China’s V-shaped Recovery Reached Turning Point, Goldman Says
China’s economy is on track to return to trend growth after its V-shaped recovery from the coronavirus slump ended with a record pace of expansion last quarter, according to Goldman Sachs Group Inc. “The economy appears to have passed a turning point,” Goldman Sachs Group Inc. economists including Hui Shan wrote in a note Tuesday. “Policy focus has also shifted from helping the economy heal from the COVID-19 downturn to addressing long-term stability and growth issues.” China Joins U.S. as Engine of Global Recovery With Record Growth The world’s second-largest economy expanded by 18.3% in the first quarter from a year earlier, when much of the country was shut to combat the coronavirus. Underneath the high rate of growth, there was a wide divergence across industries and an ongoing shift in growth drivers, according to Goldman Sachs. Compared to 2019 to avoid distortions from last year’s activity collapse, exports and property sales are clear outperformers, while housing starts and manufacturing investment underperformed, the economists wrote. The performances are likely to show some convergence going forward, but at a slow pace.
Commentary: It’s too early to slow down the Chinese economy
While the economy’s growth momentum looks strong at the moment, there are signs that China may risk tightening fiscal and monetary policy too soon, says Yu Yongding.
Xi calls for change in ‘global governance system’
President Xi Jinping said on Tuesday that the global governance system should be made more equitable and fair, and that rules set by one country or some nations cannot be imposed on others. Building barriers and pushing for decoupling will harm others and benefit no one, Xi said in his keynote speech at the annual Boao Forum for Asia, China’s answer to the Davos conference.
Xi Jinping rebukes nations who ‘arrogantly instruct others and interfere’
‘Future of the world should be decided by all nations, and rules set up by one or several countries should not be imposed on others,’ Chinese president says His speech at Boao Forum for Asia comes amid international scrutiny of China and as US puts renewed emphasis on its alliances in Asia and Europe
Blinken says US must lead green energy revolution to combat China
US secretary of state Antony Blinken has cast renewable energy investment as imperative to America’s rivalry with China days ahead of a White House climate summit where Washington’s leaders hope to reassert global influence on climate policy, reported the Financial Times.The top US diplomat warned America is “falling behind” in the green economy, noting in remarks on Monday that China holds nearly a third of the world’s renewable energy patents and is the world’s largest producer and exporter of solar panels, wind turbines, batteries and electric vehicles.“It’s difficult to imagine the United States winning the long-term strategic competition with China if we cannot lead the renewable energy revolution,” he said. Blinken said that if the US did not catch up in clean-energy investment, “America will miss the chance to shape the world’s climate future in a way that reflects our interests and values, and we’ll lose out on countless jobs for the American people”.
Tracing China’s climate change journey from denial to decarbonisation
Earth Day’s virtual summit of world leaders could be an opportunity to establish Beijing’s green credentials After decades of rejecting climate change, China is said to be eager to boost its image as a responsible global power
US falling behind China in shaping climate future, Antony Blinken says
Secretary of state vows climate will be at centre of Washington’s foreign policy, creating jobs for Americans and allowing US values to influence climate future But countries’ progress on curbing climate change should not be a bargaining chip to excuse human rights abuses, he says
Managing digital trade in Asia
For years, digitally enabled trade has grown without significant regulatory oversight. Firms started by delivering goods ordered online and then figured out ways to provide a wide range of services over the internet. Electronic payment methods and new logistics and shipping options evolved to support growing digital trade demands. Eventually, whole new categories of digital commerce sprang up, such as the sharing economy and the Internet of Things (IoT).
CONTAINER PRICES SURGE IN CHINA AND INDIA AS SUPPLY CHAIN BLOCKAGES TIGHTEN SUPPLY
The container shortages that have been adding to logistics logjams in Asia and beyond are showing few signs of being resolved, according to the latest data from Container xChange, the world’s leading online platform for the leasing and trading of shipping containers. In China, average prices for used twenty-foot containers increased 94% between November 2020 and March 2021. The surge from an average price of $1,299 per box in November last year to $2,521 in March indicates that container scarcity is continuing to worsen.
