Chindia Alert: You’ll be Living in their World Very Soon
aims to alert you to the threats and opportunities that China and India present. China and India require serious attention; case of ‘hidden dragon and crouching tiger’.
Without this attention, governments, businesses and, indeed, individuals may find themselves at a great disadvantage sooner rather than later.
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‘Forbes’ magazine reported that China’s central bank will launch its own sovereign digital currency to coincide with the Singles’ Day online shopping festival
The People’s Bank of China is seeking to address financial risks and counter the current dominance of the US dollar
The Singles’ Day is a holiday celebrated in China on November 11 and has become the largest online shopping day in the world. Photo: Simon Song
China’s desire to launch the world’s first government-backed digital currency could see the possible rival to Facebook’s Libra be launched in time for November’s Singles’ Day online shopping festival despite a Chinese media report playing down the timing as “inaccurate speculation”.
Several central bank officials have publicly spoken out over the past several weeks about the need for China to launch its own digital currency since Facebook unveiled its plans for Libra, and the People’s Bank of China (PBOC) appear to be making rapid progress ahead of an expected launch.
Forbes magazine reported this week, citing a source who previously worked for the Chinese government, that China’s central bank could launch the digital currency as soon as November 11 as its bids to address financial risks and to counter the current dominance of the US dollar.
The PBOC did not respond to a faxed request for comment on the Forbes story, although Sina.com said that the report was “inaccurate speculation” citing an unnamed source close to the central bank.
China’s central bank is expected to distribute its digital currency through the big four state-owned banks – the Industrial and Commercial Bank of China, China Construction Bank, the Agricultural Bank of China, and the Bank of China – and mobile payments systems Alipay and WeChat Pay, as well as UnionPay, the state-supported credit card provider, according to the Forbes report. Alibaba is the owner of the South China Morning Post.
Ma Changchun, deputy chief of the Payment and Settlement Division of the PBOC, said at the start of August that a digital currency prototype existed and that the central banks’ Digital Money Research Group had already fully adopted blockchain architecture to ensure its use in retail transactions.
“The People’s Bank digital currency can now be said to be ready,” said Ma on August 11.
The People’s Bank digital currency can now be said to be ready Ma Changchun
Former central bank governor Zhou Xiaochuan said last month that, in addition to central banks, “commercial entities” should be allowed to issue banknotes backed by their own private currency assets, although he did not elaborate on what kind of “commercial entities” might be appropriate to issue a digital currency in China.
China is also ready to make Shenzhen a pilot zone for digital currency as part of plans for the city to become a socialist model city, according to a statement summarising a meeting between the Shenzhen party secretary Wang Weizhong and central bank governor Yi Gang released on Thursday.
The PBOC implemented a blanket crackdown in China on trading of cryptocurrency, including bitcoin, which are not backed by any government, viewing them as risks to China’s financial stability and security. At the same time, in 2014 the central bank created its own academy to study digital currencies and the related blockchain technology.
Neil Woodfine, director of marketing at blockchain start-up Blockstream, said a digital currency created by the PBOC would be “just like cash” and “would be fully controlled by the central bank.”
“If it’s digital instead of physical, they can close accounts and monitor all activities [in the entire financial system]. Commercial bank deposits are difficult for them to monitor, control or pull information out of for verification because the numbers are in each bank’s data centre,” Woodfine said.
Wang Xin, director of the central bank’s research bureau, said last month that
to create its own digital currency have pushed Beijing to speed up its own digital currency plan as Libra could potentially pose a challenge to Chinese cross-border payments, monetary policy and even financial sovereignty.
Leonhard Weese, the president of the Bitcoin Association of Hong Kong, said that a government-backed digital currency may enhance the PBOC’s control of China’s monetary system, cutting reliance on commercial banks to transmit changes in monetary policy.
“It would be similar to just killing the commercial banks,” Weese said.
which would be a non-sovereign digital currency controlled by a Swiss-based company, has come under intense scrutiny by regulators and central banks worldwide. Last month, the Group of Seven industrialised nations, known as the G7, called for urgent regulatory measures and other types of action to address serious concerns over Libra.
Central banks, however, have expressed interest in launching their own digital currencies to counter the US dollar and to gain more control of their own monetary systems.
