Horizons newsletter – Week 12 // 2018
Horizons is a bi-monthly Dasym Research initiative to show you how the Dasym themes have been in the news. We publish the Horizons on our website and as an email newsletter. If you wish to receive the email, please contact Investor Relations.
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Last week, home-testing DNA company 23andme received approval from the U.S. Food and Drug Administration to sell direct-to-consumer tests on three genetic mutations linked to breast cancer. No prescription or physician needed. With other companies such as Color, Illumina and Veritas Genetics also making big steps in DNA testing, a new era for consumer-generated DNA testing might open. Before, genetic testing that meet FDA standards was limited to medical professionals. Direct-to-consumer tests were available merely for non-medical purposes: revealing how closely you are related to Neanderthals (Insitome) or finding your perfect match (Pheramor). The newly approved affordable medical direct-to-consumer tests might lead to growing consumer demand, which will enlarge databases with millions of DNA profiles. To use the data for clinical trials, genetic testing companies are increasingly collaborating with third parties. Furthermore, the DNA ‘miners’ aim to use consumer genetic data for drug discovery. Although privacy continues to be a top concern, the rapid technological advances will give consumers the possibility to monitor their own biology and to contribute to user-generated healthcare.
A new wave of Chinese investing
As China’s economic model is transforming from ‘Made in China’ to ‘Created in China’, its foreign direct investment (FDI) profile is changing as well. In the early 2000s, the Chinese government initiated the first wave of Chinese FDI with its “Go Out Policy”, encouraging Chinese state-owned enterprises (SOE) to invest abroad, mainly in commodities such as raw materials and agriculture, to fuel its economy’s double-digit boom. After the 2007 financial crisis, China’s FDI shifted towards capital investments in real estate, transport and infrastructure projects. This second wave allowed Chinese consortia to leverage their scale and deep pockets, and become dominant players in several world markets. Today, a decade later, we enter a new phase, as China is starting to transition into an advanced economy. As a result, Chinese FDI will focus more and more on high-quality investments in for instance manufacturing, chemicals and entertainment. Furthermore, as the private sector assumes a more important role in China’s economy, private Chinese investors will increasingly drive this third phase of Chinese overseas investments and overtake the role of Chinese state-controlled companies.
Don’t let waste go to waste
Recently, China stopped imports of “foreign garbage”. As wealthier countries such as the U.S., the E.U., the U.K., and Japan used to export millions of tons of plastics and paper to China, they now have to reconsider their use of resources and reduce waste production. Already, different strategies are taking shape globally. First is the ban on waste. The number of countries banning plastic bags is growing and for instance, Taiwan plans to ban other plastics as well. Second is the strategy of nationalizing commodities. China has nationalized a number of rare earth mines for environmental and strategic reasons. Other countries with high resource dependency might also increase state involvement in managing critical resources. Third, countries are setting circular agendas. The Netherlands wants to transition to a circular economy, reducing the use of resources with 50% by 2030. One of the ways to achieve this is through recycling waste, which can even yield scarce resources; for example, e-waste contains various reusable metals. The bulk of waste that cannot be exported to China anymore, serves as a wake-up call for the entire world to think about managing waste and resources.