China Press Review – August 23, 2019

Press review

US-China Trade War – The Big Picture
The highly publicised trade war between the US and China has largely been scrutinised for its apparent, short-term impact on the US economy. The conversation has narrowly focused on falling GDP growth and specific sectors of the economy which have been disproportionally hit the hardest, especially the American farmer. These are certainly important issues that should be continually considered and addressed.

China hits back at US with tariffs on $75 billion of imports
An extra 5% tariff will be put on American soybeans starting next month, and a 25% duty on US cars will resume 15 Dec China announced that it will impose additional tariffs on a total of $75 billion of US goods

China to Soon Unveil Plan for Retaliatory Tariffs on Some U.S. Products: Global Times
CHINA WILL soon unveil a plan to impose retaliatory tariffs on certain U.S. products, the editor in chief of China’s Global Times newspaper said. “Based on what I know, China will take further countermeasures in response to U.S. tariffs on $300 billion Chinese goods. Beijing will soon unveil a plan of imposing retaliatory tariffs on certain U.S. products”, Hu Xijin wrote in a tweet on Friday. The tweet did not give further details.

China’s yuan currency slides to fresh 11-year low, sparking fears of capital flight from Asia
China appears to be preparing to offset the impact of Donald Trump’s new US trade war tariffs, increasing fears of regional currency declines and further equity exodus On September 1, the US is set to implement the first phase of a 10 per cent tariff on a wide range of Chinese manufactured consumer goods worth around US$130 billion

China’s enormous debt ‘no longer can be ignored,’ analyst says
Fraser Howie, an independent analyst, told CNBC: “China is very much past the tipping point where the debt simply no longer can be ignored.” The trade war has put a dent in efforts to pare its massive debt as Beijing sought ways to boost its slowing economy, which was at its lowest growth in 27 years this year. In what some analysts called effectively a rate cut, the People’s Bank of China also this week launched a key interest rate reform — the loan prime rate — that would make borrowing costs for companies cheaper. But Howie told CNBC that the issue was really whether there would be demand for more credit

US criticism of China’s state-owned firms is ‘sour grapes’, says Communist Party mouthpiece
China’s subsidies for state-owned enterprises (SOEs) is one of the major roadblocks to progress in trade negotiations between the world’s two biggest economies ‘‘People’s Daily’ editorial claims that state firms have been ‘demonised’ and painted as ‘a thorn in the flesh’ by some individuals in the US

Companies listed will face severe punishment: analysts
China is preparing to launch a widely anticipated “unreliable entity list,” the Ministry of Commerce (MOFCOM) said Thursday, as expectations for the mechanism to severely punish companies that have undermined China’s national interests continue to grow. While initiated as a response to the US crackdown on Chinese tech companies, the mechanism, once launched, could also be deployed to punish companies that hurt China’s sovereignty regarding Taiwan and Hong Kong, and the punishment could be crippling given China’s massive economic power, Chinese analysts noted.

Shanghai tapping upcoming artificial intelligence conference to woo foreign AI investment amid trade-war slump
Tesla, IBM and Microsoft plan to attend AI conference, display technologies Shanghai is trying to build itself up as AI centre

US-China trade war turmoil and global economic gloom cast a dark shadow on Asian equity markets
US-China trade tensions and slowdowns in major economies have spurred recent market volatility
Until an end to the trade war is in sight, tariff concessions and looser monetary policy from Asian central banks may provide respite, but not a rescue

Facing US Sanctions, Huawei Unveils World’s Fastest AI Chip
The product launch marks Huawei’s emergence in the field of artificial intelligence amid the US’s ongoing crackdown on the telecom giant and its subsidiaries.

China to Import More Than Half of Natural Gas Needs by 2035: Report
China is expected to import more than half of its natural gas needs by 2035, according to a new report from its leading energy producer, as a Beijing campaign to reduce the nation’s reliance on dirtier coal sharply boosts demand.

