China Press Review – August 8, 2019

Press review

China exports rise despite simmering US trade row
Official figures showed exports rose 3.3% last month, compared to forecasts for a 2% drop. Imports fell 5.6% in July, less than the expected 8.3% decline.

China’s foreign trade expands steadily amid mounting challenges
The European Union remained China’s largest trading partner in the period, with bilateral trade volume up 10.8 percent from one year earlier to 2.72 trillion yuan, followed by the ASEAN, up 11.3 percent to 2.35 trillion yuan, and the United States, down 8.1 percent to 2.1 trillion yuan.

podcast : China Exports Unexpectedly Rise in July
China releases its trade data for July. Bloomberg’s Tom Mackenzie reports on “Bloomberg Markets: Asia.”

China surprises with best export growth since March, but imports remain weak
But imports remained weak, declining 5.6% and highlighting sluggish domestic demand as China’s economy struggles to get back on firmer footing. Still, the drop was less than an expected 8.3% and June’s 7.3%.

Trump finally labels China a currency manipulator. It may be too little, too late
The next step – negotiation – is unlikely to facilitate a resolution to the year-long trade spat. And when the talks do fail, none of the steps the US is mandated to take will put any meaningful pressure on Beijing

China’s currency slide has a sting in the tail for mainland airlines and these other debt-laden companies
The softening yuan is negative for mainland companies with US-dollar denominated debt or operating costs in stronger currencies The yuan’s slide against the US dollar continued Wednesday

US-China trade war: China’s $1 trillion economic weapon
China doesn’t have the ability to whack tariffs on the US in the same way Trump can, but it has a massive weapon up its sleeve that would devastate global markets. In 2002, it owned just $80 billion worth of the US government bonds but that has rapidly increased to $1.1 trillion.

Donald Trump’s WTO move is a feeble answer to the China challenge
The US wants to rewrite the rules of the global trading game it helped create, and may well succeed. But the challenge of China’s economic model, a combination of authoritarian capitalism and ruthless enterprise, won’t be so easily dismissed

Donald Trump’s China tariffs cost American businesses and consumers US$6 billion in June, advocacy group says
‘Americans are already paying record-high tariffs, and the biggest hit to consumers is still to come on September 1,’ Tariffs Hurt the Heartland spokesman says Data from the US Treasury Department shows that as of June 30, it collected US$63 billion in tariffs over the preceding 12 months

China keeps door open to September talks in Washington, despite trade war escalation
Wei Jianguo, a former vice-minister of commerce, says the meeting is likely to happen as planned Source briefed by the US government said video conferences are planned to lay the groundwork for the next round of face-to-face talks

Trump’s currency war without a cause
The greatest economic damage of the ongoing trade war between China and the United States is caused by policy uncertainty, not import tariffs.. First, it should avoid the temptation of waging a full-scale financial war with the United States. Previously, some experts recommended dumping US treasury bonds and crashing the RMB exchange rate. This is bad advice as it could inflict more pain on China than on the United States. Second, the PBoC should accelerate its process of moving toward a ‘managed free float regime’. This should be useful for reducing both uncertainty and misunderstandings of China’s exchange rate policy, especially as the IMF will start the new round of Special Drawing Rights review in 2020. And, finally, China’s should accelerate economic reform, including realising competitive neutrality domestically and opening the economic doors wider to the outside world — especially to the non-US world.

Trump’s currency war without a cause

Reforms to China’s banking industry needed
Despite sustained growth, data is highlighting potentially significant issues within the Chinese commercial banking industry. Implementing a series of reforms are needed and would raise efficiency and improve stability.

Reforms to China’s banking industry needed

China’s rare earth producers say they are ready to weaponise their supply stranglehold, pass any tariff as cost to US customers
The Association of China Rare Earth Industry, which represents almost 300 miners, processors and manufacturers, issued a statement yesterday, citing an August 5 meeting “US consumers must shoulder the cost from US-imposed tariffs,” the association said

China and US mutual mistrust brought economic superpowers to brink of currency war, analysts say
China allowed the yuan to weaken beyond a key level on Monday to follow market trends, but the timing was off, according to market watchers Washington labelling China as a currency manipulator ratcheted up trade war but neglected Beijing’s rationale for allow the yuan to fall, others observed

US agencies banned from doing business with Huawei and other Chinese tech companies, as Trump administration cites security concerns
Crackdown by the White House Office of Management and Budget also targets ZTE, Hytera, Hikvision and Dahua US government fears the companies could divulge US trade secrets and other information to Beijing

US readies Huawei federal purchasing ban despite upcoming hearing
The Trump administration released details of a rule on Wednesday that will officially bar US government agencies from buying telecommunications equipment from Huawei, despite the Chinese firm’s efforts to fight the move in court. The rule comes after the latest round of trade talks between the US and China ended without a deal, making Huawei, again, a bargaining chip in a stand-off between the world’s two largest economies.

