China Press Review – January 29, 2019

Press review

US Treasury Secretary Steven Mnuchin plays down expectations that this week’s talks will resolve trade war
Vice-Premier Liu He, who will lead the Chinese delegation, is scheduled to meet US President Donald Trump on Thursday Mnuchin sees prospects for ‘significant progress’ but underlines complexity of issues

The U.S.-China Trade War Isn’t Going Anywhere
The Trump administration views China’s economy as “unfair.” It will probably stay that way.

How the euro could become collateral damage in the US-China trade war as the yuan comes into focus
Neal Kimberley says if China accedes to US pressure to strengthen the yuan against the dollar, it would also result in a rise in the yuan’s value vis-à-vis the euro. This would be unpalatable to Chinese exporters and a blow for the euro zone Germany’s DIHK Chambers of Industry and Commerce, has estimated that some 900,000 jobs in the country depend on exports to China. So it matters when data from China’s General Administration of Customs, as reported by Bloomberg, indicates that December saw imports from Germany fall 15.6 per cent on an annual basis.

There’s one big, mathematical problem with China’s offer to go on a big US shopping spree
Analysts at Barclays write that it’s very unlikely China would be able to make good on its offer to eliminate its trade deficit with the US. Doing so would change China from a net creditor to a net debtor nation, and it lacks the financial assets to finance a current account deficit.

How China and Hong Kong stocks could react to the US-China trade talks this week
Automobiles, agriculture and technology shares could be in for a very jumpy week Hang Seng Index to ‘perform well’, says analyst

US President Donald Trump’s tariffs on US$250 billion of Chinese goods to be investigated by WTO
China’s dispute alleges the tariffs violate a World Trade Organisation provision as the measures fail to provide the same treatment to imports from all other members Investigation comes at a delicate moment between the world’s two largest economies as a new round of trade talks are expected to begin on Wednesday in Washington

Young Americans seen as ‘future of China-US relations’ as scholars reflect on soft power
Officials and experts at seminar ponder why US cultural exports like Hollywood movies are global hits but Chinese efforts miss the mark Cultural exchanges also criticised as too rigid, with not enough dialogue

China wants to boost loans to small businesses. Tech companies may be the answer
As Beijing struggles to balance a crackdown on high debt levels with maintaining growth, Chinese leaders have publicly announced support for privately-run companies. As China lacks a standardized credit system, roughly 80 percent of the nearly 90 million small and micro-sized enterprises don’t have a credit with a bank, according to Tencent-backed WeBank. That’s where financial technology firms, such as Alibaba-backed online lender MYbank and Tencent-backed WeBank, can play a greater role.

Alibaba shows signs of strain as China’s economy shudders
Alibaba Group Holding is feeling the heat as China’s economy decelerates.

US charges Chinese telecoms giant Huawei with conspiracy, money laundering
US accuses company of stealing trade secrets from a rival and violating US sanctions against doing business with Iran Acting Attorney General also confirms plan to seek extradition of CFO Meng Wanzhou from Canada

podcast : Huawei: Will US charges sink the Chinese tech company?
The US Justice Department has filed criminal charges against Huawei, but will this sink the Chinese telecoms giant?

Huawei denies wrongdoing after US criminal charges
Chinese telecoms giant Huawei has denied any wrongdoing after US prosecutors filed a host of criminal charges against the firm.

Huawei charges are US attempt to smear Chinese companies, Beijing says
‘Political motivation’ is behind attack on companies’ legitimate operations, says Chinese foreign ministry Huawei issues statement denying charges filed in US on Monday against telecoms giant for allegedly stealing trade secrets and violating US sanctions

US indictment against Huawei shows FBI interviewed founder in 2007, reviewed text from Meng Wanzhou’s electronic device
FBI interviewed Huawei’s founder, identified as ‘Individual-1’ in New York in 2007 US reviewed text from Meng Wanzhou’s electronic device when she arrived at JFK airport in 2014

