Belgian-Chinese Chamber of Commerce (BCECC)

China Press Review – February 17, 2022

Will China’s latest monetary policy easing reinvigorate the economy? Markets remain wary
While January data suggests policy easing has prompted a rise in bank lending, the figures are distorted by a tendency to issue loans at the start of the year.  As for the rest of 2022, concerns remain about the overall policy direction following last year’s regulatory crackdown.

Corporate China faces cash crunch as consumer spending slumps
Key money supply figure contracts for first time as deposits fall A key measure of China’s money supply signals that companies’ capital cushions are narrowing as sluggish consumer demand keeps cash from circulating through the economy.  The M1 money supply, which includes cash and demand deposits at banks, fell 1.9% on the year for January — the first-ever decline in data going back to 1997. This and the M2 supply, which also includes time deposits and household savings accounts, are closely tied to economic conditions and prices.  The downturn was driven by a 5.3% drop — the largest on record — in corporate deposits, which make up about four-fifths of the M1 supply.

China warns its local governments don’t be overambitious in carrying out ‘common prosperity’ drive
National Development and Reform Commission (NDRC) warns local authorities against over-promising on social welfare amid Beijing’s push to reduce inequality    Local governments should focus on essential services such as education, housing, medical and elderly care, says the nation’s top economic planning agency

‘Pathetic’ performance has left U.S. ‘well behind’ China in 5G race, ex-Google CEO Eric Schmidt says
The U.S. government’s “dithering” has left the country “well behind” China in the race to build out 5G technology, former Google CEO Eric Schmidt said in a Wall Street Journal op-ed. Schmidt and co-author Graham Allison, a Harvard professor, urged the Biden administration to make 5G a “national priority”, otherwise, “China will own the 5G future.”  The authors said 5G development is key as applications could “advantage a country’s intelligence agencies and enhance its military capabilities.”

US-China tech war: Taiwan chip giant TSMC seeks geopolitical analyst amid US-China tensions
The company, the world’s largest semiconductor foundry, has been caught in the middle of rising US-China tensions    Taiwan has passed a revised draft of its national security law amid allegations of technology theft by mainland companies

Metaverse in China will look different from the rest. Here’s why
Morgan Stanley in a note to investors believes that the nascent Metaverse industry in China alone would become an US$8 trillion market in the future. Experts foresee a ‘clean, censored, compliant and crypto-less’ metaverse industry for China.

Alibaba said to launch direct online retail model to complement Taobao, Tmall platforms amid increased competition, weak consumer spending
A new app to be launched via Tmall will establish an online retail model in which Alibaba will directly source, buy, store and market goods    A number of consumer electronics brands have already started talks with Alibaba ahead of this launch

Alibaba to further rival with a new self-operated e-commerce platform
Alibaba, one of China’s tech giants, is to renovate its current business-to-consumer (B2C) platform Tmall into a self-operated e-commerce platform with a rebranded name Mao Xiang, according to the Chinese media outlet LatePost on 16 February. The update is believed to be introduced soon to Tmall’s mobile app users with reputable brands of the 3C (computer, communication, and consumer electronics) category, being the focus of the initial launch phase.  Although there might be an overlap of products between Mao Xiang and brands’ flagship stores on Tmall, the two platforms have a different supply of goods and operating models. While products sold at Tmall’s storefronts belong to brands and are delivered directly by brands, those sold at Mao Xiang’s directly managed stores belong to and are dispatched by the e-commerce platform, therefore, delivered sales will also go to Mao Xiang.  By doing this, Alibaba can shift more of its focus on product sales and allow the group to leverage the platform’s user base to generate more shares from record-breaking online sales, in particular during annual online shopping extravaganzas such as Double 11. This is instead of relying heavily on charging brands service fees, therefore, potentially bringing out more revenue.

China Trade Unions – Considerations for Employers Under New Amended Law
China trade unions have in the past mostly been formed by blue-collar workers in traditional manufacturing and construction industries. Those working in newer types of low-paid work, such as “gig economy” workers, have mostly been overlooked by trade unions. A new amendment to China’s Trade Union Law seeks to rectify this – but it is unclear how much change it will bring. We look at how trade unions work in China, the main considerations and requirements for companies to accommodate trade unions under the law, and how the new amendments will impact workers’ rights in China.

