China Press Review – December 2, 2019

Press review

China’s miracle economy has a secret ingredient: cooked GDP books
Why fear not making good that pledge about doubling the size of the economy when the figures can simply be massaged into place? There has long been a question mark over the accuracy of Chinese statistics, especially when it comes to the economy. But Beijing’s latest move to revise up its GDP figures at a politically sensitive moment has only poured fuel on the fire.
Europe needs to adopt a harder line on relations with China, former envoy says
There is now an awareness that Europe ‘can no longer rely on vague promises of reform [from Beijing] but needs to develop its own instruments to level the playing field’, ex-EU ambassador to China Dietmar Schweisgut says    Issues like the role of China’s state-owned enterprises and subsidies ‘also need to be addressed’, he says

What’s ahead for the new EU commission as it addresses the imbalances in China ties
Mathieu Duchâtel writes that continuity should be expected from the new team under Ursula Von der Leyen on a defensive China policy agenda, focused on rebalancing the trade and investment relationship

Hong Kong, China stocks get boost from upbeat mainland manufacturing data
Alibaba posts second straight session of losses on profit taking    Hong Kong-listed property developers rise on strong November contracted home sales

China’s economy struggles as consumers tighten their belts
Communist leaders are counting on consumers to power China’s economy, replacing trade and investment. But shoppers, spooked by the tariff war and possible job losses, are cutting spending on cars, real estate and other big-ticket purchases.  Economic growth sank to a three-decade low of 6% over a year earlier in the quarter ending in September. That is stronger than most major countries but a strain for Chinese companies that need to repay debt.   Factory activity shrank more than expected in October, according to an official trade group, the China Federation of Logistics & Purchasing. Analysts said that suggested an uptick a month earlier didn’t mark the start of a recovery.  The Chinese slowdown has sent shockwaves through the global economy.

When China stumbles, the world economy will shudder
Yet another factor likely to sap China’s economic growth in the years ahead is its very poor demographics. Largely as a result of its one-child policy, the Chinese labor force is expected to decline by some 25 percent over the next thirty years. This has prompted Nick Eberstadt, my American Enterprise Institute colleague, to observe that China is set to become old before it becomes rich.    All of this is not to say that the Trump administration is mistaken to exert real pressure on China to level the trade playing field and to have China desist from intellectual property theft and forced technology transfer. Rather, it is to say that in formulating its international economic policy, the administration should not exaggerate China’s long run economic challenge to the United States and should take into account the impact of a slowing China on the rest of the global economy.

China’s SOEs post steady profit growth in first 10 months
Profits of Chinese state-owned enterprises (SOEs) grew steadily in the first 10 months of 2019, official data showed.   The combined profits of China’s SOEs rose 5.4 percent year on year to 2.94 trillion yuan (about 418 billion U.S. dollars) for the January-October period, the Ministry of Finance said on its website.

PBOC Signals Policy to Stay Cautious Amid Uncertain Data
China’s central bank governor sounded a cautious tone on the health of the global economy, while signaling that the nation’s monetary policy makers will continue to refrain from large-scale easing steps.     Policy should be prepared for a “mid- and long-distance race” and stick to a conventional approach as long as possible, according to the article by Governor Yi Gang published Sunday on the WeChat account of Qiushi, the Communist Party’s flagship magazine.

China economic recovery to be short-lived despite manufacturing rebound as analysts fail to upgrade forecasts
The private Caixin/Markit Manufacturing Purchasing Managers’ Index (PMI) edged up on Monday following a surprise growth in the official index at the weekend   Expansion across China’s factories in November has not led to any upgrade in economic growth forecasts for 2020

Big plans for Yangtze River Delta as China takes on the wealth gap and pollution
Yangtze blueprint to integrate Shanghai and the three neighbouring provinces of Jiangsu, Zhejiang and Anhui, but little word on how it will be achieved   Scheme’s fate hinges on getting rival centres and officials to work together to reduce urban-rural divide, analyst says

China fears trade conflicts, climate change could pose threat to food security
Last month the country’s leadership produced its first report on the issue in 23 years as the trade war with the US and other issues prompted a fresh look at how it can continue to feed its population  While the situation is “very sound” at present, policymakers are looking for ways to counter a series of environmental and political risks
China will not resort to quantitative easing, central bank chief Yi Gang says
‘We should not let the money held by the Chinese people become worthless,’ People’s Bank of China governor Yi Gang says   Beijing will not resort to a competitive devaluation of the yuan
US weighing further restrictions on Huawei suppliers
Earlier blacklisting by Commerce Department failed to cut off flow of products to Chinese telecoms giant, as key foreign supply chains remain out of US reach   Proposed rule changes would allow regulation of sales of non-sensitive items made abroad with US-origin technology, software or components to Huawei
A year since the arrest of Huawei’s Meng Wanzhou, US-China relations remain frayed and strained
US sanctions on Huawei are not expected to ease off amid the slow progress in hammering out an interim trade deal with China  The arrest proved to be the flashpoint that generated wide international attention to the US-China tech war

