China Press Review – January 16, 2019

Press review

China just injected a record amount of money to stimulate its economy
On Wednesday, the Chinese central bank injected a net 560 billion yuan ($83 billion) into the banking system, the highest ever recorded for a single day. “At present, it is the peak of the tax period, and the total liquidity of the banking system is declining rather quickly,” the central bank said in a statement on its website. In the afternoon, the yield on the 10-year Chinese government bond fell below 3.1 percent to its lowest in more than two years, according to financial database Wind.

China’s Vice-Premier Liu He accepts invitation to visit Washington this month for talks to end trade war
A Chinese delegation will visit the United States on January 30 and 31 Liu is expected to meet US Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin in hopes of progress toward a trade deal

Could China and the United States do a deal to end the trade war before summer? China expert and former US diplomat says ‘yes’
Andy Rothman thinks domestic issues on both sides lead to increased motivation to make an agreement Rothman was head of macroeconomics and domestic policy office of the US Embassy in Beijing.

Trump’s trade war tariffs send firms to Hong Kong for a little-known legal loophole
The US ‘first sale’ rule allows duties to be levied only on the initial sale from the manufacturer to the initial wholesaler The rule is legal in the US but requires voluminous paperwork

US-China trade war agreement could extend economic cycle, fund manager says
Trade agreement would ease market fears, according to Eoin Walsh of TwentyFour Asset Management Investors should focus on short-dated credit to lock in returns

Trade war sees China’s provinces slash growth forecasts for 2019
Eight provinces have set lower GDP growth targets for this year A nationwide slowdown is a likely scenario as trade war starts to bite

China’s Shift to a More Assertive Foreign Policy
A China in the World Podcast Shi points to two important turning points in China’s shift to a more assertive foreign policy: the 2008 global financial crisis, which made it clear that China’s economic development was an important engine for global growth; and Xi Jinping’s rise to power, which signaled China’s more ambitious international approach. Shi says China has undertaken a number of new foreign policy initiatives with regard to the South China Sea, relations with Russia, and the Belt and Road Initiative. Despite these developments, China is now at a stage where it should assess the successes and failures of its recent policies. Beijing must be willing to be flexible and adjust its future international engagement to reflect the realities of the evolving geopolitical environment

All-out trade war between China and the US leaves no room for optimism
S. George Marano says disputes over trade practices are only part of the larger power struggle between the two. Despite recent conciliatory remarks, the conflict is unlikely to wind down any time soon. Expect it to drag on, if not escalate

The world’s most closely watched China analyst explains the ‘5-second indicator’ that’ll tell you when
Business Insider interviewed the star China debt analyst Charlene Chu about the hottest debate in Chinese economics right now — whether the country’s slowdown is due to its trade war with the US or to structural factors. She came down on the latter side, saying if stimulus measures do work, they will take about a year to make a positive impact on the economy. Chu also explained a “five-second indicator” she said would tell us when the slowdown is over.

China SOE Bankruptcies, Foreign Buyers, and Product that Never Arrives
Euler Hermes, the German credit insurance company, recently released its bankruptcy filing projections for 2019 here. The Report states that bankruptcies worldwide increased by 10% in 2018 and it projects an additional 6% increase for 2019.

Will China’s Economy Hit a Great Wall?
The case for crisis seems compelling – but I said that in 2011, too. The other day I issued a warning about the Chinese economy. It is, I wrote, “emerging as a danger spot in a world economy that really, really doesn’t need this right now.”

Is China Really Cheating?
The evidence of Chinese malfeasance on trade, technology and intellectual property is a lot thinner than most people assume.

China’s hard landing? Watch prices on these 3 things, not economic data
Apple, oil and industrial commodities We are closer to an economic hard landing in China than the consensus believes, and the price of industrial commodities, crude oil and Apple’s stock will be better indicators of this than many economic statistics released by the Chinese government.

podcast video: Alibaba CEO says he is confident in China’s consumer market despite economic slowdown
The CEO of Chinese e-commerce company Alibaba says he is confident on the country’s consumer market despite reports of an economic slowdown. Yahoo Finance’s Dan Roberts and Melody Hahm discuss.

