Green is the color
It’s been a really green week in all sorts of ways, and not only because of the two-day global conference chaired by the United States to discuss climate change and in progress via computer screens. Mr Xi decided to take part as did the leaders of around 40 other countries, and there is a lot to discuss—the growing instability of the earth’s atmospheric blanket is now beyond unquestion, and China, the world’s largest greenhouse gas emitter, has announced its goal of becoming carbon emission neutral by 2060. The central bank governor Li Gang said that hitting that goal will cost China nearly RMB 139 trillion ($21 trillion), which is not a small sum. China’s use of coal for power production continued to increase last year by 0.6%, and in 2019, coal accounted for 57% of energy production. For this year, as part of its efforts to hit the 2060 target, the National Energy Administration (NEA) said the aim is to cut coal use to below 56% of energy consumption. In other words, it’s really tough to end coal addiction. But at least climate issues are becoming a big deal globally—finally!!—and the Biden climate video conference follows a visit to Shanghai last week by John Kerry, the US climate envoy. US sec of state A. Blinken said that America is “falling behind” in the green economy, pointing out 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 is marginally heartening that this has now been spotted
How China’s savings could help save the planet
Already today, China’s green finance markets are touted as the world’s largest. In the first quarter of this year, Chinese issuers sold green bonds worth $15.7 billion, overtaking the U.S. as the largest market for green bonds. Meanwhile, outstanding green loans of Chinese banks amounted to almost 12 trillion yuan ($1.8 trillion) at the end of last year, according to data from China’s central bank, making it the largest green loan book in the world (Figure 1). Despite this, green assets still account for only a fraction of China’s financial market with green loans and bonds making up less than 7 percent and 1 percent of their respective totals. Green equity markets, especially early-stage risk capital necessary to spur innovation, also remain relatively shallow.
Climate Summit Day 2 message: Invest big for big payoff
The White House is bringing out the billionaires, the CEOs and the union leaders to help sell President Joe Biden’s climate-friendly transformation of the U.S. economy “To protect the environment is to protect productivity, and to boost the environment is to boost productivity. It’s as simple as that,” Xi said. Japan announced its own new 46% emissions reduction target, and South Korea said it would stop public financing of new coal-fired power plants, potentially an important step toward persuading China and other coal-reliant nations to curb the building and funding of new ones as well. Canadian Prime Minister Justin Trudeau said his nation would boost its fossil fuel pollution cuts from 30% to at least 40%.
China’s carbon-neutrality push prompts major coal-production region to beg banks for financing
Local authorities in Shanxi province have stepped in to secure financial assistance for coal miners amid rising default risks There is growing anxiety that the reluctance of banks and lenders to inject such funding could pose a serious threat to local economic stability
China and the US: united on climate action but divided on responsibility
China is at a different development stage than the US and Europe but remains committed to its climate-related goals, says Beijing’s special envoy Xi Jinping says nations must be consistent and ‘credible’ by not changing their climate policies
Climate summit ‘may not change the forecast’ for US-China relations
Chinese observers see only limited scope for the two countries to find common ground as they face off on multiple fronts Emphasis on competition with China during early stages of Joe Biden’s US presidency has maintained the enmity of the Donald Trump years, they argue
Global climate summit: US sets emissions target for 2030; China offers no new commitments
Biden pledges that the US would cut greenhouse gas emissions in half from 2005 levels by 2030 India and China do not offer new commitments, but Xi Jinping pledges to ‘strictly control’ coal-fired power plants
Earth Day 2021: A Look at Alibaba’s Commitment to a Greener Planet
Across the globe, Covid-19 has heightened people’s awareness of the need for a healthy world and environment. In China, it’s given rise to a new class of socially conscious consumers who are increasingly seeking sustainable products. In honor of Earth Day, Alizila editors caught up with business units across Alibaba Group to see what they have done to make their operations “greener.” From e-commerce and logistics to on-demand delivery, here’s a snapshot of how the company has been ramping up its sustainability efforts all year round.
E-Commerce In China Still Booming
The Chinese e-commerce market is forecasted to reach $3 trillion by 2024, which isn’t a surprise considering the factors behind it. : The Chinese e-commerce market is forecasted to reach $3 trillion (19.6 trillion RMB) by 2024, up from $2.1 trillion (13.8 trillion RMB) in 2021, with a CAGR of 12.4 percent over the next four years, according to estimations by GlobalData.WWD highlights that in 2021, e-commerce sales in China are expected to register 17.2-percent growth, as the COVID-19 pandemic has changed consumer behavior. Although overall consumer spending took a hit in 2020, decreasing 3.9 percent, online sales in China increased by 14.8 percent during the same period. The rapid economic rebound will likely further boost the growth rate of consumer spending in the luxury industry. Various policies are already underway to boost consumption, although only the affluent class is “revenge spending.” Shortly, e-commerce sales will increase as new players enter the digital space. Moreover, e-commerce titans are constantly trying to improve their conversion rates through the use of cutting-edge technologies.
