Rotary Club of Beijing

30 November 2021 Rotary talk on asset management

Posted on by Gilbert Van Kerckhove

Kempinski Hotel

For our 30 November 2021 Rotary talk on asset management we had as speaker Gian-Marc Widmer on the topic  “Introduction to Chinese Asset and Fund Management Market”.

Our Rotary member Gian-Marc gave us an Introduction to Chinese Asset and Fund Management Market. Gian-Marc is the Director and Head of Cross-Border M&A at CITIC Securities since 2014. He has been focusing on M&A, restructuring and corporate development since 2001 with a track record of more than US$15bn of transactions executed in Europe, Asia and the Americas. Gian-Marc has been in China since 2005 and previously worked at Lazard in London and New York and at Altira Group as head of the China investment team in their renewable energy fund.

Summary of the presentation

(by Rtn Piper)

According to Gian-Marc, the asset under management AUM in China has grown ten folds to US$18 trillion in the past decade, and it is also going international. By comparison, Switzerland, Gian-Marc’s home country, has US$3-5 trillion under management and the US has US$48.6 trillion AUM, accounting for almost half of the world total. Gian-Marc presented his analysis by dissecting the value chain of investors, channels, fund managers, and assets, and how those four areas were being shaken up by the big trends in the industry.

The first such trend is pension reform, which is strengthening institutional investors. While individual retail investors still make up the bulk of the investor profile, pension reforms pushing for higher rates of returns are driving the establishment of more professionally managed pension funds. Pension funds only constitute 5% of the total asset market in China, as opposed to 34% in the global market.

Individual investors at the same time are being positively affected by the regulatory reforms and the proliferation of fintech instruments. Chinese banks with their vast branch networks had in the past nursed a large individual customer base with mostly off-balance sheet third-party wealth management products. Many of those products often went without government or regulatory oversight and have caused many unscrupulous practices often with disastrous consequences. The recent reforms have banned the banks from selling third-party products and thus have spurred the banks to set up their own fund management subsidiaries, accelerating the development of professional managers. Furthermore, since the introduction of fintech products, many fintech giants like Alipay and WeChat wallet have trapped one-third of the circulated cash away from the traditional banks. Still, with US$ 28 trillion in bank deposits, China has a largely untapped pool of money up for grabs by asset managers.

China’s potentially large fund market has long attracted foreign players. Along with the regulatory and pension reforms, China has finally paved the way for foreign players to enter the market. At the same time, it also is preparing to allow the Chinese money to leave the country into overseas funds. HK Connect or Greater Bay Area Wealth Management Connect was the first such pilot to allow Chinese investors to invest in funds in Hong Kong.

Professionally managed funds will be the future for China, and as with many other fast-moving markets in China, we will see a vastly different landscape in this financial sector. Gian-Marc was bullish about the future, both for foreign fund managers, as well as for individuals who are looking for baskets to put their eggs in.

23 November 2021 Rotary talk on CSR

Posted on by Gilbert Van Kerckhove

Schindlers Tankstelle in Sanlitun

For our 23 November 2021 Rotary talk on CSR we welcomed as speaker Ying LI Joyce, the Head of Group CSR & Media Events, Volkswagen Group China.  Topic: Volkswagen Group China CSR strategy 2025

Joyce has over 15 years of experience in PR & Marketing filed by VGC, her expertise is in strategic planning and professional project management. She successfully executed the Volkswagen brand image rebuilt in China campaign; Volkswagen & 2008 Beijing Olympic Sponsorship; Volkswagen Group China CSR strategy 2025. This time she introduced the Volkswagen Group China CSR strategy 2025 from an insider perspective.
See some of the dishes!

