China Press Review – August 12, 2019

Press review

Three long-term trends changing business in China
An aging population, automation, and the democratization of people’s jobs will be crucial factors for companies in China to manage.

Donald Trump tweets China wants a trade deal ‘so badly’, ahead of next round of talks in Washington
US President tweets that Beijing needs an agreement because ‘thousands’ of firms are leaving because of his tariffs Claim comes as attitudes harden in Beijing after currency manipulation charge

New IMF report doesn’t back Donald Trump’s currency manipulation charge against China
Review shows Beijing actually took steps last year to prop up yuan after it declined against dollar between mid-June and early August Analysis comes just days after US Treasury formally designated China as a currency manipulator

China’s official digital currency is nearly ready
The country may use it to create stability

China’s digital fiat currency is ‘nearly ready’ for launch: PBOC official
China’s planned digital fiat currency is nearly ready for release after five years of research and development, a senior official at the central bank said (in Chinese) at a forum on Saturday in Beijing without confirming a timeframe. The People‘s Bank of China (PBOC) aims to steal a march on global counterparts by accelerating the development of its national digital currency.

China’s digital fiat currency is ‘nearly ready’ for launch: PBOC official

China’s solution to Trump’s trade tantrums? Treat him like a natural disaster
Last week’s decision to devalue the yuan against the dollar sent turbulence through international markets But Washington should be aware that Beijing knows exactly what it is doing – particularly when it comes to matching Trump’s brinkmanship, writes Wang Xiangwei

How to Stop Trump’s Trade War Madness
Congress has the authority to limit the president’s reckless endangerment of the economy.

China ‘needs to do more’ to adjust foreign policy and win friends as trade war with US rolls on
Beijing needs to rethink priorities after years of taking assertive stance that has made other nations wary, according to government adviser and academic It has been seeking to mend ties with nations including Japan and India as confrontation with Washington ‘more likely to be accelerated than mitigated’

China should ‘try to win over other countries with favourable policies’ amid trade war with US
Economist at forum in northeast China says Beijing shouldn’t let dispute with Washington ‘disrupt our progress’ China could also reduce dependence on US dollar, boost use of yuan in commodities and improve free flow of currency, ex-policy bank official says

Banking fears add to China’s economic headache
Trade war, slowing economy and debt woes threaten to spoil birthday bash for the People’s Republic of China

Chinese firms learn to adapt as US trade war rages
Export-reliant Chinese companies are slashing prices, moving production abroad, creating new domestic markets and even rebranding goods as they try to survive the escalating trade war with the United States.

US-China trade war takes heavier toll than expected, could wreak biggest havoc in fourth quarter, investment banks say
Uncertainty over future policy may lead to lower capital expenditures as businesses await a resolution of trade war, Goldman Sachs said US economy faces rising fears of a recession, Goldman Sachs said, cutting fourth-quarter growth forecast for US by 0.2 percentage point to 1.8 per cen

Aimed at China, Donald Trump’s trade war shots keep businesses and investors on their toes
Whatever the intended impact of the latest tariff threat and designation of China as a currency manipulator, the US moves are sure to disrupt the global economy and inflict pain beyond their initial target. Under such conditions, market volatility is a given

Volatility in China’s yuan due to escalating U.S. trade friction: PBOC official
Volatility in China’s yuan since August is a normal market reaction to escalating trade frictions stoked by the United States and was caused, to some extent, by Washington’s decision to raise tariffs, a senior Chinese central bank official said.

China pledges not to devalue yuan exchange rate after US currency manipulator designation
The yuan was allowed to weaken beyond the key threshold of 7 to the US dollar last week for the first time in 11 years, drawing an unexpected response from Washington Foreign exchange administration chief calls currency manipulator decision last week by US President Donald Trump ‘a ridiculous case in global finance history’

Chinese consumers shrug off impact of trade war on economy with increased spending to improve quality of life
UBS survey shows that consumers were not only spending more on consumer goods and services, but they plan to increase it over the next 12 months.

