Frost & Sullivan insights "Innovation" has become the top keyword in the pharmaceutical industry in 2021. Looking at the approval of new drugs, this year at least 61 new drugs have been approved for marketing by the National Medical Products Administration (NMPA) of China, including 25 locally developed drugs. Both the overall number of approvals and the proportion of domestically innovative drugs have reached record highs. In terms of financing data, the COVID-19 pandemic has catalyzed a surge in healthcare capital, leading to a significant increase in financing events and amounts in 2021. What stage is China's innovative drugs at? What problems in the R&D of innovative drugs in China need to be urgently addressed? How do multinational companies (MNCs) respond to China's innovation wave? For the future, is it "the future has come" or "the dividend has ended"? Zhu Yi, Executive Director of the Healthcare Business Unit in Greater China at Frost & Sullivan (referred to as 'Frost & Sullivan'), was interviewed by Blue Whale Finance. He discussed with you the development trends of the healthcare industry and the innovative drug market. Blue Whale Finance "Innovation" is undoubtedly the top keyword in the pharmaceutical industry in 2021.   In terms of new drug approvals, at least 61 new drugs have been approved for marketing by the National Medical Products Administration (NMPA) of China this year, including 25 locally developed drugs. Both the overall number of approvals and the proportion of domestically innovative drugs have reached record highs. In terms of financing data, domestically, the total financing for China's healthcare industry reached 100.234 billion yuan in the first half of 2021, a year-on-year increase of about 78.72%. The COVID-19 pandemic has catalyzed the influx of healthcare capital, leading to a significant increase in financing events and amounts in 2021.   However, alongside the rise of innovative drugs, there is also a problem of homogenization of innovative targets. In 2020, the Drug Clinical Trial Registration and Information Publicity Platform registered a total of 2,602 clinical trials. However, among the top 10 target varieties registered for clinical trials, the total number of varieties reached as many as 389, accounting for over 10%, indicating severe competition.   In the face of the vigorous development of innovative drugs in China, how are multinational pharmaceutical companies (MNCs) headquartered in China actively responding? It is evident that they are increasingly willing to invest resources in China's innovation sector, whether it be in clinical BD, incubation, or investment.   In 2021, what stage is China's innovative drugs at? What problems in the R&D of innovative drugs in China need to be addressed urgently? How do multinational companies (MNCs) respond to China's innovation wave? For the future, is it 'the future has come' or 'the dividend has ended'?   With favorable policies, the approval rate of domestic innovative drugs reached a new high in 2021. Since the reform of drug review in 2015, the policy side has continuously released positive signals to promote the adjustment of the domestic pharmaceutical industry structure and technological innovation. With the deepening reform of the drug approval system, a series of policy combinations such as the pilot program for drug marketing authorization holders, quality and efficacy consistency evaluation of generic drugs, and dynamic adjustment mechanisms of medical insurance catalogs have been introduced. These have completely changed issues such as insufficient R&D resources, slow review progress, low bidding efficiency, high hospitalization difficulty, and difficulties in connecting with medical insurance in the traditional pharmaceutical industry. They have greatly accelerated the rapid market launch of innovative drugs in China, promoted centralized procurement of drugs, and medical insurance payment processes. This has completely overturned the original R&D and sales model dominated by generic drugs in the Chinese pharmaceutical industry, and since then, the era of pharmaceutical innovation in China has developed vigorously.   From the perspective of approval status, according to incomplete statistics by Blue Whale Finance reporters, since 2021 (December 29), at least 61 new drugs have been approved for marketing by the National Medical Products Administration (NMPA) of China. Among them, there are 25 domestically produced and 36 imported new drugs. Compared with previous years, both in terms of overall approval status and the proportion of domestically innovative drugs, this year has set a new historical high. In comparison, in 2017, a total of 39 new drugs were approved, including 4 domestically produced and 36 imported ones; in 2018, there were a total of 53 new drugs approved, including 12 domestically produced and 41 imported ones; in 2019, there were a total of 54 new drugs approved, including 14 domestically produced and 40 imported ones; in 2020, there were a total of 48 new drugs approved, including 23 domestically produced and 25 imported ones. It can be seen that in 2017, the number of imported innovative drugs approved was significantly higher than that of domestic innovative drugs. However, today, due to various forms such as independent research and development and authorized introduction by local enterprises, the R&D progress is gradually aligning with international standards. Data source: Compiled by Blue Whale Finance reporter   This year, the breakthroughs in some cutting-edge technologies have attracted strong industry attention upon approval for market launch. For instance, two CAR-T therapies approved domestically this year, from Fosun Kite and WuXi AppTec, respectively, are novel tumor immunotherapy methods that can be precise, rapid, efficient, and potentially cure cancer. The attention paid to these not only lies in their anticipated therapeutic efficacy but also in their often-millions-dollar treatment costs. How to commercialize these is a topic that high-value innovative therapies face next.   In addition, the COVID-19 pandemic continues, and drug breakthroughs remain a hot topic of concern. On December 8th, the National Medical Products Administration (NMPA) of China announced that it had emergency approved the registration applications for the combination therapy drugs Anbalimab Injection (BRII-196) and Remdesivir Monotherapy Injection (BRII-198), which are subsidiaries of Tengsheng Bio-Tech Group Co., Ltd. The country has finally welcomed its first independently developed neutralizing antibody combination therapy, achieving a zero breakthrough. In terms of funding, according to the prediction of Industrial Securities, the commercial market space for neutralizing antibody drugs for treating COVID-19 can reach $6.9 billion to $14.6 billion (RMB 44.8 billion to RMB 94.9 billion), indicating broad profit margins for neutralizing antibodies. Whether in terms of social attention or capital preference, the development of COVID-19 drugs undoubtedly touches the nerves of the public and capital.   In China, multiple COVID-19 drugs are racing against each other. The neutralizing antibody therapy DXP604, jointly developed by the team of Xie Xiaoliang from Peking University and Danxu Biotech, is undergoing phase II clinical trials in China; Junshi Biosciences has three COVID-19 treatment drugs advancing, including two neutralizing antibody therapies and one oral medication; in terms of oral medications, Azvudine, developed by Henan Normal University, is currently conducting phase III clinical trials in China, Brazil, and Russia, aiming to apply for conditional approval for marketing in December; Pekluramide, a promising drug developer, is conducting international multi-center phase III clinical trials in China, the United States, and Brazil, and has already obtained an Emergency Use Authorization (EUA) in Uruguay.   China and global healthcare financing reach new highs, with innovation in China moving closer to First-in-Class status According to the statistical analysis by Deng Yunting, an analyst at LeadLeo Research Institute, with the changes in the pandemic, the healthcare sector has seen broad application prospects, high risk resistance capabilities, and is more favored by capital markets. In 2020, global healthcare financing reached a record high, a year-on-year increase of 53%. In the second quarter of 2021, global financing amounted to as high as $31.224 billion, a year-on-year increase of 68.10%.   According to data compiled by the 'LeadLeo' research institute, in China, the total financing for the healthcare industry reached 100.234 billion yuan in the first half of 2021, a year-on-year increase of about 78.72%. In 2020, the total investment and financing for the healthcare industry reached 180.208 billion yuan, a year-on-year increase of 71%. Due to the short-term tightening of funds caused by the COVID-19 pandemic in the first half of 2020, financing projects for the healthcare industry dropped significantly. With the improvement in pandemic control, funds surged into the healthcare industry in the second half of the year, resulting in 470 financing events and raising over 100 billion yuan, bringing the total financing for 2020 to as high as 180.208 billion yuan. Data source: LeadLeo Research Institute Deng Yunting stated that biopharmaceuticals, internet healthcare, medical informatization, and the IVD field are hot investment and financing topics in global healthcare. In terms of biomedicine, cell and gene therapy, PROTAC, and ADC drugs have become hotspots. Following small molecule and antibody drugs, cell and gene therapy is expected to lead the next wave of treatment technologies. With products such as CAR-T being approved in China one after another, the market size for cell and gene therapy (CGT) in China is expected to reach $2.59 billion by 2025, with a CAGR (compound annual growth rate) of up to 276% from 2020 to 2025. The protein degradation targeting conjugate (PROTAC) track is poised to emerge, with Sequoia, Honghui, Tonghe Yucheng, and others investing early in related innovative pharmaceutical companies, and many Chinese pharmaceutical companies have also made arrangements. The global ADC drug market is rapidly expanding, with a significant acceleration in product launch speed in the past two years. China's ADC research pipeline is also poised to emerge, including the independently developed vedotinib by Rongchang Biotech, which was approved in June 2021, and the Chinese ADC market is about to enter a golden period. Regarding the question of what stage China's innovative drugs are in, Zhang Xiao, a partner at Yikai Capital and head of the pharmaceutical and biotechnology group, stated that China's R&D of innovative drugs started with generic drugs, went through the Me-too and Me-better phases, and is currently in a transitional period towards Best-in-Class, while also standing at a critical juncture for transitioning to First-in-Class.   "When Chinese innovative drugs first started, although domestic companies had accumulated some experience in small molecule generic drugs, they still lagged far behind overseas in terms of talent, technology, and regulatory policies. The capital market was also not fully developed, and innovation mainly focused on the research and development of Me-too drugs, which could be 10 years or more behind original research drugs. From 2010 to 2015, Chinese innovative drugs entered a transformation period, with overseas talents returning to China with R&D experience to join the wave of innovation. The time gap between Fast-Follow drugs and original research drugs was shortened to within 5 years, and molecules with the potential for Best-in-Class emerged. After 2015, the Chinese innovative drug market flourished, with review and approval gradually aligning with international standards. Chinese innovative drugs began to enter overseas markets, several products reached cooperation agreements with major international pharmaceutical companies, and capital reached an unprecedented level," said Zhang Xiao.   Zhang Xiao stated: Currently, China's innovative drugs are still in the transition period to Best-in-Class status. However, it should be noted that the differentiated R&D of drugs targeting the same target has high technical barriers. True B-I-C (Breakthrough-Into-Class) innovation should ultimately reflect differences sufficient to alter medication choices during actual clinical treatment applications. Taking PD-1 as an example, the current market competition is more about commercial layout. In terms of B-I-C drug innovation, Chinese innovative drugs still face challenges but also have tremendous opportunities.   Target homogenization is evident, and a lack of source innovation is caused by multiple factors The breakthrough of innovative drugs in China must overcome the homogenization of innovation targets. On November 10th, the Center for Drug Evaluation of the National Medical Products Administration released the 'Annual Report on the Current Status of Clinical Trials for New Drug Registration in China (2020)', which is the first report to comprehensively summarize and analyze the current status of clinical trials for new drug registration in China.   The Report points out that the number of new drug clinical trials and the variety of drugs in China have increased significantly compared to previous years. At the same time, Class 1 new drugs account for a relatively high proportion. However, the distribution of drug targets and indications is relatively concentrated, indicating that while new drug clinical trials are developing rapidly in China, there is also a problem of homogenization in clinical trials.   The report shows that in 2020, the Drug Clinical Trial Registration and Information Publicity Platform registered a total of 2602 clinical trials. However, the top 10 target drugs registered for clinical trials were PD-1, CYP51A1, VEGFR, PD-L1, DNA, EGFR, microtubule, HER2, GLP-1R, and JAK1, with a total number of 389 varieties, accounting for more than 10%.   In terms of the number of clinical trials, the aforementioned top 10 targets also have a highly concentrated clinical presence. Among them, more than 60 clinical trials have been conducted for targets such as PD-1, VEGFR, and PD-L1, with nearly 100 clinical trials targeting the PD-1 target alone.   Additionally, in terms of indications, clinical trials are mainly concentrated in areas such as anti-tumor and anti-infection. The indications for biologics and chemical drugs are primarily anti-tumor, accounting for 42.1% and 47.3%, respectively.   Zhu Yi, Executive Director of the Healthcare Business Unit at Frost & Sullivan Greater China, pointed out that although China has a rich pipeline of innovative drugs, there is serious homogenization. Taking PD-1/L1 inhibitors as an example, as of December 28, 2021, the Chinese NMPA had approved 11 products, including up to seven domestically produced innovative varieties, which is the highest number in the world. Similar phenomena are also occurring in the research and development of other popular targets. Homogeneous competition has led to waste of innovative R&D resources and indirect encroachment on the R&D resources for other clinical needs. Therefore, how to guide the rational allocation of innovative R&D resources will be an important matter for China's innovative development. Regarding the issue of innovation homogenization, Zhang Xiao interprets the concentration on the research and development of popular targets as a lack of source innovation. He points out that the current lack of source innovation is the result of multiple dimensions influencing it. Firstly, there is still a gap between China's scientific research and translational levels compared to overseas, with the university research evaluation system being biased towards projects with lower risks and clear outputs. The average conversion rate of effective patents into products for industries is less than 10%.   Secondly, payment-side bottlenecks limit the flow of capital towards source innovation. In the United States, small enterprises lead innovation, with multinational pharmaceutical companies supporting them through incubation or product introduction while taking on R&D risks. MNCs add and terminate pipelines at a similar rate each year, making high R&D risk a norm. Currently, the cooperation of leading large pharmaceutical companies in China mainly focuses on mature products, increasing the pressure on biotech companies to invest in clinical manpower and funds.   Finally, at the capital end, the proportion of venture capital funds used in China to support incubation and transformation is much lower than that of leading global biopharmaceutical countries. At the same time, the capital market's ability to absorb clinical failures is still relatively low, with the primary and secondary markets essentially tending towards risk aversion, resulting in certain financial pressure on source innovation.   The changes of giants under China's innovation Driven by innovation in China, for multinational pharmaceutical companies (MNCs), the Chinese market and innovation are becoming increasingly important. It can be seen that they are increasingly willing to invest resources in China's innovation, whether it is in clinical BD, incubation, investment, or other aspects.   In terms of clinical practice, China has gradually become part of the global clinical trials conducted by multinational corporations (MNCs). Novartis announced an adjustment to its R&D strategy in China, planning to make Shanghai's R&D center a global excellence center for early clinical development of drugs on Novartis' R&D pipeline. Boehringer Ingelheim launched the China In and China Key projects, defaulting to include all Boehringer Ingelheim's early clinical and global registration studies in China, enabling China to submit drug marketing applications simultaneously with the United States, the European Union, and Japan.   In terms of product BD, taking Amgen's strategic cooperation with BeiGene on multiple products as an example, in 2020, MNC accelerated its cooperation with Chinese pharmaceutical companies both through license-in and license-out. Numerous collaborations such as Roche's license-out deal for the development of a universal CAR-T and TCB bispecific antibody with Innovent Biologics, as well as AbbVie's license-in deal for the introduction of the Tianjing CD47 monoclonal antibody, reflect MNC's recognition of the R&D and execution capabilities of Chinese pharmaceutical companies.   In terms of incubation, more and more multinational corporations (MNCs) are starting to establish innovation incubators in China, deeply participating in Chinese innovation. Roche's accelerator located in Zhangjiang, Shanghai is the first accelerator independently established and operated by Roche globally. Startups that join can receive full-chain resource support from Roche, ranging from early research and development to later commercialization, as well as opportunities for financial support such as research funds. Similar incubators include Merck Innovation Center and Johnson & Johnson's JLABS incubator.   In terms of investment, MNCs participate in the Chinese innovative drug market through direct investment or by investing in funds. The Global Healthcare Industry Fund jointly established by AstraZeneca and CICC Capital is AstraZeneca's first healthcare industry fund raised globally and has so far been the largest in scale. Sanofi has made strategic investments in Kite Pharma Innovation Fund, indirectly supporting Chinese healthcare startups.   The future is promising Regarding the prospects for where future innovative drugs will go, Zhang Xiao stated that resource influx, crowded competition tracks, full-fledged competition, and rational capital returns are inevitable stages for every emerging industry. Continuous experimentation and trial-and-error are also signs that the research and development of innovative drugs remains active.   He stated that the integration of technologies such as AI with pharmaceuticals in the future is expected to bring new technical means for target discovery and drug development, helping to improve R&D efficiency and success rates. The continuous development of industries such as CXO can also contribute to optimizing resource allocation. There are still vast blue oceans waiting to be explored in specialized tracks like ophthalmology. In very specific areas, there is a smaller gap between Chinese innovative drugs and world-leading levels, and overseas R&D stages are still early, potentially offering opportunities for overtaking on a curve. For example, gene editing, mRNA, and iPSC are fields that have seen many outstanding scientists participating recently, with high capital support and investment.   "Although there is still a long way to go for China's innovative drugs to reach a complete and mature ecosystem, it also harbors countless opportunities, and the future is promising," said Zhang Xiao.   *This article is reprinted from 'Blue Whale Finance', authored by Tu Jun, with the original title 'Review and Outlook | The difficulty of listing as an innovation highlight masks the embarrassment of insufficient source innovation. Is local innovative drug 'the future has come' or 'dividend has ended'?'.

