China Press Review – January 10, 2019

Press review

China’s Vice-President Wang Qishan says cooperation with United States best for both sides
Nations must ‘adapt to new reality … expand common interests, promote practical cooperation’ statesman says But regardless of how international landscape changes, ‘China will unswervingly follow its own path, run its own affairs’, he says

The US will lose its crown as the world’s most powerful economy as soon as next year, and is unlikely to ever get it back
The US could lose its crown as the world’s biggest economy as soon as next year, according to data from Standard Chartered. Once it falls behind China, it is unlikely ever to regain the top spot, and by 2030 could also be behind India. By 2030, the bank said, Asian GDP will account for roughly 35% of global GDP, up from 28% last year, and just 20% in 2010. Seven of the world’s 10 largest economies will be in Asia in the next decade.

China’s great leap upwards – can the good times last or does an ‘inexorable rise’ always come before a fall?
As history has shown again and again and again – from Russia and Iran to the Philippines and Japan – a downturn is just a matter of time. China – as the rest of the world is continuously told – is poised to become the next super¬power economically, politically and, perhaps, culturally, though even the most enthu¬siastic exponents of the nation’s “inexorable rise” balk at the latter. In the long march towards these sunny, pros¬perous uplands, China continues to defy economic gravity. Mandarin proficiency is a guaranteed pathway to international success and anyone who dares to raise an eyebrow risks “offending 1.3 billion people”.

Will Beijing follow through on industrial reform? That’s the next big question in the US-China trade war
Analyst says creation of framework to monitor Chinese action is difficult Negotiations will continue as Vice-Premier Liu He is expected to visit the US

US pushes ‘needed structural changes’ on forced technology transfers and IP protection during China trade talks, but no sign if any new agreements were made
Talks also covered China’s commitment to buying ‘a substantial amount of agricultural, energy, manufactured goods, and other products’ say US trade negotiators No indication of any new agreements, but US side pushed verification and enforcement of previous ones

Why China clings to state capitalism
What further complicates matters is a clash of economic systems. China practices state capitalism; the government owns many large firms and decides which industries will receive subsidies, protected markets and favorable loans. In the United States, private markets and firms mostly determine which companies grow or shrink. The result is a stalemate. Many Chinese policies and practices (rules that coerce the transfer of new technologies or business plans to Chinese businesses, or that discriminate against foreign companies) make perfect sense in the context of state capitalism. But to Americans and other private investors, they violate the norms of open competition and fairness. This makes negotiations exceedingly difficult. For China to abandon its policies would mean, in effect, scrapping its whole economic model. Politically, this would be hard to swallow. Similarly, for the United States to condone China’s state capitalism would legitimize a system that puts U.S., foreign and private investors at a permanent disadvantage. The contradictions are inescapable. If an agreement is possible, it may skirt the central differences between the two countries and concentrate on limited Chinese pledges to buy more U.S. imports.

A reformed China is a stronger China, and such is the US dilemma
The United States ratcheted up economic pressure on China throughout 2018, raising tariffs on Chinese imports — US$250 billion so far — to which China retaliated by raising tariffs on US imports. Following the Trump–Xi meeting at the G20 in November, the United States agreed to a 90-day pause on further tariff increases. Both sides will use the time to address US concerns over Chinese trade practices, including those regarding intellectual property theft and market access.

China’s stocks drop most in week as trade talk optimism gives way to deflation concern
China’s producer prices increased the least in more than two years in December, fanning jitters about deflation in industrial products China says trade meetings were ‘extensive, in-depth and detailed’ – but investors still looking for resolution

Can China join the big free-trade deal that Donald Trump failed to kill?
Think tank urges Beijing to apply to join CPTPP, the improved version of the defunct Trans-Pacific Partnership Sees ‘time window’ for China to join as the US president pushes his ‘America first’ agenda

Trade war: Chinese factory prices ease sharply in December raising threat of deflation
Factory price index falls for sixth month in a row to lowest level in 2½ years and well below expected level Deceleration reflects weakening demand as the trade war with the United States has forced many to cut prices to sell their goods

podcast : Summers Says China’s Economy Is Facing the Toughest Time in 10-20 Years
Former U.S. Treasury Secretary Larry Summers comments on the state of China’s economy during an interview with Bloomberg’s David Westin on “Bloomberg Markets: Balance of Power.”

How China’s economy is going from strength to strength
Domestic investors made $104.48bn of non-financial outbound direct investment (ODI) in 5,213 overseas enterprises in 157 countries and regions from January to November, according to the Chinese Ministry of Commerce.

China to set fiscal deficit to gross domestic product at 2.8 per cent
Finance Ministry said to have agreed proposed deficit target of GDP at December’s Central Economic Work Conference The figure, which will be presented for approval at the National People’s Congress in March, compares with 2018’s target of 2.6 per cent

Chinese economy sets off alarms
Those companies’ troubles reflect the larger set of difficulties that China faces. The International Monetary Fund estimates that the Chinese economy will grow 6.2 percent in 2019. The Chinese Academy of Social Sciences expects slightly higher growth (6.3 percent) but recently cut its forecasts. A sustained trade war with the United States could cut growth more, and the uncertainty engendered by that conflict is anticipated to slow consumer spending in China, which would ripple through the economy. Economic advisers to U.S. President Donald Trump believe that China is more vulnerable to a trade war than is the U.S. — given the disproportionate size of its exports to America — which encourages Washington to take a harder line in trade negotiations.

