Post COVID-19 Economy and Opportunities

THE POST COVID-19
ECONOMY AND
OPPORTUNITIES

TODAY’S TALK AND
DISCUSSIONS
 The COVID19 has changed the corporate
landscape and the priorities of the
government.
 How should individual respond to these
changes especially the rise of China?
 Professor Lee will share his experience and
observations from his 30 years in the market,
and the global implications of the Chinese
Central Bank Digital Currency and Libra
Cryptocurrency.

5 OF THE WORLD’S MOST DEVASTATING FINANCIAL CRISES
1772
Credit Crisis
Triggered by British
empire rapid credit
expansion that
collapsed. Banker
Alexander Fordyce
escaped debt
repayments by
fleeing to France.
1929
Great Dep
Triggered by Wall
Street crash and
exacerbated by the
poor policy
response. Lasted
for 10 years with
unemployment
hitting almost
25pc.
1973
Oil Crisis
Triggered by
retaliation against
the US in sending
arms to Israel.
OPEC imposed oil
embargo that led
to a severe spike
of 400% in oil
prices.
1997
Asian Crisis
Triggered by over
borrowing in USD
by Asian
economies and
started in Thailand
abandoning its
fixed exchange
rate regime.
2008
Global FC
Triggered by over-
lending in the
housing market
through complex
financial
instruments. Also
known as the
Great Recession.
Boston Tea Part
Protests and the
American
Revolution.
WW II and Bretton
Wood system with
USD as the reserve
currency.
Non-Gold USD demand
increased as OPEC’s
share sank from 50% in
1979 to 29% in 1985.
Collapse of Jap econ
with 40% export to Asia.
Reduced support from
the US on Ex and trade.
QE Infinity and the
rise of Risk-Parity and
China as the lead in
Inclusive FinTech.
https://www.britannica.com/list/5-of-the-worlds-most-devastating-financial-crises

5 OF THE WORLD’S MOST DEVASTATING FINANCIAL CRISES
1772
Credit Crisis
Triggered by British
empire rapid credit
expansion that
collapsed. Banker
Alexander Fordyce
escaped debt
repayments by
fleeing to France.
1929
Great Dep
Triggered by Wall
Street crash and
exacerbated by the
poor policy
response. Lasted
for 10 years with
unemployment
hitting almost
25pc.
1973
Oil Crisis
Triggered by
retaliation against
the US in sending
arms to Israel.
OPEC imposed oil
embargo that led
to a severe spike
of 400% in oil
prices.
1997
Asian Crisis
Triggered by over
borrowing in USD
by Asian
economies and
started in Thailand
abandoning its
fixed exchange
rate regime.
2008
Global FC
Triggered by over-
lending in the
housing market
through complex
financial
instruments. Also
known as the
Great Recession.
Boston Tea Part
Protests and the
American
Revolution.
WW II and Bretton
Wood system with
USD as the reserve
currency.
Non-Gold USD demand
increased as OPEC’s
share sank from 50% in
1979 to 29% in 1985.
Collapse of Jap econ
with 40% export to Asia.
Reduced support from
the US on Ex and trade.
QE Infinity and the
rise of Risk-Parity and
China as the lead in
Inclusive FinTech.

CHANGING SECTOR LEADERSHIP IN LAST RECENT CYCLES FOR US
EQUITIES
Led by Real Estate. Telecom and
Utilities held up well when market
crashed.
1970–1980
Led by Technology and Industry.
Consumer Staples, Energy, Basic
Materials, and Real Estate held up well
when market crashed.
1980–1990
Led Energy and Basic Materials.
Consumer Staples and Health Care
Services held up, and Energy
outperformed during crashed.
2000–2010
Led by Technology and Industry, followed
by Consumer Discretionary and Finance.
Technology, Consumer Discretionary,
Healthcare Sector held up well.
2010–2020
Post 2020: Led by Technology,
Healthcare, Inclusive Technology?
2020
Source: HSBC and author

MV = PT
Where M and V are
moving fast in
different directions!

The main consumption
drive is about to take a
plunge!