Mark Carney, governor of the Bank of England, argued last week that the US dollar, the current dominant reserve currency, could be replaced by a global digital alternative to tackle ultra-low interest rates.
Facebook’s Libra, which is expected to be launched next year, will be pegged to a basket of convertible currencies – so it could serve as a stable online currency – while its payments will be endorsed by Visa and Mastercard. Photo: Reuters
A digital currency “could dampen the domineering influence of the US dollar on global trade”, Carney said last week at the US Federal Reserve’s annual conference, adding that a digital currency has the edge to counter shocks emanating from the US through trade and exchange rates.
Daniel Wang, chief executive and co-founder of blockchain start-up Loopring, said that a Chinese government-backed digital currency may provide a new way for the yuan to compete globally.
“If the central bank wants to increase the global competitiveness of the yuan through its digital currency, only an open and standard-based competitor carries any hope,” said Wang.
A digital yuan would “remain a sovereign currency under a centralised sovereign,” continuing to require the trust from users in the Chinese central bank and government institutions behind it, Wang added.
Alfred Schipke, senior resident representative for China at the International Monetary Fund (IMF), said that the bank is “open” to digital currencies, including the one being developed by China’s central bank.
The IMF in principle is looking at these things favourably. It’s a two-way process where we learn from China, which is often at the forefront of development. Alfred Schipke
“We don’t have a specific view on a particular currency, we haven’t looked at the details of the latest proposals from China,” Schipke said on Thursday. “The IMF in principle is looking at these things favourably. It’s a two-way process where we learn from China, which is often at the forefront of development.”
Blockstream’s Woodfine said that Beijing’s move also reflects a growing concerns among central banks that a financial disaster is on the horizon.
The 30-year US Treasury bond yield fell to an all-time low 1.976 per cent on Thursday, while yields around the world also plunged to multi-year or record low, triggering rising fears over a global recession.
Central banks around have also been driving down interest rates, with the PBOC recently unveiling a key interest rate reform that effectively cuts borrowing costs for companies to boost its slowing economy.
“We’ll see a move by governments and central banks to take back control over the financial system and use that power to direct their economies, continuing to pump money into the system to keep it afloat,” Woodfine added.
“A digital currency would be the perfect channel for helicopter money,” he said in reference to the idea that a central bank could stimulate the economy by giving out large quantities of money to the public, as if dumped from the sky. “They can send out free money to consumers.”
US retailer Costco was forced to close early on its opening day in China, after the store was swamped with shoppers.
Buyers battled long queues and traffic chaos, before the Shanghai store was shut hours early due to “overcrowding”.
Costco’s push into China comes as other foreign retailers have struggled to compete with local rivals.
It also comes at a time of rising tensions between the US and China over trade.
Costco is a discount warehouse store that sells a range of goods, from fresh foods to household electronics.
Some customers spent two hours lining up to pay for their purchases, while some had to wait three hours for parking, state news agency Xinhua reported.
Image copyright AFPImage caption Images from the store show customers caught up in heavy crowds
One video showed people pushing through heavy crowds to get their hands on roast chickens.
“Due to overcrowding in the market, and in order to provide you with a better shopping experience, Costco will temporarily close on the afternoon of August 27. Please avoid coming,” the retailer in a notice on its official app, according to AFP.
Image copyright GETTY IMAGESImage caption Some customers reportedly spent two hours lining up to pay for their goods
Costco has had an online presence in China since 2014, through a partnership with e-commerce giant Alibaba.
The firm’s first store in the country comes as other international retailers battle tough competition in China.
Earlier this year, Amazon said it was downsizing its operations in China and France’s Carrefour agreed to sell 80% of its China business to local retailer Suning.com after a series of losses.
The world’s two largest economies have been fighting a trade war for the past year, and tensions have escalated with the threat of more tariffs from both sides.
Chinese President Xi Jinping meets with visiting Uzbek Prime Minister Abdulla Aripov at the Great Hall of the People in Beijing, capital of China, Aug. 28, 2019. (Xinhua/Yao Dawei)
BEIJING, Aug. 28 (Xinhua) — Chinese President Xi Jinping met with visiting Uzbek Prime Minister Abdulla Aripov here on Wednesday, calling on the two countries to jointly push forward the high-quality construction of the Belt and Road.
