Belgian-Chinese Chamber of Commerce (BCECC)

China Press Review – December 13, 2021

China’s investment in diplomacy falls, as its global ambitions rise
Belt-tightening and drop in foreign ministry recruitment a stark contrast to ramped up US spending to win world’s hearts and minds. Chinese funding for its flagship belt and road overseas infrastructure programme is also down to its lowest level since 2013.
https://www.msn.com/en-xl/news/other/china-s-investment-in-diplomacy-falls-as-its-global-ambitions-rise/ar-AARJNph

China’s big moment of choice on trade policy
It’s twenty years this week since China was admitted to membership of the World Trade Organization (WTO). That presaged a remarkable surge in Chinese trade, an industrial transformation on a scale not seen before in human history, China’s emergence as the world’s largest trading nation and its integration into the global economy in a way that was hardly possible to imagine just two decades earlier. It’s little wonder that the WTO is among the most widely respected international institutions in China today.    China’s rapid growth since its accession to the WTO — per capita incomes are now well over four times as high today as they were in 2001 — was the single most important poverty-reducing event of the past century. China’s decision to join the WTO, and the stringent conditions it had to meet to be accepted, have been major drivers of the vast structural change away from subsistence agriculture, making China the undisputed factory of the world economy. Its rise as a manufacturing powerhouse has profoundly shaped the way the world economy operates, leading to soaring demand for raw materials, challenging manufacturing industries in other industrial countries, and leading to a major shift in the balance of geopolitical power away from the United States and Europe and towards Asia.
https://www.eastasiaforum.org/2021/12/12/chinas-big-moment-of-choice-on-trade-policy

China’s economic policies for 2022 – Stability is the key
China held an important meeting last week, setting the direction for economic policy in 2022. Stability is the key. This reminds us of the policy environment before the trade war. But the background has changed a lot since then. Covid and international politics do not seem to be helping. ESG will be the opportunity
https://think.ing.com/articles/chinas-economic-policies-for-2022-stability-is-the-key/

China marks 20 years at the WTO, with a wary eye on rising costs and Western tensions
Since joining the World Trade Organization in 2001, China has changed from an agricultural backwater into the world’s second largest economy   But it faces challenges from low-cost developing nations and rivalry with advanced economies producing capital and technology-intensive products
https://www.msn.com/en-xl/money/other/china-marks-20-years-at-the-wto-with-a-wary-eye-on-rising-costs-and-western-tensions/ar-AARHFvJ

As China marks 20 years of accession to the WTO, what of the trade body’s vitality and relevance?
China becoming a member of the WTO transformed the country into a significant force at the heart of the global economic system   However, with momentum behind the Doha Round of negotiations fading, so too has the WTO’s capacity to tackle 21st century trade policy challenges   As momentum behind the Doha Round faded, so too did the WTO’s capacity to tackle these 21st century trade policy challenges. Western trading powers, in particular the US, have complained ever more shrilly about China “breaking the rules” on trade, and reneging on its accession commitments, but in reality Beijing appears to have fulfilled its commitments reasonably fully.  Rather, China’s offences have much more to do with problems where rules do not yet exist, and the WTO’s incapacity over the past 20 years to reach agreements on such issues.As the US has retreated from multilateralism, instead acting unilaterally and relying on its clout to forge bilateral trade deals, Beijing has increasingly championed the virtues of multilateralism in general, and the WTO in particular, raising China’s influence as a world trading power, cementing its position at the heart of global supply chains, and playing a bigger role in setting trade rules.As it has striven to graduate from low-value-adding “assembled in China” to more value-added “Made in China”, China has strengthened its services economy. It has also lowered the extremity of its reliance on trade (trade peaked in 2006 at around 64 per cent of GDP, but has now fallen back to about 34 per cent). It has systematically raised wages to boost its domestic consumer market, at the heart of the “dual circulation” and “common prosperity” strategies. As we “celebrate” the 20th anniversary of China joining the WTO, so we can unreservedly celebrate China’s success in rejoining the world economy, and becoming an indispensable driver of economic growth in many countries. But we cannot similarly celebrate the vitality, relevance or importance of the WTO itself – and this must be a matter of great concern to us all.
https://www.scmp.com/comment/opinion/article/3159387/china-marks-20-years-accession-wto-what-trade-bodys-vitality-and