The “REAL” Economy
since 2008!

Germany's Commerz Grundbesitz
Investmentgesellschaft (CGI) group bought 78 Shenton
Way for $650 million in Dec 2007. The price works out to
$1,857 per square foot based on a total net lettable area
of about 350,000 sq ft.
The Credit Suisse-CLSA tie-up purchased 78 Shenton
Way in January 2007 for $348.5 million - or about
$1,160 psf based on the property's existing NLA of about
300,0000 sq ft - from Ferrell Realty, which is fully owned
by a property fund in which Lippo is a major investor.
Ferrell bought the property for $151 million or $505 psf
of NLA from MCL Land in August 2004.
$505 psf in 2004 151m(Capital 50m, Profit 200m)
$1160 psf in 2007 348m(Capital 120m?, Profit 300m)
$1857 psf in 2007 650m(Capital 220m?, Profit 30m)
$1878 psf in 2018 680m
Up 3.7 times in 14 years but the per square foot price has been
stagnant for 11 years!
How much will it come down in a deleveraged environment?

THE POST-COVID-19
ECONOMY
 China: From the factory of the world to the
champion of Inclusive FinTech and hard
infrastructure. They are ahead!
 USA and Europe: From complex financial
products to tighter regulation and overly
leveraged. They are struggling!
 Asia and the rest of the world: From speculation
to serving the needy. In a good position!
 Globally, as the rich-poor divide worsens, more
solutions are needed to address the
imbalances of wealth, trade, supply chain,
foreign reserves and debts. Pain Points!
 Inclusive FinTech solutions become the focus of
countries with few regulatory constraints.
Opportunities!

SUCCESSFUL
EXAMPLES
E-Commerce: Alibaba
Telecom: M-PESA
Social Media: WeChat
Mobility: Grab
And More (Education, Prop Tech, FarmTech, Telemedicine
…….)

ABCDEFG - Q
•AI
•Blockchain
•Cloud Computing and Cyber
Security
•Data Analytics and Digital
Devices
•Environmentally Friendly Tech
•Financial Inclusion Tech
•5G
•Quantum Computing

Redefining the Boundary of Digitized Finance!
B2B
C2C
B2C
Cloud Computing
IoT
Artificial Intelligence/ PAI 2.0
Source: Alibaba Website, Schulte Research
Investment
Management
Audio/Video
From
Economies of
Scale to
Economies of
Scope
To
Economies of
Integration
By acquisitions,
M&A and then
integrating
those
platforms!

Ping An has
made greater
strides into
becoming an
autonomous
financial
ecosystem
than any other
company!
Insurance
Golden Butler
Health
Management
Facial Recognition
DataAnalytics
Artificial Intelligence
Finance
Healthcare
Redefining the Boundary of Digitized Insurance!
Micro-
expression
and
Vein
RecognitionSource: Schulte Research Estimates, Zenith
Economies of
Convergence
Improves the
Interoperability
with different
technologies

Source: Schulte Research Estimates, Zenith
AI Financial Services Comparison:
Alibaba way ahead. Ping An and Tencent dominate
Company Payment Insurance Personal
Loans
SME
Loans
Credit
Rating
Money
Market
Wealth
Mgmt
Crowd-
funding
Currency
Exchange
Alibaba AliPay
(400mn)
(51.8%
ms)
Ant
Zhong An
Personal
loans -
Ant
SME
loans –
Ant
SME
Service
Zhima
Credit
Yue’bao
(CNY1.2t
n)
Ant
Financial,
AliPay
ANTSDAQ AliPay
Tencent WePay
(300mn)
(38.3%
ms)
Zhong An Weilidai Weilidai WeBank / WeBank JD.com /
Ping An Ping An
Bank
Ping An
Insurance
Ping An
Bank
Ping An
Bank
Ping An
Insurance
Ping An
Asset
Mgmt
Ping An
Asset
Mgmt
/ Ping An
Bank
Baidu Baidu
Wallet
(100mn)
/ / / Yes / Yes / /
https://www.worldscientific.com/worldscibooks/10.1142/11371

