Emerging Industries (Bi-Monthly Newsletter, Issue 14)

Date: Oct 2016
Three areas of the sports industry predicted to see explosive growth
Statistics in the 2016 Sports Start-ups White Paper showed that in the 15 months between January 2015 and March 2016, early-stage start-ups in the sports industry have recorded 257 financing deals, involving RMB17.4bn worth of funds. Within this period, an increasing number of venture capitals, private equity funds and listed companies have made inroads into the sports industry, with most of the capital flooding into areas involving technology and the internet.
China's General Administration of Sports published its 13th Five-Year Plan for the development of China’s sports industry on 13 July 2016, and set out the main targets to be hit by 2020. These include:
the total market size of the sports industry to top RMB3tn;
the sports industry to provide more than 6 million jobs in China;
the sports industry to contribute 1% of China’s GDP;
the sports service sector to account for more than 30% of the industry;
sports spending to account for more than 2.5% of Chinese citizens’ disposable income per capita.
Bolstered by such clear supportive policies, the increasing popularity of sports among Chinese people, continuous evolution of internet technology and a broad inflow of capital, China's sports industry is set to see explosive growth.
The sports industry covers the operation of sports competitions, venues, media, marketing, brokerage, training, products and the popular Chinese sports lotteries. At present, sports products contribute the vast majority of the revenues generated by this industry. Thus, the main growth is expected in other areas. Analysts of the China Strategic Emerging Industry magazine have probed the masses of information gathered regarding the intellectual property rights of existing sports competitions and their derivatives, and have outlined three areas that are likely to witness explosive growth:
areas in the sports industry that integrate technology and the internet;
new emerging sports events, their intellectual property rights, and their derivatives;
sports and fitness for the general public.
Robotics to lead a technical revolution in “precise surgery”
Southwest Hospital, a teaching hospital affiliated with the Third Military Medical University, held a product display meeting on 10 August 2016 to demonstrate its robot-assisted surgical system. During the demonstration, Professor Yu Peiwu, Head of the hospital’s General Surgery Department, concluded that such robot-assisted systems are quietly leading a technical revolution in “precise surgery”. Robot-assisted surgical systems are now widely used in China. As at August 2016, 50 hospitals in China have used 57 surgical robots for clinical applications.
According to Mr. Yu, to a surgeon operating a surgical robot system, a capillary appears the size of a water pipe. Meanwhile, a 360-degree mechanical arm can bend and rotate far further than a human hand and allows for sophisticated, delicate and precise procedures which would previously have been difficult, if not impossible, to carry out. Robot-assisted surgical systems not only enable precise surgery, they will also make “remote robot-assisted surgery” possible in the future. Given the bullish prospects of surgical robotics, researchers are probing the possibilities of domestic production. Surgical robotics is also counted among the important projects and schemes set out in China’s 13th Five-year Plan (Draft).
UAV: to ride out both in-flight turbulence and market turbulence
Unmanned Aerial Vehicles (UAV) did a very impressive job in this summer’s emergency rescue and disaster relief missions. According to those sent on such missions, UAV substantially shortened emergency rescue and disaster relief times, saved the lives of the disaster victims and protected relief workers from danger.
The UAV sector is deemed one of the most sought-after emerging industries among investors. Teal Group, an American aerospace and defense consulting company, forecasts that the global UAV market size will grow to USD11.5bn by 2024, from USD6.4bn in 2015. Other statistics show that by 2020 China is expected to sell 290,000 UAVs, and more than 300 companies will be engaged in UAV-related services.
It was only three years ago that camera-equipped UAVs first made their debut. Now, this sector sees fierce red sea competition as a result of lack of regulation, technical bottlenecks, a flood of products with identical or similar quality and functions, and price wars. China’s civil-use UAV sector attracted RMB2bn worth of financing through 25 deals in 2015, rising by 400% from 4 financing deals recorded in 2014. The sector continues to attract massive financing in 2016. In future, investors will shift their focus from consumption grade UAV to industrial grade UAV, however the entire UAV sector is set to grow significantly. Investing in the UAV sector in a scientific manner will help to secure sound growth. UAVs are also well placed to integrate into traditional sectors, and their broad applications ensure the substantial prospects of this sector.
Quantum computer sector to record further outstanding progress
China successfully launched the world’s first quantum telecommunication satellite, nicknamed “Micius”, on August 16, 2016, attracting worldwide attention. Meanwhile, the University of Science and Technology of China has made an important breakthrough in special-purpose quantum computing research. A research team led by Professor Li Chuanfeng from the University’s Quantum Information Key Laboratory has developed a non-locality quantum simulator. The purpose of the machine is to simulate the physics phenomenon of “parity” and address issues that cannot be solved by traditional computers.
Just as the core component of a traditional computer is CPU, the core components of a quantum computer are quantum chips. Compared with traditional computers, quantum computers feature far greater computing capacity, and accordingly have huge growth potential. That is why the U.S., EU and Japan have prioritized quantum computing in their national development strategies. In view of its strategic importance and a series of supporting policies from the state, research into quantum computing has been brought to center stage.
Preparations underway for 9th Chinese Green Industry Enterprises Summit & Brand Building Annual Meeting
Preparations for the 9th Chinese Green Industry Enterprises Summit & Brand Building Annual Meeting (“Summit”) have recently been initiated in Beijing. The Summit will be jointly sponsored by the China Strategic Emerging Industries magazine under the National Development & Reform Commission, China Academy of Management Development Science, the Non-state-owned Investment Committee of China Investment Association, and Research Results Commercialization Committee of China High-tech Industrialization Association.
The Summit is scheduled to be held in Beijing on 8 January 2017. Along the theme of the “sharing and sustainability of green brands”, the Summit will invite government officials, top experts, well-known green industry figures and entrepreneurs to an in-depth discussion about the industry’s growth pattern and business model amid a slowing Chinese economy. In order to promote China’s green industry, it will provide industry success stories and expert insights into policy interpretation, hold project matchmaking seminars and host green product exhibitions for entrepreneurs to promote proprietary products and brands.
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