The Future Of Sales And The Pervasiveness Of Technology

I was recently a guest speaker at the Sales Leadership Conference organized by Dr. Karen Peesker, Co-Founder of the Sales Leadership Institute, a department at the Toronto Metropolitan University (formally Ryerson University) in Toronto, Canada. The conference was hosted by IT World Canada, Microsoft, DHL, Rogers and other community leaders. The conference goals were to bring university professors, students, industry leaders, and academicians to share their learning programs, identify gaps and requirements to advance the sales profession and most importantly, tackle a vision for the future of sales.

The strongest theme of the conference was the business imperative for advancing digital literacy, data literacy and ensuring that technology was firmly embedded in all sales learning programs. Digital literacy is best defined as an individual’s ability to find, evaluate, and clearly communicate information and knowledge through using diverse digital platforms. It is best evaluated by an individual’s interaction skills with technology and includes: grammar, composition, typing skills and the ability to produce text, images, audio and designs using technology.

This point was acutely reinforced by Fawn Annan, the CEO of IT World Canada (ITWC), with her high impact video conference address, where she identified how pervasive technology is in shifting the global sales landscape. Her panoramic and rich perspectives highlighting how diverse technologies – AI, analytics, IoT, driverless cars – are collectively impacting the world of a sales professional at work, and in society.

Annan quoted Gartner Group’s research stating that “a seller’s decision making is now based more on data, analytics and AI, versus intuition and experience” – prior stable hallmarks of a sales professional. This means that sales professionals will need far more digital literacy and data literacy training to be able to function in a far more data centric world. Other key takeaways from this video included:

1.) Hyper automation is advancing a buyer’s sales journey, and that a seller only has 26 moments to engage and influence a buyer in his /her purchasing journey. In other words, finding the right moments is even more important in following the customer data crumbs.

2.) Consumers check their cell phones on average 47 times/day and these frequent check-in’s, according to Google, are referred to as micro-moments. Hence the increased value of AI driven advertising as well the increasing intrusion consumers feel in invading their privacy.

3.) Over 76% of consumers transact and ship on mobile devices, and this number is increasing year-over-year. Hence, sales professionals’ primary interaction devices must be mobile and portable.4.) Sales applications exist throughout the sales buyer’s journey and increasingly, they are AI applications. According to McKinsey, the fastest growing companies invest more in AI sales digital tools than slower growth companies. A major contributor of sales performance success is having a robust sales software infrastructure. Hence, companies must accelerate their investments in sales intelligence software toolkits for advancing competitive advantage.

5.) Annan profiled two companies in her video address: SalesChoice and RingCentral. SalesChoice’s focus is on accelerating the growth of sales professionals and is a comprehensive AI platform well known for its proven sales use cases. Solutions include:

· Predictive Opportunity Scoring (focusing on the best deals with highest probability of a win outcome),

· Predictive Sales Forecasting that are securing prediction levels of up to 95% accuracy,

· Monitoring your data to ensure the AI predictions are on solid foundations,

· Relationship intelligence, with their new alliance partner, IntroHive, to bring even more win or loss signals to the attention of sales professionals. Who would not want to buy software that can predict your future outcomes at the top of your funnel and predict a win or a loss on every sales deal outcome, and identify the depth and breadth of your customer relationships across your enterprise?

· Mood and Health Intelligence: SalesChoice is active in innovation research with the Ontario Center of Innovation (AVIN program) and Purolator, propagating the importance of health in advancing employee productivity, and reducing attrition. Did you know that according to Payscale, sales account management was ranked as the second most stressful job, with 73% of respondents rating the role as “highly stressful.” Salespeople are under a lot of pressure to meet quota, convert quickly, and keep approval rankings high.

So increasing health approaches are critical to ensure sales talent don’t burn out or give up. Estimates of annual turnover among U.S. salespeople run as high as 27%—twice the rate in the overall labor force. In many industries, the average tenure of a sales professionals is less than two years. Given that the costs to recruit a sales professional is 20% and the time it takes to ramp up a sales professional is around 9 months, you can see how expensive it is to not retain your sales talent.

