The Great Disruption: Covid-19, Geopolitics, Trade And Technology Will Challenge Entire Business Sectors

Natalie Blyth, Global Head of HSBC’s trade finance business, recently shared her views on how the world will change as a result of Covid-19 and other geopolitical challenges. Blyth oversees the approximately $750 billion of trade annually that HSBC facilitates with 2 million clients and is well-positioned to see the changes underway in the global landscape.

The summary: Look for more geopolitical tensions and new technologies to continue a period of great disruption in supply chains, business models, and consumer behavior. Asia will continue to rise but companies will be hurt by continuing Sino-U.S. tension. There will be a thickening of ties between different regions, such as Latin America and Asia. Labor cost differences will matter less, technology use more. Corporate purpose will be under increased scrutiny.

This is disruption on a scale we’ve never seen. Read more in my Forbes post.

North Korea’s Strategy To Grab America’s Attention With Explosive Displays

Count on the North Koreans to make a statement with a bang. Literally. Blowing up a liaison office that was supposed to serve as a symbol of good relations between the brother-enemies on the Korean peninsula sends a message. Especially when the June 16 big bang apparently was ordered by Sister Number One, Kim Yo Jong, North Korean leader Kim Jong Un’s sibling and a potential successor. Read more in my Forbes post.

Hong Kong Activist Investor David Webb: ‘Unfortunately, There Are Going To Be Some Changes Around Here’

American humorist Mark Twain, very much alive in London in 1895, famously responded to rumors that he was dying of poverty with the telegraphed quip: “The report of my death was an exaggeration.” Hong Kong governance activist David Webb may have done Mark Twain one better by using an internet blast to announce he had been diagnosed with cancer. Read my Forbes post on an extraordinary individual, one who has made a real difference in Hong Kong.

After the Covid Panic: Three Lessons for Business

The panic is past. But the pandemic is still with us. Businesses are preparing for a world in which the Covid-19 virus and other pandemic diseases are a recurring feature. What will this new landscape look like? Conversations with Asia Business Council members, who together directly employ some 3 million people, suggest three highlights. Read more in my Forbes post.

Four Things You Need to Know About China’s Record Solar Installations (They Aren’t All Pretty)

We’re used to big numbers from China, but the reported 20 gigawatts or so of solar power that was installed in the first half of 2016 are worth a close look.

The figures are preliminary, but the story that they tell is clear: In the first half of the year alone China installed more solar power than any other country has ever done in total, since the dawn of solar power, except for Germany, Japan, and the U.S.

China’s first-half solar installations were larger than the cumulative total of everyone outside of the big three listed above – larger than Italy, Britain, France, and Spain, all of which for years had aggressive subsidy programs to encourage solar power.

For China, the 20 gigawatts of new solar power installed in the first half of 2016 is as much new solar capacity alone as Switzerland’s total electricity generating capacity.

Is China’s solar power infatuation a bubble that inevitably will burst? Or is something more fundamental happening in China’s electricity market, where more than 60 percent of electricity is still produced by coal?

Originally published in Forbes. Can be accessed here.

Chinese Government Subsidies Play Major Part In Electric Car Maker BYD’s Rise

South Korea’s Samsung group apparently bought into China auto maker BYD as a way of improving its prospects in China, where it has struggled against government protection of the local industry. If that’s the case, it could hardly have picked a better partner, for BYD has been one of the principal beneficiaries of government largesse, emerging as a state champion in electric vehicles and hybrids on its way to becoming the world’s largest electric car manufacturer.

BYD sold 58,000 electric and plug-in hybrids last year. New energy vehicle sales were up more than two-and-a-half times from 2014 , and BYD’s popular Qin and Tang models give it an 80% share of China’s plug-in hybrid market.

The Shenzhen-based auto maker announced July 21 that Samsung, South Korea’s largest chaebol, bought a 2% stake in BYD for $450 million as part of a share placement that saw the car- and battery-manufacturer raise almost $2.2 billion, funds that will be used to expand its electric vehicle production.

Electric and plug-in hybrid car sales in China quadrupled to 351,000 last year. Government subsidies have played a big part in that surge. Consumers receive a range of subsidies and other perks when they buy electric and hybrid vehicles. But BYD, too, benefits from lavish government support, support that has played a key role as it has established its global lead in electric vehicles.

Originally published in Forbes. Can be accessed here.

China’s BYD and Korea’s Samsung: Can Two Battery Kings Forge a Profitable Partnership?

