China Press Review – July 8, 2021

Factbox: Cainiao Creates 200 Jobs in Belgium as it Kickstarts Hiring at its Smart-Logistics Hub in Liege Airport
Cainiao Network, Alibaba Group’s logistics arm, said in a recent statement that it will work with local partners to create 200 jobs for its smart-logistics hub at the Liege Airport in Belgium’s Wallonia region. The new hires will work at a 33,000-square-meter warehouse, which is under construction and due to open later this year. The warehouse is part of a larger hub that Cainiao plans to construct across 220,000 square meters at the airport.   The smart-logistics hub is one of the outcomes from the Belgian government’s 2018 agreement to join an Alibaba-led initiative called Electronic World Trade Platform (eWTP), which aims to lower barriers to global trade for small and medium-sized businesses via e-commerce.    As part of the initiative, Cainiao said that it will invest 100 million euros in building the smart-logistics hub and create 900 jobs over the duration of the project. Cainiao operates around 18 cargo flights a week during the daytime and 60 trucks per day on average, to and from Belgium, as well as a railway network extending to Zhengzhou, Henan and Yiwu, Zhejiang in China.   Cainiao worked with local engineers to make the hub environmentally friendly. Following European environmental standards, Cainiao installed solar panels to reduce energy consumption and came up with a design that ensures rainwater discharge while protecting groundwater resources from pollution.  Following the outbreak of the coronavirus pandemic, the logistics hub helped in the fight against the virus in Europe by enabling the efficient international transport of donated medical supplies to a number of European countries.  By 2036, Alibaba Group aims to create 100 million jobs globally and provide the infrastructure to help 10 million small businesses to become profitable on its platforms.
https://www.alizila.com/factbox-cainiao-creates-200-jobs-in-belgium-as-it-kickstarts-hiring-at-its-smart-logistics-hub-in-liege-airport/

Time for China’s elite to embrace the Zheng He spirit and open up to a wary world
As China’s economic and digital web continues to expand, the Chinese political establishment must adopt a more open posture towards the outside world      China’s political elite should overcome their reclusive impulses, open up further and make themselves better understood by an attentive yet wary world
https://www.msn.com/en-xl/news/other/time-for-china-s-elite-to-embrace-the-zheng-he-spirit-and-open-up-to-a-wary-world/ar-AALTeiS

China signals easier monetary policy, reviving worries about weaker growth
China’s top executive body said late Wednesday the central bank would stimulate the economy with cuts to the amount of funds banks need to hold in reserve.      “We think this policy signal suggests the economy likely slowed in June,” Zhiwei Zhang, chief economist, Pinpoint Asset Management, said in a note.
https://www.cnbc.com/2021/07/08/china-economy-pboc-central-bank-signals-rrr-cut-in-surprise-policy-move.html

China retail sales get 3 trillion yuan boost as personalised marketing grows via ‘private traffic’ in chat groups
WeChat groups, run by foreign and Chinese firms alike, have become crucial marketing tools for reaching new consumers and building brand loyalty in a post-pandemic China      E-commerce report finds that direct marketing tactics – with customised promotional offers and discounts – are helping companies better connect with their target audience
https://www.msn.com/en-xl/money/other/china-retail-sales-get-3-trillion-yuan-boost-as-personalised-marketing-grows-via-e2-80-98private-traffic-e2-80-99-in-chat-groups/ar-AALU2iM

China economic policy easing ‘would be no surprise’ after Beijing signals rate cut
Move would be the first cut in more than a year, and analysts say it would step up financial support for the economy, which could boost job growth     However, some small and medium-sized enterprises ‘would continue to operate in difficult conditions’ even if banks are encouraged to lend more money, one economist warns       The PBOC had already cut the RRR three times in the first four months of last year, releasing about 1.75 trillion yuan (US$270 million) worth of liquidity, as part of its 9-trillion-yuan package to fight the coronavirus pandemic, stabilise the economy and provide support to businesses and individuals.   After registering a record 18.3 per cent growth in the first quarter of the year, however, the Chinese economy is widely expected to lose steam in the next six months amid sluggish demand, softer export momentum, property tightening measures and higher commodity prices. Given that, some government advisers have warned that Beijing should not withdraw the expansionary fiscal and monetary policies it has conducted since the pandemic began. Instead, some have argued that it was even necessary to introduce more aggressive measures.  Sheng Songcheng, a former official at China’s central bank, wrote in an article published on Tuesday that China should “reasonably and appropriately” lower interest rate levels in the second half of the year to support economic growth and allow room for future policies.
https://www.scmp.com/economy/china-economy/article/3140375/china-economic-policy-easing-would-be-no-surprise-after