China central bank injects 30 billion yuan via reverse repos after 14-day hiatus: traders
China’s central bank will inject 30 billion yuan ($4.25 billion) into money markets on Monday through seven-day reverse bond repurchase agreements, traders said, breaking 14 straight trading days of not injecting fresh funds via reverse repos. On a net basis, the People’s Bank of China (PBOC) will inject 30 billion yuan via open market operations for the day, with no reverse repos maturing on Monday.

China’s July new loans dip more than expected, further easing seen
China’s banks extended surprisingly fewer new loans in July, while growth of money supply and total social financing also slowed, raising pressure on the central bank to ease policy further to support the slowing economy.

China’s bank lending weakened in July, suggesting Beijing’s stimulus efforts not working
Chinese banks extended 1.06 trillion yuan (US$150.17 billion) in net new loans last month, down from 1.66 trillion yuan (US$235.17 billion) in June There was an eye-catching drop in corporate lending in July, plunging by two-thirds to 297.4 billion yuan (US$42.1 billion) from 910.5 billion yuan the month before

Huawei buys time with its fledgling Harmony OS as it waits to see if it can still use Google’s Android
Huawei is not planning to install Harmony on its smartphones yet as Google’s Android remains the top choice

Huawei unveils smart displays under Honor brand equipped with alternative operating system to Android
The Honor display starts at 3,799 yuan (US$540) and is equipped with HiSilicon “Honghu 818” intelligent chipset and a smart pop-up camera for large screens

Foxconn admits schoolchildren in China factory worked overnight to build Amazon’s Alexa devices, blaming ‘lax oversight’ by local management
Newspaper investigation showed hundreds of teenagers did overtime as ‘part of a controversial and often illegal attempt to meet production targets’ Taiwanese tech giant says it has doubled monitoring of student internship programme with partner schools

Commentary: The real reasons for China’s rise
The rise of China widely attributed to its state capitalism, whereby the government, endowed with huge assets, can pursue a wide-ranging industrial policy and intervene to mitigate risks, says Zhang Jun.

Book review : Why the rise of China is a long march
For numerous reasons the book is essential reading for anyone studying China’s rise. But its importance lies above all in its “Chinese characteristics” – in showing how the framework of thought created by China’s age of struggle and rising era is the most accurate guide to current international events. It outlines the basis on which the success of the Chongyang Institute was created. In addition to its importance for China itself if Western leaders read it they will make far fewer mistakes in understanding China.

China owes its rapid economic rise not to state control, but to its unique form of fiscal federalism
Beijing’s willingness to liberalise and reform has allowed local-level competition and experimentation to flourish into the fiscal federalism that is the main driver of its economic rise

China’s consumer spending expected to weaken further this year as result of escalating US trade war tensions
Job and income growth uncertainty means consumers remain cautious about spending Retail sales growth for July predicted to slow as effect of cars sales incentives wear off

Cooling of Chinese e-commerce sector continues as slowdown takes hold
China’s online retail sales increased 17.8% year on year to RMB 4.8 trillion ($684 billion) in the first half of this year, according to official data. The annual growth rate of China’s e-retail market has stabilized at around 20% after falling from consistent figures above 30%. The slowing expansion comes as a broader economic slowdown takes a grip, and the US trade war intensifies.

Cooling of Chinese e-commerce sector continues as slowdown takes hold

Trump Is Making Xi’s Superpower 2050 Plan Tougher by the Day
Even before the trade war, Xi Jinping’s plan to turn China into one of the world’s most advanced economies by 2050 was ambitious. His grand vision is now looking more aspirational by the day. As mounting pressure from Donald Trump adds to a slew of structural challenges facing China’s $14 trillion economy — including record debt levels, rampant pollution, and an aging population — the risk is that the country gets stuck in a “middle-income trap,’’ stagnating before it reaches rich-world levels of development.

China to push to attract more high-tech manufacturers
China will push to attract more high-tech manufacturers to set up in the world’s No 2 economy, the nation’s commerce ministry said late on Friday, without giving further details.

