Reformation of China’s Healthcare

By: Qinglin Zhao (Karoline)

This land is absolutely lucrative, and also competitive; most importantly, there is a lot to explore.

The Chinese health industry is definitely a huge pie that most companies aim to share. According to the Ministry of Finance in China, the health market is expected to grow to $1.2 trillion by 2020. With such a tremendous scale, it cannot be a “winner takes all” business but will involve various players, either from online or offline.


There are several problems that the health industry in almost all countries are facing: the aging population, the increasing rate of chronic diseases, the rising cost of R&D and the insufficient workforce, especially medical specialists. For example, from 2004 to 2014, the cost of developing new drugs has increased by 145%. But China, specifically, has more challenges of its own. The fundamental problem is the disequilibrium of supply and demand in the health system and the disproportion of the medical resources. The report by iResearch indicates that there are only 2.31 practicing physicians for every 1000 people, while the Organization for Economic Co-operation and Development  averege is 3.19. Other than the first-class hospitals, where most skilled doctors work, there are only a few located in very developed cities. The quality of community and local clinics is patchy, so patients always go to the first-class hospitals for the best medical services. As a result, the resources at basic hospitals are wasted and top-tier hospitals become too overcrowded to serve the patients.

The shortage of offline medical resources is where internet companies see the opportunity. Compared to offline hospitals, internet hopsticals respond and react in a much quicker way. Besides, patients have an easier access to online doctors. As of 2015, the scale of Internet medical users in China is 152 million, which accounts for 22.1% of all Internet users. Internet medical companies usually establish electronic medical records (EMR) for every user, allowing users and their offline care-givers to keep track of their health status. Furthermore, users update their EMR from time to time, so online doctors could monitor a patient’s condition and give prescriptions more efficiently. The velocity and veracity of Internet explains the stunning scale of online user traffic, though the Internet medical service is limited to merely medical consultation, which fails to create real value for both patients and companies. The core of medical services still lies in medical diagnosis, treatment, operation, etc, which the Internet cannot  provide. Patients’ willingness to pay the Internet medical companies for consultation or appointment with offline hospitals is very low. Thus, there is lack of payers in the supply chain. The business seems to be unprofitable, so why startups keep entering the healthcare market and what exactly are they seeking for?

The target is big data, which is of the most importance to almost all industries in the 21st century. According to the report released by IMS Institute, in the healthcare industry, the most valuable data types would be administrative data, clinical data, biometric data, demographic data. The applications of big data range from clinical therapeutic methods, public healthcare policy, pharmaceutical development, marketing to health insurance plans. For example, the pattern from the big data could build a better model for the insurance companies to predict risks, which is the priority as of finance. The potential of big data is undoubtedly beyond all mentioned above. The problem is that the volume, veracity and variety of data is not ideal in China because data are not completely standardized, and it is where Internet health startups are making changes: to collect and analyze data for better use. Most startups are tech-oriented and strive to obtain personal data by online consultation or portable devices. Big data could contribute to the insurance companies, aka the biggest payer in the ecosystem, so its ultimate value seem to be self-evident. Clearly, Internet health startups are confident about this, and they do not hurry but absorb data consistently.

Companies with deep pockets have a better play. WeDoctor, a $6 billion online health platform, has invested tons of money to develop its own network of hospitals and doctors. The advantage of working directly with hospitals is data with a higher quality in terms of its format and applicable value. According to one report from Bloomberg, WeDoctor possesses a central database where doctors in its network would upload patients’ information with consent, which could benefit pharmas and insurers in terms of marketing. WeDoctor also opened clinics to complement its online medical services, most of which are located in residential projects run by WeDoctor’s partners. If WeDoctor tells a successful story of going from online to offline, Ping An is another successful case of going the other way around. Ping An Healthcare and Technology, China’s largest online health and medical platform, is the subsidiary of Ping An Insurance. Ping An Insurance is a China’s financial conglomerate, worth $213 billion, as of January 2018. Its goal is to build up its business cycle, with online health platforms, medical groups and insurance companies. Ping An Healthcare and Technology is now China’s largest online health and medical platform by it average monthly active users and daily average online consultations, according to Frost & Sullivan, and is ready for IPO in Hong Kong at a value of $5.6 billion.

