China Press Review – February 6, 2019

Press review

Donald Trump says trade deal must force ‘structural change’ to end China’s ‘theft of US jobs’
Talks with China must ‘end unfair trade practices, reduce our chronic trade deficit and protect American jobs’, he says in State of the Union address President says before address that he plans to meet Xi Jinping this month

Mnuchin says U.S. team will hold trade talks in China next week
U.S. Treasury Secretary Steven Mnuchin said on Wednesday that he and other U.S. officials will travel to Beijing next week for trade talks, aiming to clinch a deal to avert a March 2 increase in U.S. tariffs on Chinese goods

China hits back at US report on its WTO compliance saying it lacks factual basis
US Trade Representative’s office said negotiating new World Trade Organisation rules to try to rein in China’s “mercantilist” trade practices would be a futile exercise Last month, the Geneva-based arbiter of trade disputes launched an investigation into US President Donald Trump’s tariffs on US$250 billion of Chinese goods

EU rejects merger deal to create regional rail giant
European Union authorities on Wednesday rejected a massive rail merger deal between France’s Alstom and Germany’s Siemens in what the two nations had hoped would have created a global competitor to stand up to China.

US warns European allies not to buy ‘untrusted’ Chinese equipment from Huawei or ZTE for 5G networks
The US has launched a lobbying campaign in European capitals, branding Huawei’s equipment a security risk Use of Huawei or ZTE gear in European allies’ networks posed a potential threat to US national security, an official said

EU ban on Chinese technology in 5G revolution would hit trade, investment and cooperation, analysts say
Beijing hints at retaliation if Europe takes punitive action against Huawei Analyst says development of 5G has become geopolitical football

US lawmakers target China’s ZTE with new sanctions bill in case it fails to adhere to Trump agreement
ZTE broke a previous agreement and was caught illegally shipping US-origin goods to Iran and North Korea What’s Priced In? (Podcast) has survived an annus horribilis, but it’s unclear whether investors should be ready to forgive it. Temporary issues like the China-U.S. trade war and the as-of-now dismissed accusations against Founder/CEO Richard Liu could linger yet. But with the stock still 50% off all-time highs, maybe it’s all in the price?

China’s Pinduoduo plans to raise more than US$1 billion in secondary offering
PDD has seen revenue soar since its founding in 2015 as the upstart takes on e-commerce giants Alibaba and

Chinese internet users jump on Justin Trudeau’s Lunar New Year message to chide Canadian PM over Huawei
Trudeau used video to honour contribution of Chinese in building Canadian society One Weibo user calls for ‘immediate’ release of Huawei’s Meng Wanzhou

Commentary: When will China achieve quality growth?
As the external environment becomes shakier and more hostile, the prospects for China’s economic restructuring seem bleak, say Professors Andrew Sheng and Xiao Geng.

How the People’s Bank of China is changing direction and going all out to save the private sector
Hao Zhou says the Chinese central bank’s new policy tools are clearly meant to encourage banks to extend credit to small businesses. It is a striking change in policy direction, after years of focusing on state-owned enterprises

The World Bank just became the latest front in the U.S.-China shouting match
Current U.S.-China trade negotiations underway this month may yet succeed, but the Chinese already face a new battle front in Washington: the World Bank. One of those reforms will be to reduce or eliminate World Bank lending to China. Why should the United States care if a developing country accepts a murky loan with bad terms from China? Because countries that get in financial trouble due to these nontransparent Chinese loans will likely turn to institutions such as the International Monetary Fund for relief. The IMF’s biggest funding source is the U.S. taxpayer.

Trade war, economic slowdown and tighter monetary policy weighing on credit market, says S&P
Global bond issuance was down by 19 per cent in 2018 An estimated US$11 trillion in corporate debt is maturing by 2023

China’s currency is heading for a volatile year – and that may be a good thing
David Brown says Beijing has a choice: blow its foreign exchange reserves on stabilising the renminbi or let it reach equilibrium on its own. The latter would be the better choice in the long term

Luxembourg wooing mainland Chinese firms to list green bonds on new platform aimed at environment-friendly projects
China Construction Bank has listed a US$573 million green bond on the newly formed Luxembourg Green Exchange ‘We expect there will be a lot of Chinese companies and banks to list their green bonds in Luxembourg,’ Finance Minister Pierre Gramegna said

The Coming China Shock
For years, China has defied the widely held view that political openness is necessary for long-term economic development. But recent macroeconomic developments now suggest that the country’s exceptionalism is nearing its expiry date, with potentially devastating effects for the global economy.

Chinese investments in Europe take a dive
Heightened security concerns on the continent have been just one reason for a sharp drop in China’s investment activities across Europe. A fresh study shows, though, that German firms remain coveted takeover targets.

China fears shake Berlin’s economic principles
Fear of China appears set to divert Germany from decades of hands-off economic policy, as Berlin plans a public investment fund to block hostile takeovers of high-tech firms from abroad and calls for new mega-mergers. Aware he was making a rare break with conventional wisdom, Economy Minister Peter Altmaier took pains to set limits to his public investment scheme, one element of the “national industrial strategy 2030” he presented at a press conference Tuesday.

American companies get into the spirit of Lunar New Year, hoping good fortune comes their way
Robert Passikoff, a marketing consultant, says that while there has been growing awareness about China, it’s also about differentiating business and increasing revenue, and not necessarily inclusion

Hong Kong’s EU trade envoy says freedom fears over China ‘overdone’
Shirley Lam insists region retains its own capitalist and independent judicial system

Governing Hong Kong in Xi’s new era
Hong Kong’s position in China’s governance framework is becoming clearer. Mainland authorities have achieved a degree of jurisdiction over Hong Kong through a repertoire of different initiatives that may ultimately affect the city’s reputation as a global business hub. If Hong Kong becomes more like a mainland city, will foreign countries still find it an attractive place to do business?

