China ‘not interested’ in becoming world’s No 1 economy or global hegemony, says vice foreign minister
Vice foreign minister Le Yucheng says Communist Party more interested in ‘people’s desire for a better life’ than status as the next superpower. Comments come a day after China published 2021 growth figure of 8.1 per cent, moving its economy closer to the size of that of the US.
China’s annual per capita GDP rose to US$12,551 in 2021, approaching the high-income threshold of US$12,696 defined by the World Bank in 2020. Despite China’s better-than-expected growth last year, Beijing is on high alert for economic headwinds, including a shrinking population, a property sector slowdown and local government debt. Many analysts have warned the annual growth rate is likely to slow to 5-5.5 per cent in 2022. It was previously thought China’s economy would become the world’s largest by around 2030, but Yao Yang, dean of Peking University’s national school of development, said it could happen between 2028-30, citing China’s growth momentum. The economist said China’s GDP would likely be twice the size of the US’s by 2049.
China’s Foreign Firms Are Running Out of a Key Resource: Foreigners
Nearly two years of strict border controls have led to a growing shortage of foreign talent in China. Some worry it could become permanent. “When a Chinese general manager takes over a company, the company will probably get more Sinicized,” says Alhmah. “The management documents, for example, will gradually become mostly Chinese, not bilingual.” For now, it’s uncertain how far the localization trend will run. Aldaco, the SmartShanghai director, says the job market for foreigners in China will change significantly when China finally relaxes its visa policies, as this is likely to spark a large influx of returnees. “But the speed at which this occurs is anyone’s guess,” says Aldaco. “We anticipate a slow and gradual opening up.” The thousands of people anxiously trying to get their Chinese visas processed aren’t going to give up anytime soon. Litman, the Canadian, has learned the benefits of persistence. After 16 months, three visa applications, and two Sinovac shots, he finally got the green light to fly to China in January. He expects to get out of quarantine just in time for the Spring Festival. “I can’t tell you how happy I am right now,” says Litman. “It has been tough, but this does feel like a happy ending after a long ordeal. Home for the holidays, more or less.”
More expats may quit Hong Kong over its tough Covid laws: Survey
A leading business organisation says more than 40% of its members are considering leaving Hong Kong due to the city’s strict coronavirus rules.
Building 21st century companies in Asia
Asia’s corporate landscape is changing rapidly and the role and priorities of CEOs may need to evolve The Asian Century is well underway. The region is delivering on robust economic, but there is also disruption to existing business models and the corporate mix. What worked in past eras may no longer be fit for purpose in the next, and Asia’s corporate landscape is changing rapidly, shifting from makers toward services, digitizing, and climbing the value chain. Massive industrial firms are making way to hyper-globalized, technology-driven companies. Against this backdrop, the role and priorities of CEO needs to evolve, too. The five themes explored in this article are a starting point for rethinking what it takes to be a 21st century corporation in Asia.
The steps Xi must take to revive China’s economy
Shifting priorities in Beijing have devastated confidence of private entrepreneurs The Chinese government should also follow up with major policy adjustments. Aside from adopting a less disruptive approach to COVID, the easiest thing for Beijing to do is to suspend or indefinitely delay policies and regulatory enforcement actions that may be perceived as ill-conceived and harmful to the business community. The party should also repair its tattered relations with the business community, with more consultations and better communication with key stakeholders. Something else that is urgently needed will be a reversal of the policies that have decimated both business confidence and China’s once-thriving tech sector. In particular, China’s legal authorities should provide greater clarity regarding the country’s new data security law. Crude implementation of this law will have a chilling effect on private businesses. The mandatory cybersecurity review of companies seeking overseas listings should be delayed and improved with a more transparent process, fewer restrictions and mechanisms for appeal. Since reviving business confidence will not be fully successful if China does nothing to improve its relations with its main trading partners, Xi’s foreign policy priority should be the de-escalation of tensions with the U.S., the EU and Japan. Reassignment of “wolf warrior” diplomats responsible for tarnishing China’s image would be a good start. Suspension of provocative and dangerous military activities in the Taiwan Strait and the South China Sea will also help restore stability in these two flashpoints. Perhaps the lowest-hanging fruits lie on China’s edge. With the appointment of a new party chief in Xinjiang, Xi may have an off-ramp to de-escalate the repression of the Uighur minorities, thus creating an opening for the West to lift some of its sanctions. In the case of Hong Kong, suspending the prosecution and trial of pro-democracy activists under the Beijing-imposed national security law will likely also be well received in the West as well. To be sure, hard-liners in Beijing may find these modest proposals too much to stomach. But if Xi is genuinely committed to pivoting back to economic development in a year when he seeks his third term, these are the minimal steps his government must take.
