China Press Review – August 14, 2019

Press review

US to delay or remove some tariffs against China planned for September 1
Some categories are removed due to ‘health, safety, national security and other factors’; tariffs on other items are postponed until December 15.
Chinese Vice-Premier Liu He is reported to have had a ‘serious negotiation’ on trade with Robert Lighthizer and Steven Mnuchin

US-China trade war takes a breather as Beijing sees ‘positive signal’ in Donald Trump’s tariff delay
Planned levies on many of the US$300 billion of Chinese products threatened to start in September have either been delayed or removed Vice-Premier Liu He talked with US trade representative Robert Lighthizer and Treasury Secretary Mnuchin, expressing ‘solemn representations’ over the tariffs

How Donald Trump’s currency war may end up hurting the US economy, rather than China
The ‘currency manipulator’ tag may turn out to be a paper tiger. More importantly, if China recognises that yuan weakness is not in its interests and sells US-denominated assets to stabilise it, the sale of US Treasuries could add to a tightening of US financial conditions

Is a China-US cold war inevitable? Chinese analysts say it can’t be ruled out
Experts hold little hope for relations when ideology starts to define rivalry between Washington and Beijing ‘Counter-China’ coalition in US could last beyond Trump years as ‘far-right populists’ take grip of policymaking, they say

China may use foreign exchange reserves to fight US financial war risk, analysts say
The People’s Bank of China has maintained the world’s biggest pile of foreign exchange reserves at a stable level of around US$3.1 trillion in recent years But it now may consider a more defensive stance, such as supporting the yuan’s exchange rate, as the tensions with the United States spread to finance

China’s yuan exchange rate drop could roil already strained Hong Kong-protest hit economy
The yuan fell below the key level of 7 to the US dollar last week for the first time in 11 years, and could hit tourism and retail spending from mainland Chinese visitors Investment flows into Hong Kong may increase through Stock Connect if investors expect the yuan to fall further amid the US-China trade war and Hong Kong protests

America’s Anti-China Mood Is Here to Stay
Even if China and the US agree on new trade terms, the view in Washington has fundamentally changed.

U.S. Commerce chief: No quid pro quo from China as U.S. postpones some tariffs
There were no concessions from China for the U.S. decision to postpone tariffs on some Chinese imports until mid-December, U.S. Commerce Secretary Wilbur Ross said on Wednesday, adding that it was too early to assess where U.S.-China trade talks stand. Ross, speaking in an interview on CNBC, added that while further telephone conversations are planned, a date has not been set for another round of in-person discussions.

How Has the Trade War Affected China?
With further entrenchment by both sides, and a trade deal increasingly unlikely before next year’s U.S. presidential elections, China appears to be bracing itself for a protracted conflict and may have reason to believe it can “win” if President Trump faces increased political pressures entering the election. As the President recently announced, China may be counting on a Democrat to win the White House to strike a new trade deal. On the other hand, a continuing conflict between two of the world’s greatest economies which has evolved from measures to address intellectual property protection and trade imbalances to currency manipulation, may in the long run lead to recession and hurt growth globally.

How Has the Trade War Affected China?

China is still hurting from the trade war and the pressure is mounting
The trade war might be headed for a slight reprieve, but China is still getting battered by a slowing economy and its standoff with the United States.Industrial production in China — an important indicator for the country’s economy — grew just 4.8% in July compared to a year earlier, according to China’s National Bureau of Statistics. That’s the worst growth for that sector in 17 years. The metric is important because it measures the output of key businesses in China’s manufacturing, mining and utilities sectors. The latest figure fell far short of the 5.8% that analysts polled by Reuters expected. It’s also a big slowdown compared to June’s 6.3% growth

Is China About to Cause the Next Asian Economic Crisis?
Last week, the Chinese yuan depreciated further and broke through the very closely watched level of seven yuan per dollar. This depreciation sent global equity markets into a tailspin, with the Dow Jones Industrial Average declining almost 3%.

Asia fears ‘second cold war’ as Donald Trump pushes Iran into Chinese arms
Washington’s ‘maximum pressure’ campaign to limit Iran’s nuclear initiatives is prompting Tehran to pivot to Beijing and Moscow, experts say Meanwhile, the US-China trade war is forcing Asian countries to pick sides

The Chinese luxury consumer
If you’re in luxury goods and services, China is the story.Chinese consumers are now the engine of worldwide growth in luxury spending. The fast-expanding bulge of affluent citizens combined with a small but very wealthy coterie means there’s much more income to spend on luxury goods and services—from fashion, jewelry, and prestige cosmetics to artwork and high-end travel.

China’s online army shows foreign brands who’s in charge
Companies from Versace to Calvin Klein have been forced to apologise after being slammed by Chinese internet users for identifying Hong Kong as a country Chinese buyers account for at least a third of current luxury sales and two-thirds of the industry’s growth

Alibaba reportedly eyes $2 billion acquisition of e-commerce rival NetEase Kaola
Alibaba is in talks with NetEase to acquire its cross-border e-commerce arm Kaola and may merge the unit with its Tmall International platform, financial blog IPO Zaozhidao cited people with knowledge of the matter as saying on Wednesday. The deal would represent a step toward market consolidation in China’s e-commerce sector. A merger between the country’s top cross-border players would create a single market behemoth. Alibaba could also use the deal to fend off rival Pinduoduo, which has also taken an interest in Kaola to expand its cross-border presence

Alibaba reportedly eyes $2 billion acquisition of e-commerce rival NetEase Kaola

Alibaba Group is upgrading Weitao, the micro-blogging feature for use on its e-commerce sites Taobao and Tmall, to bring brands and merchants closer to their fans.