What’s needed two decades on from China’s accession to the WTO
In retrospect, the final month of 2001 was a pivot point in history. Five days before China joined the WTO on 11 December, the United States and its allies routed the Taliban in its last stronghold in Kandahar, ringing in the start of a twenty-year military adventure in the Middle East that cost the superpower blood, treasury and not a small amount of its reserves of goodwill in the international community. Those two events were turning points in the global geopolitical landscape. China’s accession to the WTO transformed the global economy as well.   As Tom Westland argues in this week’s feature article, ‘China’s record in the WTO is much better than Western narratives suggest’. China ‘implemented its WTO accession protocols not only because it agreed to them but because they propelled the domestic reforms the leadership wanted to put in place’.   That the trade rules have not kept up is ‘a problem that is not entirely China’s fault’, Westland explains. China’s not the only major power abusing the rules as the ‘United States itself has opted out of playing by the old WTO rules and forging new ones’.   There are signs that China might be willing to forgo its developing country ‘special and differential’ treatment in the WTO that countries can claim — including not-so-developing Singapore and South Korea until recently — for unilateral exemption from some agreements. That would boost confidence in China’s preparedness to accept the responsibilities of trade policy leadership.  Much more is expected of Chinese leadership now: clear and wholesale embrace of the agenda for WTO reform; rejection of economic coercion as an instrument of international political control; retreat from managed trade with the United States; and engagement in building a multilateral digital trade regime. Commitments and active progress on all four fronts would rebuild confidence in China’s own reform agenda and lay the foundations of renewed trust in its capacity for economic leadership within the global community.
https://www.eastasiaforum.org/2021/12/13/whats-needed-two-decades-on-from-chinas-accession-to-the-wto/

New China import rules bring headaches for food and beverage makers
Makers of Irish whiskey, Belgian chocolate and European coffee brands are scrambling to comply with new Chinese food and beverage regulations, with many fearful their goods will be unable to enter the giant market as a Jan. 1 deadline looms.      China’s customs authority published new food safety rules in April stipulating all food manufacturing, processing and storage facilities abroad need to be registered by year-end for their goods to access the Chinese market.    But detailed procedures explaining how to get the required registration codes were only issued in October, while a website for companies allowed to self-register went online last month. “We’re heading for major disruptions after Jan. 1,” said a Beijing-based diplomat from a European country who is assisting food producers with the new measures. China’s food imports have surged in recent years amid growing demand from a huge middle class. They were worth $89 billion in 2019, according to a report by the United States Department of Agriculture, making China the world’s sixth largest food importer. China has tried to implement new rules covering food imports for years, triggering opposition from exporters. The General Administration of Customs of China(GACC), overseeing the latest iteration of the rules, has provided little explanation for why all foods, even those considered low-risk such as wine, flour and olive oil are covered by the requirements.
https://wtvbam.com/2021/12/13/new-china-import-rules-bring-headaches-for-food-and-beverage-makers/

China’s policy shift to boost economic growth next year puts battered consumer stocks in traders’ focus
Companies that cater to the mass market will probably outperform, as the government tries to revive consumer spending, say CICC and Citic Securities   Companies related to the real estate sector will also benefit as the liquidity crunch is eased
https://www.msn.com/en-xl/money/other/china-s-policy-shift-to-boost-economic-growth-next-year-puts-battered-consumer-stocks-in-traders-focus/ar-AARKI70

China must beware ‘grey rhino’ of primary commodities shortage, top policymaker warns
Scarcities in other countries remind China that primary commodities supply is a strategic issue, Han Wenxiu says as he discusses central economic work conference    Stability is a stand-out theme in the 4,700-word statement issued after the conference, which sets the blueprint for the next year’s economic policies
https://www.msn.com/en-xl/money/other/china-must-beware-grey-rhino-of-primary-commodities-shortage-top-policymaker-warns/ar-AARIpt8

China’s Urban Rich and the Quest For Common Prosperity
The key to closing China’s income gap lies in education and bolstering the ranks of its professionals, the meteoric rise of its urban elites in recent decades suggests.
https://knowledge.insead.edu/economics-finance/chinas-urban-rich-and-the-quest-for-common-prosperity-17891

