China Press Review – January 10, 2020

Press review

Belgian security services call for stricter 5G protections as Huawei concerns cast shadow over European debate
Country’s telecoms minister Philippe De Backer tells parliament it had been recommended that the security level be raised so that government could place restrictions on ‘unreliable’ suppliers The US has already excluded the Chinese telecoms giant from its network and European countries are now debating whether to follow suit

China tops EU list of IP’s ‘problem’ countries
The “scale and persistence” of IP right problems in China, including forced technology transfer and bad faith trademark registrations, have kept the country at the top of the EU’s list of priority countries. The European Commission issued a report yesterday, January 9, identifying three groups of countries where the state of IP rights protection and enforcement gives rise to high levels of concern.

Donald Trump says he may wait till after 2020 election to finish phase two of US-China trade deal
President says negotiations to begin ‘right away’, but will ‘take a little time’ Remarks come just days before Beijing’s trade envoy is due in Washington to sign phase one pact, marking pause in trade war

Donald Trump’s tariffs cost US companies US$46 billion to date, trade war data shows
Lion’s share of higher costs – US$37.3 billion – stemmed from duties on imports from China, according to Washington-based trade consultancy Exports of US goods hit by retaliatory tariffs from China and other countries fell sharply and did not bounce back when duties were lifted

Is America’s China Strategy working? 
After a long holiday hiatus, Hudson’s Patrick Cronin joins Melanie and Chris in a spirited discussion of U.S. policy toward China. How is this competition like the Cold War with the Soviet Union, and what’s different? What aspects of China’s behavior are most worrisome? What steps can be taken to reduce the likelihood of conflict? Or is a clash, even if it is mostly non-military in nature, inevitable? Patrick gives a shout out to the heroic men and women fighting wildfires in Australia, Melanie expresses her appreciation for Ricky Gervais, and Chris offers kudos to the U.S. press corps.

Is America’s China Strategy Working?

Goldman Sachs casts doubt on whether China can honor $40 billion in US farm purchases
In 2017, China managed to buy around $27 billion worth of U.S. soft commodities and agricultural assets. The number roughly halved in 2018 and 2019 as trade tariffs took hold. Washington wants China to raise farm puchases to at least $40 billion for this year and next.

Trump’s trade deal with China won’t save the global economy
The Trump administration’s trade skirmish with China appears to have reached a reprieve. That’s something the world’s economy, which has been badly damaged in the trade war, should welcome. But the global economy still faces significant growth challenges in 2020. Economists at the World Bank are forecasting worldwide growth of between 0.1% and 2.5% this year, as both trade and investments recover slowly from the shock of last year’s US-China trade war.

As China’s days of meteoric growth come to an end, can it find a way out of its lost decade?
China ended the decade with a growth slowdown, a drop in its current account surplus and a sizeable budget deficit Having lifted millions out of poverty in the decades leading up to 2010, the country did not go far enough in the past 10 years to loosen government control

Lunar New Year countdown in China as millions head home for holiday
People expected to make 3 billion trips over the course of the festivities, government says 40-day holiday period runs from Friday until February 18

Yuan’s rise to global currency is far from guaranteed
China’s large economy does not promise its currency’s outsize influence in financial markets

China’s central bank says it has completed ‘top-level’ design of digital currency
The People’s Bank of China (PBoC), the country’s central bank, has said that the “top-level” design of its digital currency has been completed. The central bank announced the development in a new paper, saying that the “top-level design, standard formulation, functional research and development” has been completed, Sina Finance reported Friday.

China’s central bank says it has completed ‘top-level’ design of digital currency

Can the New Silk Road Compete with the Maritime Silk Road?
China’s president Xi Jinping refers the Belt and Road Initiative, aka the New Silk Road, as the “Project of the Century” and according to a recent Bloomberg article, Morgan Stanley anticipates Chinese investments will total 1.3 trillion US dollars by 2027. In addition, more than 150 countries and international organizations have committed to invest in the project as well with infrastructure enhancements, such as roadways and power plants. But will this New Silk Road ever really compete with the firmly established Maritime Silk Road?