Loans
SME Loans Credit
Rating
Money
Market
Wealth
Mgmt
Crowd-
funding
Currency
Exchange
Amazon / Electronic
Damage
Insurance
(UK)
/ USD$3bn
SME loans
(Amazon
Lending)
/ / / / /
Microsoft MSFT
Wallet
/ / / / / / / /
Google Google
Wallet,
Android Pay
/ / / / / / / /
Apple Apply Pay
(85mn,
450%YOY)
/ / / / / / / /
Facebook Messenger
Pay
/ / / / / / / /

Loans
SME Loans Credit
Rating
Money
Market
Wealth
Mgmt
Crowd-
funding
Currency
Exchange
Alibaba AliPay (400mn)
(51.8% ms)
Ant
Zhong An
Personal
loans - Ant
SME loans –
Ant
SME Service
Zhima Credit Yue’bao
(CNY1.2tn)
Ant
Financial,
AliPay
ANTSDAQ AliPay
Tencent WePay (300mn)
(38.3% ms)
Zhong An Weilidai Weilidai WeBank / WeBank JD.com /
Ping An Ping An Bank Ping An
Insurance
Ping An Bank Ping An Bank Ping An
Insurance
Ping An
Asset Mgmt
Ping An
Asset Mgmt
/ Ping An Bank
Baidu Baidu Wallet
(100mn)
/ / / Yes / Yes / /
Amazon / Electronic
Damage
Insurance
(UK)
/ USD$3bn
SME loans
(Amazon
Lending)
/ / / / /
Microsoft MSFT Wallet / / / / / / / /
Google Google Wallet,
Android Pay
/ / / / / / / /
Apple Apply Pay
(85mn,
450%YOY)
/ / / / / / / /
Facebook Messenger Pay / / / / / / / /
MISSED
OPPORTUNITY

Chinese firms have implemented quicker and jettisoned quicker. China
dropped duds & created financial empires. US firms stopped their efforts.
Company Duds Successful Replacements
Alibaba Lai Wang, Alibaba.com (HK) Ant Financial, AliPay, Taobao, Tmall, Alibaba Cloud, PAI 2.0,
Zhima Credit, ANTSDAQ, Yue’bao, Youku, Weibo, etc.
Tencent Pai Pai, E-commerce WePay, Weilidai, WeBank, JD.com, WeChat, Didi, Tencent Cloud,
etc.
Ping An Ping An Good Car Ping An Bank, Ping An Insurance, Ping An Asset Mgmt, Ping An
Health, etc.
Baidu O2O Wai Mai Baidu Wallet
Microsoft Microsoft Wallet Skype
Google Google Hangout Android Pay
Facebook Messenger Pay /
Apple Apple Pay /
Amazon Amazon Lending
Amazon Insurance
/
*China had duds but morphed quickly and pivoted effectively
Duds with no
replacement

AI Cloud Comparison:
Amazon Big Winner. Alibaba Leader in Asia.
Source: Schulte Research Estimates, HostUCan, Skyhighnetworks
Company Market Share
(in respective markets)
Comments
Alibaba 41% Leader in Asia, >100 newly developed AI services
Services in storage, networking, healthcare, logistics, lifestyle, media,
business enhancements, and etc.
Tencent 7% #3 in Chinese Market, services in public/private storage for
personal/business use
Baidu 1% Small cloud service
Amazon 47% Amazon AWS: Global & US leader
Microsoft 10% Fastest Growth Rate, 97% YOY, Azure & Office 365
Google 4% Fast growing, 45 teraflops of data (45 trillion bytes/second)
Services include AI APIs’, storage, search history, e-mail, etc.
71,000 searches/second, New quantum computer
Apple 1% Small cloud service, primarily strong in private data collection
Services in location, storage, and security
sametechnology

