China Press Review – February 21, 2019

Press review

China-US trade deal coming soon, Huawei’s Meng to be released in weeks, Communist Party insider predicts
Beijing will take steps to reduce trade imbalance but won’t bow to pressure to make major economic reforms, adviser Xie Maosong says Trade war means relations between two countries will never be the same again, according to the Communist Party adviser

Why China’s subsidised state-owned enterprises anger US, Europe – and its own private companies
The electric car sector across the world relies on government support, but the help for state-owned firms to dominate Chinese market has met hostility Revamping WTO agreement could address subsidies and disclosure, but China would have demands too – and may be unable to give up ideological attachment to SOEs

China to expand soybean crop and farm subsidies to cut reliance on US imports
Measures will add to 8.2 million hectares planted by Chinese farmers in 2017/18
Agriculture ministry wants higher-yield soy varieties used and more rapeseed planted

US and China are sketching the outlines of a deal to end the trade war
Negotiators are drawing up six memorandums of understanding on structural issues: forced technology transfer and cyber theft, intellectual property rights, services, currency, agriculture and non-tariff barriers to trade. It includes a 10-item list of commodities and goods that China will buy.

China Trade War Update: Resistance Is Futile
China will survive and grow and become an Asian powerhouse. So don’t worry corporate America and global money managers: China is not going to roll over. But that’s the problem. China is not going to roll over and give up providing certain subsidies to state-owned firms, large and small. China is not going to make its new intellectual property laws retroactive so American companies can litigate day in and day out for past harms.

China’s Premier Li Keqiang warns central bank of ‘new potential risks’ posed by record loans in January
New yuan loans last month reached US$476.97 billion, almost triple the amount from December, after Beijing eased regulations in a bid to its boost slowing economy People’s Bank of China hits back, saying growth in short-term lending ‘mainly supported the real economy’ amid the US-China trade war

China may be on the cusp of introducing ‘more aggressive’ stimulus measures, economists say
Chinese authorities could be getting ready to implement more extensive stimulus measures in a bid to encourage growth in the country, three economists said this week. Mitul Kotecha, a senior emerging markets strategist at TD Securities, said China has been reluctant to implement “hard and strong” easing measures, despite its economy losing steam, because the government has been concerned about expanding already-high debt levels. But Gavin Parry, CEO of financial services company Parry Global Group, says he thinks the People’s Bank of China is “about to turn an inflection point,” and could introduce more stimulus to the economy.

China and US sketch outline of deal to end trade war covering six key areas, sources say
Top level negotiators led by US trade representative Robert Lighthizer and Vice-Premier Liu He set to resume talks in Washington on Thursday Truce deadline agreed between President Xi Jinping and American President Donald Trump approaching on March 1

While China sells big economy ideas to the Chinese people, the West gets wrong idea, Everbright chief says
Business leaders assess the US-China trade war and the prospects for resolution Fung Group chairman says trade has changed and China must change with it

The future of China’s economic growth is personal, JPMorgan’s Jing Ulrich says
Consumption and services will continue to drive expansion, taking over where investment and exports left off, executive predicts

China Jan outbound investment falls as curbs on speculative outflows remain
China’s overseas investments fell 15 percent in January as regulators continued to crack down on deals that they suspect are being used to disguise speculation and capital outflows. Non-financial outbound direct investment (ODI) in January was $9.19 billion, data from China’s Ministry of Commerce showed on Thursday, down from $10.8 billion of ODI a year earlier. One of the reasons behind the drop was tighter security reviews on foreign investment in some countries

Why low profile Huawei founder Ren Zhengfei has grabbed the microphone to defend telecoms giant
As pressure has increased on Huawei over US allegations of intellectual property theft and evasion of sanctions, Ren has tried to regain control of narrative

Huawei to open first flagship store outside China in Vienna
Huawei is to open a smartphone flagship store in Vienna, its first such outlet outside China, as part of a charm offensive in Europe where its future hangs in the balance.

Everyone is right about China’s economy Yes and no
China bears and bulls can pick their data in the Year of the Pig. Stock markets are charging; bonds defaulting. Lunar New Year holiday spending was weak, but January exports boomed. State-owned companies and contradictory industrial and monetary policies are muddying traditional performance measures. They betray an economy going in two directions at once.

The West trusts Hong Kong, a unique position the city must not lose, business leaders say at China Conference
Chief Executive Carrie Lam hails city’s role in China’s ‘soaring success’ over past 40 years China Everbright CEO calls for Hong Kong’s position as place where East meets West to be maintained and enhanced

Chief Executive Carrie Lam Cheng Yuet-ngor said on Thursday that Hong Kong would place its future development focus on consolidating the city’s status as the financial and aviation hub, and turning the city into a world-class innovation and technology center, after the release of the Outline Development Plan for the Guangdong-Hong Kong-Macao Greater Bay Area.

Greater Bay Area: China’s ambitious but vague economic plan
China’s Greater Bay Area plan aims to boost growth in the world’s second largest economy
China’s ambitious plan to develop the so-called Greater Bay Area is designed to spur the economy, but analysts question whether its lofty goals can be achieved, as the BBC’s Ana Nicolaci da Costa explains.

