Download the App, Get a Gift – Even if you don’t read Chinese

Today I got a free set of earphones. On Sunday I could have gotten a bottle of Coke (they didn’t have Diet on offer). A few months ago I got a free shoe shine. What did I do to warrant all this loot? I downloaded an App.

20150519_140838

Today in Central a fleet of young men and women were deployed to promote a taxi hailing application. Available on iPhone and Android, the service connects us in Hong Kong with licensed taxis. These iconic red and green taxis cross-cross the nation in an efficient, low-cost way. They’re reliable and almost always sparking clean.

I had to download the App, sign in, get a verification code then I got the earphones. Thankfully one of their salesmen was nearby. The App is only available in Chinese.

It was the same with the travel app (Coca-Cola) and the business magazine app (shoe shine). They were only available in Chinese.

After downloading the app and getting the gift, I was advised by the business magazine salesman to just delete the app. No doubt I’ve since scuffed the shoes as well.

Quota-driven sales is all about getting people to download the app – and getting that much closer to your sales goal. It should matter that an English-speaker won’t be able to use a Chinese language site (there is no English language option on these apps).

I’d like to think these companies and their sales forces would learn better. But I suppose they don’t know how to spot an earphone-hungry, Coca-Cola-taking, Shoe-shine-needing expat when they’;re right in front of their noses. Maybe they can learn. Is there an app for that?

Macau: Where have all the gamblers gone?

First time visitors to Macau are astonished by the widespread building works. Even frequent visitors can’t help marvel at building on an epic scale. I first went to Macau in 1996 when it was a sleepy Portuguese colony. Then the primary industries were tourism, fishing and shipping. The nation consisted of the peninsula of Macau and two islands – Taipa and Coloane. There were bullfights and firework shows. The Lisboa Casino hadn’t been updated since it featured in James Bond film “The Man with the Golden Gun“. The Bella Vista Hotel had a renowned restaurant and a few suites for hire. Having been under Portuguese administration for over 400 years, Macau was a tranquil retreat.

Look at the map today – Coloane and Taipa have been merged into a super-island with a new section called Cotai jammed in-between. This reclaimed land is home to Las Vegas-inspired hotels like The Venetian, The Sands, Galaxy, City of Dreams and more under construction. The Macau Peninsula has a brand-new Lisboa (along with the Roger Moore retro original) as well as an MGM, Wynns, Sands and more. Last year Macau recorded seven times the gaming revenue of Las Vegas. And they’ve not finished construction.

Macau’s Wynn Casino II Under Construction

Yet there’s trouble in Macau. Gone are the seven-times Las Vegas multiple. Gamblers are spending less and the VIPs are rare to find. It’s hurting revenue, according to analyst reports:

As the first quarter of 2015 trading came to a close, on a trailing 12-month basis, the average performance of Macau gaming stocks was down 45% year over year. Macau gaming’s February 2015 revenue was still 2.7 times that of the state of Nevada, yet, unlike Las Vegas, Macau profits depend predominately on gaming revenue.

Where have all the gamblers gone?

China’s anti-corruption crack-down is the primary cause, according to The Wall Street Journal:

In addition to bringing down many top mainland officials, the campaign has scared off highrollers and decimated the city’s junket system, they say. Junket operators are middlemen who use underground banking networks to facilitate high-stakes gambling. Even though people are still coming to Macau, the majority of that growth in visitation is coming from low-spending tour groups, said Wells Fargo analyst Cameron McKnight in a report last week.

Another factor is a new law that bans smoking in casinos.

As Mark Twain famously said, “The reports of my death have been greatly exaggerated.” The same holds true for Macau. Analysts point to a cultural love of gaming in China, along with new family style resorts being built for middle-class travelers. And while VIPs may fly to Australia and Korea for now to avoid the scrutiny of gaming in China, their eventual return will propel Macau’s growth. In “Think Advisor”  Edmund Harriss, investment director at Guinness Atkinson Funds in London speaks of the attractiveness of Macau:

“In China, games of chance are deeply embedded in the culture,” he said. “Go through any park on a Sunday, or walk through the alleyways of a city during the week, and you’ll see people playing Mahjong for money. In the Macau casinos, the approach is different than it is in Las Vegas—gambling isn’t about entertainment and people take it very seriously.”

For every prediction of doom, there are others willing to bet on the future of Macau. My recent visit showed an empty casino one night, and another jam-packed the following afternoon. Cranes and building projects choke Cotai, and splendid malls and restaurants are packed with spenders. If anything, the drop-off in gaming in Macau is a temporary aberration. In Macau it’s smart to bet on the house.

