News | Mark Schlarbaum - Mainland China Business Collaboration

China January exports rise 7.9%, beating forecasts

China’s January exports easily exceeded analysts’ expectations, rising 7.9 percent from a year earlier, while imports rose by 16.7 percent, also topping forecasts, preliminary data showed on Friday.

That left the country with a trade surplus of $51.35 billion for the month, the General Administration of Customs said.

But China watchers caution that trends in January and February can be distorted by the long Lunar New Year holidays, with business slowing down weeks ahead of time and many firms scaling back operations or closing. The holiday fell on January 28 this year, 11 days earlier than last year.

Customs is due to release the final data for trade on Feb. 23.

Analysts polled by Reuters had expected January shipments from the world’s largest exporter to have risen 3.3 percent, after a dismal 2016 that saw exports slump 7.7 percent as China lagged an export rebound enjoyed by some of its North Asian neighbours.

Imports had been forecast to rise 10.0 percent, accelerating from 3.1 percent growth in December.

Analysts were expecting China’s trade surplus to have risen to $47.90 billion in January, versus December’s $40.71 billion, with growing attention on its large trade surplus with the United States as new U.S. President Donald Trump ramps up his protectionist rhetoric.

China’s trade surplus with the United States fell to $21.37 billion in January from $21.73 billion in December 2016, preliminary data from customs showed on Friday.

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MARK SCHLARBAUM - Experienced in China - US business partnerships. Never giving up for those that never stop fighting! Help me join the fight against blood cancer and reach my fundraising goal! Visit My Fund Raising Page

Mark Schlarbaum, Irvine, California

China’s Demand for Gold Can’t be Met

A couple of weeks ago, I was in Toronto meeting with gold industry experts. One night, I spoke with a man who has been in the gold business for over 45 years.

For over four decades, this man has bought and sold gold. He has bought and sold gold mining shares. He has bought and sold gold mines. During this time, he has also worked with the Chinese government, Chinese industry and Chinese investors. He knows a few things about gold, and about Chinese gold.

Here’s what he said to me: “I’ve seen estimates out of China that over 375 million Chinese want to buy gold. But they can’t. They live in the remote interior of the country, not the more open, coastal cities. These Chinese have little or no access to gold markets. And even if they did have access, there’s not enough gold.”

The man explained that any Chinese with means and access is buying gold. He told me that just the Shanghai Gold Exchange has over 10 million customers. 10 million separate, account-holding customers. Just for gold.

While we were talking, I did some quick math in my head. Suppose the average customer, a middle class Chinese worker, has about $2,500 socked into gold. At $1,250 per ounce, that’s the equivalent of about two ounces of gold.

That’s 10 million clients, each with an average of two ounces, for 20 million ounces of gold. That’s the equivalent of adding up the annual production, in 2015, of the four largest gold mining companies on the stock market — Barrick Gold, plus Newmont Mining, plus AngloGold Ashanti, plus Goldcorp.

There’s immense, pent-up demand for gold in China, and it’s already a massive pull on the world’s gold resources.

Chinese gold demand — both at the state level, and the teeming millions of individuals — is part of a story that’s not well-understood here in the West.

Gold Between the Lines

In the West, we’ve grown up in a world where the U.S. and the dollar reign supreme. Every currency moves up and down, here and there, from time to time. But it’s difficult for us to imagine anything much different than a world in which the U.S. dollar sets the pace. It’s hard for us to imagine a massive political upset that changes our way of life too much.

But if we look briefly at Chinese history, we’ll see that they haven’t had a chance to grow complacent with the status quo. We don’t have to go back to ancient times to see political upsets, famine, and fear.

When you look at the other factors Jim Rickards has highlighted, like China’s increasing debt, the problems with demographics, ghost cities… the Chinese people have picked up enough signals to start preparing for the next crisis.

That’s why many Chinese are trying to preserve whatever wealth they’ve accumulated. The safest way to preserve wealth will always be gold. But as my gold expert told me in Toronto, there simply isn’t enough gold being produced to meet this demand.