China’s tech tycoons such as Tencent and Alibaba, one focused on social media, the other online shopping, also invest heavily in the healthcare market. According to iYiou, Tencent has invested around $3.3 billion in medical startups since 2014. Back to questions we asked earlier in the article, why does the amount of medical startups keep growing even though they suffer from net losses and what are they aiming? Apart from offering better medical services in the profitable healthcare market, they may also have been waiting for the collaboration with influential business conglomerate like Baidu, Alibaba and Tencent.


With regards to issues in China’s healthcare system, big data is just the most accessible and applicable tool that the healthcare industry could rely on for now. Blockchain, artificial intelligence and augmented intelligence have gradually entered the public domain as well. The question of how they can serve as a solution to improve medical services is interesting to think about, or at least, to look forward.


  1. Ministry of Finance of the People’s Republic of China. (2013, Oct 15). Retrived from
  2. Deloitte. (2018). 2018 Global and US health care outlook. Retrieved from
  3. Lulu Yilun Chen. (2018, July 3). A $6 Billion China Startup Wants to Be the Amazon of Health Care. Retrieved from
  4. Peggy Sito, Xie Yu. (2018, April 12). Chinese Online Medical Platform Ping An Healthcare and Technology to Raise US$1B from Hong Kong IPO. Retrieved from
  5. Image source:

The rise of Elite Boutique Investment Banks

By: Karoline Zhao

To complement or supplement, that is the question.

Recently, Vault released it’s rankings of the Most Prestigious Banking Firms for 2018. Besides Goldman Sachs & Co and Morgan Stanley, some firms that have less presence in the headlines, including Lazard and  Evercore, now share a pie with those big-league names in the top 10. Renowned banks such as Citi and UBS, which were both in the top 10 of the 2008 Most Prestigious Banking Firm Rankings, have fallen  behind  these little guys ten years later. Elite boutique banks are officially under the spotlight now.

You may wonder what a boutique bank is, and how it differs  from a bulge bracket? To name a few, Bank of America, Barclays, Citigroup are examples of bulge brackets.  In general, compared to bulge brackets, elite boutique banks are smaller in size and more flexible in terms of its structure and operation. The boutiques primarily focus on specific divisions of investment banking such as mergers & acquisitions or asset management. They rarely have a full range of financial services as bulge brackets and have less of a global presence. As a result, bulge brackets still own a larger proportion of market share. Yet as Business Insider points out, these  “small banks are killing the big banks” when it comes to certain arenas, especially M&A. Based on Dealogic data, the share of US M&A by boutiques has been on the rise since 2008, and M&A boutiques accounted for 38.4% of global deal volume in the fourth quarter of 2016, which amounted to $515.1 billion. This record is largely a result of over $1b M&A advising deals. MarketMogul provides even more striking numbers: Boutiques earned 27% of M&A fees while experiencing a 47% increase in deal volume over the previous year. What factors contributed to such growth of boutique banks?


The financial turmoil of 2008 was undoubtedly a watershed moment, which marks the point when boutique banks started gaining some momentum. After the financial crisis, which Hintz describes as “the catalyst” for boutiques, more clients have been drawn to boutique banks because of their self-styled structure. Traditional bulge brackets which provide both financing and trading services are considered to have conflicts of interests when  involved in M&A advising. Since elite boutique banks don’t engage in trading but solely offer advisory, they can claim to be independent from an array of conflicts, and thus build areputation for providing objective and unbiased opinions. Furthermore, they are bound by less regulation and supervision, and often function more efficiently than the bureaucracy laden BBs.

