Falling Trade, Rising Imbalances…
If nothing changes, China’s massive trade surplus will soon be an even bigger political and economic issue…as global trade imbalances are once again being made in China. On an annualized basis, China’s trade surplus in July was around $700 billion. That’s big.
Abandoning Globalization Will Only Hurt U.S. Businesses
We are still in the midst — perhaps even the early days — of the coronavirus pandemic, but there have been many predictions of how it has permanently changed the world. The virus exposed the vulnerability of our supply chains, interrupting the flow of critical imports into the U.S., and triggering calls for American multinationals to reshore production. Coming on the heels of the trade war and Washington’s push to de-couple economically from China, this has brought widespread predictions of deglobalization. The U.S. Special Trade Representative even wrote a recent op-ed calling for the end of offshoring. The bottom line is that globalization happens because it creates value and broadens a company’s capabilities. Like any economic phenomenon, its pendulum can swing too far, creating unfair imbalances and supply risks that jeopardize U.S. security. China’s gaming of the international trade system and the coronavirus-caused interruption of key materials suppliers are two examples, both requiring focused, limited responses from the U.S. government that punish China and mandate certain materials be produced in the U.S. This is self-defense, not deglobalization. It is hard to argue that globalization works for the Chinese but not for Americans, as the U.S. annually exports $2.5 trillion of goods and services, second only to China’s $2.8 trillion. They are the high-return and, almost by definition, the best performing 12% of our economy. A deglobalized world takes away our best.
China-EU special summit to have trade focus, as US election looms
Extraordinary summit will prioritise EU-China investment agreement, source reveals Talks by video between President Xi Jinping and some European leaders come as EU plots its path through US-China rivalry
Alibaba sales soar but US crackdown may be looming
Zhang pointed out though that Alibaba has a big opportunity in the Chinese cloud market, which is still in its early stages and has the potential to grow more rapidly than cloud computing in the United States.
Alibaba rival JD.com (JD) reported a better-than-expected jump in quarterly sales of 35% from a year ago earlier this week. Another Chinese e-commerce site, group deals platform Pinduoduo (PDD), will report its latest results Friday morning. “The e-commerce growth story with all emerging markets and China in particular has been strong for a long time,” said Kevin Carter, founder of The Emerging Markets Internet & Ecommerce ETF (EMQQ), which owns shares of Alibaba. “The numbers we’re seeing are great.
Fears grow over China’s possible massive sales of U.S. debt as weapon
With Sino-U.S. tensions escalating over several security and economic issues, fears are mounting in the financial markets that China may massively sell U.S. government debt it holds as a weapon to choke the world’s biggest economy. If Beijing, which owns more than $1 trillion worth of U.S. Treasury bonds, really takes such action, that would push down debt prices and drive up interest rates in the United States, stifling investment and consumer spending at home. As large-scale sales of U.S. dollar-denominated assets would trigger the depreciation of the currency against the Japanese yen, the Asian nation’s economy could be also beset by a downturn in exports, a key engine of growth, diplomatic sources said.
The real state of China’s economy remains a mystery
The crises of 2020, worse than any single natural disaster, confront Beijing with a dilemma. On one hand, old-school fiscal pumping and railways to nowhere will boost short-term growth. So, domestic construction machinery manufacturers like Jiangsu Hengli Hydraulic forecast production of certain excavator parts to rise by 30 per cent this month from a year earlier, sending its stock price up over 80 per cent this year. On the other, the top brass knows that investments in high-tech infrastructure will pay off in coming years, helping fuel the current stock market rally. The uneven turnaround stems from unclear priorities: growth, debt, or the future economy? The numbers show as much. Underlying it all is a teetering banking system with clogged plumbing. Despite the monetary easing, direct financing is handicapped at a time the economy needs it most. State planners have tried to strike a balance. But they’ve failed to show an appetite for the pain required to let some weaker companies fail and allow real demand to emerge. Only when they demonstrate real priorities to investors can China get this recovery back above water
Hong Kong’s WTO threat against US ‘Made in China’ ruling puts city in uncharted waters
Hong Kong confirms intention to launch a World Trade Organisation case over Donald Trump’s order requiring ‘Made in China’ labels on goods exported from the city to the United States Some experts are imploring city authorities to stand up to perceived US bullying, but others warn of ‘kicking the hornet’s nest’
GM bets on EVs, new tech to reverse China slide
General Motors is overhauling its Chinese lineup with a greater emphasis on electric vehicles and smart-driving technology to stem a slide in sales after more than two decades of growth in a country that contributes nearly a fifth of its profit.