US indictments against Huawei a step towards splitting the world’s telecoms industry in two
The Shenzhen-based firm finds itself caught in the middle of a hi-tech arms race between the US and China

China is ‘the jewel in the crown’ of SAP, CEO says
Goldman Sachs warned Friday that firms such as Broadcom, Micron Technology, Qualcomm, Qorvo, Skyworks Solutions and Wynn Resort are likely to be hit by a slowing Chinese economy. The German software company SAP is still hopeful about the Chinese market despite other multinationals signaling slower demand from the world’s second-largest economy

China-led AIIB ready to ‘scale up’ to meet investment downturn
Tougher economic and geopolitical conditions are making investors cautious AIIB signals it will back infrastructure investment but warns it cannot offset market direction Joachim von Amsberg, vice-president of policy and strategy for AIIB, said the China-backed multilateral lender was prepared to “scale up” in the face of tougher conditions if the downward trend in project finance continued.

An Introduction to Doing Business in Hong Kong 2019 – New Publication from Dezan Shira & Associates
Compiled by the professionals at Dezan Shira & Associates, this comprehensive guide is designed to introduce the fundamentals of investing in Hong Kong. It is ideal not only for businesses looking to enter the Hong Kong market, but also for companies that already have a presence here and want to keep up-to-date with the most recent and relevant policy changes.

Hong Kong risks loss of leadership in ‘economic freedom’
Weakened judiciary opens way for Singapore in Heritage Foundation ranking

US-China trade war, slowing global growth weigh on Hong Kong business confidence in first quarter
Sentiment has fallen to its lowest level since second quarter 2016, according to new survey About 81 per cent of Hong Kong employers not hopeful about US, China trade talks

Although some analysts now predict home prices are poised to rise in Hong Kong, some jittery sellers just want out
Examples abound of flats whose asking prices have been slashed

Semiconductor giants are sounding the alarm on soft China demand. Here’s what they’re saying.
China’s slowdown is becoming a real headache for US semiconductors, prompting them to warn investors about soft sales in the country

Why China and America Fight Over Chicken Feet
International squabbles have stopped a once-mighty chicken foot trade. Today, the Chinese market is still shut to American chicken imports. But that may change soon. In the flurry of negotiations surrounding the current trade war, the poultry industry has been pushing hard for Beijing to lift the current ban. Industry experts are confident American’s extra-large chicken feet can edge out the competitors. But for the time being, the United States has few million pounds of extra chicken feet laying around. The next time you’re ordering takeout or enjoying a dim sum brunch, consider trying some phoenix talons

Malaysian prime minister says pressing ahead with the project would leave his country ‘impoverished’ and urges Chinese parties to understand His comments come a day after Chinese Vice-Foreign Minister Kong Xuanyou suggested talks on the project were ongoing

China, Vietnam seen as more corrupt while Indonesia, Philippines clean up their act: Transparency International report
Transparency International’s annual index on perceptions of corruption sees China’s ranking fall for the first time in five years The US drops out of the top 20 as its system of checks and balances faces threats from the Trump administration

BT becomes first foreign telecom to be given Chinese license
BT Group, formerly British Telecom, announced last week that it has become the first international telecom to receive nationwide operating licenses from China’s Ministry of Industry and Information Technology. BT already has operations in China but the new licenses will allow a new company, BT China Communications Limited, to sell directly to local customers and bill in Chinese currency. Two licenses are part of the new deal: a domestic IP-VPN license and a nationwide ISP license.

Briefing: BT becomes first foreign telecom to be given Chinese license

Alibaba Group’s cloud-computing arm has launched its second data center in Japan.

Will London’s Luxury Stores Bring Home the Bacon This Chinese New Year?
With a national plan to grow Chinese tourist spending to $1.32 billion (£1 billion) annually by 2020, the city of London clearly should look at Chinese New Year as a key period for drawing big Chinese spenders, particularly to its collection of famous luxury department stores. But are these retailers actually hitting the mark with their Chinese sales strategies?

