China Press Review – July 7, 2021

China, Asian nations to feel inflation pressure in 2022
China’s consumer prices will climb an estimated 80 basis points next year, the most in Asia, followed by Indonesia. Diverging inflation paths will determine the different paces at which Asia’s monetary authorities start to wind down coronavirus pandemic-era stimulus.

Xi Jinping talks up cooperation but it may not ease tensions with Europe, analysts say
President tells French and German counterparts that ‘China’s biggest hope is to develop itself and not to replace others’    Observers say meeting is a positive step but relations with ‘other EU member states and the EU as a whole require significant repair’  “We will see the EU roll out a series of new legislative proposals, including on supply chain due diligence, that risk deepening tensions with China. At the same time, European concerns over Hong Kong, Xinjiang and Taiwan are rising,” Barkin said. “It is important that European capitals continue to speak with Beijing, but unless China’s leadership shows a readiness to tone down its rhetoric and take steps in Europe’s direction – for example on issues like forced labour – then the relationship is likely to continue to deteriorate.”

China shows world an alternative path to modern future, Xi Jinping says
No one-size-fits-all model for modernisation and countries must do what’s best for them, political parties’ summit hears     Comments come less than a week after Communist Party’s centenary   
Whether a country is democratic should be decided by the people of that country, and not by a small handful of people,” he said.Without naming the US, which has sanctions China over various issues from Xinjiang to Hong Kong, Xi criticised “attempts by anyone to create technological blockade, scientific gap or decoupling in development”.“I believe that any political manoeuvring which threatens the development of other countries and undermines the livelihood of their people will not have the people’s support and is ultimately futile.” While Xi emphasised that China’s modernisation had succeeded in ending absolute poverty in the country and powering a global economic recovery, he also said Beijing would always stand on the side of developing countries.    “I am willing to reiterate that China will always be a member of the family of developing countries,” Xi said. “We will continue to do our utmost in raising the representation and voice of developing nations in the global governance system.”Xi also told the audience that Beijing was willing to contribute more Chinese solutions as war and disease continued to ravage the world and divisions deepened between nations. “Today, humanity again faces a historic juncture,” Xi said. “Should we choose hostility and confrontation or mutual respect? Should we choose closing the door and decoupling or opening up and cooperation?“Is it a zero-sum game or win-win benefits for all?“The choice is in our own hands, and the responsibility upon our shoulders

Oppose ‘technology blockades’: Xi Jinping
President Xi Jinping on Tuesday urged political parties worldwide to oppose any country that engages in “technology blockades”, an allusion to the United States which views China as its strategic competitor.

China’s Artificial Intelligence Research in Figures
Chinese AI researchers aim for practicality and produce the most papers, but their quality lags behind those from other countries.

China’s metals reserves snapped up at auction as Beijing tries to cool red-hot raw material prices
China’s state reserves agency auctioned aluminium, copper and zinc this week, with most of the metal reserves snapped up in two days     The reserves administration put a total of 100,000 tonnes of metal on the market on Monday and said it will release more metal in near future

New rules on overseas listings may jeopardise future US deals for Chinese firms
Chinese companies’ shares fall on US exchanges after Beijing announces new requirements and a national security review of Didi      Tech and biotech firms have seen US capital markets as the top destination for their fundraising

Alibaba China tech investment
Alibaba strengthens its local services to combat Meituan. Troubled retailer Suning gets a $1.36 billion bailout from Alibaba and a provincial government. Chinese regulators to increase penalties for misleading price practices. Nayuki Tea goes public in Hong Kong. Logistics firm Yunquna raises funds to expand overseas network. announces $1.4b stake sale to consortium
Chinese retail giant announced Monday that its controlling shareholder Zhang Jindong, along with his Suning Group and Suning Appliance Group, will sell 1.58 billion shares, or 16.96 percent of the conglomerate, to a consortium at 5.59 yuan ($0.87) apiece.