Why China’s next crop of ‘techpreneurs’ are skipping home and eyeing a fresh gold rush in new markets
During the past decade of breakneck economic growth, China has been a gold mine for tech start-ups, with the biggest internet user base in the world of 829 million. But a new wave of Chinese entrepreneurs are now deciding to skip the country in favour of fast-growing markets in Southeast Asia, India, the Middle East and Africa, taking their innovative ideas and cutting edge business models with them

How to Win Chinese Hearts with Smart Carts and New Retail
Technology is everywhere in modern China. For Western luxury brands this means experimenting with new approaches — especially online and with social media influencers — that most would shun or avoid in other markets. Collaborating so closely with Chinese KOLs and celebrities, depending on some very heavily as direct sales channels would be thought quite risky in other markets, as would putting their merchandise on an e-commerce platform with competing brands that is controlled by another company altogether. But in China, it’s business as usual.

How to Win Chinese Hearts with Smart Carts and New Retail

China’s historic car market decline continues, as trade war and emissions clampdown hit sales
Sales of sedans, sport utility vehicles, minivans and multipurpose vehicles in July fell 3.9 per cent from a year earlier to 1.53 million units US-China trade war, tighter regulations and a slowing Chinese economy combine to hit sales in the world’s largest car market

China new-energy vehicle sales drop for first time in over two years
Sales of new energy vehicles (NEVs) in China fell 4.7% in July from a year earlier, the first drop in more that two years, data from the country’s biggest auto industry association showed.

Toyota plans new China battery plant as Beijing pivots to hybrids
Toyota reportedly aims to set up a fourth hybrid vehicle battery plant in China as Beijing has shelved plans to completely do away with combustion engine cars and will look for a more balanced policy. The move coincides with Chinese government plans to amend its new energy vehicle mandate to boost production of fuel-efficient hybrids.

Toyota plans new China battery plant as Beijing pivots to hybrids

PSA, Dongfeng to drop 2 China plants, halve workforce, Reuters reports
PSA Group and partner Dongfeng Motor have agreed to cut thousands of jobs in China and drop two of their four shared assembly plants, according to a document seen by Reuters, in a last-ditch bid to curb mounting losses as the world’s largest auto market loses steam.

China scientists warn of global cooling trick up nature’s sleeve
Research sheds light on 500-year Chinese weather cycle and suggests a cool change could be on the way Findings leave no room for complacency or inaction

Versace in trouble for tops that imply Hong Kong is not part of China
Italian fashion brand Versace apologised to its Chinese customers on Sunday for producing a range of tops that suggested Hong Kong and Macau were separate countries. (Brussels was in addition misspelled)

‘I don’t’: why China’s millennials are saying no to marriage
A generation of Chinese is in no rush to tie the knot These young people are creating a ‘single society’ with implications for individuals and for the country as a whole

Underestimating Moments of Truth: Why Many Luxury Brands Fail with Millennials
Luxuries are not normal products. They’re the ones creating the highest perceived consumer value, and when things go wrong, customers feel cheated. And rightly so! More than any other product category, luxury is where people pay significant premiums for the intangible value that a brand or service creates. I called this “Added Luxury Value” (ALV). ALV makes luxury enticing because its intangible character allows the best brands to generate significant profit margins. On the flipside, its intangible nature leads to an immediate collapse of ALV when a brand makes a mistake.

Underestimating Moments of Truth: Why Many Luxury Brands Fail with Millennials

Donald Trump and Xi Jinping are both in the construction business – one builds infrastructure, the other builds barriers
The US can’t match Beijing’s plans for the Belt and Road Initiative, so it has resorted to trying to block them. However, signs from the financial world offer no indication that this plan is working

China is doing Japan a favor
Current trade relations between the US and China see them locked together like embittered opponents, with America holding a gun to China’s head while it insists that China adheres to its demands.

