China Press Review – April 11, 2019

Press review

China consumer inflation accelerates in March
Consumer and producer prices both accelerated last month, lifted by hefty increases in pork prices and higher oil prices, the latest sign that China’s economy may be stabilizing after a recent slowdown.

China producer inflation picks up for first time in nine months, eases deflation worries
China’s factory-gate inflation picked up for the first time in nine months in March, lifted by price rises in global commodities as well as signs that government efforts to boost the economy may be putting a floor under domestic demand.

EU, China try to smooth over trade and investment differences
If Beijing does not deliver on promises of mutual gains, its ‘divide and rule’ strategy towards Europe will lose steam

EU, China try to smooth over trade and investment differences
If Beijing does not deliver on promises of mutual gains, its ‘divide and rule’ strategy towards Europe will lose steam

Hopes high that EU-China joint statement on opening up is more than just words
Observers say that given pre-summit tensions, the release of a statement and commitment to a timetable for developing a monitoring mechanism is an achievement Concessions made by Chinese Premier Li Keqiang evidence of Beijing’s desire to keep EU onside ahead of G20 summit in June, expert says

China opens a ‘diamond period’ in the Balkans
Chinese Prime Minister Li Keqiang has visited Zagreb before the “16+1” summit in Dubrovnik today. “We will import more Croatian products that suit Chinese consumers and encourage a more balanced trade,” Li said after a meeting with his Croatian counterpart Andrej Plenković. “Although we are geographically distant, we are willing to bring our hearts closer together and open a diamond period in our relations,” he added.

China’s consumer inflation driven to 5-month high as pork prices rise
Consumer price index in March rose 2.3 percent from a year ago — the quickest pace since October 2018. Producer price inflation rose 0.4 percent from a year ago in March, picking up for the first time in nine months and easing deflation fears.

Top EU technology official still concerned about Beijing’s access to data from Chinese firms
Andrus Ansip, in charge of EU digital issues, says the possibility of cybersecurity breaches in 5G networks is troubling His remarks came a day after Chinese Premier Li Keqiang tried to allay such concerns at the EU-China summit

EU wary of China’s economic diplomacy
Chinese Prime Minister Li Keqiang is in Croatia today in the run up to Friday’s joint economic summit with 16 European nations. It’s the first visit by a Chinese premier to the country. Croatia might be a tiny market when compared to China – but one of many eastern and southern European countries Beijing is hoping to deepen trade ties with using cheap loans and infrastructure projects.

EU-China: Proceed with caution
China is an opportunity for our market, but its growing influence in the EU is a source of concern, argues David Martin.

EU, China agree to work together on clean energy
After a Brussels summit dominated by trade tensions, the two major powers presented a united front on climate change and clean energy

China struggles to ease concerns over ‘Belt and Road’ initiative as summit looms
China is struggling to ease worries about President Xi Jinping’s signature plan to build a new Silk Road as it readies for a major summit in late April, especially among Western nations wary about debt, transparency and Chinese influence.

US and China agree to establish trade deal enforcement offices, says US Treasury Secretary Steven Mnuchin
Mnuchin said that a call with Chinese Vice-Premier Liu He on Tuesday night was productive and that discussions would resume on Thursday

China and US reach milestone agreement on road to trade peace
Key hurdle overcome as both sides agree to mutual monitoring and enforcement of trade pledges No time frame for deal but US Treasury Secretary Steven Mnuchin hopes it can be done quickly

Trade war gives China’s chip equipment makers room to grow
Beijing plays down its ongoing semiconductor ambitions amid U.S. push back

Trump Fails To Force China Into A Hard Landing
If President Trump’s trade war can’t stop China, what will? China’s current account surplus rose by 0.8% of GDP in the fourth quarter of 2018 to 1.5% of GDP, or $54.6 billion

China’s Economy Is Likely to Grow ‘Well Above’ Target in 2019: Jefferies
China’s economy will likely grow far faster than the official target of 6 to 6.5 percent this year due to stronger fiscal stimulus including tax cuts and faster debt sales, according to analysts at Jefferies Financial Group Inc. The pace of growth will normalize in 2020, Jefferies analysts, including Laban Yu, wrote in a report dated Wednesday.

