What can we expect in China in 2021?
While China enters the new year economically stronger than any major economy in the world, fulfilling high expectations will pose a tough challenge for the country’s leaders. In 2021, with the roll-out of vaccines, manufacturers ex-China will fully recover. Additionally, the secular trend to move manufacturing (especially destined for the US) out of China will restart, and China based manufacturers will feel the full impact of the renminbi’s appreciation. Domestically, infrastructure spending has not yielded the desired results. The continued flirtation with bankruptcy of several of China’s leading property developers highlights fragility in this sector. Expect aggressive action to lower tax and other burdens on individuals. Concerns about growth will also push Beijing towards opening up further to foreign capital and business participation within China. Negative lists will shorten further and more licenses will be issued from basic materials to financial services. Geographically, China’s economic center of gravity continued its long-term shift southwards in 2020, as Tianjin fell out of the 10 ten cities by GDP, leaving only Beijing from the north on the list. Beyond the usual clusters of the Pearl River and Yangtze River Deltas, President Xi continues to push for the development of the Hainan Free Trade Port (HFTP), with preferential policies for industries from aviation to health and internet services, beyond traditional support to tourism sectors. If China does achieve 8 percent growth in 2021 with domestic inflation of 1-2 percent and currency appreciation of 3-5 percent, then the size of China’s economy relative to the US could exceed 75 percent in 2021 (using IMF forecasts). China will likely continue with its multilateral engagement strategy, building off the successes of the Regional Economic Comprehensive Partnership (RCEP) and the China–EU Comprehensive Agreement on Investment from 2020. RCEP’s gradual tariff reductions and rules of origin for manufactured goods will deepen flows of goods between China and the 14 other member economies that in combination represent 30 percent of global GDP, even if it does little on services.
Chinese stats official warns against excessive economic optimism
An official from China’s statistics agency warned against heightened optimism about the economic outlook, saying the impact of COVID-19 was likely to distort first quarter growth figures, state media reported on Friday. Sheng Laiyun, a vice head of the National Bureau of Statistics, told China News Service the large economic slump in the first quarter last year caused by the pandemic created a significant base effect that would likely lead to a rapid jump in growth in the first three months of this year. “We should not be too optimistic about China’s economic situation in 2021, but should still be clear-headed,” Sheng said.
Joe Biden calls China the ‘most serious competitor’ to the US, in first foreign policy speech
US president pledges to ‘take on directly the challenges posed [to] our prosperity, security and democratic values’ raised by Beijing Relations with China are fraught, with Washington making critical statements about actions in Xinjiang and offering early support to Taiwan
Biden calls China the ‘most serious competitor’ to the US, in first foreign policy speech as president
In his first foreign policy address, US President Joe Biden on Thursday described China as the “most serious competitor” to the United States and vowed to confront Beijing on various fronts, including intellectual property and economic policy, reported the South China Morning Post. Appearing at the State Department, Biden said his administration would “take on directly the challenges posed [to] our prosperity, security and democratic values by our most serious competitor: China”. “We’ll confront China’s economic abuses, counter its aggressive, coercive actions, and push back on China’s attack on human rights, intellectual property and global governance,” he said. “We’ll compete from a position of strength, by building back better at home, working with our allies and partners, renewing our role in international institutions and reclaiming our credibility and moral authority, much of which has been lost,” Biden said, drawing a contrast with the “America first” ideology that underpinned much of the foreign policy pursued by Donald Trump’s administration.
Macron: EU shouldn’t gang up on China with US
French president warns against creating ‘highest possible’ conflict. The EU shouldn’t gang up on China with the U.S. even if it stands closer to Washington by virtue of shared values, according to French President Emmanuel Macron. “A situation to join all together against China, this is a scenario of the highest possible conflictuality. This one, for me, is counterproductive,” Macron said, speaking in English, during a discussion broadcast by Washington-based think tank the Atlantic Council on Thursday. This kind of common front against China — as other European leaders have advocated given the new Biden administration’s revived openness to traditional alliances — risks pushing Beijing to lower its cooperation on issues like combatting climate change, and exacerbating its aggressive behavior in Asia, including in the South China Sea, according to the French president.
China’s SWIFT joint venture shows Beijing eyeing global digital currency use, to internationalise yuan
Finance Gateway Information Service was registered in Beijing last month with €10 million (US$12 million) as incorporation capital SWIFT is the largest shareholder followed by China National Clearing Centre, a wholly-owned domestic settlement subsidiary of the People’s Bank of China (PBOC)
Alibaba’s bond sale attracts US$38 billion worth of orders as investors shrug off antitrust fears and look to future of China’s booming e-commerce industry
An avalanche of orders from a veritable Who’s Who of investors allowed the e-commerce giant to price its debt tighter than initial guidance The bond sale comes after Alibaba reported a 37 per cent surge in revenue for the quarter ended December
Kuaishou shares jump 161 per cent in debut as Hong Kong’s hottest IPO paves way for offerings from rival video-sharing app owners
Kuaishou’s shares began trading at HK$338 per share and rose by as much as 200 per cent to HK$345 versus its IPO price of HK$115 The stock closed at HK$300 on Friday, valuing the 10-year-old unprofitable company at HK$1.23 trillion (US$159 billion)
US dollar-yuan exchange rate: China should not count on strong policy under Janet Yellen to ease currency pressure
Former US Federal Reserve chair Janet Yellen was sworn in as the new treasury secretary for the Biden administration last week US dollar index has fallen by more than 10 per cent from its peak at the end of March last year, fuelling appreciation pressure on the value of the yuan
LUXURY BRANDS GOING THE ‘OX-TRA’ MILE FOR CHINESE NEW YEAR
China’s most-important festival of the year is just around the corner, and to celebrate, more than 130 luxury brands have launched new products on Tmall Luxury Pavilion ahead of the crucial shopping holiday.
