Covid-19 Is a Stress Test for the Chinese Economy. Why It Keeps Passing.
Why does China’s economy keep outliving doomsayers’ predictions about an imminent collapse? That’s the question driving China: The Bubble That Never Pops, the sharp new book by Tom Orlik, the chief economist of Bloomberg Economics. I called him up for a snap briefing on China’s debt issues. Here’s an edited transcript of our conversation. —Matt Peterson
Deutsche Bank sees China’s ‘V-shaped recovery’ moderating in the second half of 2020
China’s economic recovery could cool in the second half of 2020, according to Deutsche Bank’s chief economist and head of research for Asia Pacific, Michael Spencer. While the sequential growth rate of domestic demand in China has largely recovered, Spencer said that pace is likely to slow, going forward. On the export side, Spencer said the double-digit declines in GDP seen in the rest of the world are likely to hit China “very hard” in the next quarter.
China regains 1.1% GDP growth in Q2 on production rebound: survey
Full-year estimate lowered to 1.6% as export headwinds and COVID-19 weigh — China’s economy likely expanded 1.1% in the April-June period on a recovery in production and consumption, rebounding from a 6.8% contraction for the previous quarter during the peak of coronavirus cases in the country, according to the consensus of economists surveyed by Nikkei and Nikkei Quick News.
Why national security law will not be the death of Hong Kong, just as the handover wasn’t
Fears were widespread in 1997 that handover would mean the end of Hong Kong’s freedoms but this didn’t happen because the capitalist city was valuable to China Given this is still the case today, Beijing must not ignore international alarm over the new law and apply it narrowly
Severe backlog in Europe-bound trains at Chinese border, as coronavirus increases rail freight volume
Terminals struggle to handle rise in cargo as more cities put on services to Europe and pandemic prompts many shippers to switch from air and sea transport China-Europe rail traffic exceeded planned volume in 2018, stressing limited system
Time for China to decouple the yuan from US dollar, former diplomat urges
US will pose ‘increasingly severe threat’ to future Chinese development through dollar’s global monopoly Preparations for gradual decoupling and internationalisation of the yuan should begin ‘now’
China’s central bank calls on struggling companies to restructure debt outside courts
Chinese regulators call on corporate bond issuers to seek out-of-court debt restructuring As US$51.1 billion corporate bond comes due in second half, default rates will likely surge, say analysts
China’s copyright law amendment criticised as an ‘abusive use of power’ that weakens IP protection
Proposal to update Article 4 of China’s copyright law includes a new clause of ‘abusive use of copyright’ that would hand regulators significant power It could spark disputes with trading partners, including the US and European Union, that have long complained China’s poor record in protecting intellectual property
‘Hydrogen Valley’ powers China’s fuel cell industry
The fuel cell industry is gathering steam in China as the government promotes fuel cell vehicles and related infrastructure. Amid moves to lure FC-related industries, the Nanhai district of Foshan in the southern province of Guangdong is drawing attention as the first region where drivers can get their fuel cell vehicles topped up. Xianhu Lake in Nanhai, an hour’s drive west of the provincial capital of Guangzhou, is a popular resort. At present, a 48-sq.-kilometer area — called Hydrogen Valley by locals — is rapidly developing into a hub for FC-related industries. An exhibition pavilion of hydrogen industries opened at the end of 2019. A development center and facilities for hydrogen-related technologies are due to be completed there in October, and some 500 researchers and students from Wuhan University of Technology and other institutions will gather for studies. The Nanhai government expects its investment in the hydrogen industry to date will create economic effects worth 100 billion yuan in the future. “Hydrogen has growth and future possibilities as a fuel applicable to non-automobile use as well,” You said, referring to the district plan to expand the application of hydrogen fuel from vehicles to other sectors.
Another scandal brews in China’s P2P lending sector as authorities investigate Hangzhou’s largest microloans provider
Hangzhou’s public security bureau said they will be taking action to prevent losses at Weidai and recover stolen funds China has raised the bar for P2P lenders, including increasing the minimum registered capital to 1 billion yuan for an online microlending licence
China’s shadow banking system under spotlight as Sichuan Trust misses payments amid economic slowdown
Sichuan Trust last week apologised to investors for missing payments on its financial products due in part to the coronavirus outbreak and global economic downturn The firms troubles indicate growing risks in the trust industry, which is often linked to China’s shadow banking system
China province orders new checks on big cash transactions after bank runs
New rules requiring documentation of large deposits and withdrawals is being rolled out in Hebei and will be extended to Zhejiang and Shenzhen Depositors will have to say where they got the money from while withdrawer will have to say what they intend to do with the cash
Hong Kong stocks stampede into a bull market, while Shanghai sees biggest one-day gain in five years on expected China recovery
Chip maker SMIC soars more than 20 per cent ahead of listing in Shanghai Shanghai sees biggest single day percentage gain in five years
Boris Johnson now has ‘sound reasons’ to keep Huawei out of UK 5G
Former MI6 chief said US sanctions on Huawei meant Chinese telecoms firm now posed security risks to UK
Huawei could feel chill wind in Europe if UK decides to block China giant from UK networks
British media reported that the National Cyber Security Centre of GCHQ has decided that US sanctions against Huawei have had a ‘severe’ impact
Chip maker SMIC more than doubles Shanghai share sale to US$6.5 billion after spike in Hong Kong-listed stock
China’s top semiconductor foundry prices share at 27.46 yuan each Deal’s underwriter has the option to expand the offer size by 15 per cent
US lighting company Alpan joins an exodus of manufacturers leaving China to get around higher tariffs from trade war
Alpan Lighting Products is shifting its production from Xiamen to central Java in Indonesia PT CDS Asia, a unit of Alpan, will invest US$14 million to build a factory in central Java, where it aims to employ as many as 3,500 people
BMW, Alibaba alliance to foster startups in China
German automaker and e-commerce giant to build an ‘innovation base’ for cutting-edge technology in Shanghai
Will Your Brand Survive The Chinese Decade?