Right now, almost all of China’s retail, investor-driven demand for gold is met by the Shanghai Gold Exchange. Established in 2002, the Shanghai Gold Exchange is wholly owned by the Chinese government. In recent years, the organization has become the largest facility in the world for bullion sales and trading, with money and metal passing through a network of 55 vaults.

One recent estimate is that, in 2016, Shanghai Gold Exchange moved over 2,000 tonnes (or 64,000,000 ounces) of gold into Chinese investors’ hands. It’s a mix of new production gold, and imports of gold from western inventories. All this demand and sale, even though recent gold price premiums on the Shanghai Gold Exchange have been as high as 25% above the global-posted spot price. This reflects the physical scarcity within Chinese gold trading channels.

Presently, Shanghai Gold Exchange has over 10 million customers, and it’s just a beginning. As China continues to try to combat its economic, political and social issues, we must confront the idea that Shanghai Gold Exchange could become the source for explosive growth in customer numbers, and gold demand, in the years to come.
Meeting Chinese Gold Demand

The next logical question to ask is, where’s the gold? Are there 20 or more Barrick-equivalent gold mining companies out there? It’s a simple answer: No way.

Right now, the global gold industry is scarcely keeping production at steady levels. Since 2012, many marginal gold mines closed. Many mining companies shed assets and laid off skilled workers. (We discussed some of the production problems facing gold and gold miners in our September.)

Across the world, there’s been a dearth of gold exploration, and very few significant discoveries. We don’t expect to see any significant growth in gold output over the next three to five years, based simply on the lack of new mines under construction, and the absence of expansion work at existing facilities.

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Mark Schlarbaum, Irvine, California

Hungry China sees more riches than war in Afghan future

China’s First Freight Train To The U.K. Rolls Into London

It took about two weeks, nearly 7,500 miles, nine countries and two continents. But before this freight train could roll to a well-deserved stop, it had to break through one final barrier, a banner proclaiming its historic achievement:

“First freight train from China to UK — Yiwu to London.”

The train, which set out from the eastern Chinese city earlier this month, inaugurated a direct freight train service between the two countries with its arrival in east London’s Barking terminal Wednesday. But to do so, it first had to cross Kazakhstan, Russia, Belarus, Poland, Germany, Belgium and France.

The final leg of its intercontinental trip was under the sea, in the Channel Tunnel between France and the U.K.

It should be noted, the news comes with a little caveat. The train that left Yimu isn’t identical to the one that rolled into London, as The Guardian notes: “Differing rail gauges in countries along the route mean a single locomotive and set of wagons cannot travel the whole route.”

Still, the freight train — with its rather mundane cargo of clothing and household goods — marks a milestone for an altogether more ambitious plan: the revival of the centuries-old Silk Road trade routes between China and the West. Chinese President Xi Jinping announced the multibillion-dollar investment in infrastructure known as “One Belt, One Road” in 2013.

With the new service, London is now the 15th European city to be linked with China by rail — and the BBC reports China is planning another 20 European routes. The U.K. route was announced by the state-run China Railway Corporation, and it is operated by the Yiwu Timex Industrial Investment Company.

It is seen as a possible compromise for companies looking to send goods from the one country to the other, trimming the expenses of air travel and cutting the time of shipping by sea.

“For us a service which is quicker than sea and cheaper than air is a great middle ground,” British exporter Jody Jacobs tells the BBC.

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Mark Schlarbaum, Irvine, California

China’s policing robot: Cattle prod meets supercomputer

China turns to robots as workers age

Flat, orange robots glide under stationary cars and ferry them to empty Chinese parking bays, using space more efficiently and, their creators say, reducing driver stress.

It is one of a number of elegant—and expensive—mechanical solutions China is turning to as it faces an ageing population, which, even in the world’s most populous country, is making workers harder to come by.

With an eye on the rising numbers of cars on Chinese roads, Hikvision has been testing a robotic parking system in Wuzhen, 130 kilometres (80 miles) west of Shanghai.

