China’s Latest Power Crisis Will Serve as An Important Lesson
Although China doesn’t have a shortage of coal, it experienced a round of power cuts caused by coal shortages. This has allowed the issue of energy security to regain public attention. This unexpected crisis is different from the past. It is intertwined with many complicated factors such as the upgrading of environmental protection regulatory policies such as forced caps on supply of coal.
Since October this year, under the continuous intervention of the National Development and Reform Commission, the country’s top economic planning agency, the domestic coal supply is stabilizing and coal price hikes have been curbed. In the following precious time window of a month, the decision-makers of the country quickly coordinated the supply of coal. Fortunately, the power shortage and rationing that occurred this time is not only a crisis, but also a necessary warning to the authorities and enterprises. The crisis also made everyone realize that energy reform requires systematic thinking, and industrial logic should not be ignored, let alone market forces.
Trading Kicks off on Beijing Stock Exchange, A Landmark in China’s Capital Market Reforms
On the morning of November 15, the Beijing Stock Exchange was officially launched, and the first batch of 81 listed companies started trading.
The select tier of Beijing’s over-the-counter New Third Board was transferred to Beijing Stock Exchange on the opening day. The purpose of setting up the Beijing Stock Exchange is to serve the innovative small and medium-sized enterprises.
On the first day of trading, ten newly listed stocks surged, triggering circuit breakers. This is less than three months after the announcement of the establishment of the Beijing Stock Exchange. 2021 is the third year of the reform of registration-based IPO system, and the reform has entered deep-water zone. From the creation of STAR Board to the launching of Beijing Stock Exchange, the registration-based IPO mechanism is being promoted to the entire stock market of China. After the market kicked off, more than 4 million investors have opened accounts to trade on the Beijing Stock Exchange.
China’s New Infrastructure Program Will Provide Huge Market Opportunities
In March last year, China’s authorities proposed to speed up the construction of new infrastructure. After that, the officials clearly pointed out that the new infrastructure includes seven key areas: infrastructure of 5G networks, ultra-high voltage power transmission, industrial internet, inter-city transportation and rail system, data centers, AI, and new-energy vehicle charging stations. With the pursuit of capital from various sectors, stocks related to new infrastructure program have also drastically surged. The new infrastructure is gestating huge market opportunities worth tens of trillions of yuan.
However, under the ambitious blueprint, all regions are also facing many practical problems that need to be solved urgently, especially funding gaps. To fulfill the targets of the 2020 stimulus package, namely new infrastructure, the government is much more reliant on market forces and private investment.
Therefore, there are many opportunities for business stakeholders to participate in next phase of the country’s development.
Bridgewater’s Long-Term Layout in China
Bridgewater’s flagship product won over the market during the 2008 global financial crisis and attracted global attention. Today, although this company is facing some policy challenges in the Chinese market, its operation is smooth and stable.
More than 30 years ago, Ray Dalio founder of Bridgewater witnessed the early creation of China’s capital market. In the late 1980s, Mr. Dalio came to China and made acquaintance with the major participants in the initial stage of China’s capital market, such as Gao Xiqing and Wang Boming, and he provided them with necessary help. Recently, reporters from Caijing magazine and the Chinese version of Barron’s interviewed Wang Yan, President of Bridgewater China, to discuss the growth and evolution of Bridgewater and its long-term layout in China.