China Press Review – August 13, 2019

Press review

A trade war truce? The US and Chinese economies need one, but they also need domestic reforms to stave off global catastrophe
The US’ overreliance on expansionary fiscal policy when the country is already deeply in debt is a recipe for disaster Beijing, for its part, needs reforms to spur domestic demand, not currency depreciation that could further provoke the US

Could devaluation of China’s yuan trigger the next financial crisis?
Anyone looking around for bad economic news in this ‘silly season’ is spoilt for choice

Trump’s Push to Bring Back Jobs to U.S. Shows Limited Results
Tax cuts and tariffs have not caused a significant return of factory activity, data from the government and other sources show.

U.S.-China Trade Talks: What Happened?
If the individuals involved in the negotiations are so invested in taking a legalistic approach and relying on the Chinese courts for enforcement, an approach that has never worked in China, that they cannot bring themselves to alter their strategy, then perhaps the United States should consider changing its negotiating team. Meanwhile, the relationship between the two countries continues to deteriorate: new tariffs are set to go into effect in just over two weeks; stock markets in both countries have been hurt; China’s currency has passed the 7 yuan to 1 dollar mark, and the United States has now branded China a currency manipulator. If both sides truly want to make a deal, it’s time for a major re-set.

U.S.-China Trade Talks: What Happened?

China is a rival, not an enemy
China has one-fifth of the planet’s population; the world’s second largest economy; a small but significant nuclear arsenal for deterrence; and an increasingly repressive government which combines elements of market economics with single-party totalitarianism, incredibly invasive surveillance, mass internment camps; and a newly minted “president for life,” Xi Jinping. Should it also be the recipient of Washington’s antagonism?

Trump’s ‘Sadomasochistic’ Recession Gives China The Last Laugh
“Sadomasochistic” certainly fits when you consider how Trump is hitting China with all Washington’s got, and hurting the U.S., too. Summers is hardly alone in fearing the Trump Show ends in recession. Goldman Sachs also fears Trump’s China trade brawl will end in a downturn heading into the 2020 election.

Why farmers can kiss their China market goodbye
American farmers and manufacturers shouldn’t expect relief from a burgeoning trade war with China until President Donald Trump is gone from the White House.

Why farmers can kiss their China market goodbye

The world’s largest pork producer WH Group, between the US and China, finds diversity its best solution out of the trade war
WH Group will import more meat from Europe and South America to satisfy China’s demand in the largest pork-consuming nation while domestic hog herds had been culled by an outbreak of the African swine fever It will also broaden Smithfield’s export markets to get around China’s tit-for-tat tariffs on American pork

Trump’s Trade War Puts “Belt and Road First”
As China has cut its U.S. imports, it has bought commensurately more from the rest of the world. In particular, it has expanded trade with countries participating in its massive “Belt and Road” investment initiative (BRI). As the right-hand figure above shows, African and Latin American countries, many of which signed on to BRI last year, have been among the biggest winners of the U.S.-China decoupling. “The Sino-U.S. trade conflict, if it becomes long-term,” explained one China State Council official, “will definitely impact the import origins of some products.” BRI nations, in particular, were likely to “win orders from China for land-intensive agricultural products.”

The trinity of the U.S.-China trade war
The U.S.-China trade war is actually a trinity game of “tariff, enterprise, and finance”. In essence. It is a backlash against the rise of China by the United States and other western countries, and it a response to China’s geographical expansion represented by “Belt and Road Initiative”.

Exclusive: Yuan at right level, disorderly capital flows unlikely – China central bank official
China’s yuan is at an appropriate level currently and two-way fluctuations in the currency will not necessarily cause disorderly capital flows, a senior official at the People’s Bank of China told Reuters on Tuesday.

Huawei adds Washington lobbyists to navigate US sanctions
Sidley Austin lawyers will help company on export controls and security topics

China paints rosy picture of foreign investment despite Donald Trump’s claim ‘thousands’ of firms are leaving
Foreign direct investment (FDI) into China in July rose 4.1 per cent from a year ago to US$8.07 billion, according to China’s Ministry of Commerce US President Donald Trump claims companies are fleeing China because of tariffs imposed by his administration over the last 16 months of the trade war

Goodbye China: Chinese manufacturers follow multinationals out the door
Companies look to Vietnam and beyond amid protracted trade war and rising costs at home

Bad loans in China’s banking system mount, rise 3.6 per cent in second quarter
Chinese banks’ total non-performing loans increased to 2.235 trillion yuan in the three months to June

Shanghai-based Zendai closes two P2P units worth US$1.4 billion as Beijing intensifies crackdown
The P2P platforms operated by the private investment company employed 5,000 and operated 135 outlets across the mainland

Huawei handset sales tumble in Europe amid Android concerns
US sanctions on Huawei are beginning to impact the Chinese firm’s business in key markets as handset sales in Europe tumbled 16% year on year in the second quarter, according to a report from market research firm Canalys released on Monday.