China’s central bank to build out fintech cloud infrastructure after clipping the wings of Ant Group, JD.com
The People’s Bank of China unveiled plans to build up its own financial technology, including a ‘central bank cloud’ The move comes after Ant Group and JD.com were forced to restructure their financial services, which will be overseen by the bank
For Huarong, China’s biggest bad bank, it’s bailout or bust
If Chinese authorities opt not to save China Huarong Asset Management, it could trigger a chain reaction of financial risks Huarong’s situation shows that there are many financial holes to be filled, and China still has a long way to go to minimise risks A bit of a “haircut” for bond investors could be part of the solution, and there will be some complaints and grumblings, but the odds are extremely small that Huarong’s bond woes will turn this into a Lehman Brothers moment for China. That said, it is a bit surreal to witness Huarong’s story unfold. When it was created in 1999 as one of the four state asset management companies to undertake about 400 billion yuan worth of bad loans from the Industrial and Commercial Bank of China, its very creation was hailed as a brilliant way to fix a big banking problem. But Huarong shows that there are many financial holes to be filled in the process. To that extent, Huarong is a cautionary tale of how far China still has to go to curtail its financial risks.
China’s Digital Yuan Ranks Third in World; Second In Asia In CBDC Race: Report
China has made significant progress in the development of central bank digital currency [CBDC], becoming the world’s first major economy to pilot a digital currency. Even so, as per a new report, the digital yuan is not the topmost CBDC in the world or in Asia. According to the latest report by PricewaterhouseCoopers [PwC], China is third when it comes to project maturity, behind the Bahamas with the Sand Dollar and Cambodia, with project Bakong.
China economy: benchmark loan rate kept steady for 12th straight month
China’s one-year loan prime rate (LPR) was kept at 3.85 per cent, while the five-year LPR remained at 4.65 per cent Most new and outstanding loans in China are based on the one-year LPR, while the five-year rate influences the pricing of mortgages
Rare earths elements and other critical raw materials: a geopolitical headache for the EU
Rare earth elements play a critical role in the manufacture of electric batteries, solar panels and wind turbines – products that are all necessary for the EU’s drive toward sustainability. Yet although rare earth deposits can be found in sufficient quantities in EU soil, these industries still rely almost entirely on Chinese suppliers. This creates a security and sustainability risk, says Valentina Vengust.
“Huawei Inside” Out: Telecom Giant Unveils EV Co-Developed With BAIC
BAIC’s new energy car brand ArcFox and Huawei have jointly released their first HUAWEI Inside smart luxury pure electric car, BAIC Alpha S in Shanghai, during the weekend. The Alpha S Huawei HI version of the smart cockpit uses the Harmony OS operating system to realize the operation between the smart phone and the smart cockpit.
Competition: EU and China will discuss competition policy priorities in the digital sector during the 21st Competition Week
Officials from the EU and China will meet online from 26 to 28 April 2021 for technical discussions on competition law and enforcement. The 21st EU-China Competition Week will focus on subsidy cases under the Fair Competition Review System that China started implementing in 2016. It will also deal with the co-operation between the European Commission and EU member states with respect to state aid cases as well as Regulation and policy initiatives to address competition concerns in digital markets. The Competition Weeks offer a platform for exchanges on competition policy between the Chinese State Administration for Market Regulation (SAMR) and the European Commission together with EU National Competition Authorities. The Competition Weeks are the cornerstone of the longstanding competition dialogue between the competition authorities of the EU and China in line with the commitments set out in the Memoranda of Understanding and Terms of Reference signed between all sides. The EU-China Competition Week is part of the Competition Co-operation project, a 5-year EU funded programme offering technical co-operation to competition authorities in Asia. The objective is to exchange experiences and strengthen convergence in competition policy, to the benefit of citizens and businesses in both the EU and Asia. More information about the European Commission’s bilateral dialogue with China in the field of competition policy is available on the Commission’s website.