Will the China of tomorrow run on the technology behind bitcoin?
President Xi Jinping told the Communist Party elite in October he wanted the country to be a ‘rule maker’ on blockchain technology and ever since state media has been bombarding the public with articles on the subject  One expert said it ‘could open a new chapter on the integration of governance and technology, if proved a reliable technology’

Asian markets likely to remain volatile in 2020 as US-China trade war continues to unnerve investors
Geopolitical risks could make markets ‘choppy’ next year, although a full-blown global recession is unlikely, analysts say    Investors should expect ‘modest’ returns in 2020, according to BlackRock
Investors ‘cautious’ about Hong Kong markets in 2020 as questions remain over how protests, trade war will be resolved
City’s markets ‘destined for volatility’ in coming months as the trade war drags on, and with no obvious resolution to the protests, according to State Street     Hong Kong’s bourse received shot in the arm from Alibaba listing this week
Is Vietnam the Next China: Myth vs. Reality
However, despite logging thousands of miles of travel and spending days upon days conducting factory audits in the remotest corners of the country I am discovering that Vietnam’s manufacturing industry and export products may not live up to the hype as China’s best alternative.
12 global companies evinced interest to shift base from China to India: Nirmala Sitharaman
Finance Minister Nirmala Sitharaman on Saturday said about 12 global companies have evinced interest to shift their base from China to India, taking advantage of competitive tax rate of 15 per cent announced recently.
A foreigner’s life in Beijing without access to Alipay or Wechat Pay is like a fish out of water. Here’s my experience
Alipay and WeChat Pay say they have opened up their vast ecosystems to foreigners, but access to functions is limited, Business reporter Louise Moon finds  Cash is no longer king, as life runs through screens and mobile payments platforms
China introduces mandatory face scans for phone users
: China will require telecom operators to collect face scans when registering new phone users at offline outlets starting Sunday (Dec 1), according to the country’s information technology authority, as Beijing continues to tighten cyberspace controls.
US hi-tech goods shipped through Hong Kong to face closer scrutiny under new democracy legislation
City will be subject to tighter customs controls on ‘dual-use’ products that have both military and commercial applications  Washington is becoming increasingly concerned at China’s use of American technology, analysts say
Logistics sector in China continues steady expansion
Official data showed that the logistics industry in China saw a steady expansion in the period from January to October of the current year.      The China Federation of Logistics and Purchasing (CFLP) said that the total value of social logistics in the period increased 5.8 percent since the previous year to USD34.7 trillion.

Russia turns on taps on gas pipeline to China as Moscow looks east for new markets
The Power of Siberia will transport the fuel into Heilongjiang and beyond, easing Russian reliance on European buyers   Supplies could make China Russia’s second-biggest gas customer after Germany

In China, coal creeps back in as slowing economy overshadows climate change ambitions
China is building more coal-fired power plants and approving dozens of new mines, despite assurances from the world’s biggest greenhouse gas emitter that it was serious about fighting climate change.
China’s plans for new coal plants risk undermining battle against global warming
World’s largest coal consumer shows little sign of ending its dependency even though it is also the biggest market for renewable energy sources    UN climate summit is meeting to discuss ways to limit future warming, but hopes are fading that China will commit to further curbs on emissions

China wants Canada to shut up. That’s exactly why we shouldn’t
That’s one way of putting it. It would require a great deal of political courage on the part of a country the size of Canada to denounce every one of the atrocities occurring in Mr. Xi’s China, or to impose sanctions on Chinese officials. We don’t punch in the same weight class as the United States. China would fire back with more economic punishment, Canadian farmers would lose more money and Canadian industries would find themselves shut out by Beijing. The domestic pressure to relent would be immense. That’s why “guts”

How to Respond to the Rise of China – Part 2
Perhaps we need to take a lesson from China, which is investing steadily in a stronger knowledge base, without forcing its students to incur large amounts of debt. The most promising path for the US is to renew its investment in its innovation infrastructure, to empower US businesses and US citizens to compete more effectively in the global economy. And, with interest rates approaching historically low levels, the cost of financing this investment is surprisingly affordable
From farms and coal mines to airports and water supplies: How China is gobbling up millions of acres of land, vital infrastructure and companies – as part of its ‘disturbing’ plan to exert greater influence and control over Australia
Last week ‘disturbing’ reports said that China tried to plant a spy in Parliament   Experts warn that China ‘will not stop’ meddling in Australian domestic politics   Over past decade, China has poured billions into Australia to extend influence  It owns an airport in Western Australia and nine million hectares of farm land  China also owns Port of Darwin and several Australian coalmines and windfarms
Unstoppable China factor
Expert presents the ‘other side of the coin’ in SCS territorial dispute CHINA, according to an internationally recognized academician, should not be totally blamed for ignoring the South China Sea (SCS) ruling handed down by the International Tribunal in The Hague in 2016, saying, “the United States likewise does not follow international law.”
Global education, ripe for disruption by digital technology, is a hotbed of investment opportunities, Credit Suisse says
The market for education technology is projected to grow 11 per cent annually by 2025, according to global education market intelligence platform HolonIQ  Last year, US$142 billion was spent on education technology, less than 3 per cent of global expenditure in the sector