Xi asked Aripov to convey his sincere regards to Uzbek President Shavkat Mirziyoyev.
The key to the constant leap-forward development of China-Uzbekistan relations is that both sides always adhere to the spirit of good-neighborliness, mutual benefit and mutual assistance, according to Xi.
Xi stressed that he attaches great importance to the development of the China-Uzbekistan comprehensive strategic partnership, which is in line with the fundamental interests of the two countries and their peoples.
Hailing the achievements of the fifth meeting of the China-Uzbekistan intergovernmental committee of cooperation, Xi said that the cooperation goals set by the two sides will certainly be realized as long as the bilateral relationship stays on the right track.
Xi called on both countries to further promote the high-quality construction of the Belt and Road, enhance synergy between national development strategies, strengthen connectivity through cross-border roads and railways, expand cooperation in trade, investment, high and new technology, energy and other fields, as well as foster new highlight in people-to-people and cultural exchanges.
China is willing to increase imports of Uzbek quality agricultural products, Xi said, adding that Uzbekistan is welcome to attend the second China International Import Expo as guest of honor later this year.
In addition, Xi said that the two sides should work together to combat the “three evil forces” of terrorism, separatism and extremism, fight against drug trafficking and other transnational organized crimes.
The rejuvenation of the Chinese nation is to seek happiness for the Chinese people and will also benefit world peace and human progress, Xi said, stressing that China will absolutely not follow the old path of “a strong country must seek hegemony.”
China is ready to enhance coordination with Uzbekistan on international affairs, safeguard common interests of the two countries, uphold multilateralism and promote democracy in international relations, Xi said.
He also called on the two countries to work with other members of the Shanghai Cooperation Organization (SCO) to raise the awareness of a community with a shared future and lift cooperation in various fields, so as to promote further development of the SCO and benefit peoples of various countries in the region.
Aripov conveyed President Mirziyoyev’s sincere greetings and lofty respect to President Xi and his warm congratulations on the 70th anniversary of the founding of the People’s Republic of China.
President Mirziyoyev sincerely hopes China will achieve greater prosperity and early national rejuvenation under the leadership of President Xi, according to Aripov.
Calling China “the closest and most reliable neighbor and partner” of Uzbekistan, Aripov said that Uzbekistan will work with China to firmly implement the important consensus reached by the two heads of state.
Mirziyoyev has appointed a special agency to synergize development strategies with the Chinese side, actively promote cooperation with China on the construction of the Belt and Road, and expand people-to-people and cultural exchanges, according to Aripov.
Uzbekistan firmly supports China in safeguarding its sovereignty, security and unity, and will continue to actively work with China to combat the “three evil forces” of terrorism, separatism and extremism, said Aripov.
Aripov is paying an official visit to China from Tuesday to Thursday at the invitation of Chinese Premier Li Keqiang.
NEW DELHI (Reuters) – India is set to impose a nationwide ban on plastic bags, cups and straws on Oct. 2, officials said, in its most sweeping measure yet to stamp out single-use plastics from cities and villages that rank among the world’s most polluted.
Prime Minister Narendra Modi, who is leading efforts to scrap such plastics by 2022, is set to launch the campaign with a ban on as many as six items on Oct. 2, the birth anniversary of independence leader Mahatma Gandhi, two officials said.
These include plastic bags, cups, plates, small bottles, straws and certain types of sachets, said the officials, who asked not to be identified, in line with government policy.
“The ban will be comprehensive and will cover manufacturing, usage and import of such items,” one official said.
India’s environment and housing ministries, the two main ministries leading the drive, did not respond to emails from Reuters to seek comment.
In an Independence Day speech on Aug. 15, Modi had urged people and government agencies to “take the first big step” on Oct. 2 towards freeing India of single-use plastic.
Concerns are growing worldwide about plastic pollution, with a particular focus on the oceans, where nearly 50% of single-use plastic products end up, killing marine life and entering the human food chain, studies show.
The European Union plans to ban single-use plastic items such as straws, forks, knives and cotton buds by 2021.
China’s commercial hub of Shanghai is gradually reining in use of single-use plastics in catering, and its island province of Hainan has already vowed to completely eliminate single-use plastic by 2025.
