China Press Review – January 28, 2019

Press review

US entrepreneurs make a choice: rewards of doing business in China often outweigh risks of losing trade secrets
Foreign companies are often required to hand over technologies to gain access to the massive Chinese market, a tactic that is a focus of US-China trade talks Beijing has drafted legislation to crack down on forced tech transfers, but enforcement remains a question

Expect the US-China trade war to come to a showy end, but the tech war to continue
David Dodwell says the tariff war is really a piece of political theatre that has harmed US and other companies in China as well as global supply chains, but accomplished little else. Meanwhile, US paranoia about Chinese technology grows

Why intellectual property rights will be pivotal in US-China trade talks
Beijing is offering to buy more US products to eliminate the trade deficit, but will Washington accept a deal based on purchases, not structural reform?

China, US ‘less belligerent, more cordial’ as delegation heads to Washington before Liu He
Commerce Vice-Minister Wang Shouwen and Finance Vice-Minister Liao Min are expected to arrive in the US on Monday, Bloomberg reports Both sides appear committed to reaching a deal before March 1, analysts say

Why China is under pressure to make a trade deal
In Washington this week, the US and China are due to hold their highest level talks since the two sides struck a temporary truce to their trade war

European shares drift lower ahead of key US-China trade talks – business live
Chinese vice premier Liu He heads to Washington this week and Fed is expected to hold rates steady

WTO Launches Investigation Into Trump’s China Tariffs, Official Says
Tariffs cover $250 billion in Chinese exports to the U.S. China says the tariffs violate WTO most favored nation rules

Why China’s economic policies are less of a concern than those of the Fed and European Central Bank
Nicholas Spiro says investors’ belief that Beijing is set to further stimulate the economy is not entirely misplaced. Meanwhile, the ECB has been slow to react to signs of trouble in Europe, leaving big questions over its tightening policy

Warning to China: reforms are taking too long and Germany may be about to get tough
Chamber of commerce survey shows a growing impatience for Beijing to tackle issues like intellectual property rights and market access In recent weeks calls have grown in Berlin for a sharper line on China

Besides US-China trade troubles, Europe’s economic and political struggles should have us on edge, too
David Brown says Germany’s slide towards recession and Italy again threatening a revolt could mean big trouble for China’s economy, even if the trade war is resolved

How the French are waking up to the rise of Chinese power
China’s increasing economic and technological clout is becoming more apparent to the French public, many of whom view the country’s rise positively, writes Philippe Le Corre

At last minute, China decides to join WTO talks on US$25 trillion e-commerce market
Beijing overcomes reluctance to join negotiations, citing a ‘deep crisis’ in multilateral trading system Some in the US fear it may also seek to water down any eventual outcome

The China “Hard Landing” Is Back On The Table
It’s baaa-aaack. The Chinese hard landing. Remember that one? It started around 2010 and went until around 2015 until proponents threw in the towel. With new tariffs on Made in China goods, and a government reluctant to stimulate the economy through deficit spending, investors are getting anxious. True, more than a few investment firms believe China will weather this storm. Stimulus will kick again later this quarter, and the second half of the year will be better, Morgan Stanley analysts wrote in a note last week. Worth noting here, China’s shadow banking system — a provincial form of funding pet projects with little economic viability — has been clamped down upon by Xi Jinping. Because of that, credit growth has declined dramatically in China. That’s one of the reasons for the slowdown in the growth rate, even if China is still growing over 6.5%, according to Beijing.

podcast : China’s economic slowdown explained
China’s economic growth is slowing down. But what’s really going on in the world’s second largest economy? Dharshini David takes a look at the figures behind the headlines for Reality Check.

Caterpillar says it’s seeing lower demand in China, a bad sign for the global economy
“Sales in Asia/Pacific declined due to lower demand in China, partially offset by higher demand in a few other countries in the region,” the company said in a release. The company also issued forward guidance range that fell short of Wall Street’s earnings expectations on the lower end.

