2/2556 รู้ให้ทัน ภาพรวมเศรษฐกิจจีน overlook of...

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สัมมนานักธุรกิจไทยในมณฑลกวางตุ้ง ครั้งที่ 2/2556

รู้ให้ทัน ภาพรวมเศรษฐกิจจีน

อนันต์ ลาภสุขสถิต ผู้บริหารเครือขา่ยธุรกิจจีน ธนาคารกสิกรไทย

25 กันยายน 2556

2

Agenda

1. 2013 China Economy Outlook

2. How it’s going to affect Sino-TH trading

3. How TH SME should prepare when

doing business with Chinese?

4. How can KBank assist on Sino-TH Trading?

3

Key Points

China’s economy will be likely to grow at moderate pace.

Euro zone debt crisis will continue to put pressure on China’s export and

industrial sectors.

Fast growing debts of local governments and rising house prices narrow room for

additional stimuli in the remainder of 2013.

The central policy makers will continue to focus on economic restructuring: to

curb local government investments

positive effects on fixed asset investment and industrial sectors may be limited

in 2013.

3

2013 China Economy Outlook

5

5

Concerns over Property

Bubble, Financial Risks

and Speculative Fund

Flows

Cooling

Investment

Cash and Credit

Squeeze

Rising Local Government

Debts (particularly in forms of shadow banking)

Low Growth of

Exports and

Manufacturing

Sluggish

Global Economy

Slowing Domestic Economy

Cyclical Factor Structural Reform

Financial and Capital

Account Liberalization

Cautiously Proactive Fiscal Policy and Prudent Monetary Policy

VSFake Trade Bills

Misuse of Funds

Yuan

Appreciation

Rising Business

Costs

Rebalance Growth

Raising rural income

level

Shifting from export-

oriented growth model

toward greater reliance

on domestic demand

Reducing the

government’s role in the

economy

Key Challenges for New Leadership

http://www.vectors.co.nz/wp-content/uploads/Flag_Map_Of_China.png

6

1Q13 GDP slowed to 7.7% YoY, marked the first time in at least 2 decades that growths

were below 8% for 4 periods in a row.

IMF’s new forecast : 7.75% as of

May 29 (down from 8%)

World Bank’s new forecast : 7.7%

as of Jun 12 (down from 8.4%)

KResearch : 7.5-7.9%

The mainland economy will need

accelerating growth in the later

half of 2013, to ensure its full-year

growth target of 7.5%.

Source: National Bureau of Statistics, CEIC, KResearch

6

China’s Economy Cool Down

9.8 9.5 9.2 8.98.1 7.6 7.4 7.9 7.7 7.5

2.3 2.4 2.31.8 1.6 1.9

2.1 21.6 1.7

0

2

4

6

8

10

12

China GDP Growth Rate

YoY QoQ

7

Latest Update: Positive Signal

• Majority views are positive

8

Latest Update: Positive Signal

• HSBC PMI rose to 51.2 in Sep, the sixth-month high

• Higher confidence that the government may be able to meet its growth

target for the year

• Simultaneous improvements of external and domestic demand conditions

9

China Economy is subject to China Government

• Government Policy is more important than anything

• GDP, Interest Rate, Exchange Rate, Lending Quota, Property Prices, etc. all

are (most likely) under control of Government

• Major change in Government Policy will hit the economy harder than any

other factor

• Latest Major Policy (Shanghai Free Trade Zone and Qianhai Special Economic

Zone) will play a big role in China Economy

10

Alternative Index

• China is much influenced by Government Policy than

any other country

• Maotai or Moutai Index: The World’s only

Socialist Luxury Brand

• The country’s most expensive domestic spirit

• A bottle of Standard 53-degree Feitian Baijiu,

500 ml, costs 2,000 yuan in 2012 or around

10,000 baht. Or, 20 baht per 1 ml.

• A case of 1985 Maotai is over one million yuan

• A bottle of 1958 Maotai is worth more than 1.45

million yuan

Standard 53-degree Feitian Moutai has

dropped from a price of around 2,000 yuan in

2012 to less than 900 yuan per bottle

11

Agenda



3. How TH SME should prepare when doing business with Chinese?


12

Global economic uncertainty pulled down Chinese export

China’s exports and imports

unexpectedly declined in June

Exports to the U.S. and EU declined

for a fourth straight month

We expect exports to slow over the

remainder of this year due to global economic uncertainty.

