China Press Review – January 15, 2020

Press review

Trump poised to sign ‘beautiful monster’ of a deal with China
President Donald Trump is poised to sign a deal with China on Wednesday that for the first time would punish Beijing if it fails to deliver on pledges related to its currency, intellectual property and the trade balance.    But the question set to dog Trump the moment the ink dries is whether the pact will rewire the relationship between the world’s biggest economies. For many in Washington, U.S.-China economic ties have become an example of the evils of globalization, the tensions of 21st century technology and geopolitics, and the missteps of past presidents. The “phase one” deal that Trump recently called a “big, beautiful monster” is by no means a standard trade agreement: At 86 pages, it’s thinner than most on substance and commitments. The U.S. agreed to halve 15 per cent duties on US$120 billion of imports and delay others in return for Chinese promises to make structural reforms and purchase an additional US$200 billion in American goods and services over the next two years. The full text will be released Wednesday.

US, China set to sign massive purchases deal, easing trade war
The US-China trade war is set to enter a new, quieter phase on Wednesday (15 January) as US President Donald Trump and Chinese Vice Premier sign an initial trade deal that aims to vastly increase Chinese purchases of US manufactured products, agricultural goods, energy and services.

Market Manipulation Concerns Over US-China Phase One Trade Deal
Certain aspects of the soon to be signed US-China “Phase One” trade deal to end the ongoing 18-month trade war between the two nations may not be released to the public. While this has created some negative publicity among those who see this deal as a dead duck, US Trade Representative Robert Lighthizer has stated that some aspects of the deal will not be released to the general public, including

China central bank injects $58 billion of loans but keeps rates steady
China’s central bank extended fresh short- and medium-term loans on Wednesday but kept the borrowing cost unchanged, as it seeks to maintain adequate liquidity in a slowing economy and ease a potential crunch ahead of the Lunar New Year.

Americans Are Investing More in China—and They Don’t Even Know It
A modest trade deal can’t mask major problems between Washington and Beijing. But despite those tensions, Americans are unwittingly increasing their exposure to Chinese stocks and bonds. As officials from the United States and China navigate not only a trade war but also growing geopolitical competition—as well as a clash of values on issues such as Hong Kong, Taiwan, and Xinjiang—an incongruous trend is accelerating: Americans are unwittingly becoming more heavily invested in Chinese companies and government securities.

China’s top trade war negotiator handed more control at home as Beijing expands reach of finance committee
The Financial Stability and Development Committee, under Vice-Premier Liu He, will be upgraded into a de facto governing body with local branches
China was rocked by three bank failures last year, while the phase one trade deal with the US is set to include chapters about opening up China’s financial services market

Trade war: phase one trade deal to be signed in White House’s East Room
Previous meetings between US President Donald Trump and China’s Vice-Premer Liu He have been held in the Oval Office     But venue deemed too small to accommodate the 200 executives invited to witness the signing

Trump, Chinese vice premier to sign ‘Phase One’ trade deal but details still a mystery
The U.S. and China will signal a truce in their nearly two-year trade war when President Donald Trump and Chinese Vice Premier Liu He sign a limited trade agreement at the White House on Wednesday, but what exactly they are agreeing to remains a mystery.    Neither the Trump administration nor Chinese officials have released the text of their “Phase One” trade deal, which is the product of months of intense talks between officials in Washington and Beijing.    Few details of the pact have been made public, and many tough issues, such as complaints that China subsidizes its companies to give them an unfair advantage over foreign businesses, have been left on the table for further negotiations

China, US trade ties return to normalcy; yuan’s rise worth watching
The inking of the phase one trade deal between China and US is set to call a truce in the two-year, crippling trade conflict between the world’s two largest economies. The détente will set the pace for lowered tariffs, trade revival and a gradual normalization of the previously disrupted global supply chain – steps that are desired by the global community.     But Asian and European stock markets were broadly subdued prior to the signature of the trade pact at the White House, as investors had qualms about the Trump administration’s faith and readiness to remove the punitive tariffs it had imposed on $360 billion of Chinese imports, as well as China’s proportionate efforts to reciprocate.

