Bitcoin has been grinding lower in a trading range just above $30,000, prompting cryptocurrency insiders to flag the round number as a potential floor for the virtual coin.
Crypto prognostication is fraught with risk, not least because Bitcoin’s price has roughly halved from a record high three months ago. Even so, some in the industry are coalescing around $30,000 as a support point, citing clues from options activity and recent trading habits.
In options, $30,000 is the most-sold downside strike price for July and August, signaling confidence among such traders that the level will hold, according to Delta Exchange, a crypto derivatives exchange. It “should provide a strong support to the market,” Chief Executive Officer Pankaj Balani said.
Traders are also trying to take advantage of price ranges, including buying between $30,000 and $32,000 and selling in the $34,000 to $36,000 zone, Todd Morakis, co-founder of digital-finance product and service provider JST Capital, said in emailed comments, adding that “the market at the moment seems to paying attention more to bad news than good.”
Bitcoin has been hit by many setbacks of late, including China’s regulatory crackdown — partly over concerns about high energy consumption by crypto miners — and progress in central bank digital-currency projects that could squeeze private coins. The creator of meme-token Dogecoin recently lambasted crypto as basically a sham, and the appetite for speculation is generally in retreat.
Bitcoin traded around $31,600 as of 9:26 a.m. in London and is down about 6% so far this week. It’s still up more than 200% over the past 12 months, despite a rout in calendar 2021.
Konstantin Richter, chief executive officer and founder of Blockdaemon, a blockchain infrastructure provider, holds out hope for institutional demand, arguing Bitcoin would have to drop below $20,000 before institutions start questioning “the validity of the space.”
“If it goes down fast, it can go up fast,” he said in an interview. “That’s just what crypto is.”
The dramatic pullback in bitcoin and other cryptocurrencies comes as a flurry of negative headlines and catalysts, from Tesla CEO Elon Musk to a new round of regulations by the Chinese government, have hit an asset sector that has been characterized by extreme volatility since it was created.
The flagship cryptocurrency fell to more than three-month lows on Wednesday, dropping to about $30,000 at one point for a pullback of more than 30% and continuing a week of selling in the crypto space. Ether, the main coin for the Ethereum blockchain network, was also down sharply and broke below $2,000 at one point, a more than 40% drop in less than 24 hours.
Part of the reason for bitcoin’s weakness seems to be at least a temporary reversal in the theory of broader acceptance for cryptocurrency.
Earlier this year, Musk announced he was buying more than $1 billion of it for his automaker’s balance sheet. Several payments firms announced they were upgrading their capabilities for more crypto actions, and major Wall Street banks began working on crypto trading teams for their clients. Coinbase, a cryptocurrency exchange company, went public through a direct listing in mid-April.
The weakness is not isolated in crypto, suggesting that the moves could be part of a larger rotation by investors away from more speculative trades.
Tech and growth stocks, many of which outperformed the broader market dramatically during the coronavirus pandemic, have also struggled in recent weeks.
Imagine Imagine logging on to your own account with the U.S. Federal Reserve. With your laptop or phone, you could zap cash anywhere instantly. There’d be no middlemen, no fees, no waiting for deposits or payments to clear.
That vision sums up the appeal of the digital dollar, the dream of futurists and the bane of bankers. It’s not the Bitcoin bros and other cryptocurrency fans pushing the disruptive idea but America’s financial and political elite. Fed Chair Jerome Powell promises fresh research and a set of policy questions for Congress to ponder this summer. J. Christopher Giancarlo, a former chairman of the Commodity Futures Trading Commission, is rallying support through the nonprofit Digital Dollar Project, a partnership with consulting giant Accenture Plc. To perpetuate American values such as free enterprise and the rule of law, “we should modernize the dollar,” he recently told a U.S. Senate banking subcommittee.
For now the dollar remains the premier global reserve currency and preferred legal tender for international trade and financial transactions. But a new flavor of cryptocurrency could pose a threat to that dominance, which is part of the reason the Federal Reserve Bank of Boston has been working with the Massachusetts Institute of Technology on developing prototypes for a digital-dollar platform.
Other governments, notably China’s, are ahead in digitizing their currencies. In these nations, regulators worry that the possibilities for fraud are multiplying as more individuals embrace cryptocurrency. Steven Mnuchin, former President Donald Trump’s treasury secretary, said he saw no immediate need for a digital dollar. His successor, Janet Yellen, has expressed interest in studying it. Support for a virtual greenback cuts across party lines in Congress, which will have a say on whether it becomes reality.
At a hearing in June, Senators Elizabeth Warren, a Massachusetts Democrat, and John Kennedy, a Louisiana Republican, signaled openness to the idea. Warren and other Democrats stressed the potential of the digital dollar to offer free services to low-income families who now pay high banking fees or are shut out of the system altogether.
Kennedy and fellow Republicans see a financial equivalent of the space race that pitted the U.S. against the Soviet Union—a battle for prestige, power, and first-mover advantage. This time the adversary is China, which announced this month that more than 10 million citizens are now eligible to participate in ongoing trials.
The strongest opposition to a virtual dollar will come from U.S. banks. They rely on $17 trillion in deposits to fund much of their core business, profiting from the difference between what they pay in interest to account holders and what they charge for loans. Banks also earn billions of dollars annually from overdraft, ATM, and account maintenance fees. By creating a digital currency, the Federal Reserve would in effect be competing with banks for customers.
In a recent blog post, Greg Baer, president of the Bank Policy Institute, which represents the industry, warned that homebuyers, businesses, and other customers would find it harder and more expensive to borrow money if the Fed were to infringe on the private sector’s historical central role in finance. “The Federal Reserve would gain extraordinary power,” wrote Baer, a former assistant treasury secretary in the Clinton administration.