China’s EV market: top appliances maker Midea’s US$1.7 billion car parts plant eyes market’s exponential growth
Shenzhen-based company is building an 11 billion yuan (US$1.74 billion) factory to make EV components to meet growing demand for green cars     Plant will be capable of generating 60 billion yuan worth of parts annually, including power steering motors and thermal management systems

China urges iron ore traders to reduce inventory, stocks to reasonable levels after Qingdao probe
The National Development and Reform Commission held a symposium with the State Administration of Market Regulation   They urged traders to help verify if there are any irregularities in the iron ore market, such as tactics to hoard or drive up prices

China slams New Delhi for ‘suppressing’ Chinese firms after tax raid on Huawei’s India offices
Huawei confirmed on Wednesday that India’s tax officials had visited the company’s local offices and spoke to employees    China is ‘deeply concerned’ about India’s ‘suppression of Chinese firms’, said Gao Feng, spokesperson for China’s commerce ministry   “We noticed intensifying concerns about India’s investment environment from foreign investors, including Chinese companies,” Gao said. “We hope that India could foster a fair, transparent and non-discriminatory business environment for Chinese companies in India.” Last month, India ordered the local unit of Chinese smartphone maker Xiaomi to pay 6.53 billion rupees (US$87.8 million) in allegedly unpaid import taxes. Xiaomi said it was negotiating with local authorities over the amount to be paid, noting that there was “different opinions on the price determination of imported goods”. The raid conducted at Huawei’s offices comes days after India banned 54 Chinese apps over security concerns, including those owned by Chinese tech giants Tencent Holdings, NetEase, and South China Morning Post owner Alibaba Group Holding. That is on top of the more than 200 Chinese apps that have been barred from use in India over the past two years. The action by India’s tax authorities could cast a shadow over Huawei’s business prospects in South Asia’s largest economy. The telecoms giant has been vying for a piece of India’s 5G network development, but last May the government excluded Huawei and its Chinese peer ZTE Corp from taking part in the country’s sixth-month trial of 5G technology. Separately, India is not a significant smartphone market for Huawei. The company accounted for well under 1 per cent of the country’s 161 million smartphone shipments in 2021, according to research firm IDC.

China’s Huawei seeks more information, vows to cooperate after tax raid on its offices in India
Huawei confirmed on Wednesday that India’s tax officials had visited the company’s local offices and spoke to employees       The raid could cast a shadow over Huawei’s business prospects in the Southeast Asian nation, where it has been vying for a piece of the 5G network roll out

Adidas says will grow in China in 2022
 German sportswear company Adidas ADSGn.DE said on Thursday it would grow in its key market of China in 2022 even after it was hit by renewed pandemic restrictions and the aftermath of a consumer boycott of Western brands. The comments come after Manager Magazin reported Adidas expects sales in China to be down 400 million euros ($455 million) in 2022, without citing its sources. Group will give employees the option to work remotely on certain days of the week fromMarch 1
The move will make the group the first internet company in China to implement a hybrid work model.  The new model will be rolled out to all of the group’s employees, starting with offices on the Chinese mainland.  Implementation of the policy came after trial periods in 2010, 2020 and 2021. The latest data from the 2021 trial shows that 93% of employees felt they used their time more efficiently and 75% reported feeling an improvement in their wellness.

China’s local governments double down on innovation to drive growth
Not long after metaverse became a buzzword in the tech world, generating hopes that it may unlock new potentials of the internet, the term has made its way into the industry policies of China”s local governments.    As part of their economic planning for 2022, local decision-makers have vowed to further develop future industries, from metaverse and blockchain to artificial intelligence (AI) and extended reality, a move reflective of their growing desire to look to innovation as a key driver of growth.

Shanghai takes lead in forming standards in nation
Shanghai will lead in the formulation of 60 new international and 800 new national standards as part of its pledge to be a pioneer in standardization by 2025.   A bevy of targets were announced in the Shanghai Standardization Action Plan published on Thursday, including incubating an additional 50 Shanghai standards and implementing 30 national standardization demonstration projects.

