China Press Review – August 3, 2018

Press review

China Steps In to Support Yuan With Forward Reserve Requirement
China stepped in to try to cushion the yuan after a record string of weekly losses saw the currency closing in on the key milestone of 7 per dollar. China’s central bank will impose a reserve requirement of 20 percent on financial institutions trading in some foreign-exchange forwards for clients, according to a People’s Bank of China statement on Friday evening. The move is aimed at preventing macro financial risks as the foreign exchange market shows signs of volatility amid recent trade frictions, the central bank said. The yuan surged in offshore trading and U.S. stock-index futures turned higher after the news, though the moves pared after China detailed how it plans to retaliate against U.S. tariff proposals

China’s yuan falls to 15-month low against the US dollar as trade war escalates
Traders expect the offshore yuan to trade down to close to 7 yuan per dollar next year

China Plans Tariffs on $60 Billion of Imports to Counter Trump
China announced a list of $60 billion worth of U.S. imports it plans to apply tariffs on should the Trump administration follow through with its latest trade threats

Commentary: The secret to China’s economic stamina amidst a trade war
To put forward a bearish forecast on China’s economy is easy, requires little effort, and attracts considerable attention, but to make convincing and reliable predictions is more of a challenge. It demands enormous insight into China’s internal economic logic and foresight to look through short-term fluctuations — the qualifications that not every predictor possesses. That’s why there are so many naysayers, particularly when the country is grappling with economic headwinds amid a trade row. The fact is the Chinese economy has held up despite a less favorable global environment and appeared more endurant in a U.S.-ignited trade war. The Trump administration, on the contrary, keeps threatening to escalate tensions, regardless of domestic and international opposition.

China says it wants to resolve differences with U.S. ‘on equal footing’
China is willing to resolve differences with the United States on an equal footing, the Chinese government’s top diplomat said on Friday after meeting U.S. Secretary of State Mike Pompeo, but added they did not address their trade war too specifically.

Two US lawmakers criticise watered-down Senate bill that allows ZTE to survive
A Republican and a Democratic senator said the failure to reinstate penalties on ZTE threatened US national security

China’s two largest surveillance camera makers take a beating from US ban
Investors offload Hikvision and DahuaTech shares after the US bans federal government from using Chinese made surveillance equipment

World’s largest surveillance equipment maker Hikvision to be banned from sales to US federal agencies
The world’s largest manufacturer of surveillance equipment, Hikvision, is on its way to being banned from selling its video surveillance and communications equipment to US federal agencies. On August 1st, the US Senate passed the conference report for the 2019 National Defense Authorization Act which includes new provisions on Hikvision, ZTE, and Huawei. The bill is yet to be confirmed by US President Donald Trump.

World’s largest surveillance equipment maker Hikvision to be banned from sales to US federal agencies

China’s stock exchanges cede Asia crown to Japan as investors flee Chinese equities amid trade war
Chinese equities are weighed down by trade war and domestic drive to reduce debt

China Dethroned by Japan as World’s Second-Biggest Stock Market
Nation surrenders No. 2 ranking taken from Japan in late 2014 Shanghai stock gauge one of world’s worst performers this year

Chinese tech stocks tumble from more than just trade tensions
Reports of trade tensions between China and the US in the past few months have been hard to ignore. In early July, the US imposed $34 billion on Chinese goods, prompting the Shenzhen Component Index, dominated by technology and consumer product stocks, to fall to its lowest point since 2014, igniting fears among investors.

Chinese tech stocks tumble from more than just trade tensions

China’s economy, a mesmerising focus for shipping
For the international shipping industry, continuation of a fairly robust economic activity trend in China is an essential component of a return to more balanced freight markets. If the trend suggested by IMF analysts – gradual slowing of China’s economy over the next few years coupled with the measured rebalancing implied – proves achievable, adjustments will be required in global shipping markets. But these potentially could be accommodated without too much upheaval. A number of positive influences could be sustained, and growth impulses in some seaborne trades may continue.

China’s economy, a mesmerising focus for shipping

China says it seeks more ways to support economy amid uncertainties
The State Council Financial Stability and Development Commission (FSDC), headed by Vice Premier Liu He, said more attention needs to be paid to the “transmission” of monetary policy and its support for the real economy,

Chinese Goods May Face 25% Tariffs, Not 10%, as Trump’s Anger Grows
The administration said it would consider raising proposed tariffs on $200 billion of Chinese products to 25 percent from 10 percent as China’s currency declines.

Alibaba touts success of its anti-counterfeit drive as Pinduoduo’s stocks fall over fake goods investigations
As Chinese e-commerce platform Pinduoduo faces a massive stock price drop following investigations into peddling fake goods, Alibaba appears to be gloating. Alibaba’s Anti-Counterfeiting Alliance announced on August 3rd that it now has over 100 members, NetEase reports. Alibaba’s Taobao is known to offer fake goods itself: in January, the US Trade Representative put the platform on its blacklist for the second year in a row. This prompted the e-commerce giant to launch the Alliance the very same month. Alibaba’s anti-counterfeiting partners now include brands from 16 countries and regions covering 12 industries.