Can the New Silk Road Compete with the Maritime Silk Road?

The U.S. is trying to catch up with China’s massive Belt and Road Initiative (BRI) with a new project that one expert says will be “a legacy of the administration.”
With the creation of a new taxpayer-funded entity called the U.S. International Development Finance Corporation (DFC), which some experts hail as “the most important piece of U.S. soft power legislation in more than a decade,” America is on track to counter China’s colossal project known as the New Silk Road.

Foreign Investment into China Rose 6% in 2019, High Tech Industries Surged Ahead
Foreign direct investment into China rose six percent in the 11-month period from January to November 2019, according to data released by Trading Economics. The increase means that China direct FDI reached RMB 845.94 billion (US$124.39 billion) in the first eleven months of 2019.
In November 2019 alone, it increased 1.5 percent over the previous month, with inbound foreign investment into China at around the US$140 billion a month mark

Chinese FDI to Ireland rises 56% as it falls to nine-year low in US
Forecast that FDI to the State from China will continue to grow due to pipeline of deals

How China’s tech trio — Baidu, Alibaba and Tencent — could fare in 2020
Baidu, Alibaba and Tencent, known as the BATs, are three of China’s most prominent technology firms. These companies have faced a barrage of domestic issues against a backdrop of the U.S.-China trade war, which has morphed into a tech war. CNBC looks at where these companies are headed in 2020.

Alipay launches security platform for global payment partners
Chinese mobile payment provider Alipay has launched a platform that bolsters security measures and strengthens risk detection capabilities for its service partners around the world, the company said on Thursday. Alipay and other major players in the internet finance sector have been battling increasingly prevalent financial fraud, data security threats, and other cybersecurity risks.

Alipay launches security platform for global payment partners

Alibaba and FAW team up to deliver next-generation smart vehicles
The tie-up will leverage Alibaba’s Banma Network Technology platform to build a new intelligent connected vehicle operating system

Sony’s electric car wows CES in bid for tech talent
Effort headed by engineer who led Aibo robot dog project

Donald Trump’s erratic actions on Iran should give China pause as it prepares to sign a ‘phase one’ trade deal with the US
The US president’s latest move should make it clear to China – and investors – that his decision-making will be more unpredictable in an election year Investors will also have to contend with the uncertain outcome of the US presidential election with no clear Democratic contender having emerged so far

Here’s How Your Business Can Prepare for Chinese New Year Shutdowns
It’s that time of the year once again where Chinese New Year is around the corner and preparations throughout Asian countries are underway. Countries including Korea and Vietnam are also expected to participate in the Lunar New Year celebrations around the same time as Chinese New Year, requiring other global businesses to consider what preparations need to be made in advance to ensure operations aren’t put to a halt. In a report from Dachser Logistics, it’s estimated nearly 80 million Chinese workers will be traveling to their hometowns to honor Chinese New Year – also called the “Year of the Rat.” During this time, the Chinese manufacturing infrastructure completely shuts down, from businesses to factories for up to four weeks in the region. Dacher goes on to report that this can impact production for up to two months and lists various ways businesses can be impacted:

Here’s How Your Business Can Prepare for Chinese New Year Shutdowns

2020 will be the year emerging Asia’s economic growth catches up with its equity markets
The easing of US-China trade tensions and a recovery in the tech cycle are likely to stimulate growth in the region this year, on the back of continuing monetary and fiscal policy support, even if the growth is expected to be modest

