China Press Review – January 14, 2019

Press review

China December trade data bad, but likely to get worse this year
Analysts surprised by unexpected December drop in Chinese exports and imports December data show full impact of trade war on Chinese trade for first time

China has a lot more to lose than the US in trade war, says Credit Suisse
Trade is one of several areas where tension is rising between the US and China Rising tensions come as China faces economic slowdown

There’s a lingering feeling that the global economy is due for another downturn, as one tends to come along every five to seven years But while the West points to China, it’s the US that has most reason to worry. Something eerily similar to its subprime disaster is afoot

China December trade data bad, but likely to get worse this year
Analysts surprised by unexpected December drop in Chinese exports and imports December data show full impact of trade war on Chinese trade for first time

Will Chinese negotiators ‘extract their pound of flesh’?
“The damage caused by President Trump’s trade fight with China has spread further and faster than many expected,” said Bloomberg News in an editorial. Factory orders are slumping on both sides. American farmers are feeling the pinch. Apple is suffering from China’s slowing economy. As the sparring superpowers resume talks in Beijing this week, it’s not the time for all-or-¬nothing gamesmanship. Both sides “ought to see there’s a deal to be had — and should help each other seize it, even if it’s less than perfect.” American negotiators, who are threatening to boost Chinese tariffs beginning in March, are right “to maintain a poker face.” China has been promising bold reforms for years without following through, even as state control over the economy has increased under President Xi Jinping. But “it would be counterproductive for the U.S. to press for outright capitulation, or to spin any emerging compromise as a crushing Chinese defeat.” The two countries’ economic fortunes are bound together. “Both sides ought to grant each other a face-saving exit from the mess they’ve made.

Trump Has Secret Allies in China
Private-sector Chinese businesses are key to growth, and they happen to share many of the same complaints as the U.S.

China’s economy is fine, Trump and Xi won’t fight a trade war and the Fed is a friend
The triad of China’s economy, trade war and the Fed’s policy is a false alarm. The main problems are America’s dangerous security challenges around the world involving military confrontations with China and Russia. The White House should not be pushed by its domestic adversaries to raise those tensions. A constructive relationship with China and Russia is in the interest of America and the rest of the world.

China’s Premier Li Keqiang says tax cuts support employment, economic stability
China rolled out a series of support measures for its cooling economy last year and is widely expected to unveil more in coming months to reduce the risk of a sharper slowdown.

Merkel planning EU-China summit for Germany’s 2020 presidency – sources
Chancellor Angela Merkel has proposed a China-European Union summit during Germany’s 2020 EU presidency that would include national leaders of EU countries as well as officials from Brussels and Beijing, EU diplomats said.

Is Winning Over Germany The Real Objective Behind China’s CEE Diplomacy? – Analysis
China has been ramping up its political and economic ties with Central and Eastern Europe “CEE” in recent years. But, beyond the growing skeptical media attention pointing to China’s ambitions in competing with the European Union “EU” and major western European states for influence in CEE, does Beijing actually have a long term game plan in place for the region? Alternatively, could there be a more ambitious and less recognized agenda at play?

China investment in US slides to 7-year low in 2018 amid trade war
Beijing’s tighter grip on outbound investment and Washington’s stepped-up scrutiny of Chinese purchases also take their toll, research group says

China Names and Shames Cities in Fake Data Crackdown
China’s top statistics agency says it is getting serious about authenticity of the data available on the $12 trillion economy.

Are consumers in China changing their spending habits?
Global investors are intensely interested in what China’s consumers are buying and what they’re not, because a lot of American and foreign firms rely on the Chinese market for growth.

‘Made in China 2025’ is not unique, as US hawks insist, except in its effectiveness
David Dodwell says China should not be demonised for implementing an industrial policy, especially one that invests billions in technology, such as clean energy and electric vehicles, that could benefit the planet

The Growing Popularity of Chinese Social Media Outside China Poses New Risks in the West
Chinese technology firms have developed a variety of social media outlets in the last few years. Some are wildly popular at home, while failing to attract foreign users. This indifference outside of China changed in 2018, as a Chinese app similar to Instagram made the first significant foray into the Western market. It even became popular among the US armed forces.

