China Press Review – January 18, 2019

Press review

America Last’ crowd toasts China’s rise, America’s fall, prematurely
The Standard Chartered analysis suggests that as early as next year, China’s economy will be larger than that of the U.S., which will never again be No. 1. The claim evolves from statistics combining purchasing power parity (PPP) and GDP figures.

Yes, Donald Trump’s China tariffs are raising billions. But here’s why China isn’t paying
Chinese goods have been hit with US$8 billion in tariffs, but it’s US importers who are footing the bill US businesses paid US$2.8 billion in new Trump tariffs in October alone, The Trade Partnership economic consultancy estimates

Why China’s economy faces a bumpy first half of 2019, even if ‘trade peace’ breaks out soon
Patrik Schowitz says weak stimulus measures by the government and debt concerns mean China’s economy is likely to get worse before it gets better

An American Consensus: Time to Confront China
The U.S. approach toward China under the Trump administration has quickly turned to all-out confrontation.

China revises down 2017 economic growth rate to 6.8 per cent ahead of announcing 2018 GDP figures
Downward revision creates lower comparison base for 2018 growth calculation Unclear if revision will have any effect on 2018 growth rate

What Is GDP In China?
Analysts are increasingly skeptical that China’s very high reported GDP growth rate provides a meaningful picture of the economy’s health. There are, however, at least three very different ways that reported GDP can fail to reflect the underlying economy. The first set of problems relates to the meaning of GDP itself. The second set of problems has to do with how carefully and faithfully Chinese statisticians at the National Bureau of Statistics are calculating the agreed-upon elements that go into measuring GDP. The third set of problems with GDP occurs in a very limited number of cases globally (today, China is the main example).

How slow can China go?
Markets took on a relatively buoyant mood on Friday after a succession of rumours that ongoing trade talks between the US and China are proceeding well.

China, Germany Promise Closer Financial Cooperation
China, Germany promise to open markets wider to each other’s banks and insurers in victory for Beijing amid tension with Washington.

China’s state-owned companies enjoy record profits, even as private sector flounders
Revenues and profits surge for China’s biggest state-owned industrial firms in 2018 Stellar performance of state sector contrasts with weak private sector and broad economic slowdown

Jobs in China’s export-import industries wither in the heat of Washington’s trade war with Beijing
Demand for labour plunged by 40 per cent in last quarter of 2018, survey finds Casualties in export-import blamed for biggest stresses on jobs market

Alibaba and Tencent dominate China new economy deals as market cools to lowest level in three years
The number of deals fell 12 per cent to 291 in 2018 from 2017, while transaction value rose three per cent to US$29.1 billion

Alibaba cuts travel spending, postpones hiring as economy slows
Chinese e-commerce giant Alibaba has reportedly cut travel spending and told new hires that they can only begin working in April, the fiscal new year. The travel cuts include business class airfare, with staff only being able to select a premium cabin on every fifth round trip that exceeds 20 hours. Sources also told Bloomberg that new hire headcounts are shrinking, with some people being told they would only be offered a job if they agreed to start working in April.

China steps up push to nurture cybersecurity companies to support digitisation of economy
In 2017, the country’s cybersecurity industry grew 27.6 per cent year on year to 43.92 billion yuan

Xiaomi buys back 6 million shares as stock prices fall
In an annual meeting earlier this month, Xiaomi CEO Lei Jun announced a RMB 10 billion (around $1.5 billion) investment plan in artificial intelligence (AI) and smart devices over the next five years. The company said it has confidence in its business outlook, which is driven by its smartphones and AIoT strategy—a term used to describe the convergence of AI and internet of things technologies.

How ‘Made in China 2025’ became a lightning rod in ‘war over China’s national destiny’
Industrial modernisation programme aims to make the country a dominant player in 10 strategic industries Trump labelled the programme a threat to US economic growth and an example of China’s allegedly unfair trade practices

Three Turning Points about How China is Promoting Recycling
How does China deal with its own waste? In many ways, China is already an innovation superpower. Here three relevant turning points

Where the slower growing Chinese economy leaves American retailers
After three decades of breakneck growth that steered China into becoming the second-largest economy in the world, the country has now descended into steady economic unrest. What started of as feeble whispers anticipating the crash of the Chinese economy has become a central point of concern for investors and brands across the world.

Navigating Luxury In China: Advice From The Front Line
From a business perspective, build local teams, hire local agencies and develop 360 degree marketing communications. While China can be a challenging and unpredictable market, with complexity comes great opportunity—luxury brands are in an excellent position to capitalize on this, provided they have teams ‘on the ground’ ready to tune in to its ever-changing trends.