Some economists warn that a digital dollar could destabilize the banking system. The federal government offers bank depositors $250,0000 in insurance, a program that’s successfully prevented bank runs since the Great Depression. But in a 2008-style financial panic, depositors might with a single click pull all their savings out of banks and convert them into direct obligations of the U.S. government.
“In a crisis, this may actually make matters worse,” says Eswar Prasad, a professor at Cornell University and the author of a book on digital currencies that will be published in September. Whether a virtual dollar is even necessary remains up for debate. For large companies, cross-border interbank payments are already fast, limiting the appeal of digital currencies. Early adopters of Bitcoin may have won an investment windfall as its value soared, but its volatility makes it a poor substitute for a reliable government-backed currency such as the dollar.
Yet there’s a new kind of crypto, called stablecoin, that could pose a threat to the dollar’s dominance. Similar to the other digital currencies, it’s essentially a string of code tracked and authenticated via an online ledger. But it has a crucial difference from Bitcoin and its ilk: Its value is pegged to a sovereign currency like the dollar, so it offers stability as well as privacy.
In June 2019, Facebook Inc. announced it was developing a stablecoin called Libra ( since renamed Diem). The social media giant’s 2.85 billion active users worldwide represent a huge test market. “That was a game changer,” Prasad says. “That served as a catalyst for a lot of central banks.”
Regulators also have concerns about consumer protection. Stablecoin is only as stable as the network of private participants who manage it on the web. Should something go wrong, holders could find themselves empty-handed. That prospect places pressure on governments to come up with their own alternatives.
Although the Fed has been studying the idea of a digital dollar since at least 2017, crucial details, including what role private institutions will play, remain unresolved. In the Bahamas, the only country with a central bank digital currency, authorized financial institutions are allowed to offer e-wallets for handling sand dollars, the virtual counterpart to the Bahamian dollar.
If depositors flocked to the virtual dollar, banks would need to find another way to fund their loans. Advocates of a digital dollar float the possibility of the Fed lending to banks so they could write loans. To help banks preserve deposits, the government could also set a ceiling on how much digital currency citizens can hold. In the Bahamas the amount is capped at $8,000.
Lev Menand, an Obama administration treasury adviser, cautions against such compromises, saying the priority should be offering unfettered access to a central bank digital currency, or CBDC. Menand, who now lectures at Columbia Law School, says that because this idea would likely require the passage of legislation, Congress faces a big decision: to create “a robust CBDC or a skim milk sort of product that has been watered down as a favor to big banks.”
Wall Street is warming up to the idea that the next big disruptive force on the horizon is central bank digital currencies, even though the Federal Reserve likely remains a few years away from developing its own.
Led by countries as large as China and as small as the Bahamas, digital money is drawing stronger interest as the future of an increasingly cashless society. A digital dollar would resemble cryptocurrencies such as bitcoin or ethereum in some limited respects, but differ in important ways.
Rather than be a tradable asset with wildly fluctuating prices and limited use, the central bank digital currency would function more like dollars and have widespread acceptance. It also would be fully regulated and under a central authority.
Myriad questions remain before an institution as large as the Fed will wade in. But the momentum is building around the world. As the Fed and other central banks work through those logistical issues, Wall Street is growing in anticipation over what the future will hold.
“The race towards Digital Money 2.0 is on,” Citigroup said in a report. “Some have framed it as a new Space Race or Digital Currency Cold War. In our view, it doesn’t have to be a zero sum game — there’s a lot of room for the overall digital pie to grow.”
There, however, has been at least the semblance of a race, and China is perceived as taking the early lead. With the launch of a digital yuan last year, some fear that the edge China has ultimately could undermine the dollar’s status as the world’s reserve currency. Though China said that is not its objective, a Bank of America report notes that issuing digital dollars would let the U.S. currency “remain highly competitive … relative to other currencies.”
China’s V-shaped economic rebound from the Covid-19 pandemic is slowing, sending a warning to the rest of world about how durable their own recoveries will prove to be.
The changing outlook was underscored Friday when the People’s Bank of China cut the amount of cash most banks must hold in reserve in order to boost lending. While the PBOC said the move isn’t a renewed stimulus push, the breadth of the 50 basis-point cut to most banks reserve ratio requirement came as a surprise.
Data on Thursday is expected to show growth eased in the second quarter to 8% from the record gain of 18.3% in the first quarter, according to a Bloomberg poll of economists. Key readings of retail sales, industrial production and fixed asset investment are all set to moderate too.
The PBOC’s swift move to lower banks’ RRR is one way of making sure the recovery plateaus from here, rather then stumbles.
The economy was always expected to descend from the heights hit during its initial rebound and as last year’s low base effect washes out. But economists say the softening has come sooner than expected, and could now ripple across the world.
“There is no doubt that the impact of a slowing China on the global economy will be bigger than it was five years ago,” said Rob Subbaraman, head of global markets research at Nomura Holdings Inc. “China’s ‘first-in, first-out’ status from Covid-19 could also influence market expectations that if China’s economy is cooling now, others will soon follow.”
Group of 20 finance ministers meeting in Venice on Saturday signaled alarm over threats that could derail a fragile global recovery, saying new variants of the coronavirus and an uneven pace of vaccination could undermine a brightening outlook for the world economy. China’s state media also cited several analysts Monday saying domestic growth will slow in the second half because of an uncertain global recovery.
China’s slowing recovery also reinforces the view that factory inflation has likely peaked and commodity prices could moderate further.
