2. HISTORY
ANCIENT CHINA:
• Xia Dynasty (c. 2100 – c. 1600 BC)
• Shang Dynasty (c. 1700–1046 BC)
• Zhou Dynasty (1046–256 BC)
• Spring and Autumn Period (722–476 BC)
• Warring States Period (476–221 BC)
3. History(Cont)
IMPERIAL CHINA:
• Qin Dynasty (221–206 BC)
• Han Dynasty (202 BC–AD 220)
EARLY MODERN:
• Ming Dynasty (AD 1368–1644)
• Qing Dynasty (AD 1644–1911)
7. SOCIAL ISSUES
Mass unrest issues have risen from 8,709
in 1993 to 90,000 in 2009.
Reasons:
a)Increase in migration,
b)Unemployment,
c)Loss of faith in system,
d)Corruption.
18. China is a Communist Country.
Communism is an idea of a free society with no
division or alienation, where the people are free
from oppression and scarcity.
Symbol
China adopted communism in 1949.
China operates with a ONE PARTY STATE
POLICY where Communist party of china is
the dominating party.
21. State Council
Second major institution of the Chinese
political structure.
The executive branch.
It is the Central People’s Government & is
Chaired by the Premier.
22. National People's Congress
• The legislative branch
• is the highest state body and the
unicameral legislative house
• Functions:
-Electing the President of the People's
Republic of China
- approving the appointment of
the Premier of the State Council
- approving the work reports & policies.
23. People’s Political Consultative
Conference
Perform as “democratic supervisor” of the
Party
It acts as a platform for the citizens to
make suggestions about the policies.
PPCC members are often known as
“political advisors”.
24. The People’s Liberation Army
• Unified military organization responsible
for air, water and land operations.
• Very Crucial to the party and the
government.
• Reports to Party Central Military
Commission (CMC)
28. Government Measures
Adjusting industrial structures and altering
development modes.
Establishment of about 100 specialized
environmental courts.
"Green Wall of China" project
Introduction of Environmental education
30. Ancient Era
Pioneer in the field of science and
technology
Greatest Discoveries includes-
– Paper making
– Printing Technology
– Compass
– Gunpowder
Started to loose its stand but rebounced in
19th century.
31. Modern Era
Experienced biggest technological
transformation
Over 1.5 billion cell phones & 570 million
Internet users
Major achievements
– BaiDu
– Sina Weibo
– Manufacturing hub of electronics gadgets.
32. Culture
Chinese culture is one of the
oldest culture in the world. Many
festivals are celebrated in china
like spring festival, lantern
festival. Spring festival is also
known as Chinese New year.
Important components of
Chinese culture include:
Literature
Music
Martial Arts
Cuisine
34. Causes for Income inequality
Non-Balanced Economic Development
Unreasonable economic system
Imperfect Tax System
Lack of Public Services
Low Income transfer
Houkou or Chinese household Registration
System
40. China’s economy will not fall
0
10
20
30
40
50
60
2005 2006 2007 2008 2009 2010 2011 2012
Household Saving as a % of GDP
China
India
Brazil
41. Increasing Debt is the only
option
Before 1990, RMB was pegged at 2.46 per US
dollar
As Chinese economy opened up, RMB was
devalued to 8.62 yuan per dollar.
In 2005, peg was lifted but reinstituted again in
2008 due to financial crises in 2008
42. Stages of China’s Reforms
1970’s-1980’s – Opening up the country to
the foreign investment.
US China Debt loop
China competitive advantage in the form of
cheap labour
43. Fixed Rate of Exchange and Money Supply
0
20
40
60
80
100
120
140
160
180
200
Money and quasi money (M2)
as % of GDP
Money and quasi
money (M2) as % of
GDP
0
20
40
60
80
100
120
140
1990 1995 2000 2005 2010 2011 2012
Consumer price index (2005 =
100)
Consumer price
index (2005 = 100)
44. Stages of China’s Reforms
• 1980’s-1994’s – Privatization and
Contracting
Lifting of Price controls, protectionist policies and
regulation
Introduction of tax distribution system that reduced the
proportion of tax revenues held by local government.