India lacks an organized system for management of plastic waste, leading to widespread littering across its towns and cities.
The ban on the first six items of single-use plastics will clip 5% to 10% from India’s annual consumption of about 14 million tonnes of plastic, the first official said.
Penalties for violations of the ban will probably take effect after an initial six-month period to allow people time to adopt alternatives, officials said.
Some Indian states have already outlawed polythene bags.
The federal government also plans tougher environmental standards for plastic products and will insist on the use of recyclable plastic only, the first source said.
It will also ask e-commerce companies to cut back on plastic packaging that makes up nearly 40% of India’s annual plastic consumption, officials say.
Cheap smartphones and a surge in the number of internet users have boosted orders for e-commerce companies, such as Amazon.com Inc (AMZN.O) and Walmart Inc’s (WMT.N) Flipkart, which wrap their wares – from books and medicines to cigarettes and cosmetics – in plastic, pushing up consumption.
Chinese Premier Li Keqiang (L) holds a welcoming ceremony for visiting Uzbek Prime Minister Abdulla Aripov before their talks in Beijing, capital of China, Aug. 27, 2019. (Xinhua/Yin Bogu)
BEIJING, Aug. 27 (Xinhua) — Chinese Premier Li Keqiang held talks Tuesday with visiting Uzbek Prime Minister Abdulla Aripov, and the two sides agreed to cement cooperation.
Li said China attaches great importance to China-Uzbekistan relations and is willing to maintain close high-level exchanges with Uzbekistan, promote trade and investment liberalization and facilitation, and strengthen communication and coordination in international and regional affairs.
Li said China is ready to seek synergy between the Belt and Road Initiative and Uzbekistan’s development strategy, deepen cooperation in production capacity, interconnection and agriculture, and make efforts to ensure the stability of energy cooperation.
He expected the two sides to promote cooperation in culture, tourism and higher education, so as to consolidate the people-to-people foundation of bilateral ties.
China is willing to continue to expand the scale of bilateral trade, import Uzbek products that meet the needs of the Chinese market, and support capable Chinese companies investing in Uzbekistan in accordance with market rules, Li said, hoping Uzbekistan will create a good business environment.
Aripov said Uzbekistan is ready to continue to participate in the Belt and Road Initiative, deepen cooperation in various fields, and welcome Chinese enterprises to expand investment in Uzbekistan, so as to push bilateral relations to a higher level.
The two leaders witnessed the signing of a series of cooperation documents after the talks.
The Chief Economic Adviser, K Subramanian, disagreed with the idea of industry-specific incentives and argued for structural reforms in land and labour markets. Members of Prime Minister Narendra Modi’s economic advisory council sound inchoate, resorting to social media and opinion editorials to counter one another.
In essence, the quibble among the members of the economic team of Mr Modi and his government is not about whether India is facing an economic slowdown or not, but about how grave the current economic crisis is.
To put all this in context, it was less than just two years ago, in November 2017, that the global ratings agency Moody’s upgraded India’s sovereign ratings – an independent assessment of the creditworthiness of a country – for the first time in 14 years.
Image copyrightGETTY IMAGESImage captionSales of cars and SUVs have slumped to a seven-year low
Justifying the upgrade, Moody’s had then argued that the economy was undergoing dramatic “structural” reforms under Mr Modi.
In the two years since, Moody’s has downgraded its 2019 GDP growth forecast for India thrice – from 7.5% to 7.4% to 6.8% to 6.2%.
The immediate questions that arise now are: is India’s economic condition really that grim and, if yes, how did it deteriorate so rapidly?
To make matters worse, Finance Minister Nirmala Sitharaman presented her first budget recently with some ominous tax proposals that threatened foreign capital flows and dented investor confidence. It sparked criticism and Ms Sitharaman was forced to roll back many of her proposals.
Image copyright GETTY IMAGESImage caption In 2016, India withdrew 85% of all currency notes from the economy
So, it is indeed true that India is facing a sharp economic downturn and severe loss of business confidence.
The alarm over the economic condition is not merely a reflection of a slowdown in GDP growth but also the poor quality of growth.
Private sector investment, the mainstay of sustainable growth in any economy, is at a 15-year low.
In other words, there is almost no investment in new projects by the private sector. The situation is so bad that many Indian industrialists have complained loudly about the state of the economy, the distrust of the government towards businesses and harassment by tax authorities.