China’s Latest Corporate Income Tax Update for Six Items: Q&A
China’s tax body recently clarified the corporate income tax assessment applicable on six items, including expenses associated with COVID-19 charitable donations, convertible bonds, and cross-border hybrid investments. Enterprises should note that the new policy will close some prevailing corporate income tax loopholes.
https://www.china-briefing.com/news/china-2021-corporate-income-tax-update-six-items/

China ‘needs Hong Kong’ in race for global financial leadership, former stock exchange chief says
There is a chance that China could become the leader in the global financial system, according to the former head of Hong Kong’s stock exchange operator   Hong Kong would then need to become an extension of the East, rather than an extension of the Western world, said Charles Li  i believes Hong Kong should grasp an opportunity to maintain its top-tier hub status in the upcoming financial trend amid the digitalisation era, especially with many Western hubs not wanting to change their operations and the world order.    This trend involves international investment being attracted to numerous Chinese microeconomic entities, such as restaurants, beauty salons and other small shops, whose overall volume will require a huge amount of capital.   Hong Kong, being an international financial hub, can facilitate financing of such entities, providing transparent quotation information for investment analysis, Li said.    Hong Kong has a unique role to help China develop a healthy financial market to encourage capital to flow to its economy, said Lawrence Li, chairman of the Hong Kong Financial Development Council.   “After having faced various environments and difficulties, [Hong Kong’s] resilience is pretty high. To help [China’s] dual circulation economic strategy run healthily, it is an important responsibility,” he said.
https://www.scmp.com/economy/china-economy/article/3140350/china-needs-hong-kong-race-global-financial-leadership-former

China’s central bank is ‘quite worried’ about global risks from some digital currencies
The central bank is “quite worried” about global financial risks from digital currencies, particularly so-called stablecoins, Fan Yifei, a deputy governor of the People’s Bank of China, told reporters Thursday in Mandarin, according to a CNBC translation.     Fan added the central bank’s invite-only test of the digital yuan now has more than 10 million users.    Separately, Fan said the PBoC will apply measures it took on Ant Group to other entities in the payment services market.
https://www.cnbc.com/2021/07/08/chinas-central-bank-is-quite-worried-about-some-digital-currencies.html

Displaced bitcoin miners thwarted by data centre crunch amid China crackdown
The hunt for space in bitcoin-friendly data centres has become so frenzied that bounties are being offered for referrals to new homes for displaced miners     China’s crackdown has taken out a vast number of machines in the global network used to perform the calculations that verify transactions and create new bitcoin   “There’s limited hosting space and it’s such a concern that about 30 per cent of the Chinese miners are just throwing up their hands and capitulating,” said Mason Jappa, chief executive of cryptocurrency mining hardware broker Blockware Solutions. “They’re selling rigs for 2020 prices.”    For those willing to navigate the complexities of getting machines out of China, the crackdown and lack of hosting capacity could create an ideal backdrop for distressed deal making.     “Ultimately a lot of this short-term mania will provide some very strategic opportunities for more efficient miners down the road,” said Third Prime’s Kaczmarczyk. “You’ll see some strategic buyouts and private equity like deals.”   How long the data centre crunch will last is unclear at this point, but Compass Mining’s Voell thinks it could be six months or more before new facilities can be brought online to absorb the excess capacity.   “The shortage that existed before just got blown out of the water,” said Voell. “There’s absolutely no way all these ASICs will find space and be back online before the end of this year. The problem just got five-times worse.”
https://www.scmp.com/tech/tech-trends/article/3140317/displaced-bitcoin-miners-thwarted-data-centre-crunch-amid-china

Decline in China’s forex reserves
China’s foreign exchange reserves shrank to US$3.214 trillion at the end of June, down 7.8 billion dollars from a month earlier, official data showed yesterday.     The amount fell by 0.24 percent from the end of May, according to the State Administration of Foreign Exchange.
https://archive.shine.cn/business/finance/Decline-in-Chinas-forex-reserves/shdaily.shtml