“China’s growth slowdown should mean near-term disinflation pressures globally, particularly on demand for industrial metals and capital goods,” said Wei Yao, chief economist for the Asia Pacific at Societe Generale SA.
The changing outlook reflects the advanced stage of China’s recovery as growth stabilizes, according to Bloomberg Economics.
What Bloomberg Economics Says…
“Looking through the data distortions, the recovery is maturing, not stumbling. Activity and trade data for June will likely paint a similar picture — a slower, but still-solid expansion.”
Domestically, the big puzzle continues to be why retail sales are still soft given the virus remains under control. It’s likely that sales slowed again in June, according to Bloomberg Economics, as sentiment was weighed by controls to contain sporadic outbreaks of the virus.
Even with the PBOC’s support for small and mid-sized businesses, there’s no sign of a broad reversal in the disciplined stimulus approach authorities have taken since the crisis began.
The RRR cut was partially to “manage expectations” ahead of the second-quarter economic data this week, said Bruce Pang, head of macro and strategy research at China Renaissance Securities Hong Kong.
“It also provides more policy room going forward, as the momentum of the economic recovery has surely slowed.”
— With assistance by Enda Curran, Yujing Liu, and Bihan Chen
This placed it near the middle of the Asian nations during the same period, with neighboring capitalist countries such as Japan, South Korea and rival Chiang Kai-shek‘s Republic of China outstripping the PRC’s rate of growth. Starting in 1970, the economy entered into a period of stagnation, and after the death of CCP ChairmanMao Zedong, the Communist Party leadership turned to market-oriented reforms to salvage the failing economy.
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.
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.
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.
Financial strains among Chinese property developers are hurting the Asian high-yield debt market, where the companies account for a large chunk of bond sales.
That’s widening a gulf with the region’s investment-grade securities, which have been doing well amid continued stimulus support.
Yields for Asia’s speculative-grade dollar bonds rose 41 basis points in the second quarter, according to a Bloomberg Barclays index, versus a 5 basis-point decline for investment-grade debt. They’ve increased for six straight weeks, the longest stretch since 2018, driven by a roughly 150 basis-point increase for Chinese notes.
China’s government has been pursuing a campaign to cut leverage and toughen up its corporate sector. Uncertainty surrounding big Chinese borrowers including China Evergrande Group, the largest issuer of dollar junk bonds in Asia, and investment-grade firm China Huarong Asset Management Co. have also weighed on the broader Asian market for riskier credit.
“Diverging borrowing costs have been mainly driven by waning investor sentiment in the high-yield primary markets, particularly relating to the China real estate sector,” said Conan Tam, head of Asia Pacific debt capital markets at Bank of America. “This is expected to continue until we see a significant sentiment shift here.”
Such a shift would be unlikely to come without a turnaround in views toward the Chinese property industry, which has been leading a record pace in onshore bond defaults this year.
But there have been some more positive signs recently. Evergrande told Bloomberg News that as of June 30 it met one of the “three red lines” imposed to curb debt growth for many sector heavyweights. “By year-end, the reduction in leverage will help bring down borrowing costs” for the industry, said Francis Woo, head of fixed income syndicate Asia ex-Japan at Credit Agricole CIB.
Spreads have been widening for Asian dollar bonds this year while they’ve been narrowing in the U.S. for both high-yield and investment grade amid that country’s economic rebound, said Anne Zhang, co-head of asset class strategy, FICC in Asia at JPMorgan Private Bank. She expects Asia’s underperformance to persist this quarter, led by Chinese credits as investors remain cautious about policies there.
“However, as the relative yield differential between Asia and the U.S. becomes more pronounced there will be demand for yield that could help narrow the gap,” said Zhang.
Spreads on Asian investment-grade dollar bonds were little changed to 1 basis point wider, according to credit traders. Yield premiums on the notes widened by almost 2 basis points last week, in their first weekly increase in six, according to a Bloomberg Barclays index
Among speculative-grade issuers, dollar bonds of China Evergrande Group lagged a 0.25 cent gain in the broader China high-yield market on Monday. The developer’s 12% note due in October 2023 sank 1.8 cents on the dollar to 74.6 cents, set for its lowest price since April last year
The U.S. high-grade corporate bond market turned quiet at the end of last week before the holiday, but with spreads on the notes at their tightest in more than a decade companies have a growing incentive to issue debt over the rest of the summer rather than waiting until later this year.
The U.S. investment-grade loan market has surged back from pandemic disruptions, with volumes jumping 75% in the second quarter from a year earlier to $420.8 billion, according to preliminary Bloomberg league table data
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Sales of ethical bonds in Europe have surged past 250 billion euros ($296 billion) this year, smashing previous full-year records. The booming market for environmental, social and governance debt attracted issuers including the European Union, Repsol SA and Kellogg Co. in the first half of 2021.
The European Union has sent an RfP to raise further funding via a sale to be executed in the coming weeks, it said in an e-mailed statement
German property company Vivion Investments Sarl raised 340 million euros in a privately placed transaction in a bid to boost its real estate portfolio, according to people familiar with the matter
The Chinese property bubble was a real estate bubble in residential and/or commercial real estate in China. The phenomenon has seen average housing prices in the country triple from 2005 to 2009, possibly driven by both government policies and Chinese cultural attitudes.
Tianjin High price-to-income and price-to-rent ratios for property and the high number of unoccupied residential and commercial units have been held up as evidence of a bubble. Critics of the bubble theory point to China’s relatively conservative mortgage lending standards and trends of increasing urbanization and rising incomes as proof that property prices can remain supported.
The growth of the housing bubble ended in late 2011 when housing prices began to fall, following policies responding to complaints that members of the middle-class were unable to afford homes in large cities. The deflation of the property bubble is seen as one of the primary causes for China’s declining economic growth in 2012.
