Investment In China Upgrade

Professor Dr. Yanming Wang
1980—2000 Manufacture driven
Lingnan College
2000– 2020 Investment driven
Sun Yatsen University
2020--- Innovation Driven
Jan. 10  2019, Guangzhou
stswym@mail.sysu.edu.cn
wechat 13332892133

Manufactory driven  1980’s

Labor cost
Land price
Favorable tax policy
Less care of prolusion
Hard work and learning from practice
….

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 1990’s 2010’s

Manufacture upgrade Investment Driven

Infrastructure
Real estate – urbanization
Highway net and high speed train net
Harbor, Power net, industry park

2
 Public service 
New driven power
1. Public service --- equal and fair. (Standard)
2. Manufacture upgrade – Manufacture 4.0
3.
3 Service---
Service finance,
finance consulting,
consulting design,
design
4. Consume upgrade, Food, medicine, healthcare,
…..
High speed train to every city, highway to every county, network to every town
Health care, education, culture and consume, …..

Eliminate the extreme poor

New plan -- Beautiful countryside in China

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 China Rebalance Background
1. Huge market in China (1.4 billion people)
More More International More Domestic
Import Investment consume 2. More labor and professional training

(Export-Import)/GDP
(Export Import)/GDP 2007,
2007 11
11.3%
3% decrease 2017
2017, 1
1.3%。
3%。
8 million + students graduate from university
3. Full supply train in manufacture
Income More Domestic
increase welfare Market 4. Innovation in manufacture and finance

Investment rate Infrastructure and real estate

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 Saving rate

Innovation Driven China’s new driven power

1. Political reform --- limit government power.

High quality education
2. Structure reform ---Innovation, finance,
Huge Investment in R&D and core technology
consulting, design
Cooperate with developed countries
3. Consume
4. High level open to the world
…..

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 Innovation and high tech. New industry

Labor cost driven to Research and intelligent

driven.

Following role in manufacture to Leading role

Manufacture for public service

Advanced manufacture
High Speed Train System
Long distance Power Supply System
Beidou (GPS) and Satellite System
Ocean Equipment and Machine
……
National laboratory, R&D,
Share cost and share knowledge
Welcome intelligent people.

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Advanced manufacture One belt one road

One belt one road

International
cooperation

China
Investment Growth Capacity
Efficient cooperation

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US Driven Engine—Two bay area New York, Newark

Wall Street, Finance center, High Tech

San Francisco – San Jose ‐‐ Austin Tokyo Bay Area

Innovation, education
Apple、Intel，
Google、Facebook
Finance
Manufacture
38 Fortune 500 firms

IC -- HR
IT -- Industry

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 Chinese Bay Area ‐ GHM Advantage of Hong Kong and Macau
Guangzhou
Shenzhen
Hong Kong International political, law system
Foshan
Dongguan Independent monetary system 
Zhuhai
Macau
Independent tax system
Independent tax system
Manufacture center
Financial center Flexible language and living environment
Harbor and Hub
University and R&D Free information and friendly regulation
Skillful Population

Why GHM? Key Data
Bay Area New York San Jose GHM
Hong Kong need more land and manufacture
Population million 23.4 m 4.25m 68m
Guangdong need more high quality service GDP Trillion $ 1.5 0.8 1.6
China need to get more experience to reform Harbor k TEU 4650 2270 65200
Airport passengers 130 m 70m 180 m

Universities: HKU. HKSTU, HK

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 Bay Area Advantages
Bridges, high speed train, highway, subway
International Financial Center
International Manufacture Center
International Trade Center
International Market Center
International R&D Center
(Potential) International Education Center

Typical Firm Copy to China and copy from China

Traditional manufacture: Huawei top 75 $70billion Yahoo‐‐‐Sohu

Google‐‐‐Baidu
Ebay ‐‐‐ Alibaba
F b k Tencent
Facebook ‐‐‐ T t

Easy to tell the story to investors.

Information: Tencent top 5 Market value $550b Avoid some big risk

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 Private Equity Invest Process Typical Firm

Time

Financing Invest Exit

Resource
Capital Management
LP Market
Channel Gene tech and healthcare

Firm

Shenzhen  Capital Case ‐‐ Shenzhen  Capital

Fund--1/3 SC,1/3, Local Gov.,1/3 Local private
Operation fund--1/3 fund A,1/3New fund,1/3 local
Good project Shenzhen 
capital
Good management
Easy to exit

Local 
Government  Private 
capital Capital

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 Other Chinese Bay Area ‐ SHN Other Chinese Bay Area 
Shanghai 1.Yangtze river delta
Suzhou Jiangsu, Shanghai, Zhejiang
Hangzhou 2. Beijing, Tianjin, Hebei
Ningbo 3. Qingdao, Dalian, Yantai

Finance and service, High tech, R&D

China New Driven Force Thank you!
1. 1.4 billion people and huge market. Consume
Advanced agriculture, food industry.  
Service industry, Healthcare. ……
2. Made in China, industry 2025, Upgrade
Industry design, professional consulting, finance
R&D, State laboratory, Public manufacture. 
3、New energy, new materials, medicine, medical 
equipment, Big data, VR, AI, ….

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