China Press Review – July 1, 2020

Press review

US-China relationship can be saved despite coronavirus and trade war
Renewed cooperation or even a fresh partnership between China and the United States remains a logical and compelling solution to the problems faced by both     The bilateral relationship may sour further as China becomes a major issue in this year’s US election, but mutual benefit should bring both sides back together

US economic outlook until November: cloudy with a chance of escalating trade wars
Positive sentiment in the US stock market fails to account for continuing unrest in the run-up to the presidential election, a second wave of Covid-19 infections and tensions with the European Union and China

Coronavirus: Asian governments will have to decide which sectors, firms should be saved from pandemic
After the Covid-19 pandemic, some economic sectors may no longer be viable, says Changyong Rhee, director of the IMF’s Asia and Pacific Department    Asia’s growth is expected to contract by 1.6 per cent compared to the IMF’s zero growth projection in April

China’s Huawei and ZTE officially designated ‘national security threats’ by the FCC
The U.S. Federal Communications Commission (FCC) has officially designated Huawei and ZTE national security threats.   U.S. carriers cannot use an $8.3 billion government subsidy program, known as the Universal Service Fund, to purchase, maintain or support any equipment or services from both vendors.   Critics of Huawei and ZTE have claimed that their networking equipment could be used by China for espionage.

UK government hints at U-turn on Huawei role in 5G technology
Culture secretary tells defence committee US sanctions likely to affect Chinese firm’s viability   Oliver Dowden told members of a defence select committee that a review of Huawei’s role in the 5G network was nearing completionThe government may be close to announcing a U-turn on its controversial decision to allow Huawei to supply 5G technology, the culture secretary has hinted by saying US sanctions appear likely to affect the Chinese company.

India said to dissuade telecoms network operators from buying Huawei, ZTE gear
Huawei is betting on customers for its 5G equipment in India, where it was allowed to take part in network trials   A deadly border clash between Indian and Chinese troops last month has renewed calls in the large South Asian economy to boycott Chinese tech

China’s consumption upgrade hits coronavirus hurdle as consumers want more bang for their buck amid slowdown
Spending on fast-moving consumer goods in the mainland fell 6.7 per cent in the first quarter, the biggest decline on record, study shows   Kantar’s list of the world’s 100 most valuable brands in 2020 includes Alibaba and Tencent

Shanghai bets on consumer spending to propel the battered local economy in post-coronavirus era
The government aims to foster ‘innovative commerce’ – essentially, making better use of infrastructure, retail and cultural resources to get people spending again    The focus will soon turn to the city’s nighttime economy, with initiatives to boost shopping, dining and entertainment in the evenings

An Introduction to China’s Cross-Border E-Commerce Pilot Zones and Pilot Cities
Cross-border e-commerce (CBEC) – activities of purchasing or selling products via online shopping across national borders – is gaining momentum in China. To fuel this engine of China’s import and export growth, Premier Li Keqiang reiterated the government’s support for accelerating the growth of CBEC and enhancing the country’s international shipping capacity in the 2020 Government Work Report.    In fact, over the last several months, the government has been rolling out policies, including adding new CBEC pilot zones and pilot cities for CBEC retail importation, extending the CBEC retail import list, and lowering tax and tariffs, in a bid to boost CBEC:

An imminent shift from intercontinental direct shipping to intracontinental distribution!
For years, many shoppers have been enjoying buying very cheap goods online, mainly from Chinese online sellers. With a click on the website of the e-commerce platform Alibaba, the price-sensitive consumer can order a cell phone case for 2 euros, a cheap “jewel” for 1.5 euros, or even an inflatable swimming pool for 10 euros. These prices include packing and shipping, although delivery might sometimes take up to 60 days. The Chinese e-commerce platforms mainly rely on very cheap shipping rates through China Post, which uses the worldwide postal network for delivery to the consumer’s home. This may end soon because of four significant events that will be heavily impacting the delivery flow over the next 6 months.

Why E-Commerce Giants Must Look Out For SMEs
With its new economic support plan, will provide small and medium-sized businesses with an interest-free credit line. But how will this benefit JD? Photo: Haitong Zheng/Jing Daily.
According to a JD press release, JD launched its Spark economic support plan for SMEs, stall owners, and shopkeepers on June 2. The plan consists of three priorities: ensuring supply, assisting operations, and fostering employment.   Under this plan, will select 50 billion quality goods and provide each small shop with a 100,000-yuan, interest-free credit for purchases. According to initial estimates, this support will be a lifesaving effort for millions of convenience stores and stalls, and it will ensure that 5 million people keep their jobs.