2011 estimates by property analysts state that there are some 64 million empty properties and apartments in China and that housing development in China is massively oversupplied and overvalued, and is a bubble waiting to burst with serious consequences in the future. The BBC cites Ordos in Inner Mongolia as the largest ghost town in China, full of empty shopping malls and apartment complexes. A large, and largely uninhabited, urban real estate development has been constructed 25 km from Dongsheng District in the Kangbashi New Area. Intended to house a million people, it remains largely uninhabited.
Intended to have 300,000 residents by 2010, government figures stated it had 28,000. In Beijing residential rent prices rose 32% between 2001 and 2003; the overall inflation rate in China was 16% over the same period (Huang, 2003). To avoid sinking into the economic downturn, in 2008, the Chinese government immediately altered China’s monetary policy from a conservative stance to a progressive attitude by means of suddenly increasing the money supply and largely relaxing credit conditions.
Under such circumstances, the main concern is whether this expansionary monetary policy has acted to simulate the property bubble (Chiang, 2016). Land supply has a significant impact on house price fluctuations while demand factors such as user costs, income and residential mortgage loan have greater influences.
Neil Gough (11 June 2015). “Idle Home Builders Hold China’s Economy Back”. The New York Times. By some economists’ estimates, real estate and related industries account for more than 20 percent of China’s gross domestic product
Yesterday we talked about the prospects of a digital dollar coming down the pike. It seems clear that global governments will not allow non-sovereign forms of money to continue to proliferate.
The Senate Banking committee’s hearing on the digital dollar two weeks ago was not only a public exploration and introduction to the concept a central bank-backed digital currency, the hearing was also used as a platform to publicly assassinate the viability of the private (“bogus” in the words of Senator Warren) cryptocurrency market (bitcoin, stablecoins, etc.).
With this in mind, the Chinese government has continually tightened control over the crypto market in China, most recently cracking down on cryptocurrency mining in the country. The U.S. Justice Department announced a few weeks ago that it “recovered” $2.3 million in cryptocurrency of the ransom collected from the Colonial Pipeline hack. And today, it was reported that South Korea seized almost $50 million of crypto assets from citizens accused of tax evasion.
So the benefits of the private cryptocurrency market are being deconstructed by governments. Add to that, even after gaining traction, the private crypto market continues to be used primarily as a tool of corruption and speculation. With that, this chart set up argues for a typical bubble outcome (crash).
I founded billionairesportfolio.com — an online investment advisory site that gives the average investor access to sophisticated hedge fund analysis and strategies, all in an easy to understand format. I am also CEO of Logic Fund Management. I started my career with a London-based family office hedge fund that managed money for a French billionaire.
A pair of U.S. congressmen have introduced a bill that would require the Treasury Department to evaluate the digital yuan, digital dollar and the actual dollar’s role in the global economy.
The bipartisan bill, introduced by Reps. French Hill (R-Ark.) and Jim Himes (D-Conn.), seeks to ensure the U.S. dollar remains the world’s reserve currency and directs the Treasury Department to publish a report that evaluates current policy and governance around the currency. This report would include details around central bank digital currencies (CBDC), among other issues.
Under the terms of the bill, dubbed the “21st Century Dollar Act,” the Treasury secretary (currently Janet Yellen) would submit a report to the Senate Banking and House Financial Services committees that includes “a description of efforts by major foreign central banks, including the People’s Bank of China, to create an official digital currency, as well as any risks to the national interest of the United States posed by such efforts.”
The report would update these committees on the Federal Reserve’s current status in researching a digital dollar. The bill would also require the Treasury Department to develop a strategy for boosting the dollar’s reserve status.
The report would detail “any implications for the strategy established by the secretary pursuant to subsection (a) arising from the relative state of development of an official digital currency by the United States and other nations, including the People’s Republic of China,” the bill said.
Keeping the dollar as the world’s reserve currency would be “good for American companies and workers as well as U.S. global influence,” Hill said in a statement.
Circle claims that each USDC is backed by a dollar held in reserve. USDC reserves are regularly attested (but not audited) by Grant Thornton, LLP, and the monthly attestations can be found on the Centre Consortium’s website. USDC was first announced on the 15th of May 2018 by Circle, and was launched in September of 2018.
On March 29, 2021, Visa announced that it would allow the use of USDC to settle transactions on its payment network. As of June 2021 there are 24.1 billion USDC in circulation.
Shares in China sportswear supplier Xtep ended the week at a new record high today after the company announced investment hook-ups with China private equity firm Hillhouse Capital Management, one of China’s largest private equity firms.
Xtep’s Hong Kong-traded shares rose 5.6% to HK$13.16 today; they’ve more than doubled since mid-May.
Xtep said it would raise HK$500 million from the sale to Hillhouse of bonds that can be converted into its own underlying shares. In addition, subsidiary Xtep Global raised $65 million from Hillhouse from the sale of bonds that can be converted into that unit’s shares. (See announcements here and here.) Funds will help boost sales of Xtep-owned brands.
The doubling of Xtep’s stock price has lifted the fortune of company’s controlling Ding family to $2.3 billion. Trusts held by chairman Ding Shui Bo, executive director Ding Mei Qing (his sister) and executive director Ding Ming Zhong (his brother) collectively own 1.3 billion shares that were worth $2.2 billion today. Xtep’s annual report doesn’t give a clear down of the ownership split among them. Shui Bo has another 60.7 million shares worth another $103 million.
Spending on sportswear in China has picked up amid a continuing economic recovery from the Covid-19 pandemic. Xtep, whose rivals include Anta and Nike, said in April first-quarter sales had a mid-50% increase compared with a year earlier. Nike has faced backlash in China after a statement in March expressed concern about alleged forced labor practices its Xinjiang region.