Summary of the talk

(by Rtn Piper)

Corporate Social Responsibility (CSR) has in recent decades moved from internal self-regulation to an integral part of overall corporate strategy. In the west, listed companies can often find themselves in need to design and institute vibrant CSR strategies to meet shareholders’ and activist calls. CSR has not only become an important PR tool but has also become a key share price driver for many of the publicly traded companies. In China, CSR can take on a different dimension for many domestic and multinational corporations. CSR not only has to align with corporate’s global strategies, but it also must meet the Chinese government’s priorities. As Joyce put it, Volkswagen China started its CSR fund in 2014, and during the years since has operated an active CSR program. After nearly a year of investigation and strategic planning in 2020, Volkswagen China unveiled its new five-year CSR strategy starting in 2021. This new strategy is integrated with Volkswagen’s global mission to commit to carbon neutrality and fighting climate change. In China, Volkswagen’s CSR strategy stands on four pillars: low carbon, economic empowerment, education, and social care. Except for the last pillar, Social Care, which expends on disaster relief, like Covid relief, the other three pillars are set in motion with well-crafted action plans. The low carbon Green Belt focuses on tree planting in the western provinces to fight deforestation and degradation of soil. Education Youth Summit aims to select and fund low carbon mobility projects started by university students. Through this Summit platform, Volkswagen China not only can uncover low carbon mobility but can also build competence for young people. Meeting the top leadership’s wants, Volkswagen also sets up grassroots football training to nurse the football capability of the young. As part of its community support program, Volkswagen donates sports equipment to schools and first aid kits and training to village clinics. As a group policy, Volkswagen companies do not give or operate direct CSR programs but give all donations through government-sponsored foundations. Besides financial expenditures, Volkswagen also encourages active employee volunteering, so its employees can share the pride and knowledge of the corporate CSR programs.

Gilbert and CSR

I have been a speaker on CRI at several occasions.

  • The Asian-European ECA Coaching Congress (AECC), on the 6th and 7th of May 2013 in Beijing. My topic on 7 May 2013: “CSR and Sustainability”
  • 2nd ASIAN-EUROPEAN MANAGEMENT & COACHING CONGRESS 17-19 September 2014 – Shanghai. My topic on 18 September 2014: “CSR and Sustainability”.
    Responsible Innovation, Environmental Sustainability and Corporate Social Responsibility
    Speaker Mr. Gilbert Van Kerckhove, European Chamber Vice Chair, former ALSTOM Director East China
  • 22 November 2012 – the 2012 AGRION global summit. Panel Discussion: Sustainable Development & CSR.
    See: https://blog.strategy4china.com/2012/12/gilbert-at-the-agrion-seminar-event/

 

9 November 2021 Rotary talk on digital assets

Posted on by Gilbert Van Kerckhove

Dinner meeting in Schindlers Sanlitun

For our 9 November 2021 Rotary talk on digital assets we had as speaker Cici Lu.
Topic: Insights and outlook for digital assets

Highlight of the talk

Cici Lu, Senior Partner of Apollo Capital Asia – an Australian leading crypto asset manager. Cici was born in Beijing, her schooling and career brought her to Canada, the UK, briefly in Australia and now Singapore. Prior to joining the crypto asset management industry, she had over 10 years of institutional banking career, specifically in investment banking, FI & FX trading across 4 continents. Cici would love to share us her unique perspective on crypto assets as tools to enable UN Sustainable Development Goals to create a more inclusive and efficient world
Topic: “Crypto Assets as Tools to Create a More Inclusive and Efficient world.”

For many digital asset uninitiated who are often confused by all the fuss and the spectacular rise and fall of Bitcoin or the haute technological power of Blockchain, Cici Lu, a Beijing native, educated in Canada, has built a career in IB across four continents and now works as an asset manager for a Singapore-based Crypto asset fund, Apollo. In her talk, Cici put all confusions to rest and painted a simpler picture of digital assets and how those assets could change the way we conduct financial transactions in the future. Cici explained how fast-growing innovations in cryptocurrencies have created a new asset class that has grown fast to become the new darling among financial products. In her plain and easy-to-understand presentation, Cici explained the difference between Blockchain and Cryptocurrencies. Fueled by the development of Web 3.0 to be built on blockchain technology, the trend toward Decentralized Finance, DiFi, is gaining traction.

Compared to the traditional Web 2.0 which powered apps like Google, Facebook, and Amazon and allowed them to harvest profits from consumers, Web 3.0 on Blockchain provides enhanced security, better transparency, instant traceability, increased efficiency and speed, as well as automation via smart contracts. While blockchain and crypto have become popular vocabularies, few understand the differences between them. Blockchain is an open-source public ledger on a network that runs on cryptographic consensus. When participants validate their trades on the blockchain, they then ensure the integrity of the ledger, and the more validated trades on a blockchain the more participants will use this blockchain and thus allow the blockchain to scale. So those validating traders are rewarded with additional crypto assets.