China plans to promote circular economy
China unveiled a plan on Wednesday to promote circular economy for the next five years, aiming to basically establish a resources recycling system in the country by 2025 as part of efforts to achieve carbon peak and neutrality goals.   The plan, released by the National Development and Reform Commission, specifies that China’s energy and water consumption per unit of gross domestic product will be lowered by about 13.5 percent and 16 percent, respectively, by 2025 from the 2020 levels.  Efficiency of resource utilization will be greatly improved by 2025, with circular economy playing a bigger role in ensuring resource security, reads the document.

Has Xpeng’s dual primary listing set the stage for homecoming by more US-listed Chinese tech firms?
Dual listing an option to mitigate geopolitical tensions between the US and China, says Brian Gu, Xpeng’s vice-chairman and president     The Xpeng IPO will boost Hong Kong’s ongoing drive to attract China’s technology innovators through such listings

He Xiaopeng counts on melding technology with transport as he transforms Xpeng’s smart electric cars in his vision of mobility
Xpeng’s shares, offered at HK$165 each, begin trading in Hong Kong on July 7, less than 12 months after their ADRs were offered in New York  The Hong Kong IPO adds US$37 billion of capitalisation to Xpeng, bolstering the value of the six-year-old carmaker to US$78 billion

China’s war on bitcoin just hit a new level with its latest crypto crackdown
China’s central bank said Tuesday it had called for the shutdown of a company that “was suspected of providing software services for virtual currency transactions.”   For years, China has signaled that it wanted to ban bitcoin.    Beijing could be looking to stem capital outflows via stablecoins and cryptocurrencies.

The Chinese firm behind the acquisition of the UK’s largest chip plant is state backed, analysis shows
Wingtech Technology is heavily backed by the Chinese Communist Party, according to analysis from Chinese investment screening specialists Datenna.    Wingtech is the Chinese owner of Dutch chip firm Nexperia, which confirmed on Monday that it plans to buy the U.K.’s largest chip plant.     Almost 30% of Wingtech’s shares can be traced back to the Chinese government, Datenna found.

UK chip maker Newport Wafer Fab now Chinese-owned thanks to Wise Road Capital, a little-known venture capital fund
Wise Road Capital appeared on the radar in 2017 when it acquired the standard products business of NXP for US$2.75 billion, renaming the unit Nexperia      Although Beijing quickly granted approval for Wise Road to acquire MagnaChip, the deal is now under review by Seoul after CFIUS temporarily blocked it

China busts chip smuggling operation from Hong Kong amid semiconductor supply crunch
Customs officers found and seized a total of 256 Intel CPUs taped to a driver’s chest and calves in a border inspection on June 16      Another batch of 52 Intel CPUs was found in another inspection 10 days later

Didi Chuxing’s mini app disappears from WeChat and Alipay for new users after Beijing orders it to halt new account registrations
The company’s mini program no longer appears in searches by new users in China’s biggest super apps    Didi had previously warned that the ban on new user registration will negatively impact revenues

China semiconductors: China Mobile and Apple supplier Luxshare jump on chip investment frenzy
China Mobile official Liu Chunyang pledged to ‘catch up’ in chip design for Internet of Things (IoT) applications     Taiwan’s exports to mainland China in June surged 29 per cent from a year ago to US$16 billion, bolstered by strong exports of semiconductors   May’s output of chips marked an increase from 28.7 billion units recorded in April and 29.1 billion in March.China’s chip makers are unable to produce advanced 14-nanometre node chips in volumes even though production capacity for mature technologies is quickly expanding to meet the demand amid the shortage.  The wafer fab of Semiconductor Manufacturing International Corp in the city of Shaoxing, in eastern Zhejiang province, for instance, has increased capacity to 70,000 wafers a month, according to a report in the official Zhejiang Daily this week. The plant’s production capacity reached 40,000 wafers per month in November 2020, one year after it started operations. At the same time, China is still relying on imports for the bulk of its semiconductors. IC imports rose 30 per cent in the first five months of the year over the same period in 2020, reaching 260.35 billion units, or nearly double China’s domestic output in the same period.  Taiwan’s exports to mainland China in June surged 29 per cent from a year ago to US$16 billion, bolstered by strong exports of semiconductors, Reuters reported, citing data from Taiwan’s Ministry of Finance on Wednesday.