China’s industrial profits shrink again in Dec. on weak prices, demand
Earnings at China’s industrial firms shrank for a second straight month in December, putting pressure on policymakers to support industries hurt by slowing prices and weak factory activity amid a protracted U.S.-Sino trade war.

Trade war fears and low demand sees profit growth at China’s industrial giants cut in half
Industrial profit growth falls for eight consecutive months since April, dragging the full-year growth down to 10.3 per cent, compared to 21 per cent in 2017 December’s industrial profits also fell 1.9 per cent from a year earlier, the worst monthly performance since 2015

China’s Cold Economy, Cold War: Theme of the Week
Here’s what led Bloomberg Opinion coverage this week.

China’s economy is certainly slowing but growth is still robust
China’s economy had an unexpected downturn in 2018. Industrial upgrading, economic policy battles and trade friction with the United States all contributed to the slowdown. The government is implementing policy measures aimed at stabilising economic momentum, but downward pressure on the economy will likely continue in 2019.

China’s economy is certainly slowing but growth is still robust

What’s really wrong with the Chinese economy and why it matters
The downturn in Chinese economic growth is top news around the world. That’s for good reason. China is the second largest economy in the world. Its much higher than the average world growth rate has been a major factor propping up global growth over the past few decades although the US recovery has done its bit to help in recent years.

What’s really wrong with the Chinese economy and why it matters

Just How Much Is China’s Economy Slowing?
Beijing is preparing another massive stimulus, but the economy is visibly running out of steam.
Just How Much Is China’s Economy Slowing?

IMF maintains China economic growth forecast for 2019
The figures remain robust, but US-triggered trade tensions are negatively affecting economic growth forecasts

Huawei’s treatment by foreign countries ‘unfair and immoral’, China’s foreign minister says
Boycott of Chinese telecom giant’s products has ‘obvious political intentions’, Wang Yi says Comments come as Britain’s Vodafone becomes latest Western firm to suspend purchases

Alibaba slams U.S. treatment of Huawei, efforts to curb China’s rise
A senior Alibaba executive slammed the United States’ treatment of China’s Huawei Technologies as “extremely unfair”, saying measures by the country to curb the firm’s access to their markets was “very politically motivated”.

Chinese people relax while Beijing calls on consumers to spend and lead economy out of trouble, survey says
Citizens sleep longer and take more time to eat and work out, but spend less time in front of the television while Beijing tries to rally consumers in trade war with US

Chinese in disbelief that a US$295 monthly salary makes them ‘middle class’
Statistics bureau gives rare official definition of ‘middle income’ that is met with ridicule online, forcing it to clarify that it applied to a specific report Many people in the demographic struggle to keep up with high living costs

Can E-Commerce Giant Alibaba Defy the China Slump?
Chinese stocks took a beating in 2018, but mainland companies are looking to bounce back this year despite a slowing economy and an ongoing trade warwith the U.S.

Can E-Commerce Giant Alibaba Defy the China Slump?

Big Read: China’s Generation Z teens spend more and worry less than you do
They are confident, carefree and spend over $7,000 a year on luxury goods – even before they turn 21. Meet China’s Generation Z. Spoiled by parents and grandparents for being the only child in their families, these youngsters are living it up compared to their cautious, conservative peers in the West, according to a new survey. They are pumped up about the future and not worried about their career prospects or international politics, notwithstanding a trade war at their doorsteps.

Why Are Chinese Tourists Shopping Less?
The recent headlines proclaiming that Chinese tourists are shopping less abroad may seem alarming, but it’s not all bad news, particularly not for the travel industry and service providers, who are set to welcome a record 7 million outbound Chinese tourists during the upcoming Lunar New Year holiday that begins on February 5th.

Why Are Chinese Tourists Shopping Less?

China tests new generation of maglev train
China on Saturday tested a new generation of maglev train with a top speed of 160 kilometres per hour in Changsha, the capital of central China’s Hunan Province. The test indicates that China has achieved a breakthrough in the development of maglev technology, from medium-to-low speed to medium speed, reports Chinese news portal Huanqiu.

How China will help fuel the revolution in autonomous vehicles
If the driverless-car phenomenon takes off in China, the payoff could be in the trillions of dollars.

