China Press Review – April 12, 2019

Press review

China’s March trade surplus soars past expectations, Beijing data show
Dollar-denominated exports rose 14.2 percent for March from a year ago, topping expectations of a 7.3 percent rise from a year ago, according to a Reuters poll. But dollar-denominated imports were down 7.6 percent in March from a year ago, falling short of expectations of a 1.3 percent decline from a year ago. China’s March trade surplus with the U.S. — a politically sensitive measure given the ongoing trade war between Washington and Beijing — came in at $20.5 billion.

China’s 2019 growth to slow to 6.2 per cent despite policy support, survey says
The forecast of 6.2 per cent would still fall within the government’s target of 6.0 to 6.5 per cent, but it would mark the weakest pace of growth China has seen in 29 years Optimism has increased that the United States could reach a deal with China soon to end the trade war

China’s exports recover in March, but imports crash again as trade war deal nears
Exports grew by 14.2 per cent, a big jump from the 20.7 per cent fall in January and February Imports fell 7.6 per cent, after a 19.9 per cent collapse in January and February, far below a Bloomberg forecast of 0.1 per cent growth

Britain Confronts the China Challenge
A British Parliamentary Report questions the wisdom of proclaiming a “Golden Era” in UK-China relations. Last week a British Parliamentary Report entitled “China and the Rules-Based International System” laid out in frank terms its view of the direction that China has taken under Xi Jinping, and the commensurate response with which Britain should reply.

China courts eastern Europe after key EU summit
Chinese Premier Li Keqiang will meet leaders from eastern and central Europe in Croatia on Friday (12 April) to talk business, fresh from a key summit with EU where he pledged opening up his country’s economy.

China’s spreading influence in Eastern Europe worries West
Coal-powered plants, mobile networks, major bridges, roads and railways: Chinese investments have been booming throughout Central and Eastern Europe’s cash-strapped developing countries, even as European Union officials scramble to counter Beijing’s mounting economic and political influence on the continent.

China seeks to reassure Europe at Croatia summit

China’s prime minister promised Friday that his government will respect European standards and fair trade, seeking to allay concerns that it is flouting European Union competition rules with huge investments on the continent.

Greek Prime Minister Alexis Tsipras expected to attend 16+1 talks as country looks set to join following ‘tough’ EU-China negotiations
Greek Prime Minister Alexis Tsipras is expected to join talks before the signing of a Friday agreement that will likely see the 16+1 become 17+1 The news comes after a source says EU negotiators fought hard to ensure China would include language on human rights, reciprocity and more

The future of economic growth
When it comes to the next decade, much of the focus lately has been on China, whose current slowdown seems to have taken markets by surprise. It should not have. As we predicted almost 20 years ago, China will struggle to attain growth above 5 percent in the 2021-2030 period, for the simple reason that its workforce growth will have peaked. While pessimists will no doubt find validation in the further Chinese growth disappointments that are to come, optimists can point to the fact that 5 percent annual growth in China is nominally equivalent to 15-20 percent growth in Germany. At this stage in China’s development, faster growth would actually be quite extraordinary.

Capitalism with US and Chinese characteristics can peacefully coexist – if we give up on ‘hyper-globalism’
The idea that countries must fully open their economies to foreign companies, regardless of the consequences for their own growth strategies or societies, is flawed. The US and China should give each other greater policy space

Encouraging signs for US-China business ties in cloud computing access talks
Hopeful mood at US Chamber of Commerce panel discussion as trade war talks near conclusion Chinese concessions on intellectual property and access to markets address key industry concerns

Are American Manufacturers Really Exiting China?
Keeping the Chinese economy rolling along in healthy numbers is seen as a large battle for China at present. The still-to-be-resolved US-China trade spat has certainly had an impact on American sentiment towards China, and US-China trade is down significantly as a result of both countries imposing tariffs on a raft of each other’s products.

US and China’s mutual distrust is hampering tech innovation, experts fear
‘Science collaborations typically live beyond politics,’ the director of Columbia University’s Data Science Institute said at a conference in New York A leading venture capitalist predicted that US pressure for companies to cut ties with China’s Huawei would not be successful

US focus on blocking China’s 5G technology misses bigger manufacturing risk
Venture capitalist Sean O’Sullivan says divided technology landscape would hand China an advantage Competing US and Chinese technologies will force third countries to choose between systems

‘We’re probably the most tested vendor in the world’: Huawei hits back at US campaign to block its 5G technology
Company’s cybersecurity director Sophie Batas says US is ‘singling out’ Huawei A US State Department official said on Wednesday that Huawei would be banned as result of countries adopting risk-based security frameworks for 5G

37 Chinese firms and universities added to US ‘unverified list’ telling suppliers to handle them with care

US Commerce Department warns that it cannot verify that organisations in question are abiding by export administration regulations As well as 37 mainland bodies, six Hong Kong firms also included on list as Beijing claims US is abusing its rules

WeWork Labs and Alibaba Cloud join hands to give startups a push
The China unit of WeWork’s accelerator-type program WeWork Labs and Alibaba’s cloud computing arm Alibaba Cloud have inked a partnership to support entrepreneurs grow their businesses both in Greater China and overseas.