The recent flurry of introductions of Smart Contracts, referring to transactions by self-executing digital agreements governed by software codes, fueled even more imaginations for future financial products. Available on many Blockchains, those smart contracts, accessible via computers or smartphones, can provide financial features of borrowing, lending, and even supply chain management. Those smart contracts are executed through payments using the native tokens of that blockchain, so the more people use this blockchain the more valuable those tokens become.

Currently, $275 billion, twice the HSBC market cap, is locked in DeFi smart contracts protocols and this number is fast growing. Cici finished her presentation by illustrating the importance of positive social impact and financial inclusion blockchain and smart contracts will bring to communities worldwide.

26 Oct. 2021 Rotary talk on learning to fly

Posted on by Gilbert Van Kerckhove

Mosto in Nali Patio, Sanlitun

For our 26 Oct. 2021 Rotary talk on learning to fly we had as speaker Daniel Zhang on the topic: “Joy of Flying”.

Food was reasonable but I was not convinced by some of the dishes.
Another weak point: the private room is pretty noisy and listening to the talk was not made easy.

Highlight of the talk

Flying is the new freedom! At the October 26th meeting, Rotarians and guests got to find out what it was like to take off on wings, piloting an airplane. Private aviation has not been easy in China, but Daniel Zhang, who studied aviation in the US, came back to China to start Enjoy Fly Club. EFC gives private flying lessons. Piloting a single-engine propeller plane might not take you across borders in the new pandemic world order, but it does take you off ground to new heights. Sharing his passions for flying, Daniel also told a story of his 85-year-old customer Wang Deshun who recently completed his pilot license. To a room of sitting-behind-desks Rotarian executives, this was a flying challenge.

12 October 2021 Rotary talk on red wine in China

Posted on by Gilbert Van Kerckhove

Schindlers Tankstelle (Sanlitun)

For our 12 October  2021 Rotary talk on red wine in China we had as speaker Jessica Davis. Her topic: “Red Wine in China”. See some of the dishes!

Our Rotaractor Sophie received thanks for helping out for the paperwork related to our project of hypospadias, see: https://www.beijing1980.com/2017/04/13/hypospadias-surgeries-need-support/

Highlight of the talk

After graduating from Purdue University in the U.S., Jessica, like many young people looking for foreign adventures, came to the Middle Kingdom, initially intending to stay for one year. Now 11 years later, Jessica has moved from being an MBA student and later to a TV host for a travel show, to now a wine specialist and marketer for Ca’Del Grevino, a Santa Maria California winery with Italian roots. Jessica started the talk with a general introduction to the history of red wine in China, which has grown exponentially in the past 20 years, and made China the world’s largest market for red wine by 2014. In the past decades, red wine has catapulted from being an inferior western import to the darling of the rich and powerful class, and rare wines from the world’s famous wineries have become status symbols. But Chinese thirst and consumption for expensive wines have been thwarted by the anti-corruption campaign starting in 2013, and also by the punitive high tariffs due to the recent trade wars. Imports now make up 40% of wines in China, with France leading the imported varieties, ahead of Chile, Italy, and Spain, whilst Australian and US imports have been hurt by the high tariffs in recent years because of tensions in bi-lateral trade.

But Jessica’s talk was more than the description of the phenomena of red wine conquering the Chinese palate, it was the rare tasting and elaboration of Pinot Noir, an expensive grape that was hard to grow and cultivate, because of its very thin and delicate skins. She brought two Pinot Noir for her talk. The 2019 Grevino Bambola Pinot Noir was a bit young but was 100% Pinot Noir, smooth with a fruity flavor. The second was a 2013 Red Carpet Pinot Noir, an outstanding wine with an aroma of cherry, ripe plums, and spices. Stored for 10 months in a French Oak Barrel and hand-harvested and hand-sorted, only 150 cases of this Red Carpet Pinot Noir were produced, and only 4 bottles were left in China. France, California, Australia, and New Zealand are the major producers of Pinot Noir.