China Press Review – February 14, 2019

Press review

China’s exports shot up dramatically in January boosted by EU and Asean orders, despite US trade war
Import and export figures better than expected as front-loading ahead of the Lunar New Year boosted sales, beating a median forecast of economists by Bloomberg January’s exports rose 9.1 per cent from a year earlier in a significant improvement on December when they fell by 4.4 per cent

China’s January trade data come in much stronger than expected
China’s January dollar-denominated exports rose 9.1 percent from a year ago, defying a forecast of a 3.2 percent contraction. China’s imports fell 1.5 percent over the same period, far better than the 10 percent decline that was expected. China’s overall trade surplus of $39.16 billion in January also beat expectations.

With eyes on China, EU lawmakers back investment screening
Members of the European Parliament take part in a voting session in Strasbourg Thomson Reuters
EU lawmakers overwhelmingly backed a far-reaching system on Thursday to coordinate scrutiny of foreign investments, notably from China, to protect strategic technologies and infrastructure in Europe. The vote was 500 in favor, 49 against and 56 abstaining.

US exports to China plunged in January as trade war chill took effect
China imports from US plunged 41.1 per cent in January from a year earlier, Beijing says Overall exports rose significantly but analysts put this down to seasonal factors

What’s New About China’s Latest EU Policy Paper?
The last policy paper was issued just four years before. What changed?

US’ Steven Mnuchin upbeat for Beijing trade talks with Liu He – before an unusual photo session
Treasury secretary and Chinese vice-premier, along with US Trade Representative Robert Lighthizer, offer show of respect for each other US delegation in Chinese capital for two days of talks with counterparts

Across the Negotiating Table: A Who’s Who of China’s Trade Team
U.S. Treasury Secretary Steven Mnuchin and U.S. Trade Representative Robert Lighthizer are facing off against a team of Chinese negotiators this week in Beijing, in an attempt to resolve the trade war between the two nations

China’s Economic Downturn AND the US-China Trade War AND their Impact on YOUR Company
China lawyersOur China lawyers are constantly getting asked how China’s slowing economy and all that is going on between China and the United States will impact foreign business with China. We get asked this by clients, by reporters, and even by friends and those who ask us usually expect a simple answer, like “not well.” It is though more complicated than that. We have been seeing the following (some of which we predicted, some of which we did not):

China’s Economic Downturn AND the US-China Trade War AND their Impact on YOUR Company

US-China trade deal must address IP and tech transfer threats, senators tell Donald Trump
Letter from Democratic senators reminds president of Chinese practices identified by US investigation last year Several lawmakers and business groups have urged Trump not to settle for a deal based largely on China buying US farm and energy commodities

US-China trade war having ‘no effect’ on China steel, amid surging domestic market and tariff exemptions
New study shows Chinese steel producers are enjoying more exemptions from tariffs than those from Canada, South Korea, Spain and the United Kingdom China increased its total steel production massively in 2018, from 831.7 million metric tonnes to 928.3 million metric tonnes, almost half the world’s total

Looking for the Next China? There’s Just One Problem
It won’t be easy to find an emerging-markets alternative to the world’s second-biggest economy. Is it time to ditch China and look elsewhere? With the higher tariffs that China Inc. faces, U.S. companies will be tempted to buy semiconductor parts from Malaysia, data storage units from Thailand, or cotton from Pakistan. Indeed, some asset reallocation is already taking place. Vietnam, for instance, was the only emerging Asian nation outside of China that received net foreign stock inflows last year. Many investors in the region have been betting the Southeast Asian nation will be the big winner out of the U.S.-China spat. Multinationals including Samsung Electronics Co. relocated factories there even before the trade war started.