US readies Huawei federal purchasing ban despite upcoming hearing

The Real Reason for China’s Rise
The standard account of China’s economic rise focuses on its state capitalism, whereby the government, endowed with huge assets, can pursue a wide-ranging industrial policy and intervene to mitigate risks. This explanation is wrong.– China’s rapid economic rise in recent decades has astonished The spectacular rise of these companies – and the prosperity and competitiveness that they have helped to foster – was not enabled primarily by top-down industrial policies, but by economic liberalization and the bottom-up innovation it has facilitated. At a time when the US is accusing China of using state-capitalist tools – such as subsidies for domestic companies and entry barriers for foreign firms – to gain an unfair advantage, it is worth highlighting the extent to which the country does not owe its economic success to such policies.

What’s next for China’s political economy?
As a recent McKinsey Global Institute report warned, not only has the world changed China over the last 40 years, but China has changed the world, through the sheer size of its economy, its impact on global consumer prices, and the significance of its markets. Whatever happens in the near term, the global strategic and economic landscape is undergoing a fundamental change. How China responds to its own domestic growth challenges and the real or perceived Sino-American decoupling is a matter that concerns us all.

China July new loans seen lower, more policy easing expected as trade woes build: Reuters poll
New bank lending in China likely slowed in July, a Reuters poll showed, reinforcing expectations that policymakers will need to announce more support measures in coming months to stabilize the cooling economy as U.S. trade pressure builds. The rapidly worsening trade dispute, rising borrowing costs, and this week’s sudden drop in the yuan have fanned worries that the world’s second-largest economy could face a sharper slowdown.

China’s Central Bank ‘De-Dollarizes’, Buys More Gold
Chinese central bank continued to stock up on gold for the eighth month in a row in July amid escalating trade war tensions, according to the data from the People’s Bank of China (PBOC).

Hanoi narrows ‘made in Vietnam’ to block Chinese detours
Locally added value must be 30% or higher, government says

Huawei offers top talent at least five times what their peers are making to join Chinese giant
Huawei’s latest recruitment drive seeks top global talent in fields of science and mathematics

Tech giants vie for China’s top talent
Shenzhen-based Tencent, which recruited 3,100 new graduates last year, plans to hire a total of 3,000 to 3,500 new grads

Chinese chip maker Loongson Technology to invest US$2.1 billion in a new smart industry park in Zhejiang as China pushes for tech self-reliance
China’s government has urged its private sector to invest in advanced technology as competition heats up with the US New industrial estate by Loonson will target smart devices manufacturing and R&D companies

Eyes of Taiwan and China set on the opportunities arising from the trade dispute between Japan and South Korea
Technology firms of Taiwan and China are sensing an opportunity for grabbing a greater share of the global market in the display, semiconductor, and battery sectors amidst the most recent trade spat between Japan and South Korea, according to industry sources.

Eyes of Taiwan and China set on the opportunities arising from the trade dispute between Japan and South Korea

US-China trade war is hurting farmers, but they’re sticking with Trump
Recent polls show farmers strongly support Trump, even amid rising tariffs with china.
Experts say they’re likely to stay on his side in 2020. Still, it’s too soon to tell how China’s decision to stop buying U.S. agriculture products will affect that support.

US farmers in need of advice after China halts purchases, switching to other producers
It is more urgent than ever for American farmers to seek planting advice from US President Donald Trump instead of agronomists amid the escalating trade war between the world’s two largest economies. Trump, who repeatedly vowed to protect American farmers, should just tell his loyal supporters frankly that they should switch crops if it’s not too late because there will be no exports of US agricultural products to China for as long as the trade war drags on.