Alibaba’s international presence spans seven key Asian countries:
massive data info driven by AI and cloud!
Source: Schulte Research
Payment Banking Insurance Ecommerce Media Food Lifestyle Logistics Cloud
China Alipay
Ant
Fortune
Mybank
Zhima
Credit
Zhong An
(12%)
Taobao
Tmall
1688.com
Youku
SCMP
Video++
CMC
UC Web
Ali Music
Ali Pictures
Sun Art
Tmall Supermarket
Hema
Ele.me
Alihealth
Tao Piao Piao
Damia.cn
Wandoujia
Cainiao
Alibaba
Cloud
India
Paytm
(45%)
Paytm Paytm
Paytm Mall
(~30%)
DailyHunt
(Planned)
Big Basket
Zomato
Paytm XpressBees
Indonesia
DANA,
Alipay
Tokopedia
Tokopedia
Lazada
(>83%)
Tokopedia
UCWeb
Lazada
Tokopedia
Lazada
Tokopedia
Thailand TrueMoneyTruemoneyTruemoney Lazada Lazada Lazada
Bangladesh
bKash
(20%)
bKash bKash
Daraz
(100%)
Lazada Lazada
Philippines
Gcash,
Alipay
Gcash
Gcash Lazada Lazada Lazada
Singapore Alipay SingPost SingPost Lazada Lazada Lazada SingPost

Is There
Something
More Than AI,
Data and Cloud?

Huawei’s Research and development in 2017
Wireless Networks AI Hardware
• 5G ($800m)
• Mobile Cloud service
• Wireless AI
• SingleRan Pro
• Intent – Driven
Network
• Enterprise
Intelligence
• TrafficBrain
(Shenzhen) and
Smart City initiative
• Kirin 970 chipset
• Huawei Mate 10
series
• Cloud servers
• Active data recovery
• Matebook X
$13.8
bn
Huawei spent $13.8 bn in research and
development in 2017, with plans to spend
as much as $20 bn in 2018
Huawei’s R&D spending is sig. greater than competitors (Apple & Qualcomm) and
spending more as percentage of revenue than most tech firms

SchulteResearch
5G promises faster connections, greater download
speeds, and near 0 latency
Latencies: from 25 ms (4G) to 1 ms
• Military: autonomous driving, drone strikes, mission critical
applications
Download speeds: from 1 gbps to 10 – 20 gbps
• Greater connectivity between devices
• Could be tool to actualize Internet of Things – theorized network of
devices all connected to the internet
– Smart homes
– Autonomous cars
– Smart cities
– Smart farming
Source: Reuters, Huawei

SchulteResearch
Intent-Driven Network is Huawei’s flagship networks
technology
Intent-Driven Network (IDN) – introduces Big Data and AI technologies into All-
Cloud Networks. Helps enterprises go digital.
• Campus Insights collects network data in real time to implement network fault
analysis and proactive prediction
• Next-generation SD-WAN solution
• Highest-density data center switch
• Software-defined Security
• All components rank either first or second in the Chinese market
Huawei – Ping An partnership to bring IDN to the finance industry
• Ping An using Huawei’s SD-WAN intent-driven interconnection to launch the first AI
customer service
• matching face recognition and voiceprint with Big Data to remotely verify customer
identity information
• solves the pain points of traditional insurance services, such as slow authentication
and claim settlement
Source: Reuters, Huawei

SchulteResearch
Flagship SoC (system on a Chip) comparison
• 6-core CPU – 2 Monsoon, 4 Mistral
• 3-core custom Apple GPU
• 600 billion operations per second (1/3 of
Huawei)
• 8-core CPU – 4 Cortex-A73@2.4GHz, 4 Cortex-
A53@1.8GHz
• 12-core Mali-G72 MP12 GPU
• 1.92 trillion operations per second
Huawei Kirin 970 Apple A11
Tensor processing speed: Huawei is three times faster
Floating-point operation speed is benchmark for AI capacity
• Faster chips enables better AI operations for the customer
• Both chips have dedicated AI Neural Engines, but Huawei’s is faster
• AI-powered products will be commercialized much faster for Huawei
https://super-geek-news.github.io/articles/415197/index.html
A processor
core (or
simply
“core”) is an
individual
processor
within a
CPU.

