China
&
Economy

Starbucks and Chinese Economy 

Starbucks and Shenzhen, China: Green Mermaids Catch up with the Fastest Growing Economy in China
September 3, 2016

Shenzhen in Guangdong province, a few distant north of Hong Kong Special Administrative Region, has turned itself into the fastest growing city in China. Per capita GDP of Shenzhen has grown from 835 yuan in 1980 to 158,000 yuan  in 2015 while the city’s population grew from just 30,000 to 11.4 million, respectively, within the past three decades. As the population grows rapidly, modern commercial and residential buildings start to pop up nearby newly opened Metro stations, like bamboos after rainy days. Housing prices in Shenzhen are clearly booming. In the meantime, more and more Starbucks stores are opening across the city. Between a hundred of green mermaids, Shenzhen-born Tencent is about to become the most valuable company in China while young talented workers across China are rushing into the city to attain their wealth. This vibrant, yet young and modern, city is now getting attention for global investors as well as travelers. <Continue to read - click here>

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Urumqi, China: The Farthest Inland City Now Welcomes Modernity 
June 6, 2016

​Urumqi, the farthest inland city in China or 1,500 miles west to Beijing, has started to unveil itself to the world. The city is well known among both domestic and international tourists thanks to the world-heritage Tian Lake and the Silk Road point of Turpan. Xinjiang Uygur Autonomous Region, where Urumqi is settled as a capital city, has a population of 23 million, of which local Uygur residents and Han Chinese account for 10.7 million and 8.4 million, respectively. Unlike other cities in China, Urumqi presents a diverse culture and customs. At Grand Bazaar and beyond, Uygur residents walk through a tiny path and some grab a piece of watermelon for refreshment while they communicate to each other in their own Uygur language. Growing number of Han Chinese appears at a few blocks off from the Grand Bazaar and the Chinese language turns on. International hotel, like Sheraton, and a dozen of KFC stores are all settled in the city. <Continue to read - click here>

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Shaoyang, China: Unknown City May Welcome Starbucks in the Future
​February 22, 2016

Shaoyang, the city located 150 miles southwest of Changsha, is slowly, very slowly, turning global. Though there is no Starbucks store in the city yet while wealthier Changsha residents enjoy its coffee at one of 22 available stores in the capital of Hunan province. The city of Shaoyang is widespread but once you walk off from the center, you would soon step into the dusty street toward rural villas where you may see numerous chickens as well as ducks walking throughout the farmland. Certainly, its economy is not as handsome as Shanghai or Changsha. However, the city has just welcomed the first-ever bullet train services from major big cities in mainland, including global Shanghai. In the meantime, the world-largest fast food franchise, McDonald’s, has been welcoming modernity-looking consumers from its populous 8 million residents over a past decade. With such environment, premium Starbucks may be interested in entering this city in the near future. <Continue to read - click here>

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Starbucks in Shanghai, China: Modern Shanghainese Favorite Third Place
November 12, 2015

Shanghai, one of the most dynamic cities in China, never stops changing itself. Despite overall China’s economy continues to slump, the city turns into a utopia, as new immigrants flock to the city on a daily basis to look for a job while local residents, commonly known as “Shanghainese,” enjoy attaining modernity. The modernity is what they are always seeking for. A great example of it is a new iPhone. On the Line 2 subway stations between the city’s financial hub, Lujiazui, and Shanghainese’s bed town, Jingan Temple, most passengers onboard hold the newest iPhones in hands while the gold-, now the rose gold-, colored back of the devices colorfully shine throughout inside the train cars. Up on the ground, green mermaids shine across the city. A Starbucks store at Ruffles Square, a few blocks south of the popular pedestrian East Nanjing Street, attracts local Shanghainese as well as tourists throughout the day. Across the Huanpu River, the stores at Lujiazui area welcome white-collar workers for morning as well as afternoon coffee. Over the past years, the company has been very aggressive expanding its stores in China’s largest commercial city and its number now hits 382, out of over 1,700 stores in the country. <Continue to read - click here>

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Apple and Starbucks in Chengdu, China: Fast Growing Largest Inland Economy
May 8, 2015

Chengdu, the capital of populous Sichuan province and home of the former Chinese Communist leader, Deng Xiaoping, as well as, of course, Pandas, is located about 1,000 miles west of Shanghai or a two hour high speed train ride from neighboring Chongqing. It is one of the largest cities in inland China in terms of population, but it is also one of the economically important cities in China. In the earlier last summer, United Airlines became the first U.S. carrier to fly a nonstop to Chengdu from San Francisco to meet travel demands between this inner city and the United States. Thanks to Untied, Chengdu has been more approachable than ever and this may be one of the confirmations that Apple and Starbucks have been enjoying their presence in this global city in inland. <Continue to read - click here>

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Apple and Starbucks in Chongqing, China: Price-Sensitive Inland Consumers 
April 16, 2015

