China Press Review – January 16, 2020

Press review

China’s deal to buy more US goods is ‘distortion of the market’, Europeans complain
Other trading partners fear impact of agreement, with head of EU Chamber of Commerce saying it is ‘rewriting globalisation’    Brazil’s agricultural sector is also bracing for a hit after soybean exporters benefited from the trade war

U.S. and China Sign Phase One of Trade Deal
The U.S. and China signed what they billed as the first phase of a broader trade pact on Wednesday amid persistent questions over whether President Donald Trump’s efforts to rewrite the economic relationship with Beijing will ever go any further     The deal commits China to do more to crack down on the theft of American technology and corporate secrets by its companies and state entities, while outlining a $200 billion spending spree to try to close its trade imbalance with the U.S. It also binds Beijing to avoiding currency manipulation to gain an advantage and includes an enforcement system to ensure promises are kept.

Phase one US-China trade war deal signed by Donald Trump and Liu He, though most tariffs remain
Pact includes Beijing’s pledge to buy at least US$200 billion of American goods and services more than it did in 2017, over the course of two years     In return, US is to reduce tariffs on some Chinese imports and cancel duties that were set to take effect in December

‘Regret and unhappiness’: China offers muted response to US trade deal
State media plays down agreement, in contrast to Donald Trump’s assertion it is the ‘biggest deal anyone has ever seen’

U.S.-China Trade Pact, Meant to Heal Rifts, Could Make Them Worse
The new deal leaves untouched the thorniest issues driving the two economic giants apart. Solving them could take years.

The ‘Phase One’ Trade Deal Is Still Hypothetical
The United States and China inked a preliminary agreement, but the question of its enforcement remains.

China hails phase one trade war deal signing, with focus on strategic value over specific details
A Chinese translation surfaced eight hours after the deal was signed, with state media running supportive editorials with loose details of the phase one agreement    Liu He briefed reporters in Washington after the signing, saying the concessions made by China to the US would be available to other trading partners too

European firms get ‘crumbs’ from China’s Belt and Road
China’s Belt and Road Initiative (BRI), an investment plan aiming to connect Europe with Asia, is sidelining European companies and Brussels should review its competition law to level the playing field, a business lobby said on Thursday

Hong Kong protests: Carrie Lam suggests ‘one country, two systems’ could continue beyond 2047 in appeal to protesters
Hong Kong’s leader has said that the “one country, two systems” framework under which the city enjoys freedoms unknown in China could continue after the 2047 deadline if loyalty to Beijing is upheld.

China Vice-Premier Liu He rejects Trump’s suggestion of immediate phase two talks, calling idea ‘unwise’
Vice-Premier Liu He has told Chinese media it would be foolish to chase a phase two trade deal with the United States when the ink on phase one is not yet dry   Liu’s comments diverged from those of US President Donald Trump, who has said the next stage of trade negotiations would start soon

US-China trade war deal: Liu He reassures Beijing’s other partners they will not lose out
Vice-premier says commitments to Washington on intellectual property rights, technology transfers and market access will apply to all partners     Liu says Chinese and US economies are strongly interconnected and shoots down talk of decoupling

China Ends Independent Admissions Program for Colleges
The Ministry of Education is replacing universities’ independent enrollment process with a centralized plan that emphasizes entrance exam scores.

China bracing for US tech war with plan to cut reliance on imports of key components to just 25 per cent
Beijing downplayed its ‘Made in China 2025’ plan under pressure from the US, but is now aiming to rely on domestic production for 75 per cent of its key components    Former minister Li Yizhon also said that China is planning to create 40 ‘national manufacturing innovation centers’ by 2025

China’s middle class frets the ‘good times’ are over amid sliding house prices, stagnant wages
The urban middle class have been among the biggest winners of China’s economic boom over the past five decades, but their confidence has been shaken    China’s economic growth has slowed and their incomes and assets are taking a hit, with non-essential spending on cars, home appliances and private education cut

How Luxury Retail Can Become a Tech Accelerator
As society goes high-tech, so too must luxury industries. But for the first time, luxury and tech companies are working together to help consumers and the planet. In this article: Can tech startup and luxury brand partnerships be mutually beneficial?  China’s government plays a large role in incubating tech companies  Tech has helped the retail industry become more sustainable, which appeals to younger consumers

Tesla to set up R&D center in China
U.S. electric carmaker Tesla announced on it official WeChat account Wednesday that the company will establish a research and design center in China, The Paper reported Thursday.    This comes nine days after Tesla formally delivered 10 China-made Model 3 sedans to customers at its Shanghai gigafactory.