China GDP: headwinds from coronavirus, property market slump see provinces lower economic growth targets for 2022
The provinces of Zhejiang, Anhui, Chongqing, Sichuan and Hunan this week lowered their economic growth targets for 2022 The less ambitious goals underscore the challenges facing China’s economy, including the coronavirus and a property market downturn Zhejiang, the country’s fourth largest provincial economy, which is home to tech giant Alibaba, set a GDP growth target on Monday of “around 6 per cent” this year, compared to last year’s 6.5 per cent and an actual growth rate of 8.5 per cent. The southwestern province of Sichuan, the country’s sixth largest provincial economy, announced on Tuesday a 2022 growth target of 6.5 per cent, down from 7 per cent last year, and an actual growth of 8.2 per cent. Hunan, the ninth largest economy in China, is aiming for a 6.5 per cent increase in GDP this year, compared to its 2021 target of “above 10 per cent” and actual growth rate of 7.8 per cent. Meanwhile, southeast China’s Chongqing municipality lowered its 2022 growth target by 0.5 percentage points to 5.5 per cent, and the central province of Anhui set this year’s growth target 1 percentage point lower than last year at 7 per cent. Gansu and Hebei provinces kept their targets unchanged at 6.5 per cent. Julian Evans-Pritchard, a senior China economist of Capital Economics, said the downturn in property construction is set to deepen and last year’s boost from surging exports would not be repeated. “Achieving the growth target will be a lot more challenging this year, even if it is lowered to 5 per cent,” he wrote in a note on Monday. Credit rating agency Fitch Ratings estimated on Tuesday that China would see growth of 4.8 per cent while faced with such strong headwinds. Domestic analysts, however, are more optimistic, encouraged by the central bank’s surprise decision to cut its two major policy rates by 10 basis points on Monday. To defend economic growth, the central government has also promised to “front load” some policies, such as key construction projects outlined in the 14th five-year plan for 2021-25. Local authorities were allocated a quota of 1.46 trillion yuan (US$230 billion) in special purpose bonds in December. The National Development and Reform Commission (NDRC), China’s top economic planner, is now pushing local governments to issue them earlier to fund construction projects. “We’ll go through various approval procedures as soon as possible, promptly implement construction conditions such as land acquisition and demolition … and promote the timely start of construction of new projects,” Yuan Da, director of the NDRC’s national economy department, told a media briefing on Tuesday. Some local authorities have raised their investment targets. For instance, Henan boosted its investment growth target to 10 per cent from last year’s 6 per cent, while Anhui is eying double-digit investment growth, higher than last year’s target of 9 per cent.Most provinces set their consumer inflation target at 3 per cent this year, in line with last year’s national goal
China’s SOE Reforms Continuing with Foreign Investment, Management Restructuring, and Global IPOs
Greater transparency and international standards are developing in China’s largest businesses.
HLA: the successful retailer unknown outside China
Within just 20 years, HLA was able to top down reshape and create a totally new aggressive business model that was never seen before. The brand, which now counts with more than 6,000 stores, turned itself into a dominant player in China’s menswear market, being placed by Chinese male consumers as one of their top three favourite brands. Investing in China’s second and third-tier cities was a crucial point for HLA domestic business to gain momentum.
