Dr. Guo Wanda Attends Singapore and Hong Kong: Comparative Perspective on the Occasion of the 20th Anniversary of the Handover
Executive Vice President, Dr. Guo Wanda, attended the “Singapore and Hong Kong: Comparative Perspective on the Occasion of the 20th Anniversary of the Handover” workshop held by the Institute of Advanced Studies, NTU, the Nanyang Centre for Public Administration, NTU, and the Hong Kong Singapore Business Association in Singapore on September 4. Dr. Guo Wanda spoke on “Shenzhen - Hong Kong: Review and Outlook” through analyzing Shenzhen and Hong Kong’s past economic development, e.g. “stores in front, factories in back” model, and the prosperity of Guangdong – Hong Kong – Macau Greater Bay Area and Shenzhen – Hong Kong Metropolis.
The Global Financial Centres Index 22 Launch
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The Global Financial Centres Index 22 (GFCI 22) was launched simultaneously in Chengdu, China and Abu Dhabi, The United Arab Emirates on September 11, 2017. GFCI 22 was jointly compiled by the Z/Yen group and CDI. 108 financial centres were scored and ranked from the perspectives of business environment, financial system, infrastructure, human capital, and reputation.
Date: September 11, 2017
Venue: Tianfu Fund Town, Chengdu
Host: CDI, Z/Yen Group
Theme: The Global Financial Centres Index 22
The Global Financial Centres Index 22 (GFCI 22)
Click here to download the full report as PDF.
London and New York remain in first and second places. Interestingly, despite the ongoing Brexit negotiations, London only fell two points, the smallest decline in the top ten centres. Hong Kong has moved just ahead of Singapore into third – only two points ahead on a scale of 1,000. Tokyo remains in fifth.
There are seven cities across the Chinese mainland rated in the GFCI 22, namely Shanghai, Beijing, Shenzhen, Guangzhou, Qingdao, Dalian and the newcomer Chengdu. Among them, Shanghai got 711 points and ranks 6th, rising 7 places in the rankings. Beijing rose 6 places to the 10th position. Shenzhen got 689 points and ranks 20th, rising 2 places. Shanghai, Beijing ,and Shenzhen are in the top 20 financial centres. Guangzhou ranks 32nd and Qingdao ranks 47th. Chengdu, first enlisted in the GFCI rankings from the associate centres list, ranks 86th and got 604 points. Dalian fell to 92nd.
GFCI 22, jointly compiled by Z/Yen and Group CDI, was launched simultaneously in Chengdu, China and Abu Dhabi, The United Arab Emirates.
Managing Financial Outflows with Cautions
Growth remained generally stable in July. Industrial output was up 6.4% y/y, similar to previous months. But fixed asset investment, the key growth driver, climbed only 6.8% y/y in real terms, its lowest rate this year, and was down 1.5 pps from Q2. Its adjusted growth rate is less than 5%, which will pressure future growth.
Real estate investment was hit by real estate market cooling, and was up just 4.7% y/y in July, down 3.4 pps from Q2. Imports were up 11% y/yy, down 3.2 pps. Import growth may even turn negative next year. Exports were up 7.2% y/y, down 2 pps from Q2. Retail sales of consumer goods have historically been less volatile, and were up 9.6% y/y in real terms in July, same rate as in June. CPI was slightly lower, up 1.4% y/y. But there are strong signs that vegetable, egg and pork prices will rebound, and CPI may rise to 2%. Producer price rises continued to slow. In July, ex-factory production prices rose 5.5% y/y, while PPI rose 7% y/y, down 0.3 pps from June.
Monetary policy in July continued falling back toward normal levels. M2 was up 9.2% y/y, down 2.1 pps from the end of 2016. M1 rose 15.3% y/y. Financial institutions’ estimated shadow banking investment increased 8.65 trillion yuan in 2016 alone, but decreased 845 billion yuan in Q2.
The National Financial Work Conference in July singled out prevention of financial risks as a top priority, including risks from outgoing investment. Chinese overseas M&A has often made major newspaper headlines in recent years, especially in 2016. After an August 18th session of the conference, the State Council gave detailed instructions about sectors where direct investment should be more restricted, and encouraged Chinese companies with M&A linked to real estate, hotels and entertainment, to be more cautious. This may reduce or even stop currently highly-leveraged corporations from investing. This initiative shows the government’s determination to rein in risk, and should prevent systemic financial risk.