But India’s economic slowdown is neither sudden nor a surprise.
Behind the fawning headlines in the press over the past five years about the robustness of India’s growth was a vulnerable economy, straddled with massive bad loans in the financial sector, disguised further by a macroeconomic bonanza from low global oil prices.
India’s largest import is oil and the fortuitous decline in oil prices between 2014 and 2016 added a full percentage point to headline GDP growth, masking the real problems. Confusing luck with skill, the government was callous about fixing the choked financial system.
Media caption What is really happening with India’s economy?
This move destroyed supply chains and impacted agriculture, construction and manufacturing that together account for three-quarters of all employment in the country.
Before the economy could recover from the currency ban shock, the government enacted a transition to a new indirect taxation system of the Goods and Services Tax (GST) in 2017. The GST rollout wasn’t smooth and many small businesses initially struggled to understand it.
Such massive external shocks to the economy, coupled with a reversal in low oil prices, dealt the final blow to the economy. Millions of Indians started to lose their jobs and rural wages remained stagnant. This, in turn, impacted consumption, slowing down the economy sharply.
Not easy
The wobbly state of the economy has also thrown government finances in disarray: tax revenues are much below expectations.
On Monday, the government got a much-needed breather when India’s central bank announced a $24bn (£19bn) one-time payout for the cash-starved government. (This amount is more than the dividend paid by the central bank to the government in all five years of the Congress rule between 2009 and 2014.)
The solutions to the economic crisis are not easy.
Indian industry, fed and fattened with government protection through decades, is once again clamouring for tax cuts and financial incentives.
But it is not clear that such benefits will revive private sector investment and domestic consumption immediately.
For all the hype about the Make in India programme, hailed as the harbinger of the country’s emergence as a manufacturing power, India’s dependence on China for goods has only doubled in the past five years.
India today imports from China the equivalent of 6,000 rupees ($83; £68) worth of goods for every Indian, which has doubled from 3,000 rupees in 2014.
So, India is neither making goods for itself nor for the world.
Image copyright AFPImage caption India’s agrarian crisis is a major stumbling block
Ornamental tax and other fiscal incentives to specific industries are not suddenly going to make Indian manufacturers competitive and stop India’s addiction for affordable Chinese goods. If any, the trade spat between China and the United States only saw countries such as Vietnam and Bangladesh benefit and not India.
More currency or trade tariffs are not the solutions either. The central bank has lowered interest rates and there is some push to lowering the cost of capital for industry. But again, Indian industry will invest more only when demand for goods and services increases. And demand will increase only when wages increase, or there is money in the hands of people.
So, the only immediate solution for India seems to be to boost consumption through a stimulus given directly to people, in the classical Keynesian mould.
Of course, such a stimulus should be combined with reforms to boost business morale and confidence.
In sum, India’s economic picture is not pretty.
It is important for India’s political leadership to see this not-so-pretty picture and not hide behind rose tinted glasses. Prime Minister Modi has a unique electoral mandate to embark on bold moves to truly transform the economy and pull India out of the woods.
BEIJING, Aug. 25 (Xinhua) — The water quality of China’s major rivers, lakes and coastal waters is improving, while in general, the water ecology is not optimistic, an official report showed.
The report was made by an inspection team tasked with examining the enforcement of the water pollution prevention and control law, under the Standing Committee of the National People’s Congress, China’s top legislature.
From April to June, the law enforcement inspection team was divided into four groups and went to eight provinces, including Sichuan, Jiangsu, Hunan, Hebei, Guangdong, Anhui, Yunnan and Guizhou, to carry out law enforcement inspections.
The inspection groups visited 31 cities and carried out on-site inspections of 201 organizations, villages and projects.
At the same time, 23 other provincial-level regions were entrusted to carry out similar investigations to achieve full coverage of law enforcement inspections.
According to the report, in 2018, 71 percent of the national surface water sections were of good quality and the water quality of major rivers, lakes and coastal waters was stable and good.
However, the report also points out that inadequate law implementation is still prominent, and the overall situation of China’s water environment is not optimistic.
