Belgian-Chinese Chamber of Commerce (BCECC)

China Press Review – January 28, 2022

Lunar New Year lull to make supply chain ‘even worse’ amid factory closures, port delays in China
Start of the Beijing Winter Olympics in early February and the possibility of power cuts are further clouding the ability of manufacturers to predict output levels. Industry expert says major problem facing global supply chain is that there is no time to recover before next shock hits.

China Economy: MOFCOM: Foreign trade surges to new record in 2021
China has become the world’s second largest consumer market, the largest merchandise trader for five years in a row and the second largest destination for foreign direct investment in 2021. This is announced by China’s Ministry of Commerce at a press conference Tuesday while unveiling the country’s business and trade performance for 2021. Yang Shanshan has more. Despite COVID-19, China’s foreign trade reached new highs in 2021, with total imports and exports growing by 21.4 percent to 39.1 trillion RMB, about six trillion U.S. dollars. However, Chinese Ministry of Commerce warns the global economy still faces uncertainties in 2022.

China Warns of a Slump in Exports This Year. Why Analysts Aren’t as Dour.
 “Unprecedented difficulty” is the term Chinese officials have used to describe the country’s trade stalemate this year – a outlook they seem to have seen coming. China’s vice commerce minister used the harsh term last month to describe the government’s forecasts for 2022 trade, mostly focusing on an expected slowdown in exports. As is often the case in China, officials and the media use literal public language when expressing policy lines. In addition to “unprecedented difficulty,” another recurring phrase that at least three senior officials have used in the past few months to describe downward export pressures have been: “shrinking demand, supply shocks, and weak expectations.”

For China, the costs of living with Covid-19 are still too high
China can’t just abandon its zero-Covid policy if it means health care services would be overwhelmed, especially in rural areas    Economic reopening has facilitated robust recoveries in the US and Europe. Yet, this has also led to a number of challenges

China worried by US monetary policy, decoupling, but Beijing shares optimistic economic growth outlook with IMF
Chinese officials, the private sector and academia spoke with the International Monetary Fund (IMF) last year as part of the annual Article IV consultation      Earlier this week, the IMF downgraded China’s 2022 growth estimate to 4.8 per cent from the 5.6 per cent expansion predicted in October

IMF Says China’s Economic Imbalances Have Worsened
Beijing has pulled off an impressive economic recovery since early 2020, when authorities locked down much of the country to combat the Covid-19 pandemic. The economy grew 8.1% last year, a sharp improvement from 2.3% for all of 2020. But the rebound has relied heavily on state-sector investments and exports, while private spending has plunged. And in the final months of 2021, growth slowed markedly.    Authorities’ strict pandemic restrictions have made consumers hesitant to spend. A cascade of policy measures over the past year—centered on reining in what President Xi Jinping views as capitalist excesses, including property speculation—have also damped the sentiment among both private businesses and individuals.

Exclusive-China securities regulator met foreign banks to soothe economic concerns
China Securities and Regulatory Commission (CSRC) met this week with executives at top western banks and asset managers to reassure them about the country’s economic prospects after regulatory crackdowns in 2021, three sources said on Friday.    CSRC Vice Chairman Fang Xinghai hosted the virtual meeting with more than a dozen foreign financial institutions on Tuesday, said the sources, who had direct knowledge of the meeting, declining to be identified as they were not authorized to speak to the media.   Senior executives from firms including BlackRock, Credit Suisse, Fidelity International, Goldman Sachs, JPMorgan, Morgan Stanley and UBS attended the meeting, said two of the sources

Infrastructure Investment to Support China’s GDP Growth in 2022
China’s total FAI growth decelerated to 4.9% by end-2021 from 7.3% yoy in 9M21 due to muted property FAI. Fitch expects weak contracted sales and limited funding access to continue to weigh on new starts and land acquisition, leading to a contraction in property FAI in 2022. Manufacturing sector FAI surged in 2021, but is likely to moderate in 2022 as the supply chain outside of China recovers. Infrastructure is likely to be the only major sector with accelerated FAI growth in 2022 as the government boosts special bond issuance to stabilise the economy. Fitch expects a higher percentage of special bond proceeds to be allocated to infrastructure investment in 1H22 after guidance by the central government to “properly advance” infrastructure investment in 2022. Traditional infrastructure will remain constrained by the state’s control over local governments’ implicit debt growth, while the investment focus is likely to shift to new areas, including 5G, data centres and intercity high-speed railways.

