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Quotidiano di informazione – Anno 31 n° 301

Posts Tagged ‘kamel mellahi’

Expert comment on China’s latest GDP data due to be released tomorrow

Posted by fidest press agency su sabato, 16 aprile 2016

Kamel Mellahi expert comment on China’s latest GDP. Kamel Mellahi, of Warwick Business School, is a Professor of Strategic Management and researches business in China.Professor Kamel Mellahi said: “The slew of economic data coming out of China recently points to a mix of bright spots and areas of concern. A host of key economic indicators are pointing upwards. Exports are up, capital outflow seems to be under control, there is plenty of evidence of robust growth in the service sector, and the pulse of the real estate sector is starting to beat faster. The moribund manufacturing sector is weakening, but this is widely expected. There are no shortage of reasons to be cautiously optimistic about the performance of the Chinese economy.”The new economic data may be knocking the wind out of the argument that the Chinese economy is heading for a hard landing, but I believe it’s premature to think that the economy is bottoming out. It’s far too early to start talking about a V-shaped recovery. Sure, there are plenty of bright spots but there are some genuine areas of concern. Painful reforms are still required to deal with the looming debt crisis, the power and influence of some large state-owned enterprises, and over-capacity in a number of sectors.”The Chinese economy may be hitting a soft patch, but there is still plenty of road bumps ahead. Overall, the structural reforms are heading in the right direction but so far they haven’t gone far enough. Dealing with zombie firms is going to be a thorny process, while the share of debt held by firms is still rising. The measures put in place to deal with this so far do not seem to be very effective.”That said, China has the financial fire power to manage the enormous volume of debt at risk. Plus, the rhetoric does not seem to be matched by concrete actions when it comes to credit support for struggling state-owned enterprises. This may end-up compromising the long-term economic rebalancing strategy.”

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Expert comment on Chinese export growth and increase in bank lending

Posted by fidest press agency su giovedì, 7 aprile 2016

Kamel Mellahi, of Warwick_Business_School_Scarman_road_view, is a Professor of Strategic Management and researches business in China.Professor Kamel Mellahi said: “It looks like the pulse of the Chinese economy is quickening. Both manufacturing and service sectors are expanding, and there is renewed signs of life in the property sector.”But the economy is not rebounding for everybody. This is a two-track economy. The chasm dividing the old manufacturing sector and the new service sector is going to get bigger. There has been a lot of pressure on unemployment in the old manufacturing sectors where there is an overcapacity problem, such as steel and coal. Millions of people are being laid off. The recent data suggests that the service and manufacturing sectors are not absorbing enough people to offset the restructuring in the old manufacturing sector. “Most indicators suggest that the economy is heading in the right direction, but it’s too early to say whether the economy is entering a sustainable U-turn and a major rebound is around the corner. At this stage, most of the indicators are mere anecdotal evidence that a potential economic upturn is on the horizon.”The better than expected performance does not look sustainable, as the positive indicators can easily be wiped out. There are still plenty of concerns about the Chinese economy, but the recent data suggests a hard landing is unlikely.”

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Expert comment on Anbang being set to acquire Starwood Hotels & Resorts Worldwide

Posted by fidest press agency su sabato, 19 marzo 2016

Kamel Mellahi, of Warwick Business School is a Professor of Strategic Management and researches business in China. Professor Kamel Mellahi said: “Strategically Marriott is a better suit for Starwood, but Anbang’s offer is very attractive. It will be interesting to see if Marriott comes back with a better counter-bid. This will trigger a bidding war that I think Anbang is going to win. Plus, a Starwood-Marriott deal may trigger regulatory opposition.”The acquisition of Starwood fits well with Anbang’s internationalisation strategy. Anbang tends to acquire well-performing landmark properties and businesses with a very strong brand, and, judging from past deals, Anbang often pays a premium for ‘trophy’ landmark buildings and businesses.”

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Expert comments on $43bn (£30bn) proposed acquisition of Syngenta by ChemChina

Posted by fidest press agency su giovedì, 4 febbraio 2016

Kamel Mellahi, a Professor of Strategic Management at Warwick Business Schoolwho has studied key Chinese businesses for a number of years, has made the following statement comment on the $43bn (£30bn) proposed acquisition of Syngenta by ChemChina: “This is an acquisition driven primarily by growth strategy, and not potential synergies that usually result in cost cutting and reduction of workforce. So the deal is good news for both Syngenta’s shareholders as well as its employees.”Syngenta has been going through challenging times recently, mainly because of its exposure to uncertainties in emerging markets and the recent collapse of commodity prices. For ChemChina, acquiring one of the world’s leading manufacturer of agricultural and chemicals and seeds with world class resources and capabilities will enable it to access valuable knowledge that could help its drive for innovation.”Most of the problems with such acquisitions tend to rise later on when the two firms try to integrate their processes. But typical of international acquisitions by Chinese firms, ChemChina is keeping Syngenta’s existing management which will continue to run the company, while the board of directors will be chaired by ChemChina’s head.”