WeWork Labs and Alibaba Cloud join hands to give startups a push

Dutch chip maker ASML denies IP theft linked to Chinese government
Dutch chip maker ASML is rejecting reports by newspaper Financieele Dagblad that employees passed privileged information to a Chinese firm with apparent links to the Ministry of Science and Technology. While ASML did indeed suffer the loss of intellectual property with significant commercial value, the company has denied that the theft was connected to the Chinese government. Meanwhile, ASML CEO Peter Wennik seemed confident that his company’s business with China would continue as usual, commenting, “We resent any suggestion that this event should have any implication for ASML conducting business in China.”

Briefing: Dutch chip maker ASML denies IP theft linked to Chinese government

Unicorn startups go for Shanghai IPOs instead of Hong Kong
Three Chinese unicorns are expected to scrap their plans to list in Hong Kong in favor of Shanghai’s new tech board, which features relaxed trading rules and listing requirements announced in late January. Qingdao Haier Biomedical Co., Sun Car Insurance Agency Co. and Certusnet Information and Technology Co. gave a vote of confidence to the Shanghai stock exchange, which loosened its financial regulations pertaining to high-tech companies in order to encourage key homegrown and foreign tech players to trade in China.

Briefing: Unicorn startups go for Shanghai IPOs instead of Hong Kong

China March new loans jump to 1.69 trln yuan, well above forecasts
Chinese banks extended 1.69 trillion yuan ($251.59 billion) in net new yuan loans in March, up sharply from February and far more than expected, as policymakers push lenders to support struggling smaller companies and shore up the slowing economy. Analysts polled by Reuters had predicted new yuan loans of 1.2 trillion yuan in March, up from 885.8 billion yuan in February. Total bank lending in the first three months of 2019 hit a record quarterly tally of 5.81 trillion yuan, suggesting months of policy loosening by the central bank are starting to bear fruit.

China issues record new loans on the first quarter of 2019 as Beijing battles slowing economy amid trade war
Chinese banks issued a record US$865 billion of new loans in the first quarter of 2019 In March, banks issued US$251 billion in loans, the second highest behind only March 2009

Regulators seek changes in bad debt ratio
China’s banking and insurance regulators at the local level are encouraging banks to count loans overdue by 60 days or more as nonperforming loans, with the aim of better disclosing the risk situation of the banking sector and urging banks to further improve asset quality.

How China Turned 350 Million Millennials Into Day Traders
By cracking down on peer-to-peer lending, regulators have narrowed the options for young investors. That’s birthing a generation of gamblers.

World Bank President David Malpass says there is too much debt in the world
“There are challenges facing the world in terms of how do you have transparent projects that are high quality, where the debt is transparent. China moved so fast that in some part of the world there is just too much debt,” Malpass says. “That’s something that we can work on with China.” China has lent trillions of dollars to other countries, including the U.S.

IMF leader Christine Lagarde praises China’s economic stimulus but warns on debt-heavy ‘Belt and Road’ loans
High on Lagarde’s list of self-inflicted economic wounds is the US-China trade war and its hundred of billions of dollars in tariffs Concern that some Asian, African and Latin American borrowers may not be able to repay Beijing, leaving them politically and economically vulnerable

Report reveals benefits and concerns of BRI port projects
The port of Piraeus in Greece is an example of a BRI success story. [Photo provide to China Daily] China’s investment volume in global ports has skyrocketed since the launch of Belt and Road Initiative but faces risks and challenges amid the fair share of controversy and turbulent political arena and financial markets, according to a report newly released by Grandview Institution, one of the most well-known independent think tanks in China.

Belt and Road promotes equality-based cooperation
A deep correction in the world’s economic landscape and globalization have brought new opportunities as well as challenges to all countries.

US, Canada and EU to offer ‘robust alternative’ to state-led development finance, as belt and road increases reach
The new Overseas Private Investment Corporation alliance is its second, following one last year with Japan and Australia OPIC head David Bohigian says, ‘We’re trying to hold up an example … of the way that development finance should work’

As China Trade War Cools, Japan Braces for Its Clash With Trump
Negotiators sit down for opening talks in Washington next week Abe doesn’t want to give U.S. better deal than Europe, Asia

China’s vehicles sales fell for ninth straight month in March, fuelling consumption concerns
Total automotive sales fell to 2.52 million in March, 5.2 per cent down from a year earlier, new data showed on Friday Despite consecutive slumps, the China Association of Automobile Manufacturers said that the decline has been ‘significantly reduced’

Auto tariff war would hurt more than U.S.-China fight – IMF chief economist
A new trade war sparked by U.S. automotive tariffs has the potential to do much more damage to global economic growth than the U.S.-China trade conflict has done, International Monetary Fund chief economist Gita Gopinath said on Thursday.

China recovery good news for European stocks
Firms with a significant exposure to China will likely see a big pickup in sales

How China is shaking up the global financial order
Right now China is adapting its economy and financial system to fit the U.S.-led capitalistic financial model. But given the way China has operated as a rising military and geopolitical power, its ascent likely means that things will change in global financial markets.

As money pours in, can Chinese markets continue the upward trend, or is it too much too soon?
With China’s foreign exchange reserves beating expectations, A-shares erasing 2018 losses and new recognition from international benchmarks, investors have reason to smile

China’s land auction premiums rebound as credit taps reopen to developers
The residential land price premium rose to 23.7 per cent in March, up from 10 per cent in February, according to property consultancy China Index Academy In March, second-tier cities reported a 46 per cent jump in average prices for land sold at auction compared to a year earlier

Profits for Alibaba-backed STO Express rebound in 2018 despite industry slowing
Express delivery giant STO Express reported 37.7% profit growth in 2018, a recovery following three years of lackluster results in the slowing Chinese courier market.

Profits for Alibaba-backed STO Express rebound in 2018 despite industry slowing

LVMH Reports Strong First Quarter Despite Slowing Economy
LVMH Moët Hennessy Louis Vuitton (LVMH) reported its Q1 2019 financial results on April 11, and the results should ease concerns about a slowing luxury market in China. The company’s shares climbed to record highs after posting strong first-quarter sales, thanks primarily to growth within mainland China.

LVMH Reports Strong First Quarter Despite Slowing Economy

Hong Kong tops the world’s most expensive cities for owning homes in CBRE study of 35 urban centres
The average cost of owning a home in Hong Kong rose 5.5 per cent last year to HK$9.4 million (US$1.2 million), or US$2.091 per square foot for a typical abode of 574 square feet (53 square meters) Singapore was second in CBRE’s survey, followed by Shanghai in third place

China’s state pension fund to run dry by 2035 as workforce shrinks due to effects of one-child policy, says study
The urban worker pension fund, the backbone of the country’s state pension system, is under threat, warns the Chinese Academy of Social Sciences Number of citizens exceeding the normal retirement age reached 249 million at the end of 2018, some 18 per cent of the total population

China tech money headed to Europe as US tensions remain high in first quarter
Outbound deal volumes by Chinese technology investors into Europe increased 25 per cent in the first quarter Investment into the US dropped 13 per cent

The Future of China’s Growth Glimpsed in Historic Town’s Revamp
A $300 million plan to turn a country town famous for fine porcelain into a major tourist destination gives clues as to how China’s new approach to stimulus works in reality. Shenhou in central Henan province, home to the delicately-colored jun pottery since the Song dynasty about 1,000 years ago, began work in 2016 restoring its main street. The investment is starting to pay off: During February’s week-long Lunar New Year holiday, Shenhou saw a quarter of a million visitors, boosting tourism revenue 90 percent from a year earlier.

China Has an Industry for Flaunting Fake Wealth
Looking to impress your friends? A few bucks can get you a customized video with a fat wad of cash, a luxury home, a celebrity gal pal, or the car of your dreams.

Making China Modern
From the Great Qing to Xi Jinping It is tempting to attribute China’s recent ascendance to changes in political leadership and economic policy. Making China Modern teaches otherwise. Moving beyond the standard framework of Cold War competition and national resurgence, Klaus Mühlhahn situates 21st-century China in the nation’s long history of creative adaptation.

China targets nuclear fusion power generation by 2040
China aims to complete and start generating power from an experimental nuclear fusion reactor by around 2040, a senior scientist involved in the project said, as it works to develop and commercialise a game-changing source of clean energy.

Millions of Chinese youth ‘volunteers’ to be sent to villages in echo of Maoist policy
Communist Youth League students to ‘spread civilisation’ in countryside and ‘promote technology’

Top watchdog censures China’s biggest stock photo platform amid public outrage
China’s top regulatory agencies publicly rebuked stock photo agency Visual China after it claimed the copyright for the first photo of a black hole, an image released on Wednesday that commanded headlines across the globe. Beijing-based Visual China Group (VCG) watermarked the now-famous image and claimed it held the copyright, sparking outrage from millions of netizens on Chinese social media.

Top watchdog censures China’s biggest stock photo platform amid public outrage

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