Carriers partnering on 5G networks to cut costs amid accelerated rollout
China Telecom said on Thursday it is partnering with other carriers in the construction of 5G infrastructure in order to reduce costs as the central government urges an accelerated timeline for next-generation wireless network rollout.

Carriers partnering on 5G networks to cut costs amid accelerated rollout

China holds the key to 5G technology’s growth
The most closely watched technology in the information and communications field today is the next-generation superfast mobile network. The communication speed of the fifth-generation (5G) network will be roughly 100 times faster than the current standard and, due to its ultralow risk of delays and the massive capacity for simultaneous connections, the technology will hopefully be used in a wide variety of services ranging from the delivery of high-resolution video to self driving vehicles and remote machine operation.

SOE sets goal to develop cleaner fuel via hydrogen energy
State Power Investment Corp, one of China’s largest State-owned electricity producers, plans to deploy more capital and human resources to develop hydrogen energy as the country currently is undergoing an energy upgrading boom.

China’s Very Ambitious Transportation Revolution
Currently, automobiles account for 42 percent of China’s oil consumption. Reducing the use of petroleum products will significantly impact the global oil sector. According to researchers at Stanford University, peak oil will occur around 2035, after which consumption will decrease gradually. The replacing of China’s conventional vehicles by EVs or hydrogen fuelled vehicles will impact global consumption. Therefore, peak oil could come earlier than anticipated.

Global Hydrogen Fuel-Cell Electric Vehicles Market Growth to Remain Steady during the Forecast Period
In 2019, the market size of Hydrogen Fuel-Cell Electric Vehicles is million US$ and it will reach million US$ in 2025, growing at a CAGR of from 2019; while in China, the market size is valued at xx million US$ and will increase to xx million US$ in 2025, with a CAGR of xx% during forecast period.

Global Hydrogen Fuel-Cell Electric Vehicles Market Growth to Remain Steady during the Forecast Period

China added 11.4 GW of solar capacity in first half of this year
According to official statistics produced by the nation’s National Energy Administration, China’s cumulative installed PV generation capacity had reached 185.5 GW at the end of June. After China’s first-quarter statistics were released in April, analyst the Asia Europe Clean Energy (Solar) Advisory Co Ltd maintained its prediction China would install 35-40 GW of new capacity this year. Investment bank Roth Capital said staying on track for an expected 40 GW would hinge on whether the NEA was able to publish details of projects approved for subsidies by the end of June. In another report released in July, analyst Wood Mackenzie Power & Renewables said the world’s largest solar market was likely to settle at 30-40 GW of new solar for 2019, against a backdrop of competitive procurement processes. European PV industry association SolarPower Europe was even more optimistic, predicting at least 43 GW of new PV capacity in China this year.

China added 11.4 GW of solar capacity in first half of this year

China’s central bank releases 3-year fintech development plan
The People’s Bank of China (PBOC) on Thursday released (in Chinese) a three-year plan with the aim to strengthen support for the fintech sector and curb its risks. The rapidly expanding fintech sector has been outpacing the central government’s capacity to establish a comprehensive legal and regulatory framework, leading to consumer fraud and the quick rise and fall of the peer-to-peer lending segment.

China’s central bank releases 3-year fintech development plan

Alibaba and NetEase Kaola deal off the table: report
Alibaba’s rumored acquisition of Kaola, NetEase’s cross-border e-commerce business, has reportedly fallen through after the two companies failed to agree on details, Chinese media reported, citing people familiar with the matter.

Alibaba and NetEase Kaola deal off the table: report

Tmall luxury pavillion debuts new game for fashionistas
Tmall Luxury Pavilion, Alibaba Group’s dedicated channel for luxury and premium goods, on Thursday launched a new mobile game featuring the computer-generated influencer, “noonoouri,” as it upgrades content offerings to drive more brand engagement.