China-US people exchanges: No “decoupling” yet
The spiraling economic confrontation between the United States and China has led to predictions that the two intertwined economies are heading toward a great “decoupling.” Trade barriers, export and investment controls, and fears about national security seem likely to drive these predictions. But it turns out that on one most basic and important US-China link—human interaction and people-to-people exchanges between the two countries—the concerns about estrangement seem exaggerated. Despite tough talk about a new divide, there has not been a major break in the number of travelers and migrants flowing between the world’s two biggest economies.   To be sure, growth in the number of Chinese students coming to US shores has slowed, but not enough to constitute a “decoupling” yet. Chinese students still are the biggest national group of foreign students in the United States. The number of US students in China remains low. But tourism between the two countries remains brisk, with more than two million visiting each country annually. In addition, permanent and temporary labor migration from China to the United States remains at near historically high levels.

US-China geopolitical rivalry in 2020 and beyond
A growing tech war between the two countries will involve greater decoupling of global value chains and entry into a new era of “techno-nationalism”.

China Imports of U.S. Soy, Pork, Rebound
China’s purchases of U.S. pork and soybeans rebounded in November and December, ahead of today’s (Wednesday’s) signing of the phase one trade agreement between the two nations.

China’s B2B deals seen tripling to US$350 billion by 2024 as manufacturers boost digitalisation efforts, study by Bain and Alibaba shows
B2B transaction volume is seen growing by 30 per cent a year, study shows    Digitalisation to help companies better understand market demand and trends, Bain & Co’s partner Bruno Zhao says

Huawei helps China overtake Germany in receiving US patents
Many of the US patents issued to Shenzhen-based Huawei were related to 5G mobile technology

Huawei’s latest US headache: Senate bill would spend US$1 billion on developing a 5G competitor
‘We cannot allow Chinese state-directed telecommunications companies to surpass American competitors,’ says sponsor Senator Marco Rubio   The bill is introduced a day after Secretary of State Mike Pompeo tells Silicon Valley group China ‘presents unique challenges, especially to your industry’ spotlights B2B companies with new initiative has launched its latest initiative to support B2B businesses in the U.S., creating a series of weekly events that will offer them the tools and skills necessary to grow both at home and overseas.    With the global B2B e-commerce market at $23.9 trillion and growing, Alibaba’s B2B online marketplace said that it wants the new initiative – called B2B Tuesday – to position these businesses to capture the expansion in that market and give them the resources they need to navigate what is a slow but steady move toward more digital operations in the sector.

Ant Financial to debut new fintech conference in Shanghai 
Ant Financial will debut its first-ever industry confab in April, bringing together top entrepreneurs, economists and thought leaders to “envision a world that’s more inclusive, green, and sustainable through digital technology,” the company said Wednesday.

The new year is kicked off, Cifnews highlighted the top 4 China cross-border e-commerce categories you should watch out for this year
According to data, the penetration of ecommerce in China has reached 71.1% of the total Chinese population. With the population of China, this means there are over a billion people on China’s shopping apps. 2020 is already at the beginning and we highlighted the Top 4 categories to watch this year.

WeChat mini programs: the future is e-commerce
WeChat rolled out a series of updates last Thursday, laying bare Tencent’s ambitious plans for mini programs—to build a vast online marketplace for traders and sellers. The move puts China’s most popular social media app on a collision course with Alibaba,, and Pinduoduo in the e-commerce space.

China’s EV market prospects a long-term positive: UBS
Despite a first-ever annual decline in China’s low- and zero-emission vehicle sales in 2019, an analyst from Swiss banking group UBS is positive on the market and expects that it will rebound this year, he said Tuesday.  Beijing’s heavy promotion of EVs over a 10-year span has left many questioning whether there was ever any actual consumer demand amid fears that the widespread EV slump will extend into another year.

Perfect Diary’s Virtual Influencer Gets Her Own Mini Program Store, Product Line
A screenshot of makeup tutorials from “Xiao Wanzi” using Perfect Diary products. It’s been about three months since we first wrote about Xiao Wanzi, a virtual influencer that the Chinese cosmetics brand Perfect Diary created to help it develop a closer relationship with consumers. First, it encourages customers to join one of its hundreds of private WeChat groups led by the fictional Xiao Wanzi. Then, once consumers are in the groups, Xiao Wanzi shares special offers, new product launches, and beauty and skincare advice with them.