China urged to ease economic policy, cut exposure to US assets ahead of impending Fed rate hike
Prominent Chinese economist Yu Yongding says China must ‘prepare in advance’ for a US rate hike or face consequences     A US rate hike could strengthen the value of the US dollar against the yuan and trigger a fund outflow from China
https://finance.yahoo.com/news/china-urged-ease-economic-policy-093000527.html

Show us the numbers on China’s economic risks, former finance minister says
Lou Jiwei says statistics should reflect the negatives and positives of the challenges the country faces     Rosy statistical picture presented in the data a contrast to the leadership’s tone last week, he says
https://www.msn.com/en-xl/money/other/show-us-the-numbers-on-china-s-economic-risks-former-finance-minister-says/ar-AARIUUb

China Seen Adding Fiscal Stimulus After Setting 2022 Targets
Economists predict China will start adding fiscal stimulus in early 2022 after the country’s top officials said their key goals for the coming year include counteracting growth pressures and stabilizing the economy.    Curbs on the property industry are expected to remain, while there could be fewer regulatory surprises compared with sudden moves in 2021 to rein in sectors from technology to education and entertainment, the economists said. At the end of their three-day annual Central Economic Work Conference, the Communist Party’s top decision makers on Friday said the top priority for next year is “ensuring stability.” They also vowed to “front load” policies and keep the monetary stance flexible and appropriate.
https://uk.finance.yahoo.com/news/china-seen-adding-fiscal-stimulus-210000244.html

China’s Vision for Environmental Leadership
China’s climate diplomacy expands far beyond the COP process at this point, but its larger framework is often overlooked abroad.   Indeed, the past few years alone provide remarkable evidence on Beijing’s attempts to counter its critics, however grudgingly. The aforementioned announcement that China will no longer fund coal projects abroad is only the latest example. And, for the skeptics, let it also be remembered that, when first announced, the Belt and Road Initiative contained no language on environmental protection. Eight years later, a green BRI is central to Beijing’s global vision.   China is entering a new stage of climate diplomacy outreach, one where climate change problems are conceptualized in settings that exceed the U.N. Climate Change Conference framework. Keeping Beijing accountable – at the high-level meetings and on the ground – would require more than aspirational talk about values and higher-quality standards. For global citizens, one good place to start would be to demand that Chinese corporations and policymakers begin translating Beijing’s vision of ecological civilization into practice.
https://thediplomat.com/2021/12/chinas-vision-for-environmental-leadership/

China Poised To Win The ‘Lithium War’
It is a metal that floats in water. It sparkles a beautiful red color when ignited. It is found in abundance in sea water and brine, as well as on lands in every continent other than Antarctica. It is lithium, and it is fast outpacing oil as the prime target of New Left environmentalists, even as it pits environmentalists against manufacturers of batteries used to power “environmentally friendly” electric vehicles so loved by the Biden administration.  Major industrial countries across the globe are fighting for ever more access to quantities of this metal, known as “white gold,” but none so seriously or successfully as China.China a major producer of lithium, and neither President Xi nor the communist country’s ruling oligarchs exhibit the slightest concern for the impact lithium production might have on the environment or on any indigenous peoples’ rights in China or anywhere else. China is pressing ahead unabated with domestic production of lithium not only to meet the needs of its own industries, but as an export commodity as well. China has been busy buying major interests in lithium producing facilities in other countries, including Australia and South America’s “Lithium Triangle” of Chile, Argentina, and Bolivia (where fully one-half of the world’s known lithium supplies are found).If eco-radicals and indigenous peoples advocates succeed in pressuring the Biden administration to curtail domestic production of lithium, as they have done with oil and natural gas, the United States will become increasingly – but not surprisingly – dependent on foreign sources of the metal. This avoidable predicament plays directly into the hands of our major adversary on the world stage – China.
https://dailycaller.com/2021/12/13/barr-china-poised-to-win-the-lithium-war/

