China Press Review – February 25, 2019

Press review

Donald Trump to delay extra tariffs on Chinese imports
US president cites ‘substantial progress’ in announcement that he will delay tariff hike Trump suggests further US-China negotiations will precede a face-to-face meeting between him and Chinese President Xi Jinping

US-China trade war: Can China meet US demands on IP theft and forced technology transfer?
One of the primary demands from the United States is for Beijing to strengthen intellectual property protection and stop forcing the transfer of technology China has made some concessions, but still lags well behind Western markets on enforcement

Thirty years on, U.S.-China politics and tech collide
“The tensions between the United States and China are obviously not just about trade,” said Paul Gruenwald, global chief economist at ratings agency Standard & Poor’s. He said China had offered to buy more U.S. soybeans, liquid natural gas and airplanes, but the bigger issues are about intellectual and technology transfers as well as state subsidies.

Misreading China’s Strength
The US believes that with Chinese growth slowing, China’s leaders are desperate for a deal to end the bilateral trade war, which could resume after March 1, when the current 90-day truce expires. But the two economies’ longer-term fundamentals compel a very different verdict about which side has the upper hand.

Cautious optimism in Beijing for US-China trade deal
Chinese state media welcomes the positives but warns any final agreement will not please everyone in either country Both sides agree ‘substantial progress’ has been made so far

US and Chinese officials say a trade war deal is ‘extremely’ likely
China would sharply boost purchases of US agricultural products and open its electronic payment market to Visa and MasterCard Vice-Premier Liu He and US President Donald Trump meet, and Chinese delegation extends Washington visit to continue talks

Chinese and US trade negotiators tussle over enforcement issues during ‘very productive talks’
Donald Trump tweets positive remark but offers no hint of outcome as negotiations enter fourth day Discussions on Sunday revolve around the thorny issue of how to enforce a potential trade deal

‘No second choice’: Liu He, China’s man on the front lines of the trade war talks with the United States
China’s English-speaking vice-premier, special envoy and chief trade negotiator is President Xi Jinping’s top economic who is respected the world over The 67-year-old was in Washington last week for the latest round of talks with US President Donald Trump

Will the US economy plunge into a recession by 2021? Half of America’s business economists expect it to happen
Half of the nearly 300 business economists surveyed by the National Association for Business Economics (NABE) believe a recession will begin by the end of 2021 Only 11 per cent surveyed believe a recession through 2021 can be avoided

2019 Is a Sensitive Year for China. Xi Is Nervous.
China’s leader, Xi Jinping, abruptly summoned hundreds of officials to Beijing recently, forcing some to reschedule long-planned local assemblies

UK will talk up Huawei to China, then back the US like always
Mired in Brexit and desperate for friends outside Europe, Britain is keen to court Chinese investment. But as the UK’s decision to send a warship to the South China Sea shows, its warm words are likely to be empty ones

Trump May Give Beijing What It Wants Most To Seal $1.2 Trillion China Trade Deal
President Donald Trump may have just answered the biggest question about the China trade deal talks. The negotiations seem focused entirely on what China will do for the U.S. — buy up to $1.2 trillion more American goods, provide intellectual property protections, open its markets. So what will Beijing get for a “mutually beneficial, win-win agreement” that Chinese President Xi Jinping has promised? The apparent answer is freeing Huawei to seek global domination in 5G wireless networks.

Trump May Give Beijing What It Wants Most To Seal $1.2 Trillion China Trade Deal

Mastercard teams up with online clearing house to retry China entry
American credit card company Mastercard is partnering with Chinese online payment clearing house, NetsUnion Clearing Corp or Wanglian, a company with close ties to the regulator in charge of approving credit card businesses. Mastercard plans to hold a majority stake in the new joint venture, though no formal agreement has yet been signed.

Briefing: Mastercard teams up with online clearing house to retry China entry

Here’s what’s ‘more disturbing’ to Larry Fink about the future of US-China trade than anything else
The trade war and ongoing negotiations between the world’s two largest economies is a looming danger, Larry Fink says — but not for its immediate impact on markets or growth. The threat the CEO says we are not talking about is the long-term impact of the U.S.-China trade war on U.S. Treasury bonds. China, the largest holder of U.S. sovereign debt, has cut its Treasury holdings to $1.123 trillion as of last December, down from $1.184 trillion in the same month of 2017, according to U.S. Treasury Department data.