As Christopher Alessi from Institutional Investor suggests, the crisis also drove out talent from bulge brackets that instead turned to building their own startups. This could explain why the founders of boutique banks are typically renowned experts on M&A deals from brand-name firms. Robey Warshaw, for example, is established by veterans from Morgan Stanley and  UBS.  With their former expertise, these new founders hardly lack clients. The reputation of both the boutique and its owner now is vitally hinged on the outcome of every deal. In order to maintain clients, boutique banks need to take every client seriously, which from the perspective of clients, can benefit them to the greatest extent. In contrast, human capital in bulge brackets are assigned to various tasks, so attention to advisory is not as high as specialized boutiques. Therefore, boutique banks started to complement advisory roles used to be played by large firms. An example would be Evercore, a leading advisory boutique, which collaborates with J.P Morgan, a traditional bulge bracket, and other boutiques like Greenhill & Co., a long-standing boutique bank founded by former Morgan Stanley president Robert Greenhill. Evercore advised AT&T on a $39 billion acquisition of T-mobile in 2011, which could have been the biggest deal of the year had it not collapsed by the years end.

Boutique banks are indeed the new stars on the rise, but challenges await for them as well. Their specialization also means limitation. More specifically, it is difficult for boutiques to target new clients given their limited geography and confinement to different industry sectors. While big banks start to set foot markets outside of U.S and Europe, such as Asia, the size and leverage of boutiques prevent them from having a presence in the global context. The employment hierarchy of boutiques is another structural issue since their fate largely depend on their owner, which is always at stake because the risk of decision making is not diversified. Even if the rainmaker fumbles once, it can be devastating to the firm since it is established upon the personal relationship between this owner and clients. To put all in a nutshell, boutique banks can rarely be an all-star due to its size and structure.

To put it all in a nutshell, while competing with bulge brackets in advisory services, boutique banks also function as an aid in their specialized fields.  According to NYU’s Smith, big investment banks seek help from boutiques for advisory services. In general, it is more like a symbiotic relationship that bring about potentials to benefit both in the long run.


A Cashless China

By Karoline Zhao

The cashless revolution may be real.

Last month, BTCC, the biggest Bitcoin company in China, was shut down by the government. After that, China banned other domestic platforms on which virtual currencies are traded, and thus, raised the barrier for the public to buy cryptocurrencies. But the battle does not stop at these anonymous virtual payment systems, their more tangible counterpart, cash, is also at stake in China.

There is a growing trend of leaving home with nothing more than a smartphone. With this little gadget, a person has access to almost anything they need to purchase, from metrocards to booking a flight ticket. Even street food carts have succumbed to the rise of the phone. The process of paying has never been easier. This is evidenced by the fact that last year, about 660 million mobile internet users in China spent $9 trillion through their phones. And this is only expected to grow. Customers in the US, in comparison, spent a measly $112 million.

Understanding that such payments would not thrive without continued attempts to develop the internet, the latest Five-Year Plan of China, a set of economic goals signed by the Chinese Communist Party, includes aims to further speed up digital technology like 5G. Apart from the accessibility to the Internet, the low production cost of phones also makes it affordable for customers from all economic levels, thus accelerating the penetration of smartphones. These factors mentioned above fit in many countries such as the U.S and Japan, yet one third of all transactions are still done in cash in the US according to a CPO market analysis team.


When it comes to the acceptance of a cash-free society, Sweden is most akin to China. Earlier in 2016, Jon Henley from the Guardian states that only about 2% Swedish consumers pay in cash. As Business Insider points out, going cashless partly depends on citizens’ advocacy of the government and a sense of social trust. Confidence in the government as well as among individuals in Sweden and China is approximately 78%, which is  20% higher than that in America, which aligns with the rate of online payments in each country.

U.S Share of Transaction Number by Payment Instrument


Nonetheless, it turns out that this trend in China is particularly driven by two innovative applications – Alipay and Wechat – that enable users to make transactions in an incredibly convenient way. A deal is made by simply pressing “Pay” or scanning QR codes. Also, transfers are immediate between individuals without any commission fees. Apart from financial services like vendor payments and transfers between individuals, etc, Alipay also runs Taobao, the largest e-commerce company in China. Wechat, on the other hand, is the most popular messaging app adopted by people from different socioeconomic groups. Using these advantages allowed Alipay and Wechat to become two of the most dominant payment systems in China’s market, taking up 54 percent and 40 percent, respectively, according to a report from iResearch, a consulting group that focuses on China. Further, according to the prediction done by the Better Than Cash Alliance, a global promoter of digital transfers, use of cash in China will drop to about 30 percent by 2020. If mobile payments continue to grow at the rate they have been, then it’s possible that this number is an underestimation.