New hydrogen station opens in Beijing, China
A brand-new hydrogen station is now operational in Beijing, China – and it’s believed to be the largest in the world, boasting a capacity of nearly five tonnes per day.   Open from today (July 8), the station is owned and operated by Beijing Hypower Energy Technology as part of the 200,000 square-meter Beijing International Hydrogen Energy Demonstration Zone.    Capable of refuelling 600 hydrogen fuel cell vehicles a day, the facility features eight hydrogen dispenser units which were supplied and installed by Air Liquide Houpu Hydrogen Equipment.
https://www.h2-view.com/story/new-hydrogen-station-opens-in-beijing-china/

China’s carbon neutral goal: Shanghai emissions contracts to start trading in July, using market prices to drive towards target
Electricity generators will pioneer the mandatory trading of carbon emission contracts, due to start at later this month   The trial will be followed by construction materials, steel, petrochemical, chemical, non-ferrous metal, paper and aviation
https://finance.yahoo.com/news/chinas-carbon-neutral-goal-shanghai-093000354.html

China wary of socio-economic impact of unregulated carbon market
The launch of China’s nationwide carbon market has faced delays partly because the government remains cautious about its impacts on economic inequality between provinces, higher prices for products from carbon-intensive industries and pressure to comply with an unproven global carbon regime, according to academics and researchers at a recent industry event.
The highly anticipated launch of China’s emissions trading system, or ETS, was initially slated for end-June and was postponed for undisclosed reasons. It is now expected during July, Premier Li Keqiang said on July 7.    China is reluctant to give free rein to market forces to determine a carbon price that incentivizes emissions reductions in its power, industrial and transportation sectors, which are the backbone of people’s livelihoods and its economic growth.    According to the environment ministry’s initial plan, the power sector will be the first sector to come under the ETS, which will eventually include steel, building materials, petrochemicals, chemicals, nonferrous metals, paper, and aviation by 2025.
https://www.spglobal.com/platts/en/market-insights/blogs/energy-transition/070721-china-carbon-market-emissions-socio-economic-impact-power-industry

China’s antitrust watchdog punishes Alibaba, Tencent and Didi for merger irregularities after digging into old deals
SAMR has dished out 22 new fines of half a million yuan each to the country’s Big Tech firms for merger irregularities     Fines come as Beijing ups its scrutiny of Big Tech across a range of issues, including data security, consumer privacy and anticompetitive practices
https://www.msn.com/en-xl/news/other/china-s-antitrust-watchdog-punishes-alibaba-tencent-and-didi-for-merger-irregularities-after-digging-into-old-deals/ar-AALSA4V

Tencent boss Pony Ma promotes ‘tech for good’ at Shanghai AI conference as China Big Tech incurs Beijing’s wrath
Ma spoke about his company’s collaboration with the National Astronomical Observatory to search for new stars, and he repeated the slogan ‘tech for good’     Ma’s appearance at the AI event, even if only via audio, could be a signal that he is in Beijing’s good graces
https://www.msn.com/en-xl/money/topstories/tencent-boss-pony-ma-promotes-tech-for-good-at-shanghai-ai-conference-as-china-big-tech-incurs-beijing-s-wrath/ar-AALUytu

Investment treaty arbitration in the Asia-Pacific: the impact of the CPTPP and the RCEP
Investment treaty arbitration in the Asia-Pacific rose to prominence following the exponential increase in bilateral investment agreements (BITs) entered into by states in the region. Over time, a backlash developed against investor-state dispute settlement (ISDS) provisions contained in these BITs. Subsequently, a number of multilateral treaties that contain investment chapters and provisions on ISDS have been negotiated. Most prominently, these include the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and the Regional Comprehensive Economic Partnership (RCEP). It is timely to consider the different manner in which investors are protected under these agreements and the ISDS options available under each.
https://globalarbitrationreview.com/review/the-asia-pacific-arbitration-review/2022/article/investment-treaty-arbitration-in-the-asia-pacific-the-impact-of-the-cptpp-and-the-rcep

China takeover of UK silicon wafer plant to be reviewed over security
Boris Johnson on Wednesday said the UK government would probe the takeover of the UK’s largest silicon wafer manufacturer by a Chinese-backed company on national security grounds, reported the Financial Times.   Newport Wafer Fab, which produces silicon wafers at its plant in south Wales and employs 450 people, was recently purchased by Nexperia, a Netherlands-based company that is Chinese owned and already operates a similar facility in Manchester.  Speaking at a parliamentary select committee on Wednesday, Johnson said concerns about the takeover had been flagged to Westminster by the Welsh government. Sir Stephen Lovegrove, the national security adviser, will investigate the takeover. “We have to judge whether the stuff that they are making is of real intellectual property value and interest to China, whether there are real security implications,” he said, adding: “I have asked the national security adviser to review.”
https://chinaeconomicreview.com/china-takeover-of-uk-silicon-wafer-plant-to-be-reviewed-over-security/

