EICN China: 2021 in review
How are you feeling one week into 2022? Hopeful? Overwhelmed? Enthusiastic? Maybe all of the above. Managing a business through the pandemic and the many uncertainties of this moment has certainly created new concepts of risk resilience – and not only for supply chains. It has been a privilege to support you and your business in 2021 and we look forward to continuing to do so.
We ended the year with our annual World Ahead programme and, along with the other EICN networks, heard from The Economist Deputy Editor Tom Standage on his ten themes to watch in 2022. The Hong Kong network turned the gathering into a festive evening also celebrating the EIU’s 75th anniversary. After hearing from Tom, members enjoyed a robust assessment of Asia’s business outlook by the British Consul-General to Hong Kong and Macau, Brian Davidson, and also heard from fellow members Jon Penrice (Asia President, Dow Chemical Pacific), Jacky Kwok (Chief Commercial Officer, CITIC Telecom CPC) and Scott Kelly (Senior Vice President, Starbucks), who surveyed their industries and highlighted on-the-ground future business opportunities in the region.
If you enjoyed that evening, I would recommend The World Ahead podcast hosted by Tom Standage which explores the themes he shared with us and more. This week’s was a climate-focused episode which featured Chinese environmentalist Ma Jun who will join the Beijing network next week for a programme focused on sustainability and addressing climate change in China. We’ll also have exciting programmes in Shanghai and Hong Kong in addition to our virtual Global Sustainability Initiative taking place 12 January at 21:00. We have some excellent speakers so I hope you’ll agree it is worth staying up for!
Speaking of staying up, or going up, a few 2021 facts from The Economist’s climate issue to remind us why we are having these conversations:
49.6°C: the record temperature in Lytton, in British Columbia, Canada, on June 29th—hotter than the average for a summer’s day in Dubai.
90%: the proportion of global GDP now covered by a net-zero emissions target, corresponding to 88% of emissions and 85% of global population.
2.4°C: the amount of warming above pre-industrial temperatures that is projected for 2021 if governments deliver on all the promises they made at COP26.
1.09°C: the global mean temperature for 2021, relative to the 1850-1900 average, based on data from January to September.
Asia, which produces and consumes three-quarters of the world’s coal, is especially crucial to stabilising the climate. And actions by China, which accounts for nearly 30% of global greenhouse gas emissions, are especially consequential. Next week we will consider the business opportunities presented by China’s commitments to achieve peak carbon emissions by 2030 and carbon neutrality by 2060. One certainty is that markets will play an important role. We explored this theme at a bilingual event in Shanghai last year, Carbon Neutrality and Green Finance: New Opportunities for Multinational Financial Institutions in China, in which the China CEOs of three international banks discussed the implications of China’s de-carbonization initiatives, the outlook of China’s green finance industry, and how international financial institutions operating in China can grasp the associated opportunities. Xiaoguang Huang (Head of Greater China, ANZ) stressed China’s de-carbonization initiatives to be game-changing for China’s financial industry. Nicholas Vix (President, Credit Agricole CIB (China)) discussed the fast development of China’s green bond market and the comparative strength of the green bond markets in China and Europe. Sam Xu (Country Executive China, BNY Mellon) shared his observation on the growing foreign investments in China’s capital market and the increasing demand from their local clients for ESG rated assets.
Shanghai was not the only network to explore the implications of China’s policy and regulatory actions for business. In September, the Beijing network held an event focused on China’s Data Governance Regime. Barbara Li, Head of Corporate at Rui Bai Law Firm, gave an overview of the country’s new Data Security Law and Personal Information Protection Law and recommended a series of actions that companies can take to mitigate disruption. Barbara was then joined by Shaoqing Guan (Executive Vice President of Strategy, Daimler Greater China), Brent Young (Vice President, Intel Corporation) and Weiwei Tu (Vice President and Principal Scientist, 4Paradigm) in a panel discussion which explored how these regulatory developments are impacting the business landscape, and what they imply for continued investments and operations in the Chinese market going forward.
