China Press Review – Jan. 02, 2019

Press review

Chinese President Xi Jinping urges Taiwan to follow Hong Kong model for unification
Xi calls on Taipei to start work on adopting ‘one country, two systems’ to bring island back into the China fold     Message comes a day after Taiwanese leader says self-ruled Taiwan will not cede ground on sovereignty

Xi Jinping Warns Taiwan That Unification Is the Goal and Force Is an Option
In his first major speech on Taiwan, the Chinese president laid out an unyielding stance, calling unification “the great trend of history.”

Xi Urges Peaceful Unification Of China And Taiwan, But Won’t Rule Out Using Force
A Taiwan independent from mainland China is not an option, and no person or party can stop the trend toward “unification,” Chinese President Xi Jingping said in a policy speech Wednesday.
While Beijing would seek a peaceful “reunification” with the self-governing island of over 23.5 million people, The Associated Press reports Xi said China wouldn’t rule out using force if necessary. “We are willing to create a vast space for peaceful unification, but we will never leave any room for any sort of Taiwan independence separatist activities,” he said speaking at Beijing’s Great Hall of the People.

Xi Jinping says Taiwan ‘must and will be’ reunited with China
Chinese President Xi Jinping has urged the people of Taiwan to accept it “must and will be” reunited with China.

China’s military priorities for 2019: boost training and prepare for war
PLA’s official newspaper outlines ‘work focus’ in New Year’s Day editorial, saying ‘at no time should we allow any slack in these areas’

Xi Jinping’s New Year’s address: pace of reforms won’t stagnate but challenges lie ahead for China
Xi made no specific mention of the trade war with the United States, noting that 2019 would bring ‘opportunities and challenges’

China economy endures bad start to 2019 as private data highlights weakening manufacturing sector
Caixin Purchasing Managers’ Index dropped 0.6 points to 49.4 in December, contracting for the first time since May 2017      Follows release of official figures compiled by the National Bureau of Statistics, which dropped 0.6 to 49.4 last month, its first contraction since July 2016

China’s Malign Secrecy
In principle, China’s massive savings, infrastructure know-how, and willingness to lend could be great for developing economies. Alas, as many countries have learned the hard way, Chinese development finance often delivers a corruption-filled sugar high to the economy, followed by a nasty financial (and sometimes political) hangover.

China’s economy has tough 2018; next year will be worse
Growth in China this year weakest since 1990

Most Asian currencies decline as factory activity fizzles
Most Asian currencies fell on Wednesday, shrugging off broad US dollar weakness as gloomy factory surveys added to worries about cooling regional and global growth. A private survey showed manufacturing in China, the world’s second-largest economy, contracted for the first time in 19 months in December as domestic and export orders continue to weake

Cooperation is best for us both, Xi Jinping tells Donald Trump as they hail 40 years of China-US ties
Xi’s congratulatory message says the two nations have had ups and downs but have made historic progress   Trump also prioritises cooperation in his message to Xi, and says the pair had a ‘long and very good phone call’ at weekend

Opinion: What is on the horizon for China-U.S. ties?
Ultimately, what could save trade relations between the world’s two biggest economies? Will China and the U.S. eventually subscribe to a more constructive and cooperative approach? Stephen Roach, a senior fellow of the Jackson Institute of Global Affairs with Yale University gave his answers, who is also a former investment banker and three-decade China observer. “I think the resolution of this conflict has to contain four ingredients,” said Roach.

China economy endures bad start to 2019 as private data highlights weakening manufacturing sector
Caixin Purchasing Managers’ Index dropped 0.6 points to 49.4 in December, contracting for the first time since May 2017    Follows release of official figures compiled by the National Bureau of Statistics, which dropped 0.6 to 49.4 last month, its first contraction since July 2016

US-China Trade War Has No Winner, Additional Tariffs Hurt Both Sides
There is no doubt about it; in 2018, President Trump declared a trade war against China. From washing machines to aluminum to virtually every other product made in China and exported to the U.S., there is now an additional tariff of 10-25 percent.

China often reflects on its history – but it doesn’t look itself in the mirror
The Chinese government should take note: China isn’t the only country that has a long memory and uses history as a mirror.