Alibaba touts success of its anti-counterfeit drive as Pinduoduo’s stocks fall over fake goods investigations

Seven US law firms are investigating Pinduoduo for fake products
Pinduoduo might soon find itself under US regulators scrutiny after seven US law firms have announced investigations against Chinese e-commerce platform Pinduoduo on behalf of the company’s investors. The statements issued by the firms show that the investigation launched against Pinduoduo by Chinese watchdog for selling counterfeit goods has caused the company’s stock price to plunge and investors to suffer losses, Beijing News reports.

Seven US law firms are investigating Pinduoduo for fake products

Chinese regulators intensify crackdown on counterfeit online goods
In the wake of Pinduoduo’s fake goods scandal, China’s State Administration for Market Regulation (SAMR) has called for companies to crack down on the sale of production and sale of counterfeit goods, trademark infringements, and illegal advertisements. It said that companies involved in the supply chain of sub-standard or counterfeit products would be subject to an investigation.

Chinese regulators intensify crackdown on counterfeit online goods

Beijing tells banks to lend more to small business as economy slows even before US tariffs start to bite
Financial agency says system needs to ‘create new dynamism’ for growth as it tries to head off risks to jobs and economy from trade war with Washington

Forget ‘Made in China, say hello to ‘Made in Vietnam’
Nguyen Ba Hoi produces neither smartphones nor steel for export. Instead, he’s focusing on developing his country into a centre for innovation

China and Japan move closer to cooperating on Belt and Road
Diplomats prepare for an Abe visit to China as early as October

China professor missing after radio interview is interrupted
That’s seen as a knock on President and party leader Xi Jinping’s signature “Belt and Road” initiative that has earmarked an estimated $1 trillion for ports, power plants and other projects linking China to parts of Asia, Europe, Africa and beyond. The initiative has recently run into headwinds as the countries involved balk at the massive debts they stand to incur. Before the line went dead, Sun can be heard saying “throwing money around like this is of no benefit to our country and society.

Lessons from Russia: What Luxury Retailers Can Learn From Moscow on Wooing the Chinese Traveler
Retailers big and small are reaping the benefits of this boom in Chinese tourism.

Lessons from Russia: What Luxury Retailers Can Learn From Moscow on Wooing the Chinese Traveler

China ‘Invites’ US into Indo-Pacific Infrastructure
Australia, the US and Japan have announced a joint partnership to invest in projects in the Indo-Pacific that would build infrastructure, address development, increase connectivity, and promote economic growth. In response to this projected partnership, made public by the Australian Department of Foreign Affairs and Trade on July 31, the Chinese government has deftly responded to their plans by embracing them. With Chinese banks and companies occupying such a commanding role in international infrastructure, it will be difficult for US, Australian and Japanese firms to invest in and build infrastructure in the Indo-Pacific without Chinese participation. Japanese, US and Australian banks would be reluctant to go it alone in financing multibillion dollar infrastructure projects with long payback time, since they are answerable to shareholders. If they wish to bankroll costly infrastructure projects, it will be difficult to avoid partnering Chinese lenders.

China ‘Invites’ US into Indo-Pacific Infrastructure

US is committed to rule of law in South China Sea, Mike Pompeo tells Asean
US secretary for state also says Washington wants to push forward Indo-Pacific investments

EU and Chinese foreign ministers reaffirm commitment to multilateralism and free trade
Wang says the two sides will enhance their strategic communication and cooperation

Is Donald Trump More Rational Than We Think?
The scope and depth of this sentiment are unclear, though one China expert reports hearing similar arguments in Beijing. Nonetheless, it is a striking development at a time when the general narrative within the US foreign policy commentariat is about China’s global ascendancy amid Trump’s fecklessness. And it does underscore the possibility that the current U.S. president may be a more multifaceted leader than his most vocal critics allow.

Is Donald Trump More Rational Than We Think?

Under Donald Trump, America may go from trade rule-maker to rule-taker

Matthew P. Goodman says that as the Trump administration escalates the trade conflict and undermines prior agreements, one consequence will be that it is no longer active in writing the trade guidelines that have been beneficial to American interests

Can US investment match the might of China?
In short, no. Certainly not when it comes to the size and scale of the investment China has across the region.

China rebuffs Donald Trump’s efforts to isolate Iran with refusal to stop oil imports
Beijing rejects request to stop buying Iranian crude after US quit nuclear deal

Dollar ascends further on trade war fears; U.S. jobs data eyed
“The strength of the U.S. dollar is likely to continue as we look ahead to the prospect of another two rate rises by year- end, along with some haven flows over the trade war escalation

Is ‘Made in China 2025’ a Threat to Global Trade?
China’s industrial policy is aimed at rapidly expanding its high-tech sectors and developing its advanced manufacturing base, but President Trump and other leaders of industrial democracies see the plan as a threat

Heineken eyes China’s premium beer market, signs US$3.1 billion deal with country’s biggest brewer
Dutch brewing giant Heineken NV announced on Friday it would give China Resources Beer, the country’s biggest brewer, exclusive rights to use its Heineken brand in mainland China, Hong Kong and Macau, in a deal worth US$3.1 billion. The region represents the world’s largest market for beer.