AI can act like a crystal ball. With good data, the mathematical genius in an AI algorithm and computational power is like the holy grail to guide sales professionals to greater deal outcome success and hopefully to happier behaviors and positive win outcomes as well.

The second company profiled was Ring Central, where Annan highlighted their collaboration and call center solutions, using AI methods to optimize building more productive customer interactions. Leaders like Sheevaun Thatcher, are advancing sales modernization programs at Ring Central, integrated diverse disciplines from: Adult Learning, Interactive Design, Strategic Planning, Collaborative Leadership, Diversity and Inclusiveness and always connecting the dots seamlessly. If there is a leader to watch advancing the field of sales and learning enablement, it is Sheevaun Thatcher.

Annan consistently highlighted that having advanced AI solutions can make a major difference to your digital conversion success, and reinforced that the old tools of looking in the rear view mirror are simply yesterday’s approaches. Due to the rapid speed of our world’s changing footprint, having smarter and forward looking (predictive AI analytics) toolkits is the only way that companies can grow faster, and more importantly, survive.

Increased AI Sales Toolkits Knowledge and Competency is Key.

Educating sales professionals to be ready for a smarter AI focused workplace will require skills, knowledge and proficiency in using modernized toolkits. So sales training must offer hands-on and practical skills development in universities to hit the ground running and bring value to a company immediately upon hiring.

Companies that use AI for sales in pre-sales have seen a 50% boost in leads, a 60-70% reduction in call time, and a 40-60% cost reduction. Numerous toolkits are in the market identifying the ideal buyer prospect and even knowing the propensity (density) of a buyer’s interest in your solution. Knowing where you customer is in their buyer journey is an inflection point for engaging in a micro-moment. Leading solutions advancing leads using AI are profiled in this blog.

In addition to pre-sales, other AI approaches can be used in opportunity scoring, predictive forecasting, and even mood / health indicator correlated to win rates. These are all areas that SalesChoice, a former ITWC Digital Transformation Award recipient, has been pioneering in.

According to the 2021 Buyer Experience Study, 80% of SaaS buyers report the buying process has too many steps and results in frustration for both the buyers and sellers. Hence, what this means for developing sales training programs is that skills not relevant to technology will need to be balanced with those that are. For example, empathy and two-way listening is key. Strong sales professionals understand that a buyer comes to solve a specific problem and not to buy your product. Understanding your buyer’s need is key in order to find a path for resolving it rapidly and reducing buyer and seller friction.

Research has shown that identifying the needs of your buyer can shorten sales cycle by as much as 65%. Customers (buyers) are coming into sales cycles far more informed from online sources. Hence, sales professionals need to learn more consultation skills to unravel the customer’s needs using relevant problem solving skills, enabled with as much prior information on the buyer as the buyer has on the seller.

Increase Training on Collaboration and Selling Virtually

With continued reliance on working virtually, the sales professionals will need to use a variety of online sales toolkits, ranging from a leading CRM (HubSpot, Salesforce, Microsoft Dynamics, etc.,), calendar management system, and collaboration system (like Zoom, or Microsoft Teams) etc. Expertise for effective collaboration will need to include skills in emotional intelligence, written skills, video presence (posture, smiling vs frowning), and voice skills (how you sound impacts how people want to listen). Other key skills like relationship development are increasingly valued in our network economy as building trust online must be mastered in seconds to capture a conversion in a micro-moment exchange.

Increase Digital Literacy Skills

There are many skills in digital literacy – from being able to use software, operate a digital device, to the ability to manage complex cognitive, social, emotional and motor skills to function effectively in digital high-tech environments. Key areas in digital literacy for a sales professional will need to include: the ability to understand reading instructions in digital environments, create or analyze simple to complex graphical displays in user interfaces, use diverse visualization methods, extract knowledge from non-linear, hypertextual navigation, and ascertain the quality and the validity of the information that is being presented.