The first year of China’s national carbon market, reviewed
The government is considering eliminating a large surplus of emissions allowances, to avoid market imbalance China’s national emissions trading scheme (ETS) became operational last year, obliging more than 2,000 big emitters in the power sector to account for their emissions in 2019 and 2020. The current scope of the ETS includes annual emissions close to 4.5 billion tonnes of CO2 per year, or around 40% of China’s total. Unlike similar schemes elsewhere, such as in the European Union, China’s allocation of emissions allowances is not decided upfront via an absolute cap but is based instead on emissions intensity. One allowance means a company can emit 1 tonne of carbon.

US-China relations: why Californian wines are bubbling back from Trump’s trade war
Following the outbreak of the US-China trade war, Beijing raised tariffs and taxes on US wine from 48.2 per cent to 93 per cent per bottle     Since then winemakers have recouped losses by reselling domestically, diversifying markets and cautiously re-entering mainland China

Analysis: Who’s too cozy with the private sector? Xi Jinping decides
China’s first arrest for ‘disorderly expansion of capital’ sends shock waves   China should encourage the “orderly development” of capital, the article said. But what is orderly development and how does it differ from a disorderly expansion? That comes down to the whims of the Communist Party.   It is almost as if there is a traffic light system for screening capital. A red light means stop; a green light means go, with the lights operated by the Communist Party under Xi. No rules are specified in advance.   “Which capital is good and which capital is bad will be determined from a political standpoint in the future,” said a Chinese intellectual familiar with the history of the development of the country’s socialist market economy. “Xi wants to dye even capital with his own color. Also present at the symposium were senior officials from the National Development and Reform Commission. The commission’s predecessor was the State Planning Commission, which was once in charge of building a socialist planned economy. Elements of a controlled economy or a planned economy are now entering the world of the internet.  On Tuesday, China brought into force new rules requiring any internet company with data on more than 1 million users to face a security review by authorities before listing overseas. Deng’s southern tour lasted from Jan. 18 to Feb. 21 in 1992. In the 30 years that have since passed, the degree of freedom in the socialist market economy gradually increased through the eras of three successive leaders — Deng, Jiang Zemin and Hu Jintao.   But, now under Xi, those freedoms are facing a major turning point

Enemies of My Enemy
How Fear of China Is Forging a New World Order
The history of international order, however, provides little reason for confidence in top-down, cooperative solutions. The strongest orders in modern history—from Westphalia in the seventeenth century to the liberal Until now. Through a surge of repression and aggression, China has frightened countries near and far. It is acting belligerently in East Asia, trying to carve out exclusive economic zones in the global economy, and exporting digital systems that make authoritarianism more effective than ever.     In the coming years, the trade and technology wars between China and the United States that began during the Trump administration will rage on as both sides try to expand their respective spheres. Other countries will find it increasingly difficult to hedge their bets by maintaining links to both blocs. Instead, China and the United States will push their partners to pick sides, compelling them to reroute their supply chains and adopt wholesale the ecosystem of technologies and standards of one side’s order.    The clash of systems between China and the United States will define the twenty-first century and divide the world. History shows that eras of fluid multipolarity typically end in disaster, regardless of the bright ideas or advanced technologies circulating at the time. The late eighteenth century witnessed the pinnacle of the Enlightenment in Europe, before the continent descended into the hell of the Napoleonic Wars. At the start of the twentieth century, the world’s sharpest minds predicted an end to great-power conflict as railways, telegraph cables, and steamships linked countries closer together. The worst war in history up to that point quickly followed. The sad and paradoxical reality is that international orders are vital to avert chaos, yet they typically emerge only during periods of great-power rivalry. Competing with China will be fraught with risk for the United States and its allies, but it might be the only way to avoid even greater dangers.

US accuses China of ‘serious harm’ to workers through trade
China’s economy is increasingly state-led according to the Biden administration
The US has accused China of causing “serious harm” to workers and firms around the world with its trade policies. The US Trade Representative accused Beijing of repeatedly failing to live up to trade commitments. The Peterson Institute’s Chad Bown says other countries are increasingly voicing similar concerns.   He said: “That includes the European Union, as demonstrated through the US-EU Trade and Technology Council, as well as Japan, where the three have formed a ‘trilateral’ group to identify potential new rules that could address problems posed by economies dominated by state-owned enterprises and industrial subsidies”.  Any improvement in US-China trade relations, says Mr Bown, “will take time and will [probably] only result from negotiations between not just those two economies, but the other major players as well”.

