China marks 40-year economic rise as clouds gather

BEIJING - China celebrates Tuesday the 40th anniversary of its transformative "reform and opening up" policy, which turned the world's most populous country into an economic juggernaut that now faces slowing growth and a stern US challenge.

The brainchild of late paramount leader Deng Xiaoping, the program was ratified at a Communist Party conclave on December 18, 1978, breaking with the chaotic policies of his predecessor, Chairman Mao Zedong.

The reforms ditched Maoist-style collectivization that left the nation impoverished and backward, launching a new era which led to double-digit annual growth that pulled millions out of poverty and turned China into the world's second biggest economy.

China now boasts the most dollar billionaires in the world with 620, according to Shanghai-based magazine publisher Hurun Report.

But the economic transformation has not brought changes to the Communist Party-controlled political system, with authorities harshly cracking down on the Tiananmen protests in 1989 and activists complaining of a deterioration of human rights in recent years.

"Reform and opening up let the Communist Party maintain its dictatorship and let it keep its rule from collapsing after the Cold War and survive," Beijing-based political analyst Wu Qiang told AFP.

"I think China now is state capitalism under a one-party dictatorship, or party-run capitalism," he said.

President Xi Jinping -- who has become the country's most powerful leader since Mao and secured this year a potential path to lifelong rule -- will deliver a speech to mark the anniversary at the imposing Great Hall of the People off Beijing's Tiananmen Square.

The commemoration comes as China is locked in a bruising trade war with the United States in which the two sides have exchanged tariffs on hundreds of billions of dollars worth of goods.

The rivals have agreed to a 90-day truce as they seek to negotiate a solution, with the United States seeking a reduction in its massive trade deficit as well as deeper reforms in China to stop the alleged theft of intellectual property.

China is also facing a debt mountain and a slowing economy, which grew by 6.9 percent last year and is expected by the government to slow to around 6.5 percent this year.

SECOND REFORM? 

Wu said the trade war could be a chance for China to enact more changes.

"If the Communist Party is smart enough, it may transform it into the starting point of a second reform and opening up and change the role of the party and the state," Wu said.

When the party enacted the reforms, China was still suffering from famine and was emerging from the Cultural Revolution, a period of intense social and political upheaval launched by Mao.

This new "revolution" started in the countryside, where authorities began to de-collectivize land and dismantle communes, but it quickly spread to cities.

Wary of an opposing power base in economically powerful Shanghai, Deng chose the extreme south of the country as the guinea pig for his reforms.

Southern cities including Shenzhen, which borders Hong Kong and was still a fishing village, were designated China's first Special Economic Zones that became powerhouses and models for the rest of the country.

Shenzhen has become a global technological hub, with China's internet giant Tencent and telecom titan Huawei choosing the city for their headquarters.

The poverty rate among the rural population dropped to 3.1 percent last year from 97.5 percent 40 years ago.

source: news.abs-cbn.com

Beijing overtakes NYC as 'Billionaire Capital of the World'

BEIJING — Move over, New York City: Beijing is the new "Billionaire Capital of the World." The Chinese capital has overtaken the Big Apple as home to the most billionaires — 100 to 95 — according to Hurun, a Shanghai firm that publishes a monthly magazine and releases yearly rankings and research about the world's richest people and their spending habits.

The study, which comes months after reports suggested China now has more billionaires than the United States, highlights how China's elite are continuing to accrue vast wealth despite a wobbling stock market and cooling economy.

Different tabulations of wealth, such as the Hurun Report and the Forbes list, have historically produced somewhat different results depending on their methodology.

Rupert Hoogewerf, the founder of Hurun, attributed China's explosive wealth creation to Chinese market regulators allowing a flood of new initial public offerings after holding back new IPOs for several years.

Hoogewerf said his wealth calculations were made using stock prices as of Jan. 15, which means they took into account the Chinese market's 40 percent tumble over the past half year.

Had the calculations been made at the market's peak last summer, the number of Chinese billionaires would have been nearly 150, Hoogewerf said.


Beijing took the title from New York after minting 32 new billionaires last year, while New York gained four. Moscow came in third place, with 66 billionaires, while Hong Kong and Shanghai came in fourth and fifth with 64 and 50, respectively, Hurun said.

China's richest man, real estate tycoon Wang Jianlin, came in 21st place globally behind Wal-Mart scions, the Swedish family that owns Ikea and Brazilian investor Jorge Paulo Lemann. Other Chinese billionaires in the global top 100 included Alibaba founder Jack Ma, beverage magnate Zong Qinghou, and the tech bosses at phone maker Xiaomi, social media firm Tencent and Baidu, the search engine.

Hoogewerf said China had a particularly high proportion of self-made billionaires compared to the United States.

"What we showed today is that at the super-wealth creation level, the Chinese are now leading," Hoogewerf said. "People will look at China the same way that people looked at Stanford or Silicon Valley in the 1990s."

source: philstar.com

How Apple beat Hermes in China

SHANGHAI - Apple Inc has taken the number one luxury gifting spot in China from designer goods maker Hermes International SCA, according to a Hurun luxury report on Thursday, reflecting the iPhone maker's recent hot streak in the country.

The U.S. tech firm's focus on glitzy stores and high prices helped it post a 70 percent rise in sales in China in the last three months of 2014 and powered the company to the largest profit in corporate history.

Spending on gift-giving overall dropped 5 percent in 2014, after a 25 percent drop the year before, according to the Hurun Chinese Luxury Consumer Survey. Beijing has been cracking down on corruption and luxury spending among public officials, weighing down sales of premium liquor to handbags.

Domestic luxury spending in China dipped for the first time last year, according to consultancy Bain & Co, with increasing numbers of shoppers looking to spend money overseas.

"Travel retail continues to change the dynamics of luxury in China, with 7 out of 10 luxury goods bought by Chinese now being bought overseas," said Hurun Report Chairman Rupert Hoogewerf.

Hermes dropped to seventh from the top spot last year, while Chinese premium liquor maker Kweichow Moutai Co Ltd 600519.SS re-entered the top 10 after a two year hiatus, a potentially positive sign after sales were hit by the anti-luxury campaign.

Apple in first place was followed by LVMH Moet Hennessey Louis Vuitton SE, Kering SA's Gucci and Chanel.

The report, which has been carried out for over a decade, was based upon a survey of close to 400 millionaires with a personal wealth of 10 million yuan ($1.6 million).

source: www.abs-cbnnews.com