China is cracking down on data privacy. That’s terrible news for some of its biggest tech companies
China spent months clipping the wings of some of its tech champions over concerns that they were crowding out the competition. Now Beijing is seizing on data privacy as the next step in a sweeping campaign that threatens to cut companies off from global investment.   The country’s extraordinary clampdown on Didi has focused on allegations that the ride-hailing company has mishandled sensitive data about its users in China.
https://edition.cnn.com/2021/07/07/tech/china-didi-data-tech-crackdown-intl-hnk/index.html

China corn imports to fall as farmers dump other crops to cash in on bumper profits
China’s maize output in 2021/22 is set to rise by at least 6 per cent after farmers expanded corn planting this year      The likes of the United States and Ukraine have benefited from China’s corn import binge as the world’s largest grain producer turned into the top corn buyer
https://www.msn.com/en-us/news/world/analysis-chinas-farmers-dump-other-crops-for-corn-on-bumper-profit-pull/ar-AALQZrQ

China has ‘ample room’ to absorb global minimum tax, but still ‘prickly’ on issues of economic sovereignty
China is among 130 nations that have expressed support for a minimum global tax rate of at least 15 per cent, according to the OECD    China is a magnet for global investors due to its huge market and established supply chain, rather than tax breaks it offers multinationals, experts say    China was the world’s largest recipient of foreign direct investment last year, attracting US$163 billion, according to the United Nations Conference on Trade and Development. The momentum has continued into 2021, with foreign investment rising 39.8 per cent to US$71.5 billion in the first five months from a year earlier, the commerce ministry said     Some policy advisers have even suggested Beijing’s involvement with the US-led global minimum tax proposal could be used as a bargaining chip to reduce US tariffs on Chinese imports.    But Beijing has shown enthusiasm to enhance its role in international organisations – from the World Trade Organization to the International Monetary Fund and World Bank – and it will not want to miss an opportunity to participate in international economic governance.   “In reality, the G7 still plays a global leadership role. It often has internal coordination and makes proposals ahead of G20 meetings,” said Zhu Min, former deputy managing director of the International Monetary Fund and current chair of Tsinghua University’s national institute of financial research.    “China, as the world’s second largest economy, has obligations in the construction of a new global economic governance mechanism. It should do its part,” he wrote an article published by the China Business News in early June
https://sg.news.yahoo.com/china-ample-room-absorb-global-113209259.html

E-commerce firms fined over misdeeds in M&A
CHINA’S State Administration for Market Regulation imposed administrative penalties on several e-commerce and digital platform operators’ merger and acquisition cases as it attempts to strengthen regulation in the sector.       A total of 22 cases were under scrutiny by the market regulator involving Tencent, Alibaba and Suning, according to a statement released by the SAMR, sending a signal of more frequent regulatory measures to keep both listed and private Internet companies in check.
https://archive.shine.cn/business/Ecommerce-firms-fined-over-misdeeds-in-MA/shdaily.shtml

Savoring the experience of AI digital life
AN important part of the 2021 World Artificial Intelligence Conference, the AI digital life experience activity is being held at the River Mall, a shopping center located at the former site of Expo 2010 in Shanghai.   The AI experience activity brings the city’s leading AI technologies and shows their applications in daily life, and citizens are invited to come and savor the future of digital life. More than 40 AI applications form 10 application scenarios, covering AI retailing, AI education, AI health and others.
https://archive.shine.cn/business/Savoring-the-experience-of-AI-digital-life/shdaily.shtml

3 Reasons Why it’s Going to Take Longer to Unravel the Current Global Logistics Mess
If you’re involved in global shipping or even a consumer who recently purchased furniture or other bulky items, you’re well aware of the sorry state of global logistics. The pandemic and its knock-on effects have created global shipping chaos and driven astronomical shipping costs. While we are all enduring the consequences, the big question now is when will global logistics return to normal? Will it happen after peak season this year? I am less optimistic about a quick turnaround. Here are three data points that highlight why I believe the current situation will drag on longer than anticipated.
https://www.globaltrademag.com/3-reasons-why-its-going-to-take-longer-to-unravel-the-current-global-logistics-mess/

