According to an article by Adam Roseman of ARC China, China has reaffirmed its commitment to reform its currency, albeit gradually, as it would be unreasonable to expect China to strengthen the yuan in such a short amount of time.
“We will continue to steadily promote currency reforms, but the process will be gradual. It is unjustifiable to require China to appreciate its currency substantially within a short time,” said Foreign Ministry spokeswoman Jiang Yu.
The comments came following an accusation by the US House of Representatives claiming that China has limited the value of the yuan to benefit its export industry.
In ARC China’s newsletter, Adam Roseman quoted Peter Lacy, a managing director at Accenture.
In an interview with China Daily, Lacy explained that “China has a robust domestic demand and encouraging growth figures. While the wage arbitrage between China and Western markets is closing up, many multinationals are still keen to be a part of China’s growth story.
“What we see in China is rapid urban development, increasing awareness of corporate social responsibility and energy security- all factors creating a stable investment environment for foreign businesses.”
In a company newsletter, Adam Roseman of ARC Investment Partners discussed property prices in China. China’s banking regulator recently stated that the country’s lenders are capable of handling a 50% fall in property prices. Chairman of the China Banking Regulatory Commission Liu Mingkang said the regulator had performed the stress tests mainly on domestic banks.
“The stress tests do not reflect the CBRC’s view about the property market’s direction, but the results should strengthen the confidence of all banks in implementing the property controls,” Liu said.
In the article, Roseman explained that “Mortgages and credit to property develppers account for about 20% of banks’ loan books in China, so stress tests that are confined to the direct impact of falling house prices have produced only mildly negative results in the past. But the property sector is a pillar of the Chinese economy and the indirect impact of a downturn on other industrial sectors and sentiment more broadly could be severe.”
Certainly, companies like ARC China with Founder Adam Roseman always have their eyes set on China and its latest developments. In recent news, Jungdong Mall, which operates one of China’s largest e-commerce sites, may be set for some big advancements. They are looking to raise up to $5 billion next year in New York for what may be the largest internet-related IPO in history.
As the Wall Street Journal reports, this Beijing-based company which operates the e-commerce site 360buy.com is organizing its plan of action at the moment. 360buy.com has investments from Russian’s Digital Key Technologies and other sources, but they face touch competition from other e-commerce giants such as Alibaba Group and Dangdang.
Time will tell how Jingdong Mall will do – and potential investors and those with interests in the Chinese market would do well to keep their eyes set in this area.
The European financial crisis has been felt by many other economies across the globe, as one of the largest economies in the world continues to unravel. Adam Roseman of ARC Investment Partners discussed the impact of the crisis on China’s economy.
He wrote: “The EU is China’s largest export market. The current stage of the European crisis will have a significant impact on China’s export trade and there are signs that this is already happening.”
He continues, explaining that “When the financial crisis first struck the US and Europe in 2008, China’s exports to the EU remained unaffected. It was only in 2009 that exports to the EU suffered a large fall. This was followed by a strong recovery in 2010, which brought exports to the EU back up close to their pre-crisis levels. It appeared that the EU and Chinese exports there had returned to normal. This has turned out to be an illusion. The failure of the EU to deal with the problems it faced merely delayed the day of reckoning.”
Pakistan is making life even easier for foreign entrepreneurs and investors to China, specifically in the energy sector. It was Syed Naveed Qamar, the country’s Federal Water and Power Minister, who mentioned this in a conversation with Liu Tienan, the National Development Reform Commission’s National Energy Administration Administrator last night. The two men met at the Diaiotai State Guest House. Qamar was on a visit to China to participate in a meeting of the Pakistan-China Joint Economic Working Group. Any encouragement for foreign investments in China is good news for businessmen like Adam Roseman, founder of ARC Investment Partners.
Energy Shortage
The energy shortage is a big problem for the people of Pakistan. According to an article in The Tribune, such a working group like this can provide “an ideal platform where all energy-related issues could be brought for discussion and speedy implementation.” As well, Tienan said the working group – as a group – “would provide a good opportunity to search for solutions to meet energy shortage in Pakistan.”
Energy Projects
It was also agreed upon that there will be a mechanism to facilitate the “early implementation of energy projects between the two countries.” The energy projects that are currently in existence will be banded together and attempts made to “expedite their completion and to arrange financing. The working group will also study future energy requirements of Pakistan and submit proposals for their implementation.”
It is usually good news for those wanting to make investments in China’s economy, such as Adam Roseman of ARC Investment Partners. But right now such investors may want to watch out a little. Recent news as reported in CNBC, is indicating that the country’s economy might be encountering “significant headwinds from the slowdown in Europe.” Given that the region is the country’s principal export market, according to North Square Blue Oak chairman Derek Han, this is leading to a “certain amount of concern.”
China Impacted by Europe and America
Even though it is true that it is anticipated that China’s GDP will not be reduced in the next few years, the country is not an island and relies heavily on other places. Thus, economic problems in both America and Europe could really take its toll. As Han noted, “Europe is the number one export market for China—much more than the United States. Seeing the sort of confused last minute patching together of a so-called solution—which isn’t that much of a solution at all—is an element of great worry.”
So all investors should take note before taking the plunge; while China still remains a very favorable investment opportunity for foreign investment companies like ARC Investment Partners, there are certain potential problems that have to be considered.
According to ARC China’s newsletter, written by Adam Roseman, Samsonite International has the potential to raise $1.5 billion in an initial public offering in Hong Kong. Backed by CVC Capital Partners, Samsonite is offering 671.2 million shares in the city. The final IPO price was set last month.
Nelson Yan, investment manager at Mayfair Pacific Financial Group, said “Brand-name companies targeting mainland Chinese consumers have good growth prospects in the long term as China’s economy continues to grow fast. Samsonite’s valuation is relatively attractive compared to listed luxury goods makers.”
Adam Roseman is the founder and chief executive officer of ARC Investment Partners, LLC. ARC is a private equity firm that invests largely in companies in China. Adam Roseman and ARC China work to provide strategy/business development, execution, and public market support to all of their clients. The company is led by numerous investment banking and operations professionals, and is financially and strategically supported by its investors.
In addition to the responsibility of leading a company, Roseman feels that business executives have an obligation to invest in the communities that contribute to their ongoing success.
“The need for business leaders to play an active role in philanthropy is greater than ever,” he says. “An engaged and involved CEO helps set the tone that encourages individual employees to contribute time, talents and money to help make the world a better place.”
Roseman is on the Board of Trustees of Big Brothers Big Sisters Los Angeles, as well as the Board of Governors at Cedars-Sinai Medical Center.
China Vogue, a leading casual sportswear company in China, recently announced that the global investment firm TPG, supported by Partners Group and ARC China Holdings Limited with Adam Roseman, will be investing over USD45 million into the Company.
The Company
Headquartered in Quanzhou of Fujian Province, China Vogue is one of the top 10 brands in Chinese casual sports apparel. They design, develop, manufacture and market their stylish sportswear which includes apparel, footwear and accessories.
China has seen a recent growth in stylish casual sportswear, mostly driven by their emerging middle class.
Investing in China’s Future
Christoph Rubeli, Partner in the Private Equity Directs team at Partners Group explained that, “We are pleased to partner with TPG and ARC China in this exciting investment opportunity.” And, Adam Roseman, CEO of ARC China Holdings Limited, a pre-existing investor in the Company, said that “China Vogue has demonstrated exceptional growth in its store network and distribution since its founding. We are very excited to partner with such a strong management team and believe that the company is poised to achieve strong growth in revenue and in brand awareness throughout China.”
