The world is experiencing one of the biggest revolutions in history, as economic power shifts from the developed world to emerging giants, like the BRIC countries and others. Thanks to market reforms, emerging economies are growing much faster than developed ones.
The increasing strength of emerging economies has been reflected in their stockmarkets, which have climbed steeply in recent years. According Morgan Stanley Capital International’s emerging-market index, stockmarkets in emerging economies are expected to grow nearly four times compared with an increase of only 70% in the S&P 500.
High p/e ratios indicate there is a bubble in the making. However when looking beyond the p/e ratio and compare a country’s p/e ratio with its own track record it looks lik some countries have a strong “buy”.
Interested in reading up on this issue this can be a good starter “Dizzy in Boomtown” and “Can Emerging Markets Save Europe“.
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BBC News has published a special report on Globalisation. A concise explanation on globalisation can be found here. Part of this special report is devoted to Globalisation and China. The latest article on this topic is “China may let multinationals list“, authorities of the Shanghai stock exchange are considering to allow foreign multinationals with substantial business operations in China have a listing on the SH stock exchange.
Other appealing articles in this section are: “Shanghai: Creating a global city“, how China’s economic liberalisation forged a new Shanghai. “Hong Kong v Shanghai: Global Rivals“, a historical analysis and a sneak preview in the future on how these two cities will develop and position themselves at the world stage. “Can Shanghai turn green and grow“, elaborates on Shanghai’s balancing act in managing economic growth and quality of living.
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According to the 2007 annual study on Innovation in Emerging Markets by Deloitte’s Global Manufacturing Group, more than half of the companies surveyed fell short of their revenue or operational goals in emerging markets. The report points out challenges that companies are facing while operating in emerging markets. Identified challenges are in the areas of talent management, risk management and operating models.
However, conventional thinking about emerging markets has changed. No longer do manufacturers see operations in China or India simply as a means to lower global operating costs. Now places like Hungary, Vietnam and others are being added to the list of competitive markets as an avenue to achieve top line growth. Companies are able to leverage even more sophisticated capabilities in emerging markets to handle high-value activities. This is quickly changing the global competitive landscape.
I highly recommend following this link to read this report, because it evaluates some of the strategic areas that companies need to address to succeed and realise the enormous market potential of the developing economies in China, India, Southeast Asia, Eastern Europe, and Latin America. It also highlights some of the innovative strategies that successful companies are deploying to win the war for talent, manage risk and structure their operations to achieve their revenue and operating goals in emerging markets.
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The United States regained its title as the world’s most competitive economy. According to the Global Competitiveness Report (GCR), a comprehensive annual survey published by the World Economic Forum, the Swiss-based think tank.
The GCR is a closely watched metric that combines economic statistics and surveys of business leaders and ranks 131 countries. It measures multiple dimensions in the broader context of the economic system such as macroeconomic policy, political system, health system, legal system, etc. The survey praised the U.S. economy for its efficiency and ability to innovate, but the ranking came alongside a drumbeat of negative economic news.
One of the principal winners in this year’s report was China, which jumped up the rankings from 54th to 34th. The size of its domestic and export markets were its main competitive advantages, the report concluded, while it also benefited from general economic stability. However, weaknesses included the poor financial state of many of its banks, restrictions on capital flows and legal rights and low enrolment into higher education.
The Netherlands dropped one place and is now ranking 10th. Clarification for this drop is relative low investment in education, inefficient government bureaucracy, weak labour market efficiency and low innovation.
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And in a class all by itself, the US$1 trillion (1,000,000,000,000) club.
On Monday, the 4 billion A-share offering, priced at 16.7 yuan per share, finished its first day of trading on the Shanghai Stock Exchange at 43.96 yuan, rising as high as 48 yuan intraday. At US$1.005 trillion, PetroChina’s market cap is more than twice that of its US peer, Exxon Mobil (USD $486 billion), even though Exxon Mobil generated four times as much revenue last year and trades at only a quarter of PetroChina’s price to earning ratio, 13 to PetroChina’s 55.
But the craziness doesn’t end there. The lofty market cap comes with an asterisk: US$1 trillion only if you go by PetroChina’s local valuation. Shares traded overseas (Hong Kong and New York) values the company at roughly US$400 billion. One HK share (H-share) confers equity holders the same amount of ownership as one A-share, and one share of ADR traded on the NYSE grants 100 times as much ownership.
While PetroChina’s A share closed up today at 43.96 yuan, its H-share finished down 8.2 percent at HKD $18, or 17.65 yuan (1 yuan=1.02 HKD). The gaping difference is a function of many factors: Beijing’s restriction on capital flow, lack of investment choices in China, and of course, out-of-control greed coupled with widespread ignorance on the part of Chinese retail investors.
In a related story, billionaire investor Warren Buffet sold his entire PetroChina stake several months ago, calling the price action in China “carried away.”
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Yes, that was my reaction when I saw this webpage. The image above is just a Facebook clone, Xiaonei.com. It looks like the portal was started around 2005 (less than two years after Facebook was born), and since then, it has grown exponentially to cover around 2,000 university campuses in Greater China. They have just recently started to pan out their services to cover high schools and companies.
Facebook is about to enter the Chinese market will they be too late as Chinese fancy local stuff?
The future will tell.Thanks to a friend (since my Chinese is not sufficient) I am enrolled at Xiaonei.com! Now I am a proud student of Nanjing University. Add me! 
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Indian and Chinese Tech companies are in the running to see the limelight at the centre stage of the worlds most powerful tech giants! BusinessWeek has listed the up and coming ten new Tech Giants!
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Lots have been written about China’s booming economy and its way forward. To stay on top of its high growth economic development process China has to undertake steps of improvement in various areas.
Especially if China’s economy is to go on growing and its base is to evolve from manufacturing to services, it will require a huge number of university educated people with an international mindset.
A perfect vehicle would be bringing back Chinese that are educated and residing abroad. However, according research conducted by the Academy of Social Sciences in Beijing about two-thirds of Chinese who have studied abroad since the 1980s have chosen not to go back home. Even more reason for China’s officials to research the rationale why they didn’t return home.
Today BBC news published a report on China’s threat of brain drain. The report gives room to four different stories from Chinese in different generations that have an education in the West in common.
More on the brain drain phenomenon can be found here. At this webpage you can find a scheme on how China is governed nowadays.
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Shanghai Tang has learned from its past mistakes–and now it’s gunning to become China’s first great luxury brand. Forget about cheap socks and DVD players. This is the next battlefield for global competition. Continue reading on this webpage (New Window)!
Here some related quotes!
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Multinationals from China, India, Brazil, Mexico, Russia, and even Egypt are coming on strong. They’re hungry — and want your customers. They’re changing the global game.
Today I listened to the podcast of this week’s BusinessWeek cover story on emerging giants, the future multinationals not coming from the Western world but from emerging markets. Each with their own suprising business model. When emerging markets are in your field of interest, I highly recommend listening to this podcast and read up on the article. By clicking on this link you can download the audio file of this particular article.
Another very interesting podcast that I recommend is on Innovation Champions.
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