China Press Review – February 19, 2019

Press review

Chinese Vice-Premier Liu He set for Washington talks this week in latest bid to end trade war
White House and Beijing statements reveal fresh deputy-level talks will begin on Tuesday, followed by top-level meetings from Thursday Possible memorandum of understanding to be discussed as clock ticks towards March 1, when tariff truce ends

US-China trade talks resume in Washington on Tuesday
White House says follow-up sessions will take place at a higher level later in the week after negotiations in Beijing end without a deal

Column: U.S. may have overshot in China trade talks
Brinkmanship has been one of the defining characteristics of the Trump administration, as the White House ramps up pressure to create a sense of crisis and force negotiating partners to make concessions. Back in September-October, the administration could have risked imposing punitive tariffs on China and hoped to weather the economic fallout while waiting for China to capitulate. But the economic and financial market situation is now much more fragile and punitive tariffs would threaten to tip the domestic and international economies into a recession.

Is a US-China trade deal on the horizon?
Currency traders are already looking at a potentially very hectic few weeks ahead, with Brexit developments, the deadline for a US-China trade deal and the March European Central Bank meeting all looming large.

Is a US-China trade deal on the horizon?

Europe needs a new strategy to deal with China, says Brussels-based think tank
Infrastructure investment could address ‘risks’ of asymmetrical independence Lack of common priorities makes individual policies ‘vulnerable and insufficient’

Trade war, intense overseas scrutiny will weigh down China’s M&A activity in 2019, PwC analysts say
The prospect of the US-China trade negotiators ‘walking away from the table’ would seriously stifle cross-border deals, said senior analysts with accounting giant PwC

Explained: Regional Comprehensive Economic Partnership (RCEP)
The regional trade pact has been cast as China’s response to the Trans-Pacific Trade Partnership but does not set environmental or labour standards

China’s Economic Sneeze Is America’s Flu
China’s slowdown is troubling U.S. companies that have enjoyed strong exports to that giant economy. Caterpillar missed earnings estimates partly because of China. 3M warned of a sales slowdown related to weak China business. Apple and NVIDIA warned about consumer sales being weaker than expected in China, and automakers see slower car sales in the country. But the China slowdown is pretty minor, with GDP still growing at a good pace, albeit slower than in past years. Retail sales in China are still quite strong, up 8.5% over the last 12 months. Why should a mild deceleration in China trigger substantial reductions in U.S. sales to the country? It turns out that exports tend to be more volatile in general, and also we export a great many capital goods, which are less needed by a slow-growing economy.

In a sleepy Louisiana town, two Chinese chemicals firms are being hit on multiple fronts by the trade war
Shandong companies Yuhuang Chemical and Wanhua Chemical are spending billions on factories but are being hit by both tariffs from China and the United States US companies are also being hit by Donald Trump’s tariffs which are threatening ‘renaissance’ in the American chemicals industry

Can China’s emerging cities help counter the economic slowdown and US-China trade war?

Retail sales growth in lower-tier cities have posted double-digit growth in the past few years compared with larger cities like Shanghai, Beijing and Guangzhou

Can China’s emerging cities help counter the economic slowdown and US-China trade war?
Retail sales growth in lower-tier cities have posted double-digit growth in the past few years compared with larger cities like Shanghai, Beijing and Guangzhou Companies are focusing on growing sales in emerging regions, but they are only likely to alter the national consumption picture in the long term

China shouldn’t celebrate if Donald Trump loses his border wall battle – his successor may be even harder on Beijing
If Trump loses a prolonged fight over his border wall, expect him to be succeeded by another China hawk who lacks the current president’s affinity for Xi Jinping and who can mend ties with disaffected US allies

More and more signs point to slower spending in China. Analysts say not to worry
Citigroup’s chief economist for China, Li-gang Liu, told CNBC’s “Squawk Box” that he expects Beijing to announce some new measures to boost consumption, particularly in the auto sector. On Monday, China’s top auto industry association reported that the country’s automobile car sales in January fell 15.8 percent from a year earlier to 2.37 million. That marked the seventh straight month of declining sales in the world’s largest auto market. The country’s consumer spending on services, which isn’t included in retail sales, has also seen “solid growth,” according to Oxford Economics.