Prolonged domestic sector slowdown

pressured China’s imports to drop

0.7% in June.

Concern on government debt

expected to squeeze consumption

spending over the remainder of

2013. Source: National Bureau of Statistics, CEIC, KResearch

25.0

21.7

10.014.6

0.9

-3.1

29.0

-14.9

14.2 16.6

-0.1-0.7

-20

-10

0

10

20

30

40

0

100

200

Jan-13 Feb-13 Mar-13 Apr-13 May-13 Jun-13

Export Import Export growth Import growth

USD bn %YoY

(LHS) (RHS)

China’s International Trade

13

Thai exports to China 2H13 to be impacted by Chinese slowdown

KResearch forecast :

Exports to China : -4.3% to 5.0%, base 0.7%

Imports from China : 2.3% to 8.1%, base 3.8%

China is Thai top export market that take up

11.7% of our total export.

In the base case, we expect Thai exports to

China will grow at 0.7% in 2013.

Key affected sectors are agricultural and

intermediate goods such as natural rubber,

cassava, computer parts and electronics parts

etc.

Source: Ministry of Commerce of Thailand, KResearch

-60

-30

0

30

60

90

120

Ja

n-09

Ap

r-09

Ju

l-09

Oct-09

Ja

n-10

Ap

r-10

Ju

l-10

Oct-10

Ja

n-11

Ap

r-11

Ju

l-11

Oct-11

Ja

n-12

Ap

r-12

Ju

l-12

Oct-12

Ja

n-13

Ap

r-13

May 2013: -16.3 %YoY

Jan – May 2013: -0.9 %YoY

Jul 2009

-21.6%YoY

Sep 2012

-14.7%YoY

Jul 2009 -------- 46 Months ------- May 2013

Thai’s export to China growth rate (%YoY)

Trade between China and Thailand

14

ที่มา: World Trade Atlas 2011 โดยศูนย์วิจัยกสิกรไทย

10 มณฑลแรกที่จีนค้ากับไทย (USD bn)

33

24

7.4

8.0

2.0

2.0

1.8

1.6

1.0

0.7

0.2

0.3

0.4

13.9

7.6

5.5

5.9

1.7

0.9

1.2

0.6

0.5

0.1

0.1

Guangdong

Shanghai

Shandong

Jiangsu

Zhejiang

Tianjin

Fujian

Liaoning

Beijing

Guangxi

Yunnan

Export to Thailand

Import from Thailand

12

11

5

4

3

21

0.60.6

• ตลาดหลักของสินค้าไทยกระจุกตัวบริเวณมณฑลฝั่งตะวนัออกที่ติดทะเล จากนั้นจึงกระจายตัวสู่พื้นทีต่่างๆของจีน• บางมณฑลแม้ไม่ได้ติดต่อค้าขายกับไทยโดยตรง แตส่ินคา้ไทยกระจายตัวอยูใ่นแต่ละมณฑลของจีนด้วยผู้น าเข้าของจีนอยู่แล้ว

สัดส่วนการค้าในแตล่ะพืน้ที่ต่อการคา้รวมของไทยกับจนี(%)

มณฑลใดคือคูค่้าหลักของไทย

15

Although the economic slowdown, China is still Thailand No.1 import & export counterparty. Guangdong is the province which has the largest GDP in China with share at 11%.

Top province contribute GDP in China

Guangdong: No.1 GDP in China

16

GDP & International Trade in Guangdong increase every year. Total international trade accounts to be over 90% of Guangdong GDP.

1,298 1,455 1,631 1,914 2,279 2,754 3,335 4,179 5,317 5,789 6,868 8,250 8,983

11,167

1,701 1,765 2,211 2,8353,571

4,2805,272

6,3406,835 6,111

7,849

9,1339,838

10,000

131%121%

136%

148%157% 155% 158%

152%

129%

106%114% 111% 110%

90%

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2015F*

GDP Total value of imports and exports Foreign trade dependence ratio

[USD 100 Million]

The economic growth of GD in the past decade and future forecast

Guangdong : GDP & International Trade Growth

17

ASEAN accounts at 12.4% and 19.1% for export and import respectively. Thailand is second ranks international trade in ASEAN.