According to Xinhua News Agency, a recent executive meeting of the State Council was held to determine cross-cycle adjustment measures to promote stable foreign trade development; arrangements were made for the implementation of the Regional Comprehensive Economic Partnership Agreement (RCEP) after its entry into force. The meeting pointed out that through the joint efforts of relevant international and domestic parties, the RCEP will officially come into effect on January 1, 2022. It is necessary to support enterprises to seize the opportunity of the agreement's implementation, enhance their competitiveness in the international market, further improve the level of trade and investment development, and force domestic industrial upgrading. On December 23, 2021, Gao Feng, spokesperson for the Ministry of Commerce, stated at a regular press conference that preparations for the domestic implementation of the RCEP are now complete. How to interpret China's formal accession to the RCEP? Which industries in China will benefit from the RCEP? After joining the RCEP, what changes are predicted to occur in China's global industrial chain layout? What impact does the RCEP have on China's foreign trade? How does the RCEP guide client enterprises to benefit from tariff reductions and find new opportunities? Dr. Wang Xin, a global partner at Frost & Sullivan (Frost & Sullivan, abbreviated as "Frost & Sullivan") and President of Greater China, recently spoke with the CGTN Global Business program of China International Television about his views on China's accession to the RCEP.   Reporter: What is Frost & Sullivan's interpretation of China's accession to the RCEP on January 1 st ? Reporter: What is Frost & Sullivan's interpretation of China's official accession to the RCEP on January 1? Neil Wang, Dr. of Economics, Nanyang Technological University: Thank you for your question. There is no doubt that the Regional Comprehensive Economic Partnership (RCEP) is important for Asia's regional economic integration and will drive the global economy closely around Asia, Europe, and North America. We believe that China's participation in the RCEP can promote China's international trade and outbound investment in many ways. By leveraging the closed-loop value chain in the RCEP region, we can achieve technological advancement, market integration, and industrial chain upgrading. This will reduce China's trade dependence on the United States and Europe and help further elevate China's international status. Dr. Wang Xin: Thank you for your question. Undoubtedly, the RCEP is of great significance to the economic integration of the Asian region and will drive the global economy closely centered around Asia, Europe, and North America. We believe that China's accession to the RCEP can promote international trade and foreign investment in various aspects. By utilizing the closed-loop value chain within the RCEP region, it can achieve technological upgrading, market integration, and industrial chain upgrading. This will reduce China's trade dependence on the United States and Europe and help further enhance China's international status.     Reporter: In your opinion, which industries in China will benefit from RCEP? Reporter: In your opinion, which industries in China will benefit from the RCEP agreement? Neil Wang, PhD: To promote the upgrading of China's high-end manufacturing industry and enhance China's position in the global supply chain. Dr. Wang Xin: Promote the industrial upgrading of China's high-end manufacturing industry and enhance China's position in the global supply chain. The RCEP will help upgrade China's manufacturing industry by improving the quality standards of Chinese products and driving higher-quality development in the economy. The agreement covers international trade and competition, market openness, intellectual property rights, e-commerce, and other aspects. From the perspectives of investment protection, freedom, and convenience, it will have a systematic and comprehensive impact on our foreign trade and investment development. With the upgrade in China's industrial structure and the enhancement of mid-to-high-end manufacturing capabilities, China's manufacturing industry will gradually shift to high-tech, high-value-added sectors in the international division of labor. The RCEP will guide and refine the regional trade division of labor, which is conducive to the extension of China's industrial chain and the upgrading of its value chain. The RCEP will help upgrade China's manufacturing industry, improve the quality standards of Chinese products, and promote high-quality development of the Chinese economy. The RCEP agreement covers multiple aspects such as international trade and competition, market opening, intellectual property rights, e-commerce, etc., and will have a systematic comprehensive impact on the development of China's foreign trade and investment from perspectives such as investment protection, freedom, and facilitation. With the upgrading of China's industrial structure and the enhancement of the strength of mid- to high-end manufacturing, China's manufacturing industry will gradually shift towards high technology and high added value in the international division of labor. The RCEP will guide and refine regional trade division of labor, which is conducive to the extension of China's industrial chain and the improvement of its value chain.   Reporter: What changes do you expect to happen to China's position in the global industrial chain layout after joining the RCEP? Reporter: After joining the RCEP, what changes do you predict will occur to China's position in the global industrial chain layout? Neil Wang, PhD: China will take advantage of the RCEP to promote regional economic integration and global economic and trade cooperation. Dr. Wang Xin: China will leverage the RCEP to advance regional economic integration and global economic and trade cooperation. The signing of the RCEP Agreement means that tariffs, tariff barriers, and other trade restrictions of regional member countries will be significantly reduced; trade terms will be fair, reasonable, and transparent, promoting rapid circulation of factors in the region, free and convenient trade and investment, and closer cooperation between industrial chains and supply chains. This is conducive to further expanding China's import and export trade, as well as promoting regional economic integration. The signing of the RCEP means that tariffs, tariff barriers, and other trade restrictions among member countries within the region will be significantly reduced; trade terms will become more fair, reasonable, and transparent. This will promote rapid factor flow within the region, free and convenient trade and investment, closer cooperation in industrial chains and supply chains, which is conducive to China's further expansion of import and export trade and the integration of regional economies. Among the 15 RCEP countries, China is the absolute leader in terms of population and GDP, thus placing it in a key position in the value chain cooperation across the entire RCEP region. China has developed a technological lead, and with the labor advantage of ASEAN countries and the natural resources of Australia and New Zealand, a 'world factory' led by China is being formed at an accelerating pace. Multinational companies will prefer to locate their industrial chains in the RCEP region, and China's important position in the global industrial chain pattern will be further consolidated. Among the RCEP 15 countries, China is definitely leading in terms of population and GDP. Therefore, China holds a key position in value chain cooperation across the entire RCEP region. China has already formed a technological leadership advantage. Leveraging the labor advantages of ASEAN countries and the natural resources of New Australia, a 'world factory' led by China is accelerating its formation. Multinational companies tend to locate their industrial chains in the RCEP region, further consolidating China's important position in the global industrial chain pattern.   Reporter: What are the impacts that foreign trade has brought to China? Reporter: What impact does the RCEP have on China's foreign trade? Neil Wang, PhD: From the perspective of foreign relations, the RCEP is conducive to promoting economic and trade cooperation among China, Japan and South Korea, easing trade tensions between China and the US, and reducing dependence on the US. Dr. Wang Xin: From the perspective of foreign relations, the RCEP agreement is conducive to promoting economic and trade cooperation among China, Japan, and South Korea, alleviating Sino-US trade frictions, and reducing dependence on the US. Among the 15 countries of the Regional Comprehensive Economic Partnership (RCEP), China, Japan, and South Korea account for approximately 80% of the total economic value. It is expected that cooperation among these three countries will be further improved under the framework of the agreement. Firstly, the RCEP is the first free trade agreement among China, Japan, and South Korea. Over the past decade, the overall trade volume of the three countries fluctuated due to trade frictions between China and the United States. The signing of the RCEP agreement is conducive to promoting smoother and steadier trade among China, Japan, and South Korea. Secondly, increased trade cooperation among the three countries will assist China's trade diversion. While stimulating China's trade and economic growth, the cooperation may reduce China's dependence on the US market, making China more proactive and favorable in Sino-US trade relations to compensate for the reduction in China's foreign trade caused by the friction between the US and China. Among the RCEP 15 countries, the economies of China, Japan, and South Korea account for about 80%. Under the framework of the agreement, cooperation among these three countries is expected to deepen further. Firstly, RCEP represents the first time that China, Japan, and South Korea have reached a free trade agreement. In the past decade, affected by Sino-US trade frictions, the overall trade volume of the three countries has fluctuated significantly. The signing of the RCEP agreement is conducive to promoting smoother and more stable trade between China, Japan, and South Korea. Secondly, increased trade cooperation among China, Japan, and South Korea will assist in the transfer of China's foreign trade. While promoting China's trade and economic growth, it can help reduce China's dependence on the US market, enabling China to gain more initiative in Sino-US trade relations and compensate for the reduction in China's foreign trade caused by Sino-US trade frictions. Overall, I believe that the RCEP can make China's existing international supply chain more stable and enhance China's ability to withstand risks, which will have positive effects on China's economic development, security, and stability. At the same time, when each member country can fully leverage its own advantages in factors of production, the RCEP will effectively empower the development of intra-Asia trade cooperation. By adjusting the layout of foreign trade and investment and optimizing resource allocation, member countries will strengthen the critical position of East Asia in the global economy. Thank you. Overall, we believe that through the RCEP, China's existing international supply chain cooperation can be made more stable, enhancing its ability to resist risks and thus having a positive impact on China's economic development, security, and stability. At the same time, the RCEP will effectively empower trade collaboration within the Asian region. Each contracting party can fully leverage its production factor advantages, optimize resource allocation by adjusting foreign trade and investment layouts, and enhance the key position of East Asian economies in the global economy. Thank you. Reporter: Thank you very much, Dr. Neil. You have just provided a comprehensive and in-depth explanation from a macro perspective. In fact, we are also very interested in the benefits of RCEP for the development of Chinese companies. Could you please discuss "how can RCEP guide our corporate clients to benefit and explore new opportunities from tariff reduction"? Reporter: Thank you very much, Dr. Neil. You have just provided a comprehensive and in-depth explanation from a macro perspective. In fact, we are also very interested in the benefits of RCEP for the development of Chinese companies. Could you please discuss "how can RCEP guide our corporate clients to benefit and explore new opportunities from tariff reduction"? Reporter: Thank you very much, Dr. Neil. You have just provided a comprehensive and in-depth explanation from a macro perspective. In fact, we are also very interested in the benefits of RCEP for the development of Chinese companies. Could you please discuss "how can RCEP guide our corporate clients to benefit and explore new opportunities from tariff reduction"? Reporter: Thank you very much, Dr. Neil. You have just provided a comprehensive and in-depth explanation from a macro perspective. In fact, we are also very interested in the benefits of RCEP for the development of Chinese companies. Could you please discuss "how can RCEP guide our corporate clients to benefit and explore new opportunities from tariff reduction"? Reporter: Thank you very much, Dr. Neil. You have just provided a comprehensive and in-depth explanation from a macro perspective. In fact, we are also very interested in the benefits of RCEP for the development of Chinese companies. Could you please discuss "how can RCEP guide our corporate clients to benefit and explore new opportunities from tariff reduction"? Reporter: Thank you very much, Dr. Neil. You have just provided a comprehensive and in-depth explanation from a macro perspective. In fact, we are also very interested in the benefits of RCEP for the development of Chinese companies. Could you please discuss "how can RCEP guide our corporate clients to benefit and explore new opportunities from tariff reduction"? Reporter: Thank you very much, Dr. Neil. You have just provided a comprehensive and in-depth explanation from a macro perspective. In fact, we are also very interested in the benefits of RCEP for the development of Chinese companies. Could you please discuss "how can RCEP guide our corporate clients to benefit and explore new opportunities from tariff reduction"? Reporter: Thank you very much, Dr. Neil. You have just provided a comprehensive and in-depth explanation from a macro perspective. In fact, we are also very interested in the benefits of RCEP for the development of Chinese companies. Could you please discuss "how can RCEP guide our corporate clients to benefit and explore new opportunities from tariff reduction"? Reporter: Thank you very much, Dr. Neil. You have just provided a comprehensive and in-depth explanation from a macro perspective. In fact, we are also very interested in the benefits of RCEP for the development of Chinese companies. Could you please discuss "how can RCEP guide our corporate clients to benefit and explore new opportunities from tariff reduction"? Reporter: Thank you very much, Dr. Neil. You have just provided a comprehensive and in-depth explanation from a macro perspective. In fact, we are also very interested in the benefits of RCEP for the development of Chinese companies. Could you please discuss "how can RCEP guide our corporate clients to benefit and explore new opportunities from tariff reduction"? Reporter: Thank you very much, Dr. Neil. You have just provided a comprehensive and in-depth explanation from a macro perspective. In fact, we are also very interested in the benefits of RCEP for the development of Chinese companies. Could you please discuss "how can RCEP guide our corporate clients to benefit and explore new opportunities from tariff reduction"? Reporter: Thank you very much, Dr. Wang. You have just provided a comprehensive and in-depth interpretation from a macro perspective. In fact, we are also very concerned about the benefits that RCEP can bring to the development of Chinese enterprises. Could you please focus on how 'RCEP guides customer enterprises to benefit from tariff reductions and find new opportunities?' Neil Wang, PhD: The RCEP's 'tariff-free' status will bring huge development opportunities for Chinese enterprises in various industries. Dr. Wang Xin: The RCEP 'zero tariffs' will bring tremendous development opportunities to enterprises in various industries across China. The RCEP 'tariff-free' refers to the ultimate achievement of zero tariffs on over 90% of the goods traded within the RCEP region once the agreement comes into effect, with immediate zero tariffs on some goods or zero tariffs for others within ten years. The introduction of this policy means that member countries will liberalize trade in goods in a short period of time. This enables beneficiary enterprises to significantly reduce production and investment costs, expand markets, and improve competitiveness globally. RCEP 'zero tariffs' mean that after the agreement comes into effect, more than 90% of the goods traded within the region will eventually achieve zero tariffs, with some goods immediately reduced to zero tariffs and others within ten years. The introduction of this policy