Catarina's World

Is the centre of global finance gradually moving from Wall Street to China? Goldman's vice chairman Mark Schwartz has been sent to Beijing, the new battleground for foreign banks. China is dominating Asia IPOs and the street has decided that's where the money is. Devote 3 minutes to watching Breakingviews' Wayne Arnold and Wei Gu talk about why the focus is moving to Beijing:

When it comes to capital markets Chins today is where the US was in the late 70s. For anyone, apart from multinational companies, to raise capital is almost impossible. But then came the 80s and suddenly virtually all US companies could. China is now going through a similar transition. So for international banks being downgraded by rating agencies, such as Moody's, the timing is perfect for moving in. 

China opening up its financial markets

It started in April this year when China increased the amount of money that international fund managers can invest in China to $80bn i.e. almost tripled it.

Beijing wants to increase investment and competition in its financial and banking sector. Opening up its financial markets is a way for Beijing to build up the yuan as an alternative to the US dollar as a global reserve currency.  

Wall Street swiftly moved in

Question is how will Wall Street's presence affect China? Will the Chinese allow the kind of new innovative financial products that Wall Street come up with on a regular basis? Is it even possible that China will be the new centre for dealing in risky financial products that could be regulated in the West? Maybe the Chinese market will be more tightly regulated when it comes to protecting China as opposed to the rest of the world?

Can China, once again, re-write the rules of competing in the global economy? Will the centre of finance gradually move from New York to China? The same investment banks may still dominate and set the trends, but their branches, or head offices, in China will be in charge?

Will China avoid making the same mistakes Japan did when building a capital market? How will China's equity, bonds and derivatives markets evolve? Is the investor mix in China changing? How will new financial products be received? Will the yuan emerge as a global reserve currency? Do you believe the centre of the world of finance will long term be in China instaed of New York? 

Video:ReutersVideo

Why is Washington cheering on Middle Eastern people rising against injustices but when it comes to Americans demanding change the tone is different?  The double standards are so obvious  Foreign Policy Magazine compared how protesters are handled in Cairo and New York by drawing a parallel between Hosni Mubarak and Michael Bloomberg in the article Hosni Bloomberg?. To look at the world’s opinion of the movement devote 5 minutes to watching “Occupy Wall Street through the eyes of the world”:

According to Occupy Wall Street’s official web site the revolution continues world-wide. Considering that protests have taken place in 100 US  and 1,500 cities around the world maybe it’s time to question if people are fed up with the way the global economy works? Or as the movement put it “the richest 1% of people are writing the rules of an unfair global economy that is foreclosing on our future”.  And they have a point. Twenty million jobs have been lost world-wide since Lehman Brothers collapsed and some experts believe another 20 million will be lost in the next couple of years.

My last post “Do banks rule the world?” actually had a huge respons on social media from people all over the world more than 24 years old who also want change. So it’s not just the young that are fed up, so are other parts of the 99%.

What’s it like to be young today knowing that chances of finding a job is slim compared to when we were young? Is it really realistic to expect the young to be content with the current state of affairs? Is the Occupy Wall Street movement a sure sign that people have had enough and the time has come to change? Will the movement mark the beginning of a new era of thinking? Sooner or later politicians world wide have to listen to the young generation in order to get elected. Will the future look different thanks to Occupy Wall Street? Or is the movement just a fad that will have no impact on how the world is run?

Video: RTAmerica — You Tube

Every day about 180,000 people move into cities. Add to that that half the world’s population already live in cities and it’s obvious that urbanization is one of the mega trend for the new decade.

How is urbanization affecting the kind of products and services you develop for the future? Are you adapting what your have to cater to the very specific, often more refined needs of urbanites world- wide?

Needless to say this has an enormous impact on what we consume because urban consumers are more daring, liberal, tolerant, experienced and prone to trying out new products and services.

From one century to another

In emerging markets the difference between the country side and the cities can be tremendous. Like moving from the way we lived in the West in the 1800s into a modern 21st century life style. A move away from traditional social and family structures to being exposed to a wide range of alternatives.

Hundred cities – a third of the world economy

Just one hundred urban islands account for about a third of the world economy and almost all innovation. New York’s economy is for instance larger than that of 46 Sub Saharan African countries put together and, according to Foreign Policy, Hong Kong receives more tourists annually than all of India. Obviously other metropolises are keen to join. Not least Shanghai, Sao Paulo and Istanbul.

Will we all become city dwellers?

Considering that quite a few poor people from rural areas end up going from the ashes into the fire in cities, will this trend continue? Or will less people decide to seek their fortune in urban areas because of the problems associated with it? Will we consequently see the trend gradually slowing down? Or will it continue and even accelerate? Are more and more of us becoming city dwellers, for better of for worse? If so, world-wide consumption will change drastically on a continuous basis.

Catering to city-citizens

To appeal to the population of these vast urban areas you need an urban dedicated approach to products, services and campaigns that not only mirror but slightly alter the usual country specific approach.

Considering that 3 billion people already live in cities and 60 million are, according to Intuit, being added on a yearly basis, what are you doing to cater to their needs and requirements? Urban pride is something that shouldn’t be forgotten. Look at BMW’s Megacity Vehicle and Smirnoff’s Absolut Cities. And it’s not only luxury goods that is affected by urbanization. Even consumption patterns for things like shampoo and detergents are changing. How is urbanization affecting the kind of products and services you develop for the future? Are you adapting what you have to offer to the very specific, often more refined needs or urbanites world wide? Or maybe combining the country specifics with the urban approach to develop slightly different products tailor made for different cities?

(Photo: hamron – Flickr)