Bet on the House in Macau

“The Next Economic Disaster” by Richard Vague – Agree or Disagree?

Richard Vague is described as a “serial entrepreneur” which usually sets off alarm bells. Yet he recently wrote a book called “The Next Economic Disaster” that has extensive information on China. Read below – do you agree or disagree with the prognosis?

“China is now sitting on top of the greatest accumulation of bad debt and overcapacity in history. According to the Survey and Research Center for China Household Finance, more than one in five homes in China’s urban areas is vacant, with 49 million sold but vacant units, and 3.5 million homes that remain unsold. Behind those vacant and unsold units is private debt, both loans to developers and mortgage debt. Housing values in China increased on the same perilous trajectory as in the United States before 2008 and Japan before 1991–and they have now started a similar decline. Meanwhile, real estate was 6 percent of U.S. GDP at the peak in 2005; today, it is as much as 20 percent of China’s GDP.

“There are other red flags. China produced 8 percent of the world’s furnace iron in 1980; it now produces 61 percent, even though the rest of the world still continues to produce every bit as much as it has in the past. As China’s iron production accelerated in the period from 2002 to 2011, iron prices increased twelvefold in response to debt-fueled demand. (Increases in debt cause increases in prices.) But now that iron capacity has piled up beyond need, prices have tumbled by over 50 percent, and the excess capacity is so great that even the demand generated by rapid credit growth can no longer prop prices up. Also, China used more cement in the period from 2011 to 2013 (6.6 gigatons) than the United States did in the entire twentieth century (4.5 gigatons).

“These are but a few of many examples. Researchers at a Chinese state planning agency said recently that China has ‘wasted’ $6.8 trillion in investment. Overcapacity is so significant in many sectors that it will take years for it to be absorbed by organic demand. Ironically, this problem is compounded by China’s own continued high growth rates, since high GDP growth is a measure of the creation of additional capacity even if that capacity is not needed.

“Good and sound loans, by definition, result in commensurate GDP growth. So when private-loan growth outstrips GDP growth, much of that excess — from one-quarter to one-half, based on evidence from other crises — will be problem loans. Based on this formula, China today is likely to have an estimated $1.75 trillion to $3.5 trillion in problem loans — a figure well in excess of the $1.5 trillion of total capital in China’s banking system

“Of course, China’s banks and shadow lenders are not reporting bad loans close to this amount. But neither did U.S. banks: On the eve of the U.S. crisis, banks were making loan-loss provisions at very low levels. Lending booms create the false appearance of prosperity, and fraud and corruption can make the picture even prettier.

“Some dismiss these warning signs, noting that many economic prophets wrongly made the same dire predictions for China during the late 1990s. But there’s a big difference: In 1999, China’s overall level of private debt was 111 percent of GDP; today, it’s almost double that, at 211 percent. In 1999, it had plenty of room to power growth through continued private-debt expansion, and the debt boom in the West fueled unprecedented export demand. The opposite is true today.”

The Pulse of Hong Kong

Dimid Vazhnik is a videographer from Minsk in Belarus. During his two visits to Hong Kong he developed a time-lapse video that really captures the pulse of this great city. If you’re a native, a newcomer, a transplant or a tourist you will enjoy this remarkable video journey. Buckle up!

A Tale of Two Chinas: AIDS Then and Now

Guest article by Dr Bernhard Schwartländer, World Health Organization (WHO) Representative in China

Copyright Al Jazeera

I first came to China more than 15 years ago. At that time, China was just starting to come to terms with the HIV epidemic, and scale up its response. Not long after that, the first methadone clinics were opened.  The early days of China’s HIV response were filled with hard and bitter lessons. But they showed me firsthand what China can achieve when it sets its mind to overcoming a challenge.

The HIV epidemic in China was driven by initially by injecting drug use. China’s response: set up a massive national network of needle exchanges and methadone centres. There are now 763 clinics across the country. China is a world leader in this. The result? A marked reduction of HIV prevalence among people who inject drugs.

I am heartened by the incredible progress China has made since the first outbreaks of AIDS. Compared to my early days, China is now much better placed to prevent HIV infection, and doing better at caring for those living with HIV. Yet as we recognise World AIDS Day, I know there is much more China needs to do.

It is time to bring the same spirit of pragmatism and innovation which created a world’s best practice methadone treatment program to the challenges with HIV that we confront in China today. Chief among these is the fact that the HIV epidemic in China is now largely driven by sexual transmission – in particular among men who have sex with men, where HIV infections are on the rise. But the heterosexual population is not immune: HIV infections are not decreasing in this population either.

