China Press Review – January 21, 2019

Press review

Chinese pro-market economist Wu Jinglian warns of ‘state capitalism’ dangers
Influential figure speaks out against state-led growth model, saying it’s ‘inconsistent with our reforms’ Remarks come amid growing concerns about Beijing’s intervention in the economy and commitment to economic liberalisation
www.scmp.com

China set to report slowest economic growth for 28 years
Figures to be released on Monday could show 2018 GDP growth slowed to 6.6 per cent Beijing’s promise of more support only likely to be enough to stop slide getting worse, analysts say
www.scmp.com

China’s Economy, by the Numbers, Is Worse Than It Looks
New figures suggest the economic outlook may be improving but that growth has slowed more than the headline figure shows.

China economy slows further, matching its lowest ever quarterly growth
Given continued headwinds created by government campaign to reduce debt and risky lending, as well as US trade war, China reportedly will set a growth target range of between 6 and 6.5 per cent for this year
www.scmp.com

From Mao to Xi: China’s economic roller-coaster since 1949
After remarkable growth and change for decades, most economists believe China’s economy is entering a period of slower, steadier growth.
www.channelnewsasia.com

What Next for China’s Development Model?
Even if China maintains its market-oriented reform momentum, tensions with the West are unlikely to be resolved quickly. While steps can be taken to reduce these tensions, they cannot be easily eliminated, which means that they will probably be a key factor shaping the future of China’s development model.
www.project-syndicate.org

As China’s economy slows down, Xi issues red alert to Communist party
President Xi Jinping stressed the need to maintain political stability in an unusual meeting of China’s top leaders — a fresh sign the ruling party is growing concerned about the social implications of the slowing economy. Xi told a “seminar” of top provincial leaders and ministers in Beijing on Monday that the Communist Party needed greater efforts “to prevent and resolve major risks,” the official Xinhua News Agency said. He said areas of concern facing the leadership ranged from politics and ideology to the economy, environment and external situation.
www.business-standard.com

Is China wise to bank on consumer spending to drive economic growth?
Rising household debt levels and concerns about job prospects are threatening to derail Beijing’s grand plan, analysts say Short-term incentive schemes unlikely to offset negative impact of a slowing economy, ageing population
www.scmp.com

China’s birth rate falls again, with 2018 producing the fewest babies since 1961, official data shows
New births in China fell to 15.23 million last year, the lowest since China relaxed its one-child policy in 2014.
It also marks the lowest official birth rate in China since 1961, however there are widely held concerns about the historical data collection, experts said
www.scmp.com

With Donald Trump absent, Wang Qishan will seek to make China’s case at World Economic Forum in Davos
Vice-president expected to convey message on contentious issues to delegations from other countries including Europeans, Japanese and South Americans ‘Firefighter’ will also try to convince corporate executives and opinion leaders
www.scmp.com

Section 301 Tariffs on Imported Chinese Products: A Quick Update
Despite the federal government shutdown, there have been a couple of recent developments regarding the Section 301 tariffs imposed by the Office of the U.S. Trade Representative (“USTR”) on a broad range of products imported from China.

Section 301 Tariffs on Imported Chinese Products: A Quick Update

Germany and China set aside differences to stress importance of cooperation in uncertain economic climate
Despite increasing concerns ranging from market access to Huawei, the two sides emphasised the value of working together to support multilateralism Chinese Vice-Premier Liu He tells business event both sides must work to support global free trade
www.scmp.com

Europe Has a China Problem, Too
The German industrial lobby is proposing a rethink of trade ties based on cooperation, not confrontation.
www.bloomberg.com

Europe should stand up and compete, not blame China
Germany’s weak and disoriented government is doing nothing to lead the EU Commission to even out the playing field in trade relations with China. Italy and France are preoccupied by their growing disputes and their domestic turmoil. They are, therefore, unlikely to make up for German inaction on China trades. Many EU countries are interested in special trade deals with China, serving as Belt and Road points and distribution centers of Chinese merchandise.
www.cnbc.com

THE TRUTH ABOUT CHINA’S ECONOMY THAT TRUMP WON’T GET: THERE IS NO SURPLUS
A major economic shift has taken place which has all but eliminated the structural surplus in China’s current account And it’s good news for the global economy, even if Trump – and most other observers – are struggling to see it
www.scmp.com

China maintains stable employment growth in 2018
China has seen stable employment growth in 2018, the National Bureau of Statistics data showed Monday. The number of newly-created jobs in urban areas reached 13.61 million in 2018, 100,000 more than the previous year and surpassing the government’s annual target.
www.xinhuanet.com