Hillhouse is led by billionaire Zhang Lei, who is worth $3 billion today on the Forbes Real-Time Billionaires List.
I’m a senior editor and the Shanghai bureau chief of Forbes magazine. Now in my 20th year at Forbes, I compile the Forbes China Rich List. I was previously a correspondent for Bloomberg News in Taipei and Shanghai and for the Asian Wall Street Journal in Taipei. I’m a Massachusetts native, fluent Mandarin speaker, and hold degrees from the University of Vermont and the University of Wisconsin at Madison.
Xtep engages mainly in the design, development, manufacturing, sales, marketing and brand management of sports equipment, including footwear, apparel, and accessories. Xtep is a leading professional sports brand with an extensive distribution network of over 6,300 stores covering 31 provinces, autonomous regions and municipalities across the PRC and overseas.
In 2019, Xtep has further diversified its brand portfolio which now includes four internationally brands, namely K-Swiss, Palladium, Saucony and Merrell. Xtep is a constituent of the MSCI China Small Cap Index, Hang Seng Composite Index Series and Shenzhen-Hong Kong Stock Connect.
In August 2019, Xtep signed on famous Asian basketball player Jeremy Lin as spokesperson, marking its foray into the basketball business realm. Xtep also unveiled its “Basketball Product Co-Creation Plan” to come up with basketball products via product co-creation.
The battery pack of a Tesla Model S is a feat of intricate engineering. Thousands of cylindrical cells with components sourced from around the world transform lithium and electrons into enough energy to propel the car hundreds of kilometers, again and again, without tailpipe emissions. But when the battery comes to the end of its life, its green benefits fade.
If it ends up in a landfill, its cells can release problematic toxins, including heavy metals. And recycling the battery can be a hazardous business, warns materials scientist Dana Thompson of the University of Leicester. Cut too deep into a Tesla cell, or in the wrong place, and it can short-circuit, combust, and release toxic fume.
That’s just one of the many problems confronting researchers, including Thompson, who are trying to tackle an emerging problem: how to recycle the millions of electric vehicle (EV) batteries that manufacturers expect to produce over the next few decades. Current EV batteries “are really not designed to be recycled,” says Thompson, a research fellow at the Faraday Institution, a research center focused on battery issues in the United Kingdom.
That wasn’t much of a problem when EVs were rare. But now the technology is taking off. Several carmakers have said they plan to phase out combustion engines within a few decades, and industry analysts predict at least 145 million EVs will be on the road by 2030, up from just 11 million last year. “People are starting to realize this is an issue,” Thompson says.
Governments are inching toward requiring some level of recycling. In 2018, China imposed new rules aimed at promoting the reuse of EV battery components. The European Union is expected to finalize its first requirements this year. In the United States, the federal government has yet to advance recycling mandates, but several states, including California—the nation’s largest car market—are exploring setting their own rules.
Complying won’t be easy. Batteries differ widely in chemistry and construction, which makes it difficult to create efficient recycling systems. And the cells are often held together with tough glues that make them difficult to take apart. That has contributed to an economic obstacle: It’s often cheaper for batterymakers to buy freshly mined metals than to use recycled materials.
Better recycling methods would not only prevent pollution, researchers note, but also help governments boost their economic and national security by increasing supplies of key battery metals that are controlled by one or a few nations. “On the one side, [disposing of EV batteries] is a waste management problem. And on the other side, it’s an opportunity for producing a sustainable secondary stream of critical materials,” says Gavin Harper, a University of Birmingham researcher who studies EV policy issues.
To jump-start recycling, governments and industry are putting money into an array of research initiatives. The U.S. Department of Energy (DOE) has pumped some $15 million into a ReCell Center to coordinate studies by scientists in academia, industry, and at government laboratories. The United Kingdom has backed the ReLiB project, a multi-institution effort. As the EV industry ramps up, the need for progress is becoming urgent, says Linda Gaines, who works on battery recycling at DOE’s Argonne National Laboratory. “The sooner we can get everything moving,” she says, “the better.
Now, recyclers primarily target metals in the cathode, such as cobalt and nickel, that fetch high prices. (Lithium and graphite are too cheap for recycling to be economical.) But because of the small quantities, the metals are like needles in a haystack: hard to find and recover.
To extract those needles, recyclers rely on two techniques, known as pyrometallurgy and hydrometallurgy. The more common is pyrometallurgy, in which recyclers first mechanically shred the cell and then burn it, leaving a charred mass of plastic, metals, and glues. At that point, they can use several methods to extract the metals, including further burning. “Pyromet is essentially treating the battery as if it were an ore” straight from a mine, Gaines says. Hydrometallurgy, in contrast, involves dunking battery materials in pools of acid, producing a metal-laden soup. Sometimes the two methods are combined.
Each has advantages and downsides. Pyrometallurgy, for example, doesn’t require the recycler to know the battery’s design or composition, or even whether it is completely discharged, in order to move ahead safely. But it is energy intensive. Hydrometallurgy can extract materials not easily obtained through burning, but it can involve chemicals that pose health risks.
And recovering the desired elements from the chemical soup can be difficult, although researchers are experimenting with compounds that promise to dissolve certain battery metals but leave others in a solid form, making them easier to recover. For example, Thompson has identified one candidate, a mixture of acids and bases called a deep eutectic solvent, that dissolves everything but nickel.
Both processes produce extensive waste and emit greenhouse gases, studies have found. And the business model can be shaky: Most operations depend on selling recovered cobalt to stay in business, but batterymakers are trying to shift away from that relatively expensive metal. If that happens, recyclers could be left trying to sell piles of “dirt,” says materials scientist Rebecca Ciez of Purdue University.