China’s economy slows further as manufacturing contracts for first time in two and a half years
Purchasing managers’ index falls to 49.4 in December putting more pressure on China to make concessions to ease the trade war with the United States    Drop in manufacturing activity partly offset by stronger service sector

Yearender-Economic Watch: Reasons to stay upbeat about the Chinese economy
China’s economy has defied doom-mongers again in 2018, and economists believe there are good reasons to remain confident about its outlook. Although latest economic indicators revealed signs of stress, as industrial profits posted their first drop in three years and consumption growth missed expectations in November, merely focusing on short-term fluctuations will miss the big picture of the economy.  China’s tone-setting economic meeting described problems facing the economy as part of development, noting that the country is still and will be in an important period of strategic opportunity for development for a long time to come.

China birth numbers expected to fall to lowest level since 2000, creating new economic and social challenges
Births last year will drop below 15 million despite Beijing’s relaxation of its one-child policy, according to the state-run tabloid ‘Global Times’   Increasing elderly population raising fears of economic stagnation despite introduction of two-child policy in 2016

China’s economic big picture in 2019 to remain strong with sound fundamentals, enough levers and wider opening-up efforts
Although the latest economic indicators revealed some signs of stress, as industrial profits posted their first drop in three years and consumption growth missed expectations in November 2018, merely focusing on short-term fluctuations will miss the big picture of the economy. China’s tone-setting economic meeting described problems facing the economy as part of development, noting that the country is still and will be in an important period of strategic opportunity for development for a long time to come.

China’s credit crunch is a red light to global economy, as Nomura issues warning
In its 2011 forecast, the Japanese bank warned that China is driving much of East Asia into a “credit crunch” as global liquidity wears off, with property collapses and total deflation in several countries in the coming years months.

China’s online lending crackdown may see 70 per cent of businesses close
Yidai, with about 32,000 lenders, is the latest to close shop after ‘months’ of losses    Authorities plan to wind down small P2P lending platforms as part of measures against shadow banking

China’s relaxes conditions for financing of small enterprises
China’s central bank said on Wednesday it will relax its assessment criteria for funding of small enterprises.

Why China’s private firms aren’t convinced the law will protect them
Despite Beijing’s promises to support the sector, entrepreneurs still fear government intervention in the legal process for political aims

Trade war leads China to speed up US$202 billion local government bond issue
State Council keen to boost infrastructure investment to offset tensions with the United States     Finance Minister Liu Kun reported to have said some of the advanced bond issuance funds will be spent on key projects

New Tariff, Export Duty Cuts in China for 2019 – Wide Variety of Products Affected
China announced a wide variety of tariff and export duty cuts for businesses in 2019.China will lower or remove tariffs for imports on 706 types of products, beginning January 1, 2019, in a bid to lower costs for consumers and further open the country’s economy.

For China, tax cuts may work where its 4 trillion yuan stimulus failed – by boosting the economy without creating more debt
Hao Zhou says with Beijing still struggling to control the debt that swelled as a result of its 2008 rescue package, it has no appetite for more debt-fuelled stimulus. One way to increase domestic demand is to reduce the tax burden

China’s thriving bonds, plus hopes for investment reform, trade talks and stimulus should hearten investors in 2019
Neal Kimberley says it is prudent to have both concerns and confidence regarding China’s economy in 2019, as reforms and trade negotiations continue and policy options can still lift prospects

Tesla To Start Building Gigafactory In China
In a sign that Tesla is preparing to start construction of its first factory in China, Elon Musk said on Monday that he would be visiting China soon for the groundbreaking ceremony.

Electric carmaker Faraday Future gets opportunity to rebuild after settling dispute with main investor Evergrande
Both sides agree to drop all allegations against each other    Evergrande to restructure US$2 billion investment for 32 per cent stake

China’s gaming giants excluded from first batch of new license approvals
: Tencent and NetEase, two of the largest gaming firms in China, have missed out on the first batch of video game licenses to be issued after a nine-month halt. Tencent said it has 15 games awaiting monetization approval in the pipeline. The approvals come nine months after the state suspended issuing new video gaming licenses in March 2018 due to regulatory restructuring.

Pharma firms face shake-up with China’s plan to bulk-buy drugs
Pilot programme involves major cities clubbing together to purchase certain medicines, driving down prices      Chinese companies that have invested heavily in R&D stand best chance of survival

Selling Drugs Is No Longer a Free Lunch in China
The days of fat margins and easy money are over as the government gets serious about bringing down costs.