Chinese export powerhouse bets on infrastructure to help stabilise economy
Guangdong faces challenges from slowing growth and the trade war as it tries to keep people in jobs  Provincial officials say they will encourage more service platforms to boost employment

The US is targeting China for intellectual property theft, but is the fight really worth it?
While intellectual property protection initially spurs innovation, it can end up hampering it in the long run From an ethical point of view, penalising the theft of ideas wrongly presumes that ideas are in short supply and that we can properly define their value

Huawei ‘not a chess piece’ in US-China trade deal, US Treasury Secretary Steven Mnuchin says
Issue of Chinese telecoms firm’s access to US markets will be dealt with as a national security issue, he says   Huawei will not be part of phase one trade agreement, or any subsequent phase

UK will keep Huawei out of ‘critical national infrastructure’, culture secretary Nicky Morgan says
Morgan’s comments are her strongest signal yet that Huawei will be barred from the most sensitive parts of the UK’s 5G telecommunications networks     Prime Minister Boris Johnson hinted this week he is preparing to allow Huawei to supply at least some equipment for the next-generation broadband networks

Tesla challenger NIO in talks with carmaker GAC Group for new funding worth US$150 million
NIO warned in December that it did not have adequate cash for continuous operation in the next 12 months

Xiaohongshu shutters offline shops in Shanghai
China’s social e-commerce app Xiaohongshu, also known as RED, has shut both of its brick-and-mortar experience stores in Shanghai, local media reported on Thursday. Shanghai-based Xiaohongshu is drawing back on its the new retail initiative as it refocuses on its online operations after a tumultuous 2019, when it was suspended from app stores for three months.

Shanghai unveils five-year fintech hub plan
Shanghai has set its sights on becoming a globally competitive fintech hub in five years, according to a new action plan released by the municipal financial regulator on Wednesday, including initiatives to ramp up research and development of technologies like blockchain and 5G.    In a bid to compete with global financial centers such as New York and London, China has been promoting the development of fintech applications like mobile payments, internet financial services, and a digital fiat currency in Shanghai and other major cities.

China’s smog-prone regions see clearer skies but pollution worse elsewhere
Beijing, Shanghai and Hebei are on track to meet their winter targets, but outside ‘priority areas’ little to no progress has been made, researchers say     Coal and oil use continues to increase, while dirty industries have been relocated instead of shut down

Kyle Bass says Hong Kong is headed for a ‘full-fledged’ banking crisis, markets are not convinced
‘It takes about a year for a full-fledged banking crisis to hit, and you’ll see a full-fledged banking crisis in Hong Kong now,’ founder of Hayman Capital says     The Hong Kong dollar’s ‘tear’ higher presented an attractive opportunity to short the currency via the options market, according to Trium Capital

European firms get ‘crumbs’ from China’s Belt and Road: business group
 [BEIJING] China’s Belt and Road Initiative (BRI), an investment plan aiming to connect Europe with Asia, is sidelining European companies and Brussels should review its competition law to level the playing field, a business lobby said on Thursday.   Opaque procurement processes and the dominance of giant state-owned Chinese companies mean European companies only get “crumbs from the table,” the European Chamber of Commerce in China said in a report.

Chinese chipmaker Rockchip to list in Shanghai
China’s securities watchdog has approved an application from chipmaker Rockchip to list on the Shanghai bourse, as the company taps the capital markets following an unsuccessful attempt to go public three years ago. Founded in 2001, Rockchip failed to list on Shenzhen’s ChiNext board in 2017 for “critical sales stagnation and asset decline,” according to China Money Network.

Huawei, Sinopec Were China’s Top Patent-Seekers in 2019
With safeguarding intellectual property at the center of an ongoing trade dispute with the U.S., China is hoping to more tightly regulate its tech sector and increase self-reliance.

Chinese ambassador warns Dutch government against restricting ASML supplies
ASML, one of the Netherlands’ largest companies, is a near monopolist in lithography, an essential step in the manufacture of computer chips  Beijing’s ambassador to the Netherlands has warned that bilateral trade relations would be damaged if it is not allowed to ship its newest machines to China

Xiaomi rolls out exclusive, low-priced 5G data packages to boost smartphone sales
The Chinese smartphone vendor’s new 5G data packages are priced as low as 49 yuan (US$7) per month    It has a virtual carrier license based on the network of China Unicom, which has its own 5G packages starting at 129 yuan a month

Southeast Asia’s anxiety and disillusionment with US and China deepen: poll by Singapore think tank
Over 50 per cent of respondents to the ISEAS-Yusof Ishak institute’s annual survey see Beijing as the region’s most influential power – and most are worried    Meanwhile, 47 per cent have little to no confidence in Washington as a reliable strategic partner and provider of regional security

Wuhan pneumonia: Japan confirms Chinese man has new coronavirus
The resident of Japan is the second confirmed case outside China, after a woman from Wuhan, where the outbreak was found, was treated in Thailand   Airport in Wuhan begins temperature checks for all passengers, with temporary quarantine for those showing a fever

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