China Press Review – April 4, 2019

Press review

Trump to Meet China’s Liu in a Sign Trade Talks Are Reaching Final Stages
Vice Premier Liu He in Washington for final push on a deal
U.S. President Donald Trump will meet Chinese Vice Premier Liu He at the White House on Thursday as speculation grows that negotiations over a trade deal between the world’s biggest economies are entering the final stages.

China’s Vice-Premier Liu He, US Trade Representative Robert Lighthizer start ‘endgame’ round of trade talks in Washington
The talks follow two days of negotiations last week when Liu hosted US officials in Beijing Sticking points are said to include an enforcement mechanism that can hold China responsible for reforms it agrees to, as well as the removal of US tariffs

White House’s Kudlow says U.S.-China talks making progress, could extend
Kudlow said Chinese Vice Premier Liu He and his team would remain in Washington for three days and possibly longer. “We’re covering issues that have never really been covered before, including enforcement,” Kudlow said, listing U.S. accusations that Beijing engages in intellectual property theft, forced transfer of technology from U.S. companies doing business in China, cyber hacking, tariffs and non-tariff barriers for commodity trading. “All making good progress, all making good headway, but we’re not there yet,” he said about those areas. “We hope this week to get closer.” Kudlow said it was significant that China had “acknowledged these problems for the first time. They were in denial.” Those structural issues along with the way a potential deal would be enforced have been consistent sticking points during months of talks. The United States and China have levied tariffs on hundreds of billions of dollars’ worth of two-way trade since July 2018. U.S. President Donald Trump has said he wants a “great deal” with China and has hinted that tariffs could remain in place for some time.
Kudlow said on Wednesday that U.S. charges against Chinese telecommunications giant Huawei Technologies Co Ltd had generally not come up during trade talks. Separately, Kudlow also said no decisions have been made on tariffs on auto imports coming from top U.S. allie

‘Grave concerns’: US ex-military leaders warn that allies’ use of Chinese 5G tech poses unacceptable risk
The six ex-commanders bluntly said Chinese 5G equipment risked espionage and disruptive cyberattacks on military operations, and ‘the time for action is now’ The statement was timed to the opening of a Nato summit of foreign ministers in Washington

China local governments forced to rob Peter to pay Paul to honour rising debt mountain
China’s had 18.4 trillion yuan (US$2.74 trillion) worth of local government debts at end of 2018, equivalent to 20 per cent of nominal gross domestic product Researchers estimate that true government debt level in China may have reached 92 per cent of GDP in 2017 if implicit liabilities were considered

China’s economy stabilising but risks lie ahead
Martin Wolf: Doubts linger about President Xi’s commitment to private enterprise

China faces difficult balancing act over private sector growth
As Beijing looks to create 11 million new jobs this year it cannot rely on internet firms that are laying off staff, so it must turn to innovative companies focused on science and technology

China at the crossroads
On the flip side, you could worry that more stimulus would overheat China’s economy. But inflation there remains pretty low, suggesting they’ve got room for another infrastructure boom if they want to go that route. Another thing China could try is improving its domestic consumer base. Official poverty rates there have fallen quite low, but the portion of the population that’s just above poverty is still pretty large. Inequality is also quite high. By expanding and patching the remaining holes in its welfare state, China could reduce inequality and boost low-end incomes. That would stimulate growth via direct support for consumption rather than more state-provided credit, leaving more room for market forces to decide what to do with that demand. At any rate, those are the choices China has before it. If the government takes the market route, that would certainly please the West. But maybe China will try to succeed where other central planners have failed.

Break up ‘unnatural and abnormal’ monopolies to sustain high growth, US-China business group head urges Beijing
Monopoly model no longer works for a nation that needs to focus on ‘globalisation on equal terms’, US-China Business Council president Craig Allen says Aim should be to create a level playing field for both foreign firms and private Chinese companies, he says

Bank CEO says better cultural understand can bring China, US together
East West Bank chairman and chief executive Dominic Ng believes the US and China can build a stronger relationship through mutual understanding The Pasadena, California bank is focused on companies operating between the US and China

China is lulling the market into a false sense of security
Positive economic data from China has markets around the world rallying, but the country’s rebound will be fleeting. That’s because the recovery was built on unsustainably looser credit conditions. “To sustain that next year they’re going to have to post in nominal terms a record flow of credit,” Autonomous Research’s Charlene Chu told Business Insider. China’s economy, however, is about to undergo a major structural change — one a US-China trade deal would make more pronounced. That change could put the country’s economy on even more delicate footing.

Why Europe Is Getting Tough on China And What It Means for Washington
As next week’s EU-China summit approaches, Europe has begun to fundamentally rethink its China policies. The shift is so substantial than even seasoned Asia hands have described it as a “revolution.” Despite differences among the EU member states, the overall thrust of the change is in convergence with the new U.S. approach. As recently as three years ago, member states resisted even modest changes to strengthen EU trade defense instruments, despite the flood of Chinese steel imports. The notion of an EU-level mechanism to scrutinize Chinese investments was still anathema to most European leaders. If the United States in early 2016 had suggested closer coordination in restricting Chinese access to Western technologies, a common public front on China’s non-market practices, or cooperation on infrastructure financing as a counterbalance to China’s Belt and Road Initiative (BRI), European allies would have responded with a bemused rebuff.

