Economy

Sharing Economy to Maintain High Growth

Chinas sharing economy will maintain its current 40 percent annual growth rate over the next few years， according to a recent report jointly released by the State Information Center and Internet Society of China. The report also predicted that the transaction volume of the sharing economy will account for over 10 percent of the countrys GDP by 2020， and this ratio will increase to roughly 20 percent by 2025.

Chinas fast-growing sharing economy will play a crucial role in fostering new impetus for growth， boosting innovation and increasing employment. By 2020， service providers in the sharing economy are projected to exceed 100 million， with up to 20 million full-time participants.

Although investment in the Internet sector has cooled down， enterprises in the sharing economy sector made RMB 171 billion last year， an annual increase of 130 percent.

In spite of significant progress， the sharing economy still faces many problems. Excessive administrative intervention， such as restrictions on the amount of vehicle access for car-sharing services， could affect the growth of the sharing economy.

Some existing laws and regulations are no longer suitable for the new business model， and new regulations need to be introduced， according to draft guidelines for sharing economy development released by the National Development and Reform Commission.

Investment Continues to Surge in Belt and Road Region

Strategic acquisitions and investments by Chinese companies related to the Belt and Road Initiative are expected to remain buoyant this year， despite the current uncertain global political and economic situation， according to Deloittes 2017 Outbound Investment Guide for Chinese Businesses published at the end of March.

The report shows that Chinese overseas investment hit US $170.2 billion in 2016， an increase of 44.1 percent over 2015. Countries in the Belt and Road region， especially in Southeast Asia and South Asia， are emerging as top destinations for Chinese outbound investment because of their huge market potential. Western Europe and North America will continue to be the largest recipients of Chinese outbound investment， but new political leadership in key economies in these regions will create adjustments in their trade relations with China.

Despite these changes， there is an irreversible trend of Chinese companies investing in overseas markets， and the Chinese government will continue to encourage strategic foreign investment by Chinese businesses as a way to optimize its economic structure.

In 2017， Chinese companies will remain aggressive in acquisitions to gain mature technology and supply chain resources. M&As related to smart manufacturing， digital economy， and upgrading consumption will be central to Chinas outbound foreign investment this year.

Growth in the Toy Trade

China reported an increase in the import and export of toys in 2016， according to an industrial report published by China Toy & Juvenile Products Association at the end of March.

According to customs statistics， the value of Chinas toy exports was US $33.7 billion， up 9.46 percent year-on-year， while imports exceeded US $1 billion， a rise of 22.96 percent on the previous year.

China has more than 10，000 toy manufacturers with a total of six million employees. In 2016， the trade and profitability of the toy industry markedly outstripped that of light industry as a whole， according to Zhang Chonghe， head of the China National Light Industry Council.

From 2011 to 2015， Chinese-made toys accounted for 73 percent of the toys bought globally. The China Toy & Juvenile Products Association predicted that the market size of toys would reach RMB 60.7 billion in 2017， an increase of 9.2 percent year-on-year.

Liang Mei， head of the association， attributed the trade growth to the countrys new policy allowing couples to have a second child， along with increased competition amongst manufacturers and upgraded consumption. However， Zhang Chonghe pointed out that efforts should be made to enhance innovation and cultivate a greater number of Chinese brands in the sector.

Online Catering Revenue Exceeds RMB 350 Billion

Chinas online catering revenue exceeded RMB 350 billion in 2016， forming around 10 percent of the countrys total catering revenue， according to figures from the China Cuisine Association.

Online catering benefited from the growth of third-party platforms， but， at the same time， poor service quality was attributed to the loose supervision of third-party platforms.

To regulate the sector， the China Food and Drug Administration published a draft supervision document， stipulating that “restaurants that offer online catering services should have real stores with business permits.”

Zhu Yi， associate professor with China Agricultural University， commented that considering online catering revenue normally accounts for about 30 percent of the total catering revenue in foreign countries， the market potential of “Internet plus catering” in China remains huge， and may grow to RMB 1 trillion in the future.