Mainland consumer prices drop as spending eases
China’s consumer prices fell in January after a brief improvement at the end of last year, as the world’s second-biggest economy was hit by the impact of fresh coronavirus outbreaks and decreased travel, official data showed Wednesday. The consumer price index (CPI), a key gauge of retail inflation, fell 0.3 percent from a year ago, with the National Bureau of Statistics saying that residents travelled less given a series of lockdowns in northern China and more restrictions.
Why a stronger yuan is still in China’s best interests
China, whose economy relies on US dollar-denominated food, energy and raw materials to sustain its recovery from Covid-19, has reason to be wary of dollar strength A stronger renminbi will give the PBOC a freer hand to focus on monetary policy that supports the economy without worrying about imported inflation The simple truth is that China has to import copious amounts of food, energy and raw materials, but such is the heft of the Chinese economy that when China starts buying in bulk, the price of those goods – which are usually priced in dollars – rise in consequence, creating potential imported inflation pressures within China itself. A strong renminbi mitigates that inflation risk, allowing the PBOC to focus more on monetary policy settings that will best help ensure that China’s economic recovery stays on track. Data continues to show that investors still want China’s currency, and policymakers in Beijing might easily conclude that renminbi strength is currently in China’s own interests. The yuan will continue to hold its own on the foreign exchanges.
On its own, the EU-China investment deal has little hope of holding Beijing to account
Given China’s history of ignoring bilateral agreements, how can the EU’s modest and incremental investment agreement hope to improve Beijing behaviour in problematic areas? At best, the agreement is too little, too late. The same goes for the phase one trade deal by Donald Trump’s administration, which came into effect one year ago. Rather than address the critical issues of government subsidies and the market-distorting role of SOEs, the Trump administration said they would be included in phase two negotiations, which never began. A collective approach, rooted in effective transatlantic cooperation, would at least have a fighting chance
Limits of the EU-China investment agreement
EU exports to China are actually somewhat lower than one would expect, given that China’s GDP (even at market exchange rates) is now close to 80 per cent of that of the US, whereas EU exports to China are only about 50 per cent of those to the US. Moreover, the relative importance of the US and China as export markets for the EU has not changed much over the past decade. This means that the EU’s transatlantic exports have increased almost as quickly as its trade with China – despite China’s much higher GDP growth rate. The EU’s new foreign-investment screening mechanism, which is de facto aimed mainly at China, must also be seen in the context of these numbers. Current Chinese investment flows into the EU are around 11.7 billion euros (S$18.8 billion) per year, implying no threat to a 15 trillion euro economy. And affiliates of Chinese firms employ less than 300,000 workers in the EU, a tiny fraction of the bloc’s overall workforce of about 220 million. Furthermore, a look at the CAI’s details reveals that, belying its name, the agreement is far from comprehensive. The main concrete benefit for European firms is the partial opening of China’s automotive and financial sectors. But the accord’s main provisions reiterate pre-existing commitments or promises of “best efforts” in areas such as regulatory transparency and social standards (including China’s pledge to continue working toward ratifying the Forced Labour Convention). The dispute-settlement mechanism also remains vague, and mainly enjoins both sides to consult and reach an agreement.
China’s easy credit days are numbered
China’s economy will stampede into the Year of the Ox thanks to Beijing’s enthusiastic use of its favourite prod: big licks of credit. The headline numbers from China’s January credit data look impressive at first glance, and will embolden China bulls and Australian resource companies looking for evidence the world’s second largest economy can deliver on forecasts for 8 per cent growth this year
Chinese banks see fewer bad loans as economy recovers from COVID-19
Chinese banks saw the size of their bad loans shrinking at the end of last year, statistics from the country’s top banking and insurance watchdog showed on Tuesday, as businesses’ recovery from the pandemic gathered steam, reported Reuters. The outstanding bad loans of China’s commercial banks totalled RMB 2.7 trillion at the end of December, down by RMB 133.6 billion from the end of the third quarter, China’s Banking and Insurance Regulatory Commission (CBIRC) said. The non-performing loan ration in the sector stood at 1.84% at year-end, compared to 1.96% at the end of September, according to a statement on the CBIRC website. The banking sector achieved a net profit of RMB 1.94 trillion in the whole year of 2020, falling 2.7% year-on-year, it showed, with RMB 5 trillion put aside for bad loans, reported Reuters.
