China GDP: economy surged record 18.3 per cent in first quarter compared to a year earlier, but slowed versus fourth quarter
China’s economy grew by 18.3 per cent in the first quarter of 2021 compared to a year ago but slowed to 0.6 per cent versus the fourth quarter 2020. Retail sales and industrial production grew by 34.2 per cent and 14.1 per cent respectively in March from a year earlier.
The Chinese government announced a rip-roaring GDP growth number for Q1—18.3% up on the virus-ripped Q1 of 2020 when it seemed like maybe the world was coming to an end, at least in China. It was Q2 before things started to flip, and China recouped and rebounded while the rest of the world fell ever deeper into a pandemic morass that vaccines could resolve if everyone would only take them. The 18.3 number itself means not much given the depth of the locked-down crisis back then against which Q1 performance this year is being compared, but it is still a solid sign of recovery. But then there is the world of debt, spoken of for so long as the Achilles’ heel of the Chinese economic miracle. The number of bond defaults by SOEs continues to grow, and now we have the problem of Huarong Asset Management, a key player in the SOE world, used for the past two decades to clean up the balance sheets of state banks and other entities—bad assets are transferred to Huarong which restructures them or sells them off cheap, roughly speaking. Huarong has assets of $260 billion, it has just announced a delay in the release of its 2020 results, and the markets have not reacted well. It is the old question of just what Those in Command will allow to fail to balance off SOE corporate efficiency and systemic stability, and the answer is somewhat more than before at the local government level. SOEs reneged on a record RMB 79.5 billion ($12.1 billion) of local bonds in 2020, according to Fitch Ratings, and the first quarter of 2021 was even more dire. But the central SOEs are another matter. So much is concentrated in these SOEs in terms of assets and economic power, and there is so little transparency. A big player like Huarong will of course not be allowed to fail. The key pillar of confidence for all the markets in China is the belief that such a company will always be bailed out. It’s a systemic dilemma.
China: forget the super fast GDP growth, focus on chip shortage
High GDP growth in 1Q21 was a mix of base effects and genuine recovery. Without such base effects, China’s GDP growth will appear more moderate over the rest of the year. Activity data shows that China is on a recovery path. The main risk concerns chip shortages, which could limit production and export growth in the coming quarters.
U.S. China hawks seek to cut sales of chip-making tools to Beijing
In a letter this week, congressmen called for banning exports of electronic design automation software for chip design to China They have joined a chorus of ‘hawkish’ voices in Washington that want Biden to keep up pressure on China, following an aggressive push that started under Trump
How the chip shortage got so bad — and why it’s so hard to fix
Surging demand and political tension play havoc with global supply chains And that, more than a hypothetical glut, is the problem. “This serious shortage could be detrimental, especially to many startups and smaller and medium enterprises,” said Wallace Gou, president and CEO of leading controller chip developer Silicon Motion. “Many of them could be out of business if some vital chip supplies could not come in time.” Dung, the hardware startup founder, admits the clock is ticking. “We [startups] don’t have the resources and the procurement power like big companies to launch aggressive bids to grab inventories,” he said. “Now we can only work around the clock to change our designs and find some alternative components that are more available — and fight for our survival.”
Macron and Merkel hope climate talks with Xi can help take sting out of China-EU tensions
Trilateral discussion between French, German and Chinese leaders seen as attempt to find common ground after weeks of tension Friday’s phone call is billed as preparation for two-day summit hosted by US to discuss climate issues
China’s carbon neutrality goal: more action needed on ground, report says
Implementation gap between government’s net zero target and what is happening on the ground ‘cause for concern’, London-based research firm TransitionZero says Report recommends China close, convert or put into reserve 364 gigawatts of coal-fired power capacity by 2030
China’s Coal Sector Needs Radical Revamp to Achieve Carbon Neutrality
One-third of coal-fired power capacity should be shed over the next 10 years if China is to meet its ambitious energy targets, research says.
China Cracks the Trillion-Dollar EV
Question Despite all the optimism, there’s still a multi-trillion dollar barrier facing electric vehicles. It isn’t just the hefty cost of batteries, but also investing in charging networks and power infrastructure. Without the latter two, there isn’t much of a green future It’s worth looking to China for how this should be done. Beijing’s strategy is to remove as many barriers to adoption as possible, and lower the cost of ownership by putting large amounts of capital to work, along with incentives for the private sector.
Ambitious national and local goals have served China well. The country had 1.68 million charging points at the end of last year, just over half of which are private and the rest public. While that’s below the 4.8 million original target, it’s far beyond what the U.S. has achieved at 72,000 at the end of 2019. China has one charging point for every five electric vehicles, compared with 20 in the U.S., according to BloombergNEF. China has redirected its electric-vehicle subsidy efforts toward building out a vast network of charging stations, while cutting back on consumer-focused incentives. A plan unveiled last year boosted the emphasis on charging and battery-swapping stations. The state-run grid operator’s smart network is connected to over 90% of all charging piles.
China’s digital currency won’t topple US dollar ‘so easily’, senior Bank of Japan official says
People’s Bank of China (PBOC) has moved closer to becoming the first major central bank to launch a virtual currency with a series of trials Biden administration is increasing its scrutiny of China’s progress toward a digital yuan amid concern it could kick off a long-term bid to displace the US dollar
US Treasury’s new list of currency manipulators does not include China
US Treasury Department, in first foreign exchange report of the Biden administration, keeps China on a watch list for its practices The report added Taiwan to the watch list but did not designate it as a currency manipulator
China antitrust: Alibaba promises to assist regulators to maintain ‘market order’ after record fine
Alibaba’s pledge was one of 11 released on Friday by tech firms such as video streaming site iQiyi, search engine Sogou and food delivery platform Ele.me The company said separately that trial programme for merchants on its Tmall platform would begin on April 19
Can China’s new trade strategy hit the right buttons in Washington?
The global economy is facing both COVID-19 and major power geopolitical competition. US–China rivalry could split the global market in two. The Biden administration is reigniting hopes of the future of multilateralism and a resumption of US leadership in the rules-based trade order. In China, this is all part of a strategy to promote ‘dual circulation’, which stresses the domestic market for economic growth but also builds in international openness and connection to global markets. This model is a defensive response to growing uncertainties in the trade regime. As a force for economic globalisation and an active contributor to the global trade system, Beijing is looking to the Biden administration for a positive response. As the world’s two largest economies, China and the United States share a common responsibility to build and strengthen the international trade rules.
Booming US economy is good news for emerging Asia’s exporters, but not so much for Asian equities
US data in March reflects an economic turnaround that is likely to persist, given the strong fiscal and monetary support and rising vaccination rate Emerging Asia will benefit from the rise in US demand, but expect the higher US yields and a stronger dollar to put pressure on the stock markets Emerging Asia is well positioned to benefit from the strength in US demand, as we are not seeing much tangible evidence of deglobalisation. Global exports have moved in line with industrial production. US imports as a share of the economy held steady, indicating there was not much import substitution. Moreover, there are no obvious signs of supply chains shifting out of China during the pandemic. In fact, China’s share of the global imports market increased by 1.2 percentage points and its share of the US import market rose by 3.1 percentage points at the end of 2020, compared to the end of 2019.
Tmall Looks Towards New ‘Golden Age’ Ahead for Beauty
As the impact from Covid-19 wanes in China and new consumer trends take shape, beauty brands have continued to discover untapped opportunities and pick up growth on Alibaba Group’s B2C online marketplace, Tmall.
Carmaker Geely enters China’s packed electric-vehicle arena with the long-range Zeekr 001
The carmaking giant has entered the fray against Tesla by launching an EV it describes as a vehicle to excite rather than commute in Conventional carmakers are upping the ante in EVs and mounting a challenge to Tesla, says Yale Zhang, managing director of Automotive Foresight
China’s aviation capabilities stuck at ‘low-end’ as military-civil fusion weighs on innovation: official report
China’s aviation sector is being held back by the dominant role of the state and the country’s military-civil fusion strategy, says a new Shanghai report The country is only able to make basic aviation parts as a result of inadequate core technology and poor research and development capabilities, the report says
Growing China human rights concerns risk curbing foreign investment needed to support economy
Foreign investors’ holdings of Chinese government bonds declined by US$2.5 billion in March from the previous month, the first monthly drop since February 2019 Concerned with social issues and corporate governance, China’s alleged human rights violations in Hong Kong and Xinjiang are weighing on minds of fund managers
China to be in focus at summit between Joe Biden, Japan’s Yoshihide Suga
Taiwan and Huawei will be on the agenda, but when it comes to Xinjiang and Hong Kong, the two sides have ‘slightly different perspectives’, says US official The meeting, in Washington, will be the US president’s first with another head of state since he took office in January
China tried to wage ‘undeclared war’ against India through cyberattacks, military chief Bipin Rawat says
General Bipin Rawat, the Chief of Defence Staff of the Indian Army, told the Raisina Dialogue that China’s creation of ‘disruptive technologies’ has emboldened Beijing He joined his counterparts from Australia and Japan in asserting the importance of the Quad and its focus on the Indo-Pacific region
China may send peacekeeping force to Afghanistan after US troops leave, observers say
Beijing is concerned terrorist groups will prosper if there is a lack of stability in the region, experts say US President Joe Biden says all remaining US troops in Afghanistan will pull out by September 11
Xinjiang: will the West’s sanctions on China force the issue or unravel?
US, EU, Britain and Canada sanctioned officials for alleged human rights abuses in the region, after previous bans targeting its cotton and tomato products As brands and governments argue over claims of forced labour in Xinjiang, producer of a fifth of the world’s cotton, observers debate sanctions’ possible impact
It’s not fair to call us Wolf Warriors when we’re reacting to US acts such as Donald Trump’s consulate closure, says Chinese diplomat
The diplomat said the former US president’s actions highlighted the need for a strong response to attacks on China’s interests The West is very good at putting labels on us but we only hit back when China’s interests are threatened, says source
US-China relations: career diplomat Nicholas Burns tipped to be next American ambassador
Appointment of a State Department insider would break with recent habit of political appointees being given the Beijing posting Burns previously served as undersecretary of state under George W Bush and has served as US envoy to Greece and Nato
Hong Kong: Jimmy Lai sentenced to 14 months for pro-democracy protests
Hong Kong pro-democracy media tycoon Jimmy Lai has been sentenced to 14 months in prison after being found guilty of unauthorised assembly.
EU drops plans to punish China over Hong Kong electoral reform
European Union withdraws draft text from agenda for Foreign Affairs Council meeting after failing to gain support from all 27 member states Hungary believed to have opposed measures, which included the suspension of extradition treaties between 10 EU member states and China
Why Chinese Millennials Are Daffy for Ducks
With prices for a single bird reaching 20,000 yuan, pet call ducks are a niche craze, but a big market.
Legal experts urge people to take new Chinese biosecurity law seriously
It covers activities including the handling of pandemics, biotech research, human genetic materials and the management of labs Industries affected range from health care to food and agriculture, and those in breach could be jailed or face financial penalties
Scientists Create Human-Monkey Hybrids, a Step Closer to Growing Organs
A Chinese-led team managed to grow human cells within monkey embryos for 20 days before terminating the experiment for ethical reasons.
Pentagon team reveals Covid-19-detecting chip that can be implanted in the body
DARPA, a US military research lab, has developed a chip that can continuously test people’s blood for the new coronavirus The invention is in late-stage testing and could be administered to sailors, researchers say
Service Asie Pacifique
Place Sainctelette 2
Tél 02 421 85 09 – Fax 02 421 87 75
Copyright © 2020 awex, All rights reserved