What is China buying • Top imports are Energy, Metal, Transport and Property

1. What is China buying these days ?
The Chinese Shopping Spree
Prepared by Eric Chua, eric.chuakh@yahoo.com

2. What is China buying
• Top imports are Energy, Metal,
Transport and Property

3. The wealth effects of China,
Not Yen but RMB
• In the 1980s, a string of purchases
of iconic U.S. assets by the
Japanese – from Rockefeller Center
to the Pebble Beach golf course. A
similar wave is now under way.
• Chinese firms now own IBM's
personal computer division, Volvo,
the AMC movie theater chain, and
Virginia-based pork producer
Smithfield, as well as large stakes in
Devon Energy and Chesapeake
Energy, two of the biggest U.S.
natural gas and oil companies.

4. Why buy the products if you can buy
the source
• With more than a billion people, China has a
chronic need for raw materials and energy.
• Many of its acquisitions are in those industries,
such as Canadian energy giant Nexen, oil and gas
pipelines in Central Asia, and mineral mines in
Australia and Africa.
• Growing Chinese middle class also has a fondness
for French wine, so Chinese investors have been
snapping up vineyards in Bordeaux.
• Pork is China's most popular meat, and the
country hasn't been able to meet domestic
demand since 2008 — hence a Chinese meat
producer's recent $4.7 billion purchase of
Smithfield, the world's biggest pork producer.
• Acquiring foreign companies also gives China a
quick infusion of badly needed technological
know-how.

5. Corporate China FDI, 2012
• Top inflows to Canada, US and Australia
• This has direct impacts on properties, education as Chinese tends to invest in
countries that they are familiar with

6. What are China Chinese Buying
Interesting Theme 1/4 - China Online Network + Money markets
• Alibaba's Online Money Market Fund Yu’E
Bao, an investment product offered through
the Chinese e-commerce giant Alibaba
Group Holding Ltd.'s third-party payment
affiliate, Alipay.com
• Launched just nine months ago, Yu’e Bao
now has more investors than China’s equity
markets.
• The mainland's biggest online money market
fund had attracted more than 81 million
investors by the end of February and had
accumulated at least 500 billion yuan ($81
billion) in deposits by the second week of
March.
• When an ordinary demand deposit in
savings accounts at major banks offers an
interest rate of just 0.35 percent a year, and
Yu’e Bao offers an annual 6 interest.

7. What are China Chinese Buying
Interesting Theme 2/4 - Luxury Goods + Wine
• HK has become a shopping paradise due to variety
but more due to taxes
• Tax efficiency always create price arbitrage and
business opportunities

8. What are China Chinese Buying
Interesting Theme 3/4 - Properties

9. What are China Chinese Buying
Interesting Theme 4/4 - Education

10. Just for fun. What next, durian ?
• Demand from China push up prices. Internet
platform, Alibaba has 400 suppliers of
durians.

11. Is Indonesia the next China in waiting ?