Tuesday, 17 January 2017

Ten things I learnt from day two of the Asian Financial Forum

After my day one write-up here, what did I learn from day two of the Asian Financial Forum?

1. In the breakfast panel Lei Zhang of Hillhouse Capital noted that China needed to raise US$1.5 trillion worth of green finance over the next 5 years with 85% likely to come from private sources.  That sounds like a fascinating theme.

2. I also noted clear optimism about Hong Kong's continuing role.  Benjamin Cheng of Standard Chartered noted HK's clear role in connecting China to the rest of the world whilst Tim Freshwater of Goldman Sachs observed 'fantastic' prospects.

3. And the major challenge for the payment technology and cyber security business is...industry standards and then regulation.  I kind of agree with that:


4. In the same panel the most important growth driver was unsurprisingly increased penetration of mobile internet: 

5. A couple of great observations including cross-border payments are up x45 time since 2005 and Melissa Guzy of Arbor Ventures noting that Tencent's Wechat is 'the largest bank'.  The payments and related financial world is certainly changing. 

6. Observations from Raghuram Rajan ex Governor of the Reserve Bank of India included: 

'I see China stepping up' and 'it is time to rethink the global order'

On India: 'no reason why shouldn't become a strong engine of global growth'

'How are we going to provide jobs?'

'Fed in the middle of a very tricky balance'

'Something has to give' re geopolitical frictions


7. A great healthcare thematic seminar noted that companies including AIA are focusing more on vitality ('know your age') prevention rather than simply paying out on events.

I also learnt via Dr Yach of the Vitality Group that 'vitality age is typically 7 years older than your actual age' whilst Dr Tucker of Tucker Medical observed that longevity is up 40 years since 1900.

8. Turning to an insurance thematic seminar the AIA representative said that the company 'would shamelessly adopt and adapt best practices' rather than always seek to lead innovation, meanwhile the life business has bigger barriers to entry due to the need for personal advice.

Meanwhile PingAn are not lacking in confidence hoping that in 10 years time not only will China be the largest insurance market in the world but Ping An will be the largest insurance company...

9. In the infrastructure space Ben Way of Macquarie Asia observed that they were sticking with emerging markets as progressively in the developed market world, IRRs on deals had fallen even on a levered basis to 5-6% which they did not think was attractive.  Additionally in the emerging markets they can 'still buy quite well due to less competition'.  A real key for the development of the emerging market infrastructure space is the attracting of local capital.

10.  Apparently the 'One Belt, One Road' project implies in the infrastructure space 195 projects which could involve the deployment of up to US$300bn.  A lot of money.


An enjoyable conference.  Congratulations to all involved and I look forward to participating again in the future.

3 comments:

  1. All that money and no one can be critical of the Party and survive for one day in China!

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    Replies
    1. Fair comment. A good amount of cautious chat out there in reality. Ultimately though is the economic glass half full or empty in China...i believe half full.

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