03/09/2024

BIZ & FINANCE TUESDAY | SEP 3, 2024

16

China’s economic malaise accelerates obesity rates

Value Partners co-founder Cheah to exit firm: Source HONG KONG: The co-founder of asset manager Value Partners Group is set to quit the firm in the biggest shakeup since China’s GF Securities became its largest shareholder, said a source with direct knowledge of the matter. Cheah Cheng Hye, a co-founder, co-chairman and co-chief investment officer, plans to exit Hong Kong-based Value Partners as soon as January, the source said, adding Louis So, the other co-chief investment officer and a former co-chairman, will leave by the end of this year. So has started offloading his stake in the company, according to the source, who was not authorised to speak with media. So held at least a 2.65% stake of the firm’s public shares by end-June, according to its interim report. Cheah will continue to serve as co-chairman and co-chief investment officer, while So is currently the company’s executive director and co-chief investment officer, a Value Partners spokesman said in an e-mailed statement that did not comment on whether they planned to depart in coming months. GF, Cheah and So did not immediately respond to Reuters’ requests for comment. Bloomberg reported Cheah and So’s planned departure earlier yesterday. Chinese brokerage GF Securities acquired a 20.2% stake in Value Partners in June last year and has since been exerting its influence on the firm’s operations, according to the source. On Aug 23, Value Partners replaced So as co-chair with Ling Xianghong and added Li Qian to the board. Ling and Li are senior managers at GF, according to a stock exchange filing. Value Partners, founded in 1993 as a China investing specialist, has suffered from tumbling Chinese markets in recent years. The Hong Kong firm, which has offices across Asia and Europe, managed US$5.4 billion (RM23.5 billion) of assets as of end-June, down from its peak of more than US$18 billion in 2018. It cut about one-third of its staff in mainland China as it looked to restructure the business to boost profit amid weaker market conditions, Reuters reported in April. – Reuters Indonesia’s inflation stays within central bank target JAKARTA: Indonesia’s annual inflation rate was 2.12% in August, essentially unchanged from 2.13% in July, official data showed yesterday, holding comfortably within the central bank’s target range and matching market expectations. The August headline inflation rate was the lowest since February 2022, and matched the forecast in a Reuters poll. Bank Indonesia (BI) has a target range of 1.5% to 3.5% for inflation. The annual core inflation rate edged up to 2.02% last month from 1.95% in July, the data showed, slightly above the 1.98% forecast in the poll. Inflation in Southeast Asia’s biggest economy has held within the central bank’s target range since the middle of last year, but BI has kept interest rates relatively high to focus on anchoring the rupiah currency and weathering global market volatility. Governor Perry Warjiyo has said currency stability was the policy focus for this quarter, but he saw a room for a monetary policy easing to boost economic growth in the next quarter. – Reuters