Europe’s Economy Falls Behind U.S., China, as Supply Chains and Omicron Bite
The eurozone economy slowed sharply at the end of last year, lagging the recovery in the larger economies of the United States and China, as higher energy prices, supply chain bottlenecks and new social restrictions weighed on consumer spending and the region’s large manufacturing sector.    Data from three of Europe’s largest economies published on Friday shows that sectors of the region are still lagging behind the pre-pandemic level of production, the level the United States surpassed by the middle of last year. China’s economy, the world’s second largest, quickly surpassed its pre-crisis level in 2020, but recently slowed sharply amid a downturn in the real estate market.

China Core Cities & Metropolitan Area Development Index 2020 released
Compiled by Cloud River Urban Research Institute, an international think tank, the China Core Cities & Metropolitan Area Development Index 2020 was recently released. In the comprehensive ranking, Beijing, Shanghai, Shenzhen, and Guangzhou have occupied the top four positions for three consecutive years. Chengdu has fared well, up three places to fifth in the ranking from the first release of the index in 2017. Tianjin has fallen to sixth place from fifth in 2019, while Hangzhou (7th), Chongqing (8th), and Nanjing (9th) have all maintained their 2019 rankings.  Xi’an ranks 11th, up two places from 2019. Conversely, Wuhan drops to 13th from 11th in 2019. Ningbo has maintained its 12th place.  Among the 36 core cities, Zhengzhou, Changsha, Jinan, Hefei, Fuzhou, Harbin, Nanchang, Nanning, Haikou, Hohhot, and Lhasa have climbed the ranking, in which Hefei has seen the largest increase from 23rd in 2019 to 19th in 2020. Qingdao, Kunming, and Changchun have maintained their 2019 positions.  Xiamen, Shenyang, Dalian, Guiyang, Shijiazhuang, Taiyuan, Urumqi, Lanzhou, Xining, and Yinchuan have moved down in the ranking. Among them, Dalian has seen a bigger drop from 18th in 2019 to 23rd in 2020. In general, core cities in the north have declined significantly in the comprehensive ranking.

China’s Corporate Credit Risk Classification System – What We Know
A classification system under the China corporate credit system will be rolled out nationwide over the next two years. Under the system, companies operating in China will receive a grade based on their risk level for engaging in bad behavior. Higher-risk companies will be subject to more scrutiny and a higher frequency of random inspections, whereas low-risk companies will benefit from less interference from regulatory authorities. The new system aims to improve the business environment by reducing bureaucratic procedures for compliant companies and help authorities better allocate resources for supervision.

Evergrande and some financing options for companies in distress
Ever since Evergrande Group’s debt bubble burst in September this year, the company’s financial crisis has rarely been out of the headlines. On 3 December, it announced it was exploring ways to restructure its debt, including solutions to its overseas liabilities and actively promoting overseas debt restructuring. Then, the Guangdong government stepped in, announcing that it would dispatch a working group to the company. A few days after that, Evergrande’s board announced the formation of a risk management committee. It seems clear that Evergrande’s debt crisis is beginning to come under control. Whether this was the result of the group’s own efforts to resolve its capital dilemma via asset sales, or its decision to seek a restructuring plan under government leadership is unclear. But it all comes down to quickly raising funds for Evergrande to prevent the debt-mired group from lurching a step closer to bankruptcy. In respect of the debt restructuring options of distressed companies, this article focuses on financing means with dual characteristics of being both debt- and equity-based: debt-to-equity swap and convertible bonds.

China’s middle class is developing a taste for high-end meat, sending imports surging
China’s growing middle class and greater consumer awareness about the origins of food have driven up demand for higher quality meat   In the first 10 months of 2021, sales of Spanish cured hams and shoulders grew more than 32.96 per cent in value to be worth 17.35 million euros (US$19.6 million)
China is the largest consumer market in the world, with retail sales worth 44.08 trillion yuan (US$7 trillion) last year, according to the National Bureau of Statistics. Its middle class population reached 400 million in 2021, accounting for nearly 30 per cent of the total population. “More and more multinational corporations in the food industry from the United States and Europe are raising their stakes in China, as they believe in the massive market potential here,” said Tony Wang, from strategy consulting firm Tractus Asia Limited.

Illegal Fishing Hard to Identify as China Reexports Seafood
A new study highlights a side of the country’s seafood trade system that sustainability campaigners have paid little attention to.   Using data from the Food and Agriculture Organization, Asche and other researchers from the United States and Norway found that an estimated 74.9% of China’s seafood imports are ultimately sold to other markets.