China’s Gen Z splashes out on luxury, with little regard for debt
Young Chinese have a stronger sense of identity with traditional and cultural nationalism, which has driven demand for domestic brands and products Expenditures among China’s Generation Z accounts for 13 per cent of their household income, compared with 4 per cent in France and Germany According to data from the People’s Bank of China at the end of June, the total amount of credit card bills overdue for more than six months had soared to 85.4 billion yuan (US$13 billion), more than 10 times that of 10 years ago. And around half of those who owe the debt were born in the 1990s. “Many of my friends have several or even up to a dozen credit cards at the same time, and online loans are also very common too.” Yu said. An HSBC survey in 2019 showed the debt-to-income ratio of China’s youth born in the 1990s had reached a staggering 1,850 per cent.
China doubles down on regulation of livestream e-commerce
China is taking aim at its flourishing livestream e-commerce market with the introduction of new regulations released Friday from seven government agencies including the nation’s top cyberspace watchdog and market regulator. The new rules are the latest in China’s tightening grip on the internet sector. Regulators have in recent months stepped up antitrust regulations on tech firms and halted fintech firm Ant Group’s mega dual listing. Livestreamed e-commerce has become essential to marketing in pandemic-era China. According to China’s Ministry of Commerce, more than 4 million e-commerce sessions were livestreamed in the first quarter of 2020. Major e-commerce and short-video platforms have tried combining the two markets, with Alibaba’s Taobao Live, Tencent-backed Kuaishou, and ByteDance’s Douyin emerging as leading players in the field.
China’s insatiable demand for luxury goods gets own cargo route
Cainiao plans to run seven return flights a week between Singapore and Hainan. Alibaba Group Holding’s logistics arm is launching direct cargo flights between Singapore and China’s Hainan Island, seeking to bolster the supply of luxury goods for voracious Chinese shoppers after the pandemic halted global travel. Cainiao Smart Logistics Network will run the first direct freight flight from Singapore to the city of Sanya on Sunday, carrying duty free cosmetics from brands including Estée Lauder and Clarins, James Zhao, the general manager of Cainiao’s global supply chain, told Bloomberg News in an interview.
Semiconductor-starved mainland China seen driving long-term surge in exports from Taiwan
Global chip shortage – caused by a glut in pandemic-era orders, China-US tensions and new demand from automakers – is piling pressure on chip buyers to secure supplies Mainland tech firms said to be stockpiling for the future in case worsening relations with the United States make it even harder to get Taiwanese tech supplies
Analysis | China seen bailing out biggest bad-debt manager while teaching investors a ‘hard’ lesson as contagion effects linger
Government wants to send a message that ‘even state-controlled institutions such as Huarong do not enjoy blanket government guarantees’ Other financial institutions are so closely tied to the bad-asset manager that letting it fail would pose considerable risks to the domestic and international financial systems China Huarong International Holdings, the key offshore financing arm of China Huarong Asset Management, said in a statement on Tuesday that it returned to profitability in the first quarter and would be focusing on cutting risk exposure and ensuring liquidity. International investors may be required to bear a somewhat bigger loss in any restructuring to remind them that the Keepwell arrangements backing offshore bonds have no formal validity, Gavekal’s He said. After some initial harsh rhetoric, the People’s Bank of China eventually took over Baoshang to prevent contagion and imposed an average haircut of around 10 per cent on large institutional investors. It is probable that the Huarong haircut will be on a similar scale, He argued “Nevertheless, the haircut will not be so big that it inflicts longer-term damage on investor confidence in the market,” He said.
Ant shrinks money market fund as Beijing cracks down
Ant Group’s money market fund has shrunk to a more than four-year low as users shifted their cash in the face of China’s crackdown on Jack Ma’s payments group, reported the Financial Times.
Funds invested in Ant’s flagship Yu’e Bao fund fell 18% in the first three months of the year to RMB 972 billion ($150 billion) as the group pushed users to switch to other providers’ funds, according to data released on Thursday by its Tianhong Asset Management subsidiary. The money-market fund, once the world’s largest, acts as the main repository for leftover cash stored by hundreds of millions of users of Ant’s Alipay payments app.
Alibaba: The End Hasn’t Come
Alibaba (NYSE:BABA) has widely underperformed the broad market and most of its tech peers over the last six months, mainly due to worries about regulatory pressures, anti-trust legalization, etc. Most of those issues have been resolved now, and it looks like Alibaba’s value wasn’t really damaged to a large degree. Alibaba remains a leading tech & consumer play in high-growth China that continues to trade at a clear discount compared to most US-based tech peers. There are risks, but Alibaba seems attractive at current prices.
