China Press Review – June 1, 2020

Press review

China orders state traders to stop buying American farm goods, threatening phase one trade deal
Bloomberg reported China paused purchases of some American farm goods including soybeans as Beijing evaluates the ongoing tensions with the US over Hong Kong    State-owned traders Cofco and Sinograin were ordered to suspend purchases, according to sources, throwing a new spanner in the works of the phase one deal

China factories recover slowly from coronavirus but export orders keep shrinking
Official manufacturing purchasing managers index dropped to 50.6 in May from 50.8 in April   Non-manufacturing purchasing managers index rose to 53.6 in May from 53.2 in April

Chinese factories humming doesn’t mean everyone is buying
Justin Yu, a sales manager at Zhejiang-based Pinghu Mijia Child Product Co. that makes toy scooters sold for American retailers, is among those seeing their order book improve from the depths of the coronavirus lockdown, but remain well below normal.

China’s decision to drop economic growth target is a blessing in disguise
The more Beijing weans itself off growth as the economic metric, the freer it will be to concentrate on the environment, health and education   Growth targets inevitably lock developing countries into a Western model of economic policy and a Western notion of how globalisation should wor

China is seeing a ‘V-shaped recovery,’ but don’t expect that to be the global norm, analyst warns
Asia’s Richard Martin warns that many economies around the world are unlikely to see a strong economic bounceback like what is being seen in China at the moment.  Martin said recent Purchasing Manager’s Index figures point to a so-called “V-shaped” recovery for the Chinese economy.   China’s official manufacturing Purchasing Manager’s Index as well as a private survey, released recently, both showed manufacturing activity in the country expanding in May.

Opinion: Weak economy threatens China’s one-party system
Chinese Premier Li Keqiang has admitted the country faces major challenges. It is struggling to keep its economic growth up. DW’s Dang Yuang argues that one-party rule is not tenable if the problems continue.

Reading tea leaves from China’s Two Sessions: Large monetary and fiscal stimulus and still no growth guarantee
The most obvious solution is to ramp up China’s welfare state to support the workers who will be left out in the process. The rationale for this is not only fairness or pure populism, but rather economic efficiency.

China thinks Macau can replace Hong Kong as an international financial hub
It won’t happen any time soon. As China moves to impose a national security law on Hong Kong, which has long been China’s gateway to international capital and doing business with the rest of the world, a parallel move has been unfolding in Beijing to build up nearby Macau as a replacement international financial center. Macau, long dependent on gaming and tourism for economic growth, has welcomed these actions. But developing financial services in Macau faces many constraints and cannot be achieved in the short term.

 ‘The future is elsewhere’ for Hong Kong’s youth as the outlook is bleak, says analyst
As Hong Kong gets thrust into a renewed period of uncertainty following China’s approval of a controversial national security bill for the troubled territory, Independent Strategy’s David Roche warns of a mass migration of the city’s youth.  “For young people in Hong Kong, the future is elsewhere,” Roche told CNBC’s “Squawk Box” on Friday. Roche’s comments came a day after China’s National People’s Congress approved the proposal to implement new national security legislation for Hong Kong, a move that has raised questions over the territory’s autonomy from China.

The end of Hong Kong autonomy
Nobody knows exactly what will come next, but one thing seems certain. While the end of Hong Kong’s autonomy is upon us, the city is not ready to go silently into the night. Large-scale protests erupted over the weekend, after months of quiet during the pandemic, and more are sure to follow over the coming weeks.

Trump’s plan to strip Hong Kong of its special status is light on detail, but economists still fear for city’s future
City’s trade with US is small, but some warn White House moves could reduce its importance as a financial centre   Markets shrug off White House address, but questions about export controls, trade tariffs and enhanced financial oversight loom large

What lies behind Beijing’s imposition of a national security law in Hong Kong? Fear, not arrogance
China’s leaders are facing challenges on multiple fronts – from the economy to global criticism of their handling of Covid-19    Beijing believes that another summer of protests in Hong Kong and what it perceives as hostile US activities in the city cannot be tolerated

Hong Kong national security law: all eyes on the US, but Beijing holds all the cards
Beijing’s timing shows it is prepared for a backlash and for Hong Kong to lose its shine as a financial centre; better that than let the city slip out of its control  However, reports of Hong Kong’s demise are premature. The effect of any US sanctions is likely to be more symbolic than material

Beijing has reason to be emboldened by response to Hong Kong national security law plan, US observers say
China’s leaders are probably thinking West’s reaction was ‘a lot of bark and little bite’, analyst says   China’s ambassador to the United States Cui Tiankai says Hong Kong tried for 23 years to enact security laws but opposition sought to ‘strangle them’, prompting Beijing to act

Hong Kong businesses see positive impact of national security law, worry most about foreign sanctions, chamber survey shows
More than 61 per cent believe the national security law will have positive impact on businesses in the long-run    Business sector opposes any sanctions as they may hurt both companies in Hong Kong and spread the pain overseas

Is Beijing preparing to decouple from the US?
China’s leadership has made it clear to its people that the world will become more dangerous and they must be prepared for hard times    Beijing’s relatively small stimulus response to Covid-19 suggests it wants to save its economic policy ammunition for a bigger battle

US-China tensions set to worsen as moderates lose out to hardliners, observers say
Chinese groups calling for more ‘fighting spirit’ are getting the upper hand on those who favour calm and cooperation, government adviser says    From Hong Kong to Covid-19, trade to the South China Sea, Beijing and Washington are clashing on a growing number of