It’s time for China to be honest about the poor shape of its economy
The comforting numbers, rose-tinted projections and all-round positive spin that Beijing has been feeding the public have to stop. The Chinese economy is in trouble and policymakers must take radical action to stop the rot

Waiting for the Global Renminbi
Just a few years ago, the renminbi seemed destined to become one of the world’s most significant currencies. However, its attractiveness has plunged as international investors seek currencies with legal security, ease of use and, critically, unrestricted convertibility.

Waiting for the Global Renminbi

Huawei is just the start: 5G will be a central front in the US-China war for technological supremacy
Despite Huawei’s leading role in the field, security concerns mean the US was certain to oppose the Chinese firm’s involvement in the roll-out of 5G tech – and Washington won’t be alone

Report details Huawei’s alleged tactics to steal trade secrets from Apple
A new report from The Information reveal detail accounts of Huawei Technologies’s efforts to steal trade secrets from its chief competitor Apple. Huawei’s alleged dubious tactics include luring Apple suppliers to spill confidential information with lucrative business deals. US companies including Cisco and Motorola have previously made similar claims against Huawei in lawsuits. However, the Chinese tech giant said it does not seek or have access to its competitors’ confidential information

Briefing: Report details Huawei’s alleged tactics to steal trade secrets from Apple

‘Hypocritical, immoral, unfair bullying’: Chinese spokesman Geng Shuang blasts US for ‘fabricating’ security fears against Huawei as economic ploy
Chinese Foreign Ministry spokesman Geng Shuang accused the US of faking security concerns about Chinese mobile technology to inhibit China’s development
British intelligence agencies meanwhile believe it is possible to limit security risks posed by Chinese equipment in 5G networks

‘No way the US can crush us’: Huawei founder Ren Zhengfei attacks arrest of daughter Meng Wanzhou as politically motivated
In an interview with the BBC, Ren Zhengfei said he ‘objects to what the US has done’, accusing it of an unacceptable ‘politically motivated act’ He vowed that Huawei would never undertake spying activities, and said ‘the world needs Huawei because we are more advanced’

Foxconn gets new orders from Huawei, expects to add 50,000 new workers
Taiwanese electronics contract manufacturer, Foxconn, has reportedly received orders from Huawei Technologies, according Taiwan’s Central News Agency (in Chinese). The company expects to add 50,000 workers to production lines at its plant in Zhengzhou, in central China’s Henan province. The expansion is aimed at serving incoming demand, according to the sources cited in the article.

Foxconn gets new orders from Huawei, expects to add 50,000 new workers

JD to cut 10% of executives in 2019
Chinese e-commerce giant JD announced plans to cut 10% of its vice president or higher level executives who come at the bottom of the company’s performance evaluation mechanism in 2019. With a total employee of over 180,000, the company now has around 100 such executives, according to the report.

China’s service robot market size jumps 44% to $1.8 billion
China’s service robots market hit $1.84 billion according to an article published today on the 21st Century Business Herald. This marks a nearly 44% year-on-year increase, which is higher than the global average rate of change.

China’s service robot market size jumps 44% to $1.8 billion

Hong Kong’s role in Beijing’s Greater Bay Area scheme spelled out: focus on strong suits of finance and trade; cooperate with Shenzhen and Guangzhou
City told to build on its areas of strength as much anticipated blueprint unveiled Cautious endorsement from local businesspeople, along with acknowledgement that specific details are yet to arrive

Hong Kong’s banking and insurance sectors among biggest winners under Greater Bay Area blueprint, say analysts
Hong Kong’s international reach may give it the edge over rivals when firms in the new economic hub need a way to finance their expansion plans

China’s Greater Bay Area still has hurdles to clear if it wants to be a tech challenger to Silicon Valley
Greater Bay Area aims to erase barriers between cities in the region in terms of policy, financing, logistics and talent However, regional shortage of hi-tech research capacity is turning into a hindrance, analysts say

HSBC profits hit by China slowdown
HSBC has reported a lower-than-expected 15.9% rise in pre-tax profits for 2018, partly because of an economic slowdown in China and Hong Kong.