We must do better than this, starting with making safe sex “sexy”! We need to find new, interesting, innovative, effective ways of promoting safe sex in China, especially including condom use. Because every new HIV infection is one too many; every new infection is one that could have been avoided.

There are other areas of the HIV response where China is doing well, but can do better. Take antiretroviral drugs. These drugs were a major breakthrough in the AIDS response, because they defer HIV infection progressing to full-blown AIDS. China is a leader in ‘Treatment as Prevention’ using antiretrovirals: for instance, these drugs are provided free of cost to couples when one partner is HIV positive and the other is HIV negative. This is good for the health of people living with HIV, and it will prevent transmission of HIV to their sexual partners.

But the antiretroviral treatment regime must be made much simpler, to improve uptake and adherence. People taking antiretroviral drugs in China have to take 5 or 6 pills every day. In most parts of Africa and the rest of Asia – including some of the poorest countries in the world – people on antiretrovirals need to take just one pill per day, in a fixed dose combination. By not making this fixed dose combination available here, China is falling behind the pack.

More also needs to be done to improve HIV testing. Many people with HIV actually don’t know their status, and therefore miss out completely on treatment. There are now self-test kits, and rapid HIV tests that give results in 20 minutes. Through innovations like this, we can bring HIV testing to the people – and they can benefit from treatment as they need it.

Perhaps most importantly, we must eliminate stigma and discrimination towards people living with HIV, and at-risk populations such as men who have sex with men, sex workers, and injecting drug users. I’ve seen some of my own colleagues in the medical profession turn patients away because they disapproved of the person’s sexual orientation. That is simply unacceptable, and it has to stop.

“Close the Gap” is the global theme of this year’s World AIDS Day. This means we have to work harder, and smarter – to close the gaps in access to prevention and treatment, as well as the gaps we know exist in education, awareness and action, in order to end the HIV epidemic.

This World AIDS Day is special: 30 years have passed since the virus was first discovered. We have a wealth of experience, and evidence of what works and does not work. We have the science and the tools – we just need to take them out of the toolbox. And we have the power and resources of a great nation that has proven, again and again, that it can be done. The China of today has made much progress from the China I first knew. On World AIDS Day, I want China to “close the gap”, so that the China of tomorrow ends the HIV epidemic for good.

A Tale of Two Riots: Ferguson, MO & Mongkok, Hong Kong

Copyright Getty Images

This week riots erupted in Ferguson, Missouri after a grand jury there chose not to indict police officer Darren Wilson in the shooting death of Michael Brown. Tuesday night stores were looted, cars set ablaze, traffic halted and hundreds of shots fired. In the video below cars at a local dealership burn.

By Thanksgiving Day the protests continued but in a more subdued manner. Social media remains alight with millions of posts voicing opinions of outrage or support. The verdict was Tweeted around the world.

‘The Ferguson shooting is a study, according to one observer, in “how social media make everything everyone’s business, whether you want that or not”. ‘ (Source: The South China Morning Post)

This week was also eventful for the Umbrella Revolution in Hong Kong. Police enforced injunctions granted by the High Court and cleared Nathan Road in Mong Kok, what Wikipedia refers to as one of the most densely populated places on Earth.  Their actions led to the arrest of 169 people including the highest profile leader of the Occupy Movement, 18-year-old Joshua Wong.

Hong Kong Police used a “jet pack” combination of pepper gas and tear gas that blinded one reporter for 30 minutes. The effects seem a sharp contradiction to the police’s claim of a “mild” effect of the chemical spray. (Read more in The South China Morning Post.)

Copyright Agence France-Presse

What separates the two riots is the amount of violence. No gunfire was heard in Hong Kong, versus the 100+ rounds of gunfire heard on Tuesday night. In Hong Kong no cars were set alight and no shops were looted, despite the area being one of the city’s most popular shopping streets. There wasn’t even graffiti.

I’m not sure what this illustrates. A lack of “vinegar” in the people of Hong Kong? A lack of civility in American cities? Hong Kong has always been an orderly place. It’s the only way 7.2 million people can live in a country that is 1/3 the size of Rhode Island (America’s smallest state). People line up at bus stops, and board orderly. In immense traffic queues no one honks their horn.

It’s an interesting comparison. Do you love or hate your opponent? What works better – kindness or outrage? I believe there’s room for both. But in Hong Kong I love the small courtesies, such as the protester below holding an umbrella over a policeman. That may not have happened in Ferguson.

Copyright Associated Press

Tensions in Russia: Bulletin on Impact of Sanctions

(copyright 2014 WOCH IT & News.Yahoo.Com)

Tensions between Russia and the West have not been relaxed.