A recent joint exercise in Tajikistan is the latest example of Beijing’s growing security and economic interests in the former Soviet republic
Analysts say Moscow may not be happy about China’s growing reach in the lawless, mountainous area and will be keeping an eye on the situation
Chinese and Tajik troops completed a joint exercise earlier this month in the mountainous region of Gorno-Badakhshan. Photo: Xinhua
China is increasing its military and economic presence in parts of central Asia that Russia has traditionally considered its sphere of influence – a development some analysts believe could cause concern in Moscow.
While Russia’s influence remains strong in many former Soviet republics, China is steadily building up its military and economic influence in Tajikistan, particularly in the remote, mountainous areas on its western borders where central government authority is weak.
Chinese troops recently concluded a joint drill in eastern Tajikistan involving 1,200 troops from both countries.
The eight-day exercise that finished on August 13 was conducted in the autonomous Gorno-Badakhshan autonomous region, a sparsely populated territory in the high Pamir mountains, which borders China’s Xinjiang region and Afghanistan.
China has been increasing its security presence in the strategically sensitive region. Photo: Xinhua
Although this year’s exercise involved fewer troops than the 10,000 involved in a previous drill three years ago, it tested the use of advanced aerial vehicles and ground reconnaissance technology to monitor the area.
The landlocked country is strategically important for China, which is worried that the porous borders will serve as an entry point for drugs and Islamic militants into Xinjiang, where its deradicalisation strategy has led to the detention of a million Muslim minorities in reeducation camps.
It also sits along the trade routes China hopes to develop under the Belt and Road Initiative – Beijing’s flagship plan to expand its global influence through infrastructure, trade and investment – but the area has long been plagued by lawlessness and outbreaks of violence.
The recent exercise tested aerial surveillance techniques. Photo: Xinhua
Artyom Lukin, a professor of international politics at Far Eastern Federal University in Vladivostok, said Russia was not happy about the deployment of Chinese forces in Tajikistan.
“Russia has traditionally considered Central Asia, including Tajikistan, as its sphere of political-military influence,” he said.
Observers said other Central Asian republics – such as Kazakhstan, Uzbekistan and Kyrgyzstan – are likely to stay within Moscow’s orbit, but China is steadily building closer security ties with Tajikistan.
In February, China’s defence ministry denied that it was building a base and stationing troops in the country, but defended its closer military cooperation with Tajikistan.
The recent training exercise was conducted in an area Russia has long seen as part of its sphere of influence. Photo: Xinhua
China has long-standing security interests in the country and in 2016 it agreed to finance 11 border outposts and a training centre for guards along the Afghan border.
This was part of a deal Beijing made through the Quadrilateral Cooperation and Coordination Mechanism – which also involves Pakistan, Afghanistan and Tajikistan – to strengthen cooperation in combating terrorism and improving security.
China has also overtaken Russia economically, becoming the largest foreign investor in Tajikistan in 2016, accounting for 30 per cent of Tajikistan’s total direct accumulated investments, state news agency Xinhua reported.
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China’s direct investment in Tajikistan was worth US$95 million in 2017, according to the latest available figures. China has also grown to become the country’s third largest trading partner with bilateral trade reaching around US$1.5 billion in 2018.
A recent opinion piece published by the Russian state-owned news agency Sputnik suggested China may be “getting carried away” by its investments in the region.
The article suggested that China’s growing presence in the country could lead to a “partial loss” of Tajikistan’s sovereignty and argued that Beijing may want to take control of the border with Afghanistan.
China also has economic interests to protect. Photo: Xinhua
But Lukin said even though this growing involvement may be an irritant for Russia, the strategic partnership between China and Russia will remain strong.
The two countries remain the key players in the Shanghai Cooperation Organisation, an economic and security alliance that includes the Central Asian republics and India and Pakistan.
Why Chinese investors are struggling to gain a foothold in Tajikistan
Lukin said: “Moscow no doubt understands that in terms of security, Tajikistan’s border, adjacent to China’s Xinjiang and Afghanistan, is truly a vital concern for Beijing.
“The presence of Chinese troops could actually benefit Russia, because it will be China bearing the costs of policing Tajikistan’s mountainous border areas.”
Stephen Blank, a former professor at the US Army War College and a specialist in Eurasian security, said that while Russia has mostly stayed silent about China’s presence in Tajikistan, it was closely watching the situation.