The ideal is direct recycling, which would keep the cathode mixture intact. That’s attractive to batterymakers because recycled cathodes wouldn’t require heavy processing, Gaines notes (although manufacturers might still have to revitalize cathodes by adding small amounts of lithium). “So if you’re thinking circular economy, [direct recycling] is a smaller circle than pyromet or hydromet.”
In direct recycling, workers would first vacuum away the electrolyte and shred battery cells. Then, they would remove binders with heat or solvents, and use a flotation technique to separate anode and cathode materials. At this point, the cathode material resembles baby powder.
So far, direct recycling experiments have only focused on single cells and yielded just tens of grams of cathode powders. But researchers at the U.S. National Renewable Energy Laboratory have built economic models showing the technique could, if scaled up under the right conditions, be viable in the future.
To realize direct recycling, however, batterymakers, recyclers, and researchers need to sort out a host of issues. One is making sure manufacturers label their batteries, so recyclers know what kind of cell they are dealing with—and whether the cathode metals have any value. Given the rapidly changing battery market, Gaines notes, cathodes manufactured today might not be able to find a future buyer. Recyclers would be “recovering a dinosaur. No one will want the product.”
Another challenge is efficiently cracking open EV batteries. Nissan’s rectangular Leaf battery module can take 2 hours to dismantle. Tesla’s cells are unique not only for their cylindrical shape, but also for the almost indestructible polyurethane cement that holds them together.
Engineers might be able to build robots that could speed battery disassembly, but sticky issues remain even after you get inside the cell, researchers note. That’s because more glues are used to hold the anodes, cathodes, and other components in place. One solvent that recyclers use to dissolve cathode binders is so toxic that the European Union has introduced restrictions on its use, and the U.S. Environmental Protection Agency determined last year that it poses an “unreasonable risk” to workers.“In terms of economics, you’ve got to disassemble … [and] if you want to disassemble, then you’ve got to get rid of glues,” says Andrew Abbott, a chemist at the University of Leicester and Thompson’s adviser.
To ease the process, Thompson and other researchers are urging EV- and batterymakers to start designing their products with recycling in mind. The ideal battery, Abbott says, would be like a Christmas cracker, a U.K. holiday gift that pops open when the recipient pulls at each end, revealing candy or a message. As an example, he points to the Blade Battery, a lithium ferrophosphate battery released last year by BYD, a Chinese EV-maker. Its pack does away with the module component, instead storing flat cells directly inside. The cells can be removed easily by hand, without fighting with wires and glues.
The Blade Battery emerged after China in 2018 began to make EV manufacturers responsible for ensuring batteries are recycled. The country now recycles more lithium-ion batteries than the rest of the world combined, using mostly pyro- and hydrometallurgical methods.
Nations moving to adopt similar policies face some thorny questions. One, Thompson says, is who should bear primary responsibility for making recycling happen. “Is it my responsibility because I bought [an EV] or is it the manufacturer’s responsibility because they made it and they’re selling it?” In the European Union, one answer could come later this year, when officials release the continent’s first rule. And next year a panel of experts created by the state of California is expected to weigh in with recommendations that could have a big influence over any U.S. policy.
Recycling researchers, meanwhile, say effective battery recycling will require more than just technological advances. The high cost of transporting combustible items long distances or across borders can discourage recycling. As a result, placing recycling centers in the right places could have a “massive impact,” Harper says. “But there’s going to be a real challenge in systems integration and bringing all these different bits of research together.”
There’s little time to waste, Abbott says. “What you don’t want is 10 years’ worth of production of a cell that is absolutely impossible to pull apart,” he says. “It’s not happening yet—but people are shouting and worried it will happen.
International Energy Agency (IEA), Clean Energy Ministerial, and Electric Vehicles Initiative (EVI) (June 2020). “Global EV Outlook 2020: Enterign the decade of electric drive?”. IEA Publications. Retrieved 15 June 2020. See Statistical annex, pp. 247–252 (See Tables A.1 and A.12). The global stock of plug-in electric passenger vehicles totaled 7.2 million cars at the end of 2019, of which, 47% were on the road in China. The stock of plug-in cars consist of 4.8 million battery electric cars (66.6%) and 2.4 million plug-in hybrids (33.3%). In addition, the stock of light commercial plug-in electric vehicles in use totaled 378 thousand units in 2019, and about half a million electric buses were in circulation, most of which are in China.
Shahan, Zachary (26 April 2015). “Electric Car Evolution”. Clean Technica. Archived from the original on 18 September 2016. Retrieved 8 September 2016. 2008: The Tesla Roadster becomes the first production electric vehicle to use lithium-ion battery cells as well as the first production electric vehicle to have a range of over 200 miles on a single charge.
Evans, Scott (10 July 2019). “2013 Tesla Model S Beats Chevy, Toyota, and Cadillac for Ultimate Car of the Year Honors”. MotorTrend. Archived from the original on 13 July 2019. Retrieved 17 July 2019. We are confident that, were we to summon all the judges and staff of the past 70 years, we would come to a rapid consensus: No vehicle we’ve awarded, be it Car of the Year, Import Car of the Year, SUV of the Year, or Truck of the Year, can equal the impact, performance, and engineering excellence that is our Ultimate Car of the Year winner, the 2013 Tesla Model S.