China must choose: growth or lasting economic health. It can’t have both
Beijing is trying to achieve two opposing goals – reducing debt and boosting GDP. Amid economic headwinds, something must give

Trade war deal or no deal, the damage to the world economy has been done. Central banks must act soon
The trade war has taken its toll on export-led nations, such as Germany, Japan and China. With indications that even the US economy is losing steam, it’s time for central banks to pick up the slack

China’s Xi: financial sector must serve the real economy
China’s financial sector must serve the real economy, President Xi Jinping told a study session for senior Communist Party officials, state news agency Xinhua said on Saturday.

A China debt default raises question: Will officials always step in for companies allied with local authorities?
Chinese state-backed borrower fails to make good on a payment on a dollar bond Failed payment indicates limits to officials’ appetite to aid borrowers with high leverage in industries with excess capacity

China orders banks, insurers to sharply step up lending to private firms
China’s banking and insurance regulator said on Monday it had told all of the country’s banks to sharply increase lending to private companies, as policymakers step up support for the slowing economy.

As due date nears, China’s borrowers face a $ 890 billion debt problem
Cash-strapped firms are facing a wall of debt due this year. That’s a problem for industrial companies getting less government help

China’s high savings rate
China has a remarkably high savings rate in a typical year–and sometimes its higher than that. In fact, the main reason for China’s high trade surpluses is that with such a high savings rate, China doesn’t consume either a lot of imports or domestically produced goods. A reason that China can invest so much, year after year, is that the investment is financed by high savings rates. A standard recommendation for China’s economy for at least the last 15 years or so is to “rebalance” toward being an economy driven by domestic consumption, not by investment.

China’s banking regulator declares victory in campaign to curb financial risk
Those who predicted a financial meltdown were wrong, deputy chairman of China Banking and Insurance Regulatory Commission says Debt levels ‘stabilised’ in 2018 after a decade of more than 10 per cent annual growth, watchdog says

China says has met debt control target as it ramps up economic support
The comments came as worries about China’s debt are on the rise again as Beijing ramps up efforts to support the slowing economy.

US must be ‘careful’ in demanding stable Chinese yuan to end trade war, says former US central bank head
Former US Federal Reserve chair Janet Yellen said it is ‘difficult and treacherous’ to define when a country is manipulating its currency Donald Trump’s administration have alleged China has been manipulating the currency in a bid to offset increased tariffs

China’s Entrepreneurs Are Wary of Its Future
Behind the scenes, businesspeople worry that Beijing has become more interested in solidifying its control over people’s lives than promoting economic growth.

China pushes AI chips with investment in Hangzhou Nationalchip
A fund under one of China’s largest state-owned investment holding companies has invested RMB 150 million (around $22 million) in Nationalchip, a chipmaker based in the eastern Chinese city of Hangzhou. The fund—under the State Development and Investment Corp (SDIC) and whom the Ministry of Finance is a major stakeholder—led the Series B. Venture capital firm Sinovation Ventures, founded by former Google China head Lee Kai-fu, also took part in the funding round.

Briefing: China pushes AI chips with investment in Hangzhou Nationalchip

China’s cherry phenomenon bucking trend of the overall economic slowdown
Consumers holding back from spending on big-ticket items like cars, appliances and mobile phones, but will buy pricey food items Analysts say strong sales of less expensive items will not offset ‘consumption downgrade’ by middle-class consumers

Who is really to blame, when China supplants America as the global setter of standards, from 5G to infrastructure investments?
The real reason 5G and the BRI create alarm and dismay with Trump is they point to China assuming the role the US has long been used to, as the setter of global standards A president who acts first and thinks later is divorcing, or at least alienating, his nation from the global agreements and pacts through which it exerted decisive influence

Nokia says 5G would not be delayed by ban on Chinese suppliers
Nokia does not expect the possible exclusion of Chinese companies on security grounds to delay the rollout of next-generation 5G services in European markets, CEO Rajeev Suri told Reuters.