“What happens in the long run depends on how far China goes to extend its military presence in Central Asia. And if it keeps extending, it may well provoke some expression of concern in Russia beyond the silence that has hitherto been the case,” Blank said.
Chinese troops could play an increasing role in policing the area in future. Photo: Xinhua
“[The recent drills] look like conventional war-fighting exercises as much as anti-terrorist operations and suggest that China may have bigger contingencies than anti-terrorism in mind.”
Mathieu Duchatel, director of the Asia programme at the Institut Montaigne, a French think tank, said both Russia and China share similar concerns about terrorism and drug trafficking in Central Asia.
He said Russia had not objected to the security pact with Pakistan, Afghanistan and Tajikistan because there are more important strategic priorities in China-Russia relations.
“Overall, Russia’s acceptance of a security role for China in Central Asia shows how Russia realistically adjusts to the changing balance of power with China, and is able to avoid a zero-sum game on issues where parallel efforts by China and Russia can serve Russian security interests,” he said.
Adult consumers are fuelling a boom in China’s toy collectibles market
Men are spending thousands of dollars on figurines to express their identity, boost their street cred, and indulge their inner kid
Chinese collector Don Tang with artist Jason Freeny at the Jason Freeny X-Soul Station exhibition in Shanghai. Photo: Don Tang
Don Tang is proud of his toys. So much so that the Shanghai resident, 32, puts them on display both in his home and in the office of the company he runs.
And there are plenty to display. Tang, 32, has some 100 collectibles and the number is growing all the time. Each month he sets aside 2,000 yuan (US$280) to buy the top trending toys, newest releases, or one-of-a-kind items – either from physical stores, online or at toy conventions in China.
But the toys are not connected to his work as the CEO of a firm in the intellectual property sphere. They are simply a hobby, albeit one Tang takes seriously. The crowning jewel of his collection? A 6,000 yuan KAWS action figure bought in Tokyo, Japan.
“When I return home from work each day, I get to see [my toys] and it puts me in a good mood,” says Tang, who realises some people might not get the appeal of his hobby, but says it is an “addictive” pursuit and a way of appreciating designs and craftsmanship. Whether it’s SpongeBob SquarePants, Hello Kitty or Sesame Street, each toy has its own distinct, “lovable, cute, and personalised” identity, he says.
Remind you of someone? Hambuddha is a designer figurine made by Mighty Jaxx of Singapore that is aimed at the adult market. Photo: Mighty Jaxx
“When you look back at the toys that you collected at different times, you realise how your own aesthetic, tastes, and preferences have changed over time,” adds Tang, who would never dream of selling his precious collection.
Tang’s toy story is far from unique. Sales of toys and games in China – which produces 80 per cent of all the world’s toys – soared to 324 billion yuan in 2018, up from 135 billion yuan in 2013, according to market research company Euromonitor. Fuelling these sales is a growing army of toy connoisseurs just like Tang.
CASHING IN
Mighty Jaxx, a Singapore-based urban culture company that designs and manufactures collectibles and lifestyle products, is among the many companies benefiting from this surge in demand.
Its Chinese customer base accounts for 25 per cent of its projected revenue of S$10 million (US$7.21 million) for 2019 – and this proportion is expected to hit 40 per cent over the next few years, according to Mighty Jaxx’s founder and CEO, Jackson Aw, 30.
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An avid toy collector himself, Aw first mused over the idea of turning his hobby into a viable business back in 2012. He ventured to Shenzhen in China for one month, knocking on factory doors just for a behind-the-scenes glimpse of the toy production process.
Being one of his first times to China, the mammoth scale of the industry came as a major “culture shock” to Aw.
Mighty Jaxx founder and CEO Jackson Aw. Photo: Toh Ee Ming
“I had always thought that it was just one giant machine that spits out parts and that was it. But there were rows and rows of hundreds of people printing, hand painting, assembling and using different skills just to produce one toy,” the Singaporean says.
Describing the visit as his “greatest education”, Aw was inspired to launch Mighty Jaxx from his bedroom with start-up capital of S$20,000 loaned from a bank through his parents.