1 17 6215

63133 169

448

2089

375484

36 6216 3637

5861

6466

75

85

86

136

248

64

Exports Imports

1,870

[USD 100 Million]

Destination country

% Contribution to

total international

trade in Asia

Export Import

Thailand 2.1% 4.6%

ASEAN ex Thailand 10.3% 14.5%

Other countries 87.6% 80.9%

57%18%

16%

5% 3% 1%

76%4%

9%3% 5% 3%

2011 Export value

breakdown by region

2011 Import value

breakdown by region

Asia

North America

Europe

Latin America

Africa

Oceania and others

2011 Total Value of International Trade between GD and selected countries / regions

Asia: Top International Trade Destination of Guangdong

18

Shenzhen is the largest city of Export & import values in Guangdong which contributes over 45% due to special economic and industrial zones, also Shenzhen Port is 2nd largest in China.

Top Export & Import by Guangdong Cities

Shenzhen : No.1 Foreign Trade in Guangdong

19

Agenda





20

Key Strategy to do business with China

LosersDouble Winners

Double Losers

Single Winner

Aligned with

China

Government Policy

Aligned with the Big Trends Rule of Thumbs in Doing

Business in China:

“Don’t do busines against

the China Government

Policy”

Study the Trends and

Government Policy, both

Beijing and Local

21

The End of Cheap China

China now is

the second

largest

economy

country in the

world, but the

average income

still has a room

to improve

Trend: Better

Living Quality

22

How Chinese spends the money?

23

How Chinese spends the money?

24

Housing is still a big game of Goverment

• Affordable housing is still the key

work of Government due to

population and the trend to separate

form family

• In this sector, unless the big property

corporation, there is not much room

for Thai players

• Construction material are also locally

produced

• But still this sector is important as the

indicator for overall China economy

25

The Trend: Quality Food

• Trend: Better Living Quality, esp. in Urban

• From bicycle to motorcycle and to personal car, this trend is unlikely to

reverse

• But if from passenger car to sport car, this is subject to economy

• Quality Food

• If you believe that China’s incomes will continue to rise, then high

quality food like animal protein sector will be very strong

• Exotic foods and drinks are more and more popular, with the support

from the increasing outbound oversea travel

26

Culture, Education and Entertainment Spending

The spending is growing, but largely in Urban

27

The Trend

• Younger Generation = Shift of Lifestyle

• Tea changes to Coffee: Starbuck

• The first Starbucks store in Mainland China was

opened at the China World Trade Building in

Jan 1999

• Currently, there are over 1001 stores in 60

cities in China

• Brand lovers

28

Luxury Brand in China market

Most top luxury

brands are still

from Europe.

China is the

biggest Luxury

Brand

Consumer now

while Japan

runs 2nd

29

Chinese Luxury Brand

30

Chinese Luxury Brand

31

World Luxury Brand in China market

All Global brands adapt to

China market and trend

32

Thai Brand in China

• Famous Thai brands in China are mostly

leveraged from Chinese Tourists to

Thailand, with some exception for the

brand originated from Thai agricultural

industries

• Branding is not only applied to luxury

goods

• Branding is so important to prevent the

Chinese competitors who likely possess

better manufacturing competencies

• Choose one niche and be known for one

thing

33

The Trend: Chinese Way

• Under government control

• No Facebook, Twitter, Youtube in China, but a

copycat of same concept

Facebook Tencent

Market Cap USD 118b USD 96.5b

P/E 210.65 46.21

Revenue USD 5.1b USD 7.18b

Staff 5,299 24,160

Brand Facebook QQ, WeChat, etc.

34

The Trend

• Women Rich List in

2013: No. 1, 4, 5 are in

Guangdong

• Higher Education &

Overseas Study

• RMB

Internationalization

• Increasing Outbound

Oversea Travel

35

The Chinese Tourism

2012 Chinese Outbound

83.2m 94m

2013

2.78m1.12m

1.7m

2011 2013Q12012

Chinese to

Thailand

Chinese

Outbound

Thanks to “Thai Zhong” fever!