Trade War is Not
a Trade War
• 5G war? Chip war? Raw M war?
• Game Over? What is the real war?
• Libra Versus DCEP?
• A Token Economy War!

PRIOR TO COVID19
The Trade
Strategy
The 5G
Strategy
The Cloud
Strategy
The Chip
Strategy
The Raw
Material
Strategy
The
Blockchain
Token Strategy

POST COVID-19
•Digital Currency
Electronic
Payment (DCEP)
Central Bank
Digital
Currency
(CBDC)
•Libra
Corporate
Backed
Cryptocurrency
(CBC)

The Drivers for 80 Countries
Adoption of GP-CBDC
• Payments Safety
• Domestic Payments Efficiency
• Financial Inclusion
• Monetary Policy Implementation
• Cross Border Payments Efficiency
https://www.bis.org/publ/bppdf/bispap101.pdf

Widely
Accessible
Digital Central Bank Issued
Token
Asset
Cash
Reserves and
Settlement Acc
Bank
Deposits
Pte Digital
Token
CB Tokens
CB Tokens
CB Acc

Socially scalable
/Cross Border
Corporate
DLT
Single Fiat Based
Libra I
(Multiple Fiat)
Retail
Bitcoin
Retail
DLT
USDT
Wholesale
DLT
Wholesale
DLT Stable
Coin
Ubin
Reserved +
Settlement
General
Purpose
Plenty
Loyalty
Points
Digital Tokens:
The Battle Ground
Gaming
Tencent, Alipay, ICBC Layer II- Crossing Border DCEP?
Libra III?
(No Fiat)
Libra II
(Single Fiat)
Source: Author
DCEP Layer I

Key Trends and Opportunities!
• Moving away from the USD and Fiat centric financial system. It will
take time but it has been triggered.
• DCEP and Libra: In G We Trust to In C We Trust!
• Tokenising Economic Activities not Captured by GDP Measurement
• Tokenising Assets not Sufficiently Traded
• Inclusion of those Excluded: Both Activities, Assets and People!
• Natural Decline in Demand of Non-Essential Activities
• Moving Away from Over Owned Traditional Asset Classes Because do
Deleveraging.

Read the IMDA Service 4.0 Report!

It will be more than ABCDEFG and Q!
• AI, AR/VR
• Blockchain
• Cyber Security/Cloud
• Data Analytics/Digital Devices
• Environmental Friendly Tech
• Financial Inclusion
• 5G
• Quantum Computing
https://www.rri-tools.eu/-/the-emerging-30-technologies-what-will-impact-us-the-most-over-the-next-decade

More
Thoughts
Convergence of technology
brings convergence of
profit and social objectives
That is why the leapfrog
economies may have mass
adoption before others

4Es
WEIBIAO XU Nankai University 41
Economies of Scale
Economies of Scope
Economies of Integration
Economies of Convergence

3Cs
Community
Compassion
Creativity

LASIC
Low Margin
Asset Light
Scalable
Innovative
Compliance Easy
https://www.ey.com/Publication/vwLUAssets/ey-emergence-of-fintech-and-the-lasic-
principles/$FILE/ey-emergence-of-fintech-and-the-lasic-principles.pdf

6D’s
Digitalisation
Disintermediation
Democratisation
Decentralisation
Diminishing Oneself
Data Privacy Protection

https://medium.com/@smartmesh/imda-blockchain-
challenge-featuring-suss-smartmesh-and-meshbox-
3240380cb007
It Requires a Whole New
Different Approach to Finance
and Insurance!
From Financial
Engineering to
FinTech Engineering

Inclusive
Blockchain
Projects
Established in
Singapore
Convergence
with Deep
Tech!
Aid:Tech
Sentinel Chain
Smartmesh and
Meshbox
JedTrade
Kommerce

To Complete and Not to Compete
+
To Serve and Not to Rule
+
To Empower and Not to Manipulate
Good FinTech Design

COVID19
TO CONNECT AND NOT TO CONTACT
ZERO-CONTACT CONNECTION!

Post COVID-19 Economy and Opportunities

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