Think smarter and carry a bigger stick in Asia, China-watchers urge US President Donald Trump’s administration
Group of analysts and former US officials call on America to turn its attention to developing the technology of the future and building international alliances to address China’s rise The United States should also stage military exercises in Beijing’s backyard, the researchers say

Huawei, US-China tensions and West’s 5G fears on the agenda as Beijing joins security talks
Yang Jiechi can expect to field some tough questions over Huawei partnerships US officials expected to continue to ‘lecture’ European allies over 5G alliances

White House executive order that would bar Huawei from US will be released within days, American officials say
The sweeping executive order demands an investigation into the risk posed by telecommunications equipment from countries considered US adversaries, sources say A public signing ceremony by US President Donald Trump is said to have been scrapped in a bid to limit the fallout from China

Huawei battles for hearts and minds in global soft power push
From sports sponsorship in Canada to high culture in Europe, the Chinese telecommunications giant is on a charm offensive Public relations messaging stepped up in the face of negative headlines

Huawei: New Zealand needs us like rugby needs the All Blacks
Huawei is playing on New Zealanders’ love of sport with an advert it hopes will soften the rugby-mad nation’s stance towards using the Chinese giant’s technology.

Man vs machine: China’s workforce starting to feel the strain from threat of robotic automation
Companies, including iPhone manufacturer Foxconn, are turning to robots with around 100 million workers in China’s manufacturing industry under threat The city of Dongguan in China’s industrial and export hub allocated US$56.8 million to boost automation in factories last year alone

Greater Bay Area is a chance for Hong Kong to show it hasn’t lost its edge
Christine Loh says if Hong Kong is to capitalise on China’s development plan for the Pearl River Delta, the government must engage with sectors in which the city excels, such as universities and the maritime industry, to boost areas of specialisation

China’s Deleveraging Campaign Marches On (Video)
China has struggled with bad debt for several years now, with excessive leverage threatening the financial viability particularly of state owned enterprises. China’s deleveraging campaign has strived to bring down these high levels, with top officials viewing high levels of debt as a threat to financial stability. Despite all the policy priority given to deleveraging, it was reported last year that Chinese non-financial corporate debt was on the rise in the first quarter of 2018.

Tianjin’s foreign investment and jobs drop amid trade war and industrial shift to new sectors
Closure of Samsung’s huge smartphone factory in December highlights the challenges faced by foreign firms in China’s fast-evolving business environment Total foreign direct investment in Tianjin last year plunged to US$4.85 billion from US$10.61 billion in 2017; gross domestic product growth fell to 3.6 per cent

US investment in China more than doubles in January despite trade war, hi-tech industry grows significantly
Investment from the United States increased by 124.6 per cent despite overall growth in China’s foreign direct investment (FDI) slipping to 4.8 per cent to US$12.45 billion China’s hi-tech industry saw significant growth, with the use of foreign capital surging 40.9 per cent year-on-year, the Ministry of Commerce said

China’s investment to grow faster in 2019
Investment, an important engine of the Chinese economy, is expected to grow faster this year, allowing China to better cope with economic uncertainties in 2019, according to industry reports. A report from the Economic and Strategic Planning Department of the Bank of China (Hong Kong) forecast a rise of 7.3 percent in China’s aggregated investment in 2019, up 1.4 percentage points from 2018.

Incubators in China for Developing a new Electronic Hardware Product
Many articles have explained why Shenzhen is the best place to develop a new electronic hardware product that is targeting a high sales volume. If you want to do things faster and cheaper than in your home country, this is the place to be. Some founders stay in their country and work on the design, marketing, and distribution, and they pick a local partner for handling some of the engineering work. Others decide to relocate to Shenzhen — these ones are often interested in getting help from incubators in China.

Incubators in China for Developing a new Electronic Hardware Product

As information increasingly drives economies, China is set to overtake the US in race for data
China will generate more data than the United States by 2025 as it pushes into new technologies such as the so-called Internet of Things, according to a study from the International Data Corporation and data storage firm Seagate. In 2018, China generated about 7.6 zettabytes of data and that number will grow to 48.6ZB in 2025. Meanwhile, the U.S. generated about 6.9ZB of data last year. That number is predicted to be about 30.6ZB in 2025. While the availability of more data on their customers is something businesses can cheer about, others have raised concerns over how that information is being used.