Prior to the Ukrainian parliamentary elections, which took place on 27 October, the parties of the conflict were mainly consolidating positions. While the US proved ready to cooperate with Russia only on high security issues, the newly elected EU Foreign Policy Commissioner Federica Mogherini has articulated changing EU approach to the relationship with Russia:

“I think Russia stays a strategic player in the regional and global challenges, [regardless if ] we like it or not, but I don’t think it’s a strategic partner anymore”.

Consequently, despite the absence of escalation in Ukraine in October and certain skeptical voices in the EU, there is no disagreement in the West regarding the fact that sanctions should stay in place until the Minsk protocol is fully implemented.

Meanwhile, the subjects of Western sectoral sanctions have started to file complaints to the relevant European institutions. Sberbank, VTB, VEB, Rosneft, Gazpromneft are among the contested. Arkady Rotenberg has filed a personal complaint to the ECJ, too.

The Russian authorities have been focusing on economic problems. The main news of October 2014 was the plummeting rate of the ruble against US dollar and euro. First time since 1998 one dollar rose to 48 rubles. The drop in the exchange rate of the ruble exceeded 40% since the beginning of 2014, and half of it took place in October. Compounding these challenges, the drop in the price of oil has put additional pressure on the Russian economy.

US-Ruble Exchange Rate (copyright 2014 The Money Converter)

Recent public opinion polls keep showing that the Russians are adjusting to new reality. Citizens believe these measures do not create practical problems for them and their families (79%). The respondents also believe (59%) that the country will only benefit from sanctions through local support of national industries.

The challenges of the current situation give more opportunities for those who have information at their disposal. For more, read summary of the Kreab Gavin Anderson Sanctions Bulletin October 2014 issue (download the report here: Kreab Gavin Anderson Sanctions Bulletin October 2014). We also can provide targeted studies tailored to your industry. To order a customised version send a request by e-mail to  moscow@kreab.com.

Disease Without Borders: How China is Prepared for Ebola

Airport passenger temperature screening in China’s airports introduced a decade ago after SARS.

By Dr Bernhard Schwartländer, World Health Organization Representative in China

As world leaders gather in Beijing this week for the Asia-Pacific Economic Cooperation forum (APEC), one issue that has already featured in the discussions is the Ebola epidemic in West Africa – and this region’s preparedness to deal with an outbreak. In managing the threat of Ebola, there are many lessons to be learned from China.

This is the worst Ebola outbreak the world has ever seen. It is more than just a health crisis. This outbreak has become a complex emergency with significant social, economic, humanitarian, political, and security dimensions.

As of 12 November there have been a total of 14,098 cases of Ebola reported since the outbreak began, with 5,160 reported deaths. However, clinical follow-up of Ebola patients shows that as many as 7 in 10 patients who become infected with Ebola die. Modelling work published in October showed that cases may reach as many as 10,000 a week by year-end.

The threat from Ebola has been recognised at the highest levels. In September, the United Nations Security Council passed a resolution declaring Ebola a threat to international peace and security. The UN established the United Nations Mission for Ebola Emergency Response (UNMEER) – the first time in history that the UN has created a special mission for a public health emergency.

The worst hit countries are in West Africa. The vast majority of cases occurred in Liberia, Sierra Leone and Guinea. Senegal and Nigeria have been able to contain small outbreaks. Both countries were declared Ebola-free in October. A small number of cases have now been reported in Mali. And, showing that no country is immune from this disease, isolated cases have occurred in the United States and Spain. No country has been immune from concern.

With numerous economic, trade, political and cultural links between China and West Africa, there is significant interest in China’s preparedness to respond to a potential Ebola case. There are two key points to make.

First, the best way to stop an Ebola case from arriving in China is to fight the outbreak at its source. In the worst-affected countries of Liberia, Sierra Leone and Guinea, China has made a significant contribution to the global response effort. China has provided around US$120 million worth of support to the response to date, both direct financial assistance as well as deploying medical teams and humanitarian aid. These include 252 health and medical personnel deployed from China now working in West Africa, along with essential supplies and equipment, such as mobile testing laboratories. Speed is essential to managing Ebola, and quick diagnosis close to the case is critical for good management of Ebola-infected patients.

China is to be commended for both the speed and substance with which it has responded to WHO’s call for countries to support the international response to the outbreak in West Africa. This is making a real difference on the ground.

Second, and closer to home, is that China has been working to ensure its own systems are well-prepared to respond quickly and effectively should a case arrive. China has learned a lot since the outbreak of SARS in 2003.