Huawei handset sales tumble in Europe amid Android concerns

Robots to become extended family members amid advances in AI, 5G, other tech: Huawei
About 14 per cent of families across the globe will have a function-rich home robot by 2025 On average, 10 nursing bots will be used in elderly care homes in G8 nations in the same period

Grape wall of China: More millennials move away from tea and Baijiu in favour of wine
Taste is not always the first indicator in wine purchase More Chinese millennials are moving away from tea and Baijiu, in favour of traditionally less popular drinks like wine.

Why Digital Wallets Aid Luxury Sales
Mobile payments have proliferated in China since 2004 when Jack Ma and Alibaba Group first launched Alipay. Today, mobile wallets dominate China, and Alipay is the indisputable global leader in mobile payment services. According to the South China Morning Post, “mobile payment transactions in China added up to more than$12.8 trillion last year, making it the world’s largest mobile payments market,” and Chinese consumers are adopting mobile payments at a faster rate than the rest of the world. Meanwhile, according to eMarketer, only 20.2 percent of US consumers use mobile payments, compared to 45.2 percent of Chinese buyers. Therefore, although the digital wallet is now the go-to payment source for urban, high-net-worth Chinese, heritage brands don’t seem to fully grasp the importance of mobile wallets in the country.

Why Digital Wallets Aid Luxury Sales

Alibaba rolls out operating system for stores and supermarkets and Koubei, Alibaba’s two key consumer services units, have jointly rolled out an open operating system for brick-and-mortar stores and supermarket chains in an effort to improve their efficiency, the company said on Monday.

Alibaba rolls out operating system for stores and supermarkets beats estimates with strong second-quarter sales, rebounding from loss a year ago
The online retailer’s upbeat results provided a bright spot amid the slowdown in China’s wider technology sector

China social e-commerce market to reach 1.3 tn yuan in 2019 and 2.86 tn in 2021
Social media continues to play an important role in China’s e-commerce market in the last three years. Social e-commerce GMV reached 626.85 billion yuan in 2018 with an increase of 255.8%. It’s expected to continue the fast growth and exceed 1.3 trillion yuan in 2019 and 2.86 trillion in 2021.

China’s Nio tops electric cars in quality
According to US market research agency J.D. Power, Shanghai-based Nio ranked first, followed by BMW

Solar Power Now Cheaper Than Grid Electricity Across China, Study Finds
The price of solar power has become lower than grid-supplied electricity in hundreds of cities across China, according to a new study, marking an important inflection point in the country’s deployment of renewable energy.

Towards a Sustainable Future: Case of China’s Economic Transformation
New technologies have increased the likelihood of labour-intensive jobs in the region becoming automated. Meanwhile, many countries have witnessed widening income and opportunity inequalities. Rising environmental risks and climatic disasters add further burdens to the future development agenda.

Towards a Sustainable Future: Case of China’s Economic Transformation

The question of ‘patriotism’ in U.S.-China tech collaboration
The most critical difference between the U.S. and Chinese systems, they say, is that American companies and individuals have the freedom to choose whether they want to work with the government. Framing tech in terms of “patriotism” is problematic, they say, because it suggests that companies or individuals exercising that freedom to reject U.S. military partnership are somehow unethical, when in fact they are demonstrating a strength of the American system.

Class dismissed: Surge in arrests of foreign teachers in China
“What has changed is that many government officials think that kicking out Western influences like English teachers is doing the Party’s work, and the schools are taking advantage of it” said Harris, the Seattle lawyer, who now advises against foreigners teaching in China. “The risks of going to China to teach far outweigh the rewards.”

One Child Nation: looking back at China’s horrifying policy
Authoritarian states have a quiet, insidious way of dressing up the immoral in the dowdy finery of the bureaucratically sanctioned. To an audience member sitting for Nanfu Wang’s harrowing new documentary One Child Nation, China’s former policy of permitting one infant per family (later amended to two, in the event of a first-born daughter) comes across as frightful stuff, at times borderline dystopian. A western audience would be shocked to hear the elderly so nonchalantly on such morbid matters. But Wang wanted to reveal the banality of this particular evil, to show how history can warp the perspective of those living through it.

The U.S. or China? Europe Needs to Pick a Side
Amid ten consecutive weeks of protest in Hong Kong, Beijing is looking to a seemingly unlikely place for support: Europe. In recent days, Chinese ambassadors across the continent have gone on the offensive to rally Europe behind Hong Kong’s government and against the protestors. As part of their campaign to promote Beijing’s line, China’s ambassadors are publishing op-eds in local papers and publicly criticizing European leaders for failing to denounce what they are trying to frame as violent protests. The audacity of China’s efforts suggests that in Beijing’s eyes, Europe is up for grabs.