Increase Data Science and AI Skills

In our data rich world, it is imperative for sales professionals to develop stronger data literacy skills. Data literacy skills include the ability of a sales professional to identify, understand, operate on, and use data effectively. Gartner Group defines data literacy as “the ability to read, write and communicate data in context, including an understanding of data sources and constructs, analytical methods and techniques applied, and the ability to describe the use case, application and resulting value.

Further, data literacy is an underlying component of digital dexterity — an employee’s ability and desire to use existing and emerging technology to drive better business outcomes.” Gartner Group is predicting that by 2023, data literacy will become essential in driving business value, demonstrated by its formal inclusion in over 80% of data and analytics strategies and change management programs.

However, traditionally sales professionals possess stronger skills in relationship building, listening and understanding people’s emotional states. A recent survey found that out of over 7M sales professionals on Linkedin, only 0.4% indicated they had studied math. This mirrors my experience as well leading sales teams or building software for sales professionals. Data literacy is a major gap in sales and to bridge this gap, companies will need to invest in training sales professionals in math, statistics and AI general concepts. This also will shift the hiring profile as increasing digital literacy and data skills are imperative to lead in the changing data rich world.

Conclusion

The Sales Leadership Institute and the leadership of Dr. Karen Peesker is an excellent initiative that requires government and industry support, as close to 5% of the North American labour population is comprised of sales professionals. Sales is an important profession focused on selling a company’s products or services, and also one that manages the customer’s relationship from an account management perspective.

Skill development in digital literacy, data literacy, relationship intelligence, and not losing sight of the softer skills (communication, written and oral, and listening) are all critical to advance the sales profession and be prepared to compete in a world that, as Annan shared in her video address, is increasingly technology centric.

SalesChoice, an AI SaaS company focused on Ending Revenue Uncertainty and brining more Humanity to Sales to avoid attention deficit disorder using AI and Cognitive Sciences. A former Accenture, Xerox and Citicorp executive, she bridges governance, strategy and operations in her AI initiatives. She is also a board advisor of the Forbes School of Business and Technology, and the AI Forum. She is passionate about modernizing innovation with disruptive technologies (SaaS/Cloud, Smart Apps, AI, IoT, Robots and Cobots), with 14 books in the market, with The AI Dilemma just released. Follow her on Linked In or on Twitter or her Website. You can also access her at The AI Directory.

“>

Source: The Future Of Sales And The Pervasiveness Of Technology

More contents:

Bat Viruses? Puppy Experiments? Fact-Checking Critics’ Latest Claims About Dr. Fauci.

Dr. Anthony Fauci is facing a storm of new conservative-led criticism that the National Institute of Allergy and Infectious Diseases — which he’s led for decades — funded everything from risky coronavirus research in China to unnecessary experiments on dogs; here, we break down the outrageous and not-so-outrageous new claims, and the evidence supporting them.

Key Facts

Claim: House Republicans claim a letter sent to them by the National Institutes of Health last week “confirmed” a 2018-2019 study in the Chinese city of Wuhan involved gain-of-function research, a contentious method of studying viruses by enhancing them — despite denials from Fauci that the NIH funded gain-of-function research in Wuhan.

Context: The NIH letter said mice unexpectedly “became sicker” during an experiment in Wuhan involving bat coronaviruses whose spike proteins were replaced — but it didn’t mention gain-of-function research, and Fauci and NIH Director Dr. Francis Collins argued last week the study didn’t meet the definition of gain-of-function, though several experts still told the New York Times and The Intercept this kind of research is risky.

Claim: Rep. James Comer (R-Ky.) told Fox News last week the NIH letter “proves all along that this virus was started in the Wuhan lab,” tying it to months of insinuations from Republicans that Covid-19 began after a virus leaked from a lab.

Context: These bat viruses “could not possibly have caused the COVID-19 pandemic” because they’re too genetically distinct, the NIH says, an argument seconded by many scientists and the EcoHealth Alliance, the nonprofit recipient of the Wuhan NIH grant.

Claim: Separately, in recent weeks, lawmakers like Rep. Nancy Mace (R-S.C.) have chastised NIAID for funding “barbaric and gruesome” experiments on dogs, including studies allegedly exposing dogs to insects, cutting their vocal cords or euthanizing them.

