Adam Roseman Online

China’s middle class is rising- and appears to be ready to take off by 2023.  As reported by Adam Roseman, Founder and Managing Partner at ARC China, approximately half of the urban population in China will be middle class by 2023.  At the moment, as documented by the think tank Chinese Academy of Social Science, China’s middle class population is 230 million in the cities, which accounts for 37% of its urban population.

The National Bureau of Statistics determined in 2010 that about 25% of the Chinese population is in the middle class bracket. China has made its intentions clear, hoping to move more citizens into the middle class bracket while also helping to grow the wealth of the current middle class.

One unique feature of China’s rising middle class is its age.  They are going to be unusually young.  Statistics have pinpointed that Chinese consumers between 18 and 29 are actually those with the highest income on average in the area because of their economic levels and other factors.

Certainly, as Adam Roseman points out, this is one location and one group of emerging people that is worth watching.

Adam Roseman of ARC Investment Partners wrote an article discussing China’s role in the world’s economy today. According to the International Monetary Fund, China has contributed greatly to the global economy during the financial crisis, and is expected to continue doing so.

IMF’s executive directors explained their belief that “expansionary policies in China during the crisis has played an important role in bolstering global stability and growth, and expected China’s positive externalities to continue, especially for regional economies.” IMF continued, stating that “a major disruption in China’s so-far-steady growth would have material adverse consequences for the rest of the world.”

Nigel Chalk, Senior Advisor at IMF’s Asia and Pacific Department said “Chinese economy will continue to be a ‘bright spot’ in the global growth. We do see the growth is very healthy, and inflation is declining.”

In recent news in China, Christine Lie is being appointed as Senior VP and Head of Listings to Singapore Exchange (SGX).  Lie will be attempting to beef up attempts to make it easier for Chinese based companies to make inroads into the global capital market.  In addition, it will be her responsibility to give over 150 China companies certain services that will make their packages more attractive to foreign investors such as Adam Roseman’s ARC Investment Partners.

Today, more than 20 percent of SGX’s 776 listed companies are Chinese.

Christine Lie will be working directly for Lawrence Wong, Executive VP & Head of Listings.  She has a background in the field, having worked for Hong Kong Exchanges and Clearing (HKEx) for more than a decade.  Her last position at the firm was VP of the Issuer Marketing Department.

It is a great privilege for SGX to have Lie join the team.  According to Wong, “we are pleased to have Christine join our Listings team and lead our efforts in helping China companies access global investors via the Asian Gateway.  Her appointment underscores our continued commitment to the China market and our focus on growing the pool of SGX-listed China companies.”

In a recent article in The Vancouver Sun, the question was asked, is making an investment in Chinese forestry today, a risk or an opportunity?  Well, perhaps one needs first to take a look at the Chinese language and how successful Chinese investors such as Adam Roseman of ARC Investment Partners make it in the investing world.  Doing this, one will soon realize that it could be one and the same.  For example, in Chinese, the character for crisis is comprised of two characters: danger and opportunity.

It seems like the main concern right now for Chinese investors is that neither China nor Canada seem to be in possession of “any type of formal agreement on cooperative investigations and inspections in the field.”  This has to be worrisome because most of these operations are actually taking place in China.  As well, there is the issue of the country’s “continuing forest tenure reform, to relocate its traditional collective-owned forests to individual farmers under a ‘forest contract responsibility system.’”  The goal however, is a very admirable one – to try and give farmers a bit of a lift and at the same time, build a more “harmonious society.”

Whatever  happens, at the end of the day if the problems aren’t sorted out, the situation could indeed put off Chinese investors such as ARC Investment Partners Adam Roseman.  On the other hand, they could do like the Chinese do and see the potential “crisis” as “danger” with “opportunity” and take the plunge.

According to an article by Adam Roseman, China’s water conservation investments are projected to reach $615 billion.

The country’s Minister of Water Resources Chen Lei explained that the amount spent between 2001-2005 was $55.97 billion, and over the past five years; $107.9 billion. Chen added that the expanding investment reveals the government’s dedication to transforming the nation’s current water infrastructure.