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Expert comment on the annual GDP figures from China

Posted by fidest press agency su martedì, 19 gennaio 2016

shanghai-chinaExpert comment on the annual GDP figures from China Kamel Mellahi, of Warwick Business School, is a Professor of Strategic Management and researches business in China.
Professor Kamel Mellahi said: “Against the backdrop of disappointing consumer spending, intensifying deflationary pressures, tepid export growth, and a stock market that looks out of control these figures were expected for 2015. It’s not the stellar growth of the past decades, but it’s still a decent growth given the current local and global economic conditions.”China is slowly moving from ‘Made in China’ to ‘Made for China’. The economy is no longer driven primarily by huge investment in manufacturing to produce cheap goods destined primarily for export markets. It is now moving from an export-led, low-cost producer economy, towards one driven chiefly by domestic consumption and underpinned by services, innovation and entrepreneurship.”Sustaining a decent growth during a period of major structural recalibration is not something that is easily sniffed at. China’s economy is undergoing a major restructuring. The slowdown of the Chinese economy is an expected side effect of the current recalibration of the economy.”The 13th five-year plan, which will be made public in March, is going to provide a roadmap for the future of the Chinese economy. Its major objective is to avoid the middle-income trap and transform the country from a low to a high income economy by 2020. The focus is going to be on sustainable growth obtained through innovation, use of technology, quality and efficiency.”It must be said that the government has pulled out all the stops to prop up local consumption and avert a hard landing. During the last year, the People’s Bank of China has cut the benchmark lending rates numerous times, lowered the level of reserves banks are required to hold to spur lending to stimulate growth, and fast-tracked approvals for new investment projects. As a result, the new engines of China’s economy are slowly picking up steam. In particular, the service sector continues to rise, albeit slowly.
“Plus, despite the slowdown of the economy, wage growth is rising at around 10%, unemployment is remaining relatively low at around 6%, and more importantly consumption expenditures are rising, albeit, slower than anticipated.”The government has set a very ambitious growth target for the next couple of years. It remains to be seen whether such growth level can be sustained over the long run. The target is very challenging, especially in the context of promised supply side reforms.

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Expert comment on trading suspended on the Chinese stock market

Posted by fidest press agency su venerdì, 8 gennaio 2016

pechinoKamel Mellahi, of Warwick Business School, is a Professor of Strategic Management and researches business in China comment on trading suspended on the Chinese stock market. Professor Kamel Mellahi said: “The efficacy of the circuit breaker is questionable in a highly volatile environment driven by a herd mentality. It does not seem to be having the expected effect. It looks like it’s generating more panic rather than a pause for reflection and objective assessment. “Chinese policymakers are stuck between a rock and a hard place and have no easy solutions. The yuan has risen against its major global currencies, chiefly because it was pegged against the US dollar, making Chinese exports more expensive.”Using currency depreciation to stimulate growth is a double-edged sword. A weaker yuan will help boost the country’s sagging exports and help economic growth, but it will also increase the risk of capital flight out of China, making investment in the stock market less attractive, and increase the cost of imports. “The Chinese economy is going through a very delicate transition which requires a lot of difficult adjustments. Therefore these wild swings in the Chinese stock markets are expected and investors have to get used to them. The Chinese stock markets are set for choppy waters and share prices will continue to see-saw as China seeks to recalibrate its economy while keeping economic growth on track.
“Retail investors, which account for a large portion of stock market trade in China, are not in it for the long haul and are prone to panic. It is to be expected that they react to short-term blips about the health of the Chinese economy. A weaker yuan also makes it unattractive for them to own shares. I think we are going to see more of these stampede type sell-offs driven by a herd mentality in the months to come.”The volatility in the Chinese stock markets may have some short-term impact on global stock markets, but in the medium and long-term the impact is going to be felt mainly in China.”I expect the Chinese government to intervene strongly and publicly to prop up share prices. This will undermine its pledge to let market mechanisms have more influence, but perhaps more importantly, it needs to focus on the management of economic reforms to rebalance its economy. One needs to keep in mind that the stock market fluctuations harm the reputation of the Chinese economy but they are not a true reflection of the Chinese economy.”

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Expert comment on the fall in Chinese stock markets

Posted by fidest press agency su mercoledì, 6 gennaio 2016

Warwick Business SchoolProfessor Kamel Mellahi of Warwick Business School, Professor of Strategic Management and researches business in China said: “The Chinese stock markets are set for choppy waters and share prices will continue to see-saw as China seeks to recalibrate its economy. Retail investors, which account for a large portion of stock market trade in China, are not in it for the long haul and are prone to panic. It is to be expected that they react to short-term blips about the health of the Chinese economy.
“This stampede type sell-off is often driven by a herd mentality but the concerns that triggered it in the first place were very strong. The fundamental reasons that triggered the sell-off are the continued shrinking of manufacturing activities and the expected lifting of the ban, introduced during last summer to halt the stock market rout, on share sales by major investors.”One does expect the Chinese government to intervene strongly and publicly to prop up share prices. This will undermine its pledge to let market mechanisms have more influence, but perhaps more importantly, it has a much bigger fish to fry. It’s keeping its eyes on the management of economic reforms to rebalance its economy. “The stock market fluctuations may make the news but they are not a true reflection of the Chinese economy. Also, newly introduced mechanisms such as the ‘circuit breaker’ are expected to manage sell-off panic. Interventions to support the stock market such as buying equities and perhaps even reinstating the ban on share sales by large investors might be necessary to calm things down.”

