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Dong Wang, HSBC Jintrust
A Short IntroductionThe Shanxi Province of China:
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Shanxi Province
• Shanxi:– Chinese meaning: west of the mountain (Taihang Mountain)
– Cradle of Chinese civilization (history of 3,000 years)
China
Shanxi
Datong
Shuozhou
Xinzhou
Taiyuan
Lüliang Jinzhong
Yangquan
ChangzhiLinfen
Yuncheng
Jincheng
For Professional Investors only. Not for further distribution.
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Shanxi Province Overview
• Capital: Taiyuan
• Area: 156,000km2
• Population: 36.5 million
• GDP: USD200 billion
• GDP growth rate: 3.1%
• GDP per capita: USD5,300
For Professional Investors only. Not for further distribution.
"Source: HSBC Jintrust"
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Shanxi Merchants
• Shanxi merchants: a historical phenomenon– Time period: Song Dynasty to the Tsing Dynasty
– “Silk Road” trade route
• Pingyao: the Chinese Wall Street in the late 19th century
– The financial center of China in the late Tsing Dynasty– Rishengchang, the first Piaohao (bank) in China
For Professional Investors only. Not for further distribution.
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Natural Resources
• Coal– 277 billion tons of deposits
– About a third of China’s total
• Aluminum– 1.4 billion tons of deposits– About 40% of China’s total
• 68 types of minerals
For Professional Investors only. Not for further distribution. "Source: HSBC Jintrust"
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Heavy industries
• Coal and chemical production– 6 coal producers among Fortune 500
– Half of the largest 10 Chinese coal producers are in Shanxi
• Steel– Largest stainless steel manufacturer in the world
• Metal refining
• Power generation
For Professional Investors only. Not for further distribution.
"Source: HSBC Jintrust"
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Challenge and Solution
• Prices of coal and other minerals have declined significantly in the past few years
• Shanxi’s GDP growth slumped to 3.1% in 2015, the lowest in the past two decades
• Shanxi’s economy centers around heavy industries and therefore is hit hard by the economic transition
• Supply-side reform aims to cut down over-capacity and to build infrastructure for new engines (eg tourism)
For Professional Investors only. Not for further distribution.
"Source: HSBC Jintrust"
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HSBC Jintrust Fund Management Company LimitedAddress: 17F, HSBC Building, Shanghai ifc, 8 Century Avenue, Pudong, ShanghaiTelephone: (86 21) 2037 6868Customer Service: (86 21) 2037 6888Website: www.hsbcjt.cn
For Professional Investors only. Not for further distribution.