implies that the contracting parties will liberalize trade in goods within a relatively short period, which will help reduce production and investment costs for Chinese enterprises, expand market space, and enhance their international competitiveness. In terms of imports, 'tariff-free' helps enterprises expand the procurement scale of raw materials, automotive, electronics, and other components at much lower costs, better meeting domestic market demands for consumer upgrading, cost reduction, efficiency improvement for enterprises, and supply chain optimization. From an import perspective, 'zero tariffs' help enterprises expand their procurement of raw materials, auto parts, electronic components, and other parts at lower costs, better meeting domestic market needs for consumption upgrades, reducing costs and increasing efficiency for enterprises, and optimizing the supply chain ecosystem. Regarding exports, the 'tariff-free' policy will significantly reduce product prices, promoting more Chinese products to be marketed internationally, removing many challenges faced by enterprises in the international markets. Especially for products with export advantages, 'zero tariffs' enable Chinese enterprises to enhance their competitiveness in the global market and replace the market shares of non-member countries, leading to further export expansion. From an export standpoint, the 'zero tariffs' policy will significantly reduce product prices, drive more Chinese products into international markets, and eliminate many challenges faced by enterprises in the international marketplace. Especially for products with export advantages, 'zero tariffs' will allow Chinese enterprises to enhance their competitiveness in the global market, replace the market share of non-member countries, and further expand exports. In addition, the RCEP cumulative rules of origin are highly beneficial for small and medium-sized enterprise exports. It stipulates that when goods are exported to any RCEP member country, all intermediate goods and accessories from any RCEP country can be included in the value-added percentage of the origin to meet the regional value content requirement of 40%. This makes it easier for businesses to ensure their products meet RCEP origin requirements, potentially enhancing the flexibility and autonomy of industry chain layout. Therefore, 'zero tariffs' will bring about supply chain optimization, enhanced market discourse, and expanded global influence for Chinese enterprises with broader development prospects. Furthermore, the RCEP cumulative rules of origin are very beneficial for the exports of small and medium-sized enterprises. They stipulate that when goods are exported to any RCEP member country, intermediate goods and accessories from any RCEP country can be included in the value-added percentage of the origin to meet the final export product's value-added requirement of 40%, greatly lowering the threshold for benefiting from these rules and enhancing the flexibility and autonomy of industry chain layout. Therefore, 'zero tariffs' provide broad development opportunities for Chinese enterprises to optimize their supply chains, enhance their market discourse power, and expand their global influence.

On December 29, CSSC Technology Group Co., Ltd., a listed company under China State Shipbuilding Corporation, and CSSC Power Co., Ltd. respectively issued announcements on major asset restructuring. CSSC Power announced that in order to standardize the competition among diesel engine businesses under China State Shipbuilding Corporation, the company plans to jointly invest with CSSC Industry Group and CSSC Shipbuilding to establish a joint venture. After the completion of this transaction, CSSC Power will hold a controlling stake in the joint venture; CSSC Technology Group issued an announcement stating that it plans to issue shares to acquire part or all of the equity of CSSC Marine Engineering, CSSC Wind Power Development, Xinjiang Haiwei, Luoyang Shuangrui, and Lingjiu Electric, and intends to raise matching funds. What is the global pattern of the shipbuilding industry? Is China State Shipbuilding Corporation choosing to carry out major asset restructuring at this time point in order to cope with the major cyclical explosion in the shipbuilding industry? Do domestic shipbuilding enterprises have made arrangements for high-end ships? How can they strengthen technological progress? Dr. Wang Xin, a global partner and President of Greater China at Frost & Sullivan (Frost & Sullivan, abbreviated as: Frost & Sullivan), was interviewed by Securities Daily, discussing the future development path of China's shipbuilding industry from the perspective of the major asset restructuring of 'China's Divine Ships'.   The major asset restructuring of 'China's Divine Ship' has kicked off. On December 29, CSSC Technology Group Co., Ltd., a listed company under China State Shipbuilding Corporation, and CSSC Power Co., Ltd. respectively issued announcements on major asset restructuring. CSSC Power announced that in order to standardize the competition among diesel engine businesses under China State Shipbuilding Corporation, the company plans to jointly invest with CSSC Industry Group and CSSC Shipbuilding to establish a joint venture. After the completion of this transaction, CSSC Power will hold a controlling stake in the joint venture; CSSC Technology Group issued an announcement stating that the company plans to issue shares to acquire part or all of the equity of CSSC Marine Equipment, CSSC Wind Power Development, Xinjiang Haiwei, Luoyang Shuangrui, and Lingjiu Electric, and also plans to raise supporting funds. With the disclosure of the aforementioned announcement, on that day, stocks in the CSSC group opened higher, among which CSSC HanGuang rose by 12%, closing at 18.29 yuan per share. China Coastal Defense Group hit the daily limit up, with CSSC Emergency Response Group surging by more than 7%. Zhongyongyang, China Power, CSSC Marine Engineering & Technology, and others followed suit. Pan Helin, Executive Dean of the Digital Economy Research Institute at Zhongnan University of Economics and Law, said in an interview with a reporter from Securities Daily, "This asset restructuring is an optimization and integration of internal operations by CSSC. For example, the offshore wind business has been incorporated into CSSC Technology, and the oil rig business has been moved into China National Offshore Oil Corporation (CNOC). This promotes subsidiaries to focus on their main businesses, enabling them to concentrate their efforts on developing their core competencies, making business operations more focused, achieving larger-scale integration, and enhancing the company's global competitiveness." Hu Qimu, chief researcher at the China Iron and Steel Economic Research Institute, said in an interview with a reporter from Securities Daily, "After the merger of CSSC and CRRC, internal business integration is a very urgent task. The realization of synergies is not simply about adding up scales, but about optimizing the structure through specialized integration to enhance advantages, share resources, and achieve ecological synergy." Hu Qimu told the Securities Daily reporter, 'The restructuring of listed companies under China State Shipbuilding Corporation is just a step in internal business integration, indicating that the group's integration efforts will be gradually implemented.'   Focus on core business to enhance market competitiveness Looking back at 2019, in order to deepen the reform of state-owned enterprises and further focus on the main business of ships, CSSC (China State Shipbuilding Corporation) and CSIC (China State Shipbuilding Heavy Industry Corporation), which are part of the same group, implemented a joint restructuring. On November 26th of that year, they held their founding meeting in Beijing, establishing China State Shipbuilding Group. For a time, the news of the birth of 'China's Divine Ship' spread throughout the market. On July 1, 2021, nine listed companies under China State Shipbuilding Corporation (CSSC) collectively issued an announcement. CSSC obtained 100% equity of CSSCIC and CSSC Heavy Industry Corporation through the gratuitous transfer of state-owned shares, thereby becoming the actual controller of the nine listed companies. This has officially put forward the agenda for CSSC to resolve the issue of horizontal competition among its listed companies. According to the announcement released by China Power this time, in order to further regulate the competition among diesel engine businesses under CSSC Group, the company plans to jointly invest with CSSC Industry Group and CSSC Shipbuilding to establish a joint venture. The target assets for investment are the shares held by all parties involved in the transaction, namely CSSC Power, CSSC Marine Diesel, Shaanxi Diesel Heavy Industry, and Hebei Diesel Heavy Industry. China Power stated that after the completion of this transaction, it will hold a controlling stake in the joint venture. Zhang Linxiang, a staff member of the Power Securities Department of China, told the Securities Daily reporter, 'From a regulatory perspective, this asset restructuring is conducive to solving the problem of inter-industry competition. From a business development standpoint, after this restructuring, the diesel engine business has been further coordinated and developed, reducing internal competition and enhancing the company's bargaining power and market voice. In addition, low-speed engines are mainly used on large ocean-going ships. With the recovery of the shipbuilding industry this year and riding on the wave of the industry's momentum, the company's business is expected to see further development.' CSIC Technology announced on the same day that its indirect controlling shareholder, CSSC Group, is currently planning major matters related to the company. The matter is expected to involve issuing shares to acquire 100% equity of CSSC Offshore Container Containers Co., Ltd., 88.58% equity of CSSC Wind Power Development Co., Ltd., 100% equity of Xinjiang Haiwei Co., Ltd., a minority stake of 44.64% in Luoyang Shuangrui Co., Ltd., and a minority stake of 10% in Lingjiu Electric Co., Ltd., as well as plans to raise matching funds. Hu Qimu told reporters, 'This asset restructuring will inject wind power assets and diesel engine assets into two specialized companies respectively. In fact, it is about creating two major professional operation platforms for wind power and diesel engines. This is conducive to the specialized integration of resources such as R&D, production, and channels in these business chains, focusing on the main business to enhance market competitiveness.' On December 29th, CSSC issued a notice stating that CSSC Group Co., Ltd. is planning the merger of CSSC Industry Corporation Limited, CSSC Industry Co., Ltd. (hereinafter referred to as 'CSSC') with CSSC Heavy Industry Group Power Co., Ltd. In response, someone familiar with the company told the Securities Daily reporter that this restructuring will further highlight the main responsibilities and businesses, and promote high-quality development.   Search for breakthroughs in the high-end ship sector With the integration and development of China State Shipbuilding Corporation, China's shipbuilding industry has been making visible progress towards high-precision and advanced fields at an accelerating pace, moving towards the goal of becoming a strong shipbuilding nation from a major shipbuilder. Judging from the public data, In the first half of this year, China's international market share in three major shipbuilding indicators remained above 40%. The volume of completed shipyards, new orders received, and on-hand orders accounted for 44.9%, 51.0%, and 45.8% of the world total respectively, measured by deadweight tonnage. Meanwhile, the global shipbuilding industry is structured with China, Japan, and South Korea standing in a tripartite confrontation, and the trend towards a split between China and South Korea is becoming increasingly evident. According to data from the Shipbuilding Industry Association, from January to November this year, the country's shipbuilding completed 35.88 million deadweight tons, a year-on-year increase of 7.9%. It received new ship orders worth 63.64 million deadweight tons, a year-on-year increase of 182.6%. By the end of November, there were 96.39 million deadweight tons in hand, a year-on-year increase of 35.9%. According to the financial data disclosed by CSSC from January to September this year, the group's operating revenue, new contracts received, total industrial output value, net profit, and total profit increased by 9.3%, 34.5%, 12.3%, 26.1%, and 22.9% year-on-year respectively, laying a solid foundation for achieving the annual target tasks. The operation of the shipbuilding and maritime industry has continuously made new breakthroughs, with its international market share remaining at the top among global shipbuilding groups. Is the choice by China State Shipbuilding Corporation to carry out major asset restructuring at this time point in order to cope with a major outbreak of the cyclical boom in the shipbuilding industry? Hu Qimu said, 'The focus of the major asset restructuring of CSSC this time is on power generation, which is actually about industrial upgrading rather than capacity expansion.'     "From an industry perspective, in 2020, there were approximately 400 shipyards globally. The world's shipbuilding industry generally maintained a competitive landscape of 'three giants' (China, South Korea, and Japan), while Europe and America still possess advantages in the construction of military ships and luxury cruise ships. Vertically, the global shipbuilding industry has been deeply integrated, with frequent emergence of shipbuilding giants. With the deep integration of new-generation information and communication technology with shipbuilding technology, the influence of labor costs on the transfer of the shipbuilding industry has relatively weakened, and the importance of technical factors has become increasingly prominent." Wang Xin, Global Partner at Frost & Sullivan and President of Greater China, told the Securities Daily, "In recent years, our country has continuously made progress in high-end ship types. The first large luxury cruise ship has started construction at Waigaoqiao Shipyard, and Hudong Zhonghua has also signed an order for a large LNG vessel worth 20 billion yuan. In the future, it is expected that China and South Korea will continue to engage in fierce competition around high-end ship types." Wang Xin told reporters, 'With the deep integration of information technology and manufacturing, and as international maritime affairs put forward higher requirements for ship environmental protection, shipbuilding will develop towards greener and more intelligent products and a higher-end product structure. High-tech and high-value-added ships need to rapidly improve the design and construction levels of LNG ships, large LPG ships, and other products, creating high-end brands; break through technical difficulties in the design and construction of luxury cruise ships; and actively carry out research and development of Arctic new shipping routes ships, new energy ships, etc.' " In the future, we should fully rely on local talent policies to attract high-quality talents from home and abroad, encourage industry-academia integration, and apply what has been learned. At the same time, we must continuously strengthen industrial layout adjustments, promote rational resource allocation, drive the development of the entire industrial chain, continue to deepen reforms, optimize the industrial structure, and enhance independent innovation capabilities. " Wang Xin said." In addition to continuously advancing asset integration, CSSC is also implementing asset securitization within the three-year action plan for state-owned enterprise reform. As CSSC Technology, a listed company under China State Shipbuilding Corporation, plans to issue shares to acquire partial or all equity of CSSC Marine Engineering, CSSC Wind Power Development, Xinjiang Haiwei, Luoyang Shuangrui, and Lingjiu Electric, as well as raise matching funds, the asset securitization of CSSC Corporation has taken an important step forward. The 'Three-Year Action Plan for State-Owned Enterprise Reform (2020-2022)' proposes that state-owned enterprises should become market entities with core competitiveness. The mixed reform, restructuring and integration of state-owned enterprises, as well as the reform of the state-owned asset supervision system, will enter a new stage of rapid and substantial progress, with more than 70% of the total tasks completed by the end of 2021. Chen Dingru, an analyst at Zhongtai Securities, said that the 'Three-Year Action Plan for State-Owned Enterprise Reform' is about to enter a critical year, and reform dividends are expected to be released more rapidly. The mixed-ownership reform of state-owned military enterprises is an important part of state-owned enterprise reform.   *This article is reprinted from 'Securities Daily', with reporters Jiao Yue, Shi Lu, and Zhang Xiaoyu. The original title was 'The Integration of 'China's Divine Ship' Breaks Ice, with Listed Companies Under It Taking the Lead in Reorganizing'.