Context: NIAID defended its dog experiments in a statement: It said researchers need to follow federal guidelines on humane treatment of animals, and dogs are sometimes given vocal cordectomies “humanely under anesthesia” to cut down on hazardous noise.

Claim: News outlets and advocates have spread photos of beagles from Tunisia whose heads were put in mesh cages filled with flies, part of a parasitic disease study that initially cited NIH funding when it was published in PLOS Neglected Tropical Diseases.

Context: NIAID told Forbes it actually “did not support this specific research,” and PLOS spokesperson David Knutson says the journal is issuing a correction to clarify the study’s funding was “erroneously attributed to the US National Institutes of Health.”

Chief Critic

Fauci has served as the director of NIAID — part of the NIH — since 1984, but he earned mainstream fame after Covid-19 emerged, and his support for public health measures like mask-wearing and social distancing has driven criticism from conservatives. In recent months, he’s also clashed with Sen. Rand Paul (R-Ky.) over the NIH’s ties to bat virus research in Wuhan. Most notably, during an explosive July hearing, Paul accused Fauci of lying about whether this work involved gain-of-function methods, and Fauci insisted the NIH hasn’t funded gain-of-function research in Wuhan.

Key Background

Gain-of-function research is ill-defined, and opinions on the practice vary widely. Some scientists view it as a useful way of predicting viruses’ future trajectory, but critics warn modifying viruses could pose a biosafety risk. The NIH paused gain-of-function studies for certain viruses in 2014, and three years later, it reopened this research but added extra scrutiny for any experiments that could enhance pathogens’ effectiveness against humans. However, the Wuhan research — which studied various coronaviruses — wasn’t subject to these additional rules because the bat viruses under study weren’t known to infect people, the NIH claimed in last week’s letter to Republicans on the House Oversight Committee.

Surprising Fact

The NIH’s letter to Republicans also said EcoHealth Alliance was required to report any growth in disease for its experiment beyond a certain threshold, but it “failed to report this finding right away.” NIH’s leader Collins told the Washington Post the group “messed up here,” though its findings weren’t necessarily dire. But EcoHealth spokesperson Robert Kessler told Forbes it believes these claims were a “misconception about the grant’s reporting requirements,” saying the group reported the data in question to the NIH in 2018.

What We Don’t Know

Some of this acrimony is tied to uncertainty about the pandemic’s origin. Fauci and many experts think the virus most likely jumped from animals to humans naturally and argue there’s insufficient evidence to suggest the virus escaped from a laboratory, but other scientists say an accidental leak from a lab is still a plausible theory, and Fauci and the Biden administration say they haven’t ruled out this possibility yet.

Still, even if the virus leaked from a lab, the NIH says the viruses studied in the Wuhan lab with EcoHealth Alliance’s participation were “very far distant from SARS-CoV-2,” the virus linked to Covid-19. Likewise, Kessler said none of those viruses “bear a close enough resemblance to the virus that causes COVID-19 to have played any role in its emergence.” And in his July exchange with Fauci, Paul said he isn’t necessarily alleging the NIH’s research specifically caused Covid-19.

Tangent

Some conservative pundits tied their anger over NIH-funded dog research to broader complaints about Fauci, but dog experiments have been controversial for years. NIAID says its rules around animal testing aim to “ensure the smallest possible number of subjects and the greatest commitment to their welfare,” and argues this research is useful. One study blasted by activists used dogs as an “appropriate model” to test a vaccine for a brutal mosquito-borne parasite, NIAID told Forbes, and another study in Tunisia — which it said is separate from the experiment that placed dogs’ heads in cages — investigated a vaccine for a common parasite by letting dogs roam in an “enclosed open space” during sandfly season.

However, advocates cast this research as cruel and unnecessary. Justin Goodman from the White Coat Waste Project, an anti-animal experimentation group often critical of Fauci, told Forbes in a statement the group’s concerns are “not about photos in Tunisia — or any one beagle lab. It’s about Dr. Fauci’s widespread and long pattern of wasteful and punishing puppy abuse.”

Follow me on Twitter. Send me a secure tip.