Private Equity Firm CVC Invests $255M In Chinese Toll Road Operator RKE
Luxembourg-headquartered private equity fund CVC announced that its CVC Asia Fund IV has entered into binding agreements to invest HK$2 billion (US$255 million) of new capital for 25% in RKE International Holdings Limited, a toll road operator in China.

Private Equity Firm CVC Invests $255M In Chinese Toll Road Operator RKE

China Southern Power Grid buys 25 percent in European utility Encevo
Encevo has two main subsidiaries – Creos and Enovos Luxembourg. Creos manages electricity and gas grids while Enovos Luxembourg is responsible for the sale of energy to a diversified portfolio of clients in Luxembourg and Germany.

Chinese Private Space Start-up LandSpace To Launch First Rocket This Year
Beijing-based private space launch company LandSpace announced plans to launch its first rocket into orbit in the last quarter this year, to become China’s first private rocket to carry out commercial launch mission. LandSpace said that a three-stage solid propellant rocket named Zhuque-1 will carry a China Central Television (CCTV) satellite for space science and remote sensing for a TV show at CCTV, in the fourth quarter this year

China-developed civilian helicopter passes key flight test
The first Chinese-developed light twin-engine civilian helicopter has passed its stability flight test, a key step in the validation of new models, its developer Aviation Industry Corporation of China (AVIC) announced yesterday.

Beijing’s aggression in South China Sea driving expansion of Southeast Asian coastguard fleets, report says
Use of non-military vessels allows countries to protect their sovereignty claims in disputed waterway without the tension of a naval presence, study says

Trump’s tariffs on Chinese caviar may stop a quiet takeover of the world’s gourmet kitchens
Imported caviar from China could soon cost Americans more if the US puts new tariffs on industries where mainland Chinese businesses, with the help of the government, have excelled

China’s AI Giants Can’t Say No to the Party
Open debate about the ethics of tech is a strength, not a weakness, of the U.S. system
China’s AI Giants Can’t Say No to the Party

While pragmatist Pichai ploughs into China, Google workers fume over concession to censorship
Pichai’s new leadership style and priorities haven’t always sat well with the Google rank and file, who see the company as a defender of the open web

China’s Huawei eyes smartphone summit after passing Apple
China’s Huawei on Friday said it could replace Samsung as the world’s top smartphone maker by late next year, just days after data showed it surpassed Apple for the number-two spot despite being essentially barred from the key US market.

Vanishing boss of Chinese US$5.1 billion hedge fund casts financial regulations in harsh light
Investors in Shanghai Fuxing rail against regulators in latest scandal to hit mainland China’s financial system

Investors Protest Outside Headquarters of China’s HNA Group
Investors and ex-employees of China’s HNA Group Co. who bought investment products from a unit of the conglomerate protested outside the company’s headquarters in the southern province of Hainan this week

Investors Protest Outside Headquarters of China’s HNA Group

China’s social media users call for sacking of ‘triumphalist’ academic, as anti-hype movement grows
Open letter said to have been written by Tsinghua University graduates seeks dismissal of Hu Angang for his controversial claims Professor Hu Angang, author of China in 2020: A New Type of Superpower and director of the centre for China studies at the prestigious Tsinghua University, has come under fire for his suggestion that China has already overtaken the United States as a world leader in terms of economic and technological power.

Chinese-American engineer charged with stealing General Electric trade secrets to take to China
Xiaoqing Zheng sneaked out turbine technology data by hiding it within the code of a digital photo, the FBI said

Better Together? Inside a Village’s Embrace of Collectivization
In the post-reform period, some villages have embraced re-collectivization, but the viability of the model remains in question.

Remaking China’s Civil Society in the Xi Jinping Era
In the long run, there really is no good alternative to a robust, vibrant civil society if China wants to develop into a prosperous and stable modern power. Chinese civil society’s responsibility is thus a heavy one and its supporters should recognize this moment as a critical opportunity to rethink how civil society can adapt and move forward. Despite what its propaganda might have one believe, the Party-state cannot do it all. China desperately needs bottom-up ideas and models to govern an increasingly complex and wealthy society, and when it comes time for the Party-state to relinquish power, it will need, in Minzer’s words, a “moderate, institutionalized political force” with roots in civil society ready to assist in ensuring a peaceful transition

Silk Road solar bike rally: Belgian cycles to win in 45 days
And the winner on Friday was Belgian cyclist Raf Van Hulle, 43, who completed the 12,000-kilometer rally in 45 days.

Alain Gillard
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