Frost & Sullivan insights According to Xinhua News Agency, a recent executive meeting of the State Council was held to determine cross-cycle adjustment measures to promote stable foreign trade development; arrangements were made for the implementation of the Regional Comprehensive Economic Partnership Agreement (RCEP) after its entry into force. The meeting pointed out that through the joint efforts of relevant international and domestic parties, the RCEP will officially come into effect on January 1, 2022. It is necessary to support enterprises to seize the opportunity of the agreement's implementation, enhance their competitiveness in the international market, further improve the level of trade and investment development, and force domestic industrial upgrading. On December 23, 2021, Gao Feng, spokesperson for the Ministry of Commerce, stated at a regular press conference that all preparatory work for the domestic implementation of the RCEP has been completed. How to interpret China's formal accession to the RCEP? Which industries in China will benefit from the RCEP? After joining the RCEP, what changes are predicted to occur in China's global industrial chain layout? What impact does the RCEP have on China's foreign trade? How does the RCEP guide client enterprises to benefit from tariff reductions and find new opportunities? Dr. Wang Xin, a global partner at Frost & Sullivan (Frost & Sullivan, abbreviated as "Frost & Sullivan") and President of Greater China, recently spoke with the CGTN Global Business program of China International Television about his views on China's accession to the RCEP.   CGTN China International Television Station Reporter: What is Frost & Sullivan's interpretation of China's accession to the RCEP on January 1 st ?   Reporter: What is Frost & Sullivan's interpretation of China's official accession to the RCEP on January 1?   Neil Wang, Dr. of Economics, Nanyang Technological University: Thank you for your question. There is no doubt that the Regional Comprehensive Economic Partnership (RCEP) is important for Asia's regional economic integration and will drive the global economy closely around Asia, Europe, and North America. We believe that China's participation in the RCEP can promote China's international trade and outbound investment in many ways. By leveraging the closed-loop value chain in the RCEP region, we can achieve technological advancement, market integration, and industrial chain upgrading. This will reduce China's trade dependence on the United States and Europe and help further elevate China's international status.   Dr. Wang Xin: Thank you for your question. Undoubtedly, the RCEP is of great significance to the economic integration of the Asian region and will drive the global economy closely centered around Asia, Europe, and North America. We believe that China's accession to the RCEP can promote international trade and foreign investment in various aspects. By utilizing the closed-loop value chain within the RCEP region, it can achieve technological upgrading, market integration, and industrial chain upgrading. This will reduce China's trade dependence on the United States and Europe and help further enhance China's international status. Reporter:  In your opinion, which industries in China will benefit from RCEP?    Reporter: In your opinion, which industries in China will benefit from the RCEP agreement?   Neil Wang, PhD: To promote the upgrading of China's high-end manufacturing industry and enhance China's position in the global supply chain.   Dr. Wang Xin: Promote the industrial upgrading of China's high-end manufacturing industry and enhance China's position in the global supply chain.   The RCEP will help upgrade China's manufacturing industry by improving the quality standards of Chinese products and driving higher-quality development in the economy. The agreement covers international trade and competition, market openness, intellectual property rights, e-commerce, and other aspects. From the perspectives of investment protection, freedom, and convenience, it will have a systematic and comprehensive impact on our foreign trade and investment development. With the upgrade in China's industrial structure and the enhancement of mid-to-high-end manufacturing capabilities, China's manufacturing industry will gradually shift to high-tech, high-value-added activities in the international division of labor. The RCEP will guide and refine the regional trade division of labor, which is conducive to the extension of China's industrial chain and the upgrading of its value chain.   The RCEP will help upgrade China's manufacturing industry, improve the quality standards of Chinese products, and promote high-quality development of the Chinese economy. The RCEP agreement covers multiple aspects such as international trade and competition, market opening, intellectual property rights, e-commerce, etc., and will have a systematic comprehensive impact on the development of China's foreign trade and investment from perspectives such as investment protection, freedom, and facilitation. With the upgrading of China's industrial structure and the enhancement of the strength of mid- to high-end manufacturing, China's manufacturing industry will gradually shift towards high technology and high added value in the international division of labor. The RCEP will guide and refine regional trade division of labor, which is conducive to the extension of China's industrial chain and the improvement of its value chain.   Reporter: What changes do you expect to happen to China's position in the global industrial chain layout after joining the RCEP?   Reporter: After joining the RCEP, what changes do you predict will occur to China's position in the global industrial chain layout?   Neil Wang, PhD: China will take advantage of the RCEP to promote regional economic integration and global economic and trade cooperation.   Dr. Wang Xin: China will leverage the RCEP to advance regional economic integration and global economic and trade cooperation.   The signing of the RCEP Agreement means that tariffs, tariff barriers, and other trade restrictions of regional member countries will be significantly reduced; trade terms will be fair, reasonable, and transparent, promoting rapid circulation of factors in the region, free and convenient trade and investment, and closer cooperation between industrial chains and supply chains. This is conducive to further expanding China's import and export trade, as well as promoting regional economic integration.   The signing of the RCEP means that tariffs, tariff barriers, and other trade restrictions among member countries within the region will be significantly reduced; trade terms will become more fair, reasonable, and transparent. This will promote rapid factor flow within the region, free and convenient trade and investment, closer cooperation in industrial chains and supply chains, which is conducive to China's further expansion of import and export trade and the integration of regional economies.   Among the 15 RCEP countries, China is the absolute leader in terms of population and GDP, thus placing it in a key position in the value chain cooperation across the entire RCEP region. China has developed a technological lead, and with the labor advantage of ASEAN countries and the natural resources of Australia and New Zealand, a 'world factory' led by China is being formed at an accelerating pace. Multinational companies will prefer to locate their industrial chains in the RCEP region, and China's important position in the global industrial chain pattern will be further consolidated.   Among the RCEP 15 countries, China is definitely leading in terms of population and GDP. Therefore, China holds a key position in value chain cooperation across the entire RCEP region. China has already formed a technological leadership advantage. Leveraging the labor advantages of ASEAN countries and the natural resources of New Australia, a 'world factory' led by China is accelerating its formation. Multinational companies tend to locate their industrial chains in the RCEP region, further consolidating China's important position in the global industrial chain pattern. Reporter:  What are the impacts that foreign trade has brought to China?   Reporter: What impact does the RCEP have on China's foreign trade?   Neil Wang, PhD: From the perspective of foreign relations, the RCEP is conducive to promoting economic and trade cooperation among China, Japan and South Korea, easing trade tensions between China and the US, and reducing dependence on the US.   Dr. Wang Xin: From the perspective of foreign relations, the RCEP agreement is conducive to promoting economic and trade cooperation among China, Japan, and South Korea, alleviating Sino-US trade frictions, and reducing dependence on the US.   Among the 15 countries of the Regional Comprehensive Economic Partnership (RCEP), China, Japan, and South Korea account for approximately 80% of the total economic value. It is expected that cooperation among these three countries will be further improved under the framework of the agreement. Firstly, the RCEP is the first free trade agreement among China, Japan, and South Korea. Over the past decade, the overall trade volume of the three countries fluctuated due to trade frictions between China and the United States. The signing of the RCEP agreement is conducive to promoting smoother and steadier trade among China, Japan, and South Korea. Secondly, increased trade cooperation among the three countries will assist China's trade diversion. While stimulating China's trade and economic growth, the cooperation may reduce China's dependence on the US market, making China more proactive and favorable in Sino-US trade relations to compensate for the reduction in China's foreign trade caused by the friction between the US and China.   Among the RCEP 15 countries, the economies of China, Japan, and South Korea account for about 80%. Under the framework of the agreement, cooperation among these three countries is expected to deepen further. Firstly, RCEP represents the first time that China, Japan, and South Korea have reached a free trade agreement. In the past decade, affected by Sino-US trade frictions, the overall trade volume of the three countries has fluctuated significantly. The signing of the RCEP agreement is conducive to promoting smoother and more stable trade between China, Japan, and South Korea. Secondly, increased trade cooperation among China, Japan, and South Korea will assist in the transfer of China's foreign trade. While promoting China's trade and economic growth, it can help reduce China's dependence on the US market, enabling China to gain more initiative in Sino-US trade relations and compensate for the reduction in China's foreign trade caused by Sino-US trade frictions.   Overall, I believe that the RCEP can make China's existing international supply chain more stable and enhance China's ability to withstand risks, which will have positive effects on China's economic development, security, and stability. At the same time, when each member country can fully leverage its own advantages in factors of production, the RCEP will effectively empower the development of intra-Asia trade cooperation. By adjusting the layout of foreign trade and investment and optimizing resource allocation, member countries will strengthen the critical position of East Asia in the global economy. Thank you.   Overall, we believe that through the RCEP, China's existing international supply chain cooperation can be made more stable, enhancing its ability to resist risks and thus having a positive impact on China's economic development, security, and stability. At the same time, the RCEP will effectively empower trade collaboration within the Asian region. Each contracting party can fully leverage its production factor advantages, optimize resource allocation by adjusting foreign trade and investment layouts, and enhance the key position of East Asian economies in the global economy. Thank you. Reporter: "Thank you very much, Dr. Neil. You have just provided a comprehensive and in-depth explanation from a macro perspective. In fact, we are also very interested in the benefits of RCEP for the development of Chinese companies. Could you please discuss 'how can RCEP guide our corporate clients to benefit and explore new opportunities from tariff reduction'?"   Reporter: Thank you very much, Dr. Wang. You have just provided a comprehensive and in-depth interpretation from a macro perspective. In fact, we are also very concerned about the benefits that RCEP can bring to the development of Chinese enterprises. Could you please focus on how 'RCEP guides customer enterprises to benefit from tariff reductions and find new opportunities?'   Neil Wang: The RCEP's 'tariff-free' policy will bring huge development opportunities to Chinese enterprises in various industries.   Dr. Wang Xin: The RCEP 'zero tariffs' will bring tremendous development opportunities to enterprises in various industries across China.   The RCEP 'tariff-free' refers to the eventual achievement of zero tariffs on over 90% of the goods traded in the RCEP region once the agreement comes into effect, with immediate zero tariffs on some goods or zero tariffs for others within ten years. The introduction of this policy means that member countries will liberalize trade in goods in a short period of time. This enables beneficiary enterprises to significantly reduce production and investment costs, expand markets, and improve competitiveness globally.   RCEP 'zero tariffs' mean that after the agreement comes into effect, over 90% of the goods traded within the region will eventually achieve zero tariffs, with some immediately reduced to zero and others within ten years. The implementation of this policy signifies that contracting parties will liberalize trade in goods in a relatively short period, which will help reduce production and investment costs for our enterprises, expand market space, and enhance their international competitiveness.   In terms of imports, 'tariff-free' helps enterprises expand their procurement scale of raw materials, automotive, electronics, and other components at much lower costs, better meeting domestic market demands for consumer upgrading, cost reduction, efficiency improvement, and supply chain optimization.   From an import perspective, 'zero tariffs' help enterprises expand their procurement of raw materials, auto parts, electronic components, and other parts at lower costs, better meeting domestic market needs for consumer upgrading, reducing costs and increasing efficiency for enterprises, and optimizing the supply chain ecosystem.   Regarding exports, the 'tariff-free' policy will significantly reduce product prices, promoting more Chinese products to be marketed internationally and removing many challenges for enterprises in international markets. Especially for products with export advantages, 'zero tariffs' enable Chinese enterprises to enhance their competitiveness in global markets and replace market shares of non-member countries, leading to further export expansion.   From an export perspective, the 'zero tariffs' policy will significantly lower product prices, promote more Chinese products into international markets, and eliminate many challenges for enterprises in international markets. Especially for products with export advantages, 'zero tariffs' will enable Chinese enterprises to enhance their competitiveness in global markets, replace market shares of non-member countries, and further expand exports.   In addition, the RCEP cumulative rules of origin are very beneficial for small and medium-sized enterprise exports. It stipulates that when goods are exported to any RCEP member country, all intermediate goods and accessories from any RCEP country can be included in the value-added percentage of the origin to meet the regional value content requirement of 40%. This makes it easier for businesses to meet RCEP origin requirements, which may enhance the flexibility and autonomy of industry chain layout. Therefore, 'zero tariffs' bring optimization of supply chains, enhancement of market discourse, and expansion of global influence for Chinese enterprises with broader development space.   Furthermore, the RCEP cumulative rules of origin are highly advantageous for small and medium-sized enterprise exports. It stipulates that when goods are exported to any RCEP member country, intermediate goods and accessories from any RCEP country can be incorporated into the value-added percentage of the origin to meet the final export product's value-added requirement of 40%, significantly lowering the threshold for benefiting from these rules and enhancing the flexibility and autonomy of industry chain layout. Therefore, 'zero tariffs' provide a broad development space for Chinese enterprises to optimize their supply chains, enhance their market discourse, and expand their global influence.