I am a breaking news reporter at Forbes. I previously covered local news for the Boston Guardian, and I graduated from Tufts University in 2019. You can contact me at jwalsh@forbes.com or on Twitter at @joewalshiv

Source: Bat Viruses? Puppy Experiments? Fact-Checking Critics’ Latest Claims About Dr. Fauci.

.

Related Contents:

 

Why Is China Cracking Down on Ride-Hailing Giant Didi?

Just days after Didi Global Inc., China’s version of Uber, pulled off a $4.4 billion initial public offering in New York, the Chinese cyberspace regulator effectively ordered it removed from app stores in its home market, citing security risks. The ruling doesn’t stop the company from operating -– its half-billion or so existing users will still be able to order rides for now. But it adds to the uncertainty surrounding all Chinese internet companies as regulators increasingly assert control over Big Tech.

1. What’s Didi?

It’s China’s biggest ride-hailing company. Didi squeezed Uber out of China five years ago, buying out the American company’s operations after an expensive price war. Its blockbuster IPO on June 30 was the second-biggest in the U.S. by a company based in China, after Alibaba Group Holding Ltd, giving Didi a market value of about $68 billion.

Accounting for stock options and restricted stock units, the company’s diluted value exceeds $71 billion — well below estimates of up to $100 billion as recently as a few months ago. The relatively modest showing reflects both investors’ increasing caution over pricey growth stocks, and China’s recent crackdown on its biggest tech players.

2. What is this investigation about?

The specifics are still very unclear. Two days after the IPO, the Cyberspace Administration of China said it’s starting a cybersecurity review of the company to prevent data security risks, safeguard national security and protect the public interest. Two days after that it said Didi had committed serious violations in the collection and usage of personal information and ordered the app pulled. There are no details on what precisely the investigation centers on, when or where the alleged violations occurred or whether there will be more penalties to come.

3. Are there any hints?

The Global Times, a Communist Party-backed newspaper, wrote in an editorial that Didi undoubtedly has the most detailed travel information on individuals among large internet firms and appears to have the ability to conduct “big data analysis” of individual behaviors and habits. To protect personal data as well as national security, China must be even stricter in its oversight of Didi’s data security, given that it’s listed in the U.S. and its two largest shareholders are foreign companies, it added.

4. Is it just Didi?

No. The Chinese internet regulator has widened its probe to two more U.S.-listed companies, targeting Full Truck Alliance Co. and Kanzhun Ltd. soon after launching the review into Didi.

5. Was this out of the blue?

No. In May, China’s antitrust regulator ordered Didi and nine other leaders in on-demand transport to overhaul practices from arbitrary price hikes to unfair treatment of drivers. More broadly, Beijing is in the process of a sweeping crackdown on the nation’s Big Tech firms designed to curb their growing influence.

In November 2020 the authorities derailed the planned IPO of fintech giant Ant Group Co. and in April hit Alibaba with a record $2.8 billion fine after an antitrust probe found it had abused its market dominance. Didi, however, said on Monday it was unaware of China’s decision to halt registrations and remove the app from app stores before its listing.

6. Why does Didi matter?

You can’t really overstate just how dominant Didi is in ride hailing in China, accounting for 88% of total trips in the fourth quarter of 2020. When Didi bought Uber’s Chinese operations in 2016, Uber took a stake in the company that currently stands at 12%. Didi’s U.S. IPO was shepherded by a who’s who of Wall Street banks. Its largest shareholder is Japan’s SoftBank Group Corp. with more than 20%, and others include Chinese social networking colossus Tencent Holdings Ltd. However, due to Didi’s ownership structure, Chief Executive Officer Cheng Wei and President Jean Liu control more than 50% of the voting power.

7. How’s the company doing?

While Didi had a net loss of $1.6 billion on revenue of $21.6 billion last year, according to its filings with the U.S. Securities and Exchange Commission, its diversity cushioned it against the worst of the pandemic downturn. The company reported net income of $837 million in the first quarter of 2021. With growth in its core market beginning to slow, it has expanded rapidly into fields from car repairs to grocery delivery and has pumped hundreds of millions into researching autonomous driving technology. It’s also said to be planning to expand services into Western Europe.