Chongqing, one of four central government-controlled municipalities in China, is located about 900 miles west of Shanghai and it is the mid-point of the 6,300 kilometer-long Yangtze River, which flows eastward all the way to the another municipality, Shanghai. The city is very populous with nearly 30 million people and its per capita GDP hits above 42,000RMB while Shanghai, for instance, has the population of 24 million and its GDP per capita more than twice higher at 90,000RMB. Despite Chongqing’s mid-income-leveled per capita GDP, which is inline with a nation-wide average, there are three Apple Stores and 12 Starbucks stores available to reach 30 million residents in the city as well as outsiders. <Continue to read - click here>

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Starbucks in Changsha, China: The Growing Middle-Income Consumers
March 20, 2015

Starbucks (NASDAQ: SBUX), the largest coffee chain in the world, now focuses its business expansion on China’s inland while the number of stores hit 1,497 across the country (as of the end of 2014, excluding Hong Kong, Macau, and Taiwan). Cities in China’s inland are far different from the global cities, like Shanghai and Beijing, in terms of, for instance, the people’s tastes and income levels. Chinese people love drinking tea and you merely see they are sipping coffee, especially if you are on a long-distance train to or from an inner city. The income levels between the coastal cities and inner cities are far diverse as well. While you tend to see the enormous popularity of iPhones in Shanghai, you do see less iPhone users in inland. Despite the differences, Starbucks willingly joins inland cities and continues to attract the growing upper middle-income Chinese consumers. <Continue to read - click here> 

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The Evidence of the Middle-Income Trap
January 27, 2015

Over the past few years, more and more articles from academic journals to business periodicals about the middle-income trap were published with more extensive empirical evidence. The problem of middle-income trap study was used to be a lack of empirical evidence but this problem has started to diminish. Before the financial crisis in 2008, not many economists believed about this trap and they intended to conclude the Asian miracle was over after the Asian financial crisis in 1998, rather saying they were trapped in the middle-income society. However, the word, “middle-income trap” began to widespread within the past year or even today thanks to China’s economic slowdown. <Continue to read - click here>

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What is Economics in Your Travel?
Toastmaster meeting at PayPal Shanghai
October 16, 2014

At 7:00pm on October 14, I was in one of the rooms on the 22nd floor, where PayPal Shanghai occupied, and I was ready for delivering my speech, “What is economics in your travel?” Before stepping onto the stage, what I was only thinking of was how to make audience laugh every three minute out of a 30-minute speech. 

Why did I have to make them laugh frequently during my speech? That was Toastmaster, where motivated people, like today’s audience, were here to learn, to practice, and to experience the wonderful form of communication, the speech. 

“We always have unlimited wants, you want to buy Green Tea Frappuccino (GTF) at Starbucks store everyday, you want to buy a new iPhone 6, and you want to buy a handsome boyfriend or a beautiful girlfriend. These are your wants.”
<Continue to read - click here>

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Popularity of Smartphones in Shanghai 
May 22, 2013

It is not easy to find someone, who is still using a traditional cell phone, especially here in Shanghai. Shanghai's per capita GDP now well exceeds US$10,000, which explains Shanghai is the wealthiest city in China. 

On my Line 9 subway ride to Songjiang University, where at least 15 stations away from the downtown and this mid-day crowded train runs every three minute or so, I have found out most passengers were relatively younger than some other subway lines. <Continue to read - click here>

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What you all need to know about Chinese stock markets: Background 
July 1, 2015

Chinese stock market is relatively young compared to the biggest stock exchange in the world, the New York Stock Exchange (NYSE), which opened in 1817, while the tech-dominant electronic market, NASDAQ, opened in 1971. There are two stock exchanges in China at this moment at Shanghai and Shenzhen. Shanghai Stock Exchange (SSE) opened on December 19, 1990 and Shenzhen Stock Exchange (SZSE) opened on July 4, 1991. As of 2012, there are 978 companies listed on SSE while 1,466 companies listed on SZSE. Both stock exchanges operate four hours a day from 9:30 to 15:00 with a 90 minute-break during lunch time Monday trough Friday except special holidays. The listing requirement for both exchanges vary but SSE is similar to NYSE style, which consists of large-cap companies, while SZSE is more similar to NASDAQ, which focuses more on young growth potential technology companies. <Continue to read - click here>

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What you all need to know about Chinese stock markets: Price-to-earnings multiple
July 1, 2015 

The premium is measured by “price-to-earnings ratio (PE)” and the ratio is simply calculated by dividing today’s stock price by a company’s earnings, which are generally past 12 months’ earnings (trailing twelve months TTM). In the Wall Street, this PE ratio is often called, “PE multiple” or simply “multiple” because one says how many times earnings an investor is willing to pay. Lower the ratio, cheaper the stock is, vice versa. Growth potential companies, such as technology companies, tend to have higher PE ratios because investors are willing to pay more premium for their future potential growth while non-cyclical companies, such as food and medical companies, tend to have lower PE ratios because they are relatively less economic sensitive. <Continue to read - click here>