Cloud collaboration to create new cloud value “Cloud collaboration to create new cloud value” —— The Huawei Cloud and Huawei Terminal Cloud Service Innovation Summit 2022 was grandly held in Beijing. During the conference, a “Media and Social Industry Summit Forum” themed “New Media and Entertainment, New Experiences, New Opportunities” was held on the morning of December 29th for the entertainment and social industry. Guests from the fields of internet culture, entertainment, social networking, media, etc., gathered together to look ahead to the future of the media and social industry. Mr. Guo Ming, Executive Director of Frost & Sullivan's Greater China region, was invited to attend the event and delivered a keynote speech titled “Trends and Development in the 2022 Media and Social Industry.” In the past 20 years, the internet has profoundly changed people's work and life, shaping a new pattern for global economic development, but this is just the beginning of the digital wave. Internet companies at the forefront of digital innovation face the challenge of seizing development opportunities in the trend of the next-generation internet and achieving higher-quality growth. This has become an important proposition shared by enterprise managers, industry experts, and policymakers. This summit invited representatives from Huawei Cloud and industry consulting firm — Frost & Sullivan, as well as guests from the internet media and social industry, for in-depth discussions and sharing. Mr. Lü Yangming, President of Huawei Cloud's Media Services Mr. Lü Yangming, President of Huawei Cloud's Media Services, delivered an opening speech, stating: The internet is entering a space video era characterized by immersion, personalization, and real-time interaction. Huawei Cloud MetaStudio uses cloud-native media services such as audio and video, AI, blockchain, etc., to better empower culture, enhancing the “content power” and realizing “everything is a service”! Mr. Lu Zhenyu, General Manager of Huawei Cloud's Video Services Mr. Lu Zhenyu, General Manager of Huawei Cloud's Video Services, also said: Huawei Cloud MetaStudio uses one MetaStudio solution that includes two major engines for graphics and space, a communication collaboration platform, a full-scenario media AI platform, and an NFT-based content management platform as its three major platforms, practicing technology as a service, making continuous innovation in the media and social industry within reach. At the same time, the cloud collaboration between Huawei Cloud and Huawei Terminal Cloud also brings the possibility of 1+1 > 2 for high-value growth of enterprises. Mr. Guo Ming, Executive Director of Frost & Sullivan's Greater China region Mr. Guo Ming, Executive Director of Frost & Sullivan's Greater China region, was invited to share insights and trends in the entertainment industry in 2022.   Firstly, Mr. Guo Ming shared four overall trends observed by Frost & Sullivan in the Chinese media and social industry in recent years: entertainment videoization, media socialization, image virtualization, and audit intelligence. (1) Entertainment Videoization Compared to traditional picture, voice, and text communication, videos carry higher-dimensional information density, are more real-time and interactive, and can fully enhance content interest and mobilize users' fragmented time.   Data shows that short videos and live broadcasts have become internet products with the most significant increase in user usage duration; as of 2021, the scale of short video users in China reached 873 million, astonishingly accounting for 88.3% of the total 989 million netizens; while the scale of online live broadcast users in China has currently exceeded 630 million, accounting for nearly 65% of the total.   The integration of the short video and live broadcast industries with multiple industries continues to deepen, the dissemination scenarios are expanding, and the dividend period is still worth looking forward to; related technologies such as edge cloud, AI, cloud rendering, CDN, etc., support the realization of such intelligent, real-time, and high-quality interactions. (2) Media Socialization Today's new media dissemination models have undergone profound changes, and interpersonal relationship networks are regarded as an important infrastructure for mass information dissemination.   The innovative integration of technologies such as positioning, big data, and AI can enable users to obtain full-scenario, mobileized information services (such as real-time weather forecasts, sports event reminders, etc.), and also boost the closed-loop of “online localization search + offline service”. Under a unified account system, users' search preferences can be more easily inherited across terminals. (3) Image Virtualization Whether in the domestic game production field or film and television shooting field, virtual shooting and production at the person, unit, and even scene levels have gradually entered the stage of large-scale application; currently, the precision of a certain leading domestic content producer has reached the centimeter level; if digital assets can reach millimeter-level precision, entering a virtual shooting platform is like going to Hengdian to shoot movies, and the shooting effect will be more realistic. In this process, cloud vendors provide cost-effective cloud computing power and cloud rendering capabilities to accelerate the virtualization process. (4) Audit Intelligence Nowadays, everyone is in an era of “everyone is an author”, and social news platforms generate massive amounts of information every day. Relying on manual audit not only has low efficiency but also difficult costs to bear.   Against this background, intelligent AI audit capabilities allow for custom settings, extremely high flexibility, and can specifically detect infringement, pornographic content, violence, political violations, and other multimedia information. The results after AI audit can be reviewed by auditors, greatly achieving cost reduction and efficiency improvement.   Subsequently, Mr. Guo Ming shared his insights into the three industry segments of social news, audio and video, and electronic games.   He said that in the social news industry, the main pain points faced by the business are: (1) insufficient resource elasticity, (2) mismatched AI capabilities, inability to fully tap the commercial value of information, (3) stricter content review and supervision, and non-compliance risks. The most obvious trends are (1) diversification of content and channels, (2) refinement and socialization of information, (3) multi-dimensional innovation of business forms. Mr. Guo Ming pointed out that cloud services and related technologies have greatly empowered domestic leading media social platforms. For example, Sina News uses container technology provided by cloud vendors, enabling the system architecture to quickly allocate computing resources when breaking news arrives, rapidly expanding the cluster to 8000 cores within 30 seconds, and easily handling traffic peaks. Meitu XiuXiu uses cloud storage and computing separation and heterogeneous computing solutions, increasing the overall utilization rate of Meitu's computing and storage resources by 40%, achieving cost reduction while obtaining elastic scaling capabilities. Regarding the audio and video field, Mr. Guo Ming said that for a long time, the pain points of the business have included: (1) various experience problems such as lag, latency, echo, etc., (2) high development costs of audio and video, (3) lack of innovation and experience upgrades in video content.   However, with the acceleration of 5G and the deep integration of fields such as cloud computing and artificial intelligence, the development potential of the audio and video industry is infinite. Technological innovation in the new stage will play an even more important role, and the audio and video industry will make a qualitative leap, specifically reflected in three aspects: high definition, strong interaction, and intelligence. In the audio and video field, the empowerment of game/entertainment live broadcast platforms by cloud vendors is mainly reflected in improving interactive experience, accurately identifying illegal content, and efficiently conducting operational analysis; while for internet video resource platforms, the empowerment of cloud vendors is mainly reflected in ultra-high-definition video production and broadcasting, optimization of content aggregation processes, etc. Generally speaking, cloud-based technology and services have brought about changes in production, processing, and distribution models for partners in the audio and video field. Speaking of the electronic game field, Mr. Guo Ming analyzed the business pain points from both the production and consumption sides. The domestic game industry generally faces pain points in the production side such as resource elasticity requirements (i.e., different development and testing stages have different network bandwidth, CPU, memory, disk capacity, etc.), business peak periods, traffic stability, security protection, etc.; while on the consumption side, players face pain points such as time-consuming and laborious downloads, inability to cross-platform play, insufficient terminal computing power, high costs, which greatly affect player experience and are not conducive to the growth of the number of game players.   “With the development and popularization of high-speed networks such as 5G and optical fiber, games will accelerate convergence from the terminal side to the cloud, accelerating streaming; 5G cloud gaming will become an inevitable trend in the game industry. Players are expected to be able to play AAA games anytime, anywhere using any device, and this trend will effectively boost the output value of the domestic game industry within the next few years; at the same time, the use of game subscription models is also expected to replace the traditional pay-as-you-go model.” Mr. Guo Ming said. Finally, Mr. Guo Ming said that more and more game companies are adopting one-stop cloud service solutions provided by cloud vendors. Relying on the overall collaborative optimization of “cloud-network-edge-terminal-AI”, cloud vendors empower industry customers to achieve goals such as improving development cost-effectiveness, reducing rendering costs and efficiency, and upgrading protection. Looking ahead to 2022, Frost & Sullivan hopes to see domestic leading cloud vendors relying on software-hardware collaboration and “cloud-cloud collaboration” to provide partners in the media and social industry with ultra-high-definition, low-latency, and strong interactive media capabilities covering content production, distribution, and application. Together, they will bring a new “blue ocean” to the domestic media and social industry.

Intelligent Cloud, Seeing the Future To further deepen the service model that supports scientific and technological innovation, taking investment and financing matchmaking services as a starting point to promote close interaction between capital and industries, on December 22, 2021, the fourth phase of the “Intelligent Cloud, Seeing the Future” - 2021 Municipal High-tech Zone's Plan for Supporting Scientific and Technological Innovation - “Precise Investment and Financing Roadshow Matching Session ” - Special Session on Intelligent Cloud Services, hosted by Shanghai North High-tech Service Park and organized by the Municipal High-tech Zone's Alliance for Supporting Scientific and Technological Innovation, was successfully held. Frost & Sullivan (hereinafter referred to as “Frost & Sullivan&rdquo) consulting analyst Zhang Shouyu was invited to participate in the event and delivered a speech on enterprise intelligent cloud services. Zhang Shouyu stated that the Chinese internet market is gradually transitioning from a consumer-oriented To C end market to an enterprise-level B end market. China's huge netizen dividend over the past few years has been an inherent advantage for the development of To C internet, leading to the emergence of giants such as Tencent, Baidu, JD.com, and Meituan in the To C internet sector over the past 20+ years. However, with the gradual disappearance of the netizen dividend, the internet industry has shifted from an incremental market to a stock market, making it increasingly difficult to start and break through in the To C field. Therefore, due to the ceiling effect of the To C internet market and the completion of many IT infrastructure under the development of emerging technologies, the enterprise-level service market has seen an opportunity for explosive growth. Frost & Sullivan research found that enterprise-level SaaS services began after 200 years of industrialization and 20 years of informatization in Europe and America. Customers are relatively mature, and since the dividends from rapid economic development in Europe and America have largely run out, improving management efficiency has become a necessity. As a result, enterprise customers have a higher willingness, ability, and awareness to pay. Compared to the United States, although the starting point of the Chinese enterprise service market is lower, the Chinese market has a higher economic growth rate, a larger base of enterprise customers, and is in an era of efficiency improvement and capacity upgrade. Coupled with the promotion of supply-side optimization reform policies, Chinese enterprise services have achieved a development speed that allows them to build from scratch. Data shows that China's digital economy reached 39.2 trillion yuan in 2020, accounting for more than 38% of GDP, and enterprises' expenditures on digital transformation are continuously increasing, with IT spending expected to reach 3.4 trillion yuan by 2025. “China's industrialization took 40 years to catch up with the 200-year development of American industrialization. We believe that under the premise of China's huge market demand and complete infrastructure, China has the ability to catch up with the 40-year informatization development of the United States in just 10 years,” said Zhang Shouyu. In addition, looking at the overall development of public cloud markets in China and the United States, the US market started in 2005, reaching a scale of $5 billion in 2011. In just six years, the entire market size experienced explosive growth, reaching $40 billion in 2017. The Chinese public cloud market started in 2009, developing to $5 billion in 2018, and is expected to reach $400 billion by 2022. The gap between the overall cloud computing markets in China and the United States is gradually narrowing, especially the rapid development of China's IaaS market, which provides a good foundation for the application and popularization of downstream SaaS services.   Zhang Shouyu pointed out that in the enterprise-level SaaS market, SaaS products can achieve higher valuation levels by using lower marginal costs, sustainable monetization models, and product characteristics closer to market development. SaaS products include upfront one-time fees and subsequent recurring fees. Enterprises with an upfront revenue bias have lower profit risks, shorter investor return cycles, and better approval of IT budgets for their customers. Enterprises with a later revenue bias have lower payment psychological thresholds for their customers, more accurate grasp of user pain points, better sustainable development capabilities, and better estimates of future profitability for their products.   Finally, in terms of industry applications, Zhang Shouyu made brief analyses using human resource SaaS (HR SaaS) and intelligent operations as examples. HR SaaS refers to software used to digitize and automate human resource functions within organizations. Compared to traditional software, HR SaaS can effectively help enterprises solve many pain points in human resource management and improve efficiency. In the future, HR SaaS will show a trend of horizontal integration, centered around integrated HR SaaS software, establishing close connections with customers and partners based on PaaS platforms and technologies such as AI, BI, and big data, forming an HR SaaS ecosystem. Another application - intelligent operations - refers to the application of artificial intelligence in the field of operations. Based on existing operation data (logs, monitoring information, application information, etc.), it further solves problems that automation operations cannot solve through machine learning. The surge in data volume brings huge industrial opportunities for intelligent operations. The deep coupling between intelligent operations and cloud computing can further liberate IT productivity for enterprises, and full-linkage, integrated intelligent operations will be the main trend in the future.   To accelerate the listing process of scientific and technological innovation enterprises and create a good capital service ecosystem that supports enterprise innovation, Municipal High-tech Zone, in collaboration with several leading financial institutions, established the “Municipal High-tech Zone's Plan for Supporting Scientific and Technological Innovation” in January 2019, aiming to build an IPO cultivation system for technology innovation enterprises through multi-dimensional capital empowerment and help them enter the capital market.   The COVID-19 pandemic has confirmed the value of cloudification, and enterprises and institutions have affirmed the cost-effectiveness and business continuity brought about by cloudification, accelerating their own digital business transformation. At the same time, cloud service enterprises are also paying more attention to providing diversified services, combining artificial intelligence and big data to provide efficient and comprehensive services for customers. Against this backdrop, the fourth phase of the “Precise Investment and Financing Roadshow Matching Session” of the Municipal High-tech Zone's Plan for Supporting Scientific and Technological Innovation focuses on intelligent cloud services. At the event site, Jingzhi Technology, Shenzhou Lingyun, and Cai Dao Cloud participated in project roadshows.