China tells India it is ‘highly concerned’ about situation in Kashmir
Indian External Affairs Minister Subrahmanyam Jaishankar meets Chinese foreign minister and vice-president in Beijing

India responds to Belt and Road Initiative with infrastructure push
New Delhi does not want China to dominate its backyard so has started spending

Sihanoukville is booming but it now ‘feels like a Chinese town, not a Cambodian town’, residents complain
Provincial officials say Chinese nationals own 90 per cent of businesses, including more than 150 hotels and four dozen casinos Experts believe many Chinese businessmen are using countries like Cambodia to park their wealth, hiding profits from Communist Party

US-China cooperation not a priority for either side, says Beijing academic
Any chance of an end to trade war is gone and chances to work together have turned into disputes, Shi Yinhong of Renmin University says

Portugal’s golden visa programme ‘swamped’ by inquiries from Hongkongers seeking alternative residence and a safe haven
International property advisers say they’ve seen a surge in interest from Hongkongers regarding Portugal’s investor immigrant programme Portugal’s low cost of living, Mediterranean climate, rich history and high standard of safety seen as attractive ‘drawcards’ for Hongkongers, analysts say

Hong Kong stocks dive as protests rumble, China anger builds
Hong Kong stocks tumbled on Tuesday (Aug 13) as protests that have jolted the city for more than two months fuel political and economic uncertainty, with China’s growing frustration leading to worries it will take a tougher line with the standoff.

Hang Seng Index drops to lowest level since January as a second day of disruptions at Hong Kong’s airport roil sentiments
Hang Seng Index closed 2.1 per cent down at 25,291.28, hitting its lowest level since January 3 Cathay Pacific Airways fell 2.6 per cent to HK$9.55, extending its declines after falling to a 10-year low yesterday, as the Hong Kong airport cancelled most flights for a second day after thousands of protesters laid siege to facilities

Hong Kong for Business: Stick a Fork in It
Not sure why nobody has just come out and said this yet, but Hong Kong as an international business and financial center is no more. I take no comfort in saying this because I have many friends in Hong Kong and I’ve always loved going there, but Hong Kong’s special position is over. Kaput. Fini. Terminado. 完. законченный. Done. Over. No more.

Hong Kong for Business: Stick a Fork in It

Hong Kong Risks an Economic Fate Worse Than Recession
With protests continuing to disrupt the territory’s retail and tourism industries — and bringing the airport to a standstill on Monday — analysts say it wouldn’t take much to tip the economy into negative territory. Total merchandise trade is more than triple Hong Kong’s gross domestic product. Yet that’s only half the story. Hong Kong is an important gateway for capital, too. So the bigger fear is the damage done to Hong Kong’s standing as a conduit between China and the rest of the world. Even if its economic relevance to China has faded over time, it’s still an important valve for foreign money flowing into and out of the world’s second-biggest economy. Analysis by Bloomberg Economics forecasts a recession in the second half and warns of a risk of an erosion in the high standards of corporate governance and rule of law that underpin its status as an international financial hub. That would significantly undermine the city’s long-term growth prospects, Bloomberg economist Qian Wan writes. Here’s some data from Bloomberg Economics on why Hong Kong still matters for China and global trade:

Hong Kong Declares War Rather Than Dealing With Issues
Protesters clogged the departure area at Hong Kong’s reopened airport Tuesday, a day after they forced one of the world’s busiest transport hubs to shut down entirely amid their calls for an independent inquiry into alleged police abuse. More than 100 flights were cancelled as thousands of protesters occupied the airport’s main terminal for the fifth consecutive day.

Protests Put Hong Kong on Collision Course with China’s Communist Party
The grand political experiment to marry Beijing’s brand of authoritarianism with a bastion of civil liberties appears to be facing a moment of reckoning.

Hong Kong protests as “terrorism”; RMB & the start of “financial war”?; China Development Bank scandal
Perhaps Beijing is bluffing as it ramps up the condemnations and propaganda work over Hong Kong. We should all hope that the Hong Kong police and government can find a way to calm things down and satisfy at least some of the key demands of the protestors, but that seems increasingly hard to see given the brutality and growing numbers of arrests, and I would not want to bet on Beijing just bluffing.

Canada’s Justin Trudeau extremely concerned about Hong Kong, urges China to be careful
Prime minister says Ottawa is focused on protecting Canada’s interests in Hong Kong, which is home to around 300,000 Canadian citizens US Senate Republican leader Mitch McConnell warns Beijing that any violent crackdown on protests in the city would be ‘completely unacceptable

Cathay Pacific’s majority shareholder pressed into condemning ‘violent’ Hong Kong protests
Swire Pacific expressed strong backing for the Hong Kong government and the city’s police after senior executive visited Beijing on Monday It also follows reports a Cathay Pacific flight from New York to Hong Kong was denied access to Chinese airspace under new regulations regarding the identity of flight crew

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