Huawei’s patent fight with Verizon heads to court in Texas
The jury trial, which starts this week, will determine whether Verizon infringes on three Huawei patents and whether Huawei infringes on two of Verizon’s       The litigation is the first attempt from Huawei to recoup investments after being barred from US 5G networks on national security grounds, experts say

China may require data security reviews for all overseas IPOs: experts
Chinese firms, especially those dealing with data, may have to submit every overseas IPO to regulators for a data security review, experts told TechNode.    China’s top leaders called for increased supervision of data during international IPOs on Tuesday, days after ride-hailing giant Didi Chuxing and two other recently US-listed firms were banned from registering new users during a “cybersecurity review.”Senior party and government officials issued a directive (in Chinese) on Tuesday night, calling for an increased crackdown on “illegal securities activities.” The directive was jointly issued by the General Office of the Central Committee, the administrative branch for the party’s top leading groups, and the General Office of the State Council, the Chinese cabinet.

China City Spotlight: Investing in Foshan, Guangdong Province
Foshan’s GDP tipped over the RMB 1 trillion (US$154.8 billion) mark for the first time in 2019, and despite slowdowns caused by the pandemic, grew a further 1.6 percent to reach RMB 1.08 trillion (US$167.429 billion) in 2020. This makes the city one of 23 cities in China to enter the ‘RMB 1 trillion GDP club’ and positions it as the third largest city in the PRD by GDP.

China bans super skyscrapers, putting a ceiling over new buildings that exceed 500 metres, citing safety concerns
Buildings taller than 500 metres (1,640 feet) will no longer be approved, according to the National Development and Reform Commission (NDRC)    Towers over 250 metres must be limited, while buildings taller than 100 metres must match the scale and fire rescue capacity of their locations

South China Sea: Chinese, German defence ministers discuss Beijing’s claims over waterway
Pandemic, human rights and concerns about Uygurs in Xinjiang among topics covered by Annegret Kramp-Karrenbauer and Wei Fenghe    Germany is expected to send a frigate through the disputed waters next month, its first warship to make the crossing since 2002

Chinese official declares Beijing has targeted Australian goods as economic punishment
A Chinese official has openly declared that Beijing has singled out Australia for economic punishment, saying the federal government cannot profit from China while “smearing” it.

US official warns China against ‘catastrophic’ move on Taiwan
Kurt Campbell says Beijing assessing world’s response to Hong Kong crackdown to understand potential reaction on Taiwan

China spells out wartime conscription plans for first time
Draft regulations highlight veterans as targets for active service during a war   Changes needed to bring process into line with current conditions, analyst says

podcast : VIDEO: Is China’s economic miracle all that it appears?
COVID-19 has caused massive damage to the global economy – but China’s economy has bounced back fast, after apparently avoiding the recession that hit so many other countries. David Chau takes a look.

China as gentle giant would win more hearts than wolf warrior diplomacy
For many Chinese, Xi Jinping’s stern warning to foreign powers on the centenary of the Communist Party was a sign of strength and resolve     But it would not have gone down well with the rest of the world, at a time when many are already wary of China’s rapid rise   Inevitably China’s rise will be accompanied by disagreement, conflict and criticism. The country can demonstrate its growing confidence by becoming more receptive to constructive criticism. Instead of being aggressively defensive, it could seek rapprochement.    No matter how strong and powerful it has become, China needs to cooperate economically with other countries, including the developed nations whose citizens see China in a negative light.   It has to work with them to address important issues ranging from climate change to nuclear disarmament and anti-terrorism measures.  China is poised to play a leading role in the post-pandemic world, and a more conciliatory approach would bring benefits, both to China and its critics.
   During a stand-off between nations, the one who first tries to reconcile the conflict often wins respect and makes gains by taking the moral high ground. The Chinese classic The Art of War is actually about the art of avoiding war. Sun Tzu enjoins people to avoid war whenever possible because it is far too costly compared to diplomacy.   He also advises military leaders not to show off their troops’ strength. Indeed, The Art of War disdains macho displays.  At a study session of the Politburo in June, Xi instructed officials to adopt a softer tone in foreign affairs. That is wise. I am sure that China will continue to rise. It should behave like a major modern power by showing more of its gentle, tolerant and benevolent side.

The Man Behind China’s Aggressive New Voice
How one bureaucrat, armed with just a Twitter account, remade Beijing’s diplomacy for a nationalistic era.   There is this common theme of Western hypocrisy, Western decline, Chinese model advertising, said Peter Martin, journalist and author of Chinas Civilian Army: The Making of Wolf Warrior Diplomacy. There is an ideology behind it. The idea is that our system has a model and it works and the world recognizes it more and more, and West’s system is immoral and broken and in decline. It really is that kind of sunset on the Western ideology behind it, and the strong belief in the effectiveness of the Chinese party-state.

European Parliament to call for Beijing Winter Olympic boycott and sanctions on Hong Kong leaders over Apple Daily closure
The Parliament is expected to support a motion that expresses concern about the ‘dismantling of the city’s free society’   The non-binding motion also urges Brussels to impose ‘targeted sanctions’ on the city’s leaders, including Chief Executive Carrie Lam

Tories and Royals urged to boycott China Winter Olympics over human rights shame
The government has long been seeking an investigation into China’s alleged human rights abuses – but Labour and a prominent Tory urged a boycott to avoid ‘turning a blind eye to genocide’

European Union’s Covid-19 travel pass discriminates against the developing world
Restricting the certificate to only those inoculated with four EU-approved jabs exacerbates the vaccine inequality already perpetuated by the West     The exclusion of India’s Covishield and South Korea’s SKBio, manufactured using the AstraZeneca formula, is particularly mind-boggling

The Economic Fundamentals of Chinese Communism’s Successes and Failures
From the Great Leap Forward to family-planning restrictions, China’s rise has been marred by serious policy failures. Whether the Communist Party can avoid similar mistakes in the the future will depend on its recognition of a crucial distinction between such interventions and those that have fueled its economic success.

Montenegro says deal on lifting Chinese debt burden is close
The Balkan state borrowed nearly US$1 billion in 2014 to fund a project critics branded a ‘road to nowhere’   Economy Minister Jakov Milatovic says the government is talking to US and European banks about easing the debt burden

Coronavirus: Chinese border city in lockdown after 15 new cases, link to Delta variant uncovered
Ruili party chief says authorities will crack down on unlawful entry in its efforts to keep the virus out
52 Covid-19 patients – including 30 without symptoms – were found on a flight from Afghanistan to Wuhan

China’s dark web spawns a hard-to-crack hacker community
Users post wanted ads and tips to infiltrate networks in Japan and elsewhere   Dark websites in China are unique in two ways, according to SouthPlume, the Japanese agency for CNsecurity. First, Chinese hackers communicate with one another through local social media. This creates what amounts to a members-only organisation that differs from the general darknet, where websites are accessed only through anonymising browsers such as Tor. Chinese dark websites also lack the typical underground listings of drugs, weapons or child pornography. Instead, they mostly traffic in personal information and tips on hacking corporate sites, according to SouthPlume.

Economic thought of China’s Xi Jinping to be immortalised in newly established research centre
Analysts say the move is part of President Xi’s strategy to further strengthen his rule   Announcement follows last month’s establishment of the Xi Jinping Research Centre for the Rule of Law, and the Xi Jinping Thought on Diplomacy Research Centre last year

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