Chen explained that the investment is aimed at strengthening the nation in the face of droughts and floods, which have been affecting various regions throughout the country. Projects will include boosting 15,900 small reservoirs over the next two years, as well as another 2,721 larger reservoirs by 2015.

According to a newsletter article by Adam Roseman of ARC China, it is definitely possible for China’s banking economy to exceed that of the U.S by 2023.

PricewaterhouseCoopers’s chief economist John Hawksworth has stated that current banking leaders should accept the shift in power and begin to prepare by acquiring shares of emerging markets’ unbanked populations.

“With populations of well over a billion each, access to markets like China and India is critical for growth,” he said.

Adam Roseman writes “Chinese banks already dominate global rankings by market value, and some lenders have already secured heavy emerging market exposure to tap into booming demand for financial products from young and increasingly wealthy populations.

“Banks in the fast-growing emerging markets (E7) of China, Brazil, Russia, Mexico, Indonesia and Turkey have been relatively shielded from the financial crisis that brought many western peers to their knees and sent asset values plunging.”

Hawksworth also noted “The E7 doesn’t need the G7 for capital, decision making or consumers, so the established economies will have to make a strong case to convince new economy policy makers of the benefit of inviting foreign competition in.”

According to a report by the Chinese Academy of Social Science, consumer spending in the retail sector in China is expected to double by 2015.

ARC China is an investment firm that focuses on China. In their newsletter, Adam Roseman states “Given that China’s investment-driven economic growth cannot be sustained indefinitely, the domestic consumer market will be the key to future economic growth in China. Indeed, as fears of a double dip recession hit the world, the one consumer segment that has defied analysts and kept on spending at pre-recession levels are Chinese women.”

The article goes on the  say: “3,000 women consumers in 12 cities in China were recently surveyed by China Market Research Group, and 85 percent of them said they expected to pay more in the next six months than in the last six. Despite recent food inflation, they remain optimistic about their own careers and ability of the government to navigate the country through crisis.”

The coastal cities of China have become some of the most crowded, popular investment regions in the world today. However, the increase in prices and tough competition are forcing private equity firms to dig deeper in an effort to find good investment opportunities.

Some of the most popular areas include Beijing, Shanghai, Guangzhou and Shenzehn. Numerous companies such as ARC Investment Partners with Adam Roseman have seen the potential in China, and have made it one of their primary investments.

Derek Sulger of Lunar Capital, a Shanghai-based firm, says, “By and large, Eastern China is home to more investments that are larger, and more mature companies, so it’s logical that a disproportionate focus develops on these regions.”

The negative effects can be felt by many, though. Zheng Song of MDC explained: “Even some of the top-tier fast food chains feel that the rent in Beijing/Shanghai is too high and it is too difficult and competitive to make money. They also plan on expanding to second and third tier cities in the next few years.” For this reason, many firms have begun to shift their focus towards the mainland.

In a fascinating recent article on Bloomberg.com, NYU professor Nouriel Roubini discusses the global economy.  While he explains that it is possible that the world economy will see “anemic but OK” global growth, or perhaps even more optimistic scenarios, he says that we may, instead, see stunted growth from 2013.

He discusses the slowdown in China, which is a focus of companies like ARC China with Adam Roseman, the “perfect storm” of fiscal woe in the U.S. and many other factors influencing the global outlook.

The article, by Shamim Adam, is certainly worth a read by anyone in the financial sector or anyone interested in global economic issues.

Adam Roseman, Founder and Managing Patner of ARC China, recently wrote about the 3^rd Nobel Laureate Symposium on Global Sustainability that was held in Stockholm, Sweden.  Participating in the event were many distinguished leaders, including the former Norwegian Prime Minister Gro Harlem Brundtland.

During the conference, Brundtland said, “I think the leadership in China knows that the pattern of development in China cannot be coal-based, oil-based, transport-based in private cars, so they talk about green economy, because they know they have different energy resources, they have to use solar and they are entering into changing all these technologies and implementing them.”

Roseman explained that the reliance on coal as the main source of energy in China is expected to change in the future. He explained how they plan to do so, and what the cost will be to the country.  He concluded by saying,  “China is taking an aggressive stance to reduce its environmental impact and has all the credentials to serve in the future as a model for other countries wishing to follow a sustainable path of development.”