36

Sino-

Thai

Trade at Bay

37

Sino-Thai Trade at Bay: 2012 Landscape Shifted

• More than 3-4 million Chinese

tourists will come to Thailand

every year

• Business with China doesn’t

mean you have to come to

China anymore

• It’s the first time ever to

have more than one million

tourists from one country to

visit Thailand in one quarter

• Thai Culture is very warm

welcome by Chinese

38

Sino-Thai Trade at BAY

• More than 2-3 million

Chinese tourists will come to

Thailand every year

• Business with China doesn’t

mean you have to come to

China anymore

• It’s the first time ever to

have more than one million

tourists from one country to

visit Thailand in one quarter

(2013Q1)

39

Sino-Thai Trade at BAY

• Suggestion for Sino-Thai Trade Business: “Threefold Strategy”1. Toward Chinese Tourists coming to Thailand

2. Continue consumption in China

3. Tourists as referrer

• Linked to Thai Culture, difficult to copy

• Create Imprint and Branding to keep customer

• Utilize Social network and Mobile Life to expand the market

40

Thailand needs innovation as well

• Any market in China is so big for Thai

business

• Just Mooncake is worth 16 billion

Yuan a year

• Among Chinese 5-star hotel

mooncake, Mooncake from Thailand

taste is still oustanding

• Yet, no big player from Thailand

41

“Picks and Shovels” Strategy

• Same as in “Gold Rush” era, the one who makes money is Levi Strauss

• The biggest spending is Foods, yet Chinese Food Safety is always in question

• Strong trend of Social Network and Mobile Lifestyle significantly reduce the

marketing cost to make the whole Mainland aware of a brand

• Recent Trend in China; more and more Thai restaurants open, but most

owned by Chinese

• However, decoration, food ingredients, etc. are necessary for authentic Thai

foods

42


43


Winning China

Market is not

easy.

More difficult

is to retain.

44

The Challenge for Sino-Thai Trade

•Still Trading with China is not easy; Risk is as big as opportunity

•Set aside the economy, the eminent risk is the payment risk

•Not only the counter party, but the small local banks as well

•Other than big 4 banks and foreign banks, most of small banks

in China will not have enough quota to do International Trade

Settlement, much more difficult to realize the value of L/C

(even from Top banks in Thailand like BBL, KBank, SCB, etc)

45

At the end of 2012, local

government debts are

estimated to rise to RMB

11-13 trillion (21-26% of

GDP), resulting in total

government debts

topping RMB 18.8-20.8

trillion (36-42% of GDP)

Total government debts

that include unofficial

financing, so called

shadow banking, are

possibly more than 80%

of Chinese GDP.

China's Central and Local Government Debt

Local-Lower Levels

Local-36 Provinces and MunicipalitiesCentral

(RMB tr )

6.8 7.8 +14.8%

+12.9%3.4 3.85

7.3

9.15*+25.2%

18.8 - 20.8,

36 - 42 % GDP17.5 ,

43 % GDP

* Market Estimation

KResearch

45

Risk of Local Government Debts

46

Latest Consensus

Forecast:

USD/CNY = 6.08 eop. 2013

(strengthening from the

current level of around

USD/CNY 6.13)

We expect USD/CNY will

continue to appreciate

slightly in 2013, in line

with foreign exchange

reform that will likely

allow more flexible

exchange-rate regime.

RMB/USD/THB makes thing

more complicated

May 6

46

Yuan on Appreciation Trend

USD/CNY

2012 2013

Source : Bloomberg

47

Policy Target: Emphasize on long-term stability

rather than short-term growth

Base case: No additional stimuli, while policy rate

to remain unchanged

However, there is still room for more stimulus

policies, if the economy shows sign of unacceptably

slow growth (i.e., overall 2013 GDP growth <7.5%),

- External risk

- Slowing export

- Local government debt

- Property price concern

Policy Rate

47

Situation of asset quality and tightening liquidity, and government’s measures to settle problems

18th CPC National Congress in Oct/Nov 2013

Possible changes in some macro policies: e.g., Hukou-system, VAT reform

Interest rate reform: i.e., relaxation of deposit rate to clean up WMPs and increase depositors’

earnings

Foreign exchange reform: Relaxation of Yuan trading band

Things to Monitor

Policy Direction in 2013

48

China’s economic slowdown is

unlikely to trigger a new global

economic crisis but there is a risk of

short-term volatility. Importers and

exporters should evaluate the

reliability of business partners to

prevent risks and problems with

future foreign exchange rates.