Beyondmeat Makes Grocery Debut In China With Freshippo
Beyond Meat has teamed up with Freshippo to launch its products in the Alibaba Group-owned New Retail supermarket as the plant-based market heats up in China. Los Angeles-based Beyond Meat is launching its flagship Beyond Burger – a plant-based meat burger designed to replicate the flavor and texture of a hamburger patty – in 50 Freshippo stores in Shanghai this weekend. The brand will later roll out the product more broadly, starting with select locations in Beijing and Hangzhou in September, it said in a statement on Wednesday.

The market size of China’s Greater Bay Area is the key to Hong Kong’s economic woes, says chief of oldest business guild
Tourists arrival plummeted 99.9 per cent in April, showing the need for companies to go north to serve them    WeLab is among the new generation of Hong Kong firm to invest in Greater Bay Area

Tesla’s China plant might have come to the carmaker’s rescue last quarter
The electric car giant may have delivered more than 82,000 vehicles in the second quarter, helped by its new Gigafactory in Shanghai     Tesla chief executive Elon Musk suggested to the company’s employees that the carmaker could manage to avoid a quarterly loss

EV startup Byton to halt operations amid cash woes
Cash-strapped electric car maker Byton, once seen as a Tesla challenger, will suspend its operations in China starting Wednesday as it files for bankruptcy protection for its US and German business units.

India’s TikTok ban threatens China’s rise as a global tech power
The ban may present a model for other countries that seek to curtail the pervasiveness of Chinese apps, while safeguarding their citizens’ data   It remains unclear how India will enforce the ban, given TikTok – for one – has already been downloaded by roughly one in six people in the country

China’s IT Spending Expected to Hit $297 Billion: IDC
China’s spending on products and services powered by information technology (IT) will continue to grow in 2020, as the government pledges more investment in “new infrastructure” to embrace digitalization.
The figure for this year’s IT spending is expected to hit 2.1 trillion yuan ($297 billion), representing a moderate year-on-year increase of 2.7%, according to a report by market research firm IDC.

To deal with China, understand it better
The crisis has shown the lack of domain knowledge within India. Invest in it While there is a need for a diplomatic reset, enhanced military capabilities and economic policies to reduce dependence on China, one other area which requires greater investment is the expertise on China in India There is now no doubt that China will remain India’s greatest strategic threat in the decades to come. Beijing is not just interested in taking control of strategic areas or in stopping India’s infrastructure build-up at the border. As is visible in the statements emerging from retired officials and its State-controlled media, China wants to send a message to India — to accept Chinese dominance in the Asian hierarchy of power, stop deepening the partnership with the United States, and reconcile to a curtailed global role .

Beijing wants to use blockchain for city-wide governance
Social credit, real estate, and finance are among the many areas in which Beijing’s government has promised a blockchain revamp.

Beijing shows how coronavirus’ impact on the economy can be contained
Beijing authorities responded quickly to the outbreak of a new wave of infections with aggressive mass testing and a partial lockdown, shoring up public confidence  Its playbook should be studied, as the virus is expected to re-emerge from time to time until a vaccine is found

Coronavirus lockdown offers important lessons for global development
It is clear governments are the leading actors when it comes to containing disease, providing protection to the unemployed and alleviating poverty    We have to learn and adapt international development practices and research accordingly as this will not be the last crisis of its kind

Coronavirus: Chinese scientists engineer protein in universal vaccine quest
Researchers from the Chinese CDC say the approach has had positive results in animal tests, ramping up the production of antibodies      Vaccine framework could be useful against a range of pathogens, including Mers, team says

Chinese survey and database on important new viruses ‘delayed by red tape’
Project was approved last year but interrupted by coronavirus pandemic, and now it’s in limbo waiting for final authorisation, researcher says     Scientists plan to investigate viral pathogens carried by wild animals such as bats, rats, birds and insect vectors like ticks and mosquitoes across China

Trump ‘more and more angry at China’ as US coronavirus cases rise by 47,000 in biggest daily spike
US president escalates row with Beijing over coronavirus pandemic with new Twitter post    US government’s top infectious disease specialist warned infections could rise to 100,000 a day

TPG proposal for Cirque du Soleil is doomed, creditors say
Montreal-based company has filed for bankruptcy protection after being forced to cancel shows and lay-off performers by coronavirus pandemic     Plan by shareholders, including TPG and Fosun, would have left creditors with 45 per cent stake in exchange for wiping out most of Cirque’s debt

China’s biggest gold fraud, 4% of its reserves may be fake: Report
In short, more than 4 per cent of China’s official gold reserves may be fake. And this assume that no other Chinese gold producers and jewelry makers are engaging in similar fraud, the report said.