China-EU relations: Xi, Macron phone call ‘will help ease friction’ that stalled investment deal
The two leaders made special mention of bilateral trade in areas such as agriculture, finance, aviation and commerce, as well as cooperation in climate change   Analysts say the phone call could lay the groundwork for ‘high-level consensus’ on the China-EU bilateral investment agreement that stalled amid sanctions

China vows closer ties with France, as EU relations remain strained over Lithuania’s Taiwan moves
Xi Jinping’s call for mutual respect and benefit accompanied by praise for French efforts to ‘enhance the strategic autonomy of Europe’     Latest Beijing-EU tensions stem from Lithuania’s ties with Taiwan, with the tiny Baltic nation seen to be acting as a US proxy

Xi Jinping calls for diplomatic resolution of Russia-Ukraine dispute
‘All parties concerned should stick to the general direction of a political settlement,’ Xi is reported as saying during a call to French President Emmanuel Macron     Discussion outlined ways the two nations could work together, though French ministry says Macron raised issues like Xinjiang and China’s failure to ratify ILO conventions

China-EU business competition does not exclude possibility of cooperation in Africa
The leaders of the EU and the African Union (AU) will meet for the sixth European Union – African Union summit in Brussels on Thursday and Friday. The summit is ambitious and covers sectors such as climate change, growth financing, migration, peace and education. More investment schemes will be revealed during the summit.

Chinese exile Guo Wengui files for bankruptcy after yacht dispute
Businessman was last week told to pay US$135 million fine or face arrest for violating court order to keep his vessel in American waters  The luxury yacht, called the Lady May, made the news in 2020 when Trump strategist Steve Bannon was arrested on board

Southeast Asian Elite Survey Paints Complex Picture of China Ties
The ISEAS-Yusof Ishak Institute’s latest State of Southeast Asia survey reflects the region’s fraught and ambivalent view of China’s rising power.  Ultimately, the 2022 State of Southeast Asia survey report articulates with a considerable degree of nuance the region’s fraught and ambivalent views of China, which can perhaps best be summed up as “can’t live with it, can’t live without it.” While Southeast Asians are overwhelmingly fearful of Beijing’s growing power and ambition, they are also aware that it is an important economic interlocutor and an unavoidable partner on many of the region’s most pressing issues. Similarly, while the U.S. and other major powers command higher levels of trust and support among the region’s elites, the latter do not share Washington’s often binary framing of U.S.-China competition, and are unlikely to join any coalition organized around anti-China principles.

China’s zero-Covid policy under review as economic pressure mounts, chief epidemiologist says
Chinese researchers ‘actively thinking and planning’ ways to improve the nation’s policies in dealing with the pandemic      But any changes to its strict restrictions would put ‘people first and life first’, Wu Zunyou says

Why China is standing firm on zero-Covid, and will it work for Hong Kong?
Swift, strict measures for two years have kept death rates relatively low on the mainland    Public restraint rather than lockdowns might work better for a city like Hong Kong, say experts

Beijing and Tianjin: These COVID-19 Travel Rules Still Apply
Let’s start with some positive COVID-19-related news.  Both Beijing and Tianjin are now clear of all mid- and high-risk areas for COVID-19.

Alibaba Cloud pushes new transmission tech to help broadcasters live-stream the Beijing Winter Olympics to a global audience
The Alibaba Cloud-powered transmission system, Live Cloud, is being widely used for the first time by Olympic Broadcasting Services, the IOC’s host broadcaster   There are more than 20 broadcast organisations using Live Cloud to broadcast the Beijing 2022 Winter Olympic Games to their viewers around the world

Beijing Winter Games costs spiral as China’s spends to project rising status
China has spent at least Rmb56bn ($8.8bn) to host the Winter Olympics, with the cost to retrofit or build a dozen new venues almost double the original budget, despite a pledge to ensure the Games would be “economical”. The Chinese government has disclosed little about the costs of the Games, which Beijing has sought to use as a showcase for its rising global status. But dozens of procurement and bidding documents reviewed by the Financial Times show that officials spared little expense to host the event. China budgeted $1.5bn to construct or refurbish a dozen venues, including building Olympic villages at three sites, but the documents show the projects cost at least $3bn.  Authorities also spent significantly to avoid any potential blemish to the spectacle and ward off a Covid-19 outbreak. This included Rmb32m to finance pollution studies and monitoring systems to ensure blue skies and Rmb4m to buy dividers for use in canteens.