Chinese stocks buoyed by better-than-expected exports data, Ping An Bank earnings, record first rise in seven days
But Shanghai trading volume 9.3 per cent below 30-day average, signalling lack of sustained buying interest Hang Seng Index rises for a second day

Harrods’ Beauty Director on Innovation and Savvy Chinese Shoppers
The face of beauty is constantly changing, and Chinese consumers are leading the way. With brands like Armani becoming among the first to debut an AR Mini Program on WeChat, luxury brands are competing to provide the most innovative beauty offerings to capture savvy Chinese shoppers. For traditional retailers, however, adapting to this new digital reality hasn’t been as easy.

Harrods’ Beauty Director on Innovation and Savvy Chinese Shoppers

China’s rare earth producers say they are ready to weaponise their supply stranglehold, pass any tariff as cost to US customers
The Association of China Rare Earth Industry, which represents almost 300 miners, processors and manufacturers, issued a statement yesterday, citing an August 5 meeting “US consumers must shoulder the cost from US-imposed tariffs,” the association said

Malaysia looks to woo Chinese cash with belt and road positivity
Despite initial concerns over projects deemed ‘too expensive’, Mahathir Mohamad’s government now seems on board with Beijing’s trade plans At a forum on economic cooperation on Thursday, the country’s finance minister teased a new system designed to attract Chinese investors

Beijing’s controversial ‘Made in China 2025’ plan is a linchpin of Northeastern rust belt’s future
Liaoning province, the rust belt’s biggest economy, is pinning its hopes on the industrial strategy to use technology to transform its lumbering industries The plan which uses government subsidies to help firms cut reliance on foreign technology and imports has become a political flashpoint for the US-China trade war

Nike Likes Manufacturing Outside China and You Should Too
What countries does Nike like? The answer to this question is easy because Nike has a website that tells us exactly where it manufactures its products. Nike has its products made in 41 countries, using 525 factories and a little over one million workers:

Nike Likes Manufacturing Outside China and You Should Too

Taiwan bubble tea chains face backlash in mainland China after Hong Kong franchises ‘express support for protesters’
Angry social media users call for boycott of Yifang Fruit Tea and CoCo after franchises urged Hongkongers to ‘add oil’ amid wave of protests

China’s Two-Headed Energy Policy – OpEd
Until 2017, China was championing the global movement to combat climate change through committed efforts at reducing reliance on coal and highest investments in renewable energy. The US-based Institute for Energy Economics and Financial Analysis (IEEFA) in its January 2018 report identified China as being among the top leaders in outbound clean energy investments in 2017, establishing itself as a world leader in driving a domestic decarbonisation agenda

China’s Two-Headed Energy Policy – OpEd

How Hong Kong’s complex history explains its current crisis with China
From a British colony to part of Beijing’s ‘one country, two systems’ policy, Hong Kong’s government has almost always been the exception—not the rule.

Hong Kong’s major developers call for an end to violent protests, saying it’s taking a toll on business, ordinary people
A statement signed by 16 top developers wants law and ordered restored in the city as soon as possible

Commentary: Hong Kong has become less of a financial centre prize for China
Shanghai and Shenzhen no longer consider Hong Kong as an indispensable ally, but a competitor, says the Financial Times’ Henny Sender.

Hong Kong policeman filmed aiming gun at protesters hailed as a hero by Chinese state media
The officer’s actions last month were widely criticised, but as mainland outlets ramp up their rhetoric against the protests he has been singled out for praise Police defended his actions, saying he had been surrounded by demonstrators and had lost his helmet

Will Hong Kong Unravel?
Lam is far from an ideal interlocutor for a protest movement that deeply dislikes and distrusts her. Still, better to deal with her directly now than to be forced to respond to an even less accommodating Beijing if and when the crisis escalates.

Donald Trump should court China’s reformers, former Obama diplomat says
US has preferred ‘undercutting’ Chinese economy to truly engaging in trade talks, Daniel Russel argues Hard bargaining has achieved only an ‘appearance of truce’

Xi Jinping returns to Mao to consolidate his power
The return to the “original aspirations” in the Party is the new slogan launched by the “president for life” to bend the cadres to his rule. But in the meantime the “trade war” and the domestic economy are jeopardizing the successes of his policy.–47706.html

Alain Gillard
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