By 2030, China could account for as much as 50 percent of the global luxury market. In other words: We are now entering the Chinese Decade. For luxury brands, that means they’ll need to accelerate their relief efforts and coping strategies. One crucial strategy will be a renewed China focus. China has proven to be the most resilient and fastest-growing luxury market. Many predicted the luxury sector to go into long-term slow-down when the government began taking action against corruption during the mid-2010s, but the opposite happened. While some brands saw short-term declines, the sector kept growing, and China soon became the top country for luxury consumption. Now, Chinese consumers account for approximately 40 percent of all global luxury purchases.
Inside China Tech: with India’s app bans and US reshoring, are Chinese tech lifelines being cut?
India bans 59 Chinese mobile apps, including TikTok and WeChat, amid border disputes US companies looking to reshore manufacturing out of China amid worsening bilateral relations and the pandemic
What Does China’s Revised Cosmetics Regulation Mean For Beauty Brands?
China’s State Council issued the long-awaited revised Cosmetics Supervision and Administration Regulation. What are takeaways for beauty players? On June 29, China’s State Council officially issued the Cosmetics Supervision and Administration Regulation, which was approved back on January 3 of this year. First filed in 1989, changes to the former cosmetics regulation have been in the pipeline for years and will now be enforced thanks to a recent beauty market boom in China. The revised regulation, which will take effect in January 2021, introduces overarching measures on cosmetic company manufacturing and
WHO revises coronavirus timeline to clarify its China office raised alert, not authorities
UN agency staff saw media announcement about ‘viral pneumonia’ on Wuhan Health Commission website on December 31 Information was provided by Chinese authorities on January 3, after two requests from the organisation
India’s China choice
India is at a choice point. It’s a large power that can remain one-fifth of China’s size by closing up its economy. Delhi can back President Trump’s plan for a new template of retreat from globalisation and decoupling from China. That’s a template likely to lead to a return to the 1930s. Or India can choose to engage multilaterally to build its international competitiveness and multipolar space protected by robust rules and the leverage to enforce them with others. The open road would have Prime Minister Modi seize a Nixonian moment. No leader has been willing to brave the deep anti-China sentiment in India and take steps needed to build a constructive relationship. So one of the world’s most consequential relationships is still governed through the prism of the baggage of territorial history — predominantly defined by the long-running border dispute between them. Can Indian leaders and strategists really grasp the vision of an India that can out-compete China internationally with cheaper labour and its innovation and IT potential and a world in which both India and China can be better off and constructively engaged politically? Maybe Mr Modi can yet seize the moment.
Three reasons China’s increasing assertiveness is a threat to Asia’s long-standing peace and stability
Tensions in Asia are high, not only because of concerns about the impact of Covid-19. The China-India border dispute, Beijing’s militarisation in the South China Sea and the enactment of Hong Kong’s national security law all raise fears of conflict
US sanctions and Hong Kong Autonomy Act are empty gestures that show a failure to understand
The sanctions have no real bite and the bill does little other than show commitment to a ‘hard’ policy on China ahead of House elections in November No amount of sanctions, threats or editorials will stand in the way of Beijing protecting its territorial integrity and sovereignty
China’s political adventurism will economically hit Hong Kong
Does Hong Kong remain a dream destination for global capital, manufacturing, and services? Probably the large-scale protests, layoffs, and Sinification of Hong Kong hold the answer
International call to halt extradition treaties with Hong Kong after China imposes tough national security law
Inter-Parliamentary Alliance on China wants assurances from Western countries that no extraditions to HK will take place and treaties will be reviewed Officials from both China and Hong Kong express opposition to Canadian move to suspend its extradition agreement
Hong Kong national security law and Covid-19 strain China-Japan ties
Tokyo was due to host the Chinese president in April but his trip was postponed because of coronavirus Differences over Hong Kong’s national security law and other issues mean it may not be rescheduled
Chinese envoy accuses UK of ‘gross interference’ over citizenship offer to Hongkongers
Ambassador Liu Xiaoming says Beijing will decide its response to London’s move once it has seen details of the plan He also said there would be consequences if Britain treated China with suspicion in making its decision on Huawei
Our two countries must overlook differences to defeat coronavirus, say American business leaders in China
American Chamber of Commerce in China says two superpowers should give up ‘unbridled competition’ and be better world leaders on pandemic Chinese medical professor says a lack of information exchange between American and Chinese scientists would have concerning consequences
Is China a bigger threat to Europe than Russia?
