III and all these interna-

tional financial standards. Well, they’re not perfectly compliant, in accounting there’s a difference between international reporting and Chinese accounting standards. But if you compare this with the US, China is more compliant with the ISRS. In general, it seems to me China, in economic norms and standards, has been willing to adopt a framework that was largely shaped by Western nations. Now it’s changing, of course. Emerging countries and China first among them are having a bigger impact on these global institutions.

There is a widespread feeling, however, that it’s a fairly different logic in the minds of these Chinese leaders.

So they are basically separating economic integration from geopolitical, or at least, regional thinking. Now obviously if you play through certain escalation or even conflicts, thatt would establish a link between all these ese different barriers. And we see that, hat, for example, in the case of Russia sia and a Ukraine, geopolitical confrontation ontatiion can lead to reversals in the economic onom mic area, but fortunately, China has not n so far come near the point where ere you y would have this sort of overlap..

both from an economic and political perspective. So maybe there is a bias perceiving Europe as less cohesive and decisive, and less able to make joint decisions than the reality.

London, Frankfurt and Luxembourg are all establishing renminbiclearing hubs in Europe. How does this play into the internationalization of the renminbi?

Financial centers, which deal with the renminbi transactions, will perhaps have a big influence on the pace of the yuan’s liberalization. But the most important factor remains the thinking within the Chinese government; at this point I think we’re still far from a true internationalization of the renminbi for financial transactions. Of course there’s a lot that has been already completed for trade transactions, but that’s a different thing. hi

The Eurozone crisis has deep deeply ply diminished many normal Chinese Chineese people’s views about Europe pe ass a global economic and politicall act actor. or.

Is it possible to reverse this decli decline ine in perception of the continent, nt, orr is it doomed to second-tier status? us?

The euro crisis has been very diffic difficult cult for Europe, and Europe has lostt wealth weaalth and influence in this crisis. So theree is no denying this. Having said that that, t, I think my impression when I’m in As Asia, sia, and its not just in China, is that hat perperhaps the number of observers in Asia A have overreacted and perceive Euro Europe ope as even weaker than it really is. Soo I think it’s important to really monitor monitor what is happening in Europe, even if it’s very complicated, and often n veryy boring. To be blunt, two years ago,, the overwhelming consensuss in Asia was that Greece would leave eave the Eurozone, and possibly the Eurozone would break up, and nd this hasn’t happened. So there ere is often an underestimation of those strengths that still exist st China Chi Ch C hina na Ec Economic Eco E cco on no nom omic om ic R Re Rev Review e ev eview iew ew w | July JJu Jul ully 2 u 2014 01 014 0 14 1 4

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Q&A : PR IN CHINA

Foreseeing trouble Claudia Choi, vice president of Greater China at EBA Communications, gives her thoughts on PR in China and why foreign brands shouldn’t wait for a crisis to start thinking about crisis communications What PR trends are you seeing in China?

The concept of SoLoMo, which stands for social, local and mobile and was coined by John Doerr in 2011, nicely explains what I see the PR trends are like in China. China currently has 618 million internet users, 500 million mobile internet users, 281 microblog users and 355 million users of WeChat [a mobile messaging app].

With such a huge number of netizens, social media and digital communications is a key trend if you want to communicate effectively in China.

Traditional media, such as television, radio and print media remain impor-

tant though. The adoption of smartphones and tablets, as well as the introduction of 4G telecommunication standard enable seamless communications via mobile.

When we talk about PR in China, we talk much about local. To resonate, PR practitioners have to identify local news angles to do storytelling appealing to the local audiences. It is also important that a company is perceived to be committed to the China market and actively contributing to local society. On the other hand, PR companies should also realize the potential of local companies who are actively going and looking to go international. Agencies Agencie are required to help their local clients clien to go global.

Can you give som some examples of your work for cl clients lient in China?

More and more clients clien come to EBA for integrated communications. com It is to support them th hem from setting up marketing communications com mmu strategy, developingg me message framework, training local spokesperson, spok media relations, socia al m social media, event management and m meas measurements.

PR is a cr reati industry. We creative must be able to aanticipate and to challenges are hence to create. The cha allen stay up-to-datee on the local political, economic aand ssocial matters and to anticipate the th he upcoming up communications chan channels nnels and how different audiences react reac to these communications ch channels hann to find the agile. best way to be aagile Do Chines Chinesee an and foreign firms have big differences in requirem men requirements?

If so, what are the they? ey?

Both Ch Chinese and foreign n companies com are gettin ting ng m more aware of the

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“My message to foreign companies is that they should never be perceived to apply double standards between their home country and in China. They need to show long-term commitment to the China market� importance of building, reinforcing or reinventing their brands and are taking actions to step up their communications efforts. I will say that it is to do with the aspiration for transparency from the general public and market competition.

Do you advise on crisis PR? What advice do you have for foreign companies that can be the target of media scrutiny like McDonalds and Apple?

In most cases, a crisis arises or gets escalated because of poor communications.

EBA does crisis communications.

This is a service which we are doing very well and seeing more and more interest from clients. We help clients to set up crisis communication strategy, guidelines and procedures and processes to mitigate risks, minimize damage or even turn around a crisis to enhance the image as a good corporate citizen.

In short, companies should not wait till a crisis comes to start thinking of

Credit: Ian Southwell

Q&A: PR IN CHINA

UNDER FIRE: Choi says that foreign companies in China shouldn’t wait until a crisis to start thinking about crisis communications

crisis communications.

My message to the foreign companies is that they should never be perceived to apply double standards between their home country and in China. They need to show long-term commitment to the China market.

How do you see the Chinese market developing? What sorts of PR services do you see companies operating in China needing in the future?

I started doing communications in China dating back to 1993. I am amazed by how much China has achieved. In the old days, communications was more focused on product promotion. It was used to support sale and business development. Companies are becoming more committed to reputation management. It also leads to a blue ocean for PR practitioners and it is CSR [corporate social responsibilities] communications.

As mentioned above, integrated communications is a key driver in the PR industry globally and in particularly in China. Most Chinese companies have just started seriously doing communication. They need to heavily invest in the groundwork. That is strategy, message development, crisis

“Most Chinese companies have just started seriously doing communication. They need to heavily invest in the groundwork.

That is strategy, message development, crisis communications, comms training and the cultural difference between China and the world� communications, communications training and the cultural difference between China and any of the markets Chinese companies want to go to. I am pleased to see that Chinese companies are getting more confident and be willing to communicate.

One very interesting thing I can see is that many companies are put-

ting focus on internal communications. It is to engage and embrace their employees. Talent acquisition and staff retention is a major challenge too.

To effectively communicate, people go back to the basics. Content is more recognized as the king [in communication]. Channel comes second. PR practitioners must be able to generate content, both written and non-written, to reach the people who matter via the different and evolving communications channels. Mobile communications also enable communications in a global scale. It brings out the importance of visual content like videos, photos and infographics.

What is the challenge that you face from local PR companies?

I see lots of opportunities for PR companies in China. I am also pleased to see that local PR companies are competing with their international counterparts. I always think that EBA sits in the middle of local and international companies as our origin was from Hong Kong. We know both sides of the fence well. It is also our unique selling point that we can bridge the East and the West.

China Economic Review | July 2014

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COLUMN: INTERNET GIANTS

Strength of the nation The success of internet giants Jingdong Mall and Alibaba shows that Chinese companies can develop into world leading businesses

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China Economic Review | July 2014

“In order for China to really express her global economic power it is not necessary for the country to rank first by GDP size or to have skyscrapers bloom everywhere.

Instead, China should boast a large number of invincible multinational companies across the globe” nancial records for international internet companies would announce to the world that if all companies begin from

the same starting line, Chinese firms can also come to the fore.

Currently in more traditional industries, when Chinese companies compete against their giant US peers such as Coca-Cola, Boeing, General Electric, Procter & Gamble, Pfizer and Apple, the gap between them is evident both in global and their home markets. There are many deep-seated reasons for this phenomenon.

To begin with, most major US companies have a long history; some even have a history of well over a century. In other words, when China was in the latter end of the feudal era known as the Qing Dynasty (16441911), and its people were struggling just to meet the requirements for basic survival, many of these US companies were already in existence and thriving.

Second, the properties and management mechanisms of the largest Chinese state-owned enterprises, or SOEs, are also primary factors which constrain development and growth.

SOEs are usually the biggest companies in China by scale and assets,

SOMETHING TO BE PROUD OF: Zhao says globally competitive Chinese multinationals, not GDP figures or a forest of skyscrapers, are how China should express its power to the world

Credit: Julien Gong Min

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n late May China’s largest online direct sales company, Jingdong Mall, p rraised US$1.8 billion iin an IPO on the Nasdaq. Coming soon, its d d domestic rival Alibaba Group, the largest G ee-commerce company G Bin Zhao iin China as well as in tthe world, will also list in New York. It is expected that the IPO will raise US$20 billion, surpassing the total generated by Facebook and making it the biggest internet firm in the world by market value.

This fantastic figure has caused uproar on Wall Street. The coverage in the English-language media is overwhelming. Some people have gone so far as to ask, with astonishment, “When has a Chinese company ever been the world’s No.1?”

It is indeed rare for Chinese companies to become global leaders in any industry, especially one as advanced as technology. But Alibaba has done so. Reports show that Alibaba’s websites had a turnover of US$248 billion in 2013, more than the sum of both eBay and Amazon combined. Leaving other data aside, this alone is enough to declare its No.1 position in the field of e-commerce.

In order for China to really express her global economic power it is not necessary for the country to rank first

by GDP size or to have skyscrapers bloom in cities everywhere. Instead, China should boast a large number of invincible multinational companies across the globe. Today, the comprehensive ability of a domestic company is a symbol of the international strength of a country, and it serves as an indication of the resilience of a nation’s backbone.

Alibaba landing in US capital markets and likely rewriting the fi-

but they are shielded by national policies or are reliant on their monopoly positions and lack comprehensive strength.

As a relatively new phenomenon, the internet industry is different to traditional sectors, giving Chinese firms a more even playing field on which to compete. The internet has been able to prosper in China at a time when the domestic economy has really been booming, the overall business environment has been improving and venture capital funding has really emerged as an important source of funding for start-ups.

The most basic business elements, which are commonly found in US companies, have gradually been formed in China, enabling Chinese internet companies and their US counterparts to basically stand together at the same starting line. And it should never be forgotten that US companies are generally more advanced in innovation and technology.

In addition, the development process for Chinese e-commerce providers and internet companies, represented by Alibaba, can be traced back to a process in which foreign rivals initially staked out the leading positions, mainly by virtue of their more advanced technology, but then eventually went into a period of decline.

As time elapses, history has shown that Chinese companies can grow and gradually penetrate the market, pushing the foreign companies aside.

For example, Google has almost been completely squeezed out of China. As another example, Yahoo!, one of the primary shareholders in Alibaba, now falls far behind the Chinese company that its investments helped to nurture.

The US media and American tech companies themselves have blamed their failings on the Chinese government’s strict supervision of and interference in their China operations.

Even if this is partly true, it cannot be the only explanation.

“Many attribute the American company failures to government regulations or favoritism. While these played a part in their failure, there were other more relevant reasons related to

GOING FOR THE TOP: Leading Chinese tech companies are getting multi-billion valuations in the US

the companies themselves,” according to Kaifu Lee, former president of Google China. And besides, why can other US firms, especially those mentioned above in other industries, manage to find success in China?

Meanwhile, China’s top internet companies are only going to get stronger. According to a recent study conducted by the World Bank, Chinese purchasing power will soon overtake that of the US, making it the world’s largest economy.

Despite the fact that an elephant is huge, it is most often the lion or tiger

Credit: Rolf Kleef

COLUMN: INTERNET GIANTS

that has the final say in the wild. The success of enterprises like Alibaba can be likened to the concept of genetic variation – only when there are a wide variety of successful companies will China’s voice be compared to the true roar of the dragon.

Mr. Zhao is executive editor at China's Economy & Policy, and co-founder of Gateway International Group, a global China consulting firm.

China Economic Review | July 2014

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FIT IT ALL IN: Cloud computing offers endless possibilities for companies to outsource IT and internet functions, but Chinese companies are stil unsure about it all

Grand dreams CAN FOREIGN COMPANIES CRACK THE CHINESE CLOUD COMPUTING MARKET?

