CHINA> Focus
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CHINA> Focus
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'It's all just IDOL speculation'
By Zhang Ran (China Daily)
Updated: 2009-10-16 09:29 As with most successful business models, the one employed by American Idol, a popular United States TV singing contest, has spawned a legion of imitations.
The airwaves are awash with the likes of global hits America's Got Talent and X Factor, as well as Supergirl, the Chinese hit first shown on a Hunan station in 2005 that made a star of Li Yuchun.
In June, Guoxin Securities, jrj.com and the Shanghai-based Bank of Communications launched their third annual hunt for the best independent market brokers, attracting 100,000 hopefuls from across the nation. Contestants in the six-month challenge are whittled down to 10 and are then given 1 million yuan ($150,000) to invest on the mainland's Shanghai and Shenzhen stock markets. The victor is the person with the highest return after two months. First prize is 20 million yuan in investment capital, with the winner able to keep any profits made, and a full-time job as a fund manager at Guoxin Securities in Shenzhen, Guangdong province.
However, one of the candidates tipped for "investor idol" glory dropped out last month saying the Chinese economy is still in troubled waters and that analysts at home and abroad have been premature in heralding an end to the global financial crisis. "I am very pessimistic about Chinese stock markets in the second half of the year and I lack confidence in the Chinese economy," said Zhu Hongbin, a 39-year-old entrepreneur from Beijing, who made a 25-percent return on his investments during the first month of the contest alone. "It will take a long time before the economy really recovers, despite many economists' optimistic outlooks." New reports suggest China's entrepreneurs are gaining confidence in the country's economy, but Zhu, who runs 18 stores across the capital selling one of China's leading underwear brands, AB, said small and medium-sized enterprises are still desperately struggling.
The Entrepreneur Confidence Index also soared to 120.1 in the third quarter from 110.2 in the second, after bottoming out at 94.6 in the fourth quarter last year, it said. But Zhu disagrees with the statistics and told China Daily: "Even though the central government launched a 4-trillion-yuan stimulus package, many small businesses still find it very difficult to access funds. A lot of the 7.3 trillion yuan in loans released by banks disappeared straight into the stock and property markets.
"China's economy still relies too much on exports and is very vulnerable to fluctuations in international markets. A country is like a business, and it has to set up a sustainable business model to make a profit rather than just rely on investment and exports." AB has been relatively unaffected during the economic slowdown, despite the fact it trades heavily in overseas markets. Around 70 percent of products from its factories in Jiangsu and Hubei provinces are shipped to the US. But in a nation where net exports and investment in fixed assets like property, plant or equipment accounted for more than 60 percent of China's gross domestic product growth between 2001 and last year, others have not been so lucky. The crisis resulted in exports dropping almost 22 percent year on year by the first half of this year, and caused the loss of thousands of jobs across China. However, thanks to the State Council's stimulus plan, fixed-asset investment is now the most important contributor to the nation's gross domestic product growth, rising 33 percent year on year between January and August this year, according to the NBS. "With exports struggling, it was a good time to shift our growth model to one that relied more on domestic consumption. But I don't think there have been sufficient government policies that can lead to significant changes in stimulating domestic demand," said Zhu. "Policymakers and companies still need to put a lot more emphasis on the domestic market." |