The New Retail: Today’s China is Tomorrow’s America
Today, Chinese consumer culture has taken over the world market, and China’s consumer class currently has greater exposure to emerging offline retail technology than their worldwide peers, as well as new online-to-offline (O2O) market transition technology that could offer untapped potential to the U.S. and Europe.

The New Retail: Today’s China is Tomorrow’s America

China banks’ bad loan ratio to rise in 2019
Chinese banks’ bad loans and bad-loan ratio will likely rise in 2019 amid an economic slowdown and a protracted trade dispute with the U.S., according to a report released Wednesday by a state bad bank.

China Pension System Set to Dry Up by 2035, Think Tank Says
The pension system providing the widest coverage to China’s retirees may burn through its savings by 2035 as the world’s largest population ages, according to forecasts by a leading government think tank. Cumulative savings in the basic pension fund that covers urban employees will peak at about 7 trillion yuan ($1.04 trillion) in 2027 before dropping sharply, the state-run Chinese Academy of Social Sciences said in a report. Excluding fiscal subsidies, net outflows would have begun this year instead of 2028, according to the report

China’s tax cuts were meant to boost its slowing economy, but will they end up hurting debt-ridden regions?
Premier Li Keqiang announced reductions in value-added and personal income taxes and a lowering of the social security contribution rate in March The tax cuts are said to be worth 2 trillion yuan (US$298 billion), but local authorities are already asking for additional funding due to the economic slowdown

China mobile phone shipments continue to slide in March – report
Shipments of mobile phones to China faces declined for the fourth consecutive month, falling 6% month-on-month in March, according to a report (in Chinese) by the China Academy of Information and Communications Technology (CAICT). Shipments dropped to 28.4 million units in March from 30.2 million units in March 2018. The number of new devices launched also fell 35% from a year earlier, with 52 new mobile phones hitting the market. Mobile phone shipments in 2018 fell 15.5% year-on-year in China, the world’s largest mobile phone market

Briefing: China mobile phone shipments continue to slide in March – report

EV startup CHJ opens pre-orders for SUV with 500-mile NEDC range
Chinese electric vehicle (EV) startup CHJ Automotive has starting taking pre-orders for its first electric SUV model, Leading Ideal ONE, with deliveries slated to begin in the fourth quarter.

EV startup CHJ opens pre-orders for SUV with 500-mile NEDC range

Chinese tech investors are turning towards MENA. Here’s why
Discussing China’s engagement with MENA is difficult thanks to regional factors such as oil, conflict and strategic trade routes. While there are many opportunities for private sector and technology investment – and the latter has been the most vibrant area thus far – expanding collaboration between China and the Gulf Cooperation Council (GCC) will not be easy.

China’s New E-Commerce Law and Its Foreign Company Impacts
AmCham Shanghai recently published an article I wrote on China’s new E-Commerce Law, titled, Implications of China’s E-Commerce Law, and I urge you to read it. I was asked to write this article to explain the implications (hence the title) and the practicalities of China’s new e-commerce law. Actually, my law firm was asked to write this article, but I then was tasked with this because I have been working on a steady stream of China E-commerce matters since the new law came out. The below borrows liberally from my article but summarizes it.

China’s New E-Commerce Law and Its Foreign Company Impacts

Alipay health plan aiming for 300M users
Alipay wants to provide basic health plans to 300 million people in the next two years through its Xiang Hu Bao “mutual-aid platform,” the Ant Financial-owned payments and lifestyle platform said Thursday.

