China’s Demographics in the Decades Ahead July 15, 2010
Posted by Minh Do in Business, China, Demographics, Equities Market, Life, Stock Market.add a comment
Lots of literature has been written about the rapid aging of China’s population. Simply put, due to China’s old child policy, China’s population is getting old. Fast. Experts have written about the 1 – 2 – 4 phenomenon, where 1 working class individual will be required to support two retired parents and four retired grand parents, estimated to occur between 2030 and 2040. For more statistics on this phenomenon download The Graying of the Middle Kingdom by the Centre for Strategic and International Studies (csis.org/files/media/csis/pubs/grayingkingdom.pdf).
My question is, what affect will this have on business in China and what affect will it have on business today? One thing is for sure, China needs to educate its population on the need for privately funded retirement finances. There should be a rapid growth of private funds aiming to prepare the population for this demographic shift.
China’s capital markets still have a lot of room for growth. According to report above in 2004 the total capitalization of China’s stock market is only one fourteenth the total amount of bank deposits that are available. That is compared to a ratio of 1:1.5 for the US in favour of the stock market. That has probably changed significantly by 2010 (I can’t find exact figures) however comparatively China’s stock markets are illiquid and lack transparency. In order to build a substantial pension/mutual fund industry China must improve the transparency within it’s equity markets.
About a year ago I was working on a project analyzing new Chinese laws that affected the securities markets. I realized that much of the movement in the stock market corresponded to government regulation. Although government announcements can have a substantial effect on the market in any country, in China this affect was especially profound.
Other thoughts on how will this change affect business and what should business be doing today?
Identities July 15, 2010
Posted by Minh Do in Business, Deep Meaningful Thoughts, entrepreneurs, Homepage, Life.add a comment
I started this blog in 2006. I wrote two posts. As of this moment I think about 3 people have ever been to this blog. Perseverance is a very underrated skill and definitely not taught enough in our education system.
This blog was intended to be for updates on Chinese small businesses, interesting information on Chinese private equity (my eventual goal is to be a private equity investor of sorts) and tech and mobile start-ups in China. General thoughts on economics, business and law in China and Asia would also be covered.
But for this ‘revival’ post I’m going to write what is going though my head right now. And that is a question I’m sure troubles pretty much everyone i.e. what to do with your life. Some people fortunately or unfortunately, don’t have this problem. They’re too busy trying to put food on the table or for some of the lucky ones, have had parents who have specifically pushed them in one direction until they excel in that particular skill. Put the Williams sisters and Lewis Hamilton on that list. Tiger Woods as well. These guys put their 10,000 hours into their craft starting about the time they could walk. They’ve been on that track since before they could formulate their own thoughts. Tiger Woods’ identity is a ‘golfer’, always has been and always will be.
For the majority of us, we don’t know what our ‘identity’ is and many people never establish their identity. Or perhaps even worse, they adopt an identity that isn’t particularly suited for them. My current identity is ‘lawyer’. Specifically ‘international corporate lawyer’. However I’m not entirely comfortable with that identity. It’s not that I don’t want to be a lawyer. I just don’t want to be ‘just’ a lawyer. And I’m not sure which direction to take next.
There are many people who have broken the ‘mould’ of their identity. David Rubenstein started as ‘lawyer’ then became ‘White House Staffer’ then became ‘Private Equity Mogul’. David Bonderman went from ‘lawyer’ to ‘private equity mogul’. James Caan went from ‘headhunter’ to ‘small business owner’ to ‘recruitment company managing director’ to ‘private equity mogul’ to ‘TV celebrity’. I’m not sure if this is a natural process or a directed process within the thoughts of the individuals.
I’m also pretty sure that there are many ‘identities’ that I will never have e.g. ‘fashion designer’, ‘artist, ‘engineer’, ‘teacher’, ‘journalist’, ‘chef’. There are also many identities that I wouldn’t mind experiencing e.g. ‘author’, ‘investment banker’, ‘politician’. There are some that I will be e.g. ‘father’ and ‘loving husband’. There are some identities that I definitely want to have which are ‘private equity investor’, ‘entrepreneur’. How can I break the ‘mould’ in the right way? Currently I’m looking to start a business. Alas, I have no idea what to do and what to start. Despite my best efforts so far…I’m still a ‘lawyer’. What about you? What’s your ‘identity’? Have you broken your mould before? How did you do it?
Incompatible: Censorship and search June 28, 2006
Posted by Minh Do in China.1 comment so far
A Wall Street report, drawn to my attention by MarketWatch, suggests Google will gain little from its self-censorship of its China-based sites.
Analysts from a West Coast investment bank conclude that the ideological conflicts between the American media and the Chinese Government are to a bridge too far, making China a limited opportunity, in particular for US internet companies such as Google.
The report continues by stating that in part to a recent shutdown of access to Google’s uncensored sites, around the time of the Tianamen Square massacre (June 4), Google has been losing marketshare to local rivals such as market leader Baidu.com.
The report by ThinkEquity Partners believes that Yahoo, who turned over its China operations to Alibaba, the dominant B2B marketplace in China, in return for a 40% stake, have a superior business model to competitors such as Google.
However a recent report by Paris based Reporters Without Borders found that out of the major search engines in China, Yahoo censored more terms in a limited test that is conducted. Using potentially subversive terms such as ‘Democracy’ the report noted what the first 10 results were on the Chinese sites of Google, Yahoo, Microsoft and local Baidu. Interestingly, Yahoo returned 97% pro-Beijing results, more than even Baidu. In comparison, a search for similar terms on the standard google.com returned only 28% pro-Beijing results.
There is undoubtedly huge opportunity for growth in China due to the rapidly booming internet population, and there is no doubt that Google and others should have a presence in China one way or another. However it is important to note the potential damage that they could do to their brand. This is particularly the case given Google’s motto of ‘Don’t be evil’.
Some users clearly see that Google’s job of ending censorship of political thoughts is the morally right thing to do. Personally I do not see this being the case, democracy necessarily being morally ‘right’ and communism morally ‘wrong’, but I can definitely see the potential effects on Google’s brand as an unbiased and trustworthy supplier of information.
Google’s recent loss of market share in China should definitely be a cause for concern.
Baidu currently occupies a dominant market share of 43.9% in China, followed by Yahoo! China 21.1%, Google 13.2% and Sohu 9.2%. Google’s engine is favoured by international trade advertisers, whilst homegrown Baidu is more favoured by local and online marketers.
