China Press Review – January 13, 2020

Press review

Trade war deal: How Xi Jinping rejected Donald Trump’s signing ceremony proposal during turbulent period
Xi Jinping rejected proposals for a bilateral meeting with Donald Trump after the Apec summit in Chile was cancelled in November A frantic three months in US-China relations will culminate in Liu He’s trip to Washington next week, but analysts point to more choppy waters ahead

China to Buy USD 200 Billion More Products as Part of Trade Deal Phase 1: US Treasury Secretary Mnuchin
Steven Mnuchin said the first phase of the trade deal includes real enforcement provision. If they don’t comply with the agreement, the president retains the authority to put on tariffs, both existing tariffs and additional tariffs, he added.

US-China phase one trade deal is ‘modest but helpful’, say business leaders
American executives briefed by White House officials say the agreement includes better intellectual property protection and progress on agriculture exports One business source says it is the first time ‘we have something to applaud in the US-China relationship

Phase one trade deal in the works but firms in China plan for the worst
Manufacturers and suppliers come with Plan B, C and D, despite expected signing of tariff agreement Companies diversify production and markets in case Beijing and Washington fail to make real progress in talks

China says ‘trade war is not over yet’ ahead of phase one deal signing that is just the ‘first round of a game’
Taoran Notes, a social media account affiliated with the official Economic Daily newspaper, said that it is ‘just the first round of a game’ On Thursday, China finally confirmed Vice-Premier Liu He would travel to Washington on Monday to sign the phase one deal during a three-day trip

A Delicate Truce in the U.S.-China Trade War
What Both Sides Must Do to Forge a Better Peace

Trump vaunts his China trade pact – but some say it’s too little, too late
While a cessation in hostilities is welcome, businesses have a lot of ground to make up, and few expect any further progress

China and EU may hold summit in Beijing at end of March, ahead of ‘17+1’ meeting
President Xi Jinping is then expected to host Central and Eastern European countries on April 15, according to sources There has been ‘frustration’ among European Union officials that Beijing has placed priority on the 17+1 meeting

China aims for ‘steady’ yuan despite US trade war turbulence
Deputy central bank chief says Beijing will also remain on a ‘normal’ monetary policy course and boost support for smaller businesses Chinese currency expected to be used to offset the impact of US tariffs, analysts say

China’s New Economy Sectors: How Are They Doing?
China’s economy is shifting from being primarily focused on investment and manufacturing to a consumption- and services-driven market. In this paper, we use the S&P New China Sectors Index to analyze China’s growing economic sectors and examine their equity, fundamental, and price performance characteristics.

China is really worried about unemployment. Here’s what it’s doing to avoid mass layoffs
China’s focus on the economy has been obvious, particularly in recent weeks. Some of the government’s most critical actions: It has pumped tens of billions of dollars into the banking system; announced plans to build more railways and airports; lowered import tariffs across the board for hundreds of products; and promised to open up several industries to foreign investment. China hasn’t been ignoring the private sector, either. Premier Li Keqiang recently said the government is studying how it can offer more funding support to small and micro-sized firms. That could include requiring the People’s Bank of China to cut rates for commercial lenders. Li has also called on Chinese banks to give smaller firms more money. Fiscal stimulus is also in the works. The country’s transportation ministry recently outlined plans to spend nearly $400 billion on railway, highway and waterway infrastructure…The government has also taken more direct action to stem the risk of unemployment. It recently made it easier for people to move from rural areas to most Chinese cities in search of work by relaxing a mandatory household registration system. That could accelerate urbanization in those cities and stabilize China’s property market, according to analysts from research firm Huaxi Securities

Tencent: How a global investment empire flies under the radar
This China-based company is one of the most valuable technology firms in the world. They control massive amounts of personal data for billions of the world’s internet users. They also have a widespread global presence in nearly every major corner of the digital economy, and it seems unlikely that a user of the mobile internet anywhere in the world could go through a week—or even a day—without using a product or service backed by this company.