TikTok owner ByteDance to disband strategic investment team
Moves comes as Beijing heightens scrutiny of deal-making by top tech groups Reuters reported on Wednesday that under new draft guidelines, the Cyberspace Administration of China will require internet companies with more than 100 million users or more than 10 billion yuan in annual revenue to get approval for new deals. Separately on Wednesday, a ByteDance executive said that Nick Tran, head of global marketing for TikTok, left the company two or three weeks ago. Tran, who joined the company in 2020 after stints at Hulu and Samsung Electronics, has been credited with further raising TikTok’s profile and influence. In another development, a new ranking on Wednesday of China’s most valuable private-sector companies by Hurun Research Institute showed ByteDance’s assessed market value rose 221% to $351.6 billion from a year ago, putting it behind only publicly listed Tencent and Alibaba.
Tencent pursues quieter investment strategy amid China’s Big Tech crackdown
Almost five years ago Pony Ma, Tencent chief executive, boasted to other Chinese business leaders that his company was so vital it was becoming “more and more like a supplier of water or energy, like infrastructure”. Its control of ubiquitous superapp WeChat, a spigot controlling the flow of 1bn users, also made Tencent a valuable backer for many start-ups, helping the tech company amass a listed investment portfolio worth Rmb1.2tn ($190bn) as of September 30. It also has stakes worth tens of billions of dollars more in private companies, according to a person close to company executives. But the Chinese Communist party’s campaign to rein in rival giants such as Alibaba and Meituan has prompted a dramatic rethink of Tencent’s strategy of extending tentacles throughout the country’s tech scene, according to company insiders, top industry executives and an analysis of investment data.
New German leader juggles profits and principles on China policy
U.S. seeks united front with Berlin, while Beijing keeps focus on business Despite the political baggage, many German companies in China seem to have no question where money is being made. In a business confidence survey released Tuesday, the German Chamber of Commerce in China and KPMG found that 71% of German companies in China intend to increase their investments there. Only 4% of the 596 companies that responded said they are considering leaving the country. But Rhodium Group’s Barkin said that German industry is divided on China. “A handful of big German companies, notably the carmakers, are highly dependent on the Chinese market. But many German small and medium enterprises have struggled with rising compliance costs, IP theft and intensifying competition with favored Chinese firms,” he said. “What is sometimes lost in the dependence discussion is that China is reliant on Germany for foreign capital, technology and innovation. At a time of growing geopolitical tensions between China and the U.S., Berlin has leverage with Beijing. Its failure to take advantage of this leverage has been one of the main weaknesses in its China policy over the past years.” Ellehuus of CSIS said a change in Germany’s China policy would be a big blow for Beijing. “Germany still speaks for Europe, particularly on economic and fiscal policy,” she said. “So if Germany moved away from an economic relationship with China or became much tougher in its stance towards China, that could potentially spill over into some EU policy. Germany is the bellwether for EU policy towards China.” But Germany never moves at lightning speed, Ellehuus said. “You can watch the statements of the [hawkish] foreign minister and her interaction with the more pragmatic Finance Minister Christian Lindner to get some indications about where Germany is likely to fall in this balance between engagement and more competition with China,” she said.
Exclusive-China drafts rules to give property developers more access to escrow funds – sources
China is drafting nationwide rules to make it easier for property developers to access funds from sales still held in escrow accounts in its latest move to ease a severe cash crunch in the sector, four people with knowledge of the matter said. Regulatory curbs on borrowing have driven the sector into crisis, highlighted by China Evergrande Group which was once China’s top-selling developer but is now the world’s most indebted property firm with liabilities of $300 billion. The new rules would help developers meet debt obligations, pay suppliers and finance operations by letting them use the funds in escrow that are currently controlled by municipal governments with no central oversight, the people said on condition of anonymity due to sensitivity of the matter.
Asia-Pacific markets fall after overnight sell-off on Wall Street; Sony shares tumble over 12%
Asia-Pacific markets fell on Wednesday following an overnight sell-off on Wall Street. Oil prices hit a seven-year high overnight after Yemen’s Houthi rebels claimed responsibility for a deadly attack in Abu Dhabi earlier this week, leading to fresh tensions in the region.Stateside, the Dow Jones Industrial Average lost more than 540 points after Goldman Sachs shares sold off as the investment bank missed analysts’ expectations for earnings
Year of the Tiger: avoid March, September pitfalls as Hang Seng makes amends for a poor, defeated Ox, CLSA’s Feng Shui Index shows
Luck will smile on investors born in the years of the horse, rabbit, goat and pig, according to the tongue-in-cheek index compiled by CLSA The Water Tiger signifies good prospects for industries related to shipping and cross-border trade
China unlikely to ban NFTs as ‘digital collectibles’ flourish, analysts say
Beijing’s goal is to have a controlled market for blockchain-backed tokens similar to NFTs Analysts do not expect China to crack down on digital collectibles like it has with cryptocurrencies
Chinese smartphone shipments rebound with 15.9 per cent growth in 2021, with 5G models dominant
5G smartphones accounted for 76 per cent of mobile handset shipments in 2021, compared with 53 per cent the previous year, according to CAICT data In October, Apple regained its title as No 1 smartphone brand in China by shipments for the first time since December 2015, according to Counterpoint
JD.com, Canadian internet retailer Shopify team up on cross-border e-commerce expansion amid China online sales slowdown
The partnership will link Shopify’s millions of merchants around the world with JD.com’s 550 million active customers in China Through JD Worldwide, online merchants on Shopify can start selling in mainland China in three to four weeks
China Three Gorges to add solar, wind capacity
The world’s biggest hydropower generator, China Three Gorges Corporation, is set to add solar and wind capacity in an attempt to diversify its revenue streams as the age of mega-dams draws to a close, reports Bloomberg. The state-owned firm currently has capacity to generate about 26 gigawatts of electricity using solar panels or wind turbines, according to a statement, up from 16 gigawatts in 2020. It aims to hit a target of 70 to 80 gigawatts by 2025. China is likely to see zero growth in power generation from hydroelectric plants this year, while solar and wind jump as much as 30%. There are also limited options for major hydro developments, with most of the easiest locations already utilized and costs of rival energy sources declining faster.
China corn imports hit new record in 2021
Soaring prices and a supply crunch in China led the world’s largest grain importer to more than double its corn imports in 2021, Reuters reported, citing General Administration of Customs data released Jan. 18. China, the world’s top grains market, brought in 28.35 million tonnes of corn in all of 2021, up 152% from an annual record figure of 11.3 million tonnes in 2020, the data showed. Imports of wheat in 2021 also hit a record at 9.77 million tonnes and were up 16.6% from 8.38 million tonnes in 2020
Winter Olympics 2022: China sells Xinjiang as a winter sports hub
As the Beijing Winter Olympics draws nearer, the troubled Xinjiang region is being painted as a poster destination for China’s ballooning winter sports industry. Many foreign firms are rushing to be part of that, despite Western countries alleging that China is committing genocide against ethnic Muslims there.
The Spirit of the Olympic Games and the Rise of China
In sum, this discussion on “The Olympic Games and the Rise of China” will be incomplete if it does not mention the personal ties between Chinese President Xi and the 2022 Olympic Games in Beijing where they are scheduled from February 4 to 13. From bidding for the Games to the extensive preparations, he has played a leading role and vowed to present a “fantastic, extraordinary and excellent” Games to the world. An avid sports fan, Xi sees sports as a driving force for improving people’s health, an engine to stimulate social-economic growth and a showcase to project China’s cultural legacy. As a statesman, President Xi has encourage Chinese athletes to strive for excellence at the upcoming Games while vowing to deepen international cooperation for a brighter future with people of all countries: that is, harnessing the power of the Olympic spirit to promote a community of shared future for mankind.
China’s high-tech rise sharpens rivalry with the US
As the harbingers of China’s rise to superpower status proliferate, the urge in Washington to decouple from its “strategic competitor” intensifies. But, in 2022, the increasingly bipolar world that results from this basic dynamic is set to cause a host of geopolitical headaches for smaller powers and multinational corporations. The second half of 2021 was marked by revelations of a sharp upturn in China’s strategic strength. Beijing stunned the Pentagon and the US intelligence community in July by firing a hypersonic weapon, in a test that suggested the Chinese military could hit targets anywhere in the US with nuclear weapons.
