China Press Review – January 30, 2020

Press review

What to expect from China’s economy in 2020: a solid first half followed by a loss of steam
Better GDP data in the second half of 2019 and the ‘phase one’ trade deal bode well for China’s economic prospects in 2020    However, tight financial conditions as a result of Beijing’s deleveraging campaign and the import commitments under the trade deal will weaken growth in the second half of the year

Huawei says German report it colluded with Chinese intelligence repeats ‘old, unfounded allegations’
Chinese telecoms giant Huawei denied a report that alleged the German government was in possession of evidence it had cooperated with Chinese intelligence   The German foreign ministry said it did not comment on internal documents as a matter of policy

What Alibaba and Tencent’s domination of China’s banking system means for the West
Carmignac’s Xavier Hovasse says the declining popularity of cash will favour disruptors over traditional banks.

3 Stocks to Consider Ahead of Ant Financial’s Billion Dollar IPO
Many investors believe Ant Financial will go public. Here’s 3 stocks that could benefit as a result of a successful IPO. According to the Financial Times, Ant Financial has revived plans for an IPO. Although no definitive timetable has been set, the company is reportedly considering a dual listing in mainland China and Hong Kong.    Ant Financial is the parent company of popular mobile app Alipay. Ant Financial is also a leading fintech player in money market funds and consumer credit.

EU spares Huawei, Chinese suppliers from blanket 5G ban, defying Trump
The EU released a set of commonly agreed guidelines on how to mitigate risks stemming from the roll-out of next generation telecoms networks    Despite intense US lobbying, the so-called toolbox of measures does not recommend a pre-emptive blanket ban of Chinese equipment

Telecoms carrier BT sees US$650 million hit from Britain’s new limits on Huawei
Britain decided on Tuesday to ban Huawei telecoms gear from the core of new mobile networks  The country’s telecoms carriers have three years to make the needed changes

Banning Huawei’s 5G won’t halt China’s tech revolution
China’s hi-tech firms are challenging the west’s belief in the free market’s ability to innovate

Trump’s Phase One Deal With China Misunderstands Global Trade
And it may create more losers than first meets the eye  Soon after U.S. President Donald Trump and Chinese leader Xi Jinping announced a phase one U.S.-Chinese trade deal in late December 2019, relief was palpable. Pundits looked forward to the return of some semblance of stability and quickly jumped on who had won and who had lost. And the winners seemed plentiful enough; the global business community generally welcomed a “truce” that moderates tariff-based uncertainties, keeps stock markets at historic highs, and promises reforms in China’s foreign investment regime. The agreement also appeared to meet the near-term political needs of Trump, who faces an upcoming election, and those of Xi, who wants to moderate economic risks while trying to strengthen the role of the Communist Party.

Is China’s Belt And Road Already In Retreat?
We also must look at how much money China really has to continue funding extremely expensive infrastructure projects in other countries. With many BRI nations no longer thirsty for Chinese loans—the main source of Belt and Road funding to date—the time is near when China is going to have to start putting up genuine FDI if their continent-spanning geo-economic empire is going to keep moving forward. But where this money is going to come from is the question. The U.S.-China trade war took a massive toll on China’s domestic economy and the impact of coronavirus is as yet untold—although it’s predicted that it’s going to be significant. China has also entered the typical doldrums of an upper-middle-income economy—the new normal of 6% GDP growth will turn into a new normal of 5% will turn into a new normal of … (you get the idea). However, while we can look at the failed and stagnant projects, the debt traps, the financial implosions, the fiascos, the environmental destruction and the wasted resources that have defined the early years of the Belt and Road, we must keep in mind that all of this can ultimately be seen as lessons. When China first leapt onto the global stage as a development partner, it did so on its own terms and, in many ways, it made its own rules. That did not work out so well. But the recent retraction of overseas investments and projects may be demonstrative of a change in strategy and a move towards caution at a time when the world is becoming far more economically volatile than when Xi Jinping stepped onto that stage in Kazakhstan and began talking about belts and roads for the first time.

Belt and Road Initiative to boost Chinese lending in LatAm
China’s Belt and Road Initiative (BRI) is jumpstarting new infrastructure and energy development projects in Latin America, while opening the door for more Chinese lending in the region.