China’s first e-commerce law offers consumers more protection
China’s new e-commerce laws will be effective in wiping out counterfeit goods from the online marketplace.

Baidu CEO warns that ‘winter is coming’ amid slowing growth, economic restructuring
Baidu’s 2018 revenue surpassed 100 billion yuan, CEO Li Yanhong says in letter   For years, the country’s largest drugmakers have happily sold low-cost generic medicines yielding gross margins of 80 percent to 90 percent without giving much thought to consumer protection or innovation. It’s not uncommon for pharma companies to spend one-third of their revenue on sales and marketing, while shelling out peanuts on research and development of new drugs.

China Re completes Chaucer buy
China Reinsurance announced the completion of its takeover of Chaucer Holdings from The Hanover Insurance Group on 31 December 2018. The deal, for $950m (£726m), was previously revealed in September last year after news of Chaucer being for sale first came out in March.

China plans 6,800 km of new rail track in 2019 amid infrastructure push
China plans to invest in 6,800 kilometres (4,225 miles) worth of new railway lines in 2019, a 40 percent jump from the length of tracks laid last year, the national railway operator said on Wednesday amid a wider push to boost infrastructureNSE -2.74 % spending.    At least 3,200 kilometres of this target will be high-speed rail, the China Railway Corp said in a post on its official WeChat account.

Hong Kong, Shenzhen multibillion-dollar land reclamation plans may be on collision course
The vast resources needed for Hong Kong’s Lantau Tomorrow Vision project could clash with Shenzhen’s plan to build a maritime hub also on reclaimed land    Limited resources could drive costs of both projects higher, particularly the Lantau scheme championed by Hong Kong leader Carrie Lam Cheng Yuet-ngor

China courts India to back faltering trade deal
China is arranging talks with India to address the latter’s concerns regarding an Asian free trade pact led by Beijing, sources told Bloomberg.   The Regional Comprehensive Economic Agreement, which incorporates 16 Asian countries, has met roadblocks from some signatories who fear that the conditions will unfairly benefit Chinese exports without meeting demands for greater cross-border mobility for professionals in the tech sector.

2018: A BRINK Asia Perspective
All signs point to China leading the next phase of globalization—but growing pressure from tariffs have demonstrated that no economy is bulletproof.

Here’s how China’s new e-commerce law will affect consumers, platform operators
E-commerce platform operators are jointly liable with merchants for selling counterfeit and copycat merchandise on their websites

Empty Homes and Protests: China’s Property Market Strains the World
A glut of unwanted apartments gets part of the blame for a slowdown in the world’s second-largest economy. In some places, homeowners are taking to the streets.    Unwanted apartments are weighing on China’s economy — and, by extension, dragging down growth around the world. Property sales are dropping. Apartments are going unsold. Developers who bet big on continued good times are now staggering under billions of dollars of debt.

India remains ahead of China; retains world’s fastest growing economy title
According to Niti Aayog Vice-Chairman Rajiv Kumar, the focus of the government in 2019 will be to expedite reforms with a view to accelerating growth

China is at a crossroads
Four decades ago, the Chinese Communist Party, under its new leader Deng Xiaoping, decided to subordinate ideology to wealth creation, spawning a new aphorism, “To get rich is glorious.” The party’s central committee, disavowing Mao Zedong’s thought as dogma, embraced a principle that became Mr. Deng’s oft-quoted dictum, “Seek truth from facts.”

Who Will Lead In The Age Of Artificial Intelligence?
As Lee points out, the strength of China’s economy is a productive synergy between government policies and market forces. Not only does China have advanced commercial capabilities in AI but more importantly it has a coherent national strategy. Unlike the US, China’s government has become highly invested in leveraging AI to drive its enormous economy. China’s state-led strategy builds on the country’s national champions Baidu, Alibaba and Tencent (BAT) in a long-term effort to restructure the global technology market.

Jing Daily’s Crystal Ball: 5 Radical Predictions for China’s Luxury Industry in 2019
For the luxury industry in China, 2019 will likely be a year of turbulence. Macro factors like ongoing U.S.-China trade disputes and China’s economic slowdown will surely shape the landscape. The main challenge for brands is to realize how radically the situation has already changed and to remain mindful of the micro effects in this rough market that can either make or break deals. Preparation and the right strategies are crucial.

