On the occasion of the Luxembourg Official Mission to China, the Luxembourg Chamber of Commerce, the Ministry of the Economy and the Embassy of Luxembourg in Beijing, in close cooperation with the China Council for the Promotion of International Trade Beijing Sub-Council (CCPIT Beijing) organized the seminar
“LUXEMBOURG: YOUR INNOVATION CENTER IN EUROPE”

It took place at the Rosewood Beijing (Jing Guang Center) on 6 May 2016.

Present: Their Royal Highnesses the Crown Prince and Crown Princess of Luxembourg and H.E. Mr. Étienne Schneider, Deputy Prime Minister, Minister of the Economy, as well as the Luxembourg ambassador H.E. Mr. Paul Steinmetz.

Interesting introduction of the Grand Duchy of Luxembourg by the Luxembourg Chamber of Commerce, Jeannot Erpelding, Director, International Affairs.

One of the assignments I love is talking to MBA and EMBA groups. They come from different corners of the world and each group has another focus and an own set of mind.
See here some of them, all led by the Wagner Group of Groningen. Location: Beijing Duge Boutique Hotel.

7 September 2015: Executive MBA Supply Chain Management group. The two-year, part-time Executive Master Supply Chain Management & Logistics is a first class course for people wishing to develop leadership and be a strategic discussion partner in supply chain management & logistics.

20 March 2016: Executive MBA in sport management, with a focus on soccer and sports development in China.

15 April 2016: University of Missouri, Kansas City, EMBA class of 25 students plus faculty members. Focus was on is the effects of government policies on businesses.

See here a very well done overview, with many thanks to The World Bank office in Beijing that graciously distributed the Bloomberg overview.
No comments needed…

Key Points of China’s Government Work Report: Full Text

By Bloomberg NewsC/O World Bank
The following is the full text of a summary of China’s Report on the Work of the Government distributed 11 March 2016 at the annual meeting of the legislature in Beijing:

1. China’s Economic and Social Development in 2015

• The main tasks and targets for the year were fulfilled
• Progress was achieved and stability ensured in economic and social development
• GDP reached 67.7 trillion yuan, representing an increase of 6.7% over 2014–a growth rate faster than that of most other major economies
• Consumer prices grew slowly
• A total of 13.12 million new urban jobs were created
• The service sector as a proportion of GDP rose to 50.5%
• The contribution of consumption toward economic growth reached 66.4%
• Energy consumption per unit of GDP fell by 5.6%
• The number of newly registered businesses rose by 21.6%, or an average of 12,000 new businesses per day
• Personal disposable income per capita increased by 7.4% in real terms
• The number of rural residents living in poverty was reduced by 14.42 million

2. Main Targets for 13th Five-Year Plan Period (2016-2020)

• Double the 2010 GDP and per capita personal income.
• Annual GDP growth: 6.5% or above.
• R&D spending: 2.5% of GDP
• Science and technology’s contribution to economic growth: 60%
• Permanent urban residents: 60% of the total population.
• Registered permanent urban residents: 45% of the total population.
• High-speed railways in service:30,000 km, linking 80% of big cities.
• Expressways built or upgraded: 30,000 km
• Full coverage of access to broadband networks
• Improvements to the environment
• Water consumption per unit of GDP: Down 23%
• Energy consumption per unit of GDP: down 15%
• Carbon dioxide emissions: down 18%
• Lift all rural residents falling below the poverty line out of poverty
• New urban jobs: more than 50 million
• Housing units rebuilt in rundown urban areas: 20 million

3. Major Areas for Work 2016

3.1 Main development targets

• GDP growth: 6.5%-7%
• CPI increase: approx. 3%
• New urban jobs: more than 10 million
• Registered urban unemployment rate: within 4.5%
• Steady increases in imports and exports
• A basic balance in international payments
• Increases in personal income basically in step with economic growth
• Energy consumption per unit of GDP: down more than 3.4%
• Further reductions in the release of major pollutants

3.2 Macroeconomic policies

• Implement proactive fiscal policy and prudent monetary policy
• Deficit: 2.18 trillion yuan
• Deficit-to-GDP ratio: 3%
• Special bonds for local governments: 400 billion yuan
• Continue to issue local government debt-converting bonds
• Replace business tax with VAT in all sectors
• M2 money supply growth: approx. 13%
• Aggregate financing growth: approx. 13%
• Reform the modern financial regulatory system
• Keep the RMB exchange rate generally stable at an appropriate and balanced level