Fast forward to today and his online business has worked with major brands such as Warner Brothers, DC Comics, Cartoon Network, MTV and New Balance, and shipped millions of products to collectors in over 50 countries. It is best known for its XXRAY figures, developed in partnership with artist Jason Freeny, which feature dissected Justice League characters such as Batman, Superman and Wonder Woman.
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But in its early days, the China market had intimidated Aw as a “big anomaly” that was still largely closed off. Aw had found it difficult to navigate the cultural norms and familiarise himself with unfamiliar business models.
Still, sensing China’s potential, his firm embarked on wide-ranging creative collaborations to tailor its offerings to the Chinese market – from creating yin-and-yang themed toys, celestial chicken fairy deities and the “Hambuddha” (a Buddha holding a pearl-shaped hamburger while on a lotus throne).
It also partnered with Chinese artist Chen Wei (who goes by the alias Cacooca) to develop a new Panda Ink collection, which depicts a panda in the midst of an everyday activity or hobby, such as hiking, playing video games or cuddling with cats.
Mighty Jaxx’s ‘Flow by 18 Uppercut’ has a yin and yang theme with white and black halves. Photo: Mighty Jaxx
It has also collaborated with other big-name artists and celebrities trending among Chinese consumers – such as Los Angeles-based dance crew Kinjaz, who found fame in China appearing on dance shows, and ABS, a leading graffiti crew based in Beijing’s 798 Art District – and has an upcoming collaboration with Taiwanese singer Show Luo.
But it is the comic and toy conventions that provide its biggest fans, typically men in their 20s to 40s who flock in from Beijing, Shanghai and Guangzhou.
Aw says these collectors have a huge appetite to splurge on high-end collectibles, which can range in cost from anywhere between US$10 to US$2,000.
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To these collectors, price is of little concern as they are looking for “tangible products to buy and show off their personality” and build their street cred among their friends, though they still prefer to stay under-the-radar about their collection to the general public, Aw says.
Today, Mighty Jaxx’s products are manufactured in nearly 20 different factories in Shenzhen and Guangzhou. It set up its first overseas office in Shanghai last year and is planning to open its second one in Suzhou by the end of 2019, according to Aw.
Besides growing Chinese affluence, Aw credits his company’s success to a greater exposure to Western influences and China’s own unique brand of pop culture taking off domestically.
He points to one of China’s biggest blockbusters Monster Hunt, a fantasy martial arts film of how monsters live among humans.
Mighty Jaxx’s celestial chicken fairy deity is aimed at the Hong Kong and mainland China market. Photo: Mighty Jaxx
“Outside China, you wouldn’t know what the hell it’s about. But the Chinese are creating their own unique narrative and developing their own intellectual property … That’s when we know the demand for original creation in different forms is truly there,” Aw says.
Likewise, consumers live in an age of a “mishmash of pop cultures and crossovers” and “subcultures becoming mainstream”, he says.
Citing how the business has teamed up with Team Hero, a China e-sports team comprising professional computer gamers, to roll out new figurines, Aw says: “It doesn’t mean that tattoo artists, skateboarders don’t buytoys … What seems to be separate demographics areconverging to become a multibillion-dollar market.”
Aw says the company is planning to expand from its current business model based on direct selling to collectors, to e-commerce distribution channels like Taobao and Tmall by the end of 2019.
He hopes eventually to set up the firm’s first retail store in Shanghai, as he believes the future lies in experiential retail.
“China has been cultivating that openness in recent decades, and we’re still very curious and excited for new things to happen [in this market],” Aw says. ■
BEIJING, Aug. 17 (Xinhua) — The central government has offered financial support of 920 million yuan (about 131 million U.S. dollars) to local governments to help counter typhoon, flood control and drought relief.
An emergency relief fund of 600 million yuan has been offered to 11 provincial regions including Henan, Sichuan and Gansu to help them control flood and deal with drought, according to the Ministry of Finance and the Ministry of Emergency Management.
Another fund worth 320 million yuan was used to support Hebei, Liaoning, Jilin and Heilongjiang provinces in flood control and typhoon relief.
Typhoon Lekima landed in east China’s Zhejiang on Aug. 10, wreaking havoc as a super typhoon. About 13 provincial regions have been affected by the typhoon.
China announced the second-highest level in China’s four-level typhoon emergency response system to deal with Typhoon Lekima and minimize casualties and losses.
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