Nissan (3 December 2020). “Nissan marks 10 years of LEAF sales, with over 500,000 sold worldwide” (Press release). Retrieved 11 December 2020 – via Automotive World. Nissan today celebrated the 10th anniversary of the Nissan LEAF and the delivery of 500,000 LEAF vehicles since the model was first introduced. More than 148,000 have been sold in the United States
Over 30? Then you had better read on. Shein may not be a household name like e-commerce giants, Alibaba BABA-0.4%, Taobao, or JD.com, but as China’s newest retail Decacorn, its mystery-shrouded low profile is matched only by a single-minded ambition to become a global fast-fashion retailer.
Founded in 2008, Nanjing-based Shein is aimed squarely at Gen Z, luring young shoppers via Instagram and TikTok influencers and a barrage of discount codes for low-cost styles – with a dress costing just half that of a Zara equivalent, according to Societe Generale – uploading new products online in their hundreds every week.
Yet beyond its teen audience, ultra-publicity shy Shein remains largely unknown. But that anonymity could all be about to change after the Pearl River-based company became a surprise potential bidder for ailing U.K. fashion group Arcadia. While it failed in that attempt, the message is clear: Shein is ready to take on Main Street.
The story really starts at the beginning of 2012, when notoriously hard-working founder and CEO Chris Xu (sometimes known as Yangtian Xu) – an American-born graduate of Washington University – gave up his wedding dress business to acquire the domain Sheinside.com. Initially selling women’s clothing, in 2015 he renamed the company Shein, focused on overseas markets, and began snapping up fashion rivals.
Remember that age/awareness divide? Well, in the week starting September 27, Shein was apparently the most downloaded shopping app globally on iPhone, according to analytics platform App Annie. It ranked in the top 10 in the U.S., Brazil, Australia, the U.K., and Saudi Arabia.
To service the U.S. market, products are sent from Shein’s warehouse in Foshan, Guangdong province, to a warehouse near Los Angeles, Ca., and fulfillment can take over ten days, glacial by Amazon Prime’s AMZN+0.5% next-day delivery standards. But its affordability has ensured a loyal customer base, lured by an ever-changing roster of women’s clothing and accessories added at an average of 2,000 SKUs every day.
Shein is obsessed with identifying hot searches and trends in different countries to predict the colors, fabrics, and styles that will be popular, with an even faster cycle than Zara owner Inditex. It then promotes heavily with Instagram- and Weibo-friendly imagery, for accessible and attainable fashions across all its social platforms.
However, Shein’s ascent has not been without its problems. In July it was roundly condemned for having a swastika pendant available (an error for which it profusely apologized), while paid-for posts from celebrities and fashion influencers have elevated the brand’s image as well as slowly rebutting its low–cost, low–quality rap. The label even managed to sequester stars like Katy Perry, Lil Nas X, and Rita Ora for its May 2020 #SHEINTogether global streaming event.
The Emergence Of A Global Fashion Player
All this remember for a company that didn’t even have its own supply chain before 2014, preferring to buy directly from Guangzhou’s Shisanhang Garment Wholesale Market. However, faced with soaring demand, Xu created an in-house design team and within two years had assembled an 800-strong army dedicated to designs and prototyping for ultra-fast production. It also garnered a reputation for timely payment, something of a rarity in China, and as a result when Shein moved its supply chain operations center from Guangzhou to Panyu in 2015, almost all of the factories it worked with relocated.
In the same year, Shein entered the Middle East and sales soared, with revenues in 2016 rising to $617 million and exceeding $1.5 billion the year after.
Shein and the hundreds of factories that work with the company have coalesced in a production cluster bearing close similarities to A Coruña in north-east Spain, where Inditex’s headquarters are surrounded by its upstream and downstream suppliers. It has four R&D facilities in Nanjing, Shenzhen, Guangzhou, and Hangzhou, plus six logistics centers in Foshan, Nansha, Belgium, India, and on the East and West Coasts of the U.S. It also has seven customer service centers, based out of Los Angeles, Liege, Manila, Yiwu, and Nanjing, and employs more than 10,000 people.
Future plans are thought to include the development of new businesses in mobile payments, supply chain finance, advertising, and, of course, opening brick-and-mortar stores. Whatever happens, it’s likely to do it ultra-fast.
I am a global retail and real estate expert who looks behind the headlines to figure out what makes consumers tick. I work as editor-in-chief for MAPIC and editor for World Retail Congress, two of the biggest annual international retail business events. I also organise, speak at, and chair conferences all over the world, with a focus on how people are changing and what that means for the retail, food & beverage, and leisure industries. And it’s complicated! Forget the tired mantra that online killed the store and remember instead that retail has always been dog-eat-dog: star names rise and fall fast, and only retailers that embrace the madness will survive. Don’t think it’s not important, your pension funds own those malls!
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After giving up on recycling — American recycling that is — China is still in love with the plastics biz. In fact. their companies are becoming dominant in all things plastic, one of the most important supply chains in the world.
In other words, it will be yet another segment in global business that the world will need Chinese companies to get supply.
The pandemic has helped the petrochemicals industry make up for losses in oil and gas demand. Plastics are tied to the fossil fuels industry. Stay-at-home orders throughout the U.S. and Europe has led to more take-out food orders and a lot of that is being placed in plastic containers.
I’d like to highlight one thing though: China’s Sinopec is the behemoth in this space, and although you can buy into Sinopec on the U.S. stock market, if the incoming Biden Administration makes good on a Trump order to delist Chinese companies that are not compliant with the financial audit rules under the Sarbanes-Oxley Act of 2002, then Sinopec will probably leave the NYSE.
According to industry consultant Wood Mackenzie, petrochemicals will account for more than a third of global oil demand growth to 2030 and nearly half through 2050.
The growth in both plastics consumption and production is mostly coming from Asia where economies are catching up with the western levels of plastics consumption, and becoming a source for plastics exports to the U.S. and Europe.
