News

What global investors can learn from China’s new economic governance

Published

3 years ago

06/09/2021

Several global investors appear to have recently observed a “turn” in China’s economic governance.

Aside from multiple antitrust probes and data security audits of the country’s major internet firms, officials have put stringent rules on the off-campus tutoring industry and enhanced food safety assessments of prominent food brands.

Investors are wondering if China’s policy stance is changing as a result of the comprehensive rules inside the industries. How will the regulatory changes affect the capital market and China’s economic structure in the long run?

Global financial services analysts recognized the regulatory procedures as part of China’s long-term attempts to make growth more sustainable and inclusive, which are expected to bring benefits to the regulated sectors and the broader economy in the end.

In preparation for the commencement of China’s new five-year plan period in 2021, authorities have increased regulatory monitoring in a number of areas.

The country’s highest market regulator pledged in April to increase anti-trust law enforcement, imposing record fines on the country’s digital juggernaut Alibaba and beginning anti-monopoly investigations against internet giant Meituan.

Off-campus tutoring enterprises were put on hold in July when central authorities issued guidelines restricting financing for the for-profit off-campus training organizations in an effort to alleviate student burdens.

Market authorities in the country have also increased their crackdowns on food safety infractions, conducting on-the-spot inspections of a number of popular food brand chain stores and pushing rectifications from the concerned firms.

“The regulatory actions should be placed within the broader framework of China’s economic transition,” said Robin Xing, Morgan Stanley’s top China economist.

For example, the anti-monopoly legislation gave focus to issues such as the over-concentration of market power in a few IT behemoths, which might erode profit margins of small and medium-sized businesses, he added.

“The latest policy suggested a greater emphasis on social fairness, which will promote a healthier economic structure, more stable growth, and happier lifestyles for the people,” Wang Peng, an analyst with Hangzhou-based Yongan Futures, said.

According to Shi Jialong, Nomura’s head of China internet and new media research, the regulatory moves on China’s internet sector are a signal to enable the main platforms to divert their resources and energies away from excessive rivalry and into research on advanced technologies.

“We believe the internet business, which is famed for its tenacity,” Shi said, “should be able to adjust to the environment and sustain healthy growth.”

For a long time, the emphasis has been on quality rather than speed of development. Since the concept of “high-quality development” was introduced at the 19th Communist Party of China National Congress in 2017, China has been reorganizing its economy in order to make growth more sustainable and inclusive.

Financial risks have been mitigated, absolute poverty has been eliminated, and environmental contamination has been addressed. Meanwhile, the government has prioritized the strengthening of reforms on all fronts in order to promote a new development paradigm.

The latest Central Committee for Financial and Economic Affairs meeting, joined by the country’s top authorities, emphasized high-quality growth while emphasizing “shared prosperity” in its quest.

“If you go back, you’ll see that all of the policies can be traced back to the development ideology expressed in public publications,” Wang explained.

“Some folks missed the signs or didn’t fully comprehend it,” he explained.

For example, socioeconomic fairness has long been a policy objective, according to Wang.

With a GDP expansion of 12.7 percent in the first half of this year, China is on course to fulfill its 2021 growth objective of “over 6 percent.”

“This means the country has left enough room to promote measures that are critical to long-term development,” said Victoria Mio, Fidelity International’s director of Asian Equities.

According to Mio, the laws are beneficial to the long-term growth of the Chinese economy and capital market.

Fidelity International, which is bullish on the possibilities of the Chinese market, has sought to establish a wholly owned fund management company. In August, China’s top securities regulator authorized the proposal.

Furthermore, other global asset management behemoths are rapidly turning bullish on China. In an interview on August with the Financial Times, an investment strategist at BlackRock’s research team advised investors to increase their exposure to Chinese markets.

According to Wang, there are several reasons for investors to remain bullish on Chinese assets.

According to Wang, China’s bond yield is among the highest in major nations, but its stock market valuation is lower than in most developed economies, indicating the long-term investment worth of China’s assets.

“It’s impossible to remain confident in China and its assets,” he remarked.

News

Coral bleaching alert level raised from ‘watch’ to ‘warning’

Published

9 hours ago

03/05/2024

The coral bleaching alert level in the Maldives has been raised from ‘watch’ to ‘warning’, with the Maldives Marine Research Institute warning it may soon rise further to the highest alert level in the north and southern Maldives.

Coral bleaching is when corals turn white due to various stressors. However, the leading cause of coral bleaching is climate change.

The world is currently experiencing the fourth global coral bleaching event, and the second one within the span of the year.

The MMRI said in a statement that it is now receiving reports of widespread coral bleaching across the Maldives.

According to the National Oceanic and Atmospheric Administration (NOAA), which runs a Coral Reef Program, the latest satellite images show the bleaching alert level in the Maldives is now at ‘warning’ level – the third highest warning level – up from ‘watch’ just a month ago.