China’s Influence on Smaller Economies May Be Shrinking
The fortunes of the world’s emerging economies once rose or fell in lockstep with China. No longer.
Ruchir Sharma, Morgan Stanley Investment Management’s chief global strategist, writes that in recent years we’ve seen a gradual decoupling of GDP growth between the Asian giant and the world’s smaller economies. Now Covid-19 has collapsed the link altogether. China is growing more slowly as its government imposes lockdowns to combat the virus, all while reining in its real estate moguls and tech oligarchs.   For instance, after Covid-19 highlighted the risks of concentrating supply chains in China, multinationals began looking at places like Mexico and Thailand to produce goods for the rest of the world. Some are bringing their supply chains home, a process of “reshoring” enabled by advanced manufacturing technologies like robotics and 3-D printing.    Nobody argues that China no longer matters, of course. It is, after all, the world’s biggest trader, manufacturer and lender. Nor is there any evidence that multinationals in China are pulling out. In fact, surveys of U.S. businesses in the country (by definition the ones doing well, others having packed up and left) mostly plan to double-down on their investments. And although the regulatory crackdown on big tech that wiped out trillions of dollars in shareholder value prompted claims on Wall Street that China is “uninvestable,” record sums of venture capital are flooding in. Rather, it’s dawning on investors that there are attractive alternatives. For instance, while China’s economy is sinking, Taiwan and South Korea are on a roll, boosted by their market dominance in semiconductors that are powering the digital revolution. As Sharma points out, the same forces of technology are transforming larger emerging economies, including Indonesia and India, which are building opportunities around mobile internet technologies.  There’s a broader lesson to be learned there. It’s not a given that China’s economy will overtake the U.S. in aggregate size. And even if it does, it will do so with fading momentum, held back by an aging population and massive debt.These days, Chinese state media confidently proclaim that Xi has brought China “closer to the center of the world stage than it has ever been.” In March, the Chinese president boasted to the national legislature that China’s supposed victory over Covid-19 was the result of “self-confidence in our path, self-confidence in our theories, self-confidence in our system, self-confidence in our culture.”
Yet China is hunkering down and the virus still very present. The country is largely sealed off from the world by quarantines. Mao Zedong’s “self-reliance” slogan is back as the country invests in home-grown technologies and boosts its domestic consumer markets.Meanwhile, as Sharma notes, emerging markets that once thrived primarily by selling parts and raw materials to the world’s factory floor are also gaining confidence. “Now, they have more options,” he said. So does everyone else: an enduring consequence of the coronavirus may be that global investors have seen other opportunities in the world beyond China.
https://tinyurl.com/2p9he4k2

Xi Jinping says China must be ‘self-sufficient’ in energy, food and minerals amid global challenges
China needs to establish a ‘strategic baseline’ for key primary commodities such as energy, grains and minerals, Xi Jinping says    Resource shortages could turn into a ‘grey rhino’ risk – an obvious yet ignored threat – for the world’s No 2 economy, policymakers say Xi told the state officials and provincial heads that “for a big country like us, ensuring the supply of primary products is a significant strategic problem”, according to the People’s Daily.   On grain security, Xi said China’s “arable land area is reducing” and cash crops were being favoured over cereals and legumes.  “The more food we have, the more we should think about the time of no grain,” the president said.  “I have repeatedly said Chinese people’s rice bowls should be firmly held in our own hands, never let others take us by the throat on eating, which is a basic survival issue.   The State Council had previously unveiled a five-year plan to build a green and smart cold-chain logistics system, aimed at boosting domestic consumption of cold-chain products under the inward-looking “dual-circulation” strategy.     Xi also called on local cadres to adjust their approach in implementing national carbon emission targets, which have been partly blamed for a widespread power crunch that crippled parts of the economy in recent months.    “[We] should make the direction right, make the focus clear … should prevent the ‘devil in the details’ hurting the overall situation,” Xi said.
https://www.scmp.com/economy/china-economy/article/3159522/xi-jinping-says-china-must-be-self-sufficient-energy-food-and

China carmaker BAIC has 9.98per cent stake in Daimler, no plans to raise it further
Daimler on Monday said its Chinese shareholder Beijing Automotive Group Co Ltd (BAIC) does not plan to increase its stake in the German luxury carmaker beyond the 9.98per cent stake it has held since 2019.   The two companies have collaborated in areas such as production, research and development and sales since 2003.    BAIC’s increased stake means two Chinese companies hold nearly 20per cent of Daimler, with Zhejiang Geely Holding, owning 9.69per cent of the German automaker.
https://www.channelnewsasia.com/business/china-carmaker-baic-has-998per-cent-stake-daimler-no-plans-raise-it-further-2376181