Update of China Economy

Assess Credit Risk of CN Counterparties

Chinese Culture

Related Regulations

FX Trend / Alternative Currencies

Your Brief Checklist

How Thai SME should prepare

when doing business with Chinese

49

Agenda





50

成都分行Chengdu Branch

香港分行Hong Kong Branch

深圳分行Shenzhen Branch

Beijing Rep

Kunming Rep

Shanghai

Rep

KBank Presence in China

2013

2014

2015

2016

BrachSub-

Branch

3 1

3 4

3 8

4 16

2017 5 32

Human Capital

118名/staffs

2012

158名/ staffs

20132011

43 名/staffs

7 Fl., An Lian Building, Shenzhen

Strategic Direction

1. Support Thailand – China International Trade Business

2. SME Lending in China

3. Cross Border Business to serve FDI between Thailand – China

Network Expansion Plan

Branch : Shenzhen, Chengdu, Hong Kong

Representative Offices: Beijing, Shanghai, and Kunming

51

Non – Financial Services

Global Advisory Services

Global Business Matching Services

Marketing Activities

Channel

website

https://www.kasikornresearch.com

http://www.thailand-china.com

How can KBank assist on Sino-TH Trading?

52

Financial Products

FCI services

Trade Sure Pay

RMB Settlement

Trade Reroute

Counter Party Referral

How can KBank assist on Sino-TH Trading?

53

บริการตรวจสอบความเส่ียงผู้ซื้อผ่านเครือข่าย FCI

สร้างความมั่นใจแก่ผู้ส่งออกโดยการตรวจสอบเครดิตผู้ซื้อแต่ละราย

KBank has more than

19 FCI network partner

(Factors Chain International) in China. This will ensure that KBank is gateway for customers to connect with local banks.

54

Let’s importer and exporter

define the condition by

themselves, and KBank just

follow their decision, agreed by

both party and recorded on

‘Account Custodian Agreement’

Trade SURE pay

55

Cross Border RMB Settlement

Starting from July 2009, China had launched

a pilot program which allows RMB settlement

in cross-border trade. Further, to facilitate

cross-border investment, starting from year

2011, the People's Bank of China (the

"PBOC"), the Ministry of Commerce (the

"MOC") and the State Administration of

Foreign Exchange (the "SAFE") promulgated

several regulations to officially liberalize the

cross-border use of RMB in capital account

items, such as outbound investment,

inbound investment and cross-border loans.

56

KBank HQ Other banks

KBank Shenzhen Br.

Thailand 泰国 China 中国

Trade Via KBank Thailand and

KBank Shenzhen to increase

liquidity and support your business expansion

With KBank restructured product & process,

Guangdong – TH trade transaction will flow

via KBank SZ Branch.

This way, KBank SZ can help you

preliminarily check your CN

counterparties information !!!

Enjoy Trade Reroute Benefits :1. Intermediary bank charge – FREE!! (until Jun 2014)

2. Competitive RMB:USD / RMB : THB FX Rate

3. Received in FULL amount from CN Importers

4. Fast : Same Day fund Transfer

Chinese Partner Referral

Promotion !!

Trade re-route via KBank China

57* Referral program period extended to 30/06/2014

รับสิทธิประโยชน์ฟรีทันทีทัง้ท่านและคู่ค้าเมื่อเริ่มท าธุรกรรมโอนเงินไทย-จีน และเพียงแนะน าคู่ค้าของท่านให้เปิดบัญชีกับธนาคารกสิกรไทยสาขาเสิน่เจิ้น

Chinese Partner Referral Promotion

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