Trade war drives down China’s current account forcing new reliance on foreign investment
China’s current account balance for 2018 is expected to show a modest surplus before posting deficits in coming years Shift will put increasing downward pressure on yuan exchange rate and greater need for foreign investment

China: Current Questions, Long-Term Opportunities
The goal of the Chinese government is economic stability. They’re willing to take somewhat slower growth, but not too slow, that it unsettles that stability. They’re going through this process in their economy of going from a kind of materials-led growth period, whether that’s construction or infrastructure or exporting steel to other countries, to more of a consumer-led economy. China is slowly opening up their domestic stock market to foreign investors. They want to be more integrated in the world economy.

China still borrows billions in low-cost loans from World Bank, as Trump administration pushes back
The second-largest economy in the world is still borrowing billions from the World Bank. China gets below-market rates for projects financed with loans from the World Bank’s International Bank for Reconstruction and Development. The Trump administration backed a $7.5 billion capital increase for IBRD lending as the bank agreed to change its rules to charge higher rates for developing countries with higher incomes.

‘Informal boycott’ of American products in China may have a hand in iPhone slump, Wall Street says
Chinese consumers may be waging an informal boycott of U.S. goods, including Apple’s iPhone, Wall Street speculates. Bank of America Merrill Lynch said the sudden drop-off of a broad group of U.S. imports into China may be the same phenomenon impacting iPhone sales. “I think what you see in the data is a broad pulling away from U.S. goods,” the firm’s economist told CNBC.

China to cut taxes, fees for manufacturers in 2019
China will cut taxes and fees for manufacturers in 2019 to support their sector, state television quoted the industry minister as saying on Thursday. Leaders have pledged to cut taxes more aggressively this year to support a slowing economy, amid a trade dispute with the United States.

China to roll out new consumer spending incentives for cars and home appliances to offset trade war
Overall Chinese retail sales growth decelerated in November to its lowest rate in 15 years, despite record e-commerce spending on Singles’ Day Moves follows decision by Central Economic Work Conference last month to expand domestic consumer spending this year to achieve ‘high-quality growth’

Alipay now has over 1 billion users worldwide
Chinese mobile payment service Alipay now has more than 1 billion users worldwide. The company said in an announcement that it has partnered with smart payment services in overseas markets including India and Thailand, which contributed significantly to its growing user base. According to Ant Financial’s official announcement, Alipay hit the 900 million mark in November last year.

China to roll out new consumer spending incentives for cars and home appliances to offset trade war
Overall Chinese retail sales growth decelerated in November to its lowest rate in 15 years, despite record e-commerce spending on Singles’ Day Moves follows decision by Central Economic Work Conference last month to expand domestic consumer spending this year to achieve ‘high-quality growth’

Chinese traders in American cars find temporary relief in trade war truce
Parallel importers of US-made cars hurt by trade war are moving to take advantage of tariff ‘window’ Cut-price deals on offer from importers followed by demand bounce

How China hopes to play a leading role in developing next-generation nuclear reactors
Researchers have ambitious plans that could pave the way for cleaner, safer and more efficient reactors that could cut reliance on fossil fuels China hopes to take prominent role in international collaboration designed to develop fourth-generation technology

Foreign companies file record number of patent applications in China
Beijing says 9.1 per cent rise in applications for 2018 shows improving climate for investors Figures released as US continues push for improved intellectual property protections in ongoing trade talks

China’s tech patents in US surge despite trade war
According to data from IFI Claims, China was the only country whose number of US patents grew in 2018. Most of those applied to developments in computing and communications technology. China is also on track to beat Germany’s patent figures by as early as next year, although it still only accounted for 4% of all patents issued in the US in 2018. Phone-maker Huawei ranked 16th in terms of most patents filed, followed by fellow Chinese company BOE Technology.

Asian Development Bank chimes in with dire prediction for China’s 2019 economic growth if trade war deteriorates to worst-case scenario
ADB sees China growth of 6.3 per cent this year under existing sanctions, 5.3 per cent if US sanctions all Chinese exports

Chinese firms out in force at world’s biggest health care meet, even as country’s tech companies cool on US
About 38 Chinese privately-owned and listed companies are attending the JPMorgan Healthcare Conference in San Francisco Attendance contrasts with 20 per cent decline in number of Chinese firms at annual CES consumer electronics trade show

Job cuts hit China tech sector amid mounting challenges5 min read
Looking at China tech headlines of recent months, one trend becomes evident: a whole lot of companies are not laying off workers. At least, officially. In reality, it’s becoming clear that headcount control is occurring across China’s tech sector, and jobs are becoming scarce.At the end of November, embattled e-commerce giant refuted rumors circulating that the company would be cutting 10% to 15% of its workers.