“The technology and scale of the industry is still at a very early stage,” said Wu Yonghai, the company’s head of robotics.

“This is about finding a solution to the car parking problem.”

Most firms in the sector focus on industrial robots rather than service robots, the kind which might sweep an apartment floor or act as a companion for elderly people.

With China’s labour force shrinking under the impact of the now abandoned one-child policy, the world’s second-largest economy is turning to machines to try to fill the gap.

The working-age population—defined as those from 15 to 59—fell for the first time in decades in 2012, according to official figures, and has declined ever since. It is expected to carry on falling until at least 2030, and economic growth is also slowing.

China decided to allow couples to have a second child starting last year but the looming labour shortage will take decades to address, if at all.

The country is already the world’s largest market for the mechanical helpers and it will only get bigger, according to the International Federation of Robots, which estimates China will account for 40 percent of the global industrial robot market by 2019.

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Mark Schlarbaum, Irvine, California

McDonald’s sells China business in deal worth up to $2.1 billion

McDonald’s sells China unit in $2.1B deal
McDonald’s sells China unit in $2.1B deal
7 Hours Ago | 00:34

McDonald’s has agreed to sell the bulk of its China and Hong Kong business to state-backed conglomerate CITIC and Carlyle Group for up to $2.1 billion, seeking to expand rapidly without using much of its own capital.

The 20-year deal caps months of negotiations between the fast-food chain, private equity firms including Carlyle and TPG Capital Management as well as several Chinese suitors.

The U.S. fast food chain said local partners will help speed up growth in the world’s No. 2 economy through new restaurant openings, particularly in smaller cities that are expected to benefit from increased urbanization and income growth.

“McDonald’s globally overall is struggling and didn’t have the money or intellectual resources to focus on China,” said Shaun Rein, managing director at China Market Research Group.

The company has more than 2,400 restaurants in mainland China and roughly 240 in Hong Kong. The new partnership plans to add 1,500 in the two areas over the next five years.

Under the deal, Hong Kong-listed CITIC Ltd will own about 32 percent of the business, with CITIC Capital, an affiliate company that manages private equity funds and other alternative assets, holding another 20 percent.

Carlyle will control 28 percent of the business, while McDonald’s will retain a 20 percent stake, the companies said in a statement. The deal will be settled in cash and in shares in the new company that will act as the master franchisee for the 20-year period.

McDonald’s originally wanted to raise up to $3 billion from the sale of the business, but later decided to keep a minority stake to benefit from exposure to future growth in China, a person with direct knowledge of the plans previously told Reuters.

The partnership will also aim to boost sales at existing restaurants, with menu innovation a key focus. Fast-food firms including McDonald’s and Yum Brands are recovering from a series of food-supply scandals in China that have undermined their performance.

“I’m not sure how much more you can do with McDonald’s in China. They’re a well-run company, so I’m not sure that CITIC and Carlyle are able to add that much more aside from capital,” Rein said.

McDonald’s said in March it was reorganizing operations in the region, looking for strategic partners in China, Hong Kong and South Korea. The company later decided to keep its South Korea business.

Other companies that had bid for the China and Hong Kong assets included TPG, which teamed up with mini-market operator Wumart Stores, and real estate firm Sanpower Group, which owns British department store House of Fraser, sources have said.

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Mark Schlarbaum, Irvine, California

China: We will be on Mars by the end of 2020

Beijing (CNN)China is aiming to own the race for space in the next decade.
China’s ambitious and fast-growing space program is targeting a landing on the dark side of the moon by 2018, and reaching Mars before the end of the decade.

The country’s space agency held a press conference on Tuesday to mark the release of a policy paper, and outlined the government’s goals for exploring deep space.

Wu Yanhua, deputy chief of the National Space Administration, said Beijing aims to launch its first Mars probe around 2020 to carry out orbiting and roving exploration, followed by a second mission that would include collection of surface samples from the red planet.