China’s Surprising Corporate Transparency Is Better Than the United States’
There is a risk in shaping US domestic policy regarding competition with China, as the Biden administration has sometimes done when selling its framework to build back better. If the policy’s tacit goal becomes to beat Beijing, aggressive military spending becomes more tempting than an unattractive infrastructure bill.  But there is one clear exception. There is a devastating gap in corporate transparency. No self-respecting patriotic American legislator should rest as long as the infamous Chinese Communists maintain supremacy on this decisive battlefield.

US bans telecom giant China Unicom over spying concerns
China Unicom has become the latest Chinese telecoms giant to be banned from the US over “significant” national security and espionage concerns.

China Unicom says no ‘justifiable grounds’ for US ban
China Unicom said Friday there were no “justifiable grounds” for a US order that banned the company from operating in the country on national security concerns. The decision by the US Federal Communications Commission (FCC) on Thursday was the latest broadside in a standoff that has seen Beijing and Washington clash over trade, technology, human rights and other issues.   The United States has previously cited national security fears to restrict the operations of China’s big three state-owned mobile carriers as well as tech giant Huawei, which claims to be a private company.

The scramble for semiconductors is our era’s industrial Great Game
China, Spent more money on semiconductor imports than oil in 2020Is severely squeezed by US export restrictions on advanced chips and declares that achieving technical self-sufficiency is a “society-wide” priority. With luxurious national and local funding, China was able to compete with Taiwan and South Korea as the largest buyers of semiconductor manufacturing equipment.  As intended, US export restrictions are hitting China and significantly weakening industry giant Huawei. However, as Dan Wang, a technology analyst at Shanghai-based Gavekal Research, claims, they also readjusted the commercial interests of Chinese technology companies with Beijing’s national security obligations, “semiconductors. It helped me to make it sexy again. With a vast domestic market, bold entrepreneurs, a vibrant venture capital industry, a host of trained engineers in the United States, and a flood of funds, China has its focus, brains and capital more than from the consumer internet. We are switching to strategic technology. “The US government has supercharged China’s most dynamic enterprises in pursuit of economic self-sufficiency and technological greatness,” says Wang. Still, rising authoritarianism in Beijing and increased crackdowns on parts of the tech industry could weaken China’s entrepreneurship.In her book US-China Technology War, Writer Nina Shan explains how previous state-led tech campaigns didn’t always end successfully. Designing and manufacturing 3 nanometer chips, as planned by the world’s most advanced plants, remains a daunting task for China. It is one of the most complex industrial processes invented to date and requires decades of interaction of technical experience and expertise. But according to Xiang, China doesn’t necessarily have to be at the forefront of semiconductor technology to get the most out of its benefits.

China approves AMD’s US$35 billion acquisition of Xilinx
The State Administration for Market Regulation cleared the deal with certain conditions, including asking that AMD continue to supply Xilinx chips to China    The acquisition has already been approved in the US, Europe and UK, and will bring AMD into areas including automotive and communications networking

Beijing rolls out seven key measures to support further integration of Shenzhen, Hong Kong and Macau
Measures announced by the National Development and Reform Commission come just ahead of third anniversary of blueprint for Greater Bay Area on February 18     Measures include an ‘insurance connect’ and a plan to develop a number of yuan-denominated data trading exchange marketplaces

Hong Kong stocks set for worst week since August as tech gauge hits record-low with imminent end of easy-money policies
Hang Seng Index has lost 5.6 per cent this week, the worst since the week ending August 20, amid global risk aversion     Analysts are hopeful China’s policy-easing impetus will cushion the blow, countering the tightening bias in the US

Another major Chinese tech firm expands use of the country’s digital currency
Meituan will now let users pay for offline services from hotels to movie tickets with China’s digital currency, known as the digital yuan or e-CNY.  China’s technology companies including Tencent and have been helping to widen the use of the digital yuan.  Experts have questioned the incentives for people to sign up to use the digital yuan versus the two dominant mobile payments apps in China — WeChat Pay and Alipay.

Chinese fast fashion retailer SHEIN rumoured to revive its IPO in New York
SHEIN, China’s most mysterious billion-dollar company, is rumoured, yet again, to be revisiting an IPO on New York Stock Exchange this year, as according to Reuters on 25 January. It is also reported that the company’s founder Chris Xu is considering changing into Singaporean citizenship, to sidestep the tougher rules for offshore IPOs in China, as according to two people familiar with the matter, who don’t want to be named due to the confidentiality involved. However, in response to the news, a spokesperson for SHEIN said the company “has no plans to IPO (Initial Public Offering), and its CEO Chris Xu has not applied for Singaporean citizenship.” Despite the second-time denial, expectations of this company going public remain high, and with their lack of transparency, this assumption is furthered.

CATL expects 2021 profits to triple amid EV boom
CATL expects its annual profit to nearly triple in 2021 after a strong rebound in Chinese electric vehicle sales through the year, the country’s largest electric vehicle (EV) battery supplier said on Friday.

Shell says one of the largest hydrogen electrolyzers in the world is now up and running in China
Located in Zhangjiakou, Hebei Province, China, the electrolyzer will produce green hydrogen for fuel cell vehicles during the Winter Olympics.  Wael Sawan, Shell’s integrated gas, renewable and energy solutions director, says electrolyzer is “the largest in our portfolio to date.”   While there is excitement in some quarters about green hydrogen’s potential, the vast majority of hydrogen generation is currently based on fossil fuels.

New Stellantis deal surprises local Chinese partner
Stellantis NV’s attempt to increase control over its struggling Jeep joint venture in China has seen pushback from its local partner who says they only found out about the plan via Stellantis’ website, reports Bloomberg. Stellantis, formed from the merger of Fiat Chrysler and PSA Group, said Thursday it plans to increase its shareholding in the venture with state-owned Guangzhou Automobile Group to 75% from 50%.   “GAC Group learned from the official website of Stellantis about its announcement on the equity adjustment,” of the venture, the Chinese company responded in a statement. “This announcement is not approved by us, and GAC Group deeply regrets it.” Chief Executive Officer Carlos Tavares has for months been promising investors he’d improve the carmaker’s dismal performance in China, and the shareholding change is key to his reboot. Stellantis is preparing to promote brands including Jeep and DS in the country and push an electric Opel model.  Stellantis announced the plan before it was approved by Chinese authorities. GAC said it would “strictly abide by national policies and regulations” and promote the venture “in accordance with the principles of mutual trust and win-win results.”

As Tesla puts off new launches, Chinese trio NIO, Xpeng and Li Auto get a chance to close gap with US rival
NIO says it will deliver three new models this year, while Xpeng and Li Auto will introduce one SUV each     Tesla says its focus this year remains on scaling output

Is the wild ride over? Tesla loses US$100 billion of value in a day after 12 per cent plunge in its stock
Tesla’s shares plunged by 12 per cent to US$829 overnight in New York, the lowest since October 14   The electric car maker’s decline was the second biggest on the S&P 500 Index

Why stock markets can’t rely on US or China policymakers to rescue them
Policymakers are hesitant to shore up markets given shifting political and economic priorities     Investors can no longer depend on support when sentiment deteriorates and have reason to believe they must fend for themselves

China’s 2021 gold consumption jumps by a third on-year as economy grows
China’s 2021 gold consumption rose by over a third from the previous year, as its economy rebounded from the coronavirus impact, the China Gold Association said on Thursday.     Consumption in the world’s largest gold consumer rose 36.53% year-on-year to 1,120.9 tonnes. It was also up 11.78% compared with consumption in 2019, before the pandemic.

Domestic conditions challenge China’s economic diplomacy
China has benefited tremendously from neoliberal globalisation and its accession to the World Trade Organization — this helped the country become the world’s second-largest economy and leverage its political power throughout the global economy. But once-conducive international and domestic environments have changed in ways that mean China’s internal and external economic policies need a rethink.   More importantly, the aggregated domestic pressure derived from these short-term shocks, combined with Xi’s priority to demonstrate his accomplishments to ensure a third term in 2022, will likely intensify multiple stress points in China’s domestic political economy. In other words, Xi can behave like a ‘Tiger Dad’ to implement rapid economic reform, but whether Chinese society and its political economy can tolerate such stress while still delivering the expected reform dividends is entirely another matter.    For sure, Xi intends to continue strengthening ties with developing countries across the globe, retaining them within China’s political orbit and supporting China’s own economic growth. Yet the fate of China’s economic diplomacy will depend heavily — if not fully — on China’s domestic political economy. Xi’s political decisions and China’s economic performance will undoubtedly play a crucial role in shaping the strategy and effectiveness of China’s economic diplomacy. It would not be surprising to see China’s economic diplomacy experience a bumpier road ahead.