Why the world should pay attention to Taiwan’s drought
If this and other reservoirs in Taiwan dry up, it could be detrimental for the global electronics sector, because so many of the products people use are powered by semiconductors – computer chips – made by Taiwanese companies. Around 90% of the most advanced microchips are manufactured in Taiwan.
China wants its tech companies to flourish rather than flounder as market mistakes create value, JPMorgan fund says
China’s track record confirms that it would like to see its leading tech companies ‘flourish rather than flounder,’ money manager says JPMorgan’s US$1.14 billion Pacific Technology Fund has 53 per cent of its cash in China, 21 per cent in Japan and just under 10 per cent in South Korea
Outlook: China-US Cross-Border Investment
Trans-Pacific View author Mercy Kuo regularly engages subject-matter experts, policy practitioners, and strategic thinkers across the globe for their diverse insights into U.S. Asia policy. This conversation with Dr. Jean-Marc F. Blanchard – executive director of the Mr. & Mrs. S.H. Wong Center for the Study of Multinational Corporations in the U.S. and distinguished professor at East China Normal University, School of Advanced International and Area Studies – is the 268th in “The Trans-Pacific View Insight Series.”
US-China relations: a good-versus-evil world view does no one any good
Broadly speaking, America needs a new path, rethinking its assumptions about itself and foreign policy, before dealing with Beijing and Moscow The Biden administration’s possible choices for US envoy to China, and the decision to pull out of Afghanistan, seem steps in the right direction
China’s Boycotts of Western Brands Aren’t Very Effective
Western policymakers may wish to encourage American and European companies to diversify their overseas sales to offset Beijing’s influence over their corporate decisions. But trade and investment are two-way streets. Just as officials in Washington are struggling to find ways to undo decades of trade and technology integration with China without upsetting American business interests, decision-makers in Beijing are discovering there is a price for punishing Western investors too severely. Exaggerating Beijing’s capability and willingness to damage Western companies may only advance the agendas of hawkish officials in both China and the United States, contributing to the downward spiral in the relationship. Western fashion retailers may still lose hundreds of millions of dollars due to Chinese boycotts this year. A potential Western boycott of the upcoming 2022 Winter Olympics in Beijing could inflame tensions further. But rather than inflict long-lasting damage, the current Chinese boycotts only show that job-creation and investment will remain in fashion.
EU to increase presence in Indo-Pacific under new strategy
European Council adopted document covering areas ranging from trade to climate change and maritime supply routes It is widely seen as Brussels heeding Washington’s call for allies to boost engagement in the region to counter Beijing
China-Australia relations: what’s happened over the past year, and what’s the outlook?