Chinese tech startups confident Made in China 2025 plan will carry on
Beijing still driving strategy that sparked trade war tensions with Washington

Alibaba and Intel are teaming up to create a new technology that can generate 3D models of athletes to enhance both the training programs of those athletes and the viewing experience for fans watching games at home.

World View: China’s Economy Destabilizes as Huawei Introduces Cheap Smartphone
With regard to the trade war, Xiang says that it is really a clash of value systems, with no solution in sight: In addition to this, there are three major external challenges. The first is the trade war, which is in fact no longer a trade war but rather a clash between two opposed value systems. It can be said with certainty that the Sino-U.S. relationship has come to a crossroads right now and faces significant historic challenges. What are we to do? To be honest, I don’t think we have really found much of a solution.

China’s economy and Fed policies are again unsettling markets. But don’t expect a turnaround like in 2016
Nicholas Spiro says that, now as then, concerns about the health of the global economy dominate, but the confluence of factors that stabilised, then lifted, the markets in 2016 is unlikely to come about this year

China’s A shares, world’s worst performers last year, are ‘most investible’ in 2019, says fund house
Two years as world’s worst performing market just a short-term disruption, says fund house MSCI’s inclusion of A shares in its indices to have boosted foreign investment in these stocks

China doubles quota for foreign investors, paving way for global funds to get bigger bite of A-shares amid stock market slump
The government to double the combined quota under the qualified foreign institutional investors (QFII) programme to US$300 billion Beijing is still selective in opening up, as it prefers capital inflow channels over outflow ones

China Doubles Foreign Investment Limit in Further Opening
China doubled the limit of one of the main foreign investment channels into the world’s second biggest economy, continuing to open up its financial system even as the country’s trade war with the U.S. jolts financial markets

China’s Big Banks Throw a $22 Billion Test at Hybrids Market
Flood of issuance will put pressure on convertible-bond prices Investors demand higher coupons after last year’s stock rout

China’s latest slang craze for ‘dirt-poor and ugly’ highlights growing income gap
Income inequality has been exacerbated as Communist Party-ruled China’s economy raced up the ranks to become the world’s second-largest. Plenty of individuals profited from the country’s economic growth spurt, but it stratified an elite class. The top one per cent of Chinese households own more than a third of the country’s total wealth, according to a study by Peking University.

India likely to overtake US to be world’s second largest economy by 2030: Report
As per the economists, India is projected to accelerate to 7.8 percent by the 2020s while China’s will moderate to 5 percent by 2030 reflecting a natural slowdown given the economy’s size.

Beijing approves blueprint for ‘Greater Bay Area’ to rival Silicon Valley with document expected to be released on February 21
Hong Kong will be positioned as a leading finance platform due to its strengths as a global financial centre

China is still reportedly dragging its feet in opening its market to Visa, Mastercard
The inaction comes as the U.S. and China are engaged in negotiations on how to resolve trade issues, including that of foreign access to the Chinese market. In response, the People’s Bank of China said Mastercard withdrew its application last year, while Visa’s application lacks supplemental materials.

Air freight route links Wuhan with Luxembourg
A new freight route was opened on Sunday between Wuhan in central China with Luxembourg. A Boeing 747-400 cargo aircraft, operated by Uni-top Airlines, departed from Wuhan, capital of central China’s Hubei Province, at 2:46 a.m. Sunday. It is operated between the two cities every Tuesday, Thursday and Sunday. The airport said it hopes the new route will help boost e-commerce between Hubei and Europe. It aims for more routes to the Belt and Road countries.

Relocating a Business in China: The Most Common Reasons
The ongoing trade tension between the US and China has brought relocation back into the spotlight for many business leaders in China. The American Chamber of Commerce in South China found that more than 70 percent of the US companies it surveyed were considering delaying or canceling investment in China, and relocating some or all of their manufacturing lines out of China. But relocation is not new. Before the trade war, businesses were relocating for a number of push and pull factors.