Earlier in the year, the Beijing network hosted a CxO lunch to discuss the Regional Comprehensive Economic Partnership (RCEP), and what its implementation will mean for businesses operating in the region. Tom Rafferty (Regional Director, Asia, EIU) started by giving an overview of the agreement and talking about its economic impact. Tatiana Prazeres (Senior Fellow at the University of International Business and Economics and former Senior Advisor to the Director General of the WTO) and Chang Su (Partner, King & Wood Mallesons) also shared their assessments. Discussion was lively, though opinions were divided. Some noted that RCEP does not really achieve a lot and is more of a geopolitical win for China, while others praised the positive impact it will have in deepening regional value chains and cutting administrative costs.
A similarly lively discussion took place at a lunch in Hong Kong this November when the Hong Kong network was In Conversation with Bernard Charnwut Chan (Convenor of the Non-Official Members of the Executive Council, Hong Kong SAR). We heard Bernard give his sweeping views of Hong Kong’s political and economic environment, with special emphasis on how Beijing is determining Hong Kong’s future, economic advantages, and the Hong Kong government’s renewed focus on social policies.
Also in November, we had a broader conversation in Shanghai about China’s Economic Opening in a Time of Change, bringing together economists and business executives to discuss the outlook of China’s economic opening to the rest of the world in a time when both its domestic development strategies and the external environment are changing. Dr James Liang (Co-founder and Executive Chairman, Trip.com) shared his research on China’s demographic changes and ensuing implications for China’s economy. Dr Mo Chen (Deputy Bureau Chief, Sanya CBD Administrative Bureau) discussed China’s economic opening policies from a practitioner’s perspective and introduced the newly established Hainan Free Trade Port as an example. Dr Dan Wang (Chief Economist, Hang Seng Bank (China)), stressed that China still welcomes foreign investment. Michael Zhu, (China Managing Director, HPE) talked about the implications of China’s de-carbonisation initiatives and data regulations for multinational tech companies. Eduardo Morcillo (Managing Partner, InterChina) shared his observations on the changing trends in China’s cross-border mergers and acquisitions.
Of course these are just a handful of our programmes from last year. Personally, a special highlight was our first Greater China Regional Strategic Forecast programme in September. Our Global Chief Economist, Simon Baptist, provided an update on new developments in the business, trade and political environments in Asia. Simon addressed complexity of challenges confronting businesses in Asia amid ongoing US-China tensions, calls for supply chain diversification, uneven recoveries in regional markets, the spectre of inflation and recent experiences that prompt new concepts of risk resilience. He also focused on the implications of global trends on Asia’s markets, the new frontiers for Asia’s tech sector, and our outlook for the local economic and political environment. After an excellent joint session, each network convened local sessions. In Hong Kong, we were joined by Christopher Brewer (Managing Director, Ogilvy Consulting), Richard Lin (Global Semiconductor Practice Group Leader, Egon Zehnder), and Thomas Walsh (Partner, Clifford Chance). In Shanghai, we were joined by Selina Yuan (Vice President of Alibaba Group; GM of Alibaba Cloud Intelligence, International Business Unit), Harry Hui (Founder and Managing Partner, ClearVue Partners), Tina Wu (Global Vice President, Advanced Solutions & Head of Asia Pacific Region, Dupont Mobility & Materials), and SawGin Toh (Managing Partner, Incite Consulting (The Growth Division of MediaCom China)). And in Beijing by Katharine Zhao (Head of Alibaba Cloud International Partner Ecosystem Strategy and Operations), Yvonne Zhou (Managing Director and Senior Partner, BCG), Jason Yao (Head of Greater China, and Managing Director, Ardian) and Hairong Huang (Head of China Centre, Swiss Re Institute).
2022 is a year when we will continue to be tested by the pandemic, when we will see increasing pressure for climate action as time to stablise the climate runs short, and when we will seek to make sound business decisions amid unprecedented uncertainty, geopolitical tensions, logistics, pricing and security risks, and a shifting geography of global business. It is challenging, humbling, and fascinating to be able to consider all of this together with you. As ever, I welcome your thoughts on the themes that we ought to be exploring. Even after 75 years, we strive to be always learning and evolving at Economist Intelligence, so please be in touch.
I hope you’ll enjoy the programming next week to kick off 2022 and that you’ll remain engaged as we head into the Year of the Tiger and beyond.