Apple suppliers step up expansion outside China
Foxconn and Pegatron look to Vietnam and India as trade war takes toll

China’s smartphone shipments fall to pre-2014 level as economic slowdown bites, says report
Most phone makers have shipped fewer units to the world’s largest but saturating smartphone market, says latest industry report Economic slowdown and sluggish consumer spending have resulted in slower sales last year

China’s Guangdong province wants joint tech labs with Hong Kong and Macau in 2019
Governor Ma Xingrui vows to push ahead with ‘Greater Bay Area’ plan, calling it opportunity of historic significance

Xi Jinping visits Xiongan New Area in show of impatience at lack of progress on ‘future city’ plan
Week after president’s trip to north China’s Hebei province, Xinhua publishes 13,000-word document extolling virtues of ambitious development project Planned metropolis described as a ‘strategy crucial for a millennium to come’

China’s industrial powerhouse Guangdong slashes growth target for 2019
Southeastern province, which includes the cities of Shenzhen and Guangzhou, aims for 6.0-6.5 per cent growth this year The target is the same expected to be confirmed as China’s overall growth target for 2019 as the trade war with the United States continues to slow the economy

China Focus: A healthier Shanghai economy a bliss to the world
China’s eastern metropolis of Shanghai pledges to further open up its door to let the world share the benefits of its high-quality growth. While delivering the government work report at the annual session of the municipal legislature, Shanghai mayor Ying Yong promised that the city will strengthen its efforts in reform and opening up, while pursuing high-quality growth in the year 201

Hong Kong prepares for Beijing’s 14th five-year plan earlier than usual, marking proactive approach to role in country’s development
Constitutional affairs chief Patrick Nip reaches out to think tanks for views more than two years before next phase set to be endorsed by state legislature Observers say new move signifies change in mindset of officials over willingness to integrate

Chinese state media attacks Canada for sacking outspoken ambassador
Nationalist tabloid Global Times leads charge against Canadian government’s demand that John McCallum resign Former envoy had said it would be ‘great’ if charges against Sabrina Meng Wanzhou were dropped

As questions are raised about ‘belt and road’, projects slow in Southeast Asia
China’s investments in the region plunged by nearly half in 2018, to lowest level in four years Asean member nations scrutinise Beijing’s strategy, though they still seek investment

China has nothing to fear from America’s Africa strategy, as it’s largely bluster
David H. Shinn and Joshua Eisenman say the bold proclamation of US intent to help African countries resist China’s ‘predatory practices’ carries little weight, given that the Trump administration has failed to allocate sufficient resources for it to succeed

Didi and BAIC set up joint venture to work on electric vehicles
Chinese ride-hailing giant Didi has set up a joint venture (JV) with a unit of state-owned BAIC to work on new energy vehicles (NEV) and artificial intelligence. The JV aims to develop the next generation of connected car systems amid a shift by BAIC to move away from gas-driven cars by 2025.

Briefing: Didi and BAIC set up joint venture to work on electric vehicles

China created a unicorn every 3.8 days in 2018
The valuation of China’s biggest unicorn, Ant Financial, has exceeded 1 trillion yuan

Why 2019 will be a bellwether year for tech entrepreneurs in China
The Wall Street Journal reported recently that Americans who flocked to China 15 to 20 years ago to build factories and open restaurant chains have despaired of the soaring labor costs, creeping regulation and the sour mood brought about by the Trump administration’s hostility toward China. As Plan B unfolds, it seems, Chinese VCs will no longer go only for the easy pickings, the local startups, but will be forced in their search for potential unicorns to reach farther afield for foreign-bred startups that specialize in game changing technologies in artificial intelligence, computer vision, natural language processing and cloud computing. Government lends further weight to this by enacting favorable policy and pledging money to foreign companies, entrepreneurs and scientists who come to China. True, a negative scenario may prevail, by which economic malaise and restrictions on foreign currency transfers will make China inhospitable in the foreseeable future. Still a huge consumer market and the intense competition, which fuel China’s tech boom, are unlikely to let down any time soon and may very well continue—with fits and starts—to drive the country up the value chain.

Why 2019 will be a bellwether year for tech entrepreneurs in China

Five Ways to Earn Trust of Chinese Partners
The most important thing you need to understand when negotiating with them is that you need them, they do not need you

Taiwan at risk of paralysing cyberattacks from mainland China, security think tank warns
Beijing could target undersea cables or force a change to the island’s root domain name, researchers say

In terms of the development of 5G technology, Europe seems to be ahead of China and a couple of European countries have this network and are just waiting for manufacturers to release compatible devices. Recently, Chengdu Unicom and Chengdu Chenghua District Government announced that China’s first 5G wireless home broadband demonstration community has been officially launched.

5G network now spreading through China – Chengdu 5G network speed exceeds 400Mbps

Duke University tutor steps down after row over ‘impolite’ Chinese students not speaking English on campus
Director of masters’ programme slammed on social media after passing on comments from her colleagues about ‘loud’ conversation in communal lounge Dean of medical school tells students there is ‘absolutely no restriction or limitation on the language you use to converse or communicate with each other’

Is China’s plan to use a nuclear bomb detonator to release shale gas in earthquake-prone Sichuan crazy or brilliant?
Scientists have developed an ‘energy rod’ that can fire multiple shock waves to frack sedimentary rock at depths of up to 3.5km China has the world’s largest reserves of natural gas but current mining technology makes most of it inaccessible

Mainland Chinese banks are desperate for capital
Major lenders raised or announced plans to raise 343 billion yuan in 2018, well below estimates last year that said they need 1 trillion to 3 trillion yuan

China’s slowing economy will make it harder for its companies to pay debts, ratings agencies say
China’s slowing economy means companies will find it harder to pay their debts, S&P Global Ratings says.“The economic chill in China is spreading, threatening to weaken profitability across nearly all sectors in corporate China,” the agency says in a report. Moody’s Investors Service says that increased credit for private companies promised by the government is unlikely to reach those companies that need it most.

S&P Global get the nod to enter China’s bond rating market
China’s central bank said that it supports further opening-up of the rating industry and will tighten regulations for credit assessment in China No mention of Moody’s Investors Service and Fitch Ratings in PBOC’s announcement

US$369.6 million in defaults at apparently cash-rich firms expose flaws in mainland Chinese auditing practices
Auditors are held accountable only in rare conditions, which makes the cost for committing a crime ‘small’, says analyst Accounting firms colluding with clients to fake financial data is not a new problem

China’s smog battle losing ‘momentum’ in some regions, environment minister says
Local officials should resist the idea that the country’s ‘war on pollution’ has undermined growth, according to Li Ganjie

China Readies for World’s Biggest Human Migration
It brings much of China’s economy to a halt and strains transport systems, not to mention waistlines. Chinese New Year is an annual ritual of family reunification and overindulgence. The scale of the migration is astounding: While some 54 million Americans undertake a significant journey for Thanksgiving, Chinese citizens will rack up about 3 billion trips during this year’s travel-fest.

China looks to build ‘smart courts’ with AI
A Shanghai court has adopted an artificial intelligence-enabled assistant to help improve courtroom efficiency and accuracy. The city’s No. 2 Immediate People’s Court is the first in the country to utilize the system, dubbed System 206, developed by Chinese tech firm iFlytech and the country’s judicial and public security organs. The platform can recognize verbal commands to display relevant information. It can also transcribe speech while identifying speakers.

Briefing: China looks to build ‘smart courts’ with AI

Chinese human rights lawyer Wang Quanzhang jailed in 2015 crackdown’s final case
‘Authorities are guilty, not Wang Quanzhang,’ says wife Li Wenzu as court in China’s north sentences the 42-year-old for subversion Wang had stood trial in December behind closed doors after more than three years behind bars, in a hearing condemned by lawyers and rights groups

Ma Jian fiasco shows why Hong Kong must defend its artistic freedom
U-turn by cultural complex over talks by Chinese dissident author at leading literary festival raises concerns about self-censorship and has proved embarrassing for the city

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