China’s “Great Wall” of Debt Chinese Debts and their Macroeconomic Implications. Bertelsmann Stiftung GED Focus Paper

The figures of the Chinese debts are subject to ongoing discussion among economists. The question whether the enormous rise in Chinese corporate and private debt over the past decade will lead to another global financial crisis or will be managed by the Chinese government is one of vital importance to the global economy: if China’s debt management fails, the macroeconomic effects are expected to overshadow the catastrophic effects of the 2008 financial and economic crises by large. The Economist (7 May 2016) even goes as far as to state the question not if, but when China’s debt bubble will burst. The term “China’s Great Wall of Debt” coined by Dinny McMahon (2018) to emphasize the connection between recent Chinese growth and corresponding debt seems therefore very well put

The contracts between leading agribusiness enterprises and rural households: its effects on firm-level export of agricultural products

In this paper, transaction cost is introduced into the general firm-level export behavior model. By so doing, we build a theoretical model explaining how connection modes between leading agribusiness enterprises and rural households affect the firm-level agricultural products export. Analyzing the dataset of 561 national leading agribusinesses of the year 2003, we use Tobit model to estimate the firm-level export effect of the connection modes. The empirical result demonstrates that connections in the mode of stock-cooperation or cooperation contracts have a significant positive effect on the enterprises export and export ratio. In addition, the connection with more characteristics of factor contract has stronger effect on export than that with commodity contract characteristics.Contracts; Agribusiness; Rural Households; Firm-level; Export

The chinese financial system at the Dawn of the 21st century: An Overview

Based on a systematic review and summarization of China’s 30 years of financial reform and development, this paper comprehensively analyzes the past, present and future development of China’s financial system and also presents the mechanism for China’s financial development from the view of political economics. Generally, the Chinese financial system is bank-oriented. The property rights structure, led by state-owned banks, is the prominent feature of the Chinese banking system. Equity, bond, money, currency and real estate markets have been developing rapidly; however, the development rate of these markets varies, and institutional construction generally falls behind the market development. China’s financial decision-making authority belongs to the State Council, and the financial supervision system adopts the mode of “separate regulation.” China’s state-driven, progressive financial reforms have promoted the formation of the government-led financial structure, which is composed of three parts: first, monetary policy, balancing both inflation control and economic growth; second, bank credit expansion under the implicit guarantee of the state; and third, the adjustable pegged exchange rate system based on capital controls. The next phase of financial reform in China will mainly focus on the following four key goals: first, to further improve the corporate governance and the mixed operation of financial institutions; second, to construct the institution of a financial market system and improve the effectiveness of the financial markets; third, to re-integrate regulatory resources, combine macro- and micro-prudent views, and establish a comprehensive framework for financial stability; fourth, to promote the liberalization of interest rates, marketization of the exchange rate and the opening of capital accounts based on a progressive approach and to improve the openness of the financial system based on macroeconomic stability.China, Financial System, Bank-oriented, Political Economics

The Use of Value Capture for Transport Projects in China: Opportunities and Challenges

Value capture (VC) could be a useful tool to address the huge demand for public transport infrastructure funding in China. This research identifies the opportunities and challenges faced by VC implementation in China and explains how local governments and local transit agencies dealt with the regulatory barriers. The findings of this research offer insights including: (1) macro environment, regulatory framework, and supportive policy environment provide opportunities to adopt VC projects, while the risk of acquiring land vale cannot be isolated from the global political and economic situations; (2) the regulatory challenges of land transactions and lack of property tax system restrict the application of VC; (3) evidence from the case study of Shenzhen demonstrates that local government may creatively deal with the regulatory challenges to do VC and benefit local community; (4) institutional capacity is vital to implement VC. The analysis of Shenzhen experience can provide a reference for other Chinese cities to implement VC.fals

Strategic business model typologies evident in the Chinese real-estate industry

The Chinese real estate industry has emerged over recent decades as one of the key drivers of Chinese economic growth and attracted thousands of players nationwide. Yet, despite the continuing importance of the real-estate industry in China, there has not been any work done to identify nor describe the strategic business models used by enterprises within the sector. This study fills this gap in the literature. This paper begins by building a framework for studying the strategic business models used within the Chinese real-estate industry, and then goes on to identify the generic models that exist in the industry. A two-step cluster analysis of 117 Chinese real-estate companies was carried out over seven parameters identified in the literature as impacting business models: 1) clients, 2) products offered, 3) market locale, 4) financial structure, 5) value chain embeddedness, 6) core competency, and, 7) revenue source. Five generic strategic business models that characterize the Chinese real-estate industry were identified: 1) commercial property model, 2) government servicing model, 3) cost efficiency model, 4) asset management model, and, 5) high-turnover model. The findings will assist industry practitioners in evaluating and informing their own competitive positions within the Chinese real-estate industry