Will London’s Luxury Stores Bring Home the Bacon This Chinese New Year?

Chinese investment in Southeast Asia is plummeting
China-funded infrastructure projects in Southeast Asia have plunged in the past year as foreign governments grow wary of Beijing’s overseas investments.

Belt and Road: how China’s global plans will affect copper
China’s Belt and Road Initiative is so vast that it will result in the global demand for copper rising by 22% by 2027, according to the International Copper Association. But what will this mean for miners and investors alike? Heidi Vella finds out.

Belt and Road: how China’s global plans will affect copper

The deforestation risks of China’s Belt and Road Initiative
Environmental risks vary both among and within different economic corridors of the Belt and Road Initiative (BRI), China’s initiative to strengthen regional cooperation through infrastructure and investment. Identifying the most environmentally sensitive areas during the planning of transport routes can help avoid environmental damage while availing of economic benefits that come from the improved infrastructure. This blog, based on a new working paper, provides a simple framework and illustrations of how one environmental risk from the overland (“belt”) part of the BRI might be assessed.

The deforestation risks of China’s Belt and Road Initiative

China’s startup working hours prompt online debate
Youzan, a Hangzhou-based mobile e-commerce platform, announced at its annual meeting on Jan. 17 that the company would adopt the “996” working schedule, in which workdays start at around 9 a.m., finish at 9 p.m., and extend into the weekend. When asked how employees are supposed to balance family and work under such a tight schedule, a company executive said they could refer to Huawei, which reportedly told its employees that divorce might be an optional solution. Youzan founder Zhu Ning responded in an open letter on the media outrage, saying that the incident could be a good thing because it gives the public a chance to learn about the company before joining.

Briefing: China’s startup working hours prompt online debate

US-developed virtual AI host stars in CCTV’s Spring Festival Web Gala show
Chinese state broadcaster China Central Television (CCTV) featured a virtual host in its Spring Festival Web Gala show, published online on Monday, turning to an American artificial intelligence company to provide its technical capabilities.

US-developed virtual AI host stars in CCTV’s Spring Festival Web Gala show

Poor, young and lacking a father’s influence: how teenagers struggle with career choices in Hong Kong
Richard Wong says youths from low-income, single-parent households are doubly disadvantaged by having no access to the career leg-up the missing parent, usually the father, can give. In such cases, business and the government should take the lead

Let’s Outlaw the Phrase: This is China
Methods must be different in each locality but our values must not succumb. Further, we must not haphazardly hire people who think our morality does not count as we are not Chinese. We can and should reach higher. We can find people who can catch the ball.

Let’s Outlaw the Phrase: This is China

Dangers of WeChat for China Employers and Employees
WeChat for China Employers and employeesWith widespread use of WeChat in China (it is China’s leading multi-purpose messaging, social media and mobile payment app by far), both employers and employees need to be careful with what they do and say on there. Put simply, what you say or write on WeChat may be used against you in an employment dispute. There have been written Chinese employment decisions where an employer used evidence from WeChat (such as screenshots of an employee’s WeChat posts) to prove employee misconduct and to thereby justifying discipline/termination decisions (see here). And our China employment lawyers have been involved in many matters where WeChat communications were used to influence a settlement.

Dangers of WeChat for China Employers and Employees

PSC Converges for Media Convergence
In his speech, Xi Jinping emphasized that Party newspapers, periodicals, broadcast stations, websites “and other mainstream media must catch up with the times, bravely utilizing new technologies, new mechanisms and new modes, accelerating the pace of convergence and achieving more expansive and optimized propaganda results.”

PSC Converges for Media Convergence

China shows off its ‘carrier killer’ missiles to send ‘a clear message to the US’
China has revealed footage of its next-generation Dongfeng-26 ballistic missile showing improved stability and accuracy, a move analysts say aims to send a message to the United States about its military strength.

Alain Gillard
Information Officer
Service Asie Pacifique
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