China’s Chip Fab Capacity Rising Fast
China’s installed semiconductor wafer production capacity grew faster than any other region of the world in 2018 as the nation continued to ramp into high gear its ambitious plan to bolster its domestic semiconductor industry, according to market research firm IC Insights. At the end of 2018, China accounted for 12.5% of the world’s global fab capacity, up from 10.8% in 2017, IC Insights said. The 12.5% share put China nearly in a dead heat with North America, the firm said.

Dovish Federal Reserve policy spurs a rally, including in Chinese real estate, but it’s probably just a bubble
Nicholas Spiro says investors went overboard in selling off last year and are overcorrecting mainly due to a Fed policy shift, but weak fundamentals suggest the rally in Chinese stocks can’t be sustained

Union Investment to buy 16,000 German apartments from Chinese investor – sources
German fund manager Union Investment is nearing a deal to buy about 16,000 German flats from BGP, a Chinese investor, in a roughly 2 billion euro (1.75 billion pounds) deal, people close to the matter told Reuters.

China’s top wallet app now has 4m US shoppers
China’s wallet app Alipay isn’t just big in its home nation – it also has 4 million users in the US.

‘Nice but a bit dull’ – why China’s growing ranks of affluent, independent women don’t want their men to buy them jewellery
The new trend for women to treat themselves to necklaces and rings has changed the jewellery landscape in China Local and global brands have responded to the shift in demand by launching new ranges aimed at the successful female consumer

Japanese Itochu employee detained in China linked to espionage claims
The unnamed worker is said to have been in detention since February last yea

China’s ‘ham-handed’ PR moves hurt its global image
Canada, Australia and EU push back at Beijing over perceived hostage diplomacy

China’s lost opportunity
Under Xi, China had an opportunity to reach out and explain what the world would look like if it played a bigger role. After a decade of the travails associated with the Brexit vote, the election of Trump and the rise of populism, more people than ever were willing to listen to anything fresh that China could contribute. While there are plenty in Beijing who seem to believe that the spate of bad news stories about the country is part of a conspiracy to contain and humiliate it, that is unfair and disingenuous. Some commentators might want to see nothing but bad in China’s behaviour, but the majority are neutral, and there are also many who see positive relations and good-quality cooperation as key. China is making that constructive and moderate position increasingly difficult to advance. It is a tragedy that China is in this position, not just for China itself but also for the rest of the world. Things need to change radically, and quickly, before the country settles into the role of outsider and becomes an object of constant suspicion and criticism—and before we all have to contemplate a future in which one of the world’s most important powers exercises influence through force and fear.

China’s lost opportunity

Ambassador to China Anna Lindstedt sent back to Sweden after Gui Minhai reports
The Swedish embassy in Beijing says its ambassador has been sent back to Stockholm after reports emerged that she was involved in arranging a meeting between Gui Minhai’s daughter and Chinese businessmen said to be trying to secure the release of the bookseller.

Drink Company Probed for Claiming to Give Women Bigger Breasts
Coconut Palm is in the middle of a controversy — again — for advertisements asserting it can make women “curvier.”

China’s environmental crime arrests soar in 2018
Polluters punished ‘to repair social relations and restore environmental damage’

Are Hongkongers getting more romantic? Money spent on Valentine’s Day climbs by almost two thirds, according to Mastercard’s Love Index
The city’s loved-up couples spent 62 per cent more on Valentine’s Day last year than they did in 2016, according to the Mastercard study

‘Virtual girlfriends’ like Mango Girl at the heart of a WeChat scam
Police arrest 28 people – mostly men – accused of creating fake profiles on the social network to dupe other men into sending money Shanghai man says he transferred nearly US$2,000 in ‘birthday gifts’

China’s most popular app is a propaganda tool teaching Xi Jinping Thought
The Xuexi Qiangguo app is now the most downloaded item on Apple’s App Store in China Released by China’s Communist Party, the app is helping cadres learn more about its political doctrine

Alain Gillard
Information Officer
Service Asie Pacifique
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