If you are planning to invest in China, you need to be aware of some thriving businesses in the country. This information should come in handy regardless of the industry you belong to so you are able to test the waters and be aware of business and commerce flow in China. Here are a few thriving Chinese businesses you need to know of;
Shanghai State-owned Mobile Platform
Ma Yonghua, the Secretary General of the Shanghai State-owned Assets Supervision and Administration Commission, said during the Shanghai State-owned Summit Forum, “Shanghai will gradually implement several policies, such as making the SASAC responsible for regulatory capital, Platform Companies being responsible for the basic operation, enterprise and group responsible for the daily management”.
Shanghai International Group and Shanghai Guosheng group have recently finished both vertical integration and horizontal collaboration based on the position and location. This means the Shanghai State-owned Mobile Platform is now ready and available.
In addition, the function positioning of Shanghai Guosheng group is: developing the state-owned stake, promoting the development of mixed-ownership economy as the main function, becoming the shareholders of partial state-owned equities, the operating carrier of value management, the executive channel of capital allocation and the bridge for the combination of industrial and financial capital.
The Chinese Art Industry
China’s art and antiques market is the world’s largest with sales exceeding US$8.5 billion and has consistently increased in value year after year. The overseas market of Chinese art and antiques in 2017 represents an even larger increase from the year before of 42 percent.
Transparency into the Chinese art market is growing. Thanks to professional art news providers such as Artron.net, Hurun, YangGallery.com, among others; however, art auctioneers compete aggressively.
In order to win business, the largest auctioneers might guarantee a minimum bid, and have been known to lose millions when actual bids do not clear the minimum. Moreover, art investors have also been concerned about distinguishing fakes.
BMW Pays $820 Million to Chinese Car Dealers
Bayerische Motoren Werke AG (BMW), one of the world’s biggest manufacturers of luxury automobiles and motorcycles, agreed to pay 5.1 billion yuan ($820 million) to its distributors in China to help cover losses after retailers stopped ordering cars from the manufacturer.
BMW implemented this policy for 2 factors: a decline in shares and lower vehicle quotas. BMW shares fell as much as 2.8%, and there are an increasing number of factories in China imposing purchasing restrictions on vehicles. As a result, both Toyota Motor Corp. and other dealers are going to drop out of the distribution network.
This development has been huge for people in the automobile industry. It is a welcome opportunity for startup automobile distributors but also a hindrance for people who are already tied up with automobile companies not named BMW.
Jack Ma Takes Advantage of Regulatory Black Hole
China’s new shadow margin lending does not face any of the usual margin trading restrictions and provides up to 5 times greater leverage; however, it creates an oversight problem for the CSRC.
Since 2011 some, commercial banks and trusts have created ‘umbrella trusts. Under an umbrella, trust accounts are sub-accounts held by smaller private equity funds which receive funds for trading. Therefore, the number of trades on margin is effectively limitless, creating a regulatory black hole.
This new form of margin lending is only made possible by HOMS and depends on the retail investor. Hangzhou Hundsun Technologies owns HOMS, and a Jack Ma subsidiary paid 3.3 billion yuan to become their largest and controlling shareholder which means this is a great move without risking any of his own capital in the market. Jack Ma was in place early to benefit from the recent stock market rally.
All of these business news and development will help inform you of China’s current business world. Even if you come from a different industry compared to the ones mentioned above, it is always good to have knowledge with China’s business sector in general.