He said other plans include sending probes to Jupiter and its moons.
“Our overall goal is that, by around 2030, China will be among the major space powers of the world,” he said.

China was late to the space race — it didn’t send its first satellite into space until 1970, just after the United States put the first man on the moon.

But in the decades since, China has pumped billions of dollars and other resources into research and training.

Since 2003, China has staged a spacewalk, landed a rover on the moon and launched a space lab that it hopes paves the way for a 20-ton space station.
It has also sent five crews into space in the same span of time, making it only the third country in the world — after Russia and the United States — with such success.

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Mark Schlarbaum, Irvine, California

China Space Plan to Develop “Strength and Size”

China wants to develop “strength and size” in its space program, a China National Space Administration official said last week.

In the next five years, the country plans to speed up the development of its space program. China wants to become the first country to carry out a controlled landing of a probe on the far side of the moon in 2018.

China also has plans to launch its first probe to the planet Mars by 2020.

China released an official policy proposal, known as a white paper. The document provides details of China’s plans for space exploration for the next five years. It was released by the State Council Information Office last Tuesday.

In this image taken and made from CCTV, Chinese astronaut Wang Yaping, seen on screen, listens to a question from a school girl in Beijing, China, during a live broadcast from onboard the Tiangong 1 space station, June 20, 2013.

“To explore the vast cosmos, develop the space industry and build China into a space power is a dream we pursue unremittingly,” the white paper said. China says it will use space for peaceful purposes, to guarantee national security and to carry out new scientific research according to the paper.

Russia and the United States have more experience in manned space travel with programs that have been operating for more than 50 years. China’s military-supported program, however, has made progress in a short time.

Morris Jones is an independent writer and an expert on the Chinese space program. He is based in Australia. He told VOA that the Chinese have one of the world’s best space programs. He said it was about the same as the European program.

“They’re moving ahead very rapidly. They have a very impressive human spaceflight capability. They’ve recently completed their longest space mission to date, which was roughly a month. And they’re preparing probes to go to the moon and deeper into space.”

China conducted its first manned space mission in 2003. Since then, Chinese astronauts have carried out a spacewalk. China also landed a vehicle on the moon in 2013. That was the first time a spacecraft had made a soft landing on the moon since the 1970s.

Most recently, two Chinese astronauts stayed aboard China’s Tiangong 2 experimental space station for one month. It was the country’s sixth and longest space mission. A fully operating, permanently crewed space station is to begin operations six years from now. It is expected to operate for at least 10 years.

In the white paper, Chinese officials do not talk about sending humans to the moon, but Jones says that may happen in the future.

“What I also think is interesting to consider is the fact that the white paper gives further hints that even beyond landing robot probes on the moon, China is moving steadily in the direction of eventually sending humans there.”

Jones says landing a probe on the far side of the moon is technically difficult. Because of the moon’s orbit, the far side of the moon always faces away from Earth. That, Jones says, makes communications with the landing probe more difficult. He says China will have to use advanced technology including a special satellite to communicate with the lander.

China says landing on the far side of the moon may help explain the formation and evolution of our only natural satellite.

He Qisong is a space security expert at Shanghai University of Political Science and Law. He said a soft landing on the far side of the moon would show that China has fully developed the technology needed to land on a specific area of the Moon’s surface.

“China never talks big and says something it’s unable to achieve,” he told the Associated Press.

The white paper says that China is committed to the peaceful use of space and opposes a space arms race.

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Mark Schlarbaum, Irvine, California

Wayne Rooney offered £700,000-a-week by Chinese Super League

Wayne Rooney to China: Manchester United captain offered £700,000-a-week to follow others to Chinese Super League

WAYNE ROONEY will become one of the highest-paid players in the world – if he accepts an offer to move to the Chinese Super League.

Two clubs are reported to be chasing the Manchester United and England captain on a deal worth an incredible £700,000-a-week.

Oscar left Chelsea for Shangai SIPG in a record £60million deal on Thursday and despite being paid £500,000-a-week, he doesn’t even make the top five richest players in world football.