Huawei looks to show its lead in 5G technology at world’s biggest mobile industry exhibition
Some 25 telecoms network operators are forecast to launch 5G mobile services this year In the same period, more than one million 5G smartphones are expected to be sold

The Greater Bay Area is Hong Kong’s economic opportunity of a lifetime. Don’t let prejudice or ignorance get in the way
We are in the midst of a development that has seismic implications for Hong Kong, China, and for the global economy Beijing has invited us not only to build closer links with the region, but also to play a role in shaping it

China’s plan to rival Silicon Valley stirs hopes and concern
Greater Bay Area initiative seen boosting investment, but could dent other industries

China’s factories struggling to find staff as young migrant workers seek ‘freedom’ in services sector
Booming courier business is a popular choice, where food deliverers can earn US$750 to US$1,000 a month with companies including Meituan Dianping Garment factories in Guangzhou offering over US$1,000 a month with free accommodation but unable to find enough skilled pattern cutters

Chinese textiles giant aspiring to rival French conglomerate LVMH eyes assets listing in Singapore
Shandong-based firm has spent US$4.6 billion on foreign acquisitions since 2010 Ruyi will also focus on integrating acquired businesses

Alibaba reaffirms pledge to create jobs, invest in talent
Alibaba Group Chief Executive Daniel Zhang on Friday said the company would continue to invest in talent and stimulate job creation by offering platform users more resources to boost their businesses.

China Cuts Red Tape, Seeks to Better Engage with Business Community
China will continue to cut administrative red tape with an eye to improve the country’s business environment in 2019, the State Council recently announced. At a meeting chaired by Premier Li Keqiang on February 20, the government put “high importance” on streamlining government administration, delegating powers, enhancing oversight, and providing better services, according to a release from the State Council.

Chinese overseas property buying plummets 63 per cent in 2018, hitting four-year low
Hong Kong is top buying destination, with its offices major targets, Cushman & Wakefield finds Dalian Wanda, among top sellers, offloads prime projects in Sydney next to the Opera House and Gold Coast

China’s commercial property market is thriving even as residential property lags and the overall economy slows
Foreign investment drove the growth in China’s commercial property in 2018, and domestic buyers look likely to join in the trend in 2019 While the office and retail sectors have borne the brunt of the fallout from the government’s deleveraging campaign, demand for warehousing space is surging

Hema partners with Alipay to gamify plastic-free shopping
Alibaba’s Hema supermarket today announced on Weibo that its stores will not provide free plastic bags at checkout this Thursday (Feb. 28). If shoppers choose not to buy plastic bags or use free ones after Thursday they receive 21 grams of “green energy” points. The reward points will go into Alipay users’ Ant Forest carbon account. The initiative is part of a larger campaign launched by Hema and Alipay to encourage users to adopt a greener lifestyle. Hema said it expects the initiative to save over 12 million plastic bags and generate green energy points enough to plant 15,000 trees.

Briefing: Hema partners with Alipay to gamify plastic-free shopping

The Art of Content and Commerce in China
Social commerce is not a buzzword but a lifestyle for shoppers in China. In the West, it’s more common to use e-commerce sites as the final stop when completing a purchase, but in China, e-commerce sites are a kaleidoscope where you can make new discoveries, acquire information, and socialize with your peers—hence social commerce. And now, with Chinese luxury consumption flowing back to the Mainland, and growing concerns of a possible Chinese economic slowdown, brands and retailers are becoming more and more anxious, wondering how to gain a stronger foothold into this trillion-dollar industry.

The Art of Content and Commerce in China

As US mulls new Plaza Accord, China should learn from Japan’s fate … but not the lesson it thinks
The cause of Japan’s lost decades was not the appreciation of the yen that followed the Plaza Accord. It was the misguided attempts of the Japanese authorities to resist that appreciation

Saudi Arabia and China sign $28 billion worth of economic agreements
Saudi Crown Prince Mohammed bin Salman cemented a $10b deal for a refining and petrochemical complex in China

China’s playing mind games, here’s how we deal with it
Is China’s go-slow on Australian coal imports just a routine trade detail, or is Beijing deliberately inflicting economic punishment on Australia by toying with a $60 billion export trade?

India and China have a lot in common and can share many things: Chris Tung of Alibaba
“I believe continuous dialogue between our leaders and players and exchange expertise (and) experiences will be beneficial to each other,” Tung said.