Opinion | Why Technology is Forging China’s Critical Path
It has been 40 years since Deng Xiaoping launched China’s Open Door Policy. By several metrics, China’s economic miracle has been extraordinary, with some 800 million people lifted out of poverty in just a few decades and the country playing a critical role in the global economy. But this growth was neither stable nor sustainable, and the country has run out of the low-hanging fruits that fueled its economic rise. Above all, the Communist Party of China deeply fears social unrest and thus cannot tolerate the kind of spike in unemployment that would accompany short-term periods of economic disruption. More than 200 million Chinese people work in manufacturing. It’s bad for China if firms hit by tariffs have to start downsizing. It’s a whole lot worse if firms begin abandoning the country altogether and new foreign investment simply dries up. Throw a restive Hong Kong into the mix, and Beijing has entered a crucial 18-month period in keeping its economic miracle on track.

On the Meaning of Hong Kong’s Recent Election
The results of Hong Kong’s district council elections have added a new twist to the city’s ongoing saga, as pro-democracy forces square off against the Beijing-backed authorities. Just days after the apocalyptic violence at the CUHK and PolyU campuses, we watched citizens guzzling Dom Pérignon as they joyfully celebrated the democratic parties’ landslide victory. Considering my previously grim predictions for Hong Kong,  it is worth asking if these results change anything? Probably not.

China puts Hong Kong port calls by US military on hold after Donald Trump signs democracy act
Beijing says it is also sanctioning US-based NGOs for supporting violence in the special administrative region     Move comes a week after US President Donald Trump signed a law increasing scrutiny of the city

These Common Pricing Mistakes Destroy Luxury Brands
Proper pricing offers great potential for luxury brands to become even more profitable and build greater brand equity over time.  Pricing is one of the most difficult tasks for luxury brands to manage. Even leading brands and seasoned managers fall into the same trap over and over: pricing based on cost and competitors. Because of this, we see a lot of untapped optimization potential in luxury pricing. Many luxury brands are not profitable enough because they make pricing mistakes. But what’s even worse is when their incorrect pricing erodes hard-won luxury positioning with customers. When luxury brands fail and disappear from the market, incorrect pricing is often to blame. It surprises many to learn that many luxury brands are priced too low thanks to bad internal strategies.

The Problem With Social Media-Friendly ‘INS Feng’ Art Spaces
In their pursuit of social media engagement, museums and galleries have lost their sense of mission.

New Importer from China? Beware the Credulous Foreigner Syndrome!
After about 40 years of openness, and about 15 years of ‘direct trade’ without Hong Kong trading companies, one might expect that foreign buyers take more precautions when dealing with Chinese suppliers.  And, to be sure, some buyers do pay attention to risks. They have heard a few horror stories. They have read about common misconceptionstypical pitfallsassumptions to avoid, and best practices for supply chain management. Unfortunately, it seems that a majority of people who haven’t been exposed to China yet and come to enjoy its manufacturing capabilities tend to extend trust too easily. It is so common, I am tempted to call this the credulous foreigner syndrome.

Boss of China’s on a mission to promote working mothers
Staff benefits at the country’s biggest online travel agency include flexible working, free taxis for pregnant employees and offering women the option of freezing their eggs
Chief executive Jane Sun says she wants women to be more confident

Weaponizing Chinese Outbound Travel
The Chinese government has begun weaponizing outbound international travel of its citizens to punish other countries that behave in ways that it does not like. Taiwan, regarded by Beijing as a renegade province, has been at the forefront of this travel weaponization. This year, the Chinese government announced that as of August 1, travelers from 47 Chinese cities could no longer travel independently to the island. Accordingly, Mainland Chinese visitors to Taiwan fell by 57 percent in September, down to 62,462, according to Taiwan’s National Immigration Agency

How to Survive as a Woman at a Chinese Banquet
Important: Always know when you’re “the girl.”
After the One-Child Policy
China changed its single child restriction in 2016, but the country still has a lot of work to do toward making motherhood work for women.
US finding force is as vital as words in its territorial game with China
Pentagon rallies regional partners to coax China towards path of international rules, focusing on nations that resist Chinese intrusion    Beijing, too, has upped its activities as it tries to deter and expel an American military presence

China plans sports business boost with industry investment fund
 “The government should create conditions to support and cultivate a number of world-class sports market players and sports brands. And more efforts are needed to foster new businesses in the sports sector.” China has already made clear its intentions to become a global sporting powerhouse and turn the industry into a key pillar of its economy. The country has been linked with a bid for the 2030 Fifa World Cup and is attracting more and more sports properties. This year, for example, the Bundesliga, Germany’s top soccer division, opened an office in Beijing as part of its strategy to stimulate engagement, while the country will stage the 2023 Asian Cup and has hosted Formula One’s esports series for the first time

Alain Gillard
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