THE CHINESE EXPORT THAT ISN’T DOING WELL: LABORERS
The economic downturn in China’s rust belt has provided a steady stream of workers willing to journey overseas in the hope of higher wages. China’s workers are increasingly susceptible to fraud and exploitation overseas.
www.ozy.com

Resolving China’s ‘phantom conflict’ with the West demands a strong sense of perspective
Beijing’s economic and geopolitical rise is causing a major shift in the global order, but anyone hoping for a one size fits all solution to the tit-for-tat disputes and repeated misunderstandings needs to think again, writes Kerry Brown
www.scmp.com

Chinese companies are defaulting on their debt at a record pace — and experts say it could spark a worldwide crisis
The sheer scope of debt levels in China is leading to fears that the country could be teetering on the edge of a crisis. A “startling” number of Chinese companies are relying on new borrowing to cover the interest on existing loans, according to Pantheon Macroeconomics. Rising US interest rates will put pressure on how much easing policy Chinese regulators can implement.
www.businessinsider.fr/us/china-corporate-debt-defaults-may-lead-to-crisis-global-contagion-2019-1

US-CHINA TRADE WAR: GLOOMY EXPORTS GIVE BEIJING 3 REASONS TO WORRY
The latest figures confirm the worst fears of China’s policymakers as Trump’s tariffs take hold, trade with the US deteriorates and domestic sentiment weakens
www.scmp.com

podcast : Goldman’s Tilton Says Not Seen Enough Stimulus Yet to Revive China Economy Briskly
Andrew Tilton, chief Asia economist at Goldman Sachs, talks about China’s economy and policies. China’s fourth quarter economic data confirmed a slowdown in activity amid a debt cleanup and trade woes, though some signs emerged that the deceleration will be less severe than feared. Tilton speaks with Rishaad Salamat, Yvonne Man and Juliette Saly on “Bloomberg Markets: Asi
www.bloomberg.com

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
www.scmp.com

Why the world’s hopes for order and prosperity could rest on China in an emerging age of calamity
Richard Heydarian writes that China is uniquely positioned to help mitigate climate change and provide humanitarian relief during the coming anarchy
www.scmp.com

China’s birth rate falls again, with 2018 producing the fewest babies since 1961, official data shows
New births in China fell to 15.23 million last year, the lowest since China relaxed its one-child policy in 2014. It also marks the lowest official birth rate in China since 1961, however there are widely held concerns about the historical data collection, experts said
www.scmp.com

China confirms birth of gene-edited babies, blames scientist He Jiankui for breaking rules
Official Xinhua news agency says preliminary investigations revealed that scientist had acted on his own and forged review papers
www.scmp.com

China’s tech hub Shenzhen misses growth target but leapfrogs Hong Kong into Asia’s top 5, mayor says
Gross domestic product up 7.5 per cent in 2018 to US$350 billion, mayor Chen Rugui says But claim city’s economy now among Asia’s biggest may be premature as Hong Kong has yet to show its hand
www.scmp.com

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
www.scmp.com

China’s top banker names US Fed policy and Brexit as biggest risks to global growth
Central Bank governor Yi Gang predicts a slowdown and widening differences in regional growth Speech delivered at high-level meeting of German and Chinese policymakers in Beijing
www.scmp.com

How China’s yuan can gain ground against the US dollar and the euro as a global reserve currency of choice
David Brown says the yuan has a gap to fill as the dollar’s share as a reserve currency slips and concerns about the euro’s future persist. However, market liberalisation and a hands-off approach to the currency in China are crucial
www.scmp.com

Shenzhen exchange says Chinese listed companies’ pledged-share risk under control
Pledged shares accounted for 5 per cent of total market cap on China’s two exchanges by the end of 2018 ‘Overall risk is controllable,’ Shenzhen exchange says
www.scmp.com

How China misread the US on trade during Donald Trump’s early days, according to Ronnie Chan
Hong Kong tycoon and US citizen says Beijing’s negotiators failed to pick up key points in early discussions and explains how Trump’s tweets influenced ‘old friends’ to turn hawkish
www.scmp.com

Yale economist Stephen Roach calls for China and US to establish global cyber accord, new forum for trade talks
Economist calls for Washington and Beijing to set up forum for talks on trade, including ‘joint collection of data and information sharing’ Urges Paris-like accord to monitor global cyberattacks
www.scmp.com

U.S.-China Trade Talks Falling Short on Make-Or-Break IP Issues
January Beijing meeting lacked progress on core U.S. demand
www.bloomberg.com