Does China Want Inclusive Beauty?
China’s traditional beauty standard is encapsulated by slang such as “a white complexion can hide hundreds of faults” (一白遮百丑). The country’s racial hierarchy, which was articulated by Chinese Scholar-Translator Yan Fu in the late 19th Century as non-whites being inferior, is still prevalent. While being combined with stereotypical class perceptions — Chinese people with dark skin tones are considered farmers who need to spend less time under the sun — it ultimately gave birth to the multi-dollar skin whitening market.  As the second biggest beauty market in the world, according to J.P. Morgan, China has been a big driver of revenue for international cosmetic brands and the skin lightening market shows no sign of shrinkage. In 2016, the skin lightening market in China was $1.66 billion but is projected to increase to $3 billion by 2025, according to Grand View Research’s report published last August.

Hong Kong is not the only star of China’s Greater Bay Area. It must adapt or be left behind
The unique role Hong Kong has played for at least the past century is disappearing as mainland cities such as Shenzhen and Guangzhou emerge as leaders    Months of anti-government unrest in Hong Kong may lead Beijing to consciously weaken the city’s special position in China’s overall development plan, of which the Greater Bay Area is a key plank

Tencent-backed Sea acquires Canadian video game developer to create the next global hit
Garena, the digital entertainment arm of Sea, will help add new features to Phoenix Labs’ popular game Dauntless

China coronavirus outbreak poses risk to Federal Reserve’s economic outlook
Potential fallout from China coronavirus outbreak takes centre stage in Fed Chair’s press conference after policy meeting    When China’s economy slows down, ‘we do feel that – not as much though as countries that are near China,’ Powell says

China coronavirus: US agriculture secretary unsure if trade deal farm purchase agreement will be affected
Coronavirus has cast further doubt on China’s ability to buy US$36.5 billion of agricultural goods from the United States in 2020 as part of the phase one trade deal.   US Agriculture Secretary Sonny Perdue says the outbreak will have ‘ramifications economy-wide’, though stopped short of saying it would disrupt purchase goal

Three reasons the coronavirus outbreak may hit financial markets harder than Sars did in 2003
China today accounts for a much greater share of the global economy and is more reliant on domestic consumption, which has been affected by the trade war and Beijing’s deleveraging campaign     Meanwhile, valuations in both stock and bond markets are already stretched

Belgian tour operators to cancel all China trips as coronavirus death toll rises
Belgian travel agencies will begin cancelling all trip packages to China as the death and sickness toll from a deadly outbreak coronavirus gripping the country continues to rise.

Hong Kong stocks sink to lowest in seven weeks on sell-off sparked by Wuhan virus fears
The benchmark Hang Seng Index has dropped 9 per cent since a January-high reached just two weeks ago     The biggest losers were in the commerce and industrial sectors as investors fear the Wuhan virus’ impact on suppliers in the country will be significant

China’s getting a lot more isolated from the world this week
China’s coronavirus outbreak is poised to overtake SARS in numbers of infections—and the steady spread of the outbreak is seeing countries and airlines pulling back in a bid to stop the spread of the disease outside of the country.

Hong Kong businesses cancel promotional events, launches and spring lunches as coronavirus fear grips city
Brokerage body cancels year’s biggest industry event   Manulife delays launch event of retirement mutual fund, property developer HKR International cancels media launch of Discovery Bay projects

China coronavirus: WHO in uncharted territory in dealing with emergency in world’s second largest economy
Experts say the World Health Organisation (WHO) faces an unprecedented challenge in deciding whether to declare China coronavirus a global emergency  Such decisions are inherently political, and ‘the bigger the player, the more intense and powerful the pressure’

Wuhan coronavirus: tech firms including Alibaba, Tencent donate US$432 million to boost frontline efforts in Hubei province
Alibaba tops the list and has offered 1 billion yuan for purchase of medical materials  Donations, free services are positive publicity for these big companies, analyst says

Worried you were on a train with someone infected with the Wuhan coronavirus? This AI-backed platform lets you find out
More than 21 million people have used the service in the two days since its launch, according to local media report

A Billion Homes: The Bittersweet Joy of Writing Home at Lunar New Year
An artist asked a group of Chinese living abroad to write to their relatives back home. They poured out tales of love, homesickness, and being torn between two families.

How to prevent US-China rivalry from turning Southeast Asia into a conflict zone
Both powers need to publicly agree on anti-hegemony, settle on ‘rules of the road’, particularly in the South China Sea, and start discussing arms control   Beijing and Washington must not sleepwalk into war, or force Southeast Asia to choose sides

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