Tencent bets on AI assistant to boost WeChat growth
Chinese tech giant Tencent is planning to introduce a Siri-like smart voice assistant, dubbed “Xiaowei,” for WeChat. The virtual assistant system, which works on devices from smart speakers to cars, will link Tencent’s services such as QQ Music as well as mini-programs run by third-party services such as Meituan Dianping, Didi Chuxing, and Mobike.

To Cover China, There’s No Substitute for WeChat
Li Yuan conducts much of her work on the WeChat mobile app, including spotting trends — and prodding sources to get back to her.

Norway is considering whether to exclude Huawei from building 5G network, justice minister says, citing espionage fears
Huawei gear is used in Norway’s 4G networks, but Oslo shares US and UK concerns about the Chinese firm’s 5G technology, says Justice Minister Tor Mikkel Wara

Huawei’s Battle for Central Europe
The Party-state’s efforts to protect Huawei, from friendly op-eds to the Christmas démarche in Prague, show the usefulness of the long-term build-up of influence work. Even countries of less immediate international significance can become key assets: at a critical juncture for a “national champion” desperate to keep the CEE market, politicians and commentators who have developed pro-CCP positions can be called in its defence. With a quick coordinated reaction between Xinhua and the embassy, the propaganda battle being waged in Prague can resonate throughout the region and beyond.

China’s Crackdown on Daigou, New Cross-Border e-Commerce Policies
China’s crackdown on daigou is part of its moves to strengthen e-commerce regulation and better control the rapidly expanding sector. Cross-border e-commerce in China has grown steadily in recent years, on the back of strong consumer demand for premium brands and high-quality overseas products.

You’re rehired! Chinese firm overturns decision to cancel employment offers to over 200 graduates
Shenzhen Mindray Bio-Medical Electronics cites ‘corporate social responsibility’ following public outcry after contracts were cancelled in December Initial decision seen as example of China’s struggling job market, which is battling against the economic slowdown amid the trade war with the United States

HNA’s US$41 million loss on building sale near Trump Tower is the latest price paid by Chinese firms for Donald Trump’s chokehold on China
The Chinese conglomerate sells its mid-Manhattan office building at a loss little more than two years after buying it The sale follows US concerns that HNA’s ownership posed a security threat

China’s star electric vehicle maker claims former chief fled to the US after embezzling company funds
YLE says it has filed several cases against its former chairman and major shareholder, as well as a former general manager involved in stealing US$175 million It alleges that the former chairman may have spent a portion of the stolen funds at casinos in Macau

India, China dominate top cities index
Nine Chinese cities were ranked among the world’s 20 most dynamic cities in the latest City Momentum Index released by real estate services and investment firm JLL. The index, in its sixth year, tracks a range of socioeconomic and commercial real estate indicators to identify attributes for success over the short term. It ranked 131 established and emerging business hubs across the world.

How to secure a student visa for China
China’s education hub has boomed over recent years, largely due to the economic boom and rapid development. Chinese universities are steadily growing in popularity and accreditation, climbing their way up world rankings.

Ebola-like virus found in Chinese bats
Scientists discover virus with potential to infect humans and animals in southwestern China Mengla virus shares many characteristics with deadly Ebola

China’s Digital Silk Road Is Looking More Like an Iron Curtain
China is exporting to at least 18 countries sophisticated surveillance systems capable of identifying threats to public order and has made it easier to repress free speech in 36 others

podcast : Why Communist China Has So Many Billionaires
By one estimate, China mints a new billionaire every two days, far exceeding the rate of countries like the United States. But how did China remain a nominally Communist state while becoming a hotbed for billionaires-in-the-making? Bloomberg QuickTake explains how capitalist compromises and moves begun decades ago have made China the not-quite-Communist country it is today.

China instructs short-video apps to vet all content, adopt ‘strong political sense’
Chinese authorities have published a list of rules for short-video creators and platforms, requiring apps to set up review teams with a “strong political sense” and vet all videos before they are published.

Listening to the Big Bang: China’s lunar lander tunes in to ancient radio signals from across universe
Chang’e 4 uses its unique position on the ‘quiet’ side of the moon to seek out energy emissions that originated at the time the universe was born

Xi’s US strategy recalls Mao’s ‘protracted war’
Chinese leader calls on people to unite for an extended battle

Normalization of Sino-American Relations: 40 Years Later
In the interim, of course, the U.S. and other democratic states must adjust their policies to the substantial strategic challenge that Xi Jinping’s regime presents to the liberal international order. Yet we must not overreact, creating unwise risks that threaten the fruits of normalization and 40 years of progress in China and its international relations. We should not throw out the baby with the bathwater!

Research Details How Junk Food Companies Influence China’s Nutrition Policy
A life sciences institute funded by Coca-Cola and other multinational beverage and snack companies even has offices inside the government’s health ministry.

Alain Gillard
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