Emerging Industries (Bi-Monthly Newsletter, Issue 15)

Date: Dec 2016
China’s sports industry steps into a golden era with policy and capital support
The sports industry, one of the most promising industries worldwide, is rapidly gaining momentum in China. Although China’s sports industry is still in a young stage of development, this is a good indication of its tremendous potential and bright future.
With the introduction of a series of supporting policies, such as the 13th Five Year Plan for the Development of the Sports Industry, China’s sports industry has been flourishing over the past few years with plenty of room for market growth. By the end of 2015, it grew to RMB 473.7 billion, accounting for 0.7% of China’s annual GDP (as opposed to 1% - 3% in developed economies), an representing a year-on-year growth of 17.3%.
The above supporting policies have also fuelled the rapid overseas expansion of Chinese companies, which are competing for rights in sports event broadcasting, the acquisition of sports assets, and the manufacturing of sports products. Companies such as Internet giants Baidu, Alibaba and Tencent, and cultural & entertainment groups LeTV, Wanda, Suning and China Media Capital, have invested billions of dollars into the industry.
Industry experts predict the coming 10 years will be a golden era for China’s sports industry with the dual driving forces of policy and capital support. [click here to view the Sports page]
Shanghai Free Trade Area kicks off further round of reform to build new systems ready for an open economy
On 23 November 2016, the People’s Bank of China Shanghai Branch released a trial policy that intends to improve cross-border financial services offered in the Shanghai Free Trade Area (FTA), and to support technical innovations and the real economy (New Policy). The New Policy also aims to support the formulation of a Shanghai Technical Innovation Center, and echo the national initiatives “Made in China 2025” and “Crowd Innovation and Entrepreneurship”.
The New Policy calls for action to further expand the functions of the free trade accounts that have been used in the Shanghai FTA to facilitate cross-border transactions, which include:
encouraging banking institutions and paying agents based in Shanghai to provide e-business players with cross-border financial services through free trade accounts
encouraging financial institutions to finance international trade with both domestic and foreign currencies through free trade accounts
encouraging private equity firms and funds in Shanghai FTA to use free trade accounts to raise funds both in and out of the FTA to finance cross-border equity investments
The world’s first tera-scale cloud server starts mass production in Tianjin
Cloud computing is crucial to the realization of data value, and therefore plays an irreplaceable role in today’s digital economic times. However, the dramatic rise of the amount of cloud computation from all industries has posed a severe threat to computing capacity, response time, energy costs, resource management and system reliability at traditional data centers. In this context, cloud data center owners, operators and procurers are calling for a more cloud computing suited servers to be delevoped, with lower cost and energy consumption, but better performance and output to input ratio.
On 29 November 2016, Sugon Information Industry, a Chinese high-tech company located in Tianjin, started mass production of the world’s first tera-scale cloud server system. The new system is specially designed to answer these cloud computing needs, and with a brand-new computing architecture is capable of supporting up to 100 million concurrent users. The mass production of this server marks a breakthrough for cloud computing hardware facilities, and improves the level of concurrent user access from just 10,000. This new cloud server has been deployed for the cloud platforms of China Telecom, China Unionpay and China Education Television.
Strategic emerging industries underpin the rise of China as a strong power
China’s aerospace sector has reported triumphant news this year. On November 3rd, China launched its first heavy-lift Long March 5 carrier rocket, marking its debut into the “major league” of rocketry. On November 18, China's Shenzhou-11 spacecraft landed safely after making the longest ever manned space mission. Experts argue that, while the aerospace industry involves multiple disciplines such as high-end equipment manufacturing, telecommunications and new materials, such outstanding achievements represent a boom in China’s strategic emerging industries.
According to China’s Strategic Emerging Industries Report 2017 released by Chinese Academy of Engineering on November 15th, after the positive impact of the country’s 12th Five-Year Plan, strategic emerging industries have become engines of growth in China’s economy, and have played an important role in leading technical innovation, promoting China’s economic transformation and restructuring, and securing stable economic growth. By the end of the 12th Plan, the value-added from strategic emerging industries accounted for 8% of China’s GDP, nearly double that of the same period in 2010. In the first half of 2016, 27 key strategic emerging industries recorded RMB 8.6 tn in revenue from their main business operations, an increase of 11.6% year-on-year, and 8.5% higher than the average growth for China’s industrial enterprises as a whole. This indicates that strategic emerging industries are becoming increasingly important in reversing the downward trend of the Chinese economy.
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