China struggles to ease concerns over Silk Road project as summit looms
China is struggling to ease worries about President Xi Jinping’s signature plan to build a new Silk Road as it readies for a major summit in late April, especially among Western nations wary about debt, transparency and Chinese influence.

China Belt and Road binge moves to Americas, rattles U.S.

China’s expansion in Latin America of its Belt and Road initiative to build ports and other trade-related facilities is stirring alarm in Washington over Beijing’s ambitions in a region that American leaders since the 19th century have seen as off-limits to other powers.

China’s financial hub dream for Shanghai 2020 still distant: AmCham
China’s commercial capital of Shanghai is still far from its goal of becoming a global financial hub by 2020 due to hurdles such as capital controls and a lack of consistent rules, a report by a U.S. business lobby group said on Thursday.

It’s time for China to allow foreign credit rating agencies into its US$13 trillion bond market, say experts
The world’s third largest bond market is gradually opening up to foreign players as it starts to join global bond benchmarks

China stocks breach 1-year high
Renewed optimism in China’s economy takes hold as US trade deal looks all but certain

China finally issues draft rules for carbon emissions trading scheme
Document comes after launch of ETS platform was announced in December 2017 Rules will be open for public consultation until May 2

MIT cuts funding ties with Huawei and ZTE citing US investigations
No new engagements or renewals of existing ones, Massachusetts Institute of Technology says, explaining that partnerships with certain countries need extra scrutiny Both the Chinese telecoms firms named have faced investigation in the US, including over claims that their equipment could pose cybersecurity threats

ZTE makes Europe’s first 5G call with local carrier
European mobile network operator Orange announced on Wednesday that it had made Europe’s first voice and data call over a full 5G mobile network in cooperation with Chinese telecoms equipment maker ZTE.

ZTE makes Europe’s first 5G call with local carrier

China March new bank loans seen rebounding, further easing expected: Reuters poll
New bank loans in China likely rebounded in March from a drop the previous month, a Reuters poll showed, as policymakers push the country’s banks to keep lending to struggling smaller companies even if it risks more bad loans. Chinese banks likely extended 1.2 trillion yuan ($178.78 billion) in net new loans in March, up about 7 percent from the same period a year earlier, a median estimate in a Reuters survey of 20 economists showed.

Forget the overseas holiday, Chinese consumers will soon shop at home for half of all luxury goods they buy, says HSBC
Falling prices for luxury goods in China are leading to a shift in shopping culture Domestic outlays for luxury goods are estimated to grow 12 per cent this year

WeChat Readers’ Habits Vary Greatly Among Demographics
Overall, the report reinforces that WeChat users are narrowing their reading choices on the app and have become more selective in what they read. What do brands need to understand when marketing experts say having a WeChat account is not enough in China?

WeChat Readers’ Habits Vary Greatly Among Demographics

Talent war heats up in China’s second-tier cities
Entering 2019, a talent war that has been prevalent in the past two years has again escalated in China’s second-tier cities. Nanjing, in the eastern Jiangsu province, announced at the end of February that it would continue to implement a one-year trial settlement programme for people with a bachelor’s degree or above as well as those with technical skills, which began in March last year. Apart from Nanjing, many other cities have continued to expand their talent policies this year. Official statistics show that, as of 1 March, more than 20 cities had issued policies regarding talent introduction and settlement

How livestreaming is transforming e-commerce in China
There may be no other market in the world where commerce and entertainment are more integrated than in China. For one, the country is leading the world in using livestreaming to engage consumers on e-commerce platforms, where influencers leverage the medium to bring products to life when they might otherwise remain static on a webpage. Here’s proof that it’s working: Alibaba’s Taobao Marketplace generated more than 100 billion RMB ($15.1 billion) in gross merchandise volume (GMV) through livestreaming sessions in 2018, an increase of almost 400% year-on-year

Can we talk? Canadian farmers appeal to China for dialogue to end canola dispute
‘If there is a pest problem, let us resolve it,’ Calgary-based farmer and industry group representative Kevin Serfas says Beijing yet to respond to request from Ottawa to send a delegation to discuss concerns face to face

China is not a market Canada can rely on
Canada cannot afford to rely on China to be a constant customer because clearly it is not a market we can rely on.

China is not a market Canada can rely on

Brookfield in talks to buy Shanghai property for US$2 billion even amid China-Canada spat after Meng Wanzhou’s arrest
The US$2 billion deal could become the second-largest commercial property transaction in China by a foreign investor

Rising risk of US and China housing slump causing recession – IMF
A growing number of homes in the US and China are teetering on the brink of a price slump that would drag their economies into a recession, the International Monetary Fund has warned.