Asia’s new COVID waves
Nikkei Recovery Index shows overconfidence can be deadly  Across the Asia-Pacific region, the story is similar. As the pandemic broke out across the world in 2020, many Asia-Pacific countries became examples of what can be achieved with discipline and political will, despite having far fewer resources than wealthy countries of the West. While they distinguished themselves by quick action and effective measures that largely contained the virus, a year later that willpower seems to be fraying. Fatigue has combined with complacency, along with misplaced optimism about the speed of vaccine rollouts and their effectiveness in keeping infections at bay.
https://asia.nikkei.com/Spotlight/The-Big-Story/Asia-s-new-COVID-waves

Tokyo venues for Olympics will have no spectators; Games will be held under a state of emergency
Tokyo venues for the pandemic-delayed Tokyo 2020 Olympics will not have spectators due to the city’s coronavirus state of emergency through the Games, according to the Japanese Olympic Committee.   The announcement was made following a meeting of five Olympic and Japanese government groups responsible for the Games.J   apanese Olympic Committee Seiko Hashimoto said due    to the pandemic, organizers have “no choice but to hold the Games in a limited way.”
https://edition.cnn.com/2021/07/08/asia/japan-state-of-emergency-olympics-intl-hnk/index.html

Maria Repnikova on China’s media: “an increase in sophistication of control and adaptability”
Maria Repnikova is an Assistant Professor in Global Communication at Georgia State University. As part of our series about the Chinese Communist Party (CCP) at 100, MERICS talked to her about how China’s media landscape has changed, how the CCP is trying to address a global audience and how Chinese journalists navigate an increasingly fraught working environment.
https://merics.org/en/interview/maria-repnikova-chinas-media-increase-sophistication-control-and-adaptability

Taiwan asserts island’s sovereignty after US restates opposition to independence
Kurt Campbell, the US Indo-Pacific coordinator, became the first Biden administration official to set out the White House’s stance on the issue The Taiwanese foreign ministry responded by saying the island is a sovereign state and wants to protect its democratic system  Liu Weidong, a US affairs expert from the Chinese Academy of Social Sciences in Beijing, said historically it has long been known that Washington does not support Taiwan independence.   “I think Campbell was extending US goodwill to China,” he said, adding this could help facilitate bilateral talks, including a possible meeting between Biden and Xi.    But what Campbell said will not affect the US government’s cooperation with Taiwan, including its support for the island’s participation in many more international organisations, Liu noted.
https://www.msn.com/en-xl/news/other/taiwan-asserts-island-s-sovereignty-after-us-restates-opposition-to-independence/ar-AALSAD6

Analysis: Xi becomes ‘Mao’ in Tiananmen visual effect
Chinese leader uses 100th anniversary ceremony to try the chairman look  If party higher-ups were to monitor internet chatter regarding Xi’s gray Mao suit, they would be greeted by almost complete silence. At the moment, Chinese netizens seem to be in no mood to directly discuss the suit on social media.   It is unclear whether Chinese are exercising self-restraint regarding the politically sensitive issue or if their opinions posted online are being deleted by authorities. Clues to whether Xi can march directly toward Mao status, or if he will have to lay the groundwork and take a circuitous route, will start emerging around the sixth plenary session of the party’s 19th Central Committee this autumn.    It was at a plenary session in the autumn of 2016 that Xi began being referred to as the “core” of the party.
https://asia.nikkei.com/Editor-s-Picks/China-up-close/Analysis-Xi-becomes-Mao-in-Tiananmen-visual-effect

US visa restrictions ‘necessary but don’t affect many Chinese students’
Embassy spokesman in Beijing says most young scholars are welcome in the United States    Comments latest in row amid accusations China is exploiting US technology for defence purposes via its youth studying there   Visa restrictions imposed by the United States   on Chinese students affect just a small number of applicants and are needed to prevent China exploiting   advanced US technology
 for its own ends, according to a US statement on Thursday.It is the latest development in a row   between the two nations  over young people the US believes  pose a potential security risk. A spokesman for the US embassy in Beijing said Washington  still welcomes Chinese students
 who do not further China’s efforts to modernise its military. He said the visa restrictions relate to less than 2 per cent of the overall number of Chinese students and exchange visitor visa applicants. He gave no further details on numbers.
https://www.scmp.com/news/china/diplomacy/article/3140362/us-visa-restrictions-necessary-dont-affect-many-chinese

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