China has targeted Australian barley, beef, wine, lobsters and coal over the past year after Canberra called for an inquiry into the origins of the coronavirus pandemic Despite ongoing tensions, Australia’s exports to China reached A$145.2 billion (US731.8 billion) in 2020, just 2.16 per cent less than the total in 2019
China conducts aerial bombing drill after US-Japan statement on Taiwan
PLA’s Eastern Theatre Command reportedly sent dozens of H-6K bombers in nine-hour exercise It came after Biden and Suga called for ‘peace and stability across the Taiwan Strait’
Chinese universities should produce inquisitive thinkers who are totally loyal to the Communist Party, Xi Jinping says
The Chinese president says the education system must train the ‘builders and successors’ of socialism during a visit to Tsinghua University Xi says Communist Party needs to encourage scientific talent and innovation in its centenary year
France’s Dijon creme de cassis will no longer be made in China
Producers in Dijon secured a requirement in 2013 that at least 200 grams of berries per litre that must be macerated in the Dijon region While Chinese buyers take only a handful of the 8.5 million bottles produced each year, the liqueur is prized in neighbouring Japan, the biggest export market
UK, EU still a beacon of commercial property opportunities with end of pandemic in sight
The UK’s vaccination programme is well under way and expected to be completed in the summer, allowing the economy to open to significant pent-up demand A massive injection of liquidity into the economy by the EU and by national governments to tackle the pandemic’s economic fallout has helped underpin asset values and confidence
Meng Wanzhou seeks three-month delay to marathon extradition case, citing new evidence from HSBC
The Huawei executive’s lawyers say new evidence from the bank may help prove US authorities misled the Canadian court, and they deny trying to ‘string out’ case But Canadian government lawyers say Meng is trying to turn the extradition hearing into a trial, and the adjournment request should be denied
China’s Belt and Road Initiative faces increased political risk in participating countries, report warns
The country’s top economic planner also identified changes to global governance and trade and the ongoing rivalry with the US as major challenges National Development and Reform Commission also warns that domestic companies may face problems in funding projects The report added that the pandemic has hit trade and investment in some belt and road countries, although the report said this would increase their need to sign up for the project. The initiative, which was first introduced by Chinese President Xi Jinping in 2013, has prompted warnings by Western countries that Beijing is trying to use it to expand its geopolitical influence and catch developing countries in a “debt trap” by lending large sums that will draw foreign governments into Beijing’s political orbit.
Life after Merkel: Germany’s ties with China head into the unknown
German chancellor discussed climate change and economy with China’s president but not sanctions against Europeans, Huawei or human rights The EU-China investment deal is seen as a necessary boundary to keep China in check by some but perceived by others in Germany as squandering leverage
Such ‘doge’: Chinese tech giants Tencent and ByteDance race to secure trademark for their own versions of popular emoji
Trademark tussle is the latest contest between two internet giants that increasingly clash in the fight for the attention of Chinese mobile phone users The images the companies are trying to trademark are slightly different, but the applications could be challenged after the examination stage is finished
Oppression of journalists in China ‘may have been factor in Covid pandemic’
China placed 177th in Press Freedom Index, with warning that persecution of reporters can have international impact
Young and in Debt
With temptations to consume but little financial savvy, young Chinese fall prey to online lending platforms The proliferation in recent years of easy-access online lending platforms has introduced a growing number of Chinese consumers to the joy of buying on credit—and the despair of living with debt. As of January 2019, Chinese have collectively racked up an outstanding balance of 9.3 trillion RMB (about 1.4 trillion USD) in consumer loans, excluding mortgages and auto loans. This is almost triple the 3.5 trillion RMB (563.1 billion USD) they owed in January 2015.
China to recognize Western shots for its vaccine passports, as it seeks to reopen
China has begun accepting U.S. coronavirus vaccination records in travel applications to the country, as it seeks to negotiate mutual recognition of vaccine passports with other nations. The Chinese Embassy in Washington said in an online notice late last week that Pfizer-BioNTech, Moderna and Johnson & Johnson vaccine records can be submitted as part of an application for a coronavirus QR “health code” — China’s version of a vaccine passport and a requirement to enter the country. Previously, China said it would facilitate entry only for those who have received Chinese vaccines, drawing backlash in countries where they aren’t available. No foreign coronavirus vaccine has yet been approved for use within China.
webinar April 27, 9.00 AM Brussels time Connecting Eurasia:Views from Europe, Korea and Asia
Connectivity has moved from buzzword to reality. A few examples of this are the EU’s Connecting Europe & Asia strategy, South Korea’s New Southern Policy and Northern Economic Cooperation, and connectivity strategies from ASEAN. China and Japan also seek to build digital, infrastructure, energy and people-to-people bridges across Eurasia. What are the similarities and differences between the strategies of Europe, Korea and other Asian countries? Is there scope for cooperation between these strategies or are they bound to lead to competition and tensions?
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