The Mystery of $2 Billion of Loans Backed by Fake Gold
All that glitters isn’t gold — even when the ingots have come straight from one of China’s leading precious metals processors.

Hong Kong government unveils national security law details
Beijing has given mainland China authorities broad powers to hear ‘complicated’ cases, with life imprisonment for the most serious offences   Mainland agents will be allowed to operate freely in Hong Kong and outside any supervision of local law enforcement

National security law: Britain set to confirm BN(O) passport offer to 3 million Hongkongers
British Foreign Secretary Dominic Raab to make statement about Hong Kong’s new national security law, as EU and G7 also consider action   Raab could specify extended rights for people eligible for BN(O) passports, offered to Hong Kong citizens born before 1997

Hongkongers have more freedom and are richer under Chinese rule than they were when city was British colony, says top Beijing official
Director of the central government’s liaison office in Hong Kong Luo Huining says Britain plundered city to ‘astronomical’ degree    Official cites HK$22.1 billion in military expenses city paid between 1950 and 1997, and says before China came there was no democracy

Britain to give 3 million Hongkongers residency rights and path to citizenship after national security law passed
Holders of the BN (O) passport will be allowed to resettle to work or study in UK and then given a route to citizenship      Prime Minister Boris Johnson said that government would implement its promise after implementation of law that critics say undermines city’s autonomy

National security law has destroyed Hong Kong’s autonomy, US’ Mike Pompeo says
Washington will not stand idly by, its top diplomat says after the law takes effect on Tuesday against a chorus of international condemnation   China promised 50 years of freedom to Hong Kong but gave it 23, Pompeo adds on 23rd anniversary of the city’s handover to Chinese rule

National security law will uphold ‘one country, two systems’ in Hong Kong, top Beijing official says
The new law ‘effectively stops the loopholes’ that existed in Hong Kong and undermined national security, senior Beijing official says   Hong Kong and Macau Affairs Office says passage of the law marks a new milestone in central government policy for the city

Two Systems, One “Original Intention”
 “What people wish for, and what everyone hopes.” It is with this cryptic line that today’s official commentary in the People’s Daily on Hong Kong’s new national security law begins.What does this mean? It means that whatever the people of Hong Kong may feel today about this dispiriting turn of events, a vague and expansive law that will likely have a chilling effect on the basic rights hitherto enjoyed in the territory, the Chinese Communist Party claims this as a victory for all Chinese, including “our brethren in Hong Kong.”

How Should Democracies Respond to China’s New National Security Law for Hong Kong?
The answer to the question—what leverage do democratic countries have over China in Hong Kong—is, on the face of it, pretty clear. Hong Kong is already Chinese sovereign territory, albeit under a separate form of government until 2047. Chinese troops are stationed there. The city’s political and business elite are in Beijing’s camp (not least because they have learned there’s a price to pay if they aren’t). Hong Kong’s economy depends on China’s like no other place in the world. Even the territory’s water is largely supplied from the mainland.   Democratic nations, on their own or collectively, have minimal leverage to challenge China directly on any of these fronts. The U.S., China’s only peer competitor, has already declared that Beijing is not abiding by its commitment of “one country, two systems.” But it only carried through on a threat to punish Beijing for that this week, by beginning to suspend Hong Kong’s preferential trading status. Washington knows this is a trigger with limited utility, and thus has been cautious to use it. Beijing itself has already factored such retaliation into its calculations in any case. Otherwise, all Washington has done is threaten to block visas for Chinese officials who have undermined its autonomy, without naming them.

Australia boosts defence spending by 40 per cent as China tensions rise
PM Scott Morrison said US$186 billion will be spent over the next decade to ‘maintain regional security and deter or respond to aggression in the Indo-Pacific’    Canberra’s relations with Beijing are increasingly strained over trade, the South China Sea, Huawei, espionage allegations, and Hong Kong

Why has the China-Australia relationship deteriorated into what some are calling ‘trade war 2.0’?
China imposed new import tariffs on Australian barley and banned beef imports from four firms in May    China is Australia’s biggest trading partner, but relations have been on a steady decline for at least the last five years

China targets journalists from US outlets amid row over Hong Kong national security law
Foreign ministry says Associated Press, CBS, NPR and UPI have been asked to provide information on operations in country within seven days     Move follows US decision to register Chinese state media as foreign missions and the ongoing row over law deemed to undermine Hong Kong’s autonomy

Alain Gillard
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