Green-tech rivalry will complicate US-China climate cooperation
Chinese experts prize collaboration, but also predict a race for technology and markets, says Nis Grünberg. This is the third in a series of short analyses that looks at China’s systemic competition and normative rivalry with the US and the EU. A look beyond the Beijing leadership shows how far debates about the features of political systems and the power to interpret events reach into Chinese society – and possibly shape the country’s actions.
China ‘shocked’ by Slovenia’s plans to allow Taiwan to open an office
Foreign ministry accuses Slovenian leader Janez Jansa of making ‘dangerous remarks that challenge the one-China principle and support Taiwan independence’ Jansa had referred to Taiwan as ‘a democratic country’ and said it was ‘difficult to listen to a capital with a one-party system lecturing about democracy’
Tell me how the US-China war ends
The main takeaway for policymakers, in Beijing, Washington and Taipei, is this: There almost surely would be no clear winner or verdict in a U.S.-China war over Taiwan, or any other discrete objective in the western Pacific region. Those wondering if there is a good moment to have the great battle, determine a verdict, and settle the issue once and for all — and yes, there are military planners and strategic thinkers in both countries who view the world through such a prism — need to remember history and rethink their assumptions while there is still time. This is not a war that credibly could be won by any reasonable or realistic metric of victory. Rather, it needs to be deterred — in our case, by expanding the range of plausible Western responses to any Chinese aggression, and by mitigating the risks that foreign leaders could perceive any plausible path to easy victory, even as we avoid the temptation to believe we have any such path ourselves.
US-China tech war: Shanghai showers the cash to woo semiconductor talent and support local chip development
Government will subsidise up to 30 per cent of investment in semiconductor materials and equipment projects in the city The city’s 14th Five Year Plan lists semiconductor and artificial intelligence as two pillars underpinning future technology development
China’s digital currency: e-CNY wallet nearly doubles user base in two months to 261 million ahead of Winter Olympics
The e-CNY app had been used in transactions totalling US$13.8 billion by the end of December as the central bank pushed adoption of its digital currency The currency has no official nationwide launch date, but is being trialled in several cities and at Winter Olympics venues
China Launches Digital Yuan App – All You Need to Know
China has released the new digital yuan app for iOS and Android on domestic app stores. The app is available to users in 12 cities across China and will be available to foreign visitors at the Winter Olympics – but its audience will be limited. Tencent-owned WeChat announced it would begin rolling out the e-CNY as a payment option on its platform, potentially introducing the digital currency to over 1.2 billion users.
As China’s population nears ‘normalised phase of decline’, experts assess pace and severity
Demographers offer varying takes on China’s population outlook, with some saying it could shrink by 1 million a year from 2025, while others foresee a more drawn-out decline Excess of 10 million deaths a year could become the norm for China as its ageing crisis worsens Meanwhile, experts are also warning that China’s ageing population crisis will continue to deepen, as the number of people aged 60 and older accounted for 18.9 per cent of the population last year, up from 18.7 in 2020. And the number of people aged 65 and older accounted for 14.2 per cent of the population, up 13.5 per cent last year and the first time it has ever topped 14 per cent, which some experts view as a key threshold in defining the level of population ageing. The number of people older than 60 grew at a relatively slower rate in 2021, and Yuan attributed this to fewer births in 1961 during China’s great famine. He said China should expect the ageing rate to increase rapidly moving forward, as the boom in births from 1962-75 will bring the annual growth of people older than 60 to more than 10 million. In terms of mortality, 10.14 million mainlanders died in 2021 – the second time since 1949 that the number topped 10 million, with the other year being 1960. An estimated 30 million people starved to death from 1959-61. Yuan said that an excess of 10 million deaths a year could become the norm for China as its ageing crisis worsens. Compared with Yuan and Chen’s relatively conservative predictions on China’s population, others believe China’s population peaked last year. Independent demographer He Yafu expects it will shrink by hundreds of thousands of people in 2022, with a continued drop-off after that. “From 2022 to 2024, new births will remain close to 10 million while the number of deaths will be around 10.3 million to 11 million,” He said. “After 2025, the total population will drop by more than 1 million every year, and enter a normalised phase of decline.”
South China Sea: US Navy moves suggest new approach in likely Taiwan flashpoint
US carrier strike groups entered the South China Sea 10 times in 2021, compared with six times in 2020 and five in 2019 Use of alternative routes between islands may be designed to evade PLA radars and indicates skill diversification for US sailors, defence experts say
China rights lawyer held for ‘inciting state subversion’
‘Trumped-up charges’, wife in US alleges, as Xie Yang, 49, is detained for ‘picking quarrels and provoking trouble’ Xie recently tried to visit a teacher who was hospitalised after voicing sympathy for views questioning Beijing’s narrative over the 1937 Nanking massacre
The China-US Space Race Is a Myth
The United States is not falling behind China in space – quite the contrary. Still, the China space-race narrative has helped to stoke fears in Washington. The alarm associated with “falling behind” in the space race is invariably paired with calls for the U.S. to spend more on new space military capabilities, space exploration, and the commercial space industry. Steve Kwast, a retired Air Force lieutenant general, warns “there won’t be many prizes for second place” and urges Washington to act with greater “urgency and excitement.” But much like the missile gap of the late 1950s, such “calls to arms” encourage a massive militarization of space and risk misallocating limited defense resources. The United States faces real and significant security threats in space, but efforts to develop an effective space strategy must begin with a more clear-eyed net assessment. The promotion of space cooperation with China would also help to dampen hype around a space race. While the Wolf Amendment limits U.S. government agencies, such as NASA, from cooperating with Chinese space agencies, the United States and China stand to mutually gain from collaboration for civil space exploration and science. Excluded from participation in the International Space Station or NASA’s Artemis Accords, the Chinese have had little choice but to develop their own space station and lunar base. These parallel space missions create a sense of a stark competition and fuel the space race narrative. Mutually beneficial scientific cooperation between the United States and China mitigates the risks of turning all China-U.S. relations into zero-sum competition. Let the missile gap myth be a cautionary tale.
Xi Jinping tells disciplinary watchdog to take ‘zero tolerance’ approach to corruption
Chinese president also reflects on ‘historic and groundbreaking achievements’ of his anti-graft drive But he tells cadres there is still a long way to go to tackle ‘deep-rooted corruption’ and eradicate it completely
Wish we weren’t here: why Beijingers are braving a holiday getaway over the Lunar New Year
With just weeks to go until the Winter Olympics, many residents of the capital are heading for the city’s exits But getting out means Covid-19 tests, paperwork and the uncertainty of lockdowns
Beware of Covid risk from inanimate objects after Canada letter claims, Beijing city boss tells officials
The capital’s party chief Cai Qi issued the instruction in the wake of a controversial claim that infected post may have caused the city’s first Omicron case China remains committed to the theory that food and mail can spread the virus, despite widespread scepticism in other parts of the world
China gets another centre dedicated to Xi Jinping Thought
The country’s top planning and development agency has opened an institute to study the Chinese leader’s economic theories There are now 17 centres dedicated to various aspects of Xi’s philosophy, which the party has elevated to the same level as Mao Zedong and Deng Xiaoping’s
Patriotic Gen Zs fuel pandemic jewellery boom in China
China’s biggest jewellery retailer Chow Tai Fook is banking on the young, patriotic and affluent Generation Z cohort buying “China-chic” pieces to fuel growth. The strong demand from those born after 1995 for jewellery inspired by Chinese symbols such as dragons and phoenixes — the traditional emblems of emperors and empresses — has driven substantial growth during the pandemic.
“[Gen Z] is one of the cohorts that has the ability [to pay] and is most willing to spend big,” said Chow Tai Fook managing director Chan Sai-cheong in an interview with the Financial Times.
“Many of them are not breadwinners of their families . . . so they can enjoy life more compared with their parents.” The younger generation is patriotic and willing to spend on domestic brands over the foreign brands that had enjoyed more prestige in the past, said Chan. Guochao — a trend roughly translated as “China-chic” — has led to an explosion of Chinese luxury brands.
What Do Tigers Symbolize in China?
Tigers have represented bravery, strength, and authority for centuries in Chinese culture
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