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What you all need to know about Chinese stock markets: Market inefficiency 
July 1, 2015

Since 2000, the Shanghai Composite Index experienced a roller coaster ride. When the market shows greater volatility, overpricing or underpricing appear in the stock market. In the meantime, many researchers believe stock price should follow random walk if markets were efficient. Thus, there are several factors should have created market inefficiencies in the Chinese stock market, especially in the first half of 2000s. <Continue to read - click here>

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Is China Going to be the Biggest Market for Apple Watch?
April 22, 2015

During the initial day of Apple Watch previews at one of four Apple Stores available in Shanghai, China, the crowds from local residents to tourists continuously formed in a circle around the Apple Watch showcases moments by moments. While it is the long-awaited new cutting-edge product from Apple (NASDAQ: AAPL) for many of its funs across the globe, China is soon likely to be on the center stage for the $700 billion cap company. Apple’s sales in China, including Hong Kong and Taiwan, already accounted more than 20 percent of the total globally, compared to 23 percent from Europe and 41 percent from Americas. It is very likely that China’s overall sales will overtake Europe’s within next quarters as soon as the Apple Watch debut within coming days. <Continue to read - click here>

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Chinese ADRs: Is It Good to Buy Alibaba’s Shares? 
February 15, 2015

While Chinese economy started to show its further slowdown last year, the Chinese-version of Amazon.com, namely Alibaba (NASDAQ ADR: BABA), debuted as the world’s biggest IPO ever in the history. Its value of the deal hit $25 billion while the IPO price was set $68 per share for the inaugural trading day of September 19th, 2014. By the time after the trading floor closed that day, the shares of Alibaba rose more than 38 percent to $94. <Continue to read - click here>

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Is China a Good Place to Invest?
2011 (Originally from The Sun Investment)

The answer could be intriguing. For the large- to small-companies, China has been a great place to invest thanks to lower wages. With huge population of China, most companies take advantage of their labor-intensive industry, typically manufacturing. Apple Computer assembles millions of iPhones in China and ship around the world. The company must have chosen China to assemble the most popular product, iPhone, because of the lower wages, the huge population, and the vast reasonable land. 

Starbucks also has chosen China to be a strategic field to drive their revenues. The company now has slightly above 500 stores in China (as of 2011) and expects to increase its number to 1,500 by 2015. That means the number of stores will be tripled, implying that Starbucks’ revenues in China are going to be tripled. <Continue to read - click here>

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China, Inc. 
From the Newsletter, The Sun Investment

China, Inc. is still growing at near double-digits despite China government’s attempt to ease its rapid growth. Last week, the rating agency, Standard & Poor’s lowered U.S. rating to AA+ for the first time ever. In the meantime, EU is facing massive debt crisis. The economy out of China seems very sluggish while China is firing all cylinders. Even though some people think China is over or not trustable in investing, I believe China is still an engine for the world economy. Honestly, it is even hard for me to trust Chinese government and companies when investing, there are lots of things to know about the economy in order to profit from your investing. Apple Computer, McDonald’s, and Starbucks Coffee, which everyone knows in your daily life, make massive profits from China and their growth all depends on future China, Inc. <Continue to read - click here>

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Shanghai Metro Line 16: Dishui Lake Station 
March 27, 2014

The new subway Line 16 in Shanghai inaugurated this earlier year. How interesting it is to see Shanghai’s rapid expansion of Metro system across the city. This Line 16 extends to the tip of southeast of Pudong Shanghai, about 15 miles south of the Pudong Shanghai International Airport. I took an hour-ride on L16 from the origin station of LuoShan Road station. Seats are plastic-made but different seat arrangements compared to ordinal trains, which run into the city. When I moved up the escalator to show up myself out of the subway exit, it was nothing. Dishui Lake is an artificial lake, shaping like a pizza (you can check this by simply hitting the Google Map). It is such a huge lake that you don't realize the lake was nicely rounded. There is Crowne Plaza hotel besides the Lake but unless you have any conventions to attend (there are big convention halls in this town. I once attended the WHO events in winter 2012), you would not spend a whole day there. <Continue to read - click here>

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Food Stand Business in Shanghai
March 2, 2014

I travel to Shanghai about five times a year while I used to live there for more than three years from 2010 to 2013. One of my problems living in Shanghai is food. Chinese dishes are mostly fried and oily, which I tend to avoid. Plus, it is hard for me to get into a Chinese restaurant alone. However, one Chinese food I like is the food stand meals though still oily. In my neighbor, food stands start to show up when the clock hits 9:00pm. There are numerous selections of food from BBQs (many vegies) to fried rice and noodles (similar to Panda Express’).  They are very tasty thinks to lots of oil, pepper, and salt on but again may not be healthy. Since I have always been walking by these food stands, I started to know them well. Thanks to that, I always ask them to use much less oil to cook fried rice and less salt to barbeque vegies. <Continue to read - click here>

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