In the last decade, China has invested significant resources to upgrade general screening and detection capacity at 259 points of entry, such as airports.  This long-term capacity building stands China in good stead now. In August, China strengthened these systems in line with WHO’s declaration of the Ebola outbreak as an international public health emergency.

For example, there are in place today clear and tested protocols to identify and manage incoming passengers who may have Ebola-like symptoms such as fever, as well as passengers who have been in Ebola-affected countries and had possible exposure to the disease. In Guangzhou, visitors from Ebola-stricken countries to the Canton Fair were given pre-paid mobile phones with phone numbers of health facilities saved for use if necessary.

Border screening alone will not prevent an Ebola case from arriving. The disease has an incubation period of 21 days. It is possible that, even with the most sophisticated entry screening systems available, a case could come into the country without detection at the airport. That’s where a well-prepared health network and good information to the public is crucial.

Overall, China has a strong public health system. And the country has been working hard to ensure it is well prepared should an Ebola case arrive. For instance, special infection control guidelines have been developed and communicated, with specialist staff training.

A series of hospitals have been designated to treat Ebola cases or suspected cases. These have specially designed, state-of-the-art infection control systems in place. Medical and general staff have been given special training, including in the correct use of Personal Protective Equipment. Specially equipped ambulances are on standby to transfer any suspected or actual cases to the designated hospitals. I personally inspected the systems in place at Ditan Hospital in Beijing, one of the designated Ebola hospitals, and was impressed with what I saw.

The possibility of an Ebola case arriving in China cannot be excluded. While there is an outbreak in West Africa, there is a chance of Ebola arriving in China. However, given the systems in place in China to detect early, and respond quickly, should a case appear here the risk of an isolated case progressing to widespread outbreak is currently low.

Of course China, and every other country, must remain vigilant. Further learning from global experience will ensure all countries continuously improve, identify possible gaps in the response, and respond quickly with timely solutions.

Diseases like Ebola do not respect international borders. So China is helping at the source of today’s outbreak in West Africa, ensuring its borders are well-protected and preparing its health system to manage any possible cases.

China versus America: Money Talks, Others Walk

Barack Obama and Xi Jinping wrapped up meetings with world leaders in Beijing (APEC) and Australia (G20). Both announced funds for reconstruction, loans, development and humanitarian aid to nations across the region. In on calculation by Australian National University, China pledged a total of US$70 billion in a two-week period. The largest sum was US$40 billion in loans for the development of a Maritime Silk Road across Asia-Pacific to better connect with Europe. This means the construction of massive ports able to handle the largest ships as they travel the historic trade routs from the Far East to the developed West.

In comparison to Xi Jinping, Barrack Obama looked miserly.

“The figures were particularly stark when stacked against American promises. The White House pledged $150 million for Myanmar during Mr. Obama’s recent visit for an Asian summit. On the edges of the same meeting, China pledged $7.8 billion to refurbish decrepit roads and increase energy production.” (Source: The New York Times)

While Mom always said money doesn’t buy friends, Mom wasn’t a politician. Having deep pockets when neighbouring countries are in need buys a lot of influence. And China has cash. The USA holds foreign reserves of US$136 billion. China golds US$4 trillion. (Source: Wikipedia) That means China has cash reserves 29 times larger than the USA.

And while the economy of China may be slowing, it remains healthy as it moves from a core of manufacturing up the skills index into a higher service-based economy. It has plenty of growth ahead. Thankfully the USA economy is continuing to improve. However the long road back from the 2007 financial crisis has left the coffers drained. The US government needs its cash for the domestic economy.

China has plenty for home and abroad.

Remember those rainy days as children when you were on top of the world as the richest man in the game of Monopoly? Didn’t it feel great to count (and recount) your growing pile of $500 bills? You were China today.

Xi Jinping is winning at Monopoly

Then there were the days you couldn’t catch a break. Inheritance tax? Utility payments? Rent then mortgages…jail felt like a relief! It’s always foolish to underestimate the political power of the USA, however its ability to spread the cash is limited after a large number of bills.

In Asia-Pacific, China is the banker and the emerging country’s best, new friend (sorry Mom).

 

Bloomberg Television: How to Stop Mistakes from Becoming Disasters

Nov. 21 (Bloomberg) –- In today’s “Brandstanding” Segment, Kreab Gavin Anderson Greater China Managing Partner Walter Jennings discusses the importance of crisis management, how to utilize social media and how to squash the problem immediately with Bloomberg’s Rishaad Salamat on “On The Move.” (Source: Bloomberg)

Bloomberg Television

To watch the video, click here. 

Work in Shenzhen, Live in Hong Kong

%d bloggers like this: