The EU, China and America: Hanging in, by their teeth and nails
In its relationship with China, the EU has already passed a litmus test for its geopolitical ambitions, albeit with mixed results. The Comprehensive Agreement on Investment (CAI) was concluded during the last days of December and therefore before the Biden administration took office, against the warnings of, inter alia, a prominent group of European China scholars and experts. In Europe, CAI subsequently has widely been criticized, mostly for its geopolitical shortcomings: Beijing claimed it as proof that the European Union was China’s partner, thus undercutting efforts to build a transatlantic coalition against China. The simplest way to characterize Europe’s performance in the context of CAI is that the EU wanted to have its cake and eat it. “Eating the cake” refers to the concessions Beijing is willing to make to European commercial interests in certain industrial and service sectors in China; “having the cake” relates to the second prong of EU policies towards China. The EU is building up a toolbox against China’s mercantilist practices in Europe, such as investment screening and regulations aimed at unfair advantages enjoyed by state-owned enterprises.
China facing economic crisis as population peak nears, PBOC adviser says
Consumption set to slump after population tops out in 2025, says Cai Fang, a member of the central bank’s monetary policy committee Beijing must ‘increase labour participation and social security benefits’ for the elderly to shore up consumer demand, he says Beijing said in its latest five-year plan that it was committed to reducing income inequality but has yet to introduce any major changes to its tax or spending policies. Chinese government officials have tended to favour supply side policies, such as investment, over handing cash to consumers. Assistant finance minister Ou Wenhan said earlier this month that it was necessary to maintain stability of the macro tax burden over the next five years. “That means there will not be a major increase or decrease in tax revenue’s ratio to GDP,” said Andrew Batson, director of China research at consultancy firm Gavekal. “In other words, the government is not preparing to raise revenue to finance a major expansion of the welfare state.”
China’s Economy Bounced Back – Or Did It?
The Chinese economy bounced back strongly in 2021’s first quarter The Chinese economy bounced back strongly, growing 18.3 percent in the first quarter of the year, according to China’s National Bureau of Statistics. CNBC highlights the figure as “slightly below expectations of a 19 percent increase.”
Retail sales grew 34.2 percent in March, topping expectations of 28-percent growth, despite harsh weather. Industrial production increased by a staggering 14.1 percent in March compared to 1.4. percent in the US. Last month, the US missed the 2.7-percent estimated target. China’s surveyed urban unemployment rate dropped to 5.3 percent in March, while the unemployment rate for China’s youngest workers (age 16 to 24) remained at 13.6 percent, according to the data. The Economist appears skeptical of the Chinese boom and the validity and accuracy of the data, indicating that there are “oddities in how GDP is reported.”
US and China pledge to work together on climate change after John Kerry visit
Countries issue joint statement after US special envoy’s visit to Shanghai, where he met his Chinese counterpart Xie Zhenhua Pledge comes ahead of Earth Day leaders’ summit to be hosted by US President Joe Biden
Xi Jinping slams EU’s carbon tax plan
President Xi Jinping slammed the European Union’s plan for a carbon tax system on Friday in a call with the leaders of France and Germany, state media reported.
China will keep its word on climate agreements, Xi tells Merkel and Macron
Chinese president says it will be a tough battle but Beijing is committed to building ‘green and low-carbon economy’ He also takes veiled swipe at US, saying climate change should not be used ‘as an excuse to attack other countries’
China records strong recovery, but powered by dirty energy, debt
But first, China has turned in the expected ‘very good’ economic data anticipated by analysts. The Q1-2021 GDP rose +18% above their pandemic affected Q1-2020 levels. Their fixed asset investment levels were even higher on that basis (+25%) and also as anticipated. However, industrial production there undershot expectations at +14%. Some analysts are warning of data accuracy with this latest Chinese release, but they do see the momentum continuing there. Excessive leverage remains a key risk.
Electricity production rose sharply, consistent with the economic momentum. In March it was +12% higher than in March 2019 (which avoids the twisted base effect of a year-on-year comparison). But it is coal-fired electricity generation that is driving these gains, up +26% in two years. Sadly, clean energy generation is very variable, with lesser gains for nuclear (+9%), wind (+11%), solar (+4%) and hydro (-9%), all on the March 2019 basis. The iron ore price has pushed back up to its recent highs, and on rising volumes. Chinese coking coal prices are rising too. (These greatly benefit Australia and gives them leverage in the political disputes between the two countries – at least, room to ignore Chinese attempts to punish them.) Anticipation of rising demand emanating out of the US is behind the moves up. Many other commodities are rising too, including copper.And the prices paid in China for some key agricultural products (corn, soybean, rice) are also showing signs of rising again, something that will be bad news for global food prices (if you are a consumer). Their catering sector is recovering fast, and that probably means millions more hotpot meal orders, with fast rising demand for beef and lamb, not to mention dairy products. Chinese retail sales out-performed the expected year-on-year rise, up +34% when a +28% rise was expected. And there is an expectation that this will improve sharply around their upcoming May Day holiday, a five-day long weekend and retail spending spree.
Asia sees thriving digital trade: report
Digital trade practices in Asia have developed rapidly, and Asian digital trade formats still have relatively vigorous vitality against the backdrop of global unilateralism and the COVID-19 pandemic, said a report released by the Boao Forum for Asia (BFA) Sunday.
Digital trade integral to East Asia’s recovery and dynamism
For decades, trade hovered confidently over the Asia Pacific region as its vital growth engine. As average tariffs fell from 17 per cent in 1989 to 5.3 per cent in 2018, regional trade multiplied — faster than the rest of the world — along with jobs and incomes. Deepening integration even helped the region to bounce back from shocks as severe as the Asian financial crisis of 1997 and the 2008–09 global financial crisis. Escalation of geopolitical tensions seems to have unsettled trade from its perch. As rivalries heightened and criticism of globalisation grew in recent years, the multilateral trading system on which Asia’s prosperity and security had been based was challenged and the WTO’s relevance called into question.
What differentiates China’s Big Tech antitrust challenges from those of Google, Amazon, Facebook or Apple
The antitrust investigation against China’s Big Tech companies appear to share many similarities with inquiries in other parts of the world Chinese companies’ unique challenges include dependence on their home market and a more opaque policy environment
East Asia leads e-commerce and the digital trade revolution
East Asian trade is set to rise even further in importance because the scale of the region’s economic recovery is larger and faster than anywhere else. Asia was already the second most integrated regional trade network after the European Union in 2019, with regional trade at 58 per cent of total trade. East Asia’s trading system is likely to become more inclusive and sustainable with its rapid shift to digital platforms. East Asia is leading the global e-commerce revolution. Business-to-consumer (B2C) platforms (e-commerce, online travel, advertising technology, transport, e-services and digital media) generated US$3.8 trillion in revenue in 2019, with US$1.8 trillion of it in Asia. E-commerce alone accounted for US$1.9 trillion in revenue globally and US$1.1 trillion regionally. China is at the front, accounting for 45 per cent of e-commerce transactions. Online sales already represent 12 per cent of total retail sales in Asia, compared with 8 per cent in Europe and North America. The digital economy is expected to add US$1 trillion to Asia’s GDP in the next 10 years.
China’s millennials, Gen Z turn to Louis Vuitton handbags, art toys and Japanese whisky as collector’s items
The tastes of wealthy Millennials and Generation Z members differ considerably from older generations, with a focus on items that reflect their modern culture Chinese auction houses are changing their auction catalogues, adding art toys and whisky and dropping items like rare tea preferred by older generations
A brutal price war is ravaging couriers in China’s live-streaming e-commerce hub, where not even SF Express is spared
Indonesia’s J&T Express was punished by Yiwu’s municipal postal authority for dropping delivery prices to 15 US cents per parcel The resulting price competition has hammered couriers trying to keep up with demand from the many e-commerce shops in the city, known for its cheap goods
Boao Forum to further integrate Asian economies, boost global governance
The integration of the trade of goods and services in Asia is accelerating. The trade dependence of Asian economies among each other is nearly 50 percent in 2019, with bilateral trade volumes continuing to grow, said Lin Guijun, vice president of the University of International Business and Economics, during a press conference at Boao on Sunday.
China’s High-Profile Boao Forum Returns With Investment in Focus
The annual conference bringing together government leaders, senior officials and business executives kicked off Sunday in the tropical island of Hainan and will run through Wednesday. Described by some as China’s version of the World Economic Forum in Davos, the Boao event was canceled last year due to the Covid-19 outbreak.
Record profits at China’s biggest state firms show strength of economic recovery
The profits of China’s centrally administered state-owned enterprises (SOEs) tripled in the first quarter, hitting an all-time high for the period as the country’s economy continued to recover from the fallout of the pandemic, the top SOE regulator announced at a press conference on Friday, reported Caixin.
In the first quarter of this year, central SOEs earned RMB 415.3 billion ($63.7 billion) in net profits, more than 200% the amount reported for the same period last year and up 31.1% from the same period in 2019, said Peng Huaguang, secretary general of the State-owned Assets Supervision and Administration Commission (SASAC).Peng said the central SOEs extended a growth trend that started in the second half of last year. Enterprises in certain industries, including petroleum, metallurgy, machinery, construction and military, recorded first-quarter net profits that more than doubled from the same period a year earlier, reported Caixin. Central SOEs generated RMB 7.8 trillion in revenue in the first quarter, up 30.1% year-on-year. At the end of March, the average debt-to-asset ratio of central SOEs stood at 64.7%, down by 0.8 percentage points from a year earlier, according to official data.
