China Press Review – December 14, 2018

Press review

Lowest retail sales growth for 15 years dash China’s hopes that consumption will offset trade war
Plunge in car sales helps negate record online sales on Singles’ Day Individual income tax breaks that took effect in October not having desired impact on spending

China economy showing effects of trade war as growth slows again in November
Retail sales growth slows to 8.1 per cent in November, lowest rate in 15 years Industrial production growth slows to 5.4 per cent in November, the lowest rate in 10 years

China’s Xi takes humiliating loss to US on trade, Huawei — but Trump could be getting played
President Donald Trump scored an outright victory in his ongoing trade spat when Chinese President Xi Jinping backed off his “Made in China 2025” push. “Made in China 2025” is a plan to make Xi’s China a tech and manufacturing superpower, and bore his name, making it a humiliating defeat for him to revisit it. China has also slowly started to cave in on the tariff war as the US addresses other irritants in the US-China relationship, mainly with the Chinese tech company Huawei. The US has sounded alarm bells about Huawei as a security risk and asked Canada to extradite the company’s CFO. China responded in anger but continued to appease Trump on trade, while Huawei basically groveled to get back on the West’s good side. But Xi may be playing the long game and throwing Trump some positive headlines while nothing changes on the ground.

China to Suspend Further Tariffs on U.S.-Made Cars
China’s finance ministry said Friday it will suspend additional tariffs on U.S.-made vehicles and auto parts for three months starting Jan. 1, 2019. The government will suspend 25 percent tariffs on 144 U.S. vehicle and auto part items and 5 percent tariffs on 67 auto items between Jan. 1 and March 31, 2019, the ministry said in a statement on its website.

White House trade advisor vows ‘tough’ talks with China
Financial markets have alternatively recovered and slumped on each new hint of progress or increased tensions between the world’s largest economies.

A new era of hostility in the U.S.-China fight
The risks are high on both sides, and there is also potential for spillover. For the U.S., there is the threat to billions of dollars in U.S. business in China. For China, “there was already an emerging Western coalition committed to getting tough with China economically,” Beckley says. “The detentions will solidify this coalition and put whatever remaining support China had in Western business communities in jeopardy.””This is tit-for-tat but it is also ‘kill the chicken to scare the monkeys’ — the monkeys meaning other smaller powers who the U.S. might ask to get involved in similar legal extraditions,” says Wilder, the former NSC official.

China’s dilemma in trade war talks with US: making concessions without looking weak
Beijing is walking a tightrope around its messaging, aware that concessions could give rise to domestic political problems and cause controversy The government is buffeted by the winds of nationalism it kicked up early in the trade war

China’s retail growth slows on trade war fears
As consumer sentiment darkens, pace of expansion at 15-year low

China sets sights on ‘powerful home market’ to drive growth through 2019 trade turmoil
Leadership focuses on domestic agenda to suggest it is not caving in to US demands, analyst says

China bolsters domestic market to soften trade war blow
Tax cuts and infrastructure boost likely as Politburo aims to spur demand

China economic work conference: how will Beijing combat US trade war impact on 2019 domestic economy?
Next week’s Central Economic Work Conference is expected to set higher budget deficit and lower growth target for next year, while policy priorities may also include a new tax cut President Xi Jinping, Premier Li Keqiang and Vice-Premier Liu He all to attend the event at the Jingxi Hotel in Beijing

China’s central bank keen to avoid ‘irrational panic’ despite economic slowdown, says governor
People’s Bank of China governor Yi Gang repeats pledge to maintain the stability of the yuan despite US trade war frictions by monitoring cross-border capital flows Former long-time aide of current Vice-Premier Liu He tells Tsinghua University bank will pay more attention to market interest rates rather than ‘will of officials’

Chinese Stocks Fall With Yuan After Data Show Economy Is Slowing
Chinese stocks fell along with the currency as data signaled a deepening slowdown in the economy. Losses in equities gathered pace in the afternoon, led by health-care shares.

China must be clear about government role in economy, says European lobby group in Beijing
The EU Chamber of Commerce claims that Chinese government intervention is causing market distortions in key sectors around the world Criticism comes as China is reportedly set to downgrade its controversial ‘Made in China 2025’ initiative

China’s monetary conditions should be relatively loose: central bank
China’s monetary conditions should be relatively loose to support its slowing economy but policy cannot be too loose as falls in domestic interest rates could hit the local currency, central bank chief Yi Gang said on Thursday.

China creates $12 billion fund for southern Greater Bay Area
China launched a government-backed private equity fund with $12.8 billion of capital to drive the integration of Hong Kong, Macao and nine cities in Guangdong province, Caixin reports.

Huawei CFO Meng Wanzhou’s arrest: why business executives the world over should be held to account
Richard Harris says while it’s easy to jump to the conclusion that the Huawei CFO’s detention is a trade war escalation, businesspeople are arrested every week, with little public outcry, and those at the top must take responsibility for their actions

Deutsche Telekom reviews vendors in light of China security debate
Deutsche Telekom, Europe’s largest telecoms company, said on Friday it was reviewing its network vendor strategy in light of a debate on the security of Chinese network equipment that it was taking “very seriously”.

podcast : How important is China to Canada’s economy?
The arrest of a Huawei executive could affect Canada’s economy more than you might think if China chooses to retaliate

China’s foreign direct investment plunges 27.6 per cent in November on trade war worries
Investors spooked as fears of further tariff increases cause sharp deterioration in business confidence about China’s economic outlook November drop came before trade war truce agreed by Trump and Xi

South Korea nimbly dodges crossfire of US-China trade war
From economic to diplomatic to military fronts, private sector and government both taking steps to avoid being caught in a clash of major powers

China could surpass the US in artificial intelligence tech. Here’s how
Global GDP is set to increase by 14 percent because of artificial intelligence, according to PwC. China’s vast amount of data collected along with its massive population gives it an advantage over the U.S. Some 48 percent of all AI venture funding globally went to China in 2017.