HONG KONG: Shares of New World Development, a major property developer in Hong Kong, plunged 14% yesterday after it estimated a net loss of as much as HK$20 billion (RM11.3 billion) for the financial year ended in June. The shares fell to HK$6.74 in early trading, marking a fresh 21-year low. The company said in a filing on Friday that it expected a drop of as much as 23% in core operating profit from continuing operations due to a lack of revenue and that it would have fair value and impairment losses of as much as HK$9.5 billion. “Together with the continuous interest rate hikes experienced during the year as well as the depreciation of renminbi, the group expects to record a (net) loss,” it said. In a separate statement on Friday, the company said the provisions were one-off non-cash and unrealised items and do not affect the group’s cash flow. New World has one of the highest debt-to-equity ratios among Hong Kong’s property developers and its de-leveraging plan has been closely watched by investors over the past year. While Hong Kong has not seen major defaults on debt by property developers like in mainland China, investors have been worried about weakening liquidity for the sector due to sluggish residential and commercial property markets. – Reuters as someone with a body mass index (BMI) of 25 or higher, while the BMI threshold for obesity is 30. Only 8% of Chinese are considered obese, higher than Japan and South Korea, but far lower than the United States’ 42% rate, WHO data show. That is in part because it is a relatively new problem in China, which has experienced widespread famine as recently as the 1960s. “China has undergone an epidemiological transition where diseases associated with under-nutrition have changed to an increase of those with unhealthy diets and sedentary lifestyles,” said Christina Meyer, health policy analyst at RTI International in Seattle. As consumers and workers adapt to the structural changes in an economy urbanising rapidly in the coming decade, many overweight Chinese could cross the obesity threshold, doctors say. “The economic downturn in China could lead to an increase in the consumption of low-quality foods, such as fast food, due to income declines,” said Jun Sung Kim, an economist at Sungkyunkwan University in South Korea. “This, in turn, may contribute to obesity.” China’s fresh push to increase urbanisation rates is a particular concern in light of its “996” culture of working 12-hour shifts, six days a week. Pui Kie Su, general practitioner at Raffles Hospital Beijing, says some patients report eating to “de-stress” from work. The proportion of obese boys in China jumped to 15.2% in 2022 from 1.3% in 1990, trailing the United States’ 22%, but higher than Japan’s 6%, Britain’s and Canada’s 12% and India’s 4%. Obesity in girls rose to 7.7% in 2022 from 0.6% in 1990. – Reuters

social activities might decrease.” “These alterations in daily routines can contribute to an increased incidence of obesity, and consequently, diabetes,” he said, adding that he expected obesity rates to continue “rising exponentially, burdening the healthcare system”. In July, Guo Yanhong, a senior official of the National Health Commission (NHC), said that obese and overweight people pose “a major public health issue”. Xinhua, China’s official news agency reported in the same month that more than half of the country’s adults are obese or overweight, higher than the 37% estimate provided by the World Health Organisation. A study by BMC Public Health estimates that costs with weight-related treatments are expected to rise to 22% of the health budget, or 418 billion yuan by 2030, from 8% in 2022. The estimate was “conservative” and did not take into account increases in healthcare costs, it said. That will add further strain on indebted local governments and reduce China’s ability to direct resources to more productive areas to stimulate growth. NHC and 15 other government departments in July launched public awareness efforts to fight obesity. The campaign, set to last for three years, is built around eight slogans: “lifelong commitment, active monitoring, a balanced diet, physical activity, good sleep, reasonable targets and family action.” Health guidelines were distributed to primary and secondary schools in July urging regular screening, daily exercise, hiring nutritionists and implementing healthy eating habits – including lowering salt, oil and sugar. The WHO defines an overweight person

SHANGHAI: As China builds fewer houses and bridges, its consumers buy cheaper, less-healthy meals, and as factories and farms invest in automation, a new fiscal challenge is emerging – the country’s obesity rate may grow much faster and add to healthcare costs. Job stress, long work hours and poor diets are growing high-risk factors in the cities, while in rural areas, agriculture work is becoming less physically demanding and inadequate healthcare is leading to poor screening and treatment of weight problems, doctors and academics say. In a modernising economy underpinned by technological innovation, more jobs have become static or desk-bound, while a prolonged slowdown in growth is forcing people to adopt cheaper, unhealthy diets. With housing and infrastructure already abundant, for instance, millions of workers have switched from construction and manufacturing jobs to driving for ride-sharing or delivery companies in recent years. In a deflationary environment, consumers prefer cheaper meals, which can be unhealthy. China’s fast food market is expected to reach 1.8 trillion yuan (RM1.1 trillion) in 2025, from 892 billion yuan in 2017, according to Daxue Consulting. Parents also cut down on swimming or other sport classes. “Economic downturns often lead to changes in peoples lifestyles,” said Yanzhong Huang, senior fellow for global health at the Council on Foreign Relations. “Dietary habits may become irregular, and o Consumers opt for cheaper, less healthy food

New World Development shares plunge after HK$20b loss forecast

A view of New World Development’s office tower, K11 Atelier King’s Road, in North Point of Hong Kong. – REUTERSPIC