Online retailer Suning to open 15,000 offline stores in 2019
Chinese online retailer is planning to open 15,000 offline stores in 2019. It is also promoting smart retail solutions in its massive sales networks across 350 domestic cities. Zhang Jindong, chairman of the Suning Group, described its grocery stores as the pathfinder in the company’s “Great Development” plan, aiming to drive businesses in Chinese neighborhoods and rural markets.

China Electric Car Sales Soar To Almost 160,000 In December
According to data released by the China Passenger Car Association (CPCA), China’s new energy passenger vehicle (PV) wholesale volume in December hit a record high of 159,751 units, leaping 62% over a year ago. From January to December, a total of 1,016,002 new energy PVs were sold in the world’s largest automotive market with a splendid year-on-year (YoY) growth of 83%.

Everybody Wants to Be the Next Elon Musk (at Least in China)
Tesla’s China-backed rivals have their own California dreams EV startups poaching Tesla talent and setting up shop nearby

Opinion | India has an opportunity as China tries to boost its economy
Weakening retail sales and industrial production along with wrong GDP numbers show an unpleasant economic climate in China. What are the implications or India?

China posts scant rise in outbound investment in 2018 amid outflow curbs
China’s overseas investment rose only marginally in 2018 as the yuan weakened and regulators cracked down on deals that were suspected to be skirting controls on moving money out of the country. China’s non-financial outbound direct investment (ODI) in 2018 rose 0.3 percent from a year earlier to $120.5 billion, the Ministry of Commerce said on Wednesday

Overseas investments riskier for Chinese firms as US tensions and Islamic State threats rise
Challenges are seen as particularly acute in Asian and African countries, according to a Chinese risk assessment report Meanwhile, Washington and its allies are expected to step up efforts to counter China’s growing influence, the report says

China to press ahead with investments in 5G and Internet of Things, NDRC official says
China’s top economic planning agency says investing in “new form of infrastructure” is a top priority

Founder, father, patriot: The conflict at the heart of Huawei chief’s identity
In 2019, the questions of loyalties, obligations, and identity are once again at the heart of the discourse regarding China. Ideology has begun to play a greater role in the Party, and the Party is playing a greater role in China’s tech sector as well. As geopolitics intensify, China’s global tech champions are facing a dilemma between competing interests that offers no easy solution.

Nasa wanted to use China’s spacecraft to plan a new American moon mission, top Chinese scientist says
US space scientists had asked permission to borrow China’s Chang’e 4 spacecraft and relay satellite to plan a mission to the far side of the moon Nasa scientists made the request at an international conference a few years ago, Wu Weiren said

Credit Suisse predicts steep fall in global smartphone output as demand and China economy slow
Credit Suisse analysts warn ‘the bottom is not yet in sight’ for global smartphone production levels after predicting 19 per cent drop in first quarter

Chinese Travelers Prepare for Lunar New Year Holiday Spending Spree
The Lunar New Year, which begins on February 5th this year, is the largest annual human migration, as millions of Chinese citizens are on the move, mainly to their hometowns to celebrate the holiday with family. The holiday, which is officially a week long, is a major revenue source for online travel agencies, China’s domestic airlines, as well as retailers.

7 Reasons Why Luxury Can’t Rely on the Chinese Millennial Market Growing
Luxury brands still see Chinese millennial shoppers as a powerful group of consumers. After all, they are the demographic that most contributed to global luxury growth in 2017, as reported by Bain & Co. However, a new report from the Chinese research agency Yaok Institute, published on January 14th, questions whether the millennial market in China is a sustainable revenue source for luxury brands.