Foreign investors piling into mainland China stocks – and that’s expected to only grow
After taking a pounding last year, China shares look appealing Overseas appetite would get boost by possible expansion of A-shares in MSCI benchmarks

Science and State Power in China
More importantly, science and technology development, for Xi, is the next frontier of global and great power competition. Hence the call for a “sense of urgency and crisis” when it comes to achieving breakthroughs in fundamental research, amid the deepening technology friction with the West. What remains to be seen is whether such an approach is optimal and sustainable.

Science and State Power in China

Chinese food producers warned pork consumption will suffer after more reports of African swine fever
Inspectors in Hunan and Gansu say products tested positive for virus Market analysts revise poultry meat consumption estimates upwards

Bear with Britain: Brexit mess and antagonistic China approach show UK needs time to sort itself out
A post-Brexit Britain needs trade deals, including with the likes of China. So why is it provoking Beijing by saying it will send an aircraft carrier to the South China Sea? These are signs of a government that has lost its way

What Asia can learn from Brexit
Three perils to avoid in Britain’s messy EU divorce

Why China should support – not fear – the freedoms of speech and religious practice
Fostering constitutionally guaranteed rights will only boost the government’s credibility, keep the public content and promote national stability

The Five Keys to A China Contract That Works
What are the keys to a China contract that works? The following:

The Five Keys to A China Contract That Works

For Your Eyes Only — 5 Chinese New Year Ads You Shouldn’t Miss
In understanding traditional Chinese cultural truths and modern impact on those culture truths, luxury brands can connect with the millennial and Gen-Z audiences beyond just the surface level, beyond the logo or celebrities/influencers. Chinese Lunar New Year, or Spring Festival, is the single most important holiday in China. Given that billions around the world celebrate it, it has also become one of the most important advertising periods of the year, easily surpassing the Superbowl and Christmas.

For Your Eyes Only — 5 Chinese New Year Ads You Shouldn’t Miss

Chinese schoolgirl shamed for using robot to write homework. Now everybody wants one
Teen bought device online and was caught out by her mother when she completed her Lunar New Year assignments in record time Media report alerts a wider audience to the robots, which can copy text and mimic your handwriting

Xi: China Must Never Adopt Constitutionalism, Separation of Powers, or Judicial Independence
The Chinese president calls for strengthening the Communist Party’s leadership over law in China.

President Xi Jinping’s vision of a new China has struck a great wall
President Xi Jinping’s vision of a glorious China has struck a great wall. Economic and diplomatic supremacy was supposed to open up new silk roads. Instead, he’s overreached. Now everything he says or does is met with suspicion.

China takes it all in the Black Sea region
China is becoming a major player in the Black Sea, to the advantage of the countries of the post-Soviet space and under the sometimes concerned eyes of Russia and the European Union member states.

China takes it all in the Black Sea region

Tehran eyes role in China’s Belt and Road Initiative
Chinese, Iranian foreign ministers meet in Beijing to discuss relations, regional developments

China WARNING: Beijing to deepen ‘strategic trust’ with Iran – Saudi Arabia on alert
CHINA plans to strengthen its relationship with Iran while maintaining ties risking anger from Saudi Arabia officials, as tensions escalate between the two rival Arab nations.

Alibaba reportedly behind popular Chinese Communist Party app
Tens of thousands of companies and organisations have developed applications based on the DingTalk platform, says Alibaba

Alain Gillard
Information Officer
Service Asie Pacifique
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