3.3 Supply-side structural reform

• Cancel the requirement of government review for more matters
• Pilot a negative list for market access
• Implement the strategy of innovation-driven development
• Encourage business startups and innovation
• Strengthen protection of intellectual property rights
• Address overcapacity in the steel and coal industries
• Improve SOE performance
• Diversity types of SOE equity
• Protect the property rights of entities under all forms of ownership
• Energize the non-public sector

3.4 Domestic demand

• Support the growth of consumption in elderly care, health, housekeeping, education, training, cultural, and sports services
• Strengthen the growth of emerging areas of consumption such as information goods and services, smart homes, and personalized fashion
• Cut tariffs on some consumer goods
• Increase the number of duty-free stores
• Speed up tourism development
• Invest more than 800 billion yuan in railway construction
• Invest 1.65 trillion yuan in road construction
• Start construction on 20 water conservancy projects
• Develop hydropower, nuclear power, ultra high-voltage power transmission, smart grids, pipelines for oil and gas transmission, and urban rail transit
• Improve the PPP model to stimulate private investment
• Advance new urbanization
• Grant urban residency to more people with rural household registration
• Reform the household registration system
• Implement the residence card system

3.5 Opening up

• Move ahead with the Belt and Road Initiative
• Promote innovation-driven development of foreign trade
• Launch trials in the area of trade in services
• Adopt a more proactive import policy
• Increase the import of advanced technology and equipment, key spare parts and components, and energy and raw materials in short supply in China
• Continue to relax market access restrictions on investment
• Further open up the services sector and the general manufacturing sector
• Simplify procedures for establishing overseas-funded enterprise
• Establish more pilot free trade zones
• Achieve greater industrial-capacity cooperation with other countries
• Accelerate implementation of the free trade area strategy
• Negotiate on the RCEP agreement
• Negotiate on the China-Japan-ROK free trade agreement
• Negotiate on investment agreements between China and the United States and between China and the European Union

As announced on 30 November 2015, the City of Ghent has become a new structural partner of the Flanders-China Chamber of Commerce (FCCC). With its 252,000 inhabitants, Ghent is the second largest city in Flanders.
Over 70,000 students make Ghent the largest student city in Flanders, including Ghent University that ranks 71st on the ‘2015 Academic Ranking of World Universities’. The young heart of the city boosts innovation and creativity. Ghent is a city that combines a strong logistic and industrial complex and hi-tech knowledge activities. The city’s seaport provides over 60,000 jobs and generates a surplus value of €6,7 billion. The city is developing a pro-active approach to attract activities of world-leading companies that strengthen the existing industrial clusters in the cleantech, biotech, materials and ICT sector.

Ghent is linked with China in various ways:

• In November 2013 Ghent and the Chinese city of Weihai signed an agreement within the context of the China-EU Partnership on Sustainable Urbanization.
• Various companies in Ghent do business with China. Volvo Car Gent is one of the biggest employers of the Ghent region. The factory is part of the Volvo Car, owned since 2010 by China’s Geely Holding Group.
• Ghent is an attractive city for Chinese tourists to visit.
• The City of Ghent, together with Ghent University, the Flanders-China Chamber of Commerce and Port of Ghent form the China Platform, a central point of contact for all matters relating to China. It directs, coordinates and supports initiatives in education, research and business.

I am from Ghent where I also attended the university to study engineering.
See the text here: City of Ghent and FCCC
Beijing has a special representative of the University,

As many people have requested the full version, here it is (click to download the PDF!):
Outlook2016full

Since my newsletter came out, I only get the confirmation of the trend we are witnessing. Still, many people are naïve and belief all is well. Even China Daily continuous to mention how difficult the economic situation is. Those people with rosy glasses better read a bit more China Daily, SCMP and other.
The clampdown on the media, and the Internet, is worse. During the “Two Meetings” many people became desperate as their VPN stopped working (I survived it very well, thank you). TV, newspapers, Internet: are systematically cleaned up. Even artists have to serve the Party and its goals first. Never mind art. Call it all now Propaganda.
Social unrest is starting to get worse. As the NYT and other media reported, there were “2,700 strikes and protests last year (related to labor issues), more than double the number of 2014. In January 2016 alone: 500. Closing down the zombie SOE, cutting wages, not paying salaries are all having their impact. Sadly to say, workers’ rights are a joke (Please call Marx to do something in China?). The workers who are not paid for month and protest: the police “cleans them up”.
Imports and especially exports are going further down. Real estate: as I always mentioned, different bubbles depending on what segment of the market you are looking at. But one aspect many overlook: while new housing sells sometimes very well, the existing stock does not disappear as hoped. Seems only Shanghai can justify the increasing price levels.
So, as I said, fasten seat belts. But don’t just run away yet.