Chinese Balkans investments disrupt EU objectives, Commission warns
Some Chinese investments entail “macro-economic imbalances and debt-dependency” risk in the Western Balkans and impacts EU objectives in the region, an EU spokesperson has said in light of a controversial energy project in Bosnia and Herzegovina.

Govt Report Details Alarming Effects of Climate Change in China
Temperatures are increasing, glaciers are melting, and water levels are rising, among other ominous phenomena.

Finance’s future rests with technology to create health, wealth and wisdom
Modern banking was created to protect farmers from risk and is now helping shape a healthier society Governments around the world can see the momentum in fintech and are pressing ahead with policies to attract talent. Hong Kong Cyberport is one of Asia’s most active centres for fintech start-ups, becoming increasingly competitive against neighbouring cities in mainland China such as Shenzhen and Silicon Valley in California.

How China’s child modelling boom turned small town into magnet for ambitious parents
Families are relocating to Zhili, where the growing child garment industry means models can earn up to US$1,500 a day Young children work long hours and miss schooling in attempt to win big contracts as companies clamour for star quality

Semiconductors are killing it—thanks to China
Semiconductors are killing it, and you can thank China. The Semiconductor ETF (SMH) is just shy of the historic high it hit a year ago. The five S&P companies with the biggest exposure to China all get 40% to 60% of their revenues in China.

Israel’s hi-tech firms are wary of Chinese investment, but the money keeps rolling in
Chinese investors were involved in 12 per cent of all financing deals in first nine months of 2018 But with security concerns growing, Jerusalem is considering setting up an oversight committee to monitor deals involving overseas backers

China’s Health Foods Market: What Makes it Attractive for Foreign Investors

A leading trend among Chinese consumers today is a growing awareness of healthy lifestyle habits and organic foods, which is consequently changing their purchasing behavior.

Chinese consumers ignore calls to eat less beef
Imports rise as domestic farmers struggle to meet demand. Despite increasing prices and evidence that too much beef is bad for health and the environment, belief that eating red meat makes you strong persists in China, and consumption is accelerating.

The malnutrition paradox: Lessons from China
As per the 2018 Global Hunger Index, (GHI) India is ranked 103rd out of 119 countries as compared to 25th rank of China. China is also vulnerable to the double burden of malnutrition and leads the way in its multi-sectoral strategy in addressing all forms of malnutrition. China has improved on children’s health and growth over the last few decades yet faces challenge.

The malnutrition paradox: Lessons from China

China wants unification. What will Taiwan have to give up to keep its freedoms?
Unification by force would be devastating for the region, including Hong Kong, and must be avoided Meanwhile the option of a Hong Kong-style ‘one country, two systems’ is dead on arrival. Perhaps there is a third option

Taipei complains about London university’s decision to alter artwork and portray Taiwan as part of China
LSE makes change after mainland Chinese students object to globe suggesting Taiwan and Tibet are independent nations Foreign ministry in Taipei says school should not have caved in to pressure from Beijing

Hong Kong finance firm comes up with loan scheme targeting Gen Z ease their way into a world of soaring rents
United Asia Finance’s “New Renter’s Loan” is targeted at renters of new flats Scheme provides individuals with a maximum loan of HK$200,000 to ease their initial financial burden

More China tech firms join top-employer list despite dwindling upside
Domestic tech firms made up 15 of LinkedIn China’s Top-25 Companies list in 2019, compiled based on feedback from the site’s 40 million users in China, an increase from the eight seen in 2018. Alibaba was again crowned as the most sought-after employer, with Baidu and Bytedance replacing Amazon and Apple for second and third place, respectively. Other tech companies that made it to the top include Nio, Didi, Huawei, and Meituan Dianping. New to the list this year include Tencent, JD, Didi, Ant Financial, Kwai, and Xiaohongshu.

Briefing: More China tech firms join top-employer list despite dwindling upside

For NATO, China is the new Russia
Beijing, rather than Moscow, is the top concern as the alliance gathers in Washington this week.

Death of the ‘Golden Era’? UK report demands rethink of China policy as Beijing gets tough
Report comes as the UK government is in the throes of an unprecedented political crisis over Brexit China seen as one of UK’s key trading partners – if and when Britain finally leaves the European Union

Why the Chinese internet has a hate speech problem
The feminist writer Zheng Churan observes a correlation between China’s emerging nouveau riche and the rise of xenophobia. “As the economy continues to grow, a small portion of people have grown rich in accordance with the opening-up policy, and a bigger portion are waiting on their road to riches,” Zheng wrote. “Those who have attained ‘wealth’ all think they deserve the level of respect that white people get—or the respect afforded to the big capitalists in white-people countries.”

Why the Chinese internet has a hate speech problem

Chinese workers could lose social credit for switching jobs too often

Zhejiang province considers plan to punish people who frequently change employers by downgrading their social credit score Idea provokes fierce backlash with critics asking whether firms who drive their employees to quit will also face sanctions

Alain Gillard
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