However, all technology can be a double-edged sword. The concern about the privacy arises as users are now susceptible to potential cyber risks. According to the executive of a cybersecurity company, there is 20-fold increases in online risk over merely four years. Often without a blink, people scan QR codes, which can turn them into easy victims for hackers looking to exploit vulnerabilities in the system. Also, by paying online, users’ personal information and shopping habits are all on the record, and such a huge database benefits merchants by allowing them to target specific customer groups. The report from Channel NewsAsia points out that Wechat can find customers for advertisers based on their database even though the company is bound by the law not to sell data.  It is similar to how Facebook uses data to target advertisements. The regulations and laws in China undoubtedly can prevent illegal use of data; yet in the end, it is not guaranteed that companies in charge of data will use it in an ethical way and privacy is the price to pay.

Nonetheless, the majority of people in China clearly embrace a cash free society, as well as the government, which already plans to develop a digital RMB currency. By doing so, the Central Bank can adjust monetary policies with real-time records of  transactions and data. Also, the transparency of digital currencies enables the government to keep track of all financial transactions. In this way, digital currencies are centralized, fully controlled by the authorities, which is completely opposed to the decentralized cryptocurrencies like Bitcoin. Since such currencies can be traded without any oversight, currency speculation, for which Chinese RMB is withdrawn to buy Bitcoin, became a headache of the government. The research paper, Cryptocurrencies & Capital Flight in China shows that in 2017, more than 96% of Bitcoin was bought using RMB, which indicates a huge trading volume of Bitcoin in Chinese market. The capital flight through Bitcoin worried the Chinese government so it imposed more pressure on Bitcoin exchanges to regulate trades. Yet, it also inspired the Chinese government to establish its own digital currency for surveillance as well as to combat illicit activities such as capital outflow and tax evasion. In short, though users are less and less connected to their money, the government has only extended its reach, allowing it to gain an even more complete picture of its citizens’ lives.

The battle between cash and digital currencies has begun. The disappearance of paper money may be just a matter of time, based on its status in China. Clearly, both Alipay and Wechat have ambitions to expand their influence given that they have already become acceptable modes of payment in 28 countries and 15 countries, respectively, according to the marketing executive of AliExpress in Spain. In the global context, will the Domino effect take place to respond to this wallet-free lifestyle in other countries, especially the one with so significant a size and an impact as China? Whether going cashless is just a flash in the pan or a norm in the future, time will tell.


Immigrants boost America’s economy: An Untold Story

By: Qinglin Zhao (Karoline)    

How do immigrants in America altogether play the role in the national economy?

Immigrants have embedded in the story of the United States, as a country built by immigrants. Since the President Trump accused China of “stealing” American jobs, the issue of immigrants’ employment has again been put under the spotlight. A kind of worry and fear of more intense competition and the loss of jobs was evoked in American society and accumulated to unwelcoming attitudes towards immigrants. Such opposition is unjustified, given that immigrants in fact are doing what is on the contrary—creating jobs, and adding momentum to the economy of America.

Instead of taking jobs, people from China, the country stigmatized as the “stealer” of jobs in America, have invested more than $45.6 billion in the U.S. (O’Keefe, B., & Rapp, N. 2017). The biggest component is real estate and hospitality industry with $16.8 billion, followed by transport infrastructure with $6.0 billion, then consumer products with $5.7 billion and entertainment and electronics with respectively $4.8 billion and $4.2 billion, etc.

Nicholas Rapp (2017). FDI form China to the U.S., by state and industry [Infographic]. Licensed under
With such a huge amount of investment, Chinese-founded firms are responsible for 140,000 jobs in the U.S, based on the analysis from Rhodium Group (2017). Apart from providing more job opportunities, Chinese sometimes saved the local economy. Alana Semuels from the Atlantic states that a Chinese businessman in Ohio invested $700 million in 2014 to bring a demised General Motors plant back into life (2017). Over 2,000 workers were hired, and most of them are Americans (2017). On the whole, 18.5 percent of manufacturing workers in Ohio are employed by Chinese companies, according to Brookings Institution (2017).