CDI International Report on Rethinking on RMB Internationalization
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CDI invited Professor Yosuke Tsuyuguchi from the College of Economics, Nihon University to share the experience of Yen’s internationalization, including the gains and losses in the internationalization process and how the process is relevant to RMB internationalization.
Date: August 25, 2017
Venue: Room 101, CDI Mansion, Shenzhen
Host: CDI
Theme: Rethinking RMB Internationalization: Why is Japan so Prudent about Yen’s Internationalization？
CDI Delegation Attends 2017 GRI International Conference
Zheng Yujie, Director of Department of Think Tank Research and Information, and Liu Yu, Executive Director of Silver-Lake New Energy Research Institute attended the 2017 GRI International Conference (SEE - Sustainability, Energy and Environment) held by Gyeonygi Research Institute at Suwon, South Korea from September 5 to 7. Zheng Yujie presented on the blooming bicycle sharing industry in China, and focused on its development, low-carbon footprint characteristics, accompanying life style change, public space management challenges as well as related regulation and public policies. Liu Yu discussed alongside Mongolian, Indian and Korean representatives on new energy policies and experiences.
CDI Signs MOUs with Belarusian Think Tanks
During a visit led by Vice President Wu Liangcheng to Belarus from August 21 to 25, CDI signed MOUs with the Institute of Economics of the National Academy of Sciences of Belarus and Belarusian Research Institute of Transport Transtekhnika to deepen China-Belarus cooperation and synergize development policies under the “Belt and Road” Initiative.
CDI and the two Belarusian institutes agreed to jointly carry out research projects to facilitate policy coordination and logistics connectivity between China and Belarus under the “Belt and Road” Initiative and convene conferences or seminars to expand the influence of Belarus along the Silk Road Economic Belt.
Dr. Wu Liangchen Attends BRICS Seminar on Governance
On August 17, Dr. Wu Liangchen, Vice President of CDI, attended BRICS Seminar on Governance. Dr. Wu Liangchen’s keynote speech focused on Shenzhen Special Economic Zone’s innovation development.
According to Dr. Wu Liangcheng’s speech, the successful experience of Shenzhen Special Economic Zone is as follows: to explore system reforms and institutional arrangements in small trial areas and then to effectively distribute rare resources, which can achieve rapid growth and showcase development model for other regions.
Shenzhen Annual Meeting 2017
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The annual meeting is intended to explore the way to update management procedures, regulations, optimize and deploy innovative resources efficiently with new economic engine introduced in place of the old one, as China’s economy is transitioning to a new normal. It also serves as a productive platform for Chinese enterprises and the academia to discuss how to accelerate the sound development of new economy and to seek policy proposals for the reference of policymakers.
Date: August 9, 2017
Venue: International Conference Room, First Floor, CDI Mansion
Host: CDI, Shenzhen Soft Science Development Foundation (SSSDF)
Theme: New Economy and Old System-Inclusiveness and Innovation
Groundless Claim: Too Much Money Leads to Skyrocketing House Prices in First Tier Cities
Author: Fan Gang, President, CDI
Editor’s note: Since 2015, house prices in the first-tier cities are insanely increasing while they are cooling down in second- and third-tier cities. The main reason is that the current urban development strategy is inconsistent with population migration. The government restricts the supply of land resources, thus affecting the supply in the real estate market. It has nothing to do with "too much money."
Since 2015 house prices in the first-tier cities have risen sharply, while those in the second- and third-tier cities remained stable. There are two prevailing explanations: one claims that too much money is circulated in the market, and the other claims that the land is too expensive.
First of all, money, a general equivalent, is associated with the prices of any commodities. It is illogical to conclude there is oversupply of money but that is reflected only in house prices in the first tier cities. Moreover, the monetary policy has been tight over the past two years, and M2 is growing at a rate less than 10%. Therefore, it is groundless to assert “more money” has led to polarization of house prices in the first-tier cities and second- and third-tier cities. Second, the land is priced high because the developers expect high house prices, and hence readily buy land at high prices. The price of land naturally increases with the economic development. Actually the abnormal rise of land prices is mainly attributed to the wrong urban development strategy, which results in the inappropriate allocation of land. As a result, land is in short supply in the first tier cities, and there is a huge gap between housing demand and supply.
At present, China’s house price problem is a result of inappropriate urban development strategy. Therefore, it is necessary to liberalize the supply of land to solve problem. In the long run, the most crucial thing is to correct the planning for urban development, focusing on the development of metropolises. What’s more, the improvement and establishment of the property tax and lease system also has an important impact on the property market. In the short run, the purchase restriction is an important measure to effectively protect the real estate market from the real estate speculation.