Frost & Sullivan' The new tea drink market is heating up, with both new and old players vying to enter the market. In this multi-billion-dollar arena, where many competitors compete for dominance, who can stand out? How can brands open up new growth spaces?   Recently, the 'Brainstorming' program of CBN invited representatives from new tea beverage suppliers, new tea beverage chain brands, consulting firms, and scholars and experts to discuss 'Who Will Lead the Future of the New Tea Beverage Industry'. Jia Pang, Partner and Managing Director of Frost & Sullivan's Greater China region, was specially invited as a commentator for the program. "How popular is 'new tea drinks' now?" Following Nescafé's tea listing on the Hong Kong Stock Exchange, becoming the first new tea drink stock, Momo Ice Cream has expanded its stores by 10,000 in a year. China Post has opened its own milk tea shop, Yoyao Tea, and after completing its latest round of financing, Xicha's valuation reached 60 billion yuan.   In recent years, with changes in consumer demand and technological iterations, 'new tea drinks' characterized by freshly brewed tea have become very popular among consumers. Starting from 2015, brands including Xicha, NESCAFÉ's teas, and Yidian have come into people's sight, and the term 'new tea drinks' has gradually gained momentum.   Data shows that the market size of new-style tea drinks in China was nearly 100 billion yuan in 2020, and it is expected that by 2030, the overall market size will exceed 200 billion yuan. In addition, new tea drinks are not only spreading across first- and second-tier cities but have also penetrated into third- and fourth-tier cities, becoming a daily beverage for 'townie youths'.   The 'China New Tea Drink Supply Chain White Paper 2022' points out that, under the strong attention and continuous influx of capital, new tea drinks have become one of the industries with the fastest consumer growth in recent years. When looking ahead to the future prospects of new tea drinks, many institutions have indicated that this is a high-growth track with a scale expected to exceed one hundred billion yuan in the future, and even leading players may have the opportunity to become industry giants rivaling Starbucks. What are the reasons for the continued popularity of new-style tea drinks? Has the rapid expansion of the industry also brought some hidden concerns? Who will lead the future of new tea drinks?   Highlights of this issue 1. What development opportunities have the rise of new tea drinks brought to upstream and downstream industries? 2. Homogeneous competition intensifies, so what will new tea drinks compete on in the second half? 3. Popular products are not common, so how can new tea drink brands seize the golden period of their best-selling products? 4. Food safety issues occur frequently. How can new tea drinks turn the biggest pain points in the industry chain into opportunities? 5. As new tea drinks go global, how can we create a 'Chinese Starbucks'?   Guests' wonderful views New tea drinks supplier representative Huang Guohuang Chairman of Fresh Holdings Co., Ltd. Huang Guohuang believes that what people see is a cup of milk tea that has initiated a new trend in tea drinks. The novelty of the new tea drinks lies in the introduction of fruit teas, which has led to a demand for aesthetic appeal. This 'newness' is no longer just about whether it tastes good or not, but involves an evaluation of aesthetics, and further integration with internet or mobile transmission tools has resulted in a cultural phenomenon that encompasses the sensory aspect as understood today.   Zhang Yilin Chairman of Zhelin Industry Zhang Yilin stated that he started growing mangoes in 1991, from 100 acres to the current 60,000 acres. He believes that for a fruit grower, the most difficult part is 'perseverance.' In agriculture, this is the hardest aspect. Due to market reasons, it may be hard to sell early-season fruits as they are not tasty or priced high. On the supply chain of new tea drinks, persevering in maintaining the delicious taste is his most fundamental pursuit in growing mangoes.   New tea drinks Chain Brand Representative Xie Huancheng Founder of 7 Minutes Sweet Xie Huancheng believes that the technological content of the entire tea beverage industry will become increasingly high, and the threshold will also rise. Take food safety as an example; it has now progressed from planting to traceability to pesticide residue issues. Each batch must undergo random inspections before being distributed to various stores. For store food safety audits, a professional team runs around the stores every month. In addition, there are numerous supervisors who provide guidance to the stores daily.   Tan Zhiwen Founder of Xuncha Tan Zhiwen stated that the new tea drink can be broken down into two words: one is 'tea', and the other is 'drink'. The first half of the concept is about 'drink', which means a hit product. With faster launch, more ingredients, and better raw materials, stores are opening rapidly. However, while thinking about it, as everyone has more demands for tea drinks, whether it's health concerns or cultural pursuits, the second half of the concept should return to the essence of tea, becoming simpler, purer, and incorporating deeper cultural elements.   Zhandu Former Cha Bai Dao Supervisor Zhan Desu believes that the second half of the new tea-drinking trend should focus on diversification and DIY. As a post-90s individual, from the perspective of being at the forefront and representing consumers, the post-90s generation is a 'transferred affectionate lover' type. They may choose Chaobaidao today and 7 Points Sweet tomorrow. The more likely thought among the post-90s is that they can choose product combinations based on their own personality.   Guest Commentator Jia & Pang Partner and Managing Director, Greater China, Frost & Sullivan Jia Pang stated that this year marks the first time in the new tea beverage industry that consumption demand has reached a scale of one hundred billion yuan. Frost & Sullivan also predicts that within the next three to five years, new tea beverages can maintain a level from one hundred billion to 150 billion yuan. Therefore, the current situation is definitely one of unsaturation in the new tea beverage market. It is also evident that consumers still maintain strong demand at the behavioral level of consumption needs. In fact, consumer frequency of consumption is still increasing, the unit price of consumption is rising, and there is a trend towards diversified consumption. However, it must not be denied that there are local saturation points in this industry.   Yu Mingyang Dean of China Enterprise Development Research Institute Yu Mingyang believes that a large number of new tea drinks are actually based on pearl milk tea, with milk, tea, and fruits as the core. This improvement in the industry not only meets the production side's requirements for products but also satisfies the demand side's needs. Due to the consumption characteristics represented by post-90s and Generation Z, which can be summarized into four sentences—high aesthetics, zero waiting time, minimal participation, and strong cleanliness preferences. Therefore, from the supply side to the consumer side, new tea drinks are products that meet the needs of consumption upgrading. Moreover, with further consumption upgrades in the future, there will be new reshuffling in this industry.   Comment by Chief Editor of CBN Yang Yudong Chief Editor of CBN Yang Yudong stated that the new tea beverage market is currently very active because the Chinese market is huge, and capital has been invested heavily into this sector. To some extent, the consumption habits of young people have fueled the popularity of this market. However, due to the industry's current low technical content and lack of unified standards, it can be seen that even leading companies have not found a sustainable profit model. Therefore, regarding this industry, more investment and analysis should be made from the perspective of market laws to improve its technical content and competitive barriers.

  In recent years, the world has actively faced a series of environmental and economic crises caused by climate change. The signing of the Paris Agreement has pointed out the general direction for global green and low-carbon transformation. As the world's largest developing country, China attaches great importance to addressing the severe challenges posed by global climate change and has announced a series of national policies to support this effort. Among them, the '14th Five-Year Plan' advocates major strategic decisions on 'carbon peak and carbon neutrality', and has formulated a carbon reduction timeline and roadmap. As an important national economic region, the Guangdong-Hong Kong-Macao Greater Bay Area is embracing opportunities and challenges in green economic transformation under the impetus of national policies. On December 10, 2021, the founding ceremony of the Greater Bay Area Carbon Neutrality Association was held at the Hong Kong Convention and Exhibition Centre. The ceremony was presided over by Mr. Hu Bojie, Vice Chairman and Executive Director of Peiran Environmental Consulting Co., Ltd., who is also the founding President of the Association. Together with Deputy Minister Zhang Guoyi from the Publicity Department of the Central Committee Liaison Office, Mr. Liu Zhiming, General Manager of the Beijing-Hong Kong Talent Exchange Center, Mr. Wong Kin-sing, Secretary for the Environment of the Hong Kong Special Administrative Region, Mr. GBS, JP, Vice President and President of the Hong Kong China Enterprise Association, and Academician Chen Qingquan of the Chinese Academy of Engineering, they jointly hosted the event.   At the ceremony, Mr. Hu Bojie, Vice Chairman and Executive Director of Peiran Environmental Protection Consultants Limited, the founding president of the association, presented appointment letters and membership certificates to 8 members of the Joint Expert Committee of the Senior Advisory Group and 16 founding members respectively. This event was also supported by 56 institutions including Cyberport, Hong Kong Listed Companies Chamber of Commerce, Hong Kong Green Building Council, Chartered Management Accountants Association, Hong Kong Financial Advisers Association, and Hong Kong Manufacturers Federation. The Greater Bay Area Carbon Neutrality Association was jointly initiated by Mr. Hu Bojie, Vice Chairman and Executive Director of Peiran Environmental Consulting Co., Ltd., Mr. Xu Zhuliang, Chairman of the Board of Directors of Jinshan Energy Group, Ms. Wu Min, President of Huarong Jinke Group, Mr. Geng Guohua, Executive Director and Chief Executive Officer of Aide New Energy Investment Holdings Group and Global Partner at Frost & Sullivan, and Dr. Wang Xin, Global Partner at Frost & Sullivan and President of Greater China. The association is committed to building a closer network within the region, bringing together talents from all sectors of society, and promoting cross-border cooperation in academia, innovation and finance, with the aim of collectively achieving carbon neutrality goals. Frost & Sullivan (Frost & Sullivan, abbreviated as Frost & Sullivan) is a founding member of the Greater Bay Area Carbon Neutrality Association. Dr. Wang Xin, Global Partner and President of Greater China at Frost & Sullivan, serves as the Vice-President of the association's founding board and was invited to give an opening speech at the 2021 Green Venture Capital Summit hosted by the Greater Bay Area Carbon Neutrality Association.   Since China announced its goal of achieving carbon peak by 2030 and carbon neutrality by 2060, the value of the dual carbon target, as well as how to achieve this goal, have become topics of widespread concern across all sectors of society. Dr. Wang Xin stated that the implementation and achievement of the dual carbon goal will bring about a systemic transformation to society.   Since China announced its action plans to achieve peak carbon dioxide emissions by 2030 and carbon neutrality by 2060, the value of such targets and the ways of implementation have attracted wide attention from all walks of life. Neil Wang, MD, said that the implementation and integration of carbon peak and carbon neutrality policies will bring about a systemic revolution in society.     Firstly, it is to promote the rapid and sustainable development of new energy sources, reduce the proportion of fossil energy in China's energy consumption, facilitate the transformation of the energy structure, and ensure China's energy security. In the past few years, driven by various favorable policies, China's new energy industries such as photovoltaics and wind power have developed rapidly, with the proportion of new energy generation continuously increasing; China's energy structure has also been continuously optimized. In the coming decades, new energy industries represented by photovoltaics and wind power will continue to be a focus of national development, and new energy generation will become the main energy structure in China in the future.   Firstly, the 'dual carbon' goal has driven new energy development rapidly and continuously. This goal enables a reduction in fossil energy use within China's energy consumption, which promotes the transformation of the energy mix and ensures our country's energy security. In recent years, China's new energy industries, such as photovoltaic and wind power, have developed rapidly under the promotion of various favorable policies, and the proportion of new energy power generation has been increasing. Under these circumstances, China's energy mix has achieved continuous optimization. In the next few decades, the new energy industry, especially represented by the photovoltaic and wind power markets, will continue to be a focus of national development. New energy power generation will also become the main energy mix of China in the future.   Secondly, this is closely related to everyone's life. The achievement of the dual carbon target and the mitigation of the greenhouse effect will significantly improve our ecological environment and enhance our quality of life.   Secondly, the 'dual carbon' goal is closely related to our lives. Achieving the 'dual carbon' goal and alleviating the greenhouse effect will significantly improve our ecological environment and enhance our quality of life.     Thirdly, the implementation of the dual carbon goal will force China's industrial upgrading and change the existing economic pattern. To achieve carbon neutrality, many industries with significant scale will have to restructure from raw materials, production and manufacturing to the consumer end.   Thirdly, the implementation of the 'dual carbon' goal will compel industrial upgrades and alter the current economic landscape. To achieve carbon neutrality, many large-scale industries will undergo a thorough transformation across their value chains—from raw materials and manufacturers to the consumer end.   Fourth, carbon neutrality will drive ESG investment. Against the backdrop of the dual carbon goal, ESG investment in China and even globally will accelerate its development and empower the entire society towards low-carbonization.   Fourthly, carbon neutrality will drive ESG investment. In the context of the 'dual carbon' goal, China and the rest of the world will accelerate development on ESG investment and empower low-carbonization across society. What is ESG investing?   What is ESG investment?   Dr. Wang Xin further explained, ESG investment is an investment philosophy that focuses on the environment, society, and governance. It is an important lever for the comprehensive green transformation of China's economic and social development. In order to achieve the dual carbon goals as scheduled, the Fifth Plenary Session of the 19th Central Committee of the Communist Party of China put forward the major deployment of 'promoting a comprehensive green transformation of economic and social development'. Governments and regulatory agencies at all levels actively promote the ESG concept, establish ESG disclosure standards, improve ESG information disclosure, encourage corporate ESG practices, and give full play to the incentive and restraint role of ESG investment in promoting the 'dual carbon goals'. He pointed out that ESG, as a new type of investment concept and standard, holds immense value for the economic development of enterprises, society, and the country. Currently, the United Nations Global Compact has gathered more than 12,000 leading enterprises, and investment institutions managing assets in accordance with ESG principles exceed $10 trillion. ESG investing has become a focus for global investment institutions.   