podcast : How should China’s economic progress be evaluated?
Chinese President Xi Jinping delivered an online keynote speech at the five-day Davos Agenda Virtual Event. Since his debut in 2017, President Xi has delivered 3 keynote speeches offering Chinese wisdom on how to view, understand and participate in the global economy. Despite the ongoing pandemic and disruption in the global supply chain, China’s GDP expanded by 8.1 percent in 2021, beating expectations and setting a new record for the decade.–178HH4ijt5e/index.html

EU-China Opinion Pool: Transatlantic cooperation on China
President Biden’s administration has made a great effort during his first year in the White House to mend relations with European partners. This has included both reviving old fora for cooperation and proposing new ones, such as the Trade and Technology Council. How to approach China, the opportunities and the challenges it poses to both the United States and the EU, occupied a central place in the transatlantic agenda during 2021. With a new year beginning, it is time to look ahead at what the 2022 transatlantic agenda on China must include. In this round of our EU-China opinion pool, we ask the question:What should the tangible objectives be for transatlantic cooperation on China in 2022?

Living with a feared China and Russian-built chaos
Giving way in the face of belligerence won’t make it stop –but nor does aggression portend doom and major war.  Western strategies should perhaps focus not on countering China’s and Russia’s approaches but instead on moving these towards such off-ramps. Such strategies would then have a well-defined, positive objective. Chinese and Russian approaches in having no strategic endpoint makes them vulnerable to those who can conceive of one.

Chinese military ‘ready for any external provocation’ during Winter Olympics
With a week to go until the Games, PLA embarks on various naval exercises in its waters    Defence ministry takes aim at the US over its ‘pride in provocation’

What’s Next for the Long-Awaited China-Japan-South Korea FTA?
Will RCEP be able to accelerate the negotiation process for the China-Japan-South Korea free trade agreement? China, Japan, and South Korea, the three largest economies in Asia, launched negotiations for a trilateral free trade agreement (FTA) in 2013. As of January 2022, a total of 16 rounds of negotiations between the three parties have been held, though without substantial progress.
Muhui Zhang of Pusan National University argues that South Korea, as the bridge between China and Japan, is vital for the trilateral economic integration, but unfortunately, South Korea would like to keep its distance from Japan even though both are allies of the United States. Japan’s colonial history on the Korean Peninsula continues to rankle. In addition, other disruptive factors such as nationalist sentiments and maritime disputes – between China and Japan as well as Japan and South Korea – also help explain the slow progress and few achievements of the negotiations so far. Obstacles resulting from geopolitical competition, maritime disputes, and history-related factors are almost impossible to fully remove. However, the existence of these obstacles does not mean that the attempt to formulate a CJK FTA is doomed to fail. RCEP may help create a friendly and favorable atmosphere between the three countries. Besides, past experiences also provide some clues on the question of under what conditions China, Japan, and South Korea are able to cooperate. For instance, the Asian Financial Crisis motivated the three countries to support the establishment of the Chiang Mai Initiative. Given the fact that COVID-19’s impacts on economic development are even worse than the Asian Financial Crisis and Global Financial Crisis, it is possible and likely that the lasting pandemic may provide stimulus for speeding up the long-stalled trilateral negotiations. Last but not least, if an absence of leadership partially led to the stagnation of CJK FTA negotiations, the conclusion of RCEP may directly help solve that problem. It is said that China has prioritized RCEP over the CJK FTA. After the successful conclusion of the RCEP, China has reiterated its willingness to resume and accelerate the CJK FTA negotiations. How China will mobilize Japan and South Korea to conclude this “win-win-win” trade pact will be worth following in the coming years.

Li vows actions to attract more foreign experts
At a meeting with foreign experts in Beijing on Wednesday, the premier extended festive greetings to foreign experts in China ahead of Spring Festival, which falls on Feb 1 this year, and expressed appreciation for their contributions to China”s reform, opening-up and modernization drive.   Li said he hopes foreign experts will give play to their professional expertise to promote international exchanges and cooperation and offer more advice on the work of the Chinese government.

China to Continue Strict Border Control in 2022, Official Says
The country has been largely shut off since the start of the pandemic.   China will maintain its tight border restrictions this year but avoid a one-size-fits-all approach, with authorities suggesting some curbs may likely be loosened.

Race to salvage US F-35C fighter jet that crashed in hostile South China Sea
Fears that subs from China, which claims the area, could be first to reach wreckage that plunged from deck of aircraft carrier

Entering Beijing’s Olympics Bubble Is a Surreal Experience
The experiences of AP journalists who have arrived or are preparing to depart offers a glimpse into life inside the bubble.

How Chinese Companies Force Employees to Stay
Once only signed by executives, non-compete agreements are upending the careers of China’s young workers.

What does Xi Jinping want?
The Chinese leader won’t let the west’s qualms about his country’s human rights record stand in the way of making China the world’s most successful economy Xi is now branded a Maoist because of his autocratic, nationalist style of politics, and the propaganda and worship accorded him.    That commitment to material improvements in people’s lives and pumping up GDP growth may have prevented perdition, but it created plenty of other challenges. A Chinese leader like Xi with his constant stress on the “bigger picture” would, if ever quizzed about these issues, no doubt simply reply that for the vast majority of Chinese people their country is getting better. And as this is almost a fifth of humanity, that is good news for everyone else.  Whether Xi’s style of party leadership, his diplomacy and politics really will keep that key group—the Chinese middle class—fully onside in the decade ahead is another matter. Xi’s mission, the reason he has been given the kinds of powers he has, is to make one-party rule sustainable. The Soviet Union failed in this. No other major country has achieved it. If he succeeds, it will have implications not just for his own country, but for the rest of the world. He will prove one of the core tenets of modernisation theory—that only democracy can get you a developed, wealthy society—is untrue. This will be not just a geopolitical upending, therefore, but an intellectual and ideological one, the impact of which will sweep across the planet. As of 2022, it is hard to look at all that has happened in the last decade, and not feel he has a fighting chance.

China’s Political Discourse December 2021: China’s Democracy
Whether a country is democratic should be judged by its people, not dictated by a handful of outsiders. Whether a country is democratic should be acknowledged by the international community, not arbitrarily decided by a few self-appointed judges. There is no fixed model of democracy; it manifests itself in many forms. Assessing the myriad political systems in the world against a single yardstick and examining diverse political structures in monochrome are in themselves undemocratic.

Xi Jinping’s iron grip on power brings new form of corruption, China experts tell US congressional advisory panel
There is a pervasive sense in China that the only way to rise through the ranks in the Xi era is to show all-out loyalty to the leader, experts say   The US-China Economic and Security Review Commission, which advises members of Congress, heard testimony on Thursday

Omicron: kitchen supplier hit by Hangzhou outbreak as China pursues goods transmission theory
30 cases detected in the city since first case on Wednesday, with strain different to previous local or imported Omicron cases, say officials  Some Welbilt employees attended a wedding banquet, at least seven positive cases were found among party guests

China confirms Xinjiang visit talks with UN human rights chief
Foreign ministry says Beijing welcomes the prospect of a trip but gives no dates    Goal must be to promote exchanges and cooperation, ministry says

Pets in China to feast on dim sum and seafood as families gather for Lunar New Year’s Eve dinner
Online sellers bet big on a growing pet economy and emerging demand for festive pet food    Gen Z and millennials are discovering niche products through e-commerce channels and social media, such as Douyin and Taobao.

CNY Once More
Chinese New Year is upon us again, this time shifting through to the year of the tiger. Will it have a bite? If so, of whom? This recent period has been pretty quiet for China, except for the emergence of clusters of virus cases and the determined squashing of same by the Center. The Winter Olympics are about the begin and they will go off without a hitch, with of course no visitors and strict quarantining of everyone and everything. Then the year gets started in earnest with the countdown to the 20th Party Congress in October. There are lots of problems out there, and it is always possible that grey rhinos or black swans intervene to rock the boat of state, but in all likelihood things are going to go smoothly through the year, with lower growth, continued emphasis on common prosperity, and few chance-y events that have an uncertain outcome. Steady as they go, will be the byword, and woe betide anyone who acts to upset that. By the time of the Congress, we will also have a clearer view of just how long-term the border controls are, how difficult it is to maintain a zero covid policy, and how much the availability of more effective vaccines is going to allow the freer movement of people to resume. Our prediction is that is going to be a very slow process indeed. In other news, the slow-moving property crisis inched forward with property developer Yuzhou missing bond payments and Shimao announcing plans to sell 34 projects across the country to help bolster its liquidity. Meanwhile, in the decoupling arena, the FCC revoked China’s Unicom’s right to operate in the US, and Apple’s iPhone climbed back to the top of the smart phone chart, beating Huawei to become the biggest seller in the China market. What does that mean? That many young people appreciate a symbol of international-ness, perhaps? Have a great lunar new break, if you get one, burn some incense to the right deity and try to receive more red packets than you dispense.

Alain Gillard
Information Officer
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