Chinese EV firms face slower growth, as higher metal prices push up battery costs
The prices of lithium carbonate, cobalt and nickel, key metals used in EV batteries, have soared this year   The rise in lithium carbonate alone would add an average US$470 to the cost of producing an EV battery, Suzhou Hazardtex executive says
https://www.msn.com/en-xl/money/other/chinese-ev-firms-face-slower-growth-as-higher-metal-prices-push-up-battery-costs/ar-AARJ1cw

Singaporeans explain what it’s like working for a Chinese tech company
CNBC interviewed 10 current and former employees of Chinese tech firms to ask what work life is like in those companies’ Singapore offices.   The hours may sometimes go long, but most people who spoke to CNBC said the “996” work culture common among tech firms in China hasn’t been adopted in Singapore.   English-speaking workers described Mandarin being common in the workplace, as well as working on contract.
https://www.cnbc.com/2021/12/13/singaporeans-explain-what-its-like-working-for-a-chinese-tech-company.html

Lone bear who predicted Alibaba’s US$220 billion stock crash warns of valuation sinkhole as US delisting risk mounts
Alibaba has declined 39 per cent in New York since lone bear from DZ Bank cut his rating to a sell, precipitating a US$220 billion loss of market value     Muhl is waiting for two scenarios to play out before reconsidering his bearish view on Alibaba and Chinese tech sector   libaba, the owner of this newspaper, has fallen 39 per cent in New York to US$125.06 on Friday since Muhl cut his rating to a sell on July 26, precipitating a US$220 billion loss of market value. Muhl remains the only analyst with a sell rating among 62 tracked by Bloomberg. He lowered his price target to US$130 on November 19.    Chinese tech companies still need to sit down with regulatory authorities to draw a clear boundary that will define their business scopes, according to Thornburg Investment Management, a US money manager overseeing US$49 billion of assets based in Santa Fe, New Mexico.  “I really doubt e-commerce or internet companies will resume leadership,” said Wang Lei, a portfolio manager. “Before that, it was hard to predict their earnings growth profile. You can argue valuation looks very cheap. I don’t think it is the same growth rate but how low can it be? It is still undecided and the jury is still out.” Many of DZ Bank’s clients are extremely concerned about what has happened with Didi Global, Muhl added, and some fear that this might be the end for US-listed shares of Chinese companies. China would prefer its companies to list at home for strategic reasons and the SEC will also be forced to act, resulting in more delistings. Stock fungibility may be doubtful in some cases.  “What I do know is that some US investors will be forced to liquidate due to regulatory requirements,” Muhl said. “Some investors have constraints and cannot invest in Hong Kong.”
https://www.scmp.com/business/markets/article/3159398/dz-analyst-who-predicted-alibabas-us220-billion-stock-crash-warns

As US tech bubble grows, China’s crackdown looks less like madness and more like method
Seen against the tech tycoon worship in the West steering market capital into glitzy stocks instead of real economy needs, creating a ‘cult of the equity’, Beijing’s crackdown looks more pragmatic than ideologic
https://www.msn.com/en-xl/news/other/as-us-tech-bubble-grows-china-s-crackdown-looks-less-like-madness-and-more-like-method/ar-AARJ49D

China tech crackdown: Beijing declares initial victory in cleaning up mobile apps
The country’s internet watchdog has reviewed more than 1,000 apps for data privacy violations, says government report      The government’s increased scrutiny of smartphone apps have created uncertainties for tech firms that run some of China’s most popular online platforms
https://www.msn.com/en-xl/news/other/china-tech-crackdown-beijing-declares-initial-victory-in-cleaning-up-mobile-apps/ar-AARHA10

Huawei, Tencent lose cloud market share as Alibaba, Baidu extend their lead, report shows
China’s cloud infrastructure services market saw third-quarter revenue grow 43 per cent year on year to US$7.2 billion, according to data provider Canalys     The demand for cloud computing accelerated after the Covid-19 pandemic forced activities like work, shopping and entertainment to migrate online
https://www.msn.com/en-xl/news/other/huawei-tencent-lose-cloud-market-share-as-alibaba-baidu-extend-their-lead-report-shows/ar-AARKIPv