8. What happens now?

On Didi specifically the critical question is what the review regarding user data finds. But analysts are already looking at the likely wider impact. Key issues are whether the action is likely to discourage other Chinese tech firms from embarking on an overseas listing, and whether the action marks a new direction for the regulatory crackdown. Didi itself said in a statement in would fully cooperate with the review. It warned though that the removal of the app for new users may have an adverse affect on revenue.

Based on the laws cited by the regulators, Didi is probably being investigated over its purchase of certain products and services from other suppliers, which may threaten national data security, according to analysts from Shenzhen-based Ping An Securities. “Didi will inevitably have to check its core network equipment, high-performance computers and servers, large-capacity storage equipment, large databases and application software, network security equipment, and cloud computing services, sort them out and make necessary rectifications to meet regulatory requirements,” the analysts wrote in a note on Monday.

Yang Sirui, chief analyst for the computer industry at Bank of China International, said that Didi went for its public listing in the US hastily, probably due to investor pressure. “Listing Didi as soon as possible meets the demands of the capital,” he said. “But if [Didi] had arbitrarily collected user privacy data, abused it, or monetized it illicitly, it will inevitably be punished by Chinese regulators.” Since its founding in 2012, Didi has undergone a number of private fundraising rounds, raising tens of billions of dollars from venture capital or major tech firms. According to its IPO prospectus, SoftBank Vision Fund is currently the largest shareholder of Didi, with a 21.5% stake. Uber (UBER) and Tencent (TCEHY) followed with a 12.8% and 6.8% stake respectively.

The Reference Shelf

— With assistance by Coco Liu, Molly Schuetz, Abhishek Vishnoi, and Colum Murphy

By:

Source: Why China is Citing Security Risks in Crack Down on $UBER rival $DIDI – Bloomberg

.

Critics:

Didi is a Chinese vehicle for hire company headquartered in Beijing with over 550 million users and tens of millions of drivers. The company provides app-based transportation services, including taxi hailing, private car hailing, social ride-sharing, and bike sharing; on-demand delivery services; and automobile services, including sales, leasing, financing, maintenance, fleet operation, electric vehicle charging, and co-development of vehicles with automakers.

In March 2017, the Wall Street Journal reported that SoftBank Group Corporation approached DiDi with an offer to invest $6 billion in the company to fund the ride-hailing firm’s expansion in self-driving car technologies, with a significant portion of the money to come from SoftBank’s then-planned $100 billion Vision Fund.

DiDi claims that it provides over tens of millions of flexible job opportunities for people, including a considerable number of women, laid-off workers and veteran soldiers. Based on a survey released by DiDi in March 2019, women rideshare drivers in Brazil, China and Mexico account for 16.7%, 7.4% and 5.6% of total rideshare drivers on its platforms, respectively. DiDi supports more than 4,000 innovative SMEs, which provides more than 20,000 jobs additionally.

40% of DiDi’s employees are women. In 2017, DiDi launched a female career development plan and established the “DiDi Women’s Network”. It is reportedly the first female-oriented career development plan in a major Chinese Internet company.

References

Brent Oil Extends Gain as OPEC+ Talks End Without Supply Deal

Brent oil extended gains after OPEC+ ended days of talks without a deal to bring back more halted output next month, depriving the market of vital barrels as the global economic recovery gathers pace.

Futures in London traded above $77 a barrel after rising 1.3% on Monday. The failure to reach an agreement means current production limits will remain in place for August unless talks are revived. A disagreement over how to measure output cuts upended a tentative proposal to boost supply and devolved into a public spat between allies Saudi Arabia and the United Arab Emirates.

The situation is fluid and negotiations may be reactivated in time to add more output in August. However, the breakdown has damaged the group’s image as a responsible steward of the market and raised the specter of a repeat of last year’s destructive price war that sent oil crashing.

“In theory, if the group keeps output unchanged in August that should be bullish for the market,” said Warren Patterson, the head of commodities strategy at ING Group NV. “However, in reality, what is the likelihood that members actually keep output unchanged? I don’t think it’s very high.”