Prices of China’s new homes grow at the weakest pace in eight months as purchase curbs bite hard amid a slowing economy
The slowdown was mainly dragged by second and third-tier cities, while first-tier cities staged a rebound to hit the highest in more than two years Weak price data could vindicate more policy easing this year as Beijing tried to prop up domestic demand

How Illegally Harvested Timber Is ‘Greenwashed’ in China
Even when Europeans buy certified sustainable wood, the environment pays the price.

What are the most popular traditional games and toys in China?
Construction toys are predicted to remain China’s top growth category from 2018 by 2022 Plush toys, and games and puzzles to see decline in sales by 2022

China’s soft-power play: what will it take to get it just right and hit the Goldilocks zone?
Nicholas Ross Smith and Tracey Fallon say after years of trying to win friends and gain influence through its outreach programmes, Beijing has run into a wall The reason is twofold: China must improve its art of persuasion, and the West it seeks to impress must be willing to come to the party

Four Chinese tycoons just transferred US$17 billion of their wealth to trusts as government toughens up tax regime
Sunac’s founder Sun Hongbin, Longfor’s Chairwoman Wu Yajun, and the magnates of Dali Foods and Zhou Hei Ya all transferred their wealth to trusts

Another Chinese Health Product Company Investigated for Quackery
Hebei authorities also suspect the direct sales company of operating as a pyramid scheme.

Skills training and technology were in focus at two of Alibaba Group’s annual philanthropy gatherings in the past week, with Executive Chairman Jack Ma and Executive Vice Chairman Joe Tsai emphasizing education and digitization as the key to successfully reduce poverty in China.

Chinese mobile operators censured for bad business practices
Two of China’s major mobile operators, China Unicom and China Telecom, have been censured by the central government for bad business practices. China’s Ministry of Industry and Information Technology (MIIT) published a list on Wednesday warning 29 enterprises for irregular operations and distorting markets in the telecommunications sector. Included are China Unicom’s arms in China’s northern Jilin province and eastern Fujian province, as well as an affiliate of China Telecom in the country’s Inner Mongolia region.

US and British navies carry out first joint drill in disputed South China Sea
USS McCampbell and HMS Argyll join forces as US seeks to push back against China’s claims to disputed waters

How Asia could be the winner in the US and China’s Belt and Road race
Infrastructure development has become one of the great battlegrounds of our time. The world’s three largest economies – the US, China and Japan – are actively manoeuvring for economic and geopolitical influence through an infrastructure funding and investment race across emerging markets globally, with Asia Pacific taking centre stage. But how should governments and developers that sit within targeted countries handle this newfound attention? How can they turn it to the advantage of their people?

China’s Belt And Road Initiative Faces Obstacles in 2019
China is confronting multiple setbacks, flaws, and failures in President Xi Jinping’s ambitious overseas infrastructure project—the Belt and Road Initiative. Experts note that more than five years after its launch, three of the six economic corridors planned for the massive initiative, often referred to as the BRI, lack any Chinese-funded major projects.

China firm completes $1.4bn Sri Lanka land reclamation
A Chinese state-owned company marked on Wednesday the completion of an ambitious land reclamation adjacent to Sri Lanka’s capital Colombo, part of Beijing’s “Belt and Road” infrastructure initiative that has alarmed India and the West.

Pentagon warns of global power play behind Chinese projects such as Belt and Road Initiative
US Defence Department highlights range of military and non-military challenges to US strategic interests from Beijing’s favoured projects

Some Chinese military tech surpasses US, Pentagon admits, citing hypersonic weapons
The US Defence Intelligence Agency says Chinese rules forcing foreign business partners to divulge technical secrets has led to major military advances in China The advances will ‘enable China to impose its will in the region’, the report says

Big catch for China corruption watchdog Zhao Zhengyong linked to string of scandals
Arrest was foreshadowed by state television documentary on corruption in Shaanxi province days before Former party chief was ally of Wei Minzhou, currently serving life sentence

Why a 1,200-year-old calligraphy piece angered China
A decision by Taiwan’s National Palace Museum to lend a rare calligraphy to Japan’s Tokyo National Museum has sparked outrage across China.

Alain Gillard
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