As Evergrande, Kaisa and other Chinese developers fall on hard times, Hong Kong’s bargain hunters swoop in
Mainland Chinese developers bought seven sites each year during the Hong Kong government’s 2016 and 2017 land sales programmes    By 2018 and 2019, their activities had dwindled to three each year, with only one deal so far in 2021
https://www.msn.com/en-xl/money/other/as-evergrande-kaisa-and-other-chinese-developers-fall-on-hard-times-hong-kong-s-bargain-hunters-swoop-in/ar-AARHGli

Private Equity Firms Plan Cuts in China to Escape Property Woes
Private equity investors are cooling on China, pulling back from real estate amid mounting troubles at some of the nation’s biggest developers and with many also planning to cut bets on start-ups.     Among international investors a third will reduce their exposure to Chinese real estate funds over the next three years with none planning an increase, according to a survey by alternative asset manager Coller Capital. When including buyouts, venture, infrastructure, and private credit, there was an even split between increasing or cutting investments in China, Coller said after surveying more than 100 investors.     Major developers such as China Evergrande Group are struggling to stay afloat after a multi-year push by Beijing to reduce leverage and cool the nation’s frothy property market. Adding to the chill for investors has been a broad campaign in China to rein in private businesses, including the nation’s big technology firms and private education companies. China private market fundraising has slumped more than 60% year-to-date from 2020, according to data compiled by Preqin.    The survey found that about a third of the investors plan to increase their allocations to Asia Pacific outside of China. The biggest increases will be in buyout, infrastructure and venture capital, the report said.
https://www.bnnbloomberg.ca/private-equity-firms-plan-cuts-in-china-to-escape-property-woes-1.1694873

SenseTime halts US$768 million IPO in Hong Kong after US blacklists AI firm on human rights grounds
China’s largest AI firm said it would postpone its Hong Kong IPO after the US barred American investors from owning shares in the firm    Washington blacklisted SenseTime over alleged human rights abuses in Xinjiang, which the AI firm called ‘unfounded,’ based on a fundamental misperception of the company
https://www.france24.com/en/asia-pacific/20211213-china-s-sensetime-postpones-hong-kong-ipo-after-us-investment-ban

SenseTime says the US has ‘a fundamental misperception’ of the company as sanctions cloud IPO
The White House has placed the company on an investment blacklist over alleged human rights abuses in Xinjiang      Earlier this week, the AI company cut its IPO size by more than half amid a sell-off in technology stocks triggered by regulatory and privacy concerns
https://www.yahoo.com/now/sensetime-says-us-fundamental-misperception-093000194.html

China’s tech hub Shenzhen hit by worst drought since 1963
Reserves fall by more than half in Dongjiang area, the source of 90 per cent of the city’s water supply
While immediate impact is minimal, experts point to the need to identify alternative sources
https://www.asiaone.com/china/china-s-tech-hub-shenzhen-hit-worst-drought-1963

‘Even Santa himself won’t be able to deliver’: How the global chip shortage could dampen Christmas
Semiconductors are beneath the hood of an increasing number of products — from cars and e-bikes to washing machines and toothbrushes.   Many of these chips are in short supply as the pandemic has led to supply chain bottlenecks and increased demand.  As a result, some products could be hard to come by this Christmas, depending on what you’re after and how late you leave your shopping
https://www.cnbc.com/2021/12/13/the-global-chip-shortage-could-dampen-christmas-.html

Toy sellers ponder reliance on China as supply problems bite
The colourful piñatas that usually hang from the ceiling of Jennie Hogg’s Cachao Toys store in London’s Muswell Hill have been impossible to source this Christmas.   “My suppliers said it’s too expensive bringing them over,” Hogg said. Though supply chain disruptions and higher transport costs have put piñatas out of reach, “customers will still get what they need, they just need to keep an open mind,” she added.  “We planned for 10 per cent of our production to be in France. Now, our target is 20 to 25 per cent,” said Joly. It hopes to achieve this by mid-2023.    Doudou et Compagnie’s French-made products will be no more than 40 per cent more expensive than high-quality toys from China and Joly believes demand for home-made teddies will be high.   The “made in France” toy movement is growing, up from 8 per cent of the French market in 2014 to 15 per cent today, according to Alain Ingberg, head of France’s Association of Toy Creators and Manufacturers. “I’m not saying that everything will come back, but we’ll get to 20 per cent [in five years],” he said.  But manufacturing in China is not as cheap as it was. Rising shipping, energy and raw material costs mean prices will climb further. Tutt predicts rises of as much as 12 per cent next year, especially for bulkier toys of which fewer can fit in containers.   “Retailers don’t have that much leeway,” she said. “It’s likely they’re going to pass some or all of that on to the consumer.”
https://tinyurl.com/2p89e99z

Does the ‘China Chic’ Trend Spell Trouble for Western Luxury Brands?
Chinese Gen Zers are in love with “China chic” luxury products and for more reasons than just nationalism.  The number of Chinese startups in the luxury space today is unprecedented, and many use technology as a source of differentiation or competitive advantage. Young and affluent Chinese Gen Z consumers find local brands much more aspirational and desirable than millennials or Gen Xers.  In 2020, for the first time, China overtook the US in AI research. Therefore, it is only a matter of time before more Gen Z-focused Chinese luxury brands start winning in the luxury market.
https://jingdaily.com/china-chic-trend-gen-z-shein/

Be alert to the China challenge, EU’s Borrell tells G7 foreign ministers
Beijing poses strategic and ideological tests, including in the South China Sea, he says  Chinese and US leaders have strong domestic reasons to keep up the rhetoric next year, analyst says
https://www.msn.com/en-xl/news/other/be-alert-to-the-china-challenge-eu-s-borrell-tells-g7-foreign-ministers/ar-AARJsYP

Blinken kicks off ASEAN tour with China and Myanmar in focus
U.S. Secretary of State Antony Blinken began his maiden tour of Southeast Asia on Monday, as Washington steps up its outreach to a region where China is also actively extending its influence. Blinken has a slate of meetings with regional leaders lined up, during which he is expected to discuss relations with Beijing as well as other pressing issues such as Myanmar and the COVID-19 pandemic. The secretary arrived in Indonesia on Monday afternoon. He is scheduled to move on to Malaysia on Tuesday and Thailand on Wednesday, wrapping up his tour on Thursday. Southeast Asia is an increasingly important region for the U.S. It forms the geographic heart of President Joe Biden’s strategy for a “free and open” Indo-Pacific — pushing back against China’s naval ambitions and militarization of the South China Sea. Association of Southeast Asian Nations members have also grown into key trade partners: Malaysia, Thailand and Indonesia are ranked 13th, 16th and 21st among exporters to the U.S., respectively, while they are the 23rd, 25th, and 32nd biggest importers from America, according to the U.S. Department of Commerce. But U.S. relations with the region’s governments are not always smooth. The visit closely follows the virtual Summit for Democracy the U.S. hosted last week. Of the three countries on Blinken’s itinerary, Indonesia and Malaysia were invited but Thailand was not.
https://asia.nikkei.com/Politics/International-relations/Blinken-kicks-off-ASEAN-tour-with-China-and-Myanmar-in-focus

China in Africa: no more hard cash as debt-hit nations battle Covid-19 disruptions
Latest China-Africa forum indicates big, direct cash flows from Beijing are a thing of the past, with ‘innovative financing’ models now in focus    Criticism over infrastructure debt and the need to cut defaults, as President Xi Jinping consolidates control at home, may be factors at play, observers say
https://www.msn.com/en-xl/asia/top-stories/china-in-africa-no-more-hard-cash-as-debt-hit-nations-battle-covid-19-disruptions/ar-AARIZsN

Why Is China Insisting It Is a Democracy?
The attempt to frame an alternative model of democracy highlights a shift in the CCP’s quest for legitimacy.    An explanation rests with each respective leader’s intention to expand the targeted audience of Chinese state rhetoric. While historically – until the early 2000s – the primary preoccupation of Beijing’s legitimation narrative remained domestic (e.g. the burgeoning class of wealthy entrepreneurs, but also grassroots and middle-class individuals that lacked socioeconomic wherewithal), the scope was considerably expanded as China “turned outwards.” As China acceded to the membership of significant multilateral institutions, as well as played an increasingly significant role in shaping global financial and trade networks, it correspondingly acquired a new target in its search for legitimacy: the international community.   Ideals of pragmatism, representation, and (partially) meritocracy sold well to a domestic audience, both in assuaging criticisms and convincing them that their state was worthy of their support. While during the 1980s, full democratization was (briefly) on the table and vigorously debated in public, the 1990s and 2000s saw a considerably muted response from the Chinese public – as officially sanctioned debates shifted from the politico-ideological to the economic-technocratic. Since then, it has been more than sufficient, for a vast majority of the Chinese public, that their state delivered substantial material benefits, even if they cannot directly participate in the selection and removal of their senior political leaders. Yet – as Hu exemplified in his attempt to stretch the scope of harmony to an international context in his second term – China’s increasing global influence needed to be accompanied by a narrative that would resonate with audiences beyond its borders. The audience consuming China’s legitimation narrative was not purely domestic – indeed, the party’s basis of legitimacy goes hand-in-hand with its soft power and affective aura overseas. In an era where American democracy had seemingly lost much of its allure, with its record at handling the pandemic, internal polarization, and significant socioeconomic turmoil, China has caught onto what it views to be the “changing winds” of international relations: the East is on the rise, and the West is on decline, its leaders argue. In their eyes, this has presented senior party cadres the perfect opportunity to promulgate and embody a “different” vision of democracy – one that would, if substantiated and viable, pose a fundamental challenge to the Anglo-American monopoly of the term.
https://thediplomat.com/2021/12/why-is-china-insisting-it-is-a-democracy/

China’s response to Aukus deal was ‘irrational’, Peter Dutton says
Defence minister accuses Beijing of ‘bullying’ over criticisms of Australia’s pact with the US and UK
https://www.theguardian.com/australia-news/2021/dec/12/chinas-response-to-aukus-deal-was-irrational-peter-dutton-says

China builds undersea cable bases amid digital infrastructure rivalry
The two new bases will maintain optical fibre lines on the seabed that carry internet data, making them critical to economic and security interests     Beijing has been upping investment in digital infrastructure, partly because of pressure from the US over handling of internet traffic and potential for spying
https://www.msn.com/en-xl/news/other/china-builds-undersea-cable-bases-amid-digital-infrastructure-rivalry/ar-AARJxGV

Is Ctrip CEO Right About China’s Border Opening in Half a Year?
The CEO of Ctrip, China’s leading travel agency, has predicted that China will resume international travel within around half a year. 
Speaking at a forum on Thursday, December 9, Liang Jianzhang added that some other Asian countries would likely do the same within three months, as reported by Global Times
https://www.thatsmags.com/china/post/33764/is-ctrip-ceo-right-about-china-s-borders-opening-in-half-a-year

Chinese workers urged not to travel home for Lunar New Year as fresh Covid-19 outbreak hits factory hub
Nearly 80 per cent of the country’s latest locally infected Covid-19 cases found in manufacturing powerhouse province of Zhejiang   Several local authorities step up pandemic controls and call for ‘unnecessary’ travel to be put on hold
https://www.msn.com/en-xl/news/other/chinese-workers-urged-not-to-travel-home-for-lunar-new-year-as-fresh-covid-19-outbreak-hits-factory-hub/ar-AARJAVL

China axes Guangzhou officials for destroying thousands of banyan trees
Party watchdog calls destruction ‘a serious mistake’ and sanctions 10 with sacking or reprimands     More than 4,000 mature trees were felled, many in parks and beauty spots, despite a public outcry against the project
https://www.msn.com/en-xl/news/other/china-axes-guangzhou-officials-for-destroying-thousands-of-banyan-trees/ar-AARKZDx

Live-streaming e-commerce stars disappear from China’s internet following tax evasion fines
Accounts for Zhu Chenhui and Lin Shanshan on platforms including Taobao and Douyin could not be found on Monday, and their company website became inaccessible    The live-streaming stars were fined in November for tax evasion, a known issue within China’s entertainment industry
https://www.msn.com/en-xl/news/other/live-streaming-e-commerce-stars-disappear-from-china-s-internet-following-tax-evasion-fines/ar-AARLhhA

Hong Kong: Media tycoon Jimmy Lai gets 13 months jail for Tiananmen vigil
Media tycoon Jimmy Lai was jailed earlier this year for taking part in pro-democracy protests in 2020
Hong Kong media mogul Jimmy Lai has been sentenced to 13 months in jail for participating in a vigil marking the Tiananmen massacre.
https://www.bbc.com/news/world-asia-china-59632728

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