Neil Wang further explained that ESG investment is a concept that focuses on environment, society and governance, and it is an important grasp for the comprehensive green transition of China's economic and social development. To achieve the "dual carbon" goal in a timely manner, the "Fifth Plenary Session of the Nineteenth CPC Central Committee" has put forward the major deployment of "promoting eco-friendly economic and social development in all aspects". Governments and regulators at all levels are actively promoting the ESG concept, establishing ESG disclosure standards, improving ESG information disclosure, stimulating ESG practices in enterprises, and maximizing the incentive action brought about by ESG investment while promoting the "dual carbon" goal. Neil Wang, a professor at the National University of Singapore's Business School, pointed out that as a new investment concept and guideline, ESG provides great value to enterprises, society, and national economic development. Currently, the United Nations Global Compact has gathered over 12,000 pioneering companies with assets exceeding USD100 trillion managed by investment institutions following the ESG concept. ESG investment has already become the main focus of global investment institutions.   According to the analysis of Frost & Sullivan, the value of ESG is mainly reflected in two aspects:   According to Frost & Sullivan's analysis, the value of ESG is mainly reflected in two aspects:   01 ESG drives the promotion of green investment concepts ESG Drives the Promotion of Green Investment Philosophy The dual carbon goal highlights the importance of environmental and green economic development for our country, as well as the level of attention paid by the Party and the state. At the same time, China has implemented many measures in areas such as clean energy and environmental protection, including investments in photovoltaic, wind power, and other clean energy technologies, which reflect that ESG and green investment concepts have been integrated into China's economic development and construction.   The 'dual carbon' goal underscores the importance of the environment and the development of green economy for our country, reflecting the priority given by the Party and the state. At the same time, China has implemented various initiatives in the fields of clean energy and environmental protection, including investments in photovoltaic, wind power and other technologies in clean energy. These efforts all reflect the integration of ESG and the concept of green investment into the construction of China's economic development.   02 Energy conservation and environmental protection, safeguarding the earth Strengthen corporate social responsibility and increase information disclosure ratio ESG's requirements and standards for corporate social responsibility at the societal level further boost the regulation and fulfillment of corporate social responsibilities. Data shows that driven by the ESG investment philosophy, the willingness of listed companies in China to disclose ESG reports has significantly increased. In 2020, A-share listed companies issued 1,021 ESG-related reports, accounting for 27%. Among them, 259 companies from the CSI 300 index disclosed ESG-related reports, accounting for over 86%, indicating that leading Chinese enterprises already have a strong awareness of ESG disclosure and social responsibility.   ESG sets high requirements and standards for companies at the societal level and has played a significant role in promoting regulation and fulfilling corporate social responsibilities. Data shows that under the promotion of ESG investment philosophy, listed companies in China have significantly increased their willingness to disclose ESG reports. In 2020, the number of A-share listed companies that disclosed ESG-related reports reached 1,021, accounting for 27% of the total number of A-share listed companies. In particular, 259 companies from the CSI 300 Index disclosed ESG-related reports, accounting for 86% of all 300 companies. This reflects that pioneering Chinese companies have already established a strong awareness in ESG disclosure and social responsibility.   Dr. Wang Xin emphasized that China has unlimited potential in the field of green finance and will become one of the world's major ESG markets, playing an important role in the global ESG market. Frost & Sullivan believes that the global scale of ESG investment will continue to grow, especially in China, where the scale of ESG investment is expected to experience explosive growth over the next few years or even decades.   Neil Wang, Dr. of Peking University and former Deputy Governor of the People's Bank of China, emphasized that China has unlimited potential in the field of green finance and will become one of the main ESG markets that play a critical role in the global ESG market. Frost & Sullivan believes that the scale of ESG investment will continue to rise, especially in China. It is expected that the ESG investment scale will experience explosive growth in the coming years or decades.   Frost & Sullivan has been continuously paying attention to green investment and has produced a large number of forward-looking reports on green industries, guiding investors to focus on China's green sector. "Green venture capital is an important lever for China to implement its carbon neutrality goals. Carbon neutrality is a catalyst that accelerates the significant transformation of our energy sector, improves our ecological environment, and enhances the quality of life. Frost & Sullivan will continue to pay attention to carbon neutrality and fully support the country in achieving its carbon neutrality targets," said Dr. Wang Xin.   Throughout this period, Frost & Sullivan has maintained attention in green investment while producing a large number of related forward-looking reports that have guided investors to focus on China's green industry. Dr. Neil Wang stated that 'Green venture is a key approach for implementing the carbon neutrality target in China. Carbon neutrality is a booster that accelerates significant transformation in China's energy sector, improves our ecological environment, and enhances our quality of life. Frost & Sullivan will continue to closely follow carbon neutrality and fully support our country in implementing the carbon neutrality target.'   About the Greater Bay Area Carbon Neutrality Association This association is a non-profit organization composed of scientific research institutions, universities, industry experts, funds, financial institutions, media, groups, enterprises, and individuals who support environmental protection and carbon neutrality. Its aim is to provide members with services related to carbon neutrality such as environmental protection, emission reduction, design, consulting, evaluation, certification, rating, valuation, expert opinions, talent training, academic and industry exchanges, introduction and exchange of new technologies, international promotion and exchange, joint project development, project delivery and implementation, green finance and capital market operations. It is committed to promoting the transformation of the green carbon neutrality industry in the Greater Bay Area, advancing the development of green technology, actively developing the green finance and carbon trading markets in the Greater Bay Area, and taking the lead in promoting carbon neutrality and development in various regions based on the advantages of the Greater Bay Area, contributing to the country's climate change commitments and influencing the world.

The selection process for the EY Entrepreneur of the Year 2021 is coming to a climax. Independent judging panels have rigorously evaluated candidates based on globally unified criteria, and the winners for this year have been selected. The list of winners will be announced tonight at the awarding dinner held in Shenzhen.   The members of the independent judging panel for the EY Entrepreneur of the Year 2021 are experts and leaders from the business and corporate sectors who have made outstanding contributions to promoting entrepreneurship. Next, let us get to know our judges. Mr. Ma Weihua Mr. Ma Weihua Former executive director, president, and CEO of China Merchants Bank Co., Ltd., Doctor of Economics, former chairman of Hong Kong Yonglong Bank, China Merchants Xinuo Life Insurance Co., Ltd., and China Merchants Fund Management Co., Ltd., as well as a delegate to the Tenth National People's Congress and a member of the Eleventh and Twelfth National Committee of the Chinese People's Political Consultative Conference. Currently, he serves as Chairman of the National Science and Technology Achievement Transformation Guidance Fund, Chairman of the Board of Directors of the International Public Welfare Academy, Chairman of the Social Value Investment Alliance, Chairman of One Foundation, and part-time professor at Peking University, Tsinghua University, and other institutions. In March 2019, he was appointed as a Special Advisor and Chairman of the Sustainable Development Finance Advisory Committee by the United Nations Development Programme Office in China, and in April of the same year, he was appointed as a member of the Global Steering Committee for Sustainable Development Impact Investing by the United Nations Development Programme. Before joining China Merchants Bank, Mr. Ma Weihua served as Deputy Director and Deputy Secretary-General of the Liaoning Provincial Planning Commission, Director of the General Offices of the Liaoning Provincial Party Committee and Anhui Provincial Party Committee, Deputy Director of the General Office of the People's Bank of China, Deputy Director of the Planning and Capital Department, President of the Hainan Branch of the People's Bank of China, and Director of the Hainan Branch of the State Administration of Foreign Exchange.   Mr. Ding Baoyu Mr. David Ding Co-founder and Managing Partner of Tongchuang Weiye, Director General. Member of the Shenzhen Venture Capital Association, and a member of the Science and Technology Expert Committee of the Shenzhen Municipal People's Government. Mr. Ding has been immersed in the real economy for many years and has extensive practical experience in specific businesses such as scientific research and marketing; he has a deep understanding of technology innovation enterprises, is proficient in company evaluation analysis and early project exploration, and has unique insights and rich operational experience in the Chinese venture capital market and capital market. In 1997, Mr. Ding began his career in venture capital, being one of the earliest risk investors in China and having a good cooperative relationship with the industry. He has over twenty years of private equity and investment management experience, successfully investing in dozens of domestic and international listed companies such as Tencent Music (US.TME), Cinda Biotech (HK.01801), Tianrui Instruments (300165), Aok Technology (300082), Zhongming Technology (300232), Maxtron Power Supply (002660), Jiaochuang Vision (300264), Optoelectronics (002587), Sanlip (002876), etc.   Mr. Ding has received honors such as the "Top 10 Chinese Venture Capitalists of 2011" and "Top 10 Chinese Venture Capitalists of 2017" published by Qingke and the investment community, the "Outstanding Achievement Award for Outstanding Venture Capitalists in 2012" from the China Venture Capital Committee, and has been selected into the Forbes "Best Investors Top 100" list for four consecutive years from 2017 to 2020. Mr. Ding holds a Bachelor's degree in Chemical Engineering from Tsinghua University, a Master's degree in Biochemical Engineering, an EMBA from Cheung Kong Graduate School of Business, and is an engineer and accountant.   Mr. Anthony Fan Mr. Anthony Fan Currently, he is the Chairman and Managing Partner of Dongyuan Capital Co., Ltd. His expertise includes corporate management, corporate finance, mergers and acquisitions, venture capital, company consolidation and restructuring, etc. Previously, Mr. Fan held important positions at several international financial institutions and served as Managing Partner of a company listed on the Hong Kong Stock Exchange Limited. Since 1994, Mr. Fan has served as a board member of more than 30 companies. His experience covers listed companies, family businesses, and non-profit organizations. Mr. Fan holds a Master of Business Administration degree from the United States.   Mr. Fan has held or currently holds the position of independent non-executive director of the following companies, including Unigroup China Holdings Limited, Tianfu (Cayman) Holdings Limited, Hong Kong Resources Holdings Limited, Limin Industrial Co., Ltd., SMIC International Integrated Circuit Manufacturing Co., Ltd., China Dili Group, Shanghai Industrial Urban Development Group Co., Ltd., Kaisai International Investment Co., Ltd., Guodian Technology Environmental Protection Group Co., Ltd., Tongfang TED International Technology Co., Ltd., China General Nuclear New Energy Holdings Limited, CITIC Resources Holdings Limited, Quanwei International Holdings Limited, Shenzhen World Federation Real Estate Consulting Co., Ltd., etc.   Mr. York Huang Mr. York Huang From an executive at a foreign company to successful entrepreneurship, and then to consumer goods investment, he has nearly 30 years of experience in the consumer industry. In 1992, he joined Procter & Gamble as a management trainee; in 2001, he founded Betterway Marketing Services Company, which was acquired by a globally renowned advertising group in 2006; in 2001, he initiated the establishment of the China P&G Alumni Association, which has connected more than 3,500 P&G alumni who graduated from the Whampoa Military Academy for Consumer Goods in China; in November 2013, he initiated the establishment of the Baojie Innovation Consumption Fund, focusing on innovation consumption, innovative channels, innovative enterprise services, etc., and through the deep construction of the magnetic field of the consumer goods ecosystem, provides consulting, investment, and empowerment services for Chinese consumer brands, achieving outstanding investment results. Currently, he serves as President of the P&G China Alumni Association and Executive Committee Member of the Global P&G Alumni Association; holds an Engineering Master's degree from Shanghai Jiao Tong University. Mr. Huang's representative investment cases include: Usmile, Lanhe Dairy, GOSO underwear, BFB (Doyan Slim), Kiskis, BIOLAB, Super Dental, Aikoo, Yijie Group, Dongdian Xidian, Paitong Tong, Yikr, Chopsticks Technology (Kuaijuce), Quanliang, etc., a group of outstanding enterprises.   Ms. Loretta Lee Ms. Loretta Lee Ms. Loretta Lee adheres to the social responsibility of "nourishing clear waters and blue skies, and jointly building a beautiful homeland," and has been actively involved in improving society and people's livelihoods. She has actively built waste-to-energy projects and launched the business of "turning waste into energy," leading the Yuefeng Group to be listed on the main board of the Hong Kong Stock Exchange Limited in December 2014, growing from a market value of 4.6 billion at listing to a benchmark waste-to-energy enterprise with a market value of HK$10 billion. Since its listing in 2014, the company's total financing has exceeded HK$2.8 billion, including about HK$1.09 billion raised through listing and attracting internationally renowned financial investment institutions such as International Finance Corporation (IFC) (investment amount of HK$465 million), Shanghai Industrial Holdings Limited (investment amount of HK$1.02 billion), etc.   Yuefeng takes circular economy as its concept, is proficient in mastering the leading "mechanical grate incineration" technology in China, and has rich experience in acquiring and transforming "circulating fluidized bed" technology projects into "mechanical grate furnace incineration," establishing a good reputation and image in the industry. Many projects of the group have received the title of "AAA-level Harmless Incineration Plant" awarded by the government.   