According to the Daily Mirror, China’s richest club Guangzhou Evergrande Taobao and Beijing Guoan have made signing Rooney a top priority.

Beijing made a move for the striker – no longer a regular starter for club or country – in the summer but were rebuffed by agent Paul Stretford.

But since then, Rooney has fallen down Jose Mourinho’s pecking order, while a drinking row while on England duty leaves his international future unclear.

The report states that Rooney, who has a contract until 2019, would cost the Chinese club around £10m.

The striker remains just two goals away from Sir Bobby Charlton’s all-time club goalscoring record – but he hasn’t scored in a month and his last Premier League goal came on the opening weekend.

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Mark Schlarbaum, Irvine, California

Stephon Marbury: Remade in China

How the former hoops star went from NBA outcast to international trailblazer

tephon Marbury was heading to practice with his Beijing Ducks on an October morning when his old NBA nightmares started to haunt him again.

“They don’t want me at the game tonight,” Marbury said during the ride on Oct. 12.

Seven years removed from the hard crash of his NBA career, Marbury has become a Jordanesque basketball figure in Beijing. Imagine how an NBA player would be treated if he led the Washington Wizards to a championship in the nation’s capital. That’s essentially what Marbury did in China, leading the Ducks to their first Chinese Basketball Association title and three in four years in that nation’s capital. And, boy, did Beijing ever show its appreciation.

There is a statue of him holding up the 2012 Chinese Basketball Association trophy above his head outside the home arena. He is in another statue celebrating the first title along with two of his teammates outside of the practice arena. There is a Marbury museum about five kilometers from Tiananmen Square showcasing his entire basketball career, filled with old trophies, jerseys and other hoop artifacts as well as a gift shop.

There was a Broadway-type musical centering on his life that he actually acted and danced in for 11 nights. He is acting as the lead in My Other Home, a Chinese film based on his life that is expected to debut in 2017 with cameos from Allen Iverson and Baron Davis. He also has a Chinese postage stamp, was honored as a role model by the local government and has a Chinese green card.

Marbury is quite possibly the most popular African-American in the city’s history and likely the country, too. And the Ducks are expected to be the last basketball team he plays for professionally. Now with one more year left on his Beijing contract, he said he didn’t entertain an inquiry from the Houston Rockets after winning his first title in China in 2012.

“I basically kept telling them I wasn’t interested, and I really wasn’t,” said Marbury. “That was not where my mind was. They had just talked about erecting a statue for me and the last thing I was thinking about was playing back in the NBA.”

Marbury is the last notable draftee still playing from an illustrious 1996 NBA draft class that included Allen Iverson, Kobe Bryant, Ray Allen, Steve Nash, Jermaine O’Neal, Peja Stojakovic, Marcus Camby and Derek Fisher. He averaged 19.3 points, 7.6 assists and 1.2 steals per game during his 13-year NBA career, including averaging over 21 points and eight assists while with the New Jersey Nets and Phoenix Suns. The two-time NBA All-Star believes that if it weren’t for his last two seasons struggling with the New York Knicks and Boston Celtics, respectively, he would have averaged more than 20 points and eight assists for his NBA career.

“I remember those days when it wasn’t fun with what I contributed on and off the court. I thought the league was mad about me messing up their money in Minnesota,” Marbury said.

Marbury believes his problems in the NBA began when he received his wish and was traded from the Minnesota Timberwolves, ending his star matchup with Kevin Garnett in 1999. Marbury said he wanted to leave primarily because the harsh Minneapolis winters were too cold for him and caused him too many dangerous spinouts on the roads.

Marbury believes his outspoken nature didn’t jibe with the NBA either. He put a tattoo of his Starbury logo on his bald head. He sold affordable basketball sneakers for $15 while chastising Michael Jordan for selling expensive basketball shoes that inner-city kids have killed each other over. Marbury didn’t think former NBA commissioner David Stern was a fan of his either during his reign.