Huawei’s Meng Wanzhou not a bargaining chip, says Pompeo
US Secretary of State Mike Pompeo has denied that a Huawei executive is being detained in Canada as a bargaining chip in the US-China trade war.

IKEA to invest US$1.41 bn in China strategy
Swedish firm to actively explore new business models and commit to becoming a ‘home life service expert’ for consumers

A 203-Year-Old Trading Empire Faces China’s Wrath Over Hong Kong
Beijing’s crackdown on Cathay Pacific sends a chilling message to other businesses.

Pinduoduo targets greater logistics support for merchants, rivalling Alibaba’s Cainiao
Shanghai-based e-commerce firm plans a range of services that will ensure faster and more efficient product deliveries

Why powerful China must pick its battles: boom-time Japan offers a cautionary tale
The fates of HSBC and Cathay top brass suggest China is reading the riot act to multinationals But the loss of goodwill could come at great cost when there are other, more important, battles to be fought – such as the trade war

Chanel Could Pull the Plug on its Hong Kong Show
Due to recent protests and violent actions in Hong Kong, Chanel’s scheduled cruise show now faces uncertainty. The French luxury brand had planned to re-stage its May Cruise 2019/20 Show on November 6 at the city’s Kai Tak Cruise Terminal in Victoria Harbour. But just a few days ago, in a statement to Women’s Wear Daily, a Chanel representative stated that the company is still considering other options and may move their early spring holiday series elsewhere. “Like all brands in Hong Kong, we are closely watching the development of the situation, but have not yet made a decision,” they said.

Chanel Could Pull the Plug on its Hong Kong Show

Are Exhibitions the Golden Ticket for Heritage Brands to Reach High-End Chinese Consumers
In the past decade, luxury brands have become widely accessible, but the democratization of luxury retail has damaged the notion of exclusivity. Peter York, in an interview with the BBC, says: “The more that your brand is sold in luxury malls in China, the more concerned you are to reassure people who care about these things that you’re ‘the real thing’, that you’re associated with higher-level endeavors.” Basically, luxury brands are trapped between satisfying the desires of more mature, conservative consumer segments, while also appealing to the modern, prodigal Chinese luxury buyers.

Are Exhibitions the Golden Ticket for Heritage Brands to Reach High-End Chinese Consumers

World Bank bans Chinese companies again for financial crimes
Temporarily bars many Chinese companies involved in infrastructure projects in Georgia have recently come under the scanner of the World Bank for alleged gross financial malpractices, and the financial institution has temporarily banned the Chinese companies involved in the projects.

Burger King’s $1 Billion China Franchisee Considers Hong Kong IPO
Deal could include over 1,000 Burger King outlets in China TAB Food earlier scrapped U.S. listing of its global business

Start-ups are caught in middle of US-China tech cold war as investors pull back
Chinese venture capital investment in the US plummets amid more stringent regulations in Washington along with a slowdown of China’s economy The trade war and other tensions are starting to affect early-stage investment patterns and start-up innovation

Hong Kong businesses fear protests will push economy into recession
Amid mass demonstrations and a trade war, financial observers say the city’s slowdown could deepen

Why Facebook and Twitter cracked down on Chinese state attacks on Hong Kong protesters
Social media giants are reluctant to police content extensively but are under growing pressure to shut down state actors and fake accounts Posts comparing anti-government demonstrators as ‘cockroaches’ did not violate hate speech rules but fell foul of ban on ‘coordinated’ misinformation

China’s hypersonic DF-17 missile threatens regional stability, analyst warns
With its glider technology and nuclear capability, the medium-range weapon will be able to penetrate US missile shields

South China Sea: Has Beijing Given Up Fortifying Its Illegal Islands?
My only remaining concern about the Fort Dredge is this: Like our hypothetical about France deciding not to fully commit to the Maginot Line, what’s China doing with all the resources those little islands won’t be getting?

Alain Gillard
Information Officer
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