Governing Hong Kong in Xi’s new era

Luxury goes local as Chinese shoppers gravitate towards home-grown brands
74 per cent of affluent Chinese consumers aware of at least one Chinese designer, according to report by Ruder Finn Group and CSG Chinese companies have been investing in R&D, quality control with the aim of shaking off the image of being ‘cheap’, says designer

Chinese New Year: Key trends driving growth and making China a focus for suppliers
he annual celebrations for the Chinese New Year have officially begun, with 2019 being the “Year of the Pig” and the festivities, of which food is a large component, typically lasting around two weeks. FoodIngredientsFirst takes a look at some of the key market and consumer trends driving growth in China’s food industry and what opportunities there are for suppliers in the world’s most populous country with a rapidly-growing middle class and an accelerated trend of “consumption upgrade.” Overall, these micro trends could summarize what the consumer wants, he says. “Multi-sensorial; the fast-growing foodservice market makes consumers’ taste more and more sophisticated,” Jiang notes. Consumers are looking for a better experience covering flavor innovation, unique texture and attractive appearance whether that’s in foodservice or retail. Healthy food; according to the McKinsey report, 65 percent of Chinese consumers are health conscious. “For healthy food, fresh and natural ingredients are the priority needs,” h

China’s inter-bank payment system passes severe test
China’s inter-bank payment and settlement system passed a tough test on Lunar New Year’s eve as the Chinese zealously snatched lucky money in virtual red envelopes for good fortune.

$1 Bln in Beauty: Estée Lauder’s China Campaign Pays Off with Sales Surge
Sales of Estée Lauder Companies Inc. beauty products crossed $1 billion in the Asia-Pacific region in the last quarter, for the first time in the company’s history, as efforts to grow its global business, specifically in China, appeared to pay off handsomely.

$1 Bln in Beauty: Estée Lauder’s China Campaign Pays Off with Sales Surge

Asian cities are competing to woo tech start-ups with incentives
These cities have strong economies, business-friendly policies and well-developed infrastructure Cities also offer a range of tax incentives, subsidies and related programmes to support entrepreneurs Last year, nine out of the 10 largest public venture capital deals involved start-ups in Asia – seven of which were based in China, according to capital market research firm Preqin

The rise of plastic insecurity in China’s Yangtze River economic belt
There is a major pollution problem, with 333,000 metric tons of plastic being carried by the Yangtze to the oceans each year. That’s an issue for the one-third of China’s population that depends on the Yangtze for food and water. In addition, the problem has grown over the years due to mounting population growth, as the Yangtze is adjacent to very high population nodes, including Shangai (22 million), Wuhan (9.8 million) or Chongqin (7.5 million). China’s rapid economic development also led to a shift in cons

Should China export ‘clean’ coal power?
More efficient coal technology is still incompatible with helping countries meet ambitious climate goals, writes Lili Pike

China to be World’s Largest Retail Market in 2019
China will overtake the US to become the world’s largest retail market in 2019, according to a new report from the market research firm eMarketer. According to the report, retail spending in China will grow by 7.5 percent this year to hit over US$5.64 trillion. Retail spending in the US, meanwhile, is projected to grow by 3.3 percent to reach US$5.53 trillion

China Joint Ventures: The Long Version, Part 3
This is part 3 of our series on China Joint Ventures. We are writing this series now because our China lawyers are seeing a record number of potential joint ventures, due largely to China’s declining economy, the belief that truly foreign companies will not be well-treated in China, and a desire to try to “share the risk” of all this uncertainty

China Joint Ventures: The Long Version, Part 3

The online Silk Road: China’s growing influence on tech in the UAE
As the Chinese New Year is celebrated here, we explain how the country’s big tech firms see the UAE as the perfect market for their wares

All is far from rosy on foreign policy front, despite claims of Donald Trump
Optimism on matters from the trade war with China to talks with North Korea is not to be sneered at, but a reasonable dose of reality is necessary given the uncertainties the current occupier of the White House has created

US President Donald Trump to meet North Korean leader Kim Jong-un in Vietnam for historic second summit
American president formally confirms the details during his State of the Union address from the House of Representatives on Tuesday The two men held a first meeting in Singapore in June, during which they agreed on a framework for future negotiations

When China wanted silver from the rest of the world
China accepting silver for commodities would eventually result in the world’s first common currency The institution of the Spanish dollar – or pieces of eight – was arguably globalisation’s first chapter

Chinese billionaire Huang Xiangmo stripped of Australian residency, banned from returning over ‘political interference’ concerns
Huang Xiangmo – a property developer who has donated millions to Australia’s two main political parties – has been at the centre of a spate of political interference concerns He has come under scrutiny for alleged links to the United Front Work Department – a Communist Party-linked body accused of neutralising opposition and buying political influence around the world

The global hair trade was worth more than US$81 million in 2017. Pakistan is among the world’s top suppliers; it shipped 105,000kg to China in the past five years. The hair comes from combs, traders and rubbish dumps, and much of it ends up in China’s booming cosmetics sector.

12,000 Chinese blood plasma treatments contaminated with HIV
Traces found in batch used for immune deficiencies caused by illnesses including leukaemia, hepatitis and rabies Hospitals advised to report their stocks of the treatment and closely monitor patients already treated

China will build 4 nuclear aircraft carriers in drive to catch US Navy, experts say
Beijing expected to have at least six aircraft carrier battle groups by 2035 after it prioritised modernising its navy Nuclear-powered carriers thought to be equipped with electromagnetic launch catapults similar to those of the US

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