The MMRI warned that the alert level is expected to rise to ‘alert level 1’ within one week.

“It is also possible that areas in the north and south of Maldives will reach ‘alert level 2’,” warned the institute.

Maldives experienced its first widespread coral bleaching incident in 1998.

According to MMRI, such incidents have increased in frequency.

The institute also warned that human activities may impede coral recovery.

“While Maldives’ corals recover faster after bleaching incidents compared to other countries, the impact of human activities at such a time could slow down recovery and even obstruct it,” warned the institute.

Human activities that may impede coral recovery include dredging, land reclamation and beach nourishment.

“Such activities have a negative impact on coral reef ecosystems, even if it’s is just temporary,” said the MMRI.

“We urge all parties to suspend activities that may raise coral stress level, amid forecasts of coral bleaching incidents due to the warming ocean temperature.”

MMRI also urged all parties to report coral bleach incidents to the institute.

Source(s): sun.mv

News

Land up for sale from two phases of Thilafushi

Published

9 hours ago

03/05/2024

Housing Development Corporation (HDC) has announced the sale of land from Phase I and Phase II of the industrial island of Thilafushi, exclusively for Maldivian citizens.

Total 108 plots are available for industrial purposes from Thilafushi Zone A, Area B.

Type 1: 2,500-4,999 square feet, 64 plots
Type 2: 5,000-9,999 square feet, 42 plots
Type 3: 10,000-14,999 square feet, 2 plots

The sale of land will be carried out in two phases; the submission of Expression of Interest (EOI) and, in cases where a plot receives more than one EOI, it will go to bidding.

The minimum bid price is MVR 1,700 per square feet.

Interested parties can submit their bids via HDC’s portal or via email to sales@hdc.mv.

Meanwhile, the opportunity has also been opened for parties who have leased land from Phase I of Thilafushi to purchase the plot. The opportunity is open for parties who have leased land the size of 5,000 square feet or more.

Thilafushi is being developed as the main industrial and business hub in the greater Male’ region.

Source(s): sun.mv

World

UN report: Conflict could set Gaza development back four decades

Published

9 hours ago

03/05/2024

The development of Gaza could face a retrogression by over four decades if the current Palestinian-Israeli conflict was to last for nine months, according to a UN report.

The report, issued on Thursday, reveals a joint study by the UN Development Programme and the Economic and Social Commission for Western Asia (ESCWA), which warns of sharp decline in the Human Development Index (HDI), a summary measure of well-being, in the Gaza Strip and Palestine amid the ongoing Palestinian-Israeli conflict.

The study showed that after nine months of the conflict, the HDI for Gaza could fall to 0.551, setting back progress by 44 years. For Palestine, development could retrogress by more than 20 years – to earlier than 2004.

“This assessment projects that Gaza will be rendered fully dependent on external assistance on a scale not seen since 1948, as it will be left without a functional economy, or any means of production, self-sustainment, employment, or capacity for trade,” said ESCWA Executive Secretary Rola Dashti.

As the conflict approaches its seventh month, the poverty rate in Palestine has surged to 58.4 percent and its GDP has plunged by 26.9 percent, resulting in a loss of $7.1 billion from a 2023 no-war baseline, the UN report showed.

At least 34,596 Palestinians have been killed and 77,816 wounded in Israeli attacks on Gaza since October 7, according to latest update by Palestine’s health ministry.

Hamas said on Thursday it is studying Israeli ceasefire proposals in a “positive spirit” and a delegation is set to visit Egypt soon for further talks, as Israel reiterates it will attack Gaza’s southernmost city of Rafah regardless.

Meanwhile, Israel launched an aerial attack from the direction of the occupied Golan Heights on Thursday night against a military site near the Syrian capital of Damascus, injuring eight soldiers and causing material losses, the Syrian Defense Ministry said.

The targeted areas are known strongholds for elements of Hezbollah and Iranian-backed militias, according to the observatory in Syria.

This attack follows a reported decline in Israeli attacks over the past month, which the Syrian observatory’s director attributed to the strikes on the Iranian consulate in Damascus on April 1.

Iran on Thursday announced sanctions on several American and British individuals and entities for supporting Israel in its war against Hamas. The sanctions include prohibiting accounts and transactions in the Iranian financial and banking systems, and blocking assets within the jurisdiction of Iran as well as visa issuance and entry to the Iranian territory.

Türkiye also announced the halt of all trade activities with Israel as of Thursday until the latter allows the flow of humanitarian aid to the region, said the Turkish trade ministry.

A Shiite militia in Iraq on Thursday claimed responsibility for a missile attack on three sites in the cities of Tel Aviv and Be’er Sheva in Israel “in solidarity with the people of Gaza,” and pledged to persist in targeting the “enemy’s strongholds.” The group has launched multiple attacks on Israeli and U.S. bases in the region since the Gaza conflict broke out.

Source(s): CGTN