The two sides are intimately connected in the global plastics biz.
“Amur is a milestone in the cooperation between Sinopec and Sibur,” Zhang Yuzhuo, chairman of Sinopec, says in a press statement, calling it a “model for Sino-Russian energy cooperation.”
The entire industry, while not exactly the sexy and green industry the Davos crowd is promoting heavily in the Western world, is seen by China and still-emerging markets like Russia — as a development tool for regions far away from the big city hubs of Moscow or Shanghai. This is as much about job creation as it is pumping out plastic molds and the ethylene needed to make it.
Russia recently introduced negative excise tax on LPG and ethane used in petrochemicals which was a meaty financial bone thrown to Sinopec and Sibur’s Amur project, among others in the Russian far east.
The Sibur Russia angle has gained momentum recently due to the ramp up in production from the new ZapSib Siberian facility last year. They make polyethylene and 500 thousand tons of polypropylene there; all must-have ingredients for plastics manufacturers.
Their relationship with Chinese investors, buyers and counterparties was one of the main reasons to even build that manufacturing plant in the first place, and is something the Moscow market likes to give as one of the best reasons to be bullish about a rumored initial public offering for Sibur.
Sibur has said in press statements that they expect “another jump in scale” of plastics chemicals output with the addition of the Sinopec project, Amur.
“Sibur has long built relationships with Chinese clients, partners, and investors and Sinopec has been our strategic partner since 2013,” says Dmitry Konov, Chairman of the Management Board for Sibur. Konov told Reuters recently that there was no timeline for any IPO in the Moscow Exchange. Moscow was home to one of the top four largest IPOs last year, shipping firm Sovcomflot.
Konov said their logistical advantages in the far east, near China, and competitive pricing for its polymers means they will “scale up these relationships to further expand the delivery of high-quality petrochemicals from Siberia to China.”
VTB Capital, a Russian investment bank, says those projects would allow Russia to become one of the world’s top four producers of ethylene by 2030. Russia wants to position itself as the indispensable partner to China in this space, much in the way that China has positioned itself as the key source for numerous key inputs, whether its cobalt used in electric vehicle car batteries, or solar panels now expected to criss-cross the U.S. in the Biden Administration.
Due to the pandemic, China has been focused on industries of the future alongside those needed to get itself, and its trading partners, out of the pandemic rut — those polypropylene Olive Garden to go containers might not come from China, but the plastics that made it sure might.
China remains the place for growth in this space, too. Plastics-use patterns and penetration are rising. Figure the Asians are a good 10 to 20 years behind the U.S. in terms of plastics use. They’re gaining fast.
China As Plastics Demand Driver
Plastics aren’t made from tree bark, that’s for sure. It comes from fossil fuels and non-organic chemical compounds that make the stuff designed to last hundreds of years.
And China now accounts for roughly 40% of the demand for the chemicals used in making it, an increase of just 20% in 2005.
China’s ethylene demand grew by 8.6% between 2014-17 while global demand grew by only half that.
Looking out five years, Deutsche Bank industry analysts said in a November 25 report that China will account for over half of global consumption growth for ethylene (to which Sibur and Russia are happy as their go-to for now).
China has 50% self-sufficiency in ethylene and derivative products – the domestic desire to expand capacities and increase self-sufficiency remains high. Russia is a solution. But Sinopec will invest domestically, as will the big Western multinationals who are frowned upon doing similar work back home. Exxon is case in point.
China was a relatively late entrant to the global petrochemical industry, but that does not mean much. They ramp up, and rev up fast due to state subsidies and state-owned companies’ ability to obtain raw materials and pass them along downstream for pennies on the dollar. These are loss leaders, but China doesn’t care about that stuff. They are looking to produce plastics for the locals, and for the export markets, especially U.S. and Europe, which are increasingly disinterested in anything fossil fuels related, at least on paper.
In the 1990s, the Chinese petrochemical industry was significantly smaller than the U.S. In 1995, China’s ethylene capacity totaled 3% of global capacity. In comparison, Japan had 9% of global ethylene capacity and Korea had 5% of global capacity. Ethylene is naturally occurring.
During the 2000s, China’s petrochemical industry grew substantially driven by government support and strong demand from government-directed infrastructure spending, a burgeoning middle class with rising disposable incomes, expanding residential construction and exports of course.
Between 2004 and 2012, China’s ethylene capacity — the flammable gas used to make ethanol for cars, fruit ripeners, and — more importantly, plastics — doubled to 11 million tons per year. Within 25 years, China’s capacity has moved from 3% of global to 16% of global. Who thinks they’re going to slow that down? Need plastic? China will have it. For now, Russia has the chemicals. China might just gain on that next. Follow me on Twitter or LinkedIn.
I’ve spent 20 years as a reporter for the best in the business, including as a Brazil-based staffer for WSJ. Since 2011, I focus on business and investing in the big emerging markets exclusively for Forbes. My work has appeared in The Boston Globe, The Nation, Salon and USA Today. Occasional BBC guest. Former holder of the FINRA Series 7 and 66. Doesn’t follow the herd.
📚 Get your free copy of “Poorly Made in China” from Audible, in addition to a free 30-day trial! → https://amzn.to/3dkzN9T (Note: As an Amazon Associate, we earn from qualifying purchases). China has been the leader of the recycling industry for over 30 years, importing materials more than any country in the world and making billions of dollars in the process. But recently, the Chinese government took a tougher stance on recycling, effectively disrupting the global recycling industry. More importantly, China’s decision has caused major problems for many Western countries, since they were the ones exporting millions of tons of recyclable waste to China. ⭑