China, east Asia boost share of global trade in 2020 after rapid recovery from coronavirus pandemic: UNCTAD
China boosted its share of global exports more than any other nation in 2020, followed by Taiwan and Vietnam, according to a new United Nations report Global trade dropped 9 per cent in 2020, with trade in goods declining by 6 per cent and trade in services decreasing by 16.5 per cent
China economy: FDI rose in January following record 2020
Foreign direct investment (FDI) into China rose 4.6 per cent from a year earlier in January to 91.61 billion yuan (US$14.2 billion) In US dollar terms, FDI rose 6.2 per cent year on year to US$13.47 billion, the Chinese Commerce Ministry said on Wednesday
Three reasons China’s economy is strong but not invincible
China’s economy is surging while the rest of the world struggles with the pandemic, bringing the day it surpasses the US as the leading economy ever closer Even so, China’s demographic time bomb, an only partially liberal financial market and systemic weakness in frontier science and technologies threaten its rise
The Hidden Costs of China’s Canceled New Year Parties
For Chinese businesses, the Spring Festival holiday is often the most important week of the year. But with the country still wary of COVID-19 outbreaks, many are having to tighten their belts.
Covid Keeps Workers in Factories, Distorting China Spending
For the first time in her life, Zhang Sufang won’t be going home for the Lunar New Year. Instead the 37-year-old production supervisor is exchanging gifts with her parents and 16-year-old son by post as fears of reigniting the pandemic in China disrupt the nation’s biggest holiday. “When I received boxes from home, I burst into tears,” said Zhang, who works at Fujian Strait Textile Technology Co., a yarn-maker in eastern China. China may have got its control of Covid down to a handful of new cases per day, but quarantines and travel curbs to keep it that way have forced millions of factory workers to give up the idea of a traditional family gathering. That will distort what is traditionally an annual catalyst for spending, a setback for a government trying to boost the role of consumption in the economy.
The 6G war is brewing between US, China but who will win it?
Both US and China are engaging in a geopolitical war that is based on the 6G deployment. The US has already its plans set in motion, even though they are nothing more than being in theory right now. The Alliance for Telecommunications Industry Solutions, a US-based telecom standards organisation popularly called ATIS, launched the Next G Alliance back in October to bring “North American leadership in 6G.” This alliance includes members such as Apple, AT&T, Qualcomm, Google, and Samsung. Huawei, which is in the frontier of 5G push globally, was left out. But China is leveraging this situation to show how powerful it can become. In November, China launched a satellite to test airwaves for 6G transmission while Huawei opened a 6G research and development centre in Canada, the BloombergQuint report said citing Canadian media. It is not, however, clear how the North American leadership in 6G deployment will turn out to be considering Huawei’s investments in Canada, which is the second most important country in the continent. Another telecommunications behemoth ZTE Corp. has partnered with China Unicom Hong Kong Ltd. to work on 6G development.
huawei smartphone 5G telecom handsets
A Huawei smartphone store on Nov. 17, 2019 in Beijing. (Image credit: TechNode/Coco Gao)
Huawei is seeking approval from authorities to acquire licensed digital payment provider Xunlian Zhifu, Chinese media reported. The telecommunications giant is the latest of China’s big tech firms to expand into the digital payment industry, just as regulators are trying to break Ant Group and Tencent’s duopoly in the market with new antitrust law
China antitrust: Beijing’s new rule book raises the bar for what counts as a monopoly
The final version of China’s new antitrust guidelines came into effect on Sunday It comes at a time when some of the country’s largest and most influential technology companies are embroiled in various anti-monopoly issues
China Has 264 Unicorn Firms, US Has 240: Together They Take 80% Of Global Total
In 2020, China added 46 new unicorn companies. At the end of the year, there were 264 unicorn companies in China, which has surpassed the 240 in the United States, according to Chinese data tracker IT Juzi. Europe has 61 unicorns, while Asia ex China has 62 unicorns. South American has 9 unicorns, while Africa and the Oceanic has one each. Other big countries in terms of unicorn companies are the UK, which has 28. India has 29, Germany has 12, and Israel has 11 unicorns.
tiktok national security US app bans
ByteDance’s international short video app TikTok is planning to roll out a livestream shopping feature in an effort to duplicate in the US the success of Chinese version Douyin. Troubled coffee chain Luckin filed for bankruptcy in the US. E-commerce site Vipshop.com was fined RMB 3 million for unfair competition. Didi Chuxing is raising $4 billion funding for its community-based grocery delivery unit.
