China offers US$11.5 billion in loans, credit to Southeast Asia
In a bid to inject growth in Southeast Asia and surrounding regions China has pledged that it will provide US$11.5 billion in loans and credit to Myanmar, Laos, Thailand, Cambodia and Vietnam. Premier Li Keqiang offered this credit in order to invest in better infrastructure for the regions who are struggling to raise funds for roads, ports and railways. A key ingredient required to stimulated growth in these countries. As China continues to push ahead with the Silk Road project Li mentioned that stimulation needs to be provided in these five specific regions, “There are six countries on one river. The Lancang-Mekong sub-region is our joint home”. Relationships need to be rekindled and strengthened despite previous disputes over territory and failed investments. Click here to read the full article.
China Great Wage Boom Seen Abating, With Unemployment Rising
As we see China’s economy slowdown in this fiscal year, officials are worried that domestic consumption will be severely affected. It is common rhetoric in China that the focus is moving away from secondary industries to a service based consumer model which is seeing growth. However domestic consumption will remain low if wages and employment remain stagnant. Domestic incomes rose this year from 6.5 to 6.9 but flagged behind last year’s increase of 7.4. Unemployment and new job opportunities are a key focus for the Chinese government, Premier Li Keqiang has set to create 10 million jobs this year. If this is even partly delivered this will be good news for the urban population as it is currently seeing unemployment rates predicted to rise from 5.3 percent to 5.5 percent in 2016, up from about 5.1 percent last year. Click here to read the full article.
ENN takes $1b stake in Santos
China’s largest private gas company ENN Group has just acquired a 11.7 percent shareholder stake from Hony Capital’s Santos, making it the Australian energy giant’s largest shareholder. This comes in conjunction with Hony buying a $US380 million stake in ENN privately. As of today Santos shares climbed 11 cents irrespective of continued weakening of oil prices. Santos released a statement noting that this was a step forward for it’s business across the region, and it’s aims to ‘develop a vertically integrated international natural gas company’. ENN Group chairman Wang Yusuo and Hony chairman John Zhao both reflected on the strategic benefits of having direct access to Australia and Chinese markets given the regions rapidly growing energy markets. Click here for the full article.
The bumpy future of China’s economy
At the Boao Forum this week China’s economic future was on the minds of all those present. The annual meeting held in Hainan, is frequented by the heavy hitters in China’s political and economic circles. This year on the agenda, slow growth and employment rates, moving from manufacturing to services. But what does this restructuring mean for the ‘New China’? It means the workforce will need to adapt from the factory to the office, and those who don’t transition will be left behind. Economist Rob Subbaraman stated that it wasn’t going to be easy, and that ‘like any developing economy, China had to move out of low end inefficiencies and higher up the value chain’. However, like most transitions, the concept of a ‘New China’ built on innovation and technology is an exciting prospect nonetheless. Click here for the full article.