News that South Korea’s Samsung Electronics plans to invest in China’s leading electric vehicle maker, BYD , raises the prospect of a powerful alliance that could grab pole position in the world’s fastest-growing e-vehicle market.

The two companies announced that they were exploring a tie-up that would see Samsung take a big stake of a planned secondary stock offering by BYD. BYD would not confirm a South Korean press report saying that Samsung would spend about 3 billion yuan (just shy of $450 million) for a 4% interest in BYD as part of the deal.

The planned investment would bring together two northeast Asian manufacturing powerhouses, each with a strong, even cultish,  corporate culture.

Samsung is by far the bigger company – it is the flagship company of South Korea’s most powerful business group – but it doesn’t have much of a track record in taking a small minority stake in a sizeable Chinese company. Samsung is also a substantial battery maker in its own right, with one of its group companies (Samsung SDI ) the world’s largest producer of lithium-ion batteries. Samsung, led by second-generation owner Lee Kun-Hee (see photo gallery below), is having difficulty cracking the Chinese electric auto market. Although Samsung built a battery plant in China it has not had success in getting on a government-approved procurement list for electric-vehicle batteries in China.

Originally published in Forbes. Can be accessed here.

UN Secretary General Ban Ki-Moon To Beijing: Environmentalists Need Protection, Too

Kudos to UN Secretary-General Ban Ki-moon for singling out the positive role that environmentalists play in promoting economic growth on his early-July trip to Beijing.

At a news conference with China’s Foreign Minister Wang Yi on July 7, Ban underscored the need to protect environmentalists and other NGO activists. The Secretary-General “emphasized that environmental activists, human rights lawyers and defenders, government watchdogs and other civil society groups can act as a catalyst for social progress and economic growth.”

“They can represent the diverse interests of the population and bring the voices of the vulnerable in from the margins. Along with a free and independent media they can help ensure accountability and thereby helping the state to be more effective and strengthening the standing in the eyes of the people,” Mr. Ban said, adding that the world will look to China to complement its “remarkable economic advances by giving citizens a full say and role in the political life of their country.” The Associated Press noted that Foreign Minster Wang Yi, who last month made news on a trip to Canada when he berated a Canadian journalist for asking about freedom in China, stared down at his lectern during Ban’s statement. Domestic Chinese media did not refer to Ban’s remarks.

Originally published in Forbes. Can be accessed here.

Hong Kong’s E-Waste Nightmare: Where Old Phones Go To Die

Where do old phones and computers go to die? More and more, aging motherboards and hard disk drives and touch-screens are broken up in illegal waste dumps in Hong Kong, according to a blistering report from the Basel Action Network.

China’s crackdown on corruption has slowed the illegal export of e-waste, much of it from the United States, to southern China, the traditional home of highly polluting electronics recycling sites. That has left more of the toxic material marooned in Hong Kong.

The South China Morning Post’s Sarah Karacs did an impressive trio of follow-on stories to the Basel Action Network’s far-reaching report, which was released in May, by poking around Hong Kong’s New Territories.

The Basel Action Network put GPS tracking devices on dozens of used electronic devices, which were given to designated recycling centers, from Dell to Goodwill. The SCMP then visited the sites where the GPS trackers indicated the goods had ended up and found that seven of the 10 sites were storing electronic waste. “There were hives of stripping-down activity by workers, few if any of whom were wearing protective clothing,” Karacs wrote. The SCMP used a drone camera to catch glimpses of the illegal waste dumping grounds.

Originally published in Forbes. Can be accessed here.

Watch Out, Coal! Dubai Announces Plans for World’s Lowest Cost Solar Plant

King Coal is taking a lot of blows recently. But at least it could usually count on being the cheapest alternative. Now even that’s called into question.

The latest battering to coal’s standing came when Dubai announced June 27 that it would build a massive 800-megawatt solar plant that will produce electricity at an average cost of 2.99 cents a kilowatt hour, substantially below what even coal-fired power plants charge.

This rock-bottom price offered by the developers doesn’t benefit from any obvious subsidies and is the lowest price offered by any solar plant in the world.Bloomberg reports that the price is a full 50% below the price a Saudi firm bid just 18 months ago in the same solar park in Dubai – a price that at the time was a record low, but has since been eclipsed by ever-lower prices.

That price of less than 3 cents a kilowatt hour is one-third cheaper than a coal plant also being built in Dubai, one that, like the just-announced solar facility, is also expected to start operations in 2020.

Originally published in Forbes. Can be accessed here.