The Greater Bay Area is the right thing for Hong Kong and China – if it has all the right connections
If the Greater Bay Area has uniform pricing in key areas, a smart permit system and fast train links, it will be a benefit to all involved – Hong Kong included

China’s Greater Bay Area push could worsen Guangdong inequality and usher in new ageing crisis
Massive infrastructure investment in 12 regional cities has yet to boost growth, where per capita GDP is just a third of the average in richer regions The focus on Greater Bay Area development has sparked fears that resources will not be evenly spread through Guangdong

The ‘softer’ side of Asia’s giants
Buoyed by four summit meetings and the formation of a new people-to-people mechanism in quick succession, China–India engagement appears to be on an upward trajectory. Though challenges remain, it is an opportune moment for the two countries to press ahead towards total rapprochement. China and India see this soft-power mechanism as a potential ‘social foundation’ for bilateral relations. Greater dialogue between media outlets, the acceleration of tourist flows and collaborations between museums are envisioned. An agreement has also been reached for co-production of films and other forms of entertainment. Potential new avenues of cooperation include popularisation of Chinese language and martial art forms in India, and of Indian languages and yoga in China.

The ‘softer’ side of Asia’s giants

Explained: Belt and Road Initiative
Supporters laud it as a bold initiative that fulfils the needs of emerging markets for infrastructure investment But critics warn of a lack of transparency and sustainability, while some countries have re-evaluated deals

The New Silk Railroad Revolution
China is investing billions of dollars in its Belt & Road initiative and that’s creating new options for rail transport between China and western Europe. As our new report reveals, this could shake up supply chains, as it’s twice as fast as sea freight and up to six times cheaper than air

How Belt and Road Is Upending the Beijing Consensus
Forecasts indicate that the global coal trade will decline after 2018; countries which continue to import the fossil fuel will be trapped into uncertainty patterns about power and energy prices – all while “renewables are benefitting from huge technology improvements” and sinking costs. Yet these developing countries will not only be bound to the whims of an increasingly unreliable market—they will also be tightly linked to China. In fact, coal dependence is more often than not synonymous with dependence on China. Last year, Beijing upped its coal production 2.1 percent – mostly for export, suggesting that the clearest thing about Chinese environmental policy is that it seeks to profit from creating new coal markets elsewhere. Beijing is preaching water but drinking wine in order to project its power abroad to the detriment of developing countries.

Global ambitions fuel China’s nuclear power strategy
Over the past several years, there has been a monumental shift in China’s energy policy towards nuclear power. And Beijing’s nuclear ambitions aren’t limited to its own borders. Its ‘Made in China 2025’ blueprint envisages vastly expanding China’s role in nuclear power generation in developing economies worldwide. If China intends to sell nuclear equipment abroad, it must first understand the technological and safety risks in its own backyard and ensure that its technology is dependable. A domestic nuclear accident coinciding with a flood on the Yangtze River could be catastrophic. It must also ensure that it promotes effective safety protocols and standards alongside its exports of energy equipment. For civil nuclear power to solve China’s environmental policy woes, it must be policy-complete enough not to export environmental risks.

Global ambitions fuel China’s nuclear power strategy

PC maker Lenovo returns to profit in third quarter on strong performance across business groups
Revenue up 8.5 per cent on strong performance in major businesses, with mobile group posting first pre-tax profit since Motorola buy

podcast : Who wins in a 5G world?
In this episode of the McKinsey Podcast, Simon London speaks with McKinsey senior partners Ferry Grijpink and Philipp Nattermann—ahead of the headline telecommunications conference Mobile World Congress (MWC)—about how telcos can prepare to be winners in the fifth-generation (5G) race.

Most-innovative company in the world is a Chinese firm that delivers takeaway food, not Google or Facebook
Ranking indicates that the West is finally waking up to the fact that a lot of innovation today is taking place beyond Silicon Valley

Kickstarter and China Manufacturing: You’ve Got it All Wrong
As a soon as a project is starting to get some good traction on the internet you can rest assured there are factories in China working on a lower cost version. This means the market window to establish yourself as the actual leader of the segment you’re creating shrinks rapidly with every month delay.

Kickstarter and China Manufacturing: You’ve Got it All Wrong

China’s embattled HNA looking at dumping Reuters London office at US$130 million discount
HNA bought the building four years ago – before its debt troubles and before Brexit
Possible sale would be in keeping with HNA’s sale of assets across the globe

US military plans new war-fighting concept in response to threat from China, Russia
It involves ‘stealth and joint penetration’ on land, in the air and at sea, causing simultaneous dilemmas for adversaries to effectively fight back US Air Force chief of staff says US$135 billion budget will be sought for ‘penetrating capability’

Why China Is Reactivating Its ‘Work-Unit People’
The group is viewed by China’s leaders as key to increasing the Party’s influence at the grassroots level.

No date? No problem: enlightened Chinese parents back their daughter’s choice to be single
Video shot over Lunar New Year holiday shows progressive attitude of mother and father of 25-year-old woman

Fit by Bit
The sharing economy takes on China’s fitness industry, amid concerns over gym memberships and reliability

Fit by Bit

Alain Gillard
Information Officer
Service Asie Pacifique
Place Sainctelette 2
1080 Bruxelles
Tél 02 421 85 09 – Fax 02 421 87 75
Copyright © 2019 awex, All rights reserved.