Currently, the group has a total of 35 waste-to-energy projects, with a total daily urban domestic waste treatment capacity of 51,940 tons. Among them, 23 projects have been put into operation, and the remaining 12 projects are under construction or planning as planned. In addition, in the first half of 2021, the group treated 4,624,000 tons of garbage harmlessly, generated 1,794,152,000 kilowatt-hours of green energy electricity, offset 2,608,000 tons of carbon dioxide equivalent emissions, and saved 466,000 tons of standard coal. The group's revenue in the first half of 2021 was approximately HK$2.7 billion, with a net profit of approximately HK$620 million, a year-on-year increase of 36.4%.   Ms. Loretta Lee is committed to promoting social environmental awareness and building the "Yuefeng Environmental Protection Theme Exhibition Hall," one of the largest environmental protection theme exhibition halls in China, dedicated to providing an interactive platform for government agencies, environmental organizations, enterprises, and the public to exchange green development concepts. Since its opening in 2018, the exhibition hall has received nearly 30,000 visitors. The group has won the Environmental Excellence Enterprise Award among the BOC Hong Kong Corporate Environmental Leadership Awards and the Best Investor Relations Award issued by the Hong Kong Investors Association on many occasions.   Dr. Neil Wang Dr. Neil Wang Dr. Neil Wang is the founder of Frost & Sullivan's Greater China business and currently serves as a Global Partner and President of Frost & Sullivan's Greater China region. Dr. Neil Wang has been involved in the consulting field for over twenty years, providing various consulting services for multinational companies and market leaders in the Asia-Pacific region, especially in the Greater China region. Dr. Neil Wang has led the Frost & Sullivan team to integrate 60 years of global consulting experience, serving the booming Chinese market with dedication for 23 years, helping clients accelerate their growth pace with a global perspective, assisting clients in achieving growth, innovation, and leading benchmarks in the industry, and has guided nearly a thousand domestic and international companies to list and raise funds on major global capital markets, being one of the leading figures in the field of investment strategy consulting in China.   As early as 2003, Dr. Neil Wang led the Frost & Sullivan team to explore advisory services for Hong Kong stocks and overseas listings, and was also the first to establish and standardize the business process and service standards for industry advisors in the field of investment and financing, making outstanding contributions to the standardized development of the industry. Dr. Neil Wang has also participated in the solicitation of opinions on the revision of Chapter 18A of the Hong Kong Stock Exchange listing rules regarding the listing of biotechnology companies. Since the Frost & Sullivan team began providing investment and financing advisory services for enterprise leaders and their management teams, they have helped nearly a thousand companies successfully list on Hong Kong and overseas.   From 2014 to 2020, Frost & Sullivan ranked first in market share for industry research advisory services in the Hong Kong stock and overseas IPO markets. In recent years, Frost & Sullivan reports have also been widely cited in the prospectuses of leading A-share listed companies in the industry, primary and secondary market research reports, and other capital market announcements. In addition to leading Frost & Sullivan to achieve success in the Asia-Pacific region, Dr. Neil Wang also founded the leading original corporate research content platform and new type of enterprise service provider "LeadLeo" in China, which is widely recognized by governments, financial institutions, investors, enterprises, and the media.   Mr. Landing Zhang Mr. Landing Zhang Currently, he is the CEO of Silicon Asia Investment, specializing in areas such as turning losses into profits, strategic and corporate management, equity investment, mergers and acquisitions, industrial integration, etc. With strong investment judgment and excellent post-investment management capabilities, he has led the team to create many cases of turning losses into profits and outstanding investment results. He has 17 years of experience in the investment industry, nearly 30 years of enterprise management experience, and 22 years of CEO experience. In the early 1990s, Mr. Zhang was the first to introduce South Korean Samsung products into China and received a Samsung award. Since 1996, he has served as the CEO and board member of several companies, with experience covering listed companies, family businesses, financial institutions, banks, and foreign-funded enterprises in multiple industries.   In addition, he is also a specially appointed advisor to local governments. Mr. Zhang holds a Master of Business Administration degree from France. Mr. Zhang is also regularly invited to comment on reports by multiple media outlets and has been invited as a well-known guest to participate in large-scale media forums to share views and comment on current economic, events, and strategies. These media include: Bloomberg, China Business News, CBN, Financial World, Investment World, Phoenix Finance, etc.

In order to better serve the top 50 biotech companies in the Greater Bay Area, on December 9, 2021, the 155th Guangdong Medical Valley Open Day event, themed 'Enterprise Valuation Training and Top 50 Project Roadshow', was successfully held at the Bank of China Building in Guangzhou. Mao Hua, Partner and Managing Director of Frost & Sullivan's Greater China region, Zhu Yi, Executive Director of the Greater China region, and Jiang Tengfei, Senior Consulting Director of the Greater China region, attended the event to provide training on financing valuation topics for enterprises.   Enterprise valuation methods and investment logic analysis During the event, Mao Hua delivered a speech on the theme of enterprise valuation methods and investment logic analysis for the top 50 companies. He stated that the choice of valuation method should be combined with two dimensions: the company's life cycle and industry characteristics, with the DCF (Discounted Cash Flow) valuation method being the most commonly used valuation technique in Biotech at present. The DCF valuation method adopts the logic of discounting future cash flows, taking into account both dynamic growth potential of the company and risk factors such as clinical failures.   Mao Hua pointed out that drugs with high valuations often possess high commercial value, which are measured by factors including disease burden, unmet clinical needs, policy benefits, and pipeline competition.   The disease burden has placed a huge pressure on public health and the socio-economy. Alleviating the burden of major diseases is one of the important goals of innovative drug research and development, and addressing the alleviation of high-burden diseases is also a reflection of the high commercial value of drugs. Taking liver cancer as an example, approximately half of all liver cancer patients worldwide come from China. In 2020, the number of deaths from liver cancer in China was 371,000, accounting for 45% of the global total deaths.   The unmet clinical needs of Chinese patients are mainly reflected in: a lack of effective diagnosis, limited treatment options, and low accessibility to medications. Data shows that due to the lack of effective screening and diagnosis, about 59% of liver cancer patients in China are diagnosed at an advanced stage. The five-year survival rate for liver cancer patients is about 12%, while due to late detection and high costs, less than 10% of liver cancer patients receive targeted drug treatment.   As a key focus of current pharmaceutical policy reforms, inclusion in medical insurance directly affects the sales performance of drugs in the market and is an important consideration for investment. Including drugs in the medical insurance catalog helps improve the accessibility of innovative drugs among patients and reduce their economic burden; at the same time, doctors can promptly grasp the clinical manifestations of these drugs during the prescription process for new medical insurance drugs. They can widely recommend effective drugs, thereby promoting drug sales.   The pipeline competition reflects the flow of invested capital, which can be demonstrated through the distribution of clinical pipelines for related diseases and their corresponding success rates. Investment funds flowing into companies often cover multiple therapeutic areas due to the company's product portfolio, making it impossible to split the funds by therapeutic area at the financial level. However, the vast majority of investments and financings in the biotechnology sector are used for research and development (R&D). Therefore, the number of clinical pipelines can reflect the enthusiasm for R&D in therapeutic areas promoted by investment.   New drug projects that pursue high commercial value also come with high risks, and investments need to comprehensively weigh the risks from research and development to post-marketing stages. Mao Hua further explained that the risks of new drug projects are mainly divided into two categories: pharmaceutical property risks and commercialization risks. Pharmaceutical property risks focus on the drug research and development stage, with different research and development difficulties corresponding to different pharmaceutical property risks. Commercialization risks, on the other hand, concern the risks associated with drug review and approval, drug production, and post-marketing sales. "How to find a balance between business value and risk is at the core of the investment logic of biotech companies," said Mao Hua.   Subsequently, Zhu Yi, Executive Director of Frost & Sullivan Greater China, and Jiang Tengfei, Senior Consulting Director of Frost & Sullivan Greater China, demonstrated valuation case studies to the audience.   Zhu Yi brought a case study on the valuation of innovative devices, using the percutaneous puncture surgical robot as an example. Medical devices mainly refer to two categories: medical equipment and consumables. The logic for product penetration and valuation varies accordingly; the improvement in the valuation of medical devices requires both increased revenue and control over cost items. Zhu Yi made sales forecasts for percutaneous puncture surgical robots and their consumables based on the sales prediction logic of equipment and consumables respectively. The conclusion was reached that the commercialization of surgical robots faces many challenges, and achieving rapid volume growth requires efficient market strategies and continuous clinical exploration.   Jiang Tengfei then presented a case study on the valuation of targeted drugs. He stated that, first and foremost, products suitable for inclusion in valuation must have entered clinical trials and have clear indications. Targeted drugs should specify the accessible patient population for subdividing indications as the basis for calculation. In addition to the clinical value of the drug, determining market share also involves factors such as R&D, commercialization efficiency, and production capacity support. The pricing and price reduction strategies of new products should respect macro policies and the business competition environment. Finally, Jiang Tengfei concluded with The three key success factors in valuing targeted drugs can be summarized into three words: 'Dao', 'Fa', and 'Shu'. The so-called Dao means making choices based on the purpose, the so-called Fa involves balancing relevant stakeholders, and the so-called Shu requires standardization of valuation for easy adjustment and response. The entire event was packed with valuable content, and representatives from participating companies expressed that they had gained a lot. Project valuation not only determines the investor's stake in equity financing negotiations between entrepreneurs and investors but also serves as a measure of the entrepreneur's own judgment on the industry, market, and trends.   In the future, Frost & Sullivan's Healthcare Practice in Greater China will continue to help clients accelerate their business growth with a global perspective, achieving industry-leading benchmarks in terms of growth, innovation, and leadership. Introduction to Frost & Sullivan's Healthcare Practice in Greater China Frost & Sullivan has rich research experience in the healthcare industry, providing consulting services to healthcare enterprises throughout the entire process from early strategy to business operations. It particularly focuses on corporate growth and investment and financing decisions. The Healthcare Business Unit of Frost & Sullivan Greater China provides due diligence services, valuation services, assessment services, strategic consulting, management consulting, planning consulting, technical advisory, financing and financial advisory, IPO industry advisory, and other services to nearly a thousand outstanding domestic and international biopharmaceuticals, medical devices, healthcare services, and internet healthcare companies. The clients served include Genentech, Hutchison MediTech, Novartis Oncology, WuXi AppTec, Tianjing Biotech, KangLung Chemical, RuiLi Medical Beauty, JD Health, and others. Relying on the global think tank resources of Frost & Sullivan and its cross-industry business development platform in Greater China, the Healthcare Practice Group of Frost & Sullivan Greater China has unique core strengths in providing strategic development support services for investment and financing in the healthcare industry and various sub-sectors: Relying on Frost & Sullivan's global resources The Frost & Sullivan global healthcare team has strong capabilities and extensive experience in the life sciences, as well as a broad global customer network. The healthcare team in Greater China communicates with the global team in real time and collaborates on numerous international projects with them every year. Project team focusing on consulting The Frost & Sullivan healthcare team in Greater China consists of nearly 100 members, with 80% dedicated to the pharmaceutical and medical device industries. The remaining members focus on healthcare services, medical AI, and digital healthcare respectively. All team members have a relevant educational background in medicine, pharmacy, biology, or life sciences. Gain an in-depth understanding of healthcare and niche markets Frost & Sullivan has a wide range of healthcare enterprise clients in China and has established a vast network of partnerships and an expert database over the past 20 years, covering in-depth analysis and professional judgment of China's innovative drug market. Frost & Sullivan has established good and extensive cooperative relationships with KOLs, industry experts, and experts from relevant institutions across the entire industrial chain. Rich consulting and research experience Frost & Sullivan completes over 200 projects each year, accumulating extensive experience in various healthcare sub-sectors. Project types include growth consulting, market entry, sales team assessment, global pricing strategies, operational optimization, business due diligence, and more. Professional technical advisory services A senior technical advisory team with decades of clinical development experience in innovative drugs and medical devices for both clinical practice and corporate use. Frost & Sullivan has provided clinical audit services to dozens of biotech companies and investment banks, covering types such as biosimilars, innovative biologics, small molecule targeted drugs, and Class III innovative medical devices. Perfect enterprise product valuation and media promotion services Frost & Sullivan has a team of professionals with a composite background in finance and healthcare. They possess a deep understanding of various corporate financial and valuation models, providing comprehensive valuation services for enterprises, including overall valuations related to corporate investment and financing, as well as product valuations related to product development decisions. In collaboration with well-known domestic and international information platforms and investment and financing institutions, they publish press releases and industry white papers on the fields of pharmaceuticals and medical devices, attracting widespread attention from investors.