Preface

　　The new year brings this new edition of Deloitte Perspective (Volume II) and the inaugural English edition. The aim of this publication is to share Deloitte's observations and experiences on subjects relevant to companies and business leaders operating in the China marketplace.

　　2013 was a landmark year for China. A new administration took office. The Third Plenum of the 18th Party Congress widely regarded as the barometer of China’s reform, drew to a successful conclusion. “Market" was granted an important position again. Financial and capital market reforms proceeded much faster than expected. Ecological civilization and environmental protection were given more importance than ever before. Undoubtedly, in order to drive its economic transformation toward quality growth, industrial upgrading and domestic demand stimulation, China needs to be innovative and adaptive. For businesses, it is imperative that they face up to such a changing environment by implementing their innovations with the right strategies, plans and actions.

　　This edition of Deloitte Perspective focuses on innovations in the financial sector. Be it the expansion of bitcoin transactions and subsequent regulatory challenges, the invasion of Yu'E Bao (a money market fund offered by Alipay) or WeChat payment, the world of payment and investment is being changed by internet based services, posing major challenges to traditional financial institutions. Financial services innovation is developing rapidly, changing consumers' shopping habits as well as trading, investment and credit portfolios. Changing credit and investment demands from consumers and businesses are creating new profit growth drivers for both traditional and new players, but they also require innovative products and services that have the potential to expand in the international market. Regulators too are feeling pressure brought about by financial services innovation. The Third Plenum of the 18th Party Congress sets the direction for financial reform and encourages private capital to participate in market competition. We believe that this trend will reshape the sector and usher in business model innovations.

　　Innovation is not only happening in emerging industries. With China’s economy slowing down and demographic dividend fading, the industries including real estate, which experienced surging growth in the past ten years, are actively revising their strategies and hoping to increase revenue and reduce costs by streamlining practices and expanding internationally. Striving for Sustainable Growth in Adversity compares real estate companies listed on Shanghai, Shenzhen and Hong Kong stock exchanges to provide a clearer perspective into the recent trajectory of China's real estate market and companies’ countermeasures against adversities.

　　New opportunities are arising. In 2013, the media and entertainment sector, an important part of the cultural industry, enjoyed skyrocketing growth. Meet the Golden Age of the Entertainment Business looks at the growth paths and features of the media & entertainment sectors in the Chinese Mainland, Hong Kong and Taiwan from a new perspective, exploring their complementarities, the prospects for cooperation and model innovation.

　　This new edition of Deloitte Perspective also includes our findings on the Three Rules: How Exceptional Companies Think. Drawing on the experience and observations of professionals from within Deloitte and beyond, this report examines what is exceptional performance and suggests on how to achieve exceptional performance.

　　This is the first English edition of Deloitte Perspective which was previously only available in Chinese. We hope it provides topics and information of interest and use to you.

Lawrence Chia | Deloitte China CEO

Paul Siu | Managing Partner, Clients, Industries & Market, Deloitte China