How energy guzzler Sweden has risen to the climate challenge by building nuclear power plants
David Dodwell says a new book convincingly shows how Sweden’s use of nuclear power – far less dangerous than commonly believed – offers credible support to its transition to renewable energy sources, and the world should take notice

Coal’s Belt and Road Links Are Crumbling
In Pakistan, abundant renewables and falling prices are raising doubts about whether Chinese fossil-power projects make sense.

In China industrial heartland city of Chongqing, a painful economic transition is on full display
Chongqing is hooked on expensive government infrastructure projects The city’s dominant car sector is weakening, raising fears for the wider private economy

BREAKING NEWS: U.S. Legislation Against Huawei/ZTE That Will Rock the World
In an earlier set of posts, I discussed U.S. laws and regulations to a) restrict technology transfers from US companies to Chinese companies (see New Restrictions on High Tech Technology Transfers to China and b) to prevent Chinese companies from investing in U.S. technology companies. See New CFIUS Rules Shut Down Chinese Investment in U.S. Technology. In those posts, I noted that the new rules are not intended to limit the right of U.S. companies to sell technology based products to Chinese companies.

Huawei founder Ren Zhengfei says he does not expect big impact from 5G pushback
Huawei’s lead in 5G stands it in good stead, founder Ren Zhengfei says

China Tech Investor 12: Huawei’s dilemma and the shrinking smartphone pie
China Tech Investor is a weekly look at China’s tech companies through the lens of investment. Each week, hosts Elliott Zaagman and James Hull go through their watch list of publicly listed tech companies and also interview experts on issues affecting the macroeconomy and the stock prices of China’s tech companies.

Oxford University suspends donations and sponsorship from Huawei
The University of Oxford has suspended new donations and sponsorships from Huawei Technologies. The university said the decision is linked to public concerns raised in recent months about the British government’s partnerships with the company. However, the university said it would continue existing research contracts where funding from Huawei had been received or committed.

Chinese ambassador Lu Shaye warns ‘back-stabbing’ Canada to stop rallying allies in row over detainees
Ambassador Lu Shaye warns of repercussions if Canada bars Huawei from its new 5G network Canada’s Foreign Minister Chrystia Freeland has said she intends to use next week’s Davos meeting to rally opposition to Beijing’s detention of two Canadians

Prisoner in Vancouver: Huawei CFO Meng Wanzhou awaits her fate in splendour
Meng’s bail terms include the GPS monitor, an 11pm to 6am curfew, and 24-hour surveillance by a private security firm

Chinese AI unicorn Megvii bets $300 million on smart logistics
Chinese AI unicorn Megvii Technology is planning to invest RMB 2 billion (around $300 million) to develop supply chain systems enabled by big data. Through its new program dubbed “Hetu,” or “River Map” in English, the company plans to apply AI technology in a new area of smart logistics.

Japan Inc profits under siege from China slowdown
Two prominent Japanese electronics and equipment makers warned of profit declines over the past week due to the impact of the U.S.-Sino trade war, stoking worries of widespread cuts to corporate earnings forecasts and a hit to economic growth.

Foxconn cuts 50,000 contract jobs in China: Nikkei
Apple Inc’s biggest iPhone assembler Foxconn Technology Group has let go around 50,000 contract workers in China since October, months earlier than normal, Nikkei reported on Friday.

China’s payment companies can no longer collect interest on transfers
What happened: This week, restrictions kicked in requiring non-bank payment companies to pass all transfers through a centralized clearing system. The move was announced two years ago in order to give companies time to transition. Previously, third-party payment companies were able to temporarily place money from buyers into interest-bearing bank accounts, adding to their earnings. Mobile payment giants Tencent and Ant Financial declined to comment on how much they earned from interest, but said they have fully complied with the regulations.

In China industrial heartland city of Chongqing, a painful economic transition is on full display
Chongqing is hooked on expensive government infrastructure projects The city’s dominant car sector is weakening, raising fears for the wider private economy

Foreign Investors Are on a Record China Property Spree
Deleveraging damps Chinese companies, aids foreign players Blackstone, Singapore’s CapitaLand are leading the charge

NetEase to limit the amount of time China’s youth spend gaming
Chinese giant NetEase Games has for the first time moved to limit the amount of time China’s youth spend playing its games, highlighting the increased scrutiny of the country’s gaming sector

Meet Dr Fruit: the Chinese surgeon who goes to grape lengths to promote precision surgery
Wang Yexiao originally started making short videos of his ‘fruit operations’ to entertain his two-year-old son He now regularly posts these unusual slices of surgical skill on Beijing-based video-sharing platform Kuaishou

Baidu seeks to play catch up in mobile app race with bet on world’s most-watched TV show
Baidu will be exclusive ‘red packet’ partner of state broadcaster CCTV’s Spring Festival Gala The Gala drew more than one billion viewers last year

Step up and protect Chinese interests abroad, Xi Jinping tells law enforcers
President’s call for wider international security net follows warnings of rising offshore risks from terrorists and other countries

Alain Gillard
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