China’s top electric-car battery producer, Nio to team up for battery-swap venture as industry sales forecast to triple by 2025
Contemporary Amperex, Nio and two others to form a battery-swap venture to help lower initial cost of EV ownership New venture to charge subscribers 980 yuan a month for convenience and peace of mind, in case battery goes flat on long-distance driving
China Tesla rival Nio is up 240% this year and the company is revamping plans to go global
Nio Founder and Chairman William Li told reporters Thursday the Chinese electric car company plans to venture into other markets starting in the second half of next year.The company would like to begin with Europe, and enter other major global markets in the next few years, Li said. Nio also announced Thursday a “battery-as-a-service” subscription product that it hopes will drive more electric vehicle sales.
Shanghai wants to drive up Lingang output with more success stories like Tesla’s, targets 600 billion yuan in output by 2022
China’s commercial and financial capital is looking to better use existing preferential policies to unlock Lingang’s potential and attract top companies from home and abroad Shanghai wants to draw 400 billion yuan in investments to the manufacturing sector by 2022
China’s e-commerce giants are about to overtake US logistics
Alibaba’s push for logistics dominance in e-commerce may soon expand past its domestic borders. China’s e-commerce giants have long understood that speed is the top priority when it comes to delivery—and have invested accordingly. America’s e-commerce kings, for their part, also expressed interest in lightning quick delivery times. Amazon, the undisputed industry leader in the United States, has recently trialed same-day delivery service for fresh groceries in the UK.
Alibaba tells Trump we ‘support American brands’
Alibaba has moved to ease tensions with Donald Trump, as the US president continues to threaten Chinese firms.
US tries to pick up pace in developing 5G alternative to Huawei
Open Radio Access Network, known as O-RAN, is virtual and software-based, and it has emerged as a potential option The approach is expected to be an alternative not only to Huawei, but to other hardware-centred 5G tech developers such as Ericsson, Samsung and China’s ZTE
s China running out of food? Xi Jinping’s ‘Clean Plates Campaign’ is causing rare anxiety
Some veteran China watchers believe the campaign against food waste, kicked off by Xi Jinping last week, is part of a long-term effort to increase self-sufficiency in food.
News publishers push back against Apple over app store terms, seek same deal as Amazon
Apple usually takes between 15 per cent and 30 per cent from news publishers for first-time subscriptions made through apps on the store However, it has a reduced rate for Amazon, which major news publishers say they should also qualify for
The Show Must Go On: How Cirque de Soleil Survived China’s Lockdown
For the Canadian firm’s newest troupe, keeping the show running through 2020 has been a monumental challenge — especially as several key acrobats are stuck outside China.
Double-Digit Growth In China Spurs Estée Lauder’s Recovery
The beauty company’s gradual recovery from COVID-19 was primarily due to China. On the Mainland, net sales grew by double-digits on every channel (led by online) and saw double-digit growth in every product category and with almost every brand. Online made up over 40 percent of Estée Lauder’s sales for the fiscal year, and growth in China was partially driven by successful programs during key shopping moments, like Singles’ Day and the 6.18 Mid-Year Shopping Festival — but also by targeted and expanded consumer reach. Despite the curtailed travel retail section, its domestic travel consumption in China remained stable.
Hong Kong retail stand-off turns nasty with landlords suing tenants to recover arrears as recession deepens
Wharf Reic, owner of Harbour City, sent court bailiffs last week to seal off some shops and also sued a cinema operator to recover rent arrears More than 560 companies have faced liquidation threats since early 2019, while HK$134 billion of retail sales evaporated
‘Only India in the region does not accept the political, economic and military hegemony of China’
Among the Indian Army’s operational commands, the Northern Command is perhaps strategically the most important one. It oversees the LAC between India and China, among other things. HS Panag, a former commander of both Northern and Central commands and author of the recently released book The Indian Army: Reminiscences, Reforms & Romance, speaks to Ajay Sura
New Delhi’s ‘Chinese hawala scam’ and Dalai Lama spying case – is there more than meets the eye?