How to Attract Entry-Level Luxury Buyers in China
Luxury brands that make the shift down-market will be highly rewarded. Photo: Shutterstock
Making a down-market shift might seem like an unexpected transformation for the luxury industry, but it’s what today’s modern brands are doing. That’s because brands that target entry-level luxury buyers will see a boost in revenues and profit margins, stacking the odds in their favor. Nevertheless, some luxury retailers feel that the rewards are only short-lived, and ultimately, thriving in the mass market can imply reputational risks, overexposure, and financial losses. According to certain luxury executives, heritage brands that move further into off-price retail will suffer because of the affiliation with customers who are often perceived as non-conventional luxury buyers. Indeed, launching capsule collections aimed at entry-level luxury buyers can antagonize core consumers who will eventually stop signaling their status and privileged identity through that particular brand

How to Attract Entry-Level Luxury Buyers in China

Opinion: How China’s State Sector Has Changed Since the Financial Crisis
According to the official data about China’s SOEs published by the Ministry of Finance, the National Bureau of Statistics, and the State-owned Assets Supervision and Administration Commission, three trends changes took place around the time of the global financial crisis.

China’s Investments in North America and Europe with a Record Decline in 2019
China’s investments in North America and Europe report their lowest levels in the last 9 years, according to a new report by Baker McKenzie, a global law firm and the independent consultancy company Rhodium Chinese investors have negotiated deals worth $ 19 billion in North America and Europe for the past year, the lowest level since 2010 and an 80% decline from 2017, when the investments reached the amount of $ 107 billion.

Tencent and Alibaba-backed ‘Little Red Book’ seeks US$6 billion valuation
Chinese social commerce platform Xiaohongshu said to be in talks to raise about US$400 million to US$500 million in new funds

Apple is hot in China again, but it won’t overtake Huawei anytime soon
Apple saw a huge boost in iPhone sales in China last month, but embattled tech giant Huawei won’t giving up the top spot anytime soon.

Macau approves first bond listing since Xi Jinping’s anniversary visit as China seeks to transform world’s biggest gambling hub
Nanjing Southeast State-owned Asset Investment Group’s 1 billion yuan of notes will be listed and traded on Macau exchange from January 8 The listing is the first since President Xi’s visit to Macau last month to mark its 20th handover anniversary

One in 3 super rich in China builds wealth on real estate
China’s wealthy families are twice as likely as global peers to have made their millions in real estate, according to a report co-authored by UBS Group which found an increasing focus on wealth preservation and succession.

Hong Kong, China stocks post sixth week of gains, Shanghai Composite dips on Friday
Shanghai Composite Index dips 0.1 per cent to 3,092.29 at the close on Friday Hang Seng Index adds 0.3 per cent to 28,638.20

China’s Ctrip said to tap banks to follow Alibaba with Hong Kong listing
Shanghai-based Ctrip plans to sell at least 10 per cent of its shares as early as the first half of this year

Hong Kong, China stocks’ ‘path of least resistance remains up’ as appetite for risk rises
Hang Seng Index and Shanghai Composite Index record sixth consecutive week of gains US gauges all rise to records in overnight trading, bullion futures decline

China’s bid to challenge Boeing and Airbus falters
Development of China’s C919 single-aisle plane, already at least five years behind schedule, is going slower than expected, a dozen people familiar with the program told Reuters, as the state-owned Commercial Aircraft Corporation (COMAC) struggles with a range of technical issues that have severely restricted test flights.

China crowns Xi with special title, citing rare crisis
Politburo blames country’s many problems on Trump and outsiders

podcast : Winter freeze arrives along ‘China’s sorrow’, the Yellow River
China’s sixth longest waterway, the Yellow River, has frozen for the winter of 2019/20. The river which traverses the nation’s central province of Shanxi had 30cm (12 inches) of ice along a 20km (12-mile) stretch. Known as “China’s sorrow” because of its tendency to flood over the centuries, the Yellow River originates in southern Qinghai province and flows across six provinces and two autonomous regions before joining the Yellow Sea. It freezes between mid-December and late February each year.

Mystery Chinese virus: How worried should we be?
A mystery virus – previously unknown to science – is causing severe lung disease in the Chinese city of Wuhan.

Alain Gillard
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