Tencent: How a global investment empire flies under the radar

More inclusive financing pledged for China’s small businesses
China’s top banking and insurance regulator vowed to ensure greater support in terms of inclusive financing services for the country’s small businesses amid efforts to boost the real economy. In 2020, greater efforts will be made to ensure lower financing costs and continued fast loan growth to small and micro firms, according to decisions adopted at an annual work conference of the China Banking and Insurance Regulatory Commission

Fears of Hong Kong’s economic demise are unfounded. Just look at the bigger picture of Asia’s sea trade
Hong Kong’s so-called decline says more about China’s underdeveloped economy in 1997 than it does about Hong Kong now. In fact, sea trade is gravitating towards Asia and Hong Kong’s two biggest port operators are also the world’s biggest

China tech giants wake up to renewable energy, but fossil fuels still dominate as electricity source
Fifteen of the country’s biggest cloud-storage and independent data centre companies ranked on their use of renewables Some are increasingly powered by wind and solar energy, but many are lagging in disclosure compared to their global counterparts, report says

China will not significantly cut new energy vehicle subsidies this year
China will not significantly cut its subsidies for new energy vehicles this year, as part of its efforts to stabilize market expectations and ensure the healthy and sustainable development of the industry, the country’s top industry regulator said on Saturday. In response to questions over whether China will cut subsidies for NEV again in July, and completely stop offering such subsidies by the end of 2020, Miao Wei, minister for industry and information technology, said this year’s subsidy policy will remain relatively stable and subsidies will not decline significantly.

China suspends further electric vehicle subsidy cuts in 2020: ministry
Beijing is suspending its plan to completely remove electric vehicle purchase subsidies this year, China’s chief minster of industry said on Saturday, as the government moves to stem further collapse spurred by the large-scale cuts which began in June. The move is a big positive for the industry, and is expected to calm the market and preempt widepread bankruptcies throughout the EV industry. China’s sales of new energy vehicles (NEV) dropped 6% year on year to 1.2 million units in 2019, the first decline in 10 years since Beijing began providing incentives on EV purchases, according to government figures. NEVs include fully electric cars, plug-in hybrid EVs, and fuel cell EVs.

China suspends further electric vehicle subsidy cuts in 2020: ministry

China’s battery makers, car part producers hitch a ride on Tesla’s Shanghai-made electric cars to the top of investor portfolios
A series of events leading up to the unveiling of Tesla’s Model 3 last week fuelled investors’ interest in Chinese parts suppliers That includes the companies that build charging stations, and even the miners of the lithium used in battery packs

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.

Trade War: Export-dependent South Carolina finds itself caught between its No 1 sales market and White House policies
China has been the state’s largest export market for manufactured goods since 2013, displacing Germany and Canada Companies are taking longer to decide whether to locate plants, expand production as a result of the trade war, state and local officials say

Hong Kong’s first digital bank offers 6 per cent rate to outdo HSBC in warning shot to new competition
ZA Bank, the city’s first digital-only bank, is said to be offering the 6 per cent rate for three-month deposits capped at HK$200,000 for select clients Standard Chartered, HSBC and BOC Hong Kong pay 1.9 per cent to 2.3 per cent for the same deposit maturity

China’s biggest potash producer risks delisting amid 3rd annual loss forecast
Qinghai Salt Lake said it expects to post a net loss of between 43.2 billion yuan and 47.2 billion yuan ($6.26-6.84 billion) in 2019, compared with 3.45 billion yuan in the prior year.

The costs of the Belt & Road Initiative
Xi Jinping’s Belt and Road Initiative, a trillion dollar-plus global trade and development program that was unveiled in 2013 and enshrined into the Party constitution in 2017, has attracted both international excitement and concern. While Beijing touts the plan as a “win-win” for global trade and cooperative economic growth that will usher in a new era of globalization, the massively ambitious initiative has also raised a host of concerns over its aim to expand Beijing’s global military and political influence, country-specific security issues, and looming debt traps that could arise from BRI deals. At The Atlantic, Chris Horton looks to the port city of Sihanoukville, Cambodia (known as Xigang in Chinese), a key Belt and Road outpost, as an example of the economic, social, and environmental costs and risks that come with deepening ties to Beijing through the BRI:

The Costs of the Belt and Road Initiative

8 Ways E-commerce Influencers Court Consumers in China
For most brands, e-commerce influencers are the gatekeepers to e-commerce success in China. Marketing teams can try to go it alone, combining content with community building to draw traffic to their own channels, but many will find their attempts yield disappointing returns. KOLs, on the other hand, give a brand exposure to a relevantly positioned audience in the tens of thousands, or millions—and through an elusive mix of charisma, charm, wit, and ability to inspire trust, persuade consumers to click through to e-commerce platforms and snap up the products being showcased.