China’s top climate diplomat reappointed as special envoy in ‘tailored move towards the US’
Xie Zhenhua has been involved in climate negotiations, including the Paris Agreement, for over a decade Analyst sees it as ‘an effort to ensure the diplomatic channels are there’ with America
With China’s Stores Going Digital, Some Call for Keeping It Personal
The country’s commerce ministry says mobile payment technology alienates seniors. Consumers say it’s also a privacy risk. Since 2017, such restaurants have been offering a swifter ordering mechanism, usually by having customers scan a QR code on the corner of their table. This brings up a digital menu on the customer’s phone, from which they’re asked to consent to sharing their phone number and sometimes their WeChat profile information. According to Tenpay, the mobile payment service behind WeChat Pay, in 2018 some 800 million users were generating over 600 million transactions on the platform each day. In 2019, both WeChat and Alipay, China’s two dominant mobile payment services, upped the ante by introducing facial-recognition payment, which at the time also left people concerned about the safety of their biometric information.
China’s coronavirus testing ‘overkill’ gives economy a shot in the arm, with huge windfall for industry
Millions of mandatory Covid-19 tests, plus compulsory tests for trips over Chinese New Year, result in massive profits Analysts estimate that hospitals, third-party testing institutions and test manufacturers could rake in up to 150 billion yuan (US$23.2 billion) during this year’s Spring Festival travel period alone
How delays in the EU’s Covid-19 vaccine roll-out programme could cost Europe dearly
The EU’s vaccination campaign has been hampered by a botched, centralised procurement strategy overseen by the European Commission. To make matters worse, Brussels has tried to deflect blame and curb vaccine exports
On the Trail of COVID-19 in Shanghai
The author, one of Shanghai’s top contact tracers, gives an inside look at what it’s like to chase after the coronavirus in China’s largest city.
China Opens Its Doors to Foreign Junk
A resumption in recycling imports may not sound like much. But foreign mining companies should be worried.
Mass buying that sent shares in GameStop more than 2,000 per cent higher could never happen in China. Here’s why
Short-selling and option trading, the key drivers of GameStop’s stratospheric rise, are restricted in China Chances of Chinese equivalent emerging also dimmed by recent capital market reforms
In Vietnam’s power plants, US finds a counter to China’s belt and road
To deal with a looming power shortage, Vietnam has turned to US investors rather than China’s regional infrastructure investment programme Cleaner energy, rising anti-China sentiment and less risky investment are among Hanoi’s considerations, as is balancing Beijing in the South China Sea
In Geopolitical Struggle Over Myanmar, China Has an Edge
As the United States and other nations denounce the coup, China has a chance to build up its influence. But Myanmar’s generals are difficult partners.
China urged to call off the Wolf Warriors to build ties with US under Joe Biden
Former Taiwan envoy Douglas Paarl says Beijing risks losing out on a golden opportunity to improve the two countries’ relationship Chinese government should try to work with Washington to improve relations and stop war of words, Paarl tells webinar
After 30 Years, China Revises Its Protected Wild Animals List
More than 500 new species have been added to the catalog that defines protection levels for wild animals, a move conservationists are calling “significant.”
Mozilla’s 2020 Internet Health Report Spotlights Three Major Threats Undermining The Health of the Internet
Capping a year where the COVID-19 pandemic forced the world to rely even more on the internet, Mozilla’s 2020 Internet Health Report reveals an online ecosystem that is increasingly compromised by racial bias, misinformation, and anti-worker policies. But, one which still has the potential to create a more just, equitable, and humane society. For millions of people, VPN connections are the only way to see large parts of the web. The anonymity and encryption people depend on for data security and free speech, is often maligned for enabling crimes. Meanwhile, illegal image-based sexual abuse of children and women is openly accessible on some of the internet’s most viewed and least publicly scrutinized websites. For the internet to be healthy, it should not be dominated by companies who profit from abuse, violence, racism, hate or disinformation. We must keep pushing to hold internet platforms accountable and enable better alternatives to rise.
China attacks BBC a day after British broadcast regulator Ofcom bans state media channel CGTN
British broadcaster accused of spreading ‘fake news’ in wake of decision to remove CGTN from airwaves over Communist Party control of output BBC criticised over coverage of Covid-19 pandemic and reports of mass report in Xinjiang internment camps
China – A Look Ahead to 2021 and Beyond
This paper looks at the main challenges and priorities of the Chinese Communist Party (CCP) for the coming year, and the main challenges the CCP poses to other countries. None are new, some may have added urgency, all will continue beyond 2021. The outpouring of last autumn’s 5th Plenum and subsequent pronouncements clarifying the Party’s intentions have required a severe triage, because of length constraints. The larger part of this essay focuses on domestic concerns. Understanding what is happening inside China is crucial to understanding the Party’s behaviour outside: foreign policy is domestic policy played out abroad. If 2021 is the start of a new phase for China, as Xi Jinping says, it is also a time for democracies to re-evaluate their policies towards China.
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