What the World Needs to Learn From Chinese Content Commerce: Part Five
Inundated by advertisements on a daily basis, Chinese consumers have grown numb to traditional marketing strategies and messaging. Advertisements featuring glamorous international celebrities are less relevant, while brands that are sensitive to the cultural cues and themes that resonate in China stand a better chance of appealing to consumers. Since taking office in 2013, President Xi Jinping has emphasized nationalist rhetoric and championed domestic brands, fueling the rise of “national trend” (guochao, 国潮) products and “cultural creations” (wenchuang, 文创), presenting global brands with both a challenge and an opportunity.
Ant Group explores ways for Jack Ma to exit as China piles on pressure
Ant Group is exploring options for founder Jack Ma to divest his stake in the financial technology giant and give up control, as meetings with Chinese regulators signaled to the company that the move could help draw a line under Beijing’s scrutiny of its business, according to a source familiar with regulators’ thinking and two people with close ties to the company.
Alibaba Lowers Barriers for Merchants on Tmall and Taobao
Alibaba Group has announced a new set of measures to benefit merchants and sellers on its online marketplaces, Tmall and Taobao, reducing costs and providing comprehensive support to lower entry barriers for those looking to join the platforms. Alibaba Group Chairman and CEO Daniel Zhang said in a call with investors this week that ongoing technological improvements and upgrades have enabled the company to expand its portfolio of sophisticated services, offering them for free or at lower costs than before to merchants and partners. Alibaba has said it will invest more in merchants’ training and optimize their back-end workstations to improve operational efficiency. In addition, the company has earmarked billions of RMB in additional annual spending to support merchants in the coming years. Below is an overview of initiative and new measures enacted from the start of the year until now.
China and Artificial Intelligence
China has made technological strides in the AI field. Should that be viewed as a threat? The U.S. National Security Commission on Artificial Intelligence released its final report recently, listing China as a strategic competitor to the United States in this field. The report describes China as a U.S. peer in many areas and an AI leader in some areas. This new technology allows machines to exhibit characteristics associated with human learning and problem-solving, and can be applied to areas such as facial and speech recognition, natural language processing, and automated reasoning. While China has made technological strides in the AI field, the authors of the report view these developments as a threat. As recorded in the report, potential threatening applications can be made in a number of areas.
Huawei emphasises supplier’s role as it steps up smart car business with launch of intelligent driving system
Company unveils Huawei HI intelligent automotive solution As a supplier, rather than a competitor, Huawei can tap a variety of carmakers for partnerships in intelligent driving technology: analyst
China becomes world’s biggest buyer of chip equipment in 2020, says SEMI
China bought more semiconductor manufacturing equipment than any other single country or region in 2020, as Beijing pursues self-sufficiency in chip production amid mounting tech tensions with Washington, reported Caixin. With sales of $18.72 billion, the Chinese mainland claimed the title as the world’s largest market for semiconductor manufacturing equipment for the first time last year, growing by 39% year-on-year, according to a report by SEMI, a US-based industry association representing companies involved in electronics design and manufacturing supply chain. The previously largest market Taiwan took the second spot with a market size of $17.15 billion in terms of sales, basically flat from 2019. South Korea and Japan came in third and fourth with respective sales of $16.08 billion and $7.58 billion, according to the report.
China EV war: Xiaomi boss stakes legacy on pursuit of Tesla as analysts caution latecomers to party
Xiaomi stock has outperformed rival smartphone makers and Hang Seng Index, while its dollar bonds have returned more than twice its local peers Lei Jun, already a successful entrepreneur, will take the lead in the ‘last start-up of his career’, analyst says
Shanghai Auto Show 2021: China’s Evergrande NEV, valued at US$87 billion, has not sold a single electric car
Shareholders have pushed Evergrande NEV’s Hong Kong-listed stock up more than 1,000 per cent over the past 12 months The electric car maker, which has not sold a single vehicle, is valued at US$87 billion, more than Ford Motor and General Motors
Autoshow chip shortage casts shadow on China’s auto industry recovery
Auto industry executives are rattled by a global shortage of semiconductors which is hitting production in China, after hoping the world’s biggest car market could spearhead global recovery in the sector, reported Reuters. Volkswagen AG, China’s biggest foreign automaker which wants to sell over four million vehicles in the country, said the impact of the shortage remains unabated in the second quarter this year.