Another Chinese private oil giant faces liquidation if court approves winding-up petition
Court hearing will be held on March 6 to review petition filed against Brightoil
The company’s financial health has been shaky since 2016

Reality Check: How safe is it to live in China?
China’s Director of Public Order, Li Jingsheng, has claimed it is “one of the safest countries in the world.” China’s reporting of crime data may be questionable, but there is a perception that its cities are relatively safe from violent crime.

In a report on China’s reading habits released last week, Tmall said it had sold 1 billion physical books last year, the equivalent of a third of all books in the retail market. Tmall found that about 80% of the platform’s book-buyers were born after 1980, the year at which the Millennial generation began.

Pollution warnings as cities in northeast China shrouded in smog
Weather bureau issues orange pollution alerts, the second-highest, for Tianjin and seven provinces in the region Visibility is down to less than 50 metres in the worst-affected areas

After 40 years of peace efforts since Beijing’s ‘Message to compatriots in Taiwan’, president’s forceful words show threat of conflict has only grown

Is Xi Jinping’s Taiwan reunification push hastening a US-China clash?
Fragile power balance in Taiwan Strait exposed with superpowers locked in a trade war Taipei using the US as a hedge against mainland’s pressure campaign

Attack on Chinese consulate in Karachi ‘planned in Afghanistan, aided by Indian spy agency’
Five suspects have been arrested over deadly attack in November, but New Delhi denies claim its spy agency was involved Authorities in Pakistan also highlighted security risks Beijing is facing over its China-Pakistan Economic Corridor

China corruption watchdog to target health, education and the financial sector in 2019
‘Interest groups’ and grass-roots government will be in the spotlight Party aims to eliminate bureaucratic tendencies and perfunctory officials

1MDB scandal: Malaysian police hunting Jho Low meet Chinese officials to help track him down
Low has been painted by US prosecutors as a central figure in Malaysia’s 1MDB scandal, where billions of dollars were allegedly embezzled He has maintained his innocence and faces charges including money laundering in Malaysia. His whereabouts are not known

Zhou Yongkang, Bo Xilai among elite prisoners in China’s ‘tigers’ cage’ Qincheng growing vegetables and wearing suits
Former security chief Zhou Yongkang has a garden near his cell, while disgraced politician Bo Xilai doesn’t have to don his prison uniform, according to sources

Huawei’s Poland spying case threatens China’s efforts to win over Eastern and Central Europe
Latest controversy surrounding Chinese telecoms giant could hit Beijing’s efforts to boost its presence in the region

‘Poland is a US accomplice’, China says after Huawei worker’s arrest
Poland “must pay” for arresting an employee of Chinese telecom giant Huawei for alleged espionage, state-run tabloid Global Times said on Monday.

Huawei fires Chinese sales director arrested in Poland on spying charges, says case not related
Company says decision was taken to sack Wang Weijing because the incident ‘brought Huawei into disrepute’ Pressure is building on the telecoms firm in Europe, its biggest foreign market

Poland calls for ‘joint’ EU-Nato stance on Huawei after spying arrest
Country’s foreign minister says both entities need to decide whether to exclude telecom giant from their markets

Huawei’s 5G gear seen as a bargain in many European capitals even though Polish arrest lifts security stakes
Chinese tech giant’s 5G gear seen as cost-effective and reliable in many developing countries who will have to weigh security risks

The Chinese technology helping New York police keep a closer eye on the United States’ biggest city
China is exporting its cutting-edge facial recognition across the Pacific

China’s first 3D-printed footbridge opens in Shanghai
Developer says 15-metre span is an example of the many possibilities of the new technology Sturdy design means bridge is strong enough to support four adults per square metre, engineer says

China sentences Canadian man to death for drug smuggling
The Canadian national was sentenced to death by the court in the north-eastern city of Dalian
China’s court has sentenced a Canadian man to death for drug smuggling – a verdict likely to reignite a diplomatic row between the two countries.

Alain Gillard
Information Officer
Service Asie Pacifique
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