Beware of Celebs Selling Financial Services, Government Watchdog Warns
After several online lending platforms promoted by public figures folded in recent years, leaving customers out of pocket, authorities are reminding celebrities that they’re required by law to vet the products and services they endorse. China’s top financial watchdog has admonished the public to be cautious about embracing celebrity-endorsed financial products, following years of dubious lenders going under and taking customers’ funds with them. The China Banking and Insurance Regulatory Commission said Thursday that financial products and services — including peer-to-peer (P2P) lending platforms, insurance companies, and banking services — advertised by celebrities could be risky and result in losses for buyers. The commission added that individuals should always seek professional information regarding such investments.
China’s economy: The past and future 20 years
The last 20 years have seen a dramatic transformation in China’s economy. Twenty years ago, China was not a very big part of the world economy – it had just been admitted to the WTO. Now, it’s the second-largest economy in the world if you measure the current prices, and it’s the largest economy in the world if you measure it by purchasing power parity.
US-China tech war: congressional think tank urges Biden to team up with Japan, EU to counter Beijing’s semiconductor push
A new congressional report recommends that the Biden administration put additional controls on US chip equipment exports Beijing has been rolling out state subsidies and other incentives to drive China’s semiconductor expansion and technological self-reliance
Why China Will Remain a Challenge Whether Its Economic Reform Policies Succeed or Fail
China has long paid lip service to reforming its economy, particularly its bloated, inefficient state-owned or state-supported enterprises. The IMF has long argued that China’s unusually “heavy dependence on investment in infrastructure and property” has resulted in an unbalanced economy.
The Chinese Communist Party has been attached to capitalizing on greater political control, even at the cost of long-term economic development. The Heritage Foundation launched the China Transparency Project to facilitate a global campaign to systematically expose the party’s behavior.
China urged to address global digital tax rules to avoid ‘new tariff war’ as G20 push for July consensus
In February, the US withdrew a safe harbour proposal, paving the way for a digital tax on the likes of Facebook, Google and Amazon The Group of 20 hopes to reach a consensus over the digital tax by July, after some firms were accused of exploiting loopholes to minimise their tax bills
China is undermining the dollar’s global role
Through small steps and major developments, China is replacing the dollar Finally, China has given up on creating its own SWIFT-like messaging system and joined the global system operated by SWIFT. It set up a joint venture, the Finance Gateway Information Service, to operate financial messaging and a financial data warehouse. All these moves clearly point to China’s resolution to replace the dollar, not with a big bang but with small steps.
China’s Booming Economy Is Fueling Alternative Yuan Trades
Buy the yuan against the Singapore dollar and yen on expectations that China’s growth would outperform the region, analysts say. The upbeat view has boosted the Bloomberg CFETS RMB Index, which tracks the Chinese currency’s movement against 24 trading-partners, to its highest in three weeks. Another way to benefit from expectations for a stronger yuan is through the carry trade, according to Bloomberg Intelligence strategist Stephen Chiu. The baht can be used as a funding currency to invest in offshore yuan, with Thailand expected to keep rates low for longer as its tourism-reliant economy takes longer to recover from the pandemic, he said.
US-China tech war: senators renew push to advance self-driving cars to compete with China
Democrat Gary Peters and Republican John Thune call for law amendments that make it easier to deploy autonomous vehicles in the US Current safety standards for cars are written with human drivers in mind
Heavily indebted developer China Evergrande to sell onshore bonds worth US$1.3 billion
Proceeds from the sale will be used to meet an early repayment request on bonds maturing in 2023 Hengda Real Estate, the company’s Shenzhen unit, has proposed the bond sale, according to documents filed with the city’s stock exchange
Chinese coin miners flock to new cryptocurrency Chia resulting in hard drive shortages and price surges
Chia’s creators say they want to reduce some of the problems associated with traditional coin mining such as e-waste Prices of hard drives have surged in China on online platforms and in offline markets
This Autonomous Electric Car Concept Actively Cleans the Air While It Drives
We’ve seen plenty of electric car concepts designed to push the boundaries of the way we think about what a car can do. This sentiment is especially true when it comes to the autonomous versions with reconfigurable interior spaces and computer chauffeurs, but even those aren’t quite like the new Airo concept. Designed by Heatherwick Studio–the same studio that brought the Vessel building to New York’s Hudson Yards–for IM Motors, Airo is a self-driving electric car concept that doubles down on the eco-friendly aspect of electric by using a built in HEPA filter to actively clean the air around it while it drives. It was also important to Thomas Heatherwick to address the global space shortage, which is why the interior can be configured into multiple functional spaces for eating, lounging, gaming and even sleeping by adjusting the chairs, table and screens. It does have the ability to be driver-controlled, but we don’t see that getting used that often when you can catch up on emails, have a meal or take a nap on the road. The Airo is scheduled to go into production in 2023.