Additionally, similar cases are not uncommon in other states of America.

The report of Robert Delaney, a US correspondent from South China Morning post, shows that Allentown of Pennsylvania has revived from “rust belt status” with the help of Chinese investors (2017). The Lehigh Valley of the Allentown was once the most advanced pioneer in iron and steel industry, yet it declined partly due to the globalization and the exodus of the locals. According to Robert Delaney (2017), since 2014, Chinese companies like Beijing Oriental Yuhong, a producer of weatherproofing materials of high quality, have started dotting in Allentown, which gradually rehabilitate its economic vitality. He also mentions that China’s Fuling Global, a production factory of plastic tableware in Allentown, hired almost entirely local residents (2017). The company also trains the local labor to gain higher skills, which thus can increase the human capital in the region.

More often, foreign-born persons in states provide labor, which makes up 16.9% of the total labor force in the U.S, according to Bureau of Labor Statistics (2017). Yet in this sense, immigrants can not only further promote the regional economy, but also create more jobs and cultivate more highly-skilled local worker.

As for the concern about less space in job markets left to native-born workers, researchers offer a rather positive view on employment prospect. In Julia Preston’s article posted on The New York Times (2017), a report (National Academies of Sciences, Engineering, and Medicine, 2017) through the collaboration of economists, demographers and scholars in other fields, including those from Princeton and Harvard, believe in immigrants’ positive influence on the economy. “We found little to zero negative effects on overall wages and employment of native-born workers in the longer term,” said Francine D. Blau, the Cornell economics professor leading this voluminous report (2017). This report (2017) also points out that highly-educated immigrants, especially STEM (science, technology, engineering, and math) workers are crucial to the U.S innovation since the their cutting-edge ideas can be put into practice, which can bring about more jobs, and thus raise the living standards as a whole and brighten the economic prospect in the long run. Based on the records by the American Immigration Council (2017), twenty-five percent of high-tech companies founded between 1995 and 2005 had at least one immigrant founder, and over 40 percent of companies in the Fortune 500 in 2010 were founded by an immigrant or the child of an immigrant. Most importantly, the statistics is rising, so is the weight of immigrants in STEM fields.

Interestingly, immigrants may not be paid equal right and respect entitled by everyone else in the U.S., but they are not exempt from paying taxes. The report from the Institute on Taxation and Economic Policy (2017) indicates that, even the undocumented immigrants comprises $11.6 billion taxes in 2013, not to mention the amount of taxes paid by immigrants altogether adding to state and local taxes.

The latest estimates of economic growth during the first quarter reaches 3%, which is an incredibly fast pace since 2015 (Egan, 2017). Such rocketing economic growth in the U.S is accompanied by the rising population of immigrants. Whether or not immigrants share the contribution to the nation’s economy, we all know well.

Works Cited

Nichola Rapp (2017, March 15). FDI form China to the U.S., by state and industry [Infographic]. Retrieved from

O’Keefe, B., & Rapp, N. (2017). Chinese Investment in the U.S. Is Booming. Fortune. Retrieved 15 March 2017, from

Semuels, A. (2017). Will China Save the American Economy? The Atlantic. Retrieved 15 October 2017, from

Delaney, R. (2017). How an American city is cashing in on China’s ‘made in USA’ desire. South China Morning Post. Retrieved 15 October 2017, from

Bureau of Labor Statistics. (2017). Foreign-born Workers: Labor Force Characteristics Summary. Retrieved 15 October 2017, from

Preston, J. (2017). Immigrants Aren’t Taking Americans’ Jobs, New Study Finds. Retrieved 15 October 2017, from

National Academies of Sciences, Engineering, and Medicine. (2017). The Economic and Fiscal Consequences of Immigration. Washington, DC: The National Academies Press.

American Immigration Council. (2017). Foreign-born STEM Workers in the United States. (2017). Retrieved 15 October 2017, from

American Immigration Council. (2017). Adding Up the Billions in Tax Dollars Paid by Undocumented Immigrants. Retrieved 15 October 2017, from

Egan, M. (2017). U.S. economy records fastest growth in 3 years. CNNMoney. Retrieved 15 October 2017, from