The global market has tightened significantly over the past few months amid a robust rebound in fuel demand in the U.S., China and parts of Europe, draining stockpiles built up during the pandemic. The International Energy Agency last month urged the OPEC+ alliance to keep markets balanced as worldwide demand accelerated toward pre-virus levels.

The market has moved further into a bullish structure after the breakdown of talks. The prompt timespread for Brent was 99 cents a barrel in backwardation — where near-dated contracts are more expensive than later-dated ones — compared with 87 cents on Friday.

OPEC+ had restored about 2 million barrels a day halted during the pandemic from May to July. The alliance was close to a deal to raise daily output by a further 400,000 barrels in each month from August through December, as well as extend the supply pact beyond April 2022. The UAE, however, said it would only accept the proposal if it was given better terms for calculating its quota.

The UAE said throughout that it would accept the output increase without the deal extension, but the Saudis argued that the two elements must go together.

Related news
Prices
  • Brent for September settlement rose 0.4% to $77.48 a barrel on the ICE Futures Europe exchange at 12:02 p.m. in Singapore.
  • West Texas Intermediate for August delivery gained 2% from Friday’s close to $76.69 on the New York Mercantile Exchange.
    • There was no settlement Monday due to a U.S. holiday.

With no imminent boost to OPEC+ supply, the market is likely to tighten further and could result in Brent climbing to $80 a barrel by September, according to UBS Group AG. It’s unclear if the no deal will translate into lower compliance rates next month, although the the release of Saudi Aramco’s official selling prices for August should provide more clarity, the bank said.

— With assistance by Keith Gosman

 

China’s GDP Surge Is Chance To Reboot Country’s Image On World Stage

China’s economy had a great 12 months, leading the globe out of the Covid-19 era. Yet the last year has damaged something equally important: Beijing’s soft power.

Beijing’s handling of questions about what happened in Wuhan—and why officials were so slow to warn the world about a coming pandemic—boggles the mind. If China’s handling of the initial outbreak was indeed the “decisive victory” that it claims, why overreact to Australia’s call for a probe?

Harvard Kennedy School students might one day take classes recounting how China’s leaders squandered the Donald Trump era. As the U.S. president was undermining alliances, upending supply chains, losing allies, and playing down the pandemic, Beijing had a once-in-a-lifetime opportunity to increase the country’s influence at Washington’s expense.

And now, many in Beijing appear to understand the extent to which they blew it. Earlier this month, Xi Jinping urged the Communist Party to cultivate a “trustworthy, lovable and respectable” image globally. It’s the clearest indication yet that the “wolf warrior” ethos espoused in recent times by Chinese diplomats was too Trump-like for comfort—and backfiring.

The remedy here is obvious: being the reliable economic engine leaders from the East to West desire.

The Trump administration’s policies had a vaguely developing-nation thrust—favoring a weaker currency, banning companies, tariffs of the kind that might’ve worked in 1985, assaulting government institutions. They shook faith in America’s ability to anchor global finance. The last four years saw a bull market in chatter about replacing the dollar as reserve currency and the centrality of U.S. Treasury debt.

China is enjoying a burst of good press for its gross domestic product trends. Not just for the pace of GDP, but the way Xi’s team appears to be seeking a more balanced and sustainable mix of growth sources. Though some pundits were disappointed by news that industrial production rose just 6.6% in May on a two-year average basis, it essentially gets Asia’s biggest back to where it was pre-Covid-19.

China is getting there, slowly but surely. Far from disappointing, though, data suggest Xi’s party learned valuable lessons from the myriad boom/bust cycles that put China in global headlines since 2008. That was the year the “Lehman shock” devastated world markets and threatened to interrupt China’s meteoric rise.

Instead, Beijing bent economic reality to its benefit. Yet the untold trillions of dollars of stimulus that then-President Hu Jintao’s team threw at the economy caused as many long-term headaches as short-term gains. It financed an unproductive infrastructure boom—one prioritizing the quantity of growth over quality—that fueled bubbles. It generated a moral-hazard dynamic that encouraged greater risk and leverage.