“We treat our friends with fine wine, but for our enemies we got shotguns.” This is how China´s ambassador addressed Sweden when the country was demanding a better and more humane treatment of one of its citizens. This statement was made at a Swedish public radio station a while ago.
India can’t replace China at manufacturing, not without paying more: Economics commentator Martin Wolf
In conversation with ThePrint’s Editor-in-Chief Shekhar Gupta, Chief Economics Commentator at The Financial Times, Martin Wolf discussed India’s fiscal deficit, banking sector and its potential in the global market
Is UK trying to launch another opium war against China?
The Financial Times (FT) published a report titled “Britain’s armed forces pivot east to face growing China threat” on Saturday. British Conservative Party politician Tobias Ellwood said the UK needs to work out how to deal with China. British politicians also recommended a more visible UK presence in China’s “sphere of influence” and to work more closely with allies on “China’s doorstep.”
China-India border dispute: is Pakistan about to enter the fray?
The military stand-off in the Himalayas has raised the prospect of a clash between three nuclear-armed powers, experts say The dispute goes beyond Kashmir’s borders. At stake are water resources on which 270 million people depend
Prelude to a China–India strategic showdown?
Perpetual border tensions between Asia’s biggest neighbours turned ominous in the harsh Himalayan terrain of the Galwan Valley in the twilight of 15 June 2020. The agreed de-escalation of a nearly 40-day confrontation was to take place in that valley in the western sector of disputed Sino–Indian boundary.
India set to pose growing challenge to China at sea
New Delhi is developing its strategic partnership with the US, Australia and Japan as part of efforts to counter China’s growing influence in the Indian Ocean
Some observers say its relationship with Washington has already developed in a quasi-alliance
China accuses Canada of ‘grossly interfering’ over Hong Kong national security law
The Chinese embassy in Ottawa issued a statement in midst of outcry over the national security law Canadian Prime Minister Justin Trudeau said on Friday that his country was ‘extremely concerned’ about the situation in Hong Kong
China is facing the same kind of protectionism that has shielded it from competition
India’s TikTok ban has left a huge gap in the market — and the government is calling on Indian companies to fill it Over the past few years, TikTok creator ByteDance has reportedly invested over $1 billion in the Indian market. Last week, India blocked 59 apps developed by Chinese firms — and TikTok was one of them.
Did China miscalculate the rise of India?
Beijing has been preoccupied with tensions with Washington, but a deadly brawl on the Himalayan border last month raised the possibility of wars on two fronts Decades of talks have failed to bridge trust deficits and misperceptions, observers say
Australia sees ‘partial economic decoupling’ from China as Canberra weighs risks of over reliance after coronavirus disruptions
Parliamentary inquiry examined the vulnerability of supply chains, defence and foreign affairs after supply chains collapsed at the height of the coronavirus outbreak Experts argued there was a critical need for Australia to plan its own network of supply chains to shore up sovereign resilience, with a need to drift away from China
China on higher alert as floods hit – and climate change promises more extreme weather
Millions have been affected by heavy downpours in the last few weeks, particularly in the south of the country Environmentalists say these events could become the new normal
US Peace Corps’ exit from China cuts valued channel of Sino-American dialogue
Agency that broke down nationalistic barriers and stereotypes through English-language teaching ends its China programme after 26 years Participants from both countries lament the loss of a cultural and educational exchange, with Beijing and Washington locked in escalating rivalry
China’s Confucius Institutes rebrand after overseas propaganda rows
Hanban changes name 16 years after first overseas language and culture outpost established New organisation aims to keep up cooperation with international partners, particularly in the United States, senior official says
Beijing ‘is ready to counter US’ as both navies hold drills in South China Sea
US military says exercises are a response to Beijing’s rising assertiveness and it will not be intimidated by China Retired PLA naval officer says China will not waver in safeguarding its interests, while Global Times says the sea is fully in the PLA’s grasp
Is Manila pivoting back to the US with Locsin’s South China Sea warning?
Philippine Foreign Secretary Teodoro Locsin Jnr issues unexpected warning over Chinese naval exercises near Paracel Islands Statement comes as US and Chinese forces gather in the South China Sea, and is seen by some as evidence Manila may be rethinking its pivot to Beijing