China Press Review – January 21, 2020

Press review

What will it take to refuel China’s slowing economy?
China has been experiencing a gradual and persistent slowdown in economic growth from an average of 10 per cent over 1980–2010 to below 6.5 per cent in 2019. Chinese President Xi Jinping described this as the ‘new normal’ for the Chinese economy in May 2014. The economic slowdown has triggered worries and speculation about further slowing and even economic collapse. China plays an important role in global supply chains and in supporting demand for commodities and intermediate goods from resource-intensive economies, including Australia. It is therefore crucial to gain a better understanding of the causes of China’s economic slowdown.

Mnuchin tells WSJ that phase 2 of China trade deal may not remove all tariffs
Steven Mnuchin said the next step in trade negotiations with China could be a phase “2A” that removes some, but not all, of the tariffs, according to the Wall Street Journal.      The United States and China officially signed the first phase of the trade deal last week in Washington, D.C.

Donald Trump says he and China’s Xi Jinping ‘love each other’, phase two trade talks to start ‘very shortly’
US President Donald Trump addressed the annual World Economic Forum in Davos, Switzerland, less than a week after signing the phase one trade deal with China    China’s President Xi again opted to skip the event, having also sent Vice-Premier Lui He to sign the deal in Washington

EU Seen Losing $11 Billion in China Exports After Phase-One Deal
Germany to be most strongly affected by trade diversion   China’s pledge to boost imports from the U.S. under a recently signed trade deal could end up costing the European Union about $11 billion next year.   “If trade costs and hence relative prices do not change, Chinese imports from the U.S. must come at the expense of third countries,” according to Germany’s Kiel Institute for the World Economy, contradicting recent remarks by China’s government.

Solid Majority Of China Executives Say Trade War Hurting Their Business
Nearly 60% of Chinese business leaders taking part in a recent survey said the trade war would negatively impact their business. That’s nearly two times what U.S. business leaders said, with 34% of them seeing the trade war hurting their bottom line.

China warns Communist Party officials: cover up spread of Wuhan virus and be ‘nailed on pillar of shame for eternity’
Commentary put out by body responsible for law and order tells cadres not to forget the painful lessons of Sars and to ensure timely reporting   It also cites Xi Jinping’s instruction that the outbreak must be ‘resolutely contained’

Wuhan’s viral outbreak knocks the stock markets of China and Hong Kong off their paces, just as a rally is building momentum
Hong Kong’s benchmark Hang Seng Index plunged by as much as 2.8 per cent on Tuesday, its biggest intraday decline since November 11      In Shanghai, the A Share Index retraced 1.4 per cent, while a similar benchmark in Shenzhen dropped by as much as 1.3 per cent

New China virus: ‘Wash your hands, be honest with your doctors’
With a new virus spreading in China and beyond, a public health expert gives some advice on how to avoid catching the contagion and urges the public to be honest with their doctors.    Gabriel Leung, chair of public health at Hong Kong University, was giving a press briefing on his team’s research into the spread of the virus which originated in the Chinese city of Wuhan

Chinese travel sites offer free cancellations for Wuhan bookings amid virus outbreak
Companies say policy will also cover those who have been quarantined or diagnosed with the pneumonia-like illness     Jump in cases has sent jitters among travellers ahead of this week’s Lunar New Year holiday

China’s 2019 foreign direct investment grew most in two years, but outbound investment fell 6 per cent
Foreign direct investment (FDI) in China in 2019 rose 5.8 per cent from a year earlier to 941.5 billion yuan (US$137 billion), the commerce ministry said on Tuesday    China’s outbound direct investment (ODI) declined 6 per cent to 807.95 billion yuan (US$118 billion)

China’s trade war deal ‘may be doomed from start’ as scepticism mounts over capacity to buy US products
Analysis continues to flood in suggesting that if China continues to insist it will buy US goods according to market conditions, it cannot meet Donald Trump’s demands    With 28 per cent of US exports to China not covered by the deal, economist Chad Bown suggests that these exporters could be cut out of the equation

LVMH’S Kenzo joins TMall luxury pavillon 
Luxury fashion house Kenzo, best known for its signature tiger embroidery, on Friday launched a flagship store on Tmall Luxury Pavilion. This marks the brand’s first partnership in China with an e-commerce provider.

Anna Sui Thinks China is Ready to Inspire Asia
The New York Times called her “fashion’s favorite daughter.” Renowned fashion journalist Tim Blanks proclaimed her “one of fashion’s best storytellers.” And the head of the Met’s Costume Institute, Andrew Bolton, once said about her that “there is not one art movement or artist she hasn’t touched on in her work.” Anna Sui, the American fashion designer known for constructing a one-of-a-kind, rock-inspired fantasy world, has stood the test of many a fashion trend, and now, she’s taking on China.

Angela Merkel said to be seeking to delay Germany’s Huawei position until after March EU summit
Merkel’s conservatives are divided on whether to support a proposal that, if approved, would effectively shut out Huawei from the country’s 5G network    The chancellor favours strict security requirements for the 5G network, but opposes excluding individual companies

Huawei founder Ren Zhengfei defiant over US blacklisting
Ren expects the US to further escalate its campaign against Huawei

Chinese EV battery maker confirms talks with Volkswagen
Guoxuan High-tech, a Chinese electric vehicle battery maker, has confirmed it is in discussions with Volkswagen AG about a potential investment, as the German automaker accelerates its shift to electrification in its largest consumer market.    Why it matters: Global automakers’ push toward electric vehicles will drive growth for Chinese auto suppliers like battery and component makers.

China Electric Vehicle Sales — The Light At The End Of The Tunnel?
After some terrible months (-42% in November), the Chinese plug-in market seems to have finally bottomed out, falling just 22% year over year (YoY) in December, to 149,000 units, with both powertrain technologies dropping. Fully electric vehicles (BEVs) suffered less (only -17% YoY) than plug-in hybrids (-45%).

China wants to make swappable electric vehicle batteries mainstream
Driving an electric car is, for the most part, exactly like driving an internal combustion engine vehicle, except when it comes to refueling. Charging an electric car can often take hours at a time, but China is making a push to support technology that could cut that down to just minutes

Climate change may spark ‘green swan’ disasters that trigger systemic financial crisis unless authorities take action, BIS warns
The Bank of International Settlements (NIS) is often described as the central bank for the world’s central banks     The analysis by officials at the Basel-based BIS adapts the “black swan” concept devised by Nassim Nicholas Taleb to describe adverse events outside the scope of regular expectations with wide-ranging or extreme impacts

For China’s zero-waste campaigners, overconsumption means it’s time for the last single-use straw
With estimates that China will produce as much as 500 million tonnes of rubbish annually by 2030, there are growing signs of resistance to consumer culture   Schemes like Shanghai’s waste separation programme are becoming mainstream and reviving ideas that older generations of Chinese may find familiar

Chinese mobile payment adoption drove tourist spending in 2019: survey
Global adoption of Chinese mobile payment services is on the rise as merchants look to attract Chinese tourist spending, according to a new survey released Tuesday by market research firm Nielsen along with Alibaba’s fintech arm Ant Financial.    Chinese mobile payment giants including Alipay and WeChat Pay have been eager to cash in on the spending power of Chinese tourists traveling abroad.

Hong Kong was the protest story of 2019. This year it’s Modi’s India
Thousands have taken to the streets to defend the world’s largest democracy from the premier’s Bharatiya Janata Party, and the world is taking notice   Modi has energised his support base, but last December’s Citizenship Amendment Act has sparked a resistance from across the political spectrum

China’s ex-Interpol president Meng Hongwei jailed for 13½ years for corruption
Country’s first head of global policing agency abused his past positions in China to receive US$2 million in bribes between 2005 and 2017, Chinese court rules    Meng disappeared in 2018 before the Communist Party’s anticorruption watchdog confirmed he was under investigation

Calls for China’s ambassador to be thrown out of Sweden amid diplomatic storm
Gui Congyou lashed out at local media in an interview on the weekend, saying they ‘have a habit of criticising, accusing and smearing China’   He has been summoned for a meeting at the foreign ministry on Tuesday, and three Swedish parties have called for him to be expelled

Bosses at Ocean Park must pay for mess
Time has come for a senior management overhaul at Hong Kong theme park, which is billions of dollars in debt and now expects the government to bail it out

The China-Japan Economic Relationship Is Getting Stronger
 “If the relationship between China and the United States, the world’s two largest economies, is the most important relationship in the world, then arguably the second most important relationship is that between China … and its neighbor, Japan, the third largest economy,” wrote distinguished East Asia expert, Ezra Vogel.  Indeed, Japan and China have been closely intertwined for more than 1,500 years through economic, cultural and political connections, perhaps longer than any other two countries.

Alain Gillard
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