The Belt and Road and the Pandemic: China in Eurasia
The ongoing pandemic has influenced all these dimensions of the BRI in Eurasia. In the short term, the pandemic has led to disruptions. The Chinese foreign ministry declared in mid-2020 that 20% of BRI projects were “severely hit,” while half of the remainder were affected somewhat. The effects of the pandemic pose a fundamental challenge to many in Eurasia as economies are in recession and resource prices down. Some states have called for debt relief. Allegedly, China’s Export-Import Bank agreed to restructure Kyrgyz debt worth $1.7 billion. The pandemic has also seen positive effects for the BRI. Despite disruptions at border crossings, train connections across Eurasia have proved a reliable alternative to maritime and air transport. 2020 saw an increase of a whopping 41% in cross-Eurasian rail transport. Chinese telecom and e-commerce giants are likely to make further inroads into Eurasia. This will also bring about more Chinese standards in that sector – an important factor to observe. Already, Eurasia is the stage for “vaccine diplomacy.”
China’s Belt & Road: Britain’s Empire Meets Brooklyn’s Mob
The Belt & Road initiative will serve still another Chinese need. The country’s leadership in Beijing is no doubt aware of China’s impending demographic problems. As this post explains in some detail, Beijing’s decades-long one-child policy has so reduced the flow of young people into the country’s labor force that China in coming years will face a shortage of workers to serve its economy and support an outsized elderly population. Since Beijing can have little expectation of an inflow of youthful immigrants, the ownership and control of foreign facilities can serve as a substitute for China’s lost labor. Presently, China mostly uses its own labor to construct and run projects in the Belt & Road, but in time it could, much the way the British Empire did, use native labor, reserving management for its own citizens. And perhaps, as also happened with the British Empire, the arrangement would garner for China a loyalty among a group of natives that supersedes that group’s loyalty to the local or national authority. Whether China succeeds in this effort is and open question and will remain so for some time to come. Amid the fear and anxiety Americans surely feel in anticipating any level of Belt & Road success, the effort by the Chinese Communist Party does bring up a delightful irony. Vladimir Lenin, the founder of Russia’s communist movement and then the Soviet Union, identified all European imperialism as a futile effort to sustain an economic system – capitalism – that he believed was ultimately unsustainable. Now the world can witness an effort by the Chinese Communist Party to use its version of imperialism in an effort to sustain communist economic arrangements that look fundamentally unsustainable.
China’s outbound-investment rankings see US, Australia downgraded amid rising political conflict, deteriorating relations
Government-backed institute also warns of the risks in investing in nations that fall under China’s Belt and Road Initiative In ranking the state of China’s relationship with 114 countries, the United States is now dead last, while Australia plunged to 89th from 50th last year
Philippines protests over ‘swarming’ Chinese vessels
The Philippine foreign ministry said maritime officials had observed the “continued unauthorised presence and activities” of 160 Chinese fishing and militia vessels around the disputed Spratly islands and Scarborough shoal, as of April 20.
US says Australia bearing brunt of China’s ‘coercive’ behaviour
Washington expressed solidarity with Canberra after the US ally angered Beijing by pulling Victoria state’s participation in China’s Belt and Road Initiative The State Department said Australia has ‘borne a tremendous toll’ from actions by China
Australia faces serious consequences for unreasonable provocation against China over BRI deals: observer
Australia has essentially fired a major shot in what could lead up to a potential trade conflict with China and could face serious consequences for its “unreasonable provocation” against China, Chinese experts said on Wednesday after Canberra moved to use what has been viewed as an anti-China law to revoke agreements signed between Victoria state and China on the Belt and Road Initiative (BRI).
China hits out at British parliament after it declares Xinjiang’s Uygurs are subject to genocide
Embassy in London says a ‘handful of MPs cooked up’ the motion to discredit China and defends Beijing’s policies in the region Non-binding vote does not change Britain’s official policy, but is likely to increase pressure on Boris Johnson to take a tougher stance
China’s Covid-19 vaccines reach final stage of WHO approval process
Authorisation will pave the way for Sinopharm and Sinovac jabs to be included in the Covax Facility for equitable distribution Agency’s immunisation chief says formal review meetings have been scheduled, with the first one set for Monday
The Big Short: How Height Discrimination Hurts Chinese Men
China’s Post-2000 generation is the tallest in East Asia. For some, that’s still not tall enough.
From Mao Zedong to Xi Jinping
A former Beijing bureau chief shares insights from her time in China
Why ‘Clean Plate’ must only be part of China’s war on food waste
Although the Asian powerhouse has recently seen a decline in population growth, food security remains a key issue. Andy Coyne looks at what lies behind China’s attempts to tackle food waste through its Clean Plate strategy.
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