Apple China to update iOS in a bid to resolve patent case
In order to avoid compliance issues, US technology giant Apple has said it will release a software update next week after a Chinese court issued an order instructing the company to stop selling certain iPhone models in China. The move comes after the court granted US chipmaker Qualcomm two preliminary injunctions against Apple in an ongoing patent dispute

Xiaomi restructures to increase its focus on the Chinese market
Chinese smartphone maker Xiaomi is restructuring its business to focus on the Chinese market, according to an internal letter obtained by Chinese media. The new China-focused business group has been established in light of the company’s success overseas, a market that generated more than 40% of its revenue in the third quarter. The group is born out of the former Sales and Services Group and is to be led by Wang Chuan, co-founder and senior vice president of Xiaomi. He will report to company CEO Lei Jun.

Starbucks on Friday announced a new virtual store in China that lets customers order their favorite beverages and food from the Seattle-based coffee company across multiple Alibaba Group mobile apps and Starbucks’ own China app.

London’s British Museum, the most-visited cultural attraction in the U.K., has inked an agreement with Tmall, Alibaba Group’s B2C online marketplace, to expand their partnership beyond sales to include marketing, localized content and product licensing.

How Four Seasons Hotels Woos Wealthy Chinese Tourists — With WeChat and a Party
China is playing an increasingly crucial role in the business and expansion plans of luxury hotel chains. But few of those companies are as committed to touting their brand to Chinese travelers as passionately as the Four Seasons Hotels and Resorts, which is enjoying double-digit revenue growth with this clientele. The Toronto-based chain is taking the unusual step of bringing its elaborate “pop-up pop-down” event to Hong Kong in March, timing the sumptuous affair to coincide with the influential Art Basel Hong Kong art fair.

Reaching Your Audience in China Requires Culture and Authenticity
Famous international luxury brand CEOs have recently made headlines withgrade school-level gaffes while attempting to promote their brands in China. Some have even offended so considerably, that their brands may never recover in what is fast becoming the world’s largest marketplace for luxury goods.

China Development Bank supervises debt-laden HNA Group on asset sales
China Development Bank (CDB) is leading a team to supervise HNA Group’s asset disposals as the heavily indebted conglomerate scales back operations to a point that will leave it holding only core assets, people familiar with the situation said. The finance-to-aviation group is more than a year into the process of unwinding a $50 billion acquisition spree that at its peak netted the group stakes in banks, fund managers, hotels, property and airlines, among other assets.

Club Med parent Fosun Tourism slides 3.4 pc in Hong Kong trading debut
Fosun Tourism shares slide 3.4 per cent to HK$15.06 in debut trade, easing from its initial public offering price of HK$15.60 The benchmark Hang Seng Index was down 1.6 per cent, or 415.12 points, to 26,109.23 in early trading

View from China: Designing the blueprint for smart living
We are moving closer to a reality of ubiquitous AI, where the technology could be and will be in our smartphones, computers, cars, and in every nook in our homes.

China demands developed countries ‘pay their debts’ on climate change
Key sticking point at UN negotiations is how countries should account for their greenhouse gas emissions

When it comes to climate finance, a tale of two Chinas
“China’s overseas investment policies are currently inconsistent with the domestic investment policies — and with the Paris Agreement

China-Europe freight trains to make more than 6,000 journeys in 2018
It is estimated that more than 6,000 trips will be made in 2018 by China-Europe freight trains, according to the Transport Coordinating Committee attached to the China Railway Corporation’s China-Europe Project.

Chinese railways set to grow 2.8pct from 2019-2027 – Fitch
China’s railway sector is projected to grow at an average 2.8% from 2019-2027 thanks to an increase in public-private partnerships (PPP) despite their limited usage. China’s PPP programme has been criticised for the lack of involvement of private players amidst an infrastructure boom across all sectors in the past decade, with state-owned enterprises or private partners with links to the government dominating the project pipeline.

The China “Debt Trap”: Freedom, Sovereign Debt, and Generational Accounting
The “creditor imperialism” fallacy is in essence a deliberate attempt by India and Western countries to denigrate the Belt and Road Initiative, which exhibits their envy of the initial fruits the initiative has produced. Such an argument stems from their own experiences of colonialism and imperialism. It is exactly the US-led Western countries that attached their political and strategic interests to the debt relationship with debtor countries and forced them to sign unequal treaties. China’s Belt and Road Initiative is proposed and implemented in the context of national equality, globalization and deepening international interdependence, and based on voluntary participation from relevant countries, which is totally different from the mandatory debt relationship of the West’s colonialism.

Wanda to build a US$1.74 billion theme park in the cradle of the Chinese Communist revolution to cash in on ‘red tourism’
The investment is the second major push by Wang Jianlin’s company to hew to the government’s preferred agenda

Chinese corruption suspect who fled to New Zealand returns voluntarily after 11 years on the run
Jiang Lei, former official of automobile manufacturers’ association, became subject of Interpol red notice after fleeing Chinese authorities’ corruption charges

‘Crushing victory’: what’s next for Chinese President Xi Jinping’s war on corruption?
The Communist Party says a milestone has been reached but assessments vary on just what it all means

China’s lonely bachelors spend thousands with Mekong bride matchmakers to save face and buy time
Single Chinese men are known as ‘bare branches’, a pejorative term in a country where pressure to marry and extend the family tree is sharp A massive gender gap has led many men to spend thousands on buying brides from poor Mekong countries such as Cambodia and Laos

Alain Gillard
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