8 Ways E-commerce Influencers Court Consumers in China

More Chinese firms shun CES
Trade tensions, more channels to go global dim attraction of electronics event Chinese companies, a major force in the Consumer Electronics Show (CES) in Las Vegas in past years, are less eager to attend the global electronics exhibition this year amid the protracted China-US trade war as well as an intensifying technology race between the world’s two largest economies. A total of 1,097 Chinese companies were listed in the 2020 directory on the official website as of press time, down from more than 1,200 last year, the first drop in at least four years. In 2018, the number was 1,551, according to official figures and media reports.

Beijing’s new man in Hong Kong: how the ‘odd choice’ of Luo Huining could signal a change in thinking
The former provincial party chief has had little experience dealing with Hong Kong, but a fresh mindset could be just what the central government wanted His appointment also signals Xi Jinping’s thinking in terms of promoting officials based on their records, rather than on age or term limits

Difficult times for China’s political elite
In Zhongnanhai, the Beijing compound where China’s Communist Party leaders reside and conduct business, 2019 was a bad year. The trade war with the United States dragged on — an accountability issue for President Xi Jinping who’s responsible above all for foreign policy. Despite common perceptions that he’s an autocrat with a totalitarian’s attitude to power and a bureaucrat’s attention to detail, Xi couldn’t easily get his cabinet to sign off on the US–China trade deal. The proposed text fell apart amid bitter debate about whether it was sufficiently nationalist.

Difficult times for China’s political elite  

Taiwan elections: Beijing ‘will view Tsai Ing-wen’s victory as setback but not a crisis’
Mainland Chinese observers do not expect extreme reaction to president’s re-election – but warn Beijing will respond to ‘provocations’ such as moves towards independence Cooler cross-strait relations appear likely, but one academic says Beijing has learned how to respond to the swings in Taiwanese politics

William Lai tipped to be DPP’s presidential candidate after Tsai Ing-wen’s Taiwan poll victory
Analysts say Tsai’s running mate and former bitter rival had party’s support clinched before Saturday’s election victory A reputation as a capable administrator and willingness to mend fences with Tsai have paved the way for Lai to become DPP standard-bearer four years from now

Prague mayor hits out a ‘unreliable’ China, as Czech capital switches from Beijing to Taipei in twinning deal
Zdenek Hrib explains decision to end sister city arrangement with the Chinese capital saying he would not sign deal that forced his city to ‘speak out against independence of Tibet and Taiwan’ Mayor tells German newspaper that China is ‘full of resentment’ and is trying to sway public opinion in the Czech Republic

US-Iran crisis: a Middle East war risks drawing in China and Russia, too
Beijing and Moscow have stood by Iran in the face of Washington’s belligerence. Now they must decide: how true a friend is Tehran, really?

China can boost Asean’s smart-city dreams but, first, it needs to earn some trust in Southeast Asia
China has a lot to offer the ambitious Asean Smart City Network project and has pledged to share its experience and technology But the rise of anti-China sentiment in Asean over South China Sea tensions and unpopular Mekong dam projects may hinder cooperation

US Army aiming to counter Chinese ‘threat’ with Indo-Pacific security expansion, top official says
Task forces to be set up in the Indo-Pacific will focus on non-conventional warfare realms such as cyberspace over the next two years Aim is to counter China’s military activities in the region and bolster alliances with regional partners, Army Secretary Ryan McCarthy says

Former head of China Development Bank expelled from Communist Party, facing prosecution
Hu Huaibang accused of exploiting his position for financial gain and taking bribes directly or through his relatives, anti-corruption watchdog says Official also lived a decadent lifestyle and refused to cooperate during his investigation

First Death Reported From Wuhan Pneumonia Cases
No new cases have been detected since Jan. 3, and the WHO says it is “reassured” by Chinese health authorities’ investigations and response efforts.

Alain Gillard
Information Officer
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