COVER STORY: CLOUD COMPUTING

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lmost all of the six hundred and twenty million Chinese people and the hundreds of thousands of domestic firms that connect to the internet daily store some form of content online.

Social media platforms such as Sina Weibo and file sharing services are increasingly a part of daily life.

For the firms that provide these online services, start-up and operating costs can be high. The hardware and software that keep their businesses alive don’t come cheap. But as cloud computing gains traction in China business expenses are coming down. “We are able to quickly deploy a lot of services without spending an enormous sum of money in the early stage,” says Yue Pengyu, director of operations and maintenance at NQ Mobile, a Chinese mobile internet company that focuses on security and privacy products.

NQ Mobile is a client of Amazon Web Services, which entered the domestic market in December 2013 with a limited offering. Amazon is one of the main foreign players, along with Microsoft and IBM, that are driving the development of the cloud computing market in China. If they can be successful they will earn huge revenues and deliver the benefits that businesses in North America are already realizing. In their way stand national security issues, regulatory hurdles and a lack of market trust.

The next internet boom “The market itself, even without the foreign players, has exploded in the last year,” says Steve Mushero, CEO of ChinaNetCloud, a foreign-owned sever management and cloud computing company based in Shanghai. When ChinaNetCloud started running cloud services in 2008, there was virtually no competition, and even until last year, Mushero says, the industry had very few significant players.

China Economic Review | July 2014

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COVER STORY: CLOUD COMPUTING

AIMING HIGH: Microsoft has done its homework for cloud computing in China, following the rules closely and securing strong partnerships

Growth in China is coming from an explosion of data, digital media and web-based applications in a country with 618 million internet users as of the end of last year. Internet behemoths like Alibaba Group, Baidu and Tencent Holdings are pulling people online. China is the world’s largest smartphone market.

Cloud computing is reshaping how people live, work and do business. People increasingly use the cloud for everything from social networking to online shopping to filesharing. Companies access cloud services for tasks ranging from document editing and data backup to advertising, sales, and customer relationship management. A survey by North Bridge Venture Partners found that 75% of American companies were using cloud services in 2013.

Understanding the size and scope of the market is complicated by differing definitions. Broadly speaking, cloud computing can be defined as the practice of storing data and running software over the internet.

This includes cloud software, such as internet apps that allow companies to 18

China Economic Review | July 2014

track sales, and hardware, for instance the data centers that store information. Then there are “public clouds” that anyone can sign up to use and “private clouds” that are built by companies to keep others out.

Consequently, market valuations can vary wildly. Research firm Zero2IPO estimates that China’s cloud computing market will grow at an annual rate of 50% over the next few years and surpass RMB13.6 billion (US$2.19 billion) by the end of 2015. Wang Feng, manager of China Telecom’s cloud computing unit, sees market growth of 26% per year between 2013 and 2017, with a market value of RMB13.4 billion already at the end of 2013. State-run China Software Industry Association estimates the cloud computing value chain, a much wider definition, could be worth RMB1 trillion by 2015.

Global players are following Amazon and rushing in. Microsoft launched its Azure cloud computing platform in China in March while IBM recently entered the sector with its SmartCloud Enterprise+ system, serving mainly enterprise and gov-

ernment customers. Intel and Oracle have either launched their own or bought into existing cloud services in the country.

Foreign knowledge Amazon, Microsoft and IBM in China all offer what is known as ‘infrastructure as a service,’ one of three service models in cloud computing. It provides virtualized hardware, or in other words computing infrastructure. Yet they each have a differing approach.

AWS is a platform designed to run on economies of scale, which will gives clients the ability to provide services at the best available prices, said Justin Mallen, founder and CEO of Silk Road Telecommunications, a Hangzhou-based corporate telecom services provider. IBM is much more focused on the corporate cloud, while Microsoft is all about Microsoft products.

Amazon is the world’s largest provider of public cloud computing services. It currently offers a limited range of its AWS in China, allowing companies to purchase its comput-

COVER STORY: CLOUD COMPUTING

ing, database and storage services by invitation only. AWS has partnered with the regional authorities in Beijing and Ningxia. Under this arrangement, Amazon supplies the software, while Chinese partners provide local data centers, bandwidth and content delivery.

Microsoft has a stronger foothold in the Chinese market with its Azure service, which launched as a limited preview last June and went fully live this March. “We pride ourselves as the only multinational company that has a true public cloud service here in China,” George Yan, who manages Microsoft’s China cloud business, told China Economic Review in an interview in early June. Azure’s key selling point as a global provider is that any individual or company can sign up for the service, in contrast with AWS, which is not yet fully public. Amazon declined to comment

for this story.

Yan claims that Azure’s success lies in its unique partnership model.

Microsoft’s partner, Chinese tech firm 21Vianet Group, operates the service, running data centers in Shanghai and Beijing that deliver Azure, while Microsoft licenses the software. The Shanghai municipal government is also a party to the deal. Microsoft claims to have had big success in China so far. Among Azure’s customers are Coca-Cola China, which uses the platform for digital advertising, mobile games company LineKong Entertainment, which hosts top games on Azure, and state-run China Network Television, which will use Azure for this year’s webcast of the Spring Festival Gala, the most-watched TV show on earth.

IBM is also partnering with 21 Vianet Group, but unlike Microsoft’s public cloud it is working with the

For SMEs and startups, cloud services remove a huge headache Cloud computing is booming in developed markets thanks to demand from small and medium enterprises, or SMEs. With IT and the internet critical parts of almost any company these days, a service that can reduce costs is going to be welcomed.

By signing up to public cloud providers such as Microsoft’s Azure or Amazon Web Services, SMEs no longer need to buy servers or manage software and can outsource the expense and headache of maintaining a technical team to someone else.

Ireland-based O’Reilly Media estimates that firms can save up to 30% on IT costs over a three year period by employing cloud services rather than using on-site equipment.

The global market has exploded.

Almost one in three US firms use some form of cloud. China is catching up, albeit slowly. Microsoft says a large portion of the SME clients using Azure in the Chinese market are developers. Tech costs, paid incremen-

tally and moved to operational costs, are no longer a barrier to innovation. Chinese e-commerce firm Kuke Industry says that using Alibaba’s cloud unit is “much faster than our own server, and has saved us lots of money on tech and personnel.”

Technology startups in China, a growing scene in Beijing and Shenzhen, are huge users of clouds. These services give clients instant access to server power and enable them to instantly expand or shrink their pool of machines, paying only for what they need at any given point. All this makes it possible to launch a serious startup without serious capital. Whereas in the past new companies had to invest in expensive equipment in order to get off the ground, “the biggest line items in these companies now is rent and food... A decade ago, I don’t think you could write a line of code for less than US$1 million,” former Google executive Chris Sacca said in a media interview in 2010.

Chinese internet data service provider to host its managed private cloud service. A flagship project for the company is the development of a smart logistics center in the coastal port city of Ningbo, which once complete will enable more than 5,000 firms at the site to share data across the cloud.

In addition to providing services locally, the companies are also working with Chinese firms operating overseas. AWS already serves 5,000 Chinese customers outside of China.

The growing popularity of cloud services hasn’t gone unnoticed by local technology players. E-commerce giant Alibaba has launched Aliyun, the biggest cloud service in China, Tencent offers Q-Cloud and former Tencent executives have formed startup UCloud. With their local knowledge, strong ties to Chinese businesses through existing internet services and cost competitiveness they come to the market in a solid position.

Yet foreign companies have their own advantages that can’t be discounted. “The key strength of major global players are the richness of their product offerings, as well as the quality and experience servicing large scale clients,” said Charlie Dai, an analyst at Forrester Research in Beijing.

“The entry of global players will further impact, and actually has already impacted, the Chinese market.”

Heavy cloud These are exciting times for foreign cloud providers, but can they succeed in what looks like becoming an increasingly difficult marketplace?

Global vendors face a range of challenges in China – lagging infrastructure, a complex regulatory environment, a shortage of skilled personnel and geopolitical tensions. It’s also not clear that Chinese businesses will adopt cloud services on a large scale, let alone those provided by foreign firms. Whether Amazon, Microsoft and others can thrive will depend on their ability to navigate these obstacles as well as the willingness of Chinese companies to entrust their data to the cloud.

Microsoft is the only global China Economic Review | July 2014

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company that has managed to offer a completely public cloud service in China. This hints at the knotty legal and regulatory tangles that foreign firms must cut through in order to do business in a sensitive sector. Foreign companies looking to set up data centers or cloud services in China must establish a joint venture with a local firm. Not only do they have to take pains to avoid hosting illegal content, such as pornography and politically sensitive speech, they also have to contend with heavy-handed government measures, like the occasional “lockdown” in which companies are prohibited from moving hardware into or out of internet data centers. The most recent such lockdown lasted for 22 days in February and March, while big political meetings took place in Beijing.

Another issue for cloud companies in China is personnel. In an industry still in its infancy, companies have a hard time finding people with the requisite skills to operate a cuttingedge cloud service. “Running a data center is relatively easy,” says Mushero. “Running a cloud is much more operationally difficult; even Aliyun has had problems with that. Longterm that’s going to be a challenge.”

The government’s preoccupation with “internet sovereignty” poses a particular challenge for cloud service providers. Multinationals are finding that the only way to enter the Chinese market may be to completely segregate local from global operations. “What we have done in China is basically we have carved out an island of services that exist in China, that’s exactly the same as the rest of the world, but they don’t talk to each other,” says Microsoft’s Yan. “We purposely disconnected the China services from the rest of the world because of the rules and regulations here.”

In the past two months the issue of “internet sovereignty” has become entangled with a diplomatic flareup that could make life much harder for foreign, especially US, technology companies than it already is. The US government in May publicly named five members of China’s armed forc20

China Economic Review | July 2014

BRAIN POWER: Servers such as these in data centers across the country power the Chinese cloud system. Foreign companies like Amazon, however, do not deal with the hardware

“What we have done in China is basically we have carved out an island of services that exist in China, that’s exactly the same as the rest of the world, but they don’t talk to each other” - George Yan, Microsoft China es as suspected perpetrators of cyber crimes against US companies. Beijing reacted with fury. In a vaguely worded notice, state media said China will review all foreign IT products sold domestically and block any that fail to pass a new “cyber security vetting system” designed to weed out secret spying and surveillance activities.

Only a few weeks earlier the government banned state agencies from using Microsoft’s Windows 8 operating system, without making it clear why. Reports, which have not been

confirmed, also surfaced saying that state companies are being told not to use IBM’s servers.

The speed with which the above measures were rolled out and the lack of clarity on implementation mean that the possible impact on the cloud computing sector is hard to predict at the moment. However, the way in which foreign companies provide cloud computing services in China may make them less susceptible to any sharp or aggressive changes in government regulations.

As Mallen notes, Amazon and Microsoft are the middle layer in the cloud computing chain – they are neither service providers nor data centers. Such functions are sensitive and restricted to foreigners. Non-Chinese companies operating in cloud computing must have a local partner to do business in China. Amazon, Microsoft and IBM all offer services through licenses, partnerships and relationships with local entities. They do not run the entire cloud computing value chain. In the Microsoft partnership 21 Vianet is the contract holder responsible for protecting client data, something that Yan says the company has made very clear to the media and government.

Credit: Stan Dorsett

COVER STORY: CLOUD COMPUTING

COVER STORY: CLOUD COMPUTING

China’s dreams of IT dominance start in the cloud

POWERING MOBILES: Lu Zhaoxi (3rd right), CEO of Alibaba, attends the launch ceremony last year for yunos.com and six smartphones that run on the Aliyun cloud computing system developed by Alibaba

It’s hard to see what rice wine has in common with big data. But poor, mountainous Guizhou province in southwestern China, mainly known for the traditional liquor Maotai, is vying to be China’s main hub for data centers and cloud computing. According to Chinese media, the country’s big three state-owned telecom carriers have moved into the Guian New District, a development zone near the provincial capital Guiyang, since last October to set up data centers. These are clusters of networked computer servers that store and process vast amounts of digital information.

Joining them are over 100 hightech firms, including internet heavyweights Baidu, Sina and Sohu as well as e-commerce giant Alibaba. Lured

by Guizhou’s manufacturing industry, low electricity prices and mild climate – which makes it cheaper to keep buildings full of humming servers cool – plus a host of tax and other incentives rolled out by provincial authorities, these companies are looking

to cash in on the explosive growth of China’s digital ecosystem.

A data center boom is sweeping the nation. State-owned telecom provider China Unicom recently launched two huge data centers in Inner Mongolia’s Hohhot and Hebei’s Langfang, in addition to the facility currently under construction in Guizhou. The facilities will host a cloud service for government and enterprise customers, called WoCloud, which the company rolled out last December. China Telecom, too, is building a data center capacity in Inner Mongolia. News reports indicate that the facility will have 2 million servers, making it the largest data center of its kind in Asia.

In the meantime, Alibaba unit Aliyun, the largest cloud computing provider in China, is expanding at a rapid clip. Aliyun in June opened its first data center in Beijing, boasting 10,000 servers. Foreign companies, too, are seeking a piece of the action. IBM announced in 2011 that it would build a goliath information center in conjunc-

tion with Chinese tech firm Range Technology. Expected to be completed in 2016, the project in Langfang, serving local governments and foreign enterprises, will be nearly the size of the Pentagon at 6.2 million square feet.

Beijing recognized the potential of cloud computing for the first time in the Twelfth Five-Year Guideline (20112015), in which it was marked as a “strategic emerging industry.” This economic blueprint is an important tool with which to direct investment in key sectors. All of the above ties into the Chinese government’s goal of turning China into a global IT powerhouse. The endgame, as outlined in ambitious government plans, is to make the country an “innovation-driven country” by the 2020s and a world power in science and technology by 2050. “Efforts should be made to build our country into a cyber power,” President Xi Jinping said in February, after setting up a central leading group for “internet security and informatization” that he will preside over.

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COVER STORY: CLOUD COMPUTING

Nevertheless more needs to be done to overcome pre-existing anxieties in the local market about uploading company data to foreignrun clouds. “We won’t do that now because we don’t know if it is safe to do that for our data,” a spokesperson for Kuke Industry, a Shanghai-based e-commerce firm with annual revenues of US$1 million, told China Economic Review. “It is so hard to handle and control the situation if something unfair happens to us [when] working with a foreign company.”

The question of trust runs much deeper than just worries about foreign companies. In the West, governments and companies are more open to working with cloud providers. Last October AWS won a US$600 million contract with the US Central Intelligence Agency to build a cloud network. China appears to be less ready, partly out of a lack of experience or faith in outsourcing such functions.

“Yes, we do have worries [about cloud computing], such as if they are going to sell our customers’ data to others or if they are going to control us because we have to use their service,” said Kuke Industry.

“I don’t yet know that that’s something that people here are comfortable with,” says Mallen. “The big internet players in China like to build their own networks, they like to build their own data centers, they like to build their own systems. Where a Netflix will host on Amazon, I don’t know that a Youku would ever host on Amazon.” Youku Tudou is China’s largest online video provider.

Going skyward If global companies can figure out how to win the trust of the government and local companies, they will transform the industry. Indeed, the entry of big foreign brands is already shaking up the market, bringing healthy competition and global standards to a fast-evolving sector. Mushero sees the trend as a huge positive.

“The more competition, the lower prices, the better features, the higher standards, just the better off China 22

China Economic Review | July 2014

“I think the only key tectonic shift that ever may happen is if once again the Alibabas and the Baidus of the world decide to outsource their infrastructure” - Justin Mallen, CEO and founder, Silk Road Telecommunications is in general,” he says. “It also allows Chinese companies to use global standard tools and clouds, which

means then they can go global.”

The spread of the cloud also benefits Chinese companies, particularly small and medium enterprises. Businesses can use the cloud not only to store their data, but also to run their core management systems. To Mallen, the value proposition of cloud computing is “as simple as it gets.”

The cloud frees firms from having to buy their own IT infrastructure and hire their own technicians to run, maintain and troubleshoot all that hardware and software. Instead of spending many thousands of dollars on servers, a company might subscribe to cloud services for a few hundred renminbi per month.

Mallen says that cloud computing services can relieve the headache of upfront capital, server and service maintenance and staff problems.

“Your headache of what happens when it’s broken and you don’t have

Credit: Microsoft

COVER STORY: CLOUD COMPUTING

the right expertise in-house – gone.

One phone call and you fix everything.” By lowering the cost of critical infrastructure and making it more flexible and easier to use, cloud computing also promotes innovation.

“You also get more niche things,” says Mushero, “not only innovation, but [apps] that don’t make a lot of money and aren’t mainstream but are useful to some people.”

Yue at NQ Mobile acknowledges the cost savings. “Although we doubled the number of servers, we didn’t double manpower. We do massive operations by ourselves based on AWS. Basically, all we have to do is to press one button to complete the deployment of a group of servers. We don’t worry about where the servers are and what the configuration is, we are concerned only about its services.

Product research and development is the only thing we have to do.”

It previously took NQ Mobile around 15 days to start providing services to an overseas client, or three days if they were super quick. The job can now be completed in 20 minutes with AWS, Yue says.

Making it rain Cloud computing is still at its relative infancy in China. The demand fundamentals are seemingly there to forecast growth at similar levels to North America. Big foreign players have moved quickly to enter the country and are well positioned to influence the development of the local market.

Where analysts see more work needed is in firming up local offerings and having the flexibility to adjust to changing conditions.

AWS arrived in China first, but it hasn’t tailored its products carefully enough to meet domestic

requirements and still has to define its Chinese partners. Microsoft has built smart partnerships and overcome regulatory hurdles, noted Dai from Forrester Research, but faces the challenge of extending and enabling its partner ecosystem to have technical consistency.

Influencing the biggest change necessary for the market to achieve its full potential is likely beyond the ability of foreign firms. Deals with big companies offer the largest revenues, but they are fewer in number, said Microsoft’s Yan. A number of multinationals who use Microsoft’s Azure services in China are already global clients.

But the big money lies in providing services to huge Chinese firms.

Many of these are state run. The challenge in winning their business is two-fold: State-owned enterprises are slow to adapt to technological innovation and extremely protective of their data.

Until recently they were not allowed to sign contracts with outsourced data center services.

Although they might soon be permitted to buy computing as a service, there is no guarantee they would opt for a foreign provider. SOEs are often obliged to ink deals with Chinese firms, usually other SOEs. If large emerging private-sector companies, especially in technology and internet, can be persuaded of the benefits of public clouds instead of hosting themselves, then the market could move decisively. That would benefit the likes of Microsoft and Amazon.

“I think the only key tectonic shift that ever may happen is if once again the Alibabas and the Baidus and the Tencents of the world decide to outsource their infrastructure, said Mallen. “[However] I don’t see that happening anytime soon.”

“Maybe a Youku will do it first, maybe not. They’ve got a lot of legacy infrastructure already built in place that I’m sure they’re goning to keep using. But I’d say if mid-tier internet companies decide to shift to the cloud, that’ll be tectonic for the cloud business.”

China Economic Review | July 2014

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UNDER THE SURFACE: Remediation is going to be big business with so much land to decontaminate and is crucial to China’s urbanization

Ground wash With a fifth of its arable land contaminated China can’t afford to look the other way, but the country is struggling to put the incentives in place to start cleaning up

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weeping problems under the rug can make them disappear from sight for while. Chinese leaders, like their developed world peers, have felt a good grip on the broom for years. However, as they start to do more house cleaning of the economy, many nasty surprises are in store.

In this latest stage of development the heavy industries such as power generation and steel that created huge economic zones on the east coast are heading inland. As those factories move away, they leave with them a legacy of torrid environmental degradation. Poor agricultural practices from the overuse of pesticides have also laid waste to much terrain.

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China Economic Review | July 2014

According to a major recent official survey, up to 16% of soil is polluted and almost 20% of arable land is contaminated, About 8 million acres has been declared polluted beyond agricultural use – an area roughly the size of Belgium. With China supporting a fifth of the world’s population on only around 8% of its arable land, the country needs every last bit of farmland it has to feed its people. Land must also be cleaned up to accommodate new homes and residential communities springing up across the country in the wake of a frenzied pace of urbanization.

Beijing is waking up to this prob-

lem and realizing it can’t overcome it alone. The state is responding with new policies and increased investment, attracting foreign companies with much needed experience and advanced solutions. But the domestic soil remediation industry is not only lacking in terms of technology, there is an absence of rules and regulations: The required policy simply does not exist yet. Until that is done, and ways are found to get more private and public money into cleaning farmland, major social and health risks will stick around.

An invisible disaster To most observers the filthy air that

Credit: Lee Woodcraft

ECONOMICS & POLICY: CLEANING CHINA

ECONOMICS & POLICY: CLEANING CHINA

clogs major cities and rafts of dead fish cluttering waterways are the obvious signs of three decades of breakneck development. Toxic sludge pits are pretty illustrating as well. By contrast, soil pollution is often invisible – and in many ways worse.

Damaging contaminants have leaked into the soil across much of China. Among the most often found in tests is cadmium, which is known to cause lung and liver disease and may increase the risk of cancer. Pesticides from agricultural production are another major pollutant.

China’s food supply is under threat. Contaminants leech into rivers and aquifers, tainting the water supply. Cadmium doses in the soil are highest in regions that house mining and smelting industries, which often happen to be major agricultural regions too, Greenpeace noted in a recent report. Last year the government of Guangdong province shocked the public by declaring that 44% of rice samples had excessive levels of cadmium. Greenpeace warns of “arsenic rice.”

Acknowledging the severity of the problems is the first step for the government to come up with viable ways to tackle them. The official survey, conducted jointly by the environmental protection and land resources ministries, went some way to doing that. Never before had they publicly released data on this field that could be classified as a “state secret.”

Then there are signs that greater policy support for action is in the works, a key trigger for things to get done. Environmental authorities in March passed a plan to tackle soil pollution. But it’s still far too soon to expect brown fields to turn green in the near future.

Technical challenges Soil pollution is not only hidden from the eye; it’s hard for advanced equipment to detect and even worse to map. The degree of contamination can differ dramatically from one square meter to the next, requiring extensive testing to understand a single site, experts said.

The sheer scale of China complicates the viability of solutions.“The

average [remediation] project size in China is estimated to be about 150,000 tonnes [of soil],” said Stephen Clarke, vice president of business development at West Mountain Capital, a Canadian firm specializing in pesticide contamination that is working on remediation projects in China. “The largest site to have ever been remediated in Canada… was 125,000 tonnes. And there was only one of those.”

There are estimated to be 300,000 contaminated sites of widely varying size in China, said Clarke, who has seen proposed projects that exceed one million tonnes.

Treating this problem is simply beyond China’s current capabilities in a way that potentially inflates the problem. Soil remediation can be done on-site or off-site. Chinese companies usually go with the former, which involves digging up all the soil, trucking it somewhere, and typically burying or burning it. At minimum, this involves moving tens of thousands of truckloads of dirty soil, which invites spillage accidents.

Burying may simply result in moving the problem, and while burning can be done safely under the right controls, it can easily dump pollutants into the air if not managed correctly.

Foreign companies with decades of experience cleaning up their own homes first come with a different solution. Typically they either excavate, process and replace dirty soil on site, or undertake in situ treatment without displacing the earth at all. West Mountain Capital’s current project in Hangzhou, which is remediating the site of a former pesticide plant slated for urban development, involves on-site excavation.

The company is importing customized machines to do the job. While Clarke maintains that it’s tough to know what a standard project looks like in such an infant industry, the Hangzhou site is certainly not uncommon.

The inability of China to clean up its own mess is a boon for international operators. The country already represents more than 90% of revenue for West Mountain Capital. Demand is only going to grow, and if Beijing

pumps more cash into it, the returns could look even better. Separate estimates from Japan’s environmental agency and the state-run China Securities Journal value the Chinese remediation market at around US$18-19 billion per year by 2020.

A localized problem Cleaning up the soil will require more from foreign firms that just shipping over machines, however. They need to dig in for the long haul to have any real impact.

The technical challenges posed in China mean that a company has to to develop its local operations on a project-by-project basis. Every soil remediation project is essentially a local project: Soil and pollutants differ from site to site, and continent to continent. “There is a need to develop specific solutions because the soil and the land is different,” said Oliver Wu, president of Liaoning Huafu Group.

Huafu is working on a pilot remediation project with a Canadian firm.

Being forced to work on the ground has its benefits – it could lower the chance of intellectual property theft. This is particularly relevant to industries such as remediation that require advanced proprietary technology and equipment. Major international manufacturers of trains, autos and solar panels have seen local firms overtake them after copying their technologies used in joint projects.

“The intellectual property rests on how the remediation strategy is applied and managed, and how the unexpected is addressed. That’s critical,” says Bengt von Schwerin, Asia Pacific managing director of environmental services for AECOM, a leading global company in soil remediation. “It’s the experience that makes the difference. From a remediation perspective, that’s the difference between making money and losing the company.”

Von Schwerin also emphasized that implementing the all-valuable experience itself depends on a high degree of cooperation with Chinese firms and experts. Local players already understand the indigenous soil characteristics as well as the business and political scene – necessary China Economic Review | July 2014

25

ECONOMICS & POLICY: CLEANING CHINA

components to a profitable project.

All this impacts the way companies do business in this space.

AECOM’s offices operate as a wholly foreign-owned enterprise in China, but projects are often done as partnerships. At times AECOM takes the lead, at other times it assumes a supporting role. As von Schwerin says, it’s “horses for courses,” and in fact not all that different from doing business elsewhere in the world. Companies should adapt to the local conditions, soil and otherwise.

Only the largest foreign firms will have the resources to get through such a process. And yet despite their scale they have nowhere near enough capacity to take on an area the size of a small European nation, which some experts see as only the tip of iceberg of contamination.

Credit: Zhouyou Sifang

More policies, please China is not alone in facing the challenges of a major post-industrial economy. The US, Canada and Australia, at least in terms of geographical scale, faced similar problems.

“If you take the US Superfund mechanism for example, initially it created a lot of money for lawyers, but didn’t really remediate any sites,” said von Schwerin, referring to a program set up in the 1980s that allows the authorities to clean up polluted areas and also force responsible parties to act. “China has the benefit of understanding what getting it wrong

26

up front means.”

Whether policymakers are learning from those historical lessons isn’t clear. China still lacks a solid policy framework to cover remediation. The cleanup plan presented by the Ministry of Environmental Protection earlier this year still has to be approved by the State Council. Until it is there are only patchwork policies in place in addition to vague promises by officials. Beijing has been pledging to clean up the environment since the late 1980s. Critics are still waiting.

Some industry insiders are more optimistic. Von Schwerin sees remediation guidelines being developed and applied for rigorously in the next five years, and more strict enforcement happening in the next ten – seemingly a long time, but much shorter than the decades it took to build adequate systems in other countries. Until then, firms are free to try their hand at cleaning up.

“There aren’t that many clear barriers from the government right now, just a lot of encouragement,” notes Huafa Group’s Wu. Such freedom won’t do much to help address soil pollution through a systematic process, which is really what is needed. Under-regulated sectors are prone to breaking rules.

Clarke from West Mountain Capital pointed out that companies can offer a variety of remediation services in China across different price points.

But without set standards it is hard

NEW PASTURES: Cleaning up brownfield sites could give China more arable land to farm

China Economic Review | July 2014

to know whether a site that has been cleaned up is in fact actually safe for end use – especially when “safe” differs considerably from land that will support apartment blocks to land that will support crops.

The money flow Without policy and financial support from Beijing it will be a challenge to direct investment in remediation to agricultural land. But in order for that to happen, some serious conflicts that already exist between the central and local governments will need to find resolution.

As industry is pushed away from urban centers, land is being freed up for other use, mainly luxury and commercial development in cashstrapped cities, says Charlie Welsh, founder of XportReporter, an intelligence company. Local governments rely heavily on sales of land-use rights for their income. Overall, the economy is unhealthily dependent on property.

“There is a profit motive for them to actually invest there and get that land properly treated, as opposed to believing that ‘we must improve the farmland’,” said Welsh. “Anything that results in improving somebody’s bottom line is where you see the real investment taking place.”

The importance of tackling residential development sites shouldn’t be underestimated, especially given the continued push for urbanization. But fixing up farmland is a bigger public health issue, one that will need to be fixed, at least initially, with government cash and not private investment.

Who pays is debatable. Amid all the talk of state support for the sector there is little clarity on where the burden lies. Local authorities already shoulder much of China’s social welfare spending and can hardly afford to carry more.

Yet some public financing is starting to trickle through, says von Schwerin, although like any other major funding program it takes time to get to the actual remediation.

“It is a constant battle between land use and financing,” said Clarke.

“The challenge is large enough to be considered generational.”

ECONOMICS & POLICY: SOE REFORM

A GIANT MOVES: The group that was at the heart of China’s opening up is being thrown into the limelight again, this time as a model for SOE reform

Selling the state China shuffles the deckchairs of state ownership with Citic Group’s backdoor listing

B

osses at top state-owned enterprises, or SOEs, are all about control. On the occasions that they have had to let go, such as when big firms were listed on capital markets in the early 1990s, they fought hard to ensure outside investors got little say in management.

This is one of the biggest obstacles to shaking up governance and ownership of top SOEs, which the current administration is pursuing with a vigor not seen since those days. Back then President Jiang Zemin and his reform-minded Premier Zhu Rongji broke up thousands of state factories as they decisively smashed China’s “iron rice bowl.”

Nobody is anticipating a similarly brutal tactic during this latest round

of reform to be deployed on the SOEs that survived that blood bath.

Experts have come to expect tactical, nuanced moves that bring in capital or expertise but retain state control.

A landmark deal involving China’s first SOE to be run on marketlike principles has been heralded as a blueprint for state enterprise reform in the Xi Jinping-Li Keqiang era.

Shareholders in Hong Kong-listed Citic Pacific recently approved the company’s plan to buy the key operating assets of parent Citic Group for US$36 billion. These include lucrative stakes in financial services providers such as Citic Securities and Citic Bank.

“Listing most state owned assets in domestic and overseas exchange

[without relinquishing state control points to] the direction for future SOE reform,” Kai Hu, a senior analyst with ratings agency Moody’s in Hong Kong, told China Economic Review.

As the largest ever capital injection by an SOE into an overseas-listed unit, observers ponder the Citic deal’s significance. They note that Citic Group was at the forefront of Chinese economic reforms. Under the guidance of Rong Yiren, an illustrious “red capitalist” who won the trust of the Communist Party, the company spearheaded China’s first efforts to attract foreign investment within Deng Xiaoping’s plan to let market forces into a then undeveloped economy. Now it is the biggest finanChina Economic Review | July 2014

27

Credit: Kennyc

ECONOMICS & POLICY: SOE REFORM

DOING IT OUT WAY: Selling shares in SOEs in Hong Kong won’t make them play by market rules

cial conglomerate in China.

Experts see several positive outcomes from the news. The inclusion of private shareholders into Citic Group’s assets “will [also] at least improve its transparency,” noted Hu – not something SOEs enter into willingly. Listing in Hong Kong will also mean the assets are subject to more stringent disclosure requirements and better governance.

High profile institutional investors that bought into a share offering from Citic Pacific to fund the deal should also add a counterbalance to the state’s control. In the event that Chinese policymakers support projects that could “destroy the value of the company … there will be pressure from [its] financial shareholders,” Hu said. These include influential government bodies such as the National Social Security Fund.

The unique nature of the backdoor listing of Citic Group through the 28

China Economic Review | July 2014

asset injection, which is the practical result of the transaction, suggests this could be a model for future shakeups in the ownership of state enterprises.

So, is this the answer to arguably the biggest economic question facing the government since the 2008 financial crisis: How to retain a heavy government hand in SOEs even while making them more market-oriented?

Or in other words, how can the state spread prosperity without giving up control of China’s economy?

Leaders appear to think it is, at least for now. Many large SOEs including China Mobile and Sinopec have listed in Hong Kong and New York over the past two decades as part of government-designed restructuring and fundraising. The rebirth of capital markets on the mainland in the 1990s wasn’t designed to improve governance or profit investors.

With the economy sputtering policymakers recognize the benefits of

unlocking growth in SOEs that sit on juicy, strategic assets from energy to utilities. The language of the Third Plenum talked of the market having a “decisive” role in SOEs; this year more and more state projects have been opened up. But the need for public control remains critical.

Beijing has decided that state firms will continue to be the backbone of China’s economy, ratings agency Fitch said in a report in late May, and therefore “there is a low likelihood of the state relinquishing its control over the large and strategic SOEs in this round of reforms.” In fact, the central government will “solidify their status as linchpins of the economy” through preferential policies, an age-old habit that is dying hard.

The Citic Group transaction not only retains state control of Citic Pacific, but will actually increase it.

Beijing’s stake in the listed unit will rise from 58% at present to 82% upon completion. This doesn’t look much like reform anymore.

Critics of the state sector say it is inefficient. The purpose of opening up ownership to private, and eventually foreign, investors is to maximize returns on assets. Governance of state giants must also be tightened to prevent catastrophic financial losses.

Citic Pacific burned US$2 billion in 2008 after an executive made unauthorized currency derivatives transactions. Flabbergasted investors had believed that supposedly responsible management at a listed firm would reduce the risk of such an event.

This deal does not look like it will achieve either – or that it is even trying to. Neither will the market be given a chance to price SOEs fairly.

Beijing forbids state assets to be sold at below book value, regardless of the trading price of the firms that control them. State investors in Citic Pacific, such as the social security fund don’t like to lose money, but they are also operated at the behest of the state and are unable to ignore the directives coming from Beijing.

What initially appeared to be a step towards change now looks more likely a clever illusion as the arms of the state continue to grip hard onto government companies.

HIDDEN FROM VIEW: Banks are adept at obscuring their loan deals to circumvent lending quotas. This time interbank lending is the conduit of choice

Credit: Smartti1970

M A R K E TS & F I N A N C E : S H A D O W B A N K I N G

Out of the shadows Stringent regulations to curb informal lending could end up hurting the economy

N

ew regulations announced since early May seek to impose some semblance of order in China’s murky world of informal lending. Beijing wants shadow banking activities to be curbed to ease financial risks and push more money into the real economy.

But getting Chinese banks to follow instructions is an uphill struggle for regulators. Bankers like the profits they get from lending to desperate borrowers including private enterprises, local governments and property developers. Many of those loans look unstable. China had about US$30 trillion in shadow banking assets at the end of 2013, a third of which is risky and may pose problems, according to ratings agency Moody’s.

Even if lenders paid more heed to regulatory announcements, the most

recent measures alone are not enough to curb risky practices. And if they were, they could do more harm to the economy than good by stemming a vital flow of credit into the system.

Recent rules issued by China’s financial regulators have focused on the interbank market, a conduit for dodgy off-the-balance sheet loans.

In the West, interbank loans ensure banks hold enough capital to meet reserve requirements by the end of each day. Such loans in China, however, are a way for banks to get past strict caps on deposit-to-loan ratios.

By disguising corporate loans as interbank loans, Chinese banks can hold on to less capital while lending more. In other words, they raise leverage, and thus profits. Interbank assets in China surged 140% between

2010 and 2013. Smaller banks have become large net borrowers in the interbank market, expanding more quickly than their deposit bases would normally allow, thereby becoming more exposed to wholesale funding markets and a liquidity crunch.

Lenders have been able to get away with it because the interbank market is less regulated compared to other financial areas as such loans are seen as safer than corporate lending.

Chinese bankers use them to make high-risk but high-interest paying loans to property developers, small and medium enterprises and local government financing vehicles – entities that are otherwise unable to borrow directly from banks.

Previous efforts to regulate have been ineffective. Late last year the China Banking Regulatory ComChina Economic Review | July 2014

29

M A R K E TS & F I N A N C E : S H A D O W B A N K I N G

mission (CBRC) sought to close the existing loophole with Document No. 9, under which new rules would cap the volume of interbank loans by imposing stringent capital requirements. That could have led to an unwinding of interbank investments in shadow loan products, Standard Chartered said in a report.

Interbank lending continued unabated. Document No. 9 was not a set of regulations itself and, as such, had no teeth, said Sara Hsu, an economics professor at State University of New York New Paltz. Their profitable shadow banking operations under threat, bankers complained and pushed the document quickly into the background, she said.

China’s central bank, frustrated by the banking regulator’s unwillingness to rein in rampant shadow lending, fought a series of turf wars with the CBRC for greater regulatory control over the area, eventually winning out.

On May 16, the central bank and four other financial regulators jointly issued Document No. 127.

Although in the end a watereddown version of rules discussed by regulators last autumn, Document No. 127 nonetheless issued a set of concrete limits on interbank lending.

Interbank loans cannot account for more than a third of banks’ liabilities.

Bank-to-bank loans must be included in banks’ official loan quotas, recording them on their balance sheets.

The results have been felt immediately. “With increased regulation and supervision, off-balance sheet shadow banking credit creation remained subdued” in May, UBS said in a report.

Meanwhile, more money is being created via normal channels to fill the gap.

But other analysts worry that Document No.127 is not enough to curb shadow lending. Most of the interbank loans of big Chinese banks fall easily within the new lending caps so will not be affected. The contribution of interbank lending to overall shadow banking activity is also overstated, said Andrew Collier, managing director of Orient Capital Research in Hong Kong, noting there are many other sources of shadow financing.

Wealth management and trust 30

China Economic Review | July 2014

products are by far the biggest channels of shadow lending, together worth RMB20 trillion (US$3.2 trillion), according to Hsu’s calculations.

These investments are sourced from a large range of credits, including brokerages and insurers. Banks listed in Hong Kong only hold RMB2.3 trillion of such products, or 2.4% of their total assets, according to a note by Deutsche Bank. China’s main banks are all listed in the territory.

It is these shadow products that need to be regulated for financial risks to be better contained. In April the government ordered lending institutions to build up capital or scale back business in case of potential losses, but that hasn’t stopped the trust and wealth management industry from handing out loans to high-risk borrowers, said Hsu. Wealth management and trust products are effectively free to charge higher interest rates to borrowers than banks are. But only companies that have poor credit ratings or have been banned from borrowing from banks would accept such high interest rates.

Ironically, this high-risk lending has shielded these products from nosy regulators. A significant portion of trust and wealth management lending is made to local governments that have provided much of the backbone of China’s investment-led growth in the last decade.

After the central government clamped down on the practice of banks directly lending to local governments, officials started to instead borrow from trust companies. By 2013, shadow banking provided 27.8% of the RMB7.13 trillion borrowed by local governments, up from nothing in 2010.

Resistance from banks to limits on shadow banking, as well as regulatory in-fighting between officials at the CBRC and central bank, will likely delay any effective efforts to control wealth management and trust products, despite new guidelines. New rules are often watered-down: The caps on interbank lending were lower than many in the market expected.

Still, any moves to tighten shadow lending further could hurt credit crea-

tion, which would ripple throughout the economy. Developers, local governments and small businesses depend on such flows to stay afloat.

Total credit growth decelerated in May on new shadow banking curbs, despite a strong pickup in bank lending.

“China’s credit system is becoming increasingly more sensitized to the risks posed by a … credit event in the shadow credit market or regulatory tightening,” UBS noted in a June report.“As such, we continue to see heightened liquidity and credit volatility risks, particularly with regard to the latest new interbank business regulation.”

“The trouble is that the crackdown risks choking off credit to private firms, which rely disproportionately on shadow channels to finance their growth,” Thomas Gatley, an analyst at GavekalDragonomics, said in a June note. “China desperately needs more private investment to offset the slowdown in capex by inefficient state-owned enterprises in excess capacity industries” that until now has been an important driver of growth.

Real estate offers another danger.

Developers under pressure from falling house prices might not be able to make loan repayments to trust products, which still have significant exposure to property.

Investors that once overlooked the risk of shadow banking products for higher returns could pull out their money and tighten liquidity. Collier warns this could precipitate a further “deflation in property prices that underpin most of the economic activity in China.”

A weakening property market and insolvent developers threaten local government finances. Local government income is highly dependent on land sales, which, in turn, are decided by housing demand and housing prices. The fear that local governments might default on their debt means regulators are forced to tread lightly, said Collier.

Overzealous regulators could force a “bankruptcy of a municipality.” Central leaders in Beijing are not expected to countenance that.

2014ฤ7Ꮬఓ

营销大趋势 新黄金十年 打造绿色新地标

www.cerchinese.com

目录

ቤ਋‫ފ‬ 32 互联网乌托邦

33 ௡ୡ ॖෂ৺ူ 34 营销大趋势

જᄌ 36 智能投资热潮 37 新黄金十年 38 向低碳环保转型 39 打造绿色新地标

34

40 掘金汽车产业链

ॖෂ৺ူ ፦ሾࡍཋဴ

ఘᒦਪ 42 一位坚强的安徽妇女

互联网乌托邦

新观察

消费者主权可能只是一种幻觉 文 | 海潮

32

互

联网思维这个幽灵正在商业领域盘

真实地暴露在企业面前。消费者会通过各

有人乐观地预计，粉丝经济其实是消

旋。如今，小米手机的神话已被

种方式将需求传递给企业，关键在于企业

费者主权时代的产物。这个时代，不再是

视为互联网思维颠覆传统产业的范例，而

和品牌能否很好地捕捉到这种需求。

以品牌和产品为核心的单向垄断时代。

说到小米就不得不说“米粉”，没有后者

这种双向互动的起点是信息透明。有

互联网的未来果真如此乐观？不妨回

就没有今天的小米。粉丝是指忠诚度极高

人天真地预测，也许未来连个人隐私都将

顾历史。由于科学技术的发达和工业革命

的消费者。粉丝现象古已有之，但只有到

不复存在。消费者既没有了隐私，企业也

的成效，19世纪西方新启蒙思潮曾对“历

了互联网时代，借助低成本高效率地传递

就没有了不可告人的机密，如此则企业和

史向何处去”的问题抱持乐观态度。譬如

沟通信息的互联网，粉丝的市场价值被放

消费者之间也就建立起了信任度，消费者

英国历史学家黎德为欧洲的未来描绘了一

大，粉丝经济才成为可能。

也必然成为忠实的粉丝。再进一步，还要

幅天堂般的景象，他甚而宣称：“一旦我

以往消费者所看到的企业和品牌都

让消费者与企业及品牌达成情感共鸣，形

们理解了（自然）规律，我们就能够预知

蒙上了面纱。有人认为，也许将来所有信

成利益共同体。卖家与消费者融为一体，

未来。”

息都会透明，没有任何隐瞒。在透明世界

粉丝就会主动认同和维护企业和品牌。

以史为鉴，可以想象，没有个人隐私

里，企业对消费者所做和所承诺的一切，

如此一来，企业大概就可以一边看着

的社会将会怎样。互联网思维说到底是以

必定有迹可循，立辨真伪。企业再也不能

真金白银滚滚而来，一边像唐太宗李世民

商家盈利为目标的商业思维。消费者主权

通过广告或营销将面纱牢牢地裹在脸上，

那样志得意满地感叹着“天下英雄尽入吾

可能只是互联网乌托邦的幻觉，而乌托邦

而要向消费者袒露真相，这也会让消费者

彀中矣”。

是终将幻灭的。

China Economic Review | July 2014

聚焦

亚太地区航空公司运力持续上升

产业与市场

求实现多任务分屏处理，分屏功能将成智

尹文宣表示，中国互联网企业有三大IPO

全球航空公司运力持续增长

能手机卖点。如一款5.7英寸的中兴分屏手

交易所，分别为香港证券交易所、纳斯达

据OAG FACTS 最新数据，2014年6月全

机，可将屏幕分成两半，出租车司机能够

克证券交易所和纽约证券交易所。港交所

球航空公司运力继续保持过去三个月的增

同时看两个打车APP，不用来回切换。中

融资额大、上市条件较为开放。纳斯达克

长趋势。本月新增运力中超过一半来自亚

兴通讯手机品牌部总经理马文龙认为，智

证交所融资范围较宽，股票流动性较大。

太地区航空公司，该地区6月航班总座位数

能手机大屏化促进了分屏运行的需求，分

纽交所主要面向成熟企业。中国企业可以

较去年同期将上涨8%，相当于新增920万

屏运行可以实现一边导航一边微信或操作

根据自身特点选择合适的市场融资。

个座位。OAG是英国一家面向客运航空、

其他应用，市场前景看好。

奖励预算只会增加不会压缩

空运物流和商务旅行市场的全球性航班信 息和数据解决方案公司。据悉，印度航空

B2C双超多强格局更明显

高力国际于2014年房地产投资世界

将于7月加入星空联盟，其航线网络新增的

根据易观智库监测报告数据显示，今年第

（REIW）卓越大奖中再度获客户评选为

国际目的地就有2个中国目的地。OAG亚

一季度，中国B2C市场交易规模为1896亿

亚洲区最佳房地产咨询/顾问，系该公司

太区总监Mark Clarkson指出，这一网络

元，环比下降2.6%，同比上涨50%。从

连续第二年获颁此奖项。近期高力国际华

将使印度的旗舰航空公司及多个联盟成员

市场格局来看，随着腾讯入股京东以及双

东区人力资源及业务运作董事杜顺娣向本

从中得益。对于中国以及非洲地区不断增

方战略合作关系的建立，天猫、京东&腾

刊介绍了奖励旅游的情况：高力国际的公

长的交通量，印度相较中东在地理位置上

讯第一梯队更加巩固，“双超多强”的市

司奖励每年一次，覆盖整个亚太区员工。

是更好的中转点。印度航空的国内航线网

场格局更加明显。从主流厂商表现来看，

一般会选择较出名的旅游景点与酒店。旅

络覆盖全面，对希望将业务拓展至印度次

天猫的市场份额略有下降；京东、QQ网

游目的地必须具备休闲或度假性质及有特

大陆的星空联盟成员颇具吸引力。

购、易迅的市场份额略有上浮，京东&腾

色。酒店必须是五星或超五星级休闲性

讯（包括京东、QQ网购、易迅）合计市

质。一般会举行给个人和集体颁奖的晚

场份额加大，两超局面明朗。

会，全亚洲精英汇聚一堂，酒店场地必须

智能手机大屏化和分屏应用 美国IT行业分析师巴雷多（Alex Bar-

满足晚会要求。与当地品牌酒店会有长期

redo）近期撰文称，智能手机屏幕越做越

中概股赴美上市持续火热

合作，并会优先考虑。每年会选择不同的

大，未来两年有可能稳定在5至5.5英寸，

据清科私募通统计，5月中概股赴美上市持

目的地，近年来的旅游目的地有日本、新

而不会小于5英寸。中兴通讯手机产品体系

续火热，继4月达内科技、爱康国宾、新浪

加坡、泰国、越南、中国台湾和云南等。

PR部上海分部有关负责人表示，智能手机

微博、乐居在美上市后，5月猎豹移动、途

奖励旅游的目的是希望员工互相沟通和了

屏幕越来越大，3.5和5英寸是发展趋势。

牛旅游网、聚美优品、京东商城4家企业也

解，有些项目可以相互介绍与引荐。因此

消费者对手机功能的要求越来越像PC，要

成功进入美国股市。清科研究中心分析师

只会增加奖励员工的预算而不会压缩。

China Economic Review | July 2014

33

封面故事

营销大趋势 运用数字营销理念驶向新的价值蓝海

今电商格局风云变幻，有识之士无

当

基本不做广告投放，利用数字化媒体营销

不在捕捉发展大势，跨界、革新、

引爆“米粉”这样独特的群体，成为继苹

今年初有媒体披露，海尔集团发邮件

整合、创新，谋势而动，乘势而上。移动

果、三星之后在手机终端业务上盈利的公

称将不再向平面媒体投放硬广告，这被认

互联大势已至，传统营销无法满足精准转

司。

为是颠覆性事件。作为传统制造企业，海

化需求的渴望，越来越多的广告主将数字

李智表示，只有将数字业务和消费者

营销作为最主要的投放渠道之一，从营销

洞察排在第一优先级，才能将营销做得更

海尔家电产业集团数据运营总经理孙

到渠道，移动互联网浪潮逐步改变着商业

好。网络服务供应商，无论是电商还是游

鲲鹏解释道：“我们有两方面的思考：一

的未来。

戏厂商，都依赖对于数字消费者的理解做

个是无交互不海尔，第二个是无数据不营

尔数字化营销的思路是什么？

传统企业互联网化之势汹涌澎湃，

营销。而家电、金融、通信服务和产品生

销。”海尔主要思考四个问题：用户在哪

自媒体开启粉丝经济、社交营销时代。传

产企业，也在用互联网思维改造自身。让

里？用户要什么？海尔给用户什么？用户

统媒体如何进行自我革新？如何开展创意

消费者获得主权，将消费者放在第一位，

给海尔什么？

互动营销？新媒体将如何发展？互联网时

不再以产定销，而是以销定产，真正满足

海尔启动网络化战略，核心就是为用

代如何经营用户和融合资源？如何利用大

消费者需求，才有可能在营销互联网化矩

户按需设计、按需制造、按需配送的个性

数据进行精准营销？广告主、媒体资源应

阵中，获得领先者的位置。

化体验。海尔探索全流程用户交互，要做

如何利用数字营销理念，驶向新的价值蓝 海？在2014易观第七届数字营销大会上， 易观智库、海尔家电、新浪微博、招商 银行、巴士在线、奇虎360、百度垂直搜 索、风行网、本来生活网、易传媒等业界 知名企业代表和顶尖数字营销专家们汇聚 一堂，把脉时代大趋势，探索电商企业如 何进行跨平台营销。

颠覆无底线 一些互联网思维拥趸宣称，未来不需 要营销了。营销会被颠覆么？营销是不是 真的没有价值了？营销的价值需要通过什 么渠道释放出来？ 易观智库首席分析师李智提出“颠覆 无底线，价值造重生”。营销盘子很大， 全球广告市场规模5000多亿美元。中国市 场近年已经超过日本，成为继美国之后的 第二大广告市场。还有更大的前景就是14 亿潜在数字消费者，他们在各种数字终端 的覆盖之下。经过数字化洗礼的消费者， 已成为数字广告市场的主要受众。中国数 字广告市场不断颠覆着今天的千亿级市 场，并诞生了一些新品牌，比如小米。李 智认为小米是颠覆传统营销的典型。小米

34

全流程交互

China Economic Review | July 2014

引入互联网思维，让业务不断升级和腾飞

营销大趋势

到“无数据不营销”。海尔去年推出天樽

移动化应用

200亿元规模。作为手机游戏首选的移动

空调，从外观到命名都来自用户交互，甚

包括互联网产品和服务在内的各种应

应用分发平台，奇虎360手机助手副总经

至不同型号定什么价格都是在网上与用户

用可能都是媒体，比方手机安装的APP也

理郭子文表示，对于手机游戏营销，360

互动时，由用户提出，再通过大数据挖掘

在以它的方式向用户传播着信息。李智如

扮演发行方角色，负责全方位营销。360

和分析，预测大部分客户可能接受什么样

此认为。

运营团与每款游戏都会有紧密的配合，对

的价格。天樽营销没有硬广只有交互，世

微信和微信公众平台的使用者日众，

产品做技术植入，包括策划符合360玩家

界杯期间通过中央五套电视进行交互，扫

诸多企业在进行着微信营销。招商银行通

特质的运营活动，每个游戏平台的属性都

描二维码参与互动。在用户参与过程中，

过对CRM技术的重视，将固有优势带入微

不一样，如何更清晰地了解所在平台的用

通过移动终端征得用户的同意采集需求，

信，而不是简单地以传统营销来嫁接微信

户属性、喜好程度和特质，进行针对性

在此基础上精准投放用户可能感兴趣的信

资源。

的活动，这是做好平台发行非常重要的

息。孙鲲鹏认为数字不等于数据，在企业

新浪微博今年4月成功登陆纳斯达

方面。360做发行游戏平台强调“乙方心

经营过程中，每个节点都有数字，只有融

克，证明了微博的独特价值。在移动营销

态”：游戏开发者是甲方，360则做好游

合连接才会成为数据。而数据也不等于信

时代，微博能扮演怎样的角色？负责全国

戏分发和运营，帮助游戏开发商挣钱。

息，只有数据挖掘才会得到信息。

品牌销售的新浪微博副总裁艾勇表示，从

善谋势者胜

海尔30年熟悉的是工人、销售、渠道

去年第四季度起，新浪微博财报就不再披

等，孙鲲鹏引用黑格尔“熟知非真知”的

露注册用户数，因为用户数没有太大意

首批获得虚拟运营商牌照的巴士在线

观点说明，现在最需要熟悉用户在移动互

义。核心关键指标是DAU，即每天使用微

董事长王献蜀指出，不管是广告主还是媒

联网时代的行为和属性，一切行为应从用

博的用户量是多少。现在的数据是6700

体和营销服务公司，移动化是绕不开的话

户出发。

万，而微信的DAU估计在1.5亿甚至更

题。互联网公司在下沉，在找线下资源，

高。但从另外角度来看，日常的移动新闻

而传统企业也在用互联网手段和服务模式

客户端，有的DAU连1000万也没有。新

转型为互联网公司。新浪微博是媒体属性

浪微博在移动端仍然扮演着重要角色。

的社交媒体平台，现在也在转变，如何转

新浪微博在二三线城市的用户增长非

向营销？应该换一种思维。他认为，未来

常快，想要获得稳定的用户增长，低线城

经济是粉丝经济和电商经济，每家公司都

市很重要。艾勇认为，二三四线城市和年

是电商和互联网公司。

轻人群为移动互联网市场增量作出主要贡

易观国际最早提出“互联网化”的概

献。而一线城市用户的绝对数量没有那么

念。易观国际高级副总裁、易观智库执行

大，忠诚度很低，付费意愿不强，抱怨也

总裁刘怡女士表示，易观将互联网化划分

特别多，所以不是最理想的用户。

几个层次，第一是营销互联网化，第二是

移动互联网使营销产生了哪些变化？ 艾勇表示，每条微博对于广告主来说就是

渠道互联网化，第三是产品互联网化，第 四是运营互联网化。

创意，可以用微博触达消费者，用内容型

很多企业在部署互联网的过程中都会

广告来触达：一条微博140个字，可以带

在这四个方面不断积累经验，不断尝试、

视频和图片，有非常多的创意和空间来帮

创新，引入互联网思维，让业务不断腾飞

助广告主展示创意。他指出，微博端有几

和升级。而在这个过程中，最重要的就是

个数据非常重要，用户单向关注其实特别

要把握住“势”。刘怡表示，今天去做营

有价值，通过关注什么样的账户，非常清

销，已经从操之在我，发生了转变，不再

晰地展现了自己的偏好。第二是兴趣，用

以品牌和产品为中心，而要逐步转到以用

户在微博平台上主要是发微博转微博，这

户为中心。而在满足用户为核心的营销体

些微博的关健词展示了他的兴趣所在。第

系里，还有大数据的趋势和移动之势，移

三是时空场景，用户在不同时空使用微博

动互联网改变了PC互联网的营销本质。

提供了很多的洞察。 手游营销成为下一个追逐热点，奇 虎360预估，今年手游行业应该能达到

当今互联网潮流，顺势者昌，逆势者 败，惟有善谋势者才能乘势而上，不谋势 或不善谋势者，必然会落伍淘汰。

China Economic Review | July 2014

35

话题

智能投资热潮 智能家居蕴藏着千亿级市场

智

能产业正在掀起新一波投资热潮。 智能家居被认为蕴藏着千亿级市

场。在智慧城市建设进程中，物联网技术 在建筑领域不断发展，智能家居深入住户 家中，在社区信息化、改善居住品质、提 高物业服务质量等方面将发挥更大作用。 目前主要智能家居企业的市场占有率 达40%左右，兴天下、安居宝、慧居智能 率先推出智能家居终端，在行业中拉开数 字化序幕。数字化萌芽初期，少数有实力 的企业在朝阳产业中发挥引导作用，投入 大量的精力、物力培育市场。企业引导消 费的模式在数字化技术发展初期推动了行 业发展。 清科研究中心《2014年智能家居行 业研究报告》从行业发展现状，业内企业 概况及投资风险与机遇角度描述了智能家 居行业的沿革、发展与趋势。 根据清科研究中心不完全统计，去年

未来的智能家居将会升级为智慧社区的有效组成部分

1月到9月共发生智能家居行业投资案41 起。已披露融资额3.66亿美元，已披露累

今年小米春季发布会上，正式推出了

性。平板电脑、小米手机、小米路由等与

计融资额7.7亿美元。该阶段投资主要分布

小米电视2代和小米平板。易观智库分析师

小米电视之间的无缝连接构建出家庭终端

在美国，共发生27起。企业主要集中于家

徐昊认为，小米两款终端设备，为其终端

生态的闭环，为用户打造出更好的多屏协

电智能操控；水、电、暖气等能耗管理；

生态构建打下了坚实基础。同时也显示，

同娱乐生态服务基础。

空气、水净化设施；垃圾智能处理；在线

小米布局多屏终端生态，全领域进军互联

未来社会转型，需要信息化增长点。

节能与环保服务社区；防灾减灾；节能建

网化生活。两款小米路由设备的发布为其

清科研究中心分析师金恩廷认为，经过10

材制造与节能建筑设计开发等环节。由数

日后发展智能家居打下基础，而在现阶段

年快速发展，平安城市、智慧城市投资和

据可见，智能家居与新能源、新材料、清

智能化远没有达到用户所期望的状态，小

应用实施已经达到一定规模；通过社区信

洁科技、移动互联网等行业互促互进，硬

米电视在现阶段理所当然的成为了客厅第

息化，促进城市的信息消费，带动地区经

件创新是其中的重要因素。此外，智能家

一智能家居。小米电视此次配备更新的

济发展，正成为继软件和动漫产业之后，

居的建设与高效的市政管理、公共服务密

MIUI TV操作系统和独立的小米发烧级音

各地政府致力扶持的下一个重点。

不可分。

响设备。从其更新结果来看，小米现阶段

典型案如NEST2013年获得8000万

36

更注重于打造视听体验的极致效果。

传统的智慧城市应用以数字电力、 数字城管等政府应用为主，智慧城市的应

美元融资，今年被谷歌以32亿美元收购，

徐昊表示，目前很多用户还没有培

用如何真正落地，如何真正为城市居民生

国内如BroadLink获得1000多万元融资。

养出在智能电视上使用应用的习惯，更主

活方式服务，正是行业萌发突破的下个焦

今年初，CES、三星、LG、海信、长

要的行为还集中在通过电视去看丰富的视

点。金恩廷预计，未来的智能家居会升级

虹、海尔等传统电子和家电厂商集中展示

频资源。小米正是很好地抓住了这点市场

成为智慧社区的有效组成部分，功能和应

家庭互联网概念产品。接着，谷歌斥巨资

特征，在用户目前常用的功能上打造极致

用范围将得到极大的延伸和扩展，也将为

收购NEST，拉开智能家居的投资热潮。

效果，以加强现阶段用户对小米电视的黏

行业带来新的增长机会。

China Economic Review | July 2014

话题

新黄金十年 当前正是私募股权投资最好的时机

在

新经济形势下，私募股权投资格局

住风险门户”。关键在于打破垄断，让民

济形势下，私募股权投资存在新的变化和

将会如何分化？改革进入深水区，

营经济重现活力，这才是未来希望所在。

机会。如80后将取代70后成为核心劳动力

人口结构转型，消费行为的改变，将会为

相对而言，达晨创投创始人董事长刘

私募股权投资带来哪些新的机会？IPO重

昼比较乐观，他预测今年中国经济还将保

启为私募股权推开大门，迎接回归，暴利

持7%左右的增速。反腐对中国经济的长期

外界市场的变化，使众多创新企业开

似乎远去，价值投资正在坚定地走来。近

影响有利。中央政府明确提出要提高居民

始在技术、商业模式、体制上进行创新。

期，中国PE界最重要的峰会之一，诺亚财

收入。中国资本市场不会那么悲观，因为

日趋成熟的资本市场，也使私募股权投资

富领军者系列论坛私募股权投资高峰论坛

已经有7到8年熊市。他认为现在投资穿越

的退出通道增加。新兴产业的快速发展，

再次召开。

周期型的PE，未来收益还是可以预期的。

涌现出一大批创新企业，持续的创业潮将

和消费群体，人口老龄化，以及随着人均 GDP持续上升所带来明显消费结构变化。

造就更多杰出的新兴产业企业。

中国经济将进入风险集聚期，瑞士

“我们研究部认为，中国有可能进入

信贷董事总经理、亚洲首席经济分析师陶

明斯克时刻，也就是部分经济已经进入泡

私募股权投资正在回归价值投资的

冬认为，2014年中国是3个R：倒退(Re-

沫破灭的前夜。”诺亚（中国）控股有限

本质，聚焦专业化。殷哲称，像目前移动

treat) 改革(Reform) 风险(Risk)。春节期

公司董事局主席兼CEO汪静波表示，

互联网和互联网金融的发展，大有取代传

间销售增长特别疲弱，GDP不再是政府的

对财富管理而言这是很大的挑战。中

统行业的趋势。国内经济结构的转型在加

主要指标。同业拆息率上升，加大了企业

国经济的希望和光明在哪里？汪静波指出

速，行业的洗牌和分化将加剧，基金管理

融资的成本。人民币汇率波幅大幅上升、

今后20到30年的四个趋势：一是老龄化

人更加专业化和专注化，回归价值投资成

房地产总体市场价格仍在上涨，土地出售

后，养老产业、健康医疗和财富管理需求

为方向。

量、房地产销售量出现下降。影子银行规

增加；二是随着新经济的发展，行业的变

私募股权行业也存在几大趋势。比

模激增，系统性风险正在增加。2014年下

化，PE/VC也得到相应发展；三是电影产

如：外资机构持续双币策略，本土机构持

半年至2015年上半年将是信托资金偿还的

业和文化产业蓬勃发展；四是城镇化带来

续尝试美元基金；行业聚焦明显，主要集

下一个高峰期。

的机遇。诺亚财富对投资组合总体的建议

中在TMT、医疗健康、消费服务、先进制

是“全球化配置”。

造&清洁技术等领域；行业新品牌、新团

对中国投资者来说，最近这段时间， 陶冬认为最重要不是投资收益，而是“守

诺亚财富联合创始人殷哲表示，新经

队不断涌现。 随着IPO重启，私募股权投资开始吸 引投资人的眼光。在长达近12个月的IPO 暂停期和高达800家的待上市企业的排队 中，私募股权行业也经历了一次“市场严 冬”。很多没有清晰投资策略、没有投资 和投后管理能力的基金，被持续不断的亏 损清理出市场。而大量“关系型”和“投 机”型基金被从市场清理出去以后，价值 投资理念将获得全市场的认可。 经受市场的洗礼，更为成熟和高效 的私募股权投资时代正在来临。而这正为 下一个黄金十年的新高速增长期，做好了 准备。很多早期的投资人也在迎来硬指 标—丰厚的预期赢利。对于中国很多投 资人而言，当前正是私募股权投资最好的

早期投资人正在迎来丰厚的预期赢利

时机。

China Economic Review | July 2014

37

话题

向低碳环保转型 北外滩绿色建筑项目树立了可持续发展的典范

市滨水港区怎样实现功能重塑？如

城

因地制宜、以人为本、历史传承、文化延

的指导下，积极发挥作用，为推动上海绿

何走好绿色低碳、节能环保的可持

续的开发原则，创新性地集中应用了多项

色建筑发展做出更大贡献。

续发展之路？北外滩绿色建筑项目树立了

绿色建筑规划理念和节能技术。包括集中

上海国际航运服务中心常务副总经

一个典范。在6月27日召开的上海北外滩

式能源中心，采用了江水源热泵与冰蓄冷

理吴鹏程在发言中表示，北外滩从上海最

金融航运中心绿色建筑发展论坛上，住房

技术相结合的冷热源方案，实现区域的统

早的开埠码头发展到上海最繁华的物流岸

和城乡建设部建筑节能与科技司韩爱兴副

一供冷/供热。此外还运用双层玻璃幕墙设

线，再经历了仓储物流行业的转型调整，

司长向上海国际航运服务中心颁发了“中

计、地板送风、地道新风降温系统、人工

直至现在重新成为充满活力、焕发勃勃生

国绿色建筑三星认证”证书，上海国际航

港池与游艇码头设计、中庭采光设计、地

机的城市CBD，都紧跟着上海这座城市

运服务中心开发有限公司董事总经理贺斌

下空间自然采光设计、港池水及中水综合

发展的脉搏和趋势。绿色低碳、节能环保

吾先生代表企业接受了此项证书。此前，

处理与回用技术、雨水收集与回用技术、

是北外滩功能转型过程的重要原则，创新

上海国际航运服务中心已先后获得美国

建筑智能系统等多项绿色措施。

性地集中应用多项绿色建筑规划理念和节

LEED、英国BREEAM绿色认证，成为全

上海市绿色建筑协会会长甘忠泽在论

能技术，在节约项目运营成本、提升项目

国第一个同步取得三项高等级绿色权威机

坛发言中指出，在上海创新驱动、转型发

品质的同时，为节能减排作出了应有的贡

构认证的建设项目。

展的关键时期，北外滩这个老港口、老码

献。上海国际航运服务中心将会继续沿着

上海国际航运服务中心与周边的上海

头集聚的地区，结合时代发展的主题，成

节能减排、低碳环保的可持续发展之路探

港国际客运中心、海门路55号地项目均位

功实现了功能转型、产业升级和区域经济

索下去。

于北外滩滨江核心地段，与陆家嘴隔江相

的新发展，正在建设成为生态、环保、绿

上海市城乡建设和管理委员会副主

望，拥有近2公里黄浦江滨江岸线。项目

色的新兴城区。上海市绿色建筑协会将在

任裴晓为上海国际航运服务中心西块工程

由上海国际港务集团、中国中化集团方兴

推进新型城镇化建设中，将北外滩作为绿

颁发了“上海市建筑节能示范工程”的奖

地产共同投资兴建，总建筑体量近150万

色建筑示范性项目加以推广，也希望绿色

牌。上海市绿色建筑协会会长甘忠泽为北

方，计划于2017年全部建成。项目遵循

建筑行业的相关企业在政府相关管理部门

外滩的4个重点项目（上海港国际客运中 心、上海国际航运服务中心、海门路55 号地项目、北外滩滨江绿化工程）颁发 了“华东地区绿色建筑基地”的奖牌。本 次论坛由上海市绿色建筑协会、上海国际 航运服务中心开发有限公司主办，以“城 市滨水港区功能重塑与可持续发展”为主 题，国内外专家学者和企业机构代表上百 人济济一堂。同济大学绿色建筑及新能源 研究中心常务副主任谭洪卫教授在演讲中 强调，绿色建筑要做好整体规划、整体设 计，建立并完善全生命周期建筑能效评价 体系。他还透露，住建部正在研究建筑能 效提升工作，未来可能将出台更严格的绿 色建筑高标准。据悉，在国务院批复《绿 色建筑行动方案》后，上海市最近也通过 了绿色建筑三年行动方案，向绿色低碳、 节能环保能转型已是未来城市发展的必由

上海市绿色建筑协会会长甘忠泽为北外滩的4个重点项目颁奖

38

China Economic Review | July 2014

之路。

话题

打造绿色新地标 专访北外滩绿色建筑项目开发领军人贺斌吾先生

亚

洲最大绿色建筑商务办公楼群正在 上海虹口北外滩崛起。这个由上海

国际客运服务中心、上海国际航运服务中 心和星外滩中心等组成的绿色建筑集群， 在国家和上海市全面推动建筑节能减排、 推进绿色建筑行动的大背景下，已成为引 领城市发展走向的绿色新地标。 北外滩绿色建筑项目开发建设的领 军人—方兴地产执行董事兼副总裁、上 海国际航运服务中心开发有限公司董事总 经理贺斌吾先生简要介绍了项目的区位优 势：位于虹口区南部滨江区域，坐北朝 南，面水朝阳，西向外白渡桥与老外滩相 贺斌吾先生

连，南面与陆家嘴金融贸易区相望，与外 滩、陆家嘴共同构成“黄金三角”。 北外滩是老港区和老码头集聚的地 段。近10年来，通过上述几大重点项目的

同供冷，可以减少白天用电高峰时的用

千家国内外知名航运、金融及经贸企业。

电，达到城市用电削峰填谷的作用。

一些有意向入驻的跨国企业会对绿色认证

建设，完成了城市功能的转型。擅长商业

在这寸金寸土之地，大气而精致地建

运作、富于创新精神的贺斌吾在其中起到

设了两公里超长观景岸线和9万平方米的

了领军作用。

超大滨江绿地，为业主和市民创造了亲水

这位拥有逾20年房地产开发经验，多

提出要求；而不少国内企业因为缺乏绿色 建筑理念，对绿色措施将信将疑。

在北外滩功能转型过程中，绿色低

和宜人的滨江休闲场所。对这一大手笔之

次荣获上海市重大工程实事立功竞赛（建

碳、节能环保是贯穿其中的一条重要原

作，贺斌吾的想法是：“我们是国企，理

设功臣）奖的领军人士感叹道，很多开发

则。贺斌吾说道：“为积极响应国家和上

应为改善城市环境，提升市民生活质量，

商宁可投巨资高价竞拍土地，却不愿在绿

海市政府的号召，我们的项目从一开始就

承担更多的社会责任。”

色措施上多花钱。根据测算，北外滩项目

追求人与自然的协调，从开发设计到建设

在规划设计中，将防汛岸线与建筑相

在绿色措施上仅增加了1.5%的开发费用，

过程中全盘考虑绿色建筑理念，细致落实

结合，合理开发城市地下空间。还运用了

而节约的资源和能源则远远大于投入的成

绿色建筑技术，旨在改善滨江地区自然生

双层玻璃幕墙设计、地板送风、地道新风

本。经济效益显著，既实现了节能减排和

态环境，创造绿色的办公休闲环境。”对

降温系统、人工港池与游艇码头设计、中

低碳环保，又体现了社会责任，开发商何

于具体的绿色措施，他是如数家珍，娓娓

庭采光设计、地下空间自然采光设计、港

乐而不为呢！

道来。

池水及雨水中水综合处理与回用技术、建

如集中式能源中心，利用江水源热泵

筑智能系统等多项绿色措施。

国务院办公厅于2013年1月批复了 国家发改委和住房城乡建设部《绿色建筑

与冰蓄冷技术相结合的热源方案实现区域

项目的开发建设得到了政府管理部门

行动方案》，要求全面推进绿色建筑行

的统一供冷/供热。夏天，利用黄浦江水作

的鼎力支持，贺斌吾指出，推进绿色建筑

动。上海市最近也通过了绿色建筑三年行

为空调的冷却水，可以高效地达到制冷目

行动，政策支持是关键；此外，还须向全

动方案，积极部署推动建筑节能减排和加

的，大幅度降低空调能耗，节省能源；而

社会大力推广绿色建筑理念。

快绿色建筑的发展。贺斌吾表示：“我们

冬季，用黄浦江水则作为水源热泵热源，

上海国际航运服务中心是国内第一个

将会以此为起点，继续探索走一条绿色低

为建筑室内供暖，节省能源。采用冰蓄冷

“三证齐全”（美国LEED、英国BREE-

碳、节能环保的可持续发展之路，为推动

技术，利用夜间低谷负荷电力制冰储存起

AM绿色认证和中国绿色建筑三星认证）的

上海绿色建筑快速有效的发展做出更大

来，白天用电高峰时溶水，与冷冻机组共

绿色建筑项目。北外滩项目区域内入驻几

贡献。”

China Economic Review | July 2014

39

话题

掘金汽车产业链 探索中国汽车产业链新的投资机遇 文 | 薛俊 胡莹 全球经济缓慢复苏、弱势增长的

在

个国家和地区都已颁布了儿童乘车安全的

大环境下，2013年中国汽车产

相关法规和儿童安全座椅标准，且安全座

销2211.7万辆和2198.4万辆，同比增长

椅普及率都达到了90%甚至更高。中国已

14.8%和13.9%，连续五年成为全球最大

高度重视这个问题，并计划将强制使用儿

汽车销售市场。在全球汽车制造业的市场

童约束系统纳入法律。一旦儿童安全座椅

份额从2000年的3.5%提高到26.4%，成

质量标准出台，纳入法规强制使用，能满

为名副其实的世界汽车制造大国。据麦肯

足中国强制性产品认证的儿童安全座椅生

锡咨询公司预测，全球汽车市场重心将进

产企业将有更大的市场。

一步向新兴国家转移，到2020年中国乘用

车内空气污染也是大家关注的一个焦

车销量将年增8%，对全球汽车市场增长的

点问题，《乘用车内空气质量评价指南》

贡献率将达到35%，包括金砖国家在内的

有望升级为国家强制性标准。业内专业人

新兴市场在全球销售中的比重将从2012年

士透露，预计在未来2-3年内，车载空气

的50%提高到60%。这为中国的汽车制造

净化器将形成超过100亿元的规模，符合

业带来发展契机。

新国标要求的车载净化器生产企业将得到 受益。

新发展商机

充换电设施领域蕴藏着投资机会

改善和扩大海外事业，在增强产品线的同

中国汽车保有量的迅速增长带来了 新机遇，在汽车产业链中，无论是设计研

大对高压共轨技术的研发，这将为生产高

时，也将对现有的供应链进行调整。这对

发、零部件制造，还是在后市场领域，都

精密度柴油燃料喷射系统部件企业带来更

掌握了低成本、高性能新技术的零部件企

有着新的发展商机。

多利润。

业也提供了新的商机。

标准法规日益严格，在为核心技术零

又如安全类零部件，2012年新版

部件供应商提供发展空间，同时也将带动

GB 7258《机动车运行安全技术条件》出

一些新兴零部件行业迅速发展。为提升传

台，本次修订的目的主要为提高车辆运行

作为国家战略性新兴产业之一，新能

统汽车产业竞争力，中国正在加快制定、

安全性，因此提高了重点车辆的安全装置

源汽车产业蕴藏着广阔的投资机会。2012

推出更严格的排放和油耗标准以及安全标

配备要求。如对半挂牵引车和总质量大于

年7月，国务院印发《节能与新能源汽车

准等，希望以此构建与发达国家比肩的标

等于12000KG的货车、危险货物运输车

产业发展规划（2012~2020年）》，明确

准体系。随着强制性国家标准日益完善、

要求装配符合规定的防抱死制动装置、缓

了十年内中国新能源汽车发展的总体目标

严格，与排放、汽车安全相关的零部件

速器（或其他辅助制动装置）和汽车行驶

和阶段目标，并对新能源发展路线及扶持

行业将得到大力推动，除传统关键零部件

记录仪等安全装置；车长大于9m的公路

政策提出了明确要求；2013年9月，四部

外，一些新兴的零部件行业也展示了良好

客车、旅游客车等应装配限速装置；发动

委联合出台《关于继续开展新能源汽车推

的投资机会。

机后置的客车应装配发动机舱自动灭火装

广应用工作的通知》，启动新一轮新能源

置。随着标准的实施，缓速器、限速器、

汽车推广应用政策，继续推动新能源汽车

行车记录仪等零部件行业将迎来春天。

的市场规模………随着一系列支持新能源

以发动机零部件为例，为减少汽车 尾气排放，促进大气污染防治，2014年4

40

此外，本土系整车制造商基于收益

新能源汽车

月，工信部第27号公告表示，定于2014年

近年来，中国家庭乘用车保有量的增

汽车产业发展的扶持政策的发布，显示了

12月31日废止适用于国家第三阶段汽车排

加，儿童乘车安全问题日益突出，但目前

政府大力培植发展节能与新能源汽车的决

放标准柴油车产品《公告》，2015年1月

儿童安全座椅在全国只有不到1%的使用

心，后期有望继续得到更多的政策支持。

1日起国三柴油车产品将不得销售。这意味

率，仅有上海一地将使用儿童安全座椅纳

2014年，《乘用车企平均燃料消耗

着从2015年起将全面实行国四排放标准。

入当地的青少年保护条例中。纵观全球，

量核算办法》等节能减排法规与《大气污

为应对标准提升，整车、零部件企业都加

瑞典、美国、加拿大以及日本等超过90多

染防治行动计划》等环保政策的制定也对

China Economic Review | July 2014

话题

新能源汽车行业进入快速发展起到积极作 用，预计未来3-5年国内新能源汽车将迎

迎来投资机会。

汽车金融业务更广泛的参与，中国在汽车

动力电池行业前景光明。在新能源汽

金融市场上将有很大的发展空间。在民生

车成本构成中，动力电池约占一半，可谓

银行与德勤联合发布的《2012中国汽车金

根据节能与新能源汽车产业发展

是最具利润的部分。随着新能源汽车的快

融报告》中预测，到2015年，汽车消费金

规划与两批补贴试点城市的推广目标来

速发展，动力电池的市场需求必定高速增

融市场的余额将达6700亿元，消费金融渗

看，2014年新能源汽车产销增速有望超

长。动力电池中，锂电池无疑是最发展的

透率将提高至30%甚至更高。

100%。新能源汽车行业展现巨大商机。

来加速增长期。

重点，预计2013-2018年全球锂电池市

德勤预计，未来几年中国乘用车销售

作为新能源汽车基础配套装置，充

场规模年均复合增长率高达50%，并将于

市场将以每年超过7%的增长率增长，而

换电设施是推广新能源电动汽车的重要

2018年达到160亿美元。拥有先进电池技

二手车市场的年均增长率将会超过15%。

基础环节。目前，中国充电站和充电桩

术的企业、原材料供应商将获益，对投资

对潜在消费者的调查显示，约80%的受访

建设明显落后，制约了新能源汽车的发

者而言，动力电池行业是投资的好方向。

者表示会考虑购买二手车。随着市场的日 益成熟以及消费观念的改变，越来越多的

展。按照原规划，2011~2015年，国家 电网的电动汽车充电站规模达到4000座；

汽车后市场

消费者开始接受二手车。据中国汽车流通

2016~2020年，国家电网建设充电站目

随着中国民用汽车保有量达到1.37亿

协会公布的数据显示，2014年一季度，

标10000座，建成完整的电动汽车充电网

辆，中国汽车后市场吸引越来越多的资本

全国共交易二手车129.78万辆，同比增长

络。但截至2013年底，国网已建成的充换

进入，二手车市场、汽车租赁、汽车金融

11.08%。可见，二手车市场业务将进入

电站为400座，离2015年的目标只完成了

服务等呈现出高速发展势态

迅速发展期，交易量的快速增加带来更大

10%。近期，国家电网宣布全面放开分布

作为汽车产业大国，中国汽车金融行

式电源并网工程与电动汽车充换电设施市

业还相当落后,尤其是融资购车和车辆租赁

大环境利好，租赁市场商机无限。目

场，这对民营资本进入这曾经的垄断市场

的比例加起来不到20%，而发达国家通常

前，中国汽车租赁服务仍处于发展的初级

提供了商机。

在50%-80%之间。随着80、90后逐渐成

阶段，最明显的特点就是租赁渗透率低，

的商机。

大力发展充换电设施建设，充电机、

为购车主力军，他们在消费理念上更容易

远不及于美国、德国等发达国家。但近年

电能监控系统等配套电力设备企业及拥有

接受贷款购车，加之政府对诚信体系及汽

来乘用车保有量的迅速增长为租赁市场培

先进充换电技术的公司势必会受益匪浅，

车金融相关政策法规的不断完善、厂商对

育了大量潜在的消费者。从各国的发展经 验也可以看出，乘用车的普及对租赁市场 有非常显著的推动作用，乘用车保有量的 增速直接决定了租赁市场的增速。另外， 随着经济社会快速发展，城镇化进程进一 步加快，城乡、区域一体化迅速推进，驾 驶技能广泛普及，企事业单位用车制度改 革、部分城市限购等影响，汽车租赁需求 将会飞速增长，发展潜力巨大。据欧洲知 名咨询公司罗兰贝格的调查数据显示，中 国汽车租赁行业规模预计将从2011年的 182亿元增加到2014年的380亿元左右， 可见汽车租赁行业投资机会已经到来。 服务类型多元化的汽车金融公司将获 得更多利润。相比发达国家，中国汽车金 融仍处于初级阶段，服务类型仍大多停留 在传统的购车贷款方面，对于售后的消费 信贷范围仍有限。如能提供保险、维修、 汽车美容等汽车金融衍生服务，将创造更 多利润空间。（作者来自上海机动车检测

中国连续第五年成为全球最大汽车销售市场

中心）

China Economic Review | July 2014

41

看中国

一位坚强的安徽妇女 她的故事好似当代中国颇具意味的一幅缩影 文 | 晏格文 (Graham Earnshaw)

晏格文

这

是一位57岁的妇

坡，做家庭主妇，但她不愿接受。况且，

厂关了不少，餐厅生意也因为政策而受到

女，在安徽的一

潘女士觉得那个新加坡男人看不起大陆

冲击。“公款消费其实还有，只是不在我

座小镇上经营着一家旅馆

人，母女俩对此都不能接受。

们这样的餐厅里罢了。”潘女士说。

和一间餐厅。前不久的某

于是，那个男人抛下妻女，独自回了

每年她需要支付70万元租金，但生意

个夜晚，为了躲过房间里

新加坡。小女孩今年6岁，我在旅馆大堂见

却从未盈利过。由于未和公安系统联网，

的蚊子，我来到旅馆大

过她，聪明伶俐，喜欢跳舞，是个惹人喜

消防部门的审批发不下来，因而旅馆也就

堂，有幸和她聊了聊。她

爱的孩子。潘女士的女儿和外孙女如今一

没有正式注册登记。而之所以不能和公安

的故事，至少我所得知的

同住在旅馆里。

系统联网，也正是因为得不到消防部门的

潘女士的另一个女儿在海军工作，今

具意味的一幅缩影，打动了我。下面请听

年33岁，依旧单身。潘女士的旅馆生意并

我道来。

不太平，但都不及担心女儿变成“剩女”

潘女士攒了几十年积蓄，如今都乐意

的旅游网站上为自己的旅馆刊登广告了。

潘女士，出生在这个小镇，年纪轻轻

这事儿让她头疼。她感到是自己辜负了女

花在完善旅馆和餐厅上。在这座不知名的

便嫁了人，婚后育有两女。后来，她的丈

儿。我告诉她这种想法是荒谬的，孩子的

安徽小镇上，潘女士餐厅的菜色在我尝来

夫和别的女人跑了，留下她独自抚养两个

人生由她自己做主，做母亲的无需为此自

相当好，除了有蚊子，旅馆房间也不错。

女儿。据潘女士介绍，她的前夫找不到工

责。但为人父母，对孩子总是很难做到真

“每天醒来，孤身一人，盯着天花

作，新老婆又大字不识。而她自己投身于

正放手，尤其是在中国文化里，父母与孩

板，我总在想自己是何苦。但一想起小外

工作，将餐馆生意经营得有声有色。因为

子之间总有牵绊。

孙女，便又有了起床的动力。有时候也考

潘女士的旅馆位于小镇经济开发区，

虑退休，但退休以后干嘛？看电视？还是

在路口交界处的一座楼房里，四周环绕着

工作更有乐趣。我有40个员工，但每天

大女儿今年35岁，曾和一位新加坡商

低矮的厂房，是她从别的公司手里转租到

我还是会自己去买菜，要买就要选最好的

人结婚，生有一女。丈夫希望她定居新加

的店面。如今生意也在每况愈下，周围工

菜。”潘女士如是说。

太忙，潘女士便开始雇前夫做些接送女儿 上下学的事。

中国父母对孩子总是很难做到真正放手

42

审批。如此一来，潘女士也就无法在国内

这部分，好似当代中国颇

China Economic Review | July 2014

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Airlines

44

Harrow International School

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China Economic Review | July 2014

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Leasing Enquiries

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Language Schools MandarinKing www.mandarinking.cn

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China Economic Review | July 2014

45

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China Economic Review | July 2014

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