China’s new income tax law could be costly for foreign workers, but there’s good news too
Non-nationals who spend more than six months working in China are now classed as residents for tax purposes and required to declare their worldwide income     But an extended trip back home once every six years is all it takes to make the headache go away

Asian geopolitics are increasingly contentious with China (and Trump) playing its part
Its neighbours are well aware of China’s expansion and investment ambitions, as well as their need to stay suitably pliable


Qatar Airways takes 5 per cent stake in China Southern Airlines in sign that Beijing is encouraging more foreign investment
Gulf carrier says it acquired shares in the Guangzhou-based airline for an undisclosed sum on December 28

More than 1.27 million Chinese tourists visited the country in the first eight months of 2018, a 72 per cent increase over the same period in 2017    But locals say Chinese-owned businesses are benefiting most from the surge

China disputes ‘misleading’ US$40 billion debt estimate for Pakistan’s belt and road projects
Debate over how much Islamabad owes for China-Pakistan Economic Corridor developments adds to concerns   Media reports claimed repayments would be made over 20 years

German companies want to benefit from China’s new ‘Silk Road’
China has been building the Silk Road for five years. More than 100 projects have been completed as part of its Belt and Road Initiative. Apart from major transportation infrastructure projects, cables for faster internet have also been laid out. German companies also want to benefit from the initiative.

The Domestic Consequences of China’s ‘One Belt One Road Initiative’
Last year, the Xinhua News Agency said that OBOR has already made 76 major achievements and had more than 270 specific results, which included all sorts of international treaties, cooperation, projects, funds and aids. This year is the fifth anniversary of OBOR and the propaganda machine of the CPC has produced a lot of articles to praise its greatness. However, they hardly ever mention any benefit brought back to the Chinese people. No figure about any relevant increases in terms of jobs, foreign exchange reserves or domestic living standards has been found. Maybe it’s too slapdash to conclude that there are no significant positive domestic consequences, but the reality in today’s China——economic slowdown, social instability and intensified repression, shows that OBOR has not been able to push the country in a bright direction.

Britain’s planned naval base in Southeast Asia seen as ‘muscle-flexing’ against China
Building a facility in the region, potentially in Singapore or Brunei, is likely to further complicate the geostrategic landscape, analysts warn    They say it could also cast a shadow over Beijing’s relations with its neighbours and worsen tensions with London – though ‘Washington will be pleased’

The China Political Model
Foreign Affairs has an excellent article up that explains the China Political Model and why they are successful. China has been very successful in giving freedom to succeed to its people, and so they have succeeded in 40 years of fabulous growth.How they do it is different than in the West, so it is often misunderstood and even condemned. The article says Deng Xiao Ping saw China needed wise leadership of the party while avoiding Mao’s Top Down excesses.  Furthermore, the article noted that Deng added elements of democracy to the party and governance. They further achieved success by allowing space for bureaucrats to try many different models.

No let-up for corrupt ‘tigers’ in 2018 as China’s graft-busters claim more big scalps
More high-ranking officials were detained and charged last year than in 2017    But after the Communist Party declared a ‘crushing victory’ in the anti-corruption drive it is unclear if there will be any change in priorities

The Rise and Fall of China’s Cycling Empires
China’s bike-sharing firms were supposed to be the next big thing. What happened?

Selling Your Product Overseas: The Business Basics
he following email (modified a bit) that provides such good and basic business advice that I wanted to share it here. It deals with the basics on what to do when you are approached by a foreign company wanting to sell your products in another country.

China launches first satellite in bid to create global communications network and broaden net access
The Hongyun Project represents an important part of China’s national policy to commercialise space technologies and broaden net access to rural areas

Chang’e-4: China mission primed for landing on Moon’s far side
China is preparing to make the first attempt at landing robotic spacecraft on the Moon’s far side.

Twee Cups of Tea
Why twisted traditions and kitschy displays have China’s tea ceremony experts steamed. The core problem isn’t the misuse of tongs; it’s that modern tea ceremonies have become more performance art than substance. Although form has always been important, it was never supposed to be more than a means to an end: good-tasting tea. The ceremonies emphasized how to make good tea on a technical level, and the etiquette and rules surrounding tea ceremonies were primarily designed to prepare drinkers both physically and mentally for the experience.

Alain Gillard
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