China and Japan vow to build ties for ‘new era’ as strategic talks resume
After seven-year hiatus, dialogue between Le Yucheng, China’s foreign vice-minister, and Japanese counterpart Takeo Akiba is held in Nagano prefecture Foreign ministry says they had candid exchanges about bilateral and regional issues and would push forward consensus reached between leaders in June

Watch out free world, the China-Russia threat just went over your head
When warplanes from four countries faced off over the Sea of Japan, it was as much cold war thriller as it was Top Gun

Lender’s remorse? China finds Africa projects require a growing wave of debt forgiveness
From Kenya to Ethiopia, Botswana to Cameroon, belt and road developments have seen write-offs of hundreds of millions of dollars African nations have problems making repayments, which report says raises ‘legitimate concerns about the sustainability of China’s outbound lending

Collapse of intelligence pact between US, South Korea and Japan ‘will be symbolic victory for China’
Three-year-old security treaty between US and two key allies under threat as tensions between Seoul and Tokyo continue to escalate End of General Security of Military Information Agreement risks undermining Washington’s influence in the region

Typhoon Lekima death toll rises to 28 after storm forces a million to leave homes in eastern China
Most of the deaths happened in one area of Zhejiang province after a landslide blocked rivers, causing a sudden rise in water levels

Cities in trouble: London will weather a no-deal Brexit but can Hong Kong survive its political crisis?
While commercial property investment in both cities has fallen sharply, the challenges facing Asia’s premier financial hub are more severe than those affecting London. In Hong Kong, the anti-government protests have only just begun

Hong Kong business warns of risks to economy as protests continue
Visitors deterred by unrest, hitting airlines, hotels and shopping malls

As Hong Kong lenders trim staff, prospects tighten for some expat bankers unless they change roles, take a pay cut
Banks in Hong Kong are increasingly focused on local hires with language skills, according to headhunters Wealth management, fintech remain ‘hot’ areas for hiring, recruiter says

American Chamber of Commerce in China says smoothly functioning commerce in Hong Kong ‘fundamentally important’
Nine weeks of protests, civil unrest have disrupted businesses in the city
Smooth commerce in Hong Kong ‘validator’ of ‘one country, two systems’ concept, AmCham China says

Beijing’s new weapon to muffle Hong Kong protests: fake news
China’s media used to ignore the turmoil. Now the state is waging a campaign that could pave the way for intervention

Nationalist Chinese tabloid editor blasts Hong Kong’s Harbour City mall for ‘kowtowing’ to protesters
Global Times chief Hu Xijin takes aim at shopping centre, saying it was weak for allowing ‘rioters’ to remove national flags and toss them into sea Beijing is apparently pressing city’s tycoons to fall into line over protests

Would China risk another Tiananmen in Hong Kong?
While China might be exploiting fears of a bloody “Tiananmen” crackdown on Hong Kong’s protest movement, analysts say the potentially catastrophic economic and political consequences will deter Beijing from any overt boots-on-the ground intervention.

Illegal anti-government march sets off in Hong Kong
Only a rally – not a march – in Causeway Bay had police approval Marches planned in Kowloon and the east of Hong Kong Island were ruled out by the force

Hong Kong’s airport authority cancels flights over protests
All flights not checked in by Monday afternoon have been grounded as rallies continue

Beijing warns of ‘signs of terrorism’ in violent unrest in Hong Kong
China’s top policy office on the city reiterates support for police, saying a ‘critical moment’ had been reached Hong Kong and Macau Affairs Office also vows to crack down on violent crime with ‘iron fist’

Donald Trump’s war on climate science, Brexit and Hong Kong’s housing disaster are what happens when governments disregard evidence
Western societies, which once prided themselves on reason and respect for science, have become overrun with populists who reject both Hong Kong has shown a similar malady when it comes to addressing the city’s major issues

China, Not U.S., May Be the Land of Opportunity for Children
The U.S. has deficits other than trade to worry about with China. Since the early days of the global economic crisis, China has led the U.S. by as much as 20 percentage points on Gallup’s question of whether most children in their respective countries have the opportunity to learn and grow every day.

Eight+ Things to Read About China and Other Things, Part 13

Eight+ Things to Read About China and Other Things, Part 13

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