Government used debt to finance its expenditure which
led to increase in the debt to GDP ratio.
45. Current Economic Conditions
Fitch has downgraded China from AA- to AA+
Debt to GDP has accelerated from 148% to 205%
IMF has warned China for rising Debt levels
GDP has reached to 7.5% in 3rd Quarter of 2013
46. History of Banking sector
History of banking sector can be divided
into two main periods
The Mao Era (1949-1978)
The Post-Mao Era or Deng Era (1978
onwards)
47. Banking Sector Outlook
Current cash reserve ratio
for China stands at 20.50
which is one of the highest in
the world.
POP has taken steps to
improve the market
sentiments
Money Supply and Loans
are expected to grow
48. Banking Sector Outlook(Cont)
Urbanization is growing at a rate of 1.37%, which will increase the
demand of financial services
Shadow Banking is increasing at 34%
China’s Development Bank and China’s six largest commercial
bank continued to grow internationally.
Reintroduction of asset securitization is expected to be a
breakthrough for asset and intermediate business innovation for
banks.
It is expected that that the Banking sector Net profit would increase
by 3% for 2013
49. Stock Markets
In 1990 and 1991, China sets up stock exchanges in
Shanghai and Shenzhen
Stock Markets in Chine is regulated by China Security
Regulatory Commission.
SSE composite Index is the most commonly used
indicator to reflect SSE’s market performance.
50. Securities sectors outlook
Increase in the stake foreigner could hold.
Number of Brokers increased from 11 to 30
Investment Banking to move towards follow on and debt
financing.
China stock market could fall because of the property
bubble
57. Agriculture
China ranks first in worldwide farm output
No. 1 in Wheat Production
Contributes 9% to GDP
Great Leap Forward (1958 – 1961)
Great Chinese Famine(1958 – 1961)
World’s Largest Importer of Soyabeans
58. Industry Sector
Industry Contributes 46% to China’s GDP
World’s leading manufacturer of chemical fertilizers,
cement, and steel
China ranks second worldwide in industrial output
Four Modernizations (1975)
o Industry
o National Defence
o Agriculture
o Science and technology
Energy industry
Manufacturing and Automobiles
Steel
64. Fall Of China
Ageing Population
Yuan Appreciation
Dependence on World
MiddleClass Sector
A Deaf Pilot cannot fly an airplane effectively, however
good he may be
65. Will China Become Super Power ?
Military Power
Economic Power
Transnational Power
66. Market Outlook China
• Economy Set to take off again
Increase in spending by state government
Measures taken by People’s Bank of China
Increase in Demand and supply perception
New reforms of rational distribution system
67. Market Outlook China
• Points of Concerns
China’s economy is at a moderation point from high
growth to mid high growth
China is loosing out on its competitive advantage
Manufacturing Sector is reaching saturation
Shadow Banking is a big concern
Property Bubble in China
Consumption is only 35% of the GDP. Even if the share goes up to 50 %, it will still have the lowest consumption share as compared to any large economy.
Saving Rate is high because rising working age population, increase in the negative perception due to rise in uncertainties due to reforms, inadequate pension health care and education
In order to maintain a fixed rate of interest with United States, People’s Bank of China prints more money which is exchanges with US Dollars. The excess of US dollars is used to by Treasury Bonds in United States. Increase in the lending capacity of capacity leads to decrease in the US interest rate of US treasury bonds, which in turn reduces the interest rate for other debt instruments such as corporate bonds.
Less Land, Existing Land used for Indsutries, Unequal Distribution of Land, Pesticides -> Land Pollution
Power 3.85 GW #1 in WindFarms
Middle Class Population Increasing 16 Hours of work – NO Ageing Population