Unfortunately, Xi’s government doubled down on the approach in 2015, when Shanghai stocks went into freefall. The impulse then, as in the 2008-2009 period, was to throw even more cash at the problem—treating the symptoms, not the underlying ailments.

The ways in which Team Xi restored calm—bailouts, loosening leverage and reserve requirement protocols, halting initial public offerings and suspending trading in thousands of companies—did little to build a more nimble and transparent system. The message to punters was, no worries, the Communist Party and People’s Bank of China have your backs. Always.

Yet things appear to be changing. In 2020, while the U.S., Europe and Japan went wild with new stimulus schemes, Beijing took a targeted and minimalist approach. Japan alone threw $2.2 trillion, 40% of GDP, at its cratering economy. The Federal Reserve went on an asset-buying tear.

The PBOC, by sharp contrast, resisted the urge to go the quantitative easing route. That is helping Xi in his quest to deleverage the economy. It’s a very difficult balancing act, of course. The will-they-or-won’t-they-default drama unfolding at China Huarong Asset Management demonstrates the risks of hitting the stimulus brakes too hard.

The good news is that so far China seems to be pursuing a stable and lasting 2021 recovery, not the overwhelming force of previous efforts. And that’s just what the world needs. A 6% growth rate year after year will win China more soft-power points than the GDP extremes. So will China accelerating its transition from exports to an innovation-and-services-based power.

It’s grand that President Joe Biden rapidly raised America’s vaccination game. That means the two biggest economies are recovering simultaneously, reinforcing each other.

China’s revival could have an even bigger impact. Look at how China’s growth in recent months is lifting so many boats in Asia. In May alone, Japan enjoyed a 23.6% surge in shipments to China. Mainland demand for everything from motor vehicles to semiconductor machinery to paper products is helping Japan recover from its worst downturn in decades. South Korea, too.

The best thing Xi can do to boost China’s soft power is to lean into this recovery, and provide the stability that the rest of the globe needs. Xi should let China’s GDP power do the talking for him.

I am a Tokyo-based journalist, former columnist for Barron’s and Bloomberg and author of “Japanization: What the World Can Learn from Japan’s Lost Decades.” My journalism awards include the 2010 Society of American Business Editors and Writers prize for commentary.

Source: China’s GDP Surge Is Chance To Reboot Country’s Image On World Stage

.

Critics:

The economy of China is a developing market-oriented economy that incorporates economic planning through industrial policies and strategic five-year plans. Dominated by state-owned enterprises (SOEs) and mixed-ownership enterprises, the economy also consists of a large domestic private sector and openness to foreign businesses in a system described as a socialist market economy.

State-owned enterprises accounted for over 60% of China’s market capitalization in 2019 and generated 40% of China’s GDP of US$15.66 trillion in 2020, with domestic and foreign private businesses and investment accounting for the remaining 60%. As of the end of 2019, the total assets of all China’s SOEs, including those operating in the financial sector, reached US$78.08 trillion. Ninety-one (91) of these SOEs belong to the 2020 Fortune Global 500 companies.

China has the world’s second largest economy when measured by nominal GDP, and the world’s largest economy since 2014 when measured by Purchasing Power Parity (PPP), which is claimed by some to be a more accurate measure of an economy’s true size.It has been the second largest by nominal GDP since 2010, which rely on fluctuating market exchange rates.An official forecast states that China will become the world’s largest economy in nominal GDP by 2028.Historically, China was one of the world’s foremost economic powers for most of the two millennia from the 1st until the 19th century.

The Chinese economy has been characterized as being dominated by few, larger entities including Ant Group and Tencent. In recent years there has been attempts by the Xi Jinping Administration to enforce economic competition rules, and probes into Alibaba and Tencent have been launched by Chinese economic regulators.

The crackdown on monopolies by tech giants and internet companies follows with recent calls by the Politburo against monopolistic practices by commercial retail giants like Alibaba. Comparisons have been made with similar probes into Amazon in the United States.

See also

%d bloggers like this: