china presentation final section 1
TRANSCRIPT
CHINA ची�न 中国
Understanding Emerging Markets
Group 1
HISTORY
ANCIENT CHINA:• Xia Dynasty (c. 2100 – c. 1600 BC)• Shang Dynasty (c. 1700–1046 BC)• Zhou Dynasty (1046–256 BC)• Spring and Autumn Period (722–476 BC)• Warring States Period (476–221 BC)
History(Cont)
IMPERIAL CHINA:• Qin Dynasty (221–206 BC)• Han Dynasty (202 BC–AD 220)
EARLY MODERN:• Ming Dynasty (AD 1368–1644)• Qing Dynasty (AD 1644–1911)
MODERN CHINA:
• Republic of China (1912–1949)
• People's Republic of China (1949–present)
GEOGRAPHY
GEOLOGYWorld’s largest producer of antimony,
graphite, tungsten and zinc.
Largest hydro power potential.
SOCIAL ISSUES
Mass unrest issues have risen from 8,709 in 1993 to 90,000 in 2009.
Reasons:
a)Increase in migration,
b)Unemployment,
c)Loss of faith in system,
d)Corruption.
The imbalance of wealthUrbanization
CENSORSHIP:
a)Freedom of speech
b)Freedom press
c)Internet
Hukou system.
DEMOGRAPHICS
AGE STRUCTURE (present):
a)0-14 years: 17.4%
b)15-24 years: 16.1%
c)25-54 years: 46.5%
d)55-64 years: 10.9%
e)65 years and over: 9.1%
Median age: 35.9 years.
POPULATION GRAPH
1975 1980 1990 1995 2000 2005 2010 2011 20120
200
400
600
800
1000
1200
1400
1600Population(in millions)
Population, total
LIFE EXPECTANCY
1975 1980 1990 1995 2000 2005 2010 201160
62
64
66
68
70
72
74
76Life expectancy at birth, total (years)
Life expectancy at birth, total (years)
DEATH RATE
1975 1980 1990 1995 2000 2005 2010 20115.8
6
6.2
6.4
6.6
6.8
7
7.2
7.4Death rate, crude (per 1,000 people)
Death rate, crude (per 1,000 people)
FERTILITY
1940 1950 1960 1970 1980 1990 2000 2010 20200
1
2
3
4
5
6
7Total Fertility Rate (children born/woman)
Total Fertility Rate (children born/woman)
SEX RATIO
1940 1950 1960 1970 1980 1990 2000 2010 2020103.5
104
104.5
105
105.5
106
106.5
107
107.5
108
108.5
Sex Ratio In China
Political Systemof
China
China is a Communist Country.Communism is an idea of a free society with no
division or alienation, where the people are free from oppression and scarcity.
Symbol
China adopted communism in 1949.China operates with a ONE PARTY STATE
POLICY where Communist party of china is the dominating party.
Political Structure
Communist Party
82.6 million members
State Council
Second major institution of the Chinese political structure.
The executive branch.
It is the Central People’s Government & is Chaired by the Premier.
National People's Congress
• The legislative branch• is the highest state body and the
unicameral legislative house• Functions:
-Electing the President of the People's Republic of China
- approving the appointment of the Premier of the State Council
- approving the work reports & policies.
People’s Political Consultative Conference
Perform as “democratic supervisor” of the Party
It acts as a platform for the citizens to make suggestions about the policies.
PPCC members are often known as “political advisors”.
The People’s Liberation Army
• Unified military organization responsible for air, water and land operations.
• Very Crucial to the party and the government.
• Reports to Party Central Military Commission (CMC)
Environmental Conditions In
China
Environmental Problems
Water ResourcesDeforestationDesertificationClimate changePollution
Government Measures
Adjusting industrial structures and altering development modes.
Establishment of about 100 specialized environmental courts.
"Green Wall of China" projectIntroduction of Environmental education
Technological Scenario in China
Ancient Era
Pioneer in the field of science and technology
Greatest Discoveries includes-– Paper making– Printing Technology– Compass– Gunpowder
Started to loose its stand but rebounced in 19th century.
Modern Era
Experienced biggest technological transformation
Over 1.5 billion cell phones & 570 million Internet users
Major achievements
– BaiDu
– Sina Weibo
– Manufacturing hub of electronics gadgets.
Culture Chinese culture is one of the
oldest culture in the world. Many festivals are celebrated in china like spring festival, lantern festival. Spring festival is also known as Chinese New year. Important components of Chinese culture include:
Literature Music Martial Arts Cuisine
Economic Inequality
Income inequality
Gini coefficient is 0.74
Regional Income inequality
Rural-Urban income inequality
Causes for Income inequality
Non-Balanced Economic DevelopmentUnreasonable economic systemImperfect Tax SystemLack of Public ServicesLow Income transferHoukou or Chinese household Registration
System
Economics in China
अर्थ�शा�स्त्र
經濟學
1975 1980 1990 1995 2000 2005 2010 2011 2012
-6
-4
-2
0
2
4
6
8
10
12
14
GDP Growth
China
India
Brazil
Main reason for China’s Growth
1980 1985 1990 1995 2000 2005 2010 2011 20120
5
10
15
20
25
30
35
40
Export as a % of GDP
China
Brazil
India
Raise More Debt
Increase the Household
Consumption
2005 2006 2007 2008 2009 2010 2011 2012 2010 2011 20120
10
20
30
40
50
60
70
Household Consumption as a % of GDP
China
India
Brazil
China’s economy will not fall
2005 2006 2007 2008 2009 2010 2011 20120
10
20
30
40
50
60
Household Saving as a % of GDP
China
India
Brazil
Increasing Debt is the only option
Before 1990, RMB was pegged at 2.46 per US dollar
As Chinese economy opened up, RMB was devalued to 8.62 yuan per dollar.
In 2005, peg was lifted but reinstituted again in 2008 due to financial crises in 2008
Stages of China’s Reforms
1970’s-1980’s – Opening up the country to the foreign investment.
US China Debt loop
China competitive advantage in the form of cheap labour
Fixed Rate of Exchange and Money Supply
1975 1980 1990 1995 2000 2005 2010 20110
20
40
60
80
100
120
140
160
180
200
Money and quasi money (M2) as % of GDP
Money and quasi money (M2) as % of GDP
1990 1995 2000 2005 2010 2011 20120
20
40
60
80
100
120
140
Consumer price index (2005 = 100)
Consumer price index (2005 = 100)
Stages of China’s Reforms• 1980’s-1994’s – Privatization and
Contracting
Lifting of Price controls, protectionist policies and
regulation
Introduction of tax distribution system that reduced the
proportion of tax revenues held by local government.
Government used debt to finance its expenditure which
led to increase in the debt to GDP ratio.
Current Economic Conditions
Fitch has downgraded China from AA- to AA+
Debt to GDP has accelerated from 148% to 205%
IMF has warned China for rising Debt levels
GDP has reached to 7.5% in 3rd Quarter of 2013
History of Banking sector
History of banking sector can be divided into two main periods
The Mao Era (1949-1978)
The Post-Mao Era or Deng Era (1978 onwards)
Banking Sector Outlook
Current cash reserve ratio for China stands at 20.50 which is one of the highest in the world.
POP has taken steps to improve the market sentiments
Money Supply and Loans are expected to grow
Banking Sector Outlook(Cont)
Urbanization is growing at a rate of 1.37%, which will increase the demand of financial services
Shadow Banking is increasing at 34%
China’s Development Bank and China’s six largest commercial bank continued to grow internationally.
Reintroduction of asset securitization is expected to be a breakthrough for asset and intermediate business innovation for banks.
It is expected that that the Banking sector Net profit would increase by 3% for 2013
Stock Markets
In 1990 and 1991, China sets up stock exchanges in Shanghai and Shenzhen
Stock Markets in Chine is regulated by China Security Regulatory Commission.
SSE composite Index is the most commonly used indicator to reflect SSE’s market performance.
Securities sectors outlook
Increase in the stake foreigner could hold.
Number of Brokers increased from 11 to 30
Investment Banking to move towards follow on and debt financing.
China stock market could fall because of the property bubble
Growth
वि�का�स
發展
Infrastructure
Telephones (1989):
– Country X: 107 telephone sets per 1000
persons
– Country Y: 10 telephone sets per 1000
persons
Length of Railways (Electrified Railways) (1980)
– Country X: 61,240 kms (5,345 kms)
– Country Y: 53,900 kms (1,700 kms)
Infrastructure
China’s Growth
1 Country – 2 System
Han Dynasty
No Enemies
China’s GDP Growth
1975 1980 1990 1995 2000 2005 20100
10
20
30
40
50
60
AgricultureServicesIndustry
GDP Distribution
Agriculture
China ranks first in worldwide farm output
No. 1 in Wheat Production
Contributes 9% to GDP
Great Leap Forward (1958 – 1961)
Great Chinese Famine(1958 – 1961)
World’s Largest Importer of Soyabeans
Industry Sector Industry Contributes 46% to China’s GDP World’s leading manufacturer of chemical fertilizers,
cement, and steel China ranks second worldwide in industrial output Four Modernizations (1975)
o Industryo National Defenceo Agricultureo Science and technology
Energy industry Manufacturing and Automobiles Steel
Service Sector
Service Sector Contribution - 44 % Quantity Quality Hospitality Aviation Banking Automation
Trade relations
World Trade Organization, G20, BRICS
USA
Africa
Russia
Border Problems
TibetTaiwan (Kuomintang)IndiaJapanMongolia
Business Opportunities
• Education• Healthcare• Clean-tech/green-tech• Software• Food
Labour Issues
Fall Of China
Ageing PopulationYuan AppreciationDependence on WorldMiddleClass Sector
A Deaf Pilot cannot fly an airplane effectively, however good he may be
Will China Become Super Power ?
Military Power
Economic Power
Transnational Power
Market Outlook China
• Economy Set to take off again
Increase in spending by state government
Measures taken by People’s Bank of China
Increase in Demand and supply perception
New reforms of rational distribution system
Market Outlook China
• Points of Concerns China’s economy is at a moderation point from high
growth to mid high growth
China is loosing out on its competitive advantage
Manufacturing Sector is reaching saturation
Shadow Banking is a big concern
Property Bubble in China
Appendix
http://www.worldbank.org/en/country/china\
http://www.indexmundi.com/china/
http://en.wikipedia.org/wiki/China
http://www.pbc.gov.cn
http://www.fitchratings.com/web/en/dynamic/fitch-home.jsp
http://www.deloitte.com/view/en_CN/cn/ind/g
http://www.businessweek.com/articles/2013-03-26/chinas-stock-markets-fall-on-fears-of-a-real-estate-crackdown
http://www.bloomberg.com/news/china/
Presented by:Anand KJAnkit Vora
Malhar Lakdawala
Shubham Jain
Lakshay Nangia