Chinese Olympians Balance Politics and Sport
Chinese athletes must navigate not only their chosen sports but also CCP redlines, online nationalism, and corporate demands.   Athletes are also subject to surveillance and image management by the CCP itself. When Reuters covered Chinese weightlifter Hou Zhihui’s gold medal victory with “ugly photos” at Tokyo 2020, government officials tweeted their resentment. Meanwhile, gold medal cyclists Bao Shanju and Zhong Tianshi donned Mao Zedong pins during their medal ceremony last summer – a direct violation of the Olympic Charter, which bans political propaganda –  and were met with a mere warning from the IOC while Chinese officials failed to condemn the political display. For a nation that has opposed the “politicization of sport” ahead of Beijing 2022, China has used the Winter Games to boost its own national agenda, not excluding its most brash elements. The Global Times used Beijing 2022 as a platform to attract attention to winter sport tourism in Xinjiang and to claim that skiing originated in the region. Earlier this month, People’s Liberation Army commander Qi Fabao, who was injured in the 2020 Galwan Valley border clashes with India, carried the Olympic torch. Xi Jinping has similarly leveraged Beijing 2022 to receive his first foreign leaders for the first time in nearly two years, including Russian President Vladimir Putin during the Ukraine crisis. But arguably most controversial among Beijing’s political activities during the Games is Uyghur Olympian Dinigeer Yilamujiang lighting the cauldron at the Olympic opening ceremony amidst international concern over human rights violations in Xinjiang, where experts estimate around 1 million Uyghurs have been forced into involuntary detention. Chinese officials state that its Xinjiang policies are “about countering violent terrorism and separatism” and deny any human rights violations,

China population: marriages fall in latest blow to Beijing’s push for couples to have more children
Jiangsu province saw the number of marriage registrations drop for a fifth consecutive year in 2021, with a 5.16 per cent fall compared to 2020     It is the latest blow to China’s plans to encourage more couples to have children after the number of births dropped for the fifth consecutive year in 2021

China’s Family Planning Body Clarifies Its Abortion Intervention
Officials stressed that the move aimed to prevent unintended pregnancies and abortions among teens, and protect their health and future wellbeing.

What Is China Reading Right Now?
Megan Walsh on the “Little Emperors” of Contemporary Chinese Literature   And at a time when diligence and hard work are part of the government’s national project, indolence is the most rebellious act of all. From Lu Nei’s Salingeresque fuck-ups to the funny, feckless dossers in stories by Da Tou Ma and Wu Qing, many authors born in the last three decades have embraced a lack of drive with a mixture of humility, inevitability, and comedic pride—an irreverence that has recently transformed itself into a growing counter-cultural movement widely known as “lying flat” or tangping—consciously opting out of the rat race.   Having come of age at the same time as China’s contemporary cities, most people born in the seventies and eighties belong to the first one-child, urban, globalized generation in China. With the iron rice bowl long gone, theirs is a time of stark differences in opportunities for those with rural or urban residence cards (hukou), between rich and poor, between old and young, while the shift from the collective to the individual has shattered the notion of communal experience. They are a frontier generation whose apparent mistakes and failures should be seen as the forgivable result of growing up in uncharted territory.

Mattel’s global fashion icon, Barbie has partnered with Guo Pei to create a Lunar New Year doll
 In collaboration with the Chinese stylist and designer Guo Pei and with the support of the Asian Couture Federation, Barbie has created a doll dedicated to the celebration and enhanced the most important festival on the Chinese calendar. Guo Pei is China’s most well-known couturier. She is the designer of the CNY Barbie doll and successfully brought the doll to life. This initiative shows the brand’s recognition of its audience’s Asian heritage. The Barbie wears a traditional Chinese wedding dress with Guo Pei’s signature embroidery detailing.

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