“It was basically set in stone of who they were going to push and how they were going to push them … ,” Marbury said. “The people who complained, who had strong personalities, were basically speaking truth and what’s real instead of falling back, just staying quiet and not being penalized for it. Guys now have more of a voice.”

Marbury’s NBA career started spiraling to an end when coach Mike D’Antoni of his hometown Knicks benched him during the 2008-09 season. While on the pine, Marbury says, he began thinking about life after basketball before the Knicks released him on Feb. 21, 2009. D’Antoni declined comment on Marbury’s Knicks days, but wished him the best through ESPN.com’s Calvin Watkins. Marbury finished the 2008-09 season, his last in the NBA, coming off the bench for the Celtics.

“It hurt more because of the way it was done. We were winning by a lot of points and he still didn’t put me in,” Marbury said.

In July 2009, Marbury streamed a 24-hour meltdown about his life and basketball career live on the internet that received a lot of criticism. At that time, he said, he was in a “depressed state” and was still mourning the recent deaths of his father, aunt and childhood basketball coach.

“It was pretty much isolation,” Marbury said. “All of what I’ve done and given to the game, at the time I felt I didn’t have the support system I needed in order to get back on my feet. I was in a dark place where I was not feeling like myself.”

After turning down his lone NBA offer with the Celtics during the 2009 offseason, Marbury often lay in bed depressed, eating not much more than cereal. Inspiration from his wife, Tasha, later got him thinking about a return to basketball. In January 2010, he became the first notable NBA player to depart to play in China, starting with Shanxi.

“There were like 5,000 fans [at the airport]. To be greeted the way I was greeted was amazing,” said Marbury, who arrived solo without his wife and three kids.

Three championships and six years later, the old Marbury is back in China and still thriving at 39 years old.

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Mark Schlarbaum

Mark Schlarbaum, Irvine, California

Tech Trends From China To Watch Out For

The Biggest Tech Trends From China To Watch Out For In 2017

China’s technology sector dominated headlines in 2016 both in the Middle Kingdom and abroad, ranging from coverage of Uber’s merger with Chinese rival Didi Chuxing to the newly popular bike-sharing apps.

Just a few years after China’s tech scene emerged, the conversation has shifted from questioning if Chinese firms can innovate to how Western firms can mimic the success of Chinese mobile apps, such as WeChat. As the year comes to a close, analysts and VCs are now shifting focus to new emerging trends and companies.

A Boom in Fintech

Financial products aimed at an emerging and growing middle class are on the rise and are expected to grow amid burgeoning demand.

China’s consumers have skipped many stages in their technological progression, bypassing aging Western technology in favor of new trends, said Jeremy Peruski, from ICR, a consulting firm.

“I really do believe that China is becoming a global hub when looking at global technology and they historically have led with creating financial products,” Peruski said. “This will only continue to accelerate because we see China skipping growth patterns we saw in the U.S.”

Credit cards have never taken hold, with most customers opting instead to use their phones and payment apps such as Alibaba’s payment system, Alipay, and WeChat. An Ernst & Young report found that 40 percent of consumers in China now use new payment methods.

Further underpinning growth in the country’s fintech segment is a new social credit system that the government expects to fully implement by 2020. The system assigns each citizen and business a credit score based on their social behavior, previous purchases and other financial data. The score would then be used to determine a person’s eligibility for everything from loans and government jobs to where they can travel.

While the system has been criticized as draconian and a further reach into the lives of the country’s private citizens, eight of China’s largest companies are developing credit systems that could be incorporated into the new system, including Alipay and Sesame Credit – both offshoots of Alibaba.

In the meantime, China’s peer-to-peer lending segment is expected to continue to grow over the next year to fill the space left by more traditional banking. China Rapid Finance, one of the country’s largest consumer lending platforms, facilitates in providing loans to online consumers and the middle class, who by and large do not have access to credit scores. The company currently has more than 1 million borrowers, and analysts anticipate that number will rise.

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Mark Schlarbaum, Irvine, California

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