U.S. chipmakers may give clues on China hazard
Intel Corp operates mostly outside the Apple-sphere, and that is exactly why whatever it says next week about business in its vital Chinese market matters so much for investors.
www.euronews.com

ALIPAY GROWS OVERSEAS WITH CHINA OUTBOUND TOURISM: REPORT
As Chinese consumers increasingly vacation overseas, their beloved mobile-payment apps are following them, says a report released jointly by U.S. research firm Nielsen and Alipay. That’s making it easier for travelers to make purchases and conduct other business while abroad.
www.alizila.com

China wants consumers to drive economic growth, but they are already being squeezed
Trade war with United States over Beijing’s technology ambitions is adding to anxiety about job losses and hitting sales of cars, property and consumer goods
www.scmp.com

Cautious consumers feel the pinch as Chinese economy slows
Deserted high streets show that after decades of breakneck growth, the world’s second largest economy is faltering
www.theguardian.com

The 2019 China Luxury Forecast
Ruder Finn & Consumer Search Group Download

The 2019 China Luxury Forecast

3 Trends Fueling China’s Luxury Design Boom
A shift in how millennials and Gen-X consumers live is fueling a high-end design boom in China.

3 Trends Fueling China’s Luxury Design Boom

White House prepares executive order for Donald Trump restricting Chinese telecom firms over national security fears
Sources say the measure has not yet been presented to Trump and does not name specific firms But it would give US commerce officials greater oversight of deals involving firms linked to adversarial countries, including China
www.scmp.com

Emerging EU Policies Take a Harder Look at Chinese Investments
Like the Belt and Road Initiative (BRI), foreign direct investment (FDI) from the People’s Republic of China (PRC) now has a much broader reach than Beijing’s own backyard. It is well-known that Washington is actively working toward mitigating U.S. vulnerabilities to PRC investments in strategic sectors, and those that contain critical technologies and infrastructure. However, Europe, a region that also offers access to high technology desired by the PRC, is also taking a harder look at its own potential investment vulnerabilities. This process is leading to increasing debates and increasing regulation, both of which could impact the future course of Chinese investment in Europe.
jamestown.org

Chinese outbound projects plunge, investors pull back from US
US think tank warns continued ‘financial strain’ may put the brakes on Beijing’s global trade and infrastructure programme Value of overseas investment and construction dropped to US$179.1 billion last year, down from US$279.8 billion in 2017
www.scmp.com

China’s developing country status in the WTO: time for an upgrade?
As the United States and China continue to negotiate to avert a further escalation of trade tensions, the two countries face an extensive list of issues to address — technology transfer, intellectual property protection and market access core among them. One issue that often garners less attention is China’s self-declared status as a ‘developing country’ in the World Trade Organization (WTO).

China’s developing country status in the WTO: time for an upgrade?

Canadian telco Telus backs China’s Huawei as ‘viable and reliable’
Telus sent a memo to employees last week, sticking by its work with Huawei
www.scmp.com

Huawei to lay off employees and cut costs as economy slows
Chinese telecommunications giant Huawei plans to drive a new round of personnel reductions as it faces challenges amid China’s struggling economy. The solution is to “cut a portion of jobs with less value and simplify the organization to ensure those who work hard can gain more benefits from their jobs,” Ren Zhengfei, founder and chief executive said in an internal memo on Friday. He also mentioned the company will avoid overly laying off staff, while warning employees to prepare for “times of hardship” as the overall situation might be not as good as imagined.

Briefing: Huawei to lay off employees and cut costs as economy slows

Oxford University says two Huawei projects will continue but new grants suspended
Spokesman confirms decision was made last week, but Chinese tech giant says it has not been informed Other British universities say they have no plans to sever donor ties with the company
www.scmp.com

China could make it harder for Canadian firms over detainee row
Increased scrutiny, higher barriers to entry could be some economic responses if Beijing retaliates against Ottawa bid for international support
www.scmp.com

Huawei founder says West would be ‘foolish’ not to buy its 5G products as they are leading edge
In his first ever TV interview, Ren Zhengfei said Huawei’s wireless and 5G solutions are world class and will solve issues many Western countries face in 5G
www.scmp.com

China December aluminum production surges to record monthly high
China’s primary aluminum output defied low prices to rise for a second straight month to a record high in December as falling alumina costs boosted margins, while 2018 annual output was also a record, official data showed on Monday.
www.reuters.com

How China is Forging a New Global Clean Energy Landscape
Yes—the world’s largest carbon emitter is simultaneously leading the globe in renewable energy production.

How China is Forging a New Global Clean Energy Landscape

As winter grips rural China, who’s really paying the price for Beijing’s clean air plan?
Xi Jinping wants to beat pollution by building an ‘ecological civilisation’ But high prices and an unstable supply of natural gas are leaving rural villagers out in the cold
www.scmp.com

China’s Draft Foreign Investment Law: Good News for FDI
China’s new draft Foreign Investment Law has recently been published and is available for public inspection and comments. In essence, the new draft indicates the government’s willingness to further open up its markets to foreign businesses and address complaints that have been prevalent among foreign investors.
www.china-briefing.com

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
www.scmp.com

China pharma must swallow that jagged little pill called R&D as government slashes profit margins of generic drugs
New policy environment demanding cheaper drugs adds pressure to innovate China’s hospital drugs market was US$118 billion last year
www.scmp.com

Hong Kong tops the table as world’s most expensive housing market for 9th straight year
It would take on average 21 years to save enough money to buy a home in the city, according to the Demographia International Housing Affordability Study In second place is Vancouver where it would take an average of 12.6 years to get on the property ladder
www.scmp.com

Nasa says it will work with Chinese space agency on lunar landing research
Discussions have been held with China National Space Administration and cooperation will be ‘transparent, reciprocal and mutually beneficial’ Nasa scientists have been exchanging data with Chinese team since Chang’e 4 soft landing, and its lunar orbiter will take pictures of the site
www.scmp.com

China has opened thousands of new museums, but who wants them?
Experts say many are white elephant projects designed to advance officials’ political careers, with little benefit for locals The number of museums in China has risen to more than 5,100, from 349 in 1978
www.scmp.com

Hainan is the latest Chinese free-trade zone with tech hub ambitions
Hainan island was designated as China’s 12th free-trade zone by Chinese President Xi Jinping in April last year In 2017 a total of 269 companies received money from a special fund for internet development
www.scmp.com

Ctrip eyes Europe amid rising domestic competition
China’s biggest online travel agent, is planning to expand its businesses to Europe in 2019, CEO Sun Jie announced at the company’s annual meeting. Ctrip has been plotting its global expansion over the past few years, first focusing on securing a firm foothold in Asia markets.

Briefing: Ctrip eyes Europe amid rising domestic competition

DJI places 45 employees under investigation for corruption
Chinese drone-maker DJI has published an anti-graft announcement that places 45 former or current employees under investigation for allegations of fraudulently elevating product prices. Of the total, 16 have been sent to the police and 29 have been dismissed by the company. DJI said it expects losses to exceed RMB 1 billion ($150 million) as a result of the incidents.

Briefing: DJI places 45 employees under investigation for corruption

Chinese Police Are Vying for Viral Videos
The wildly popular meme-making app TikTok has become an officially endorsed battleground for China’s law enforcement arms.
www.sixthtone.com

New Rules Crack Down on Short Videos
New rules released last week by the industry group China Netcasting Services Group are expected to lead to more explicit censorship of short videos as online platforms distributing that type of media are growing in popularity. The rules require platforms to increase censorship and vet all content before posting it, and also include 100 categories of content that are expressly forbidden.

New Rules Crack Down on Short Videos

Peppa Pig Promo Video Goes Viral in China
Released to publicize an upcoming children’s movie, ‘What’s Peppa’ has become an online sensation in less than 24 hours.
www.sixthtone.com

Chinese embassy in Sweden hits out at ‘totally irresponsible’ security threat claims
Remarks follow Swedish media reports that agreements were signed with Chinese military on controversial satellite station in the country’s north Embassy also calls accusations about China’s ‘control’ over telecoms networks and infrastructure ‘unjustified’
www.scmp.com

US-CHINA BATTLE FOR DOMINANCE EXTENDS ACROSS PACIFIC, ABOVE AND BELOW THE SEA
Even the US’ Mariana Islands are caught up in Washington and Beijing’s simmering power struggle in the region From unprecedented deep-sea research in the Mariana Trench to what was the world’s most lucrative casino operation, China’s influence is growing in an area once essential for American power projection
www.scmp.com

3 billion trips in 40 days: China begins Lunar New Year mass migration
Hundreds of millions of people will travel across the country for family reunions
www.scmp.com

Thinking of avoiding the rush? Think again
Travelers queue up to check in for the first extra train of this year’s Spring Festival at Shanghai Railway Station Thursday. This year’s holiday rush is expected to see nearly 3 billion passenger trips across the country.
www.shine.cn/news/metro/1901188298/

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Alain Gillard
Information Officer
Awex
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a.gillard@awex.be
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