JD shares jump as Q2 earnings beat expectations
Shares in closed 12.9% higher in US trading overnight after the e-commerce player posted better-than-expected earnings for the second quarter of the year. The results provide investors with renewed confidence in not only JD but also China’s overall e-commerce sector.

JD shares jump as Q2 earnings beat expectations

Healthcare, China’s Must-Have Overseas Luxury
But today’s younger high-net-worth individuals are shifting their priorities from ‘ownership’ to ‘access’ and are distinguishing themselves from the masses by embracing a more inconspicuous consumption. Instead of spending on traditional luxury goods, they’re investing in quality healthcare, education, and enrichment activities. In other words, for them, luxury is less about goods than services. And now, the maturing Chinese luxury market is following suit, with education and healthcare becoming priorities for affluent Chinese consumers. According to the New York Times, “Chinese people took an estimated 500,000 outbound medical trips” in 2016 — a number that’s been trending upwards ever since. But in a country like China, where consumer confidence in the national healthcare system is low and the reputation of the healthcare sector has been tainted by an endless succession of scandals, having access to premium health services can be a matter of life and death.

Healthcare, China’s Must-Have Overseas Luxury

Ray Dalio: ‘Now is the time’ to invest in China
China’s economic growth is slowing down. As trade tensions with the U.S. drags on, China’s domestic stock market (SS) has crashed and its currency devalued. Despite all of that, Ray Dalio, the founder and co-chair of $160 billion Bridgewater Associates, is advising investors not to retreat.

India beat China for number of fintech deals in Q2: CB Insights report
India has surpassed China as the top recipient of fintech investment in Asia for the first time, according to a report from CB Insights covering the second quarter. Regional fintech deals and funding are expected to fall short of last year’s levels partly due to a significant drop-off in China

India beat China for number of fintech deals in Q2: CB Insights report

China’s push back on dual passports may derail investment immigration schemes
Mainland authorities may tighten up on the practice of holding citizenship rights in countries other than China, potentially impacting high-net-worth individuals Potential crackdown on second passport holders would dampen Chinese enthusiasm for investing in overseas property, experts say

China auto sales in July on track for worst year in history
World’s biggest market to see double-digit drop in 2019New automobile purchases in China have declined for 13 straight months, raising the specter of the world’s largest market contracting by double digits for the first time this year.

Is the world’s biggest pork consumer ready for substitutes, as African swine fever burns a path through China’s hog herds?
The Chicago-based biotech start-up says its alternative protein product can help fill the supply gap caused by deadly porcine virus outbreak in China Start-up has won backing from tech fund started by Bill Gates, and attracted former Kraft Foods chief executive Tony Vernon to its board

Shanghai to give foreign workers access to share options for locally-listed firms to attract more funds and talent
Move comes as protests put Hong Kong’s status as region’s financial centre at risk, analysts say Step is part of Shanghai’s bid to be a global financial powerhouse

China-proposed BRI designed with economic development, capacity building in mind, benefitting others, say experts
The China-proposed Belt and Road Initiative (BRI) was formulated with economic development agenda through increased connectivity, infrastructure and capacity building, according to academics and experts at a conference here on Wednesday.

Hong Kong airport shutdown could give Shenzhen the edge as top air hub in Greater Bay Area
Chaos at Hong Kong International Airport comes as neighbouring centres press ahead with big plans Shenzhen Baoan International Airport gained approval in April to build a third runway, which would allow it to handle 80 million passengers a year

Hong Kong protests: How could China intervene?
Hong Kong has experienced weeks of unrest of unrest now, sparked by opposition to an extradition bill, with increasing outbreaks of violence and strikes causing major disruption.

‘Frightened, angry and exhausted’: Hong Kong protesters apologise for airport violence
Protest group asks for understanding after clashes in which a reporter and policeman were attacked

Hong Kong stocks pare gains after a strong start as weak Chinese data, protests weigh on sentiment
Smartphone components maker Sunny Optical Technology (Group) was the day’s biggest gainer, jumping 8.7 per cent Cathay Pacific reverses four days of losses to rise 2.83 per cent

China-US talks held by top diplomats Yang Jiechi and Mike Pompeo amid Hong Kong spat
The pair meet in New York on Tuesday for exchange of views that observers predict will include anti-government protests in Hong Kong Meeting shows willingness to manage the countries’ many differences – but neither side indicates any positive outcome

Beijing unlikely to intervene in Hong Kong but police under pressure to end protests, analysts say
Central government’s warning about ‘signs of terrorism’ in escalating violence ‘provides cover for local authorities to continue on path they are on’ Unless the city asks for help, Beijing is bound by law and cannot step in

Bitter unrest in Hong Kong prompts city’s ultra rich to look into relocating their families to the US
New York agent says inquiries have shot up from Hong Kong about buying luxury homes, relocating businesses Interest has shifted from mere investment to becoming US residents

Chinese engineers follow the Sea Dragon with new submersible that can ‘fly’ through water like a plane in the air
Developers say their prototype craft could dive to 1,000 metres in five minutes Liu Kaizhou, who also worked the Jiaolong submersible, says ‘We are in uncharted water’

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