Chinese national Luo Sang, alias Charlie Peng, was arrested for running a remittance system and using WeChat to pay monks to spy on the Tibetan spiritual leader This comes as ties between India and China have deteriorated amid a border stand-off, with India banning Chinese technology and restricting imports
India-China tension: New Delhi tightens curbs on visas, universities to limit Beijing’s influence
Visas for Chinese businessmen, academics, industry experts, and advocacy groups will need prior security clearance, officials say The government is also reviewing Beijing’s links with 54 Indian educational institutions
More strategy and less Washington in Sino-Indian relations
Not long after the deadly border clash in June between China and India, observers were trying to ascertain the geopolitical consequences of the incident. Many focussed on how the clash would drive India closer to the United States, a popular view in the West. In India itself too, there is growing desire to abandon ‘appeasement’, get tough on China and strategically strengthen ties with the United States.
India, Japan, Australia keen to boost supply chain security by reducing reliance on China
The Supply Chain Resilience Initiative will look to secure supply chains and reduce dependence on China in wake of the disruptions caused by the coronavirus The supply chain initiative could also eventually be expanded to include the 10 members of the Association of Southeast Asian Nations (Asean)
US-China relations: Middle East countries under pressure to take sides against Beijing: former Chinese envoy
Former Chinese ambassador to the region says UAE-Israel agreement part of bigger American bid to isolate Iran US also expected to try to exclude Chinese players from reconstruction of Iraq and Syria, he says
Can a Xi charm offensive win over Japan?
Amid Japan’s rising tensions with the United States, Chinese President Xi Jinping has been reaching out to Japan, sending masks, ventilators and other medical supplies. Chinese leaders are trying to improve public opinion in order to put the bilateral relationship on solid footing, launching a political campaign centred on the slogan ‘neighbour-to-neighbour help’.
US-China relations: PLA Navy conducts live-fire exercise in East China Sea
Flotilla from East Sea Fleet was led by Russian-made Sovremenny-class guided-missile destroyer, official report says Drill ‘laid a solid foundation for winning a battle, while polishing the troops’ combat capability’, it says
Why Donald Trump vs Joe Biden in US election should keep investors on their toes
The twists and turns so far of the divisive contest, amid a global pandemic and widespread economic pain, are not yet reflected in buoyant financial markets But the result will be consequential, especially given the possibility of the incumbent refusing to concede defeat. The risks should not be so easily dismissed Indeed, in Bank of America’s latest fund manager survey, published on Tuesday, respondents ranked the election as the third-biggest “tail risk” in markets, behind a second wave of Covid-19 cases and the US-China trade conflict – threats which themselves have not stopped asset prices powering higher in recent months.
US-China relations: Joe Biden vows to end America’s reliance on Chinese medical equipment
‘We will never again be at the mercy of China and other foreign countries in order to protect our own people,’ he tells Democratic Party convention Presidential candidate accuses Donald Trump of ‘cosying up to dictators’
President no more? A US bill would ban the title for China’s leader
Under the Name the Enemy Act, Xi Jinping would no longer be called China’s president in any US government document While it follows remarks by US officials calling Xi general secretary, the legislation is not likely to come up for a vote this session
Chinese 709 rights lawyer Xie Yang loses professional licence
Xie says he will seek to overturn the decision even though there is little chance of success He pleaded guilty to subversion in 2017 on understanding that he would not face further punishment, he says
China’s global navigation satellite system
China recently joined an elite group by launching its own global navigation system, BeiDou, named after the Big Dipper asterism. But how does it stack up against the other major systems?
China should rethink how Confucius Institutes operate or risk undermining soft power efforts
The institutes are clearly bearing the fallout from fractured US-China ties, but more could be done to alleviate West’s concerns of academic interference They should take heart at their success educating more than 9 million students worldwide and consider reforming their approach
Service Asie Pacifique
Place Sainctelette 2
Tél 02 421 85 09 – Fax 02 421 87 75
Copyright © 2020 awex, All rights reserved