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Expert comment on China’s yuan set to be given reserve status by the IMF

Posted by fidest press agency su martedì, 1 dicembre 2015

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Expert comment on China’s yuan set to be given reserve status by the IMF Kamel Mellahi, of, is a Professor of Strategy and researches business in China and other emerging economies. Professor Kamel Mellahi said: “The inclusion of the yuan in the basket of international currencies is a huge symbolic victory for China, but comes with strings attached to it. China has been loosening its tight grip on the management of the yuan for a while, but now the PBOC is going to come under immense pressure to be more transparent and improve its way of communicating with international markets. This requires massive cultural and procedural changes. “Also, China will have to loosen its grip on the management of its currency and introduce a bunch of financial reforms. This may result in a loss of vital control over the management of the currency and the flow of yuan across China’s borders.”China has lobbied extremely hard to get the yuan added to the elite basked of reserve currencies. Joining the US dollar, the British pound, the euro and the Japanese yen is a big achievement for the Chinese Government and sends a strong signal about the important role of China in global financial markets. It is also a vote of confidence in the economic and financial reforms underway in China. “This is not only a symbolic achievement but could in the long term challenge the dominance of the US dollar as the global reserve currency of choice. In the short term, there is an expectation that the inclusion of the yuan in the basket of reserve currencies will draw more than $150 billion of foreign currencies into Chinese bonds.”

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Expert comment: Why are China and the UK’s economic ties now flourishing?

Posted by fidest press agency su domenica, 25 ottobre 2015

pechinoKamel Mellahi, a Professor of Strategic Management at Warwick Business School who has researched a number of issues on the Chinese economy, has made the following statement:“The UK and China need each other more than ever in confronting their internal economic challenges. But the fact remains that at this point in time the UK needs Chinese investment more than China needs UK investment opportunities. This perhaps explains why the UK is rolling out the reddest of red carpets for the Chinese government delegation.“That said, each country contributes distinct but complementary resources and capabilities to the economic partnership. The UK gets the badly needed investments into its infrastructure, including its nuclear power plants, high-speed rail, and potentially becomes the key trading centre for China’s currency, and China gets the chance to use its outstanding capabilities in mega infrastructure projects, obtain a strong foothold in key infrastructure and energy sectors in the UK and use some of them as ‘shop windows’ to promote its capabilities to other countries, as well as open up an offshore renminbi debt market.“When it comes to trade and economic ties with China, not long ago, the UK was trailing behind major European countries but it has been working flat out to make up for lost ground and get in front of the queue. The UK is the first Western country to seek to join the Asian Infrastructure Investment Bank and has been very open and encouraging Chinese investment in the UK economy.“When one cuts through the rhetoric and bombast headlines, two things emerge. First, the new emerging relationship between the UK and China is a strategic response by two major world economies to a changing global economic landscape.“Second, China and the UK are waltzing to the same tune because their economic interests are currently in alignment. Economically, it looks like a win-win economic alliance.”

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Expert comment on China cutting interest rates after the market turmoil

Posted by fidest press agency su mercoledì, 26 agosto 2015

Expert Kamel Mellahi, of Warwick_Business_School_Scarman_road_view, comment on China cutting interest rates. Mellahi is Professor of Strategic Management and researches emerging markets.He said: “The market is looking for some strong signs that China has enough ammunition and more importantly it is willing to use it effectively to weather this storm. The cut of interest rates by 0.25 per cent and lowering the bank reserve requirement ratio by 0.5 per cent may calm the stock market turmoil, but does not address the underlying causes”The devaluation of the yuan, a decline in exports, and multiple signs that China’s economic pulse is slowing down at a much faster pace than expected have created a toxic cocktail, fuelling uncertainty and eroding confidence in the turnaround of the Chinese economy. The Chinese economy has hit some rough weather for sure. But is it a passing storm? I think so. What we are seeing now is a dress rehearsal of things to come. The Chinese economy is going to be on this bumpy road for a while and it will have ebbs and flows that will no doubt have a serious impact on the global economy.”The devaluation of the yuan was widely perceived as an export boosting measure to aid economic growth, which only fuelled concern about the health of the Chinese economy. But the devaluation may not be sufficient enough to boost export demand enough to achieve this year’s seven per cent growth target.”With $4 trillion of bank deposits, China still has the financial firepower to alleviate market pressure. But the Government’s reluctance to initially interfere aggressively to calm markets around the world suggests that China has finally decided to let market forces play a bigger role in deciding the value of the currency.”China is concerned that aggressive interference in the market may sow the seeds for future problems especially worsening the credit growth which is already high and could go out of control.”

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