Can the centre hold in Asian affairs?
The 10-member Association of Southeast Asian Nations (ASEAN) is at the centre of regional affairs, acting as a buffer in a theatre of major power interactions in Asia and as a platform for their cooperation. It has played that role almost by default for close to 30 years since APEC was established. Thus far there has been no collective or coherent response to any of those external plays to shape the region. The Belt and Road Initiative can bring much needed infrastructure that can improve connectivity within ASEAN and with its neighbours, but without an ASEAN plan the priorities will be set by China and infrastructure financing will likely go to where regulations and governance are weakest, increasing costs and risks for all.

Can the centre hold in Asian affairs?

BRI not meant to counter US Indo-Pacific strategy
Since its inception, the “Belt and Road” initiative (BRI) has been gaining partners around the world. The international community’s attitude toward the BRI has gradually changed from initial incomprehension, suspicion and fear to one of understanding, acceptance, and participation.

Huang Xiangmo and Meng Wanzhou today, any other Chinese tomorrow?
The US and Australia have slapped China in the face by hounding these Chinese business figures, but Beijing’s response – and its clumsy public relations skills – have served only to make matters worse

The story of China’s economy as told through the world’s biggest building
It is a microcosm that reveals how much China is master of its own fate The world’s biggest building got off to a bad start. On the eve of its opening, Deng Hong, the man who built the mall-and-office complex, disappeared.

China’s social credit system report shows richest provinces are home to the most dodgy firms
Firms in Jiangsu and Guangdong provinces top the list of new additions to blacklist in 2018 Bogus advertising, illegal activities in property industry, substandard health care products and P2P lending fraud are typical cases

The road to hell is paved with good intentions. What price will society pay for China’s social credit system?
Labels are damaging and undermine our push for a more diverse world. We must avoid them at all costs

From Mao’s Cultural Revolution to managing billions of dollars: how six years stuck in Gobi Desert shaped one man’s life
He says that despite China’s reform and opening up in the past 40 years, the country still needs to change even more. “State-owned enterprises are too large and inefficient, and too many resources [are] allocated to them. That is a cause for worry,” he says. “The economy cannot be efficient when you have inefficient sectors. I think that the structural reforms should continue and deepen, and the private sector should grow even stronger to be the leading driver of economic growth, and China should be more open to trade and investments and flow of information

US certifier expands in Hong Kong as man-made diamonds sparkle among millennials
Lab-grown diamonds to be ‘pretty prevalent’ in the market over the next year or two, says executive vice-president of Gemological Institute of America The concern of the trade in not being able to differentiate between natural and man-made stones, says CEO

Chinese boycott of Dolce & Gabbana continues at Milan Fashion Week
Last November the Italian label cancelled a major show in Shanghai after racist comments about the Chinese people from Stefano Gabbana surfaced on Instagram

When marrying young is the norm, courageous Chinese women take back control by asking parents to “Meet me halfway”
Deep-rooted conservative values cause a rift between parents and daughters, but taking the first step to communicate has enabled them to come together and meet on middle ground

Depression and Anxiety on the Rise in China, Study Shows
In the first report of its kind, researchers say that “rapid social change is likely to bring about a general increase in psychological pressure and stress.”

China’s military build-up just starting – a lot more to come, expert warns
Military watchers can expect ‘something new’ at this year’s National Day parade in October, Professor Jin Canrong tells forum in Hong Kong As tensions rise over Taiwan, Beijing is building a naval and missile force as powerful as any in the world, he says

China to ‘optimise’ spread of controversial Confucius Institutes
Organisation will also ‘strengthen work on the teaching of Chinese internationally’, government statement says

Caught between ‘black swans’ and ‘gray rhinos’, Xi Jinping fears Instability and dissent
China’s Communist regime is obsessed with a possible uprising. As the economy worsens, people from all walks of life could turn against those in power. Rights lawyers, underground churches, dissidents, internet commentators and the poor are the “five new black categories”.

Alibaba Pictures shares rise after striking gold with Green Book’s best picture win at the Oscars
The movie unit of Alibaba Group has already struck gold from Wandering Earth, which has reached US$648 million box office so far, the second highest-grossing movie of all time in China

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