From Lightbulbs to 5G, China Battles West for Control of Vital Technology Standards – The Wall Street Journal
Nearly every product in American homes, from lightbulbs to couches, windows and Wi-Fi routers, conforms to standards and measurements of a global system established to ensure quality and seamless operation. Industrial standards, created by the U.S. and its allies over decades, form an invisible matrix of rules that underpin the global marketplace. Mundane though it may sound, this uniformity is critical to international trade in how it guarantees that bolts, USB plugs and shipping containers can all be used interchangeably world-wide. The standards reflect the consensus of international panels long dominated by Western technical experts.China now wants to take the lead in fields of the future. To the consternation of many Western countries, Beijing is employing state funding and political influence to try to define the norms for all manner of cutting-edge technologies that span telecommunications, electricity transmission and artificial intelligence.
Volkswagen is exploring flying vehicles in China
Volkswagen (VLKAF) is looking into flying vehicles in China, becoming the latest automaker to probe the possibilities of personal air travel.
Yangtze River Delta: Hong Kong, mainland Chinese developers invest billions as they seek to ride region’s ambitious development plan
Hong Kong-listed K Wah International Holdings sets the bar high with plans to invest US$1.55 billion in proposed mixed-use project in Nanjing Capital investment in the Yangtze River Delta is being driven by infrastructure development and companies’ expansion plans, say analysts
Dongguan’s multinational factories from Gillette to Samsung give it an edge as a manufacturing hub for the bay area
Dongguang is the fifth-largest city in the Greater Bay Area by size of economy, boosted by investments by the likes of Swire Pacific and Samsung The city is seeking to wean itself off a reliance on low added-value and labour-intensive manufacturing as growth has lagged the nation’s average
New ‘future city’ to rise in southwest China
The 4.6-square-kilometer (1.8-square-mile) site outside Chengdu, the capital of Sichuan province, will be home to multiple new universities, laboratories and offices, according to the architectural firms behind the project, Office for Metropolitan Architecture (OMA) and Gerkan, Marg & Partners (GMP)
Questions remain for China’s ‘eco-civilisation’ ambitions
On 22 September 2020, a year already dominated by the unexpected, China’s President and Communist Party General Secretary, Xi Jinping, delivered a surprise that was more widely welcomed than many of the year’s events. Speaking by video link to the UN General Assembly, Xi announced that China was setting a target for carbon neutrality by 2060 and that the country’s emissions would peak before 2030. Results in some areas have been clear — air quality, at least in the eastern cities, is notably improved—but in others large questions remain. Despite the COVID-19-induced economic slowdown, China’s emissions have not yet peaked, and the country’s post-pandemic stimulus package is more brown than green, despite the regime’s claim to green leadership. Moreover, China continues to build substantial numbers of new coal-fired power plants at home and, damagingly, overseas. If Xi’s 2060 target is to be met, China’s continuing dependence on coal will be among the biggest challenges. If Xi is truly to claim climate leadership, he must ensure that China’s overseas investments are brought into alignment with the global ambitions of the Paris agreement.