Ant Financial disrupts old school health insurance in China, attracts 50 million users to its newly launched protection plan
Plan pays out up to US$45,000 to members who fall critically ill Ant will take an 8 per cent administrative fee out of every payout

Xiaomi founder Lei Jun earned almost as much as the company last year but pledged to donate it to charity
Xiaomi’s annual adjusted net profit for 2018 was 8.6 billion yuan (US$1.3 billion)

China’s Property Market Is Feeling the Stimulus Effect
China’s year-long campaign of targeted stimulus to stoke the economy is making its presence felt in the property market, a sector that has the power to cement a recovery and improve the fiscal health of local authorities

What does China’s move to relax residency curbs mean for the property sector?
51 Chinese cities have eligibility restrictions, which accounted for 21 per cent of national new home sales in 2018 The new policy will effectively relax home buying curbs in 33 cities, according to Nomura

For Chinese Raised in Prosperity, Shrugs in the Face of Layoffs
Few cities in China have had as grim a history over the past century as Chongqing. Now the enormous city is prospering, but faces a wave of pink slips at factories

China’s Geely launches new electric car brand ‘Geometry’
– Geely, China’s highest profile car maker with investments in Volvo and Daimler, launched a premium all-electric car brand “Geometry” on Thursday as it pushes ahead with its plans to boost production of new energy vehicles.

Pork group scraps big trade event over African swine fever fears
The group said it would cancel its annual trade show in Des Moines, Iowa, to avoid the risk of the disease spreading to the US pig population

Hong Kong’s first-quarter IPOs generate biggest returns in four years as bull market builds up
Two big reasons behind surge: Fewer IPOs and overall strength of market CStone Pharmaceuticals led returns with 31 per cent in first month

Chinese brokerage giant seeks to raise US$1.25 billion in Hong Kong’s largest IPO this year
Cornerstone investors, including China Life Insurance and ICBC Asset Management, have committed US$829 million to Shenwan Hongyuan’s IPO Shenwan plans to sell 2.5 billion shares priced between HK$3.63 and HK$3.93

podcast : Grading China’s Belt and Road Initiative
Daniel Kliman, senior fellow at the Center for a New American Security, discusses the risks to investing in China. He spoke on April 9 on “What’d You Miss?” (Source: Bloomberg)

The Piraeus miracle and the way forward
Against this backdrop, COSCO expressed an interest in the privatization of the Piraeus Port Authority (PPA) to expand its activities, inter alia, in pier I and the car and passenger terminals. In 2016, it won a tender and bought a 51% stake of PPA that could reach 67% in the future. The general performance of the Piraeus port has further improved since then. Chinese President Xi Jinping made particular reference to it in his keynote address during the first Belt and Road Forum for International Cooperation in May 2017.

French asset manager Ostrum launching US$500 million Asian infrastructure debt fund
Ostrum Asset Management is building an investment team in Hong Kong Infrastructure spending in Asia-Pacific estimated at US$22.6 trillion by 2030

Senators criticize Microsoft for China AI research
Between March and November of 2018, Microsoft researchers in Beijing co-wrote and published three papers on artificial intelligence with a university run by China’s top military body. The revelations about the American company’s involvement in building surveillance systems for the Chinese government, a possible breach of US laws, has sparked alarm from leading China hawks in Washington DC. One of the papers delineates an AI method to create accurate environmental maps by using facial recognition. Microsoft defended the academic papers, saying that they are the result of a collective effort involving an international team of scientists and academics researching key technologies.

Briefing: US Senators criticize Microsoft for China AI research

Giggling Into the Abyss: China Memes First Black Hole Image
With the release of Wednesday’s astronomically historic image, the country’s social media has crossed an event horizon of viral black hole content.

‘We’re seeing the unseeable’: Scientists reveal first true image of a black hole
Astronomers hold six press conferences simultaneously in Belgium, Chile, Shanghai, Japan, Taipei, and the US to unveil results from the Event Horizon Telescope Black holes are so powerful that nothing nearby – not even light – can escape their gravitational pull

No major breakthroughs, but EU claims progress in science talks with China
China-EU summit tackles mutual access to funding, research ethics and transparency, but comes up with few specific actions

Chinese ‘spies’ stole Dutch chip machinery giant’s secrets, newspaper says
Links between company accused of receiving confidential information and Beijing, according to report Investigation follows US court ruling against six Chinese employees of semiconductor maker ASML

Chinese scientists add human genes to monkey brains in latest ethics controversy
Experiments compared to dystopian science fiction classic Planet of the Apes Research follows other controversial projects in China, including last year’s gene-edited twins

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