Fukushima: Japan must be transparent on water discharge, experts say
Tokyo must ‘publish monitoring data so we can see the treatment ability in the first and second processes’, Greenpeace researcher says About 1.25 million tonnes of contaminated water are currently being held in about 1,000 tanks at the former power plant site
US-China ties: negativity could lead to catastrophe, diplomat says
Cooperation should not be ‘one side drawing up a laundry list of demands for the other side’, foreign vice-minister Le Yucheng says There is a ‘negative tendency in the US’ to be tough on China, which is ‘dangerous, and could derail this relationship’, he says
Biden, Suga call for ‘peace and stability across Taiwan Strait’
First mention of Taiwan in a joint statement by the leaders of the US and Japan since 1969 looks set to infuriate Beijing Two sides also discussed Xinjiang and a ‘free and open Indo-Pacific’, Suga says
Chinese physicist hunts for a ghost particle, undeterred by US-China friction
Li Liang has worked for nearly a decade on the Muon g-2 experiment involving 200 researchers from seven countries at Fermilab in the US Teams in China are working on the blueprint for a muon collider with sites in Guangdong province among candidates to host the potential project
China-Australia relations: on first anniversary of trade conflict, hay-import licences bedevil Australian exporters
China’s import permits for 25 Australian hay exporters have not been renewed two months after their expiration Hay-licence problems are just the latest in a series of trade difficulties resulting from the war of words that erupted one year ago between Canberra and Beijing over the coronavirus origin
Riding the dragon
US-China relations might become more civil but the rivalry will be no less intense, and that is a worry for Asean countries.
Was China’s military modernisation driven by its ‘humiliation’ in 1996?
Deliberate disruption to America’s GPS is thought to be the reason the PLA ‘lost’ two missiles during a test-firing 25 years ago, and Beijing was determined to never let it happen again As well as building its own satellite navigation system, China has developed a modern, hi-tech fighting
China deploys long-range rocket launcher ‘as deterrent to India’
Military newspaper says PLA has performed drills using a long-range rocket system with precision strike capability The two countries failed to reach agreement in the latest talks over full disengagement along their disputed border
China ‘not afraid of falling behind’ on military technology, analyst says
Military expert Zhou Chenming makes claim after South Korea unveils prototype of new 4.5th generation fighter It will take many years for the KF-21 Boramae to become fully operational and China’s air power will also improve in that time, he says
New Zealand ‘uncomfortable’ with growing scope of Five Eyes as members speak out on China
Foreign Minister Nanaia Mahuta says Wellington prefers ‘multilateral opportunities to express our interests’ rather than invoke intelligence network She tells NZ China Council that Wellington will continue to speak out to Beijing on human rights issues informed by national values and interests
Will the Five Eyes stare down China’s economic coercion?
Trade figures suggest promises to “have Australia’s back” are yet to be matched by economic solidarity.
When Diplomacy Is Lost in Translation
Diplomatic translation is never easy, but the task is all the more challenging when established protocols begin to fray. When diplomats from China and the United States met in Alaska for the first high-level bilateral talks of the Biden administration, few expected the translators to steal the spotlight. In China, Zhang Jing won praise for her calm and fluent translation of the Chinese representatives’ remarks, while Zhang’s American counterpart was criticized for amplifying the U.S. delegation’s already strident language.
US Secretary of State Antony Blinken condemns sentencing of Hong Kong activists
Blinken asserted that ‘fundamental freedoms’ were being undermined in the city His comments were latest sign of bipartisan anger in Washington over Beijing’s actions in Hong Kong
China looks to recreate ancient Silk Road with network of African ports
Latest addition is a port on the Kenyan island of Lamu, which is set to go into operation in June US$5 billion project is part of a US$25 billion infrastructure project to link Kenya with Ethiopia, Uganda and South Sudan
In China’s Restaurants, Data-Hungry Apps Will Take Your Order
Profitable to businesses and convenient for diners, the mass collection of personal information still has some feeling queasy.
China seeks to become major global vaccine player in wake of Covid-19 pandemic
The country’s pharmaceutical industry is expanding its production capacity as it gears up to produce 5 billion doses by the end of next year Providing vaccines to poorer countries could boost Beijing’s influence – but it will first have to prove that its drugs meet international standards
Judicial (In)dependence Under Xi
The high-profile court reforms, initiated at the fourth plenum of the 18th CCP Party Central Committee in 2014, are now complete. On the surface, many reform measures appear to boost judicial independence and Chinese judges’ prestige. But in reality, the regime has further tightened the control of the judiciary and its judges.
How can I enter China under COVID-19 travel restrictions?
Based on the above-mentioned policies, different foreigners may adopt different entry strategies based on their visa type/status, nationality, and vaccination status. If you are a holder of diplomatic visa, service visa, courtesy visa, or C visa (under ordinary visa), you should follow the entry policies set before the travel ban, that is, the Phase I policy implemented since March 28, 2020. If you are not a holder of the above visas, but have been inoculated with China-made COVID-19 vaccines properly (that is, either vaccinated two doses of Chinese-made vaccines with the stipulated gap in between or a single-dose Chinese-made vaccine at least 14 days prior to the application) and obtained the vaccination certificate
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