The dimensional structure of TL company's dynamic capabilities

Faced with intensive policy adjustments and diversified customer needs, how regional real estate enterprises develop their core competitiveness has become the most concerned issue for business managers. This thesis selects TL Company as a typical representative of regional real estate companies, and uses case studies and literature research methods from the perspective of dynamic capabilities to reveal when the competitive environment changes and how real estate companies can quickly break through the initial identity constraints. This thesis analyzes the dimensional structure and improvement path of dynamic capabilities, and evaluates the dynamic capabilities of TL Company based on the dynamic capabilities of real estate companies. And based on the perspective of dynamic capabilities, the thesis make proposes suggestions of cultivating dynamic capabilities, building regional core competitiveness, and carrying out effective strategic transformation for other regional real estate companies that are seeking reforms. The research significance of this thesis is mainly concentrated on two aspects: First, based on the development history of TL Company in the past 20 years, this company can be used as a reference to other real estate enterprises’ Strategic transformation path in China. Secondly, this thesis summarizes the dynamic capacity’s development path suitable for the development of regional real estate enterprises in China through analyzing dynamic capacity’s development, construction and function of TL Company. And to some extent, this study can provide ideas and lessons having certain practical significance to other real estate enterprises that are seeking reform and transformation.Confrontados com ajustamentos políticos frequentes e a diversidade das necessidades dos clientes, os gestores das empresas de imobiliário elegeram, como assunto mais importante, o desenvolvimento da competitividade central das suas empresas. Esta tese seleciona a empresa TL como um caso representativo das empresas regionais de imobiliário e utiliza o método de caso de estudo e a teoria das capacidades dinâmicas para estudar como face a mudanças da envolvente as empresas podem rapidamente romper os constrangimentos identificados. Esta tese analisa a estrutura dimensional e o caminho de melhoria das capacidades dinâmicas e avalia as capacidades da empresa TL baseando-se nas capacidades dinâmicas das empresas de imobiliário. Com base na perspectiva das capacidades dinâmicas esta tese propõe sugestões referentes ao desenvolvimento de capacidades dinâmicas, à construção de competitividade central e à implementação de uma efetiva transformação estratégica que podem ser úteis a outras empresas regionais de imobiliário que procurem reformas. Podemos sintetizar a importância da pesquisa desta tese em dois aspectos: 1) com base na história do desenvolvimento da empresa TL nos últimos 20 anos, utilizamos esta empresa como uma referência para outras empresas que queiram proceder a uma transformação estratégica; 2) esta tese sumariza o caminho adequado para o desenvolvimento das capacidades dinâmicas das empresas regionais de imobiliário chinesas. Até certo ponto, este estudo pode fornecer ideias e lições com sentido prático para outras empresas regionais de imobiliário que queiram reformarse

Asset securitization for small and medium-sized real estate enterprises in China

Based on the economic background of strict regulation and control of real estate bank credit and on the background of vigorous development of the financial system of direct financing in China, this thesis analyzes the necessity and feasibility of asset securitization financing for small and medium-sized real estate cmpanies. It shows that this type of financing is not only in line with the direction of the dual economic and financial reforms, but also that small and medium-sized real estate companies can meet their financing needs by relying on their specific high-quality assets rather than the main body credit financing. Using Company A as a typical case, we carried out design of the securitization program for the underlying asset pool construction, choice of bankruptcy remote and credit enhancement instruments, and product tranches, based on the characteristics of the asset composition status and low credit rating of the main body. Not only does it meet financing needs, but it also improves other financial situations. Therefore, this thesis has reference value, promotion, and practical significance for small and medium-sized real estate companies.Este trabalho analisa a necessidade e a viabilidade do financiamento de pequenas e médias empresas imobiliárias por via da securitização de ativos, no contexto económico da rigorosa regulamentação do crédito imobiliário e do vigoroso desenvolvimento do sistema de financiamento direto na China. Demonstra-se que este tipo de financiamento não só está de acordo com a direção da dupla reforma no âmbito da economia e das finanças, mas também que as pequenas e médias empresas do setor imobiliário podem satisfazer as suas necessidades de financiamento por via dos seus ativos específicos de alta qualidade como alternativa ao crédito por financiamento bancário. Utilizando a empresa A como um caso típico, elaborou-se o desenho do programa de securitização para uma pool de ativos subjacentes, a seleção de instrumentos de isolamento de insolvência e de melhoria do nível do crédito, e o desenho do programa de securitização com tranches de produtos, com base nas características dos ativos e na avaliação de crédito da estrutura principal. Isto não só satisfez as necessidades de financiamento, como também melhorou outras condições financeiras. Por conseguinte, este trabalho tem valor de demonstração, de divulgação e significado prático para as pequenas e médias empresas imobiliárias chinesas

Franchising Model for Expansion of the International Travel Business

The hotel sector of the travel industry is the leader according to the indicator of economic growth, which is observed in both developed and developing countries. Even under the economic instability and global natural disasters, the industry has seen growth in recent years. The franchising model for expanding activities is central to all successful hotel chains. The article deals with the franchising model for the travel business expansion and the economic performance of hotel chains such as Marriott International, Wyndham Hotels, and Hilton. They hold a prominent place in the global hotel business, have a steady tendency to expand their business, hold high positions in the ranking of the best franchises in the world and have been recognized by experts. The main risks for the franchisor and franchisee are determined when making a decision on the expansion of the international travel business, which must be taken into account when developing new markets for hotel chains. The main advantages of the franchising model of expansion, which promote understanding between the parties of the franchise agreement, dynamicize hotel chains expansion and allow for reducing their expenses and increasing incomes. It was found that the growth of net profit and total income in the indicated hotel chains was due to the increase in the number of rooms in franchising and the positive dynamics of franchise income. A more dynamic pace occurred after the crisis growth in revenues from the franchisee compared with the managerial model. A closer relationship between revenues and key financial indicators has been proved when using a franchising model

The globalisation of Chinese brands

China has taken over Japan over the last decade to become the largest manufacturer and exporter of more than one hundred consumer products. However, China, as “the world factory”, has yet to create a single brand that is recognised worldwide. The recent acquisition of IBM’s PC business by China’s Lenovo may signal the beginning of the globalisation of Chinese brands. This paper considers the current brand revolution in China, focusing on the unique challenge faced by major Chinese enterprises: how to sustain their brands in domestic competition and how to expand in the global markets. The paper is divided into two parts: it first gives a brief review of the development of marketing and branding in China since the start of economic reform in 1978, and then discusses current issues in the domestic market: changes from price competition to brand competition, as well as diversification and the role of the government. The second part examines the routes to internationalisation taken by some of China’s biggest brands; differences in their entry modes and branding strategies are analysed