Climate change: China’s energy regulator proposes target of 40 per cent renewables by 2030
NEA also calls for share of power generated by non-hydro renewable sources to be raised to 25.9 per cent, in draft policy document Analysts disagree on whether the country could meet the goals within a decade
China’s electric cars: unit of most indebted developer rolls out nine EV models, but no sign of launch
The company, which unveiled six Hengchi-branded EVs in August, rolled out another three models on Wednesday While none of the nine models has been assembled yet, the company previously said the cars would be launched either in the second half of this year or the first half of 2022
Southeast Asia’s China anxieties are rising despite coronavirus aid, most would side with US: study
While region’s elites acknowledge China has been of more help than the US in the pandemic, their concerns over Beijing’s clout have grown, study finds Almost nine in 10 are worried about Beijing’s rising influence, and more than six in 10 now say the bloc should side with the US over China if forced to pick
How China has Tightened its Grip on Myanmar’s Economy
Myanmar’s top leaders visit China regularly while China’s top leaders rarely visit Myanmar. The country is falling into Chinese debt trap with China accounting for 40% of the national debt. The huge Chinese investments in Myanmar, worth US$21.5 billion so far, comes with recent loans of a higher interest rate of 4.5%, much above the interest rate charged by agencies like the World Bank and the IMF. Myanmar, a country with a GDP of US$76 billion, pays China annually US$500 million for its loan repayment. And it has no other option but to look up to China when it comes to defend its position on Rohingya Muslim issue or the recent military coup. Beijing has fully backed Myanmar in the face of mounting international pressure on the Rohingya issue that forced hundreds of thousands of Rohingya Muslims to flee Myanmar. China has also blocked the UN condemnation of the military coup. And, in bargain, China is extracting its price, expanding its presence in Myanmar.
The U.S.’s China Strategy Needs New Tools
Ultimately, China’s sense of its national interest is unlikely to change dramatically under Xi. Beijing will cooperate on issues that it believes advance those interests (see: climate change) while holding firm on those it does not (see: state subsidies for strategic industries). The same can be expected for its use of potential retaliatory tools such as rare earth quotas. Xi will hold his nose on aggressive U.S. trade action or industrial policy so long as he believes Chinese rare earths sales are ultimately beneficial for advancing technological self-reliance and broader economic development. The Biden administration can show Xi that the U.S. means business by enhancing support for strategic domestic industries like semiconductors and demonstrating a renewed commitment to our allies in times of international pressure. With the current leadership in Beijing, an overhaul of China’s economic policy is unlikely to occur absent a definitive demonstration that its strategy is futile and too expensive. But that’s not going to happen anytime soon. And until that time comes, U.S. policymakers should be prepared to adapt to a system with tightening plurilateral rules while semipermanent retaliatory measures become the new normal. To do any less would be to repeat the mistakes of a past generation of policymakers, extending deference to China’s development to a far greater degree than it deserves.
South China Sea: US and allies apply pressure on Beijing but ‘they’re unlikely to go all out’
American aircraft carrier strike groups and a French nuclear submarine carried out separate operations in the disputed waterway this week Analysts expect more such efforts to challenge China’s activities in the region but they do not see an increased risk of conflict breaking out
How an Australian identity crisis may be fuelling recent tensions with China
The cause of the downward spiral in relations may not be Australian politicians’ unwise choices and China’s forceful reaction, but deeper structural forces at play in Australian society, particularly its cultural, political and economic ties to the US
China’s corruption busters warn ‘poisonous elements’ are still part of domestic security apparatus
Inspectors from the Communist Party’s top disciplinary body say not enough has been done to root out the influence of fallen officials The public security ministry and Shaanxi province have been singled out for criticism over the toxic legacy of the ‘big tigers’ jailed for graft
Tianwen-1, China’s mission to Mars, has entered orbit
After traveling through space for seven months, China’s Tianwen-1 probe has reached Mars and successfully entered the planet’s orbit on Wednesday — bringing it one step closer to landing on the surface.
Why China’s Elderly Are Still Waiting to Get Vaccinated
Even with two domestically developed COVID-19 vaccines approved for public use, only adults under 60 are currently eligible for inoculation.
Chinese New Year: as coronavirus crashes the party, Southeast Asians find other ways to celebrate
Covid-19 restrictions have put a spanner in the works for traditional festivities that emphasise family gatherings and communal meals But people in Southeast Asia say there are other ways to make the period special, even if the ‘prosperity toss’ needs to be toned down
Service Asie Pacifique
Place Sainctelette 2
Tél 02 421 85 09 – Fax 02 421 87 75
Copyright © 2020 awex, All rights reserved