Asia’s retailers shun artificial intelligence
Microsoft study finds 67% of businesses fail to adopt emerging tech

Shanghai aiming for 6 per cent GDP growth in 2020, will bank on foreign investment and exports, mayor says
Shanghai barely met its target for 2019 amid the US-China trade war    City will facilitate foreign investment, particularly in free-trade zone at Lingang

US venture capital in China tumbles as tech decoupling deepens, report says
US venture investment in China is expected to plunge to a 6-year low for 2019, to less than US$4 billion, just one year after peaking at US$17.4 billion   Widening US-China technology rift ripping apart early-stage investment, according to report by Rhodium Group and the National Committee on US China Relations

Short video is now more attractive than news sites for online advertisers in China
Video sites drew in more online advertising revenue than news platforms in China last year, according to a recent report   But e-commerce and search engine sites raked in the most money from online advertising

China’s trade with BRI countries booms in 2019
China’s trade with countries participating in the Belt and Road Initiative (BRI) posted robust growth in 2019, revealing the resilience of the world’s biggest trader against economic headwinds, customs data showed Tuesday.      Trade with BRI partner countries totaled 9.27 trillion yuan (about 1.34 trillion U.S. dollars) in 2019, up 10.8 percent year on year, outpacing the country’s aggregate trade growth by 7.4 percentage points, according to the General Administration of Customs (GAC).

Push for electric vehicles will shift from China to Europe in 2020
In 2020, the push to electrify vehicles and transportation will shift from China to Europe, as both governments and manufacturers aim to cut carbon emission, according to a new report.   Global car companies will sell about 2.5 million electric vehicles this year, which is an increase of 20% compared to 2019, according to the ‘EVs and New Mobility: Trends to Watch in 2020’ report by Bloomberg New Energy Finance (BNEF) researchers.

A brutal 2020 for China’s OEMs
BAIC, China’s number 4 OEM and a local EV manufacturing leader, is anticipating another brutal year. This is how their GM, Zhang Xiyong puts it: “It is a knockout match that some auto industry insiders have not yet understood to the full extent.” Local OEMs need the joint ventures with EU and US brands to work well in order to survive. Another risk here, as the Chinese Government is allowing for foreign manufacturers (under certain conditions, such as innovation, high-tech implementation…) to operate in China without JVs in place.  Eventually, Chinese manufacturers will need to start focusing on export, which has never been very high on the agendas. This requires again an expensive change in strategy… All in all, not a good time to make cars in China. We’ll probably see a “survival of the fittest” 2020, surely with a few bankruptcies, merge

China and Hong Kong stocks retreat before Washington and Beijing prepare to sign trade deal
Investors are concerned as the US will not immediately remove some of the levies on Chinese goods even after the two nations sign the phase one trade deal     Huawei’s suppliers fall on speculation that Washington will roll out a new rule to block exports to the Chinese telecom equipment maker

China-backed Asian Infrastructure Investment Bank won’t create ‘debt trap’ for borrowers, chief says
President Jin Liqun says the bank’s lending will help to cut the debt burden of borrowing countries, with membership having grown to 102 in four years     He also pledges transparency in bank operations and special efforts to address climate change by boosting green lending to support ‘low carbon’ development

Companies must help defuse Hong Kong’s crisis, and do what the government can’t
Like the wildfires in Australia, the political flames in Hong Kong burn hotter with each outbreak. Given that the government shows no intention of heeding the public’s voices, corporate Hong Kong must get to work on community engagement

TikTok, Douyin the world’s second most-downloaded app in 2019
TikTok and Chinese version Douyin were the second most-downloaded app across Apple’s App Store and Google Play in the fourth quarter and full year of 2019, according to a report from analytics firm Sensor Tower. : Despite rising controversy in 2019, it remained one of the world’s most popular apps, led only by Facebook’s WhatsApp.

Trade, tech … and now the Arctic? The next frontier in the China-US struggle for global control
Beijing has defined itself as a ‘near-Arctic state’ and is taking a growing interest in shipping and economic development of other countries in the area
But Washington is wary of its rival’s ambitions and the potential for Chinese science and commerce to morph into a security threat

Tsai Ing-wen says Beijing must face reality that Taiwan is ‘an independent country already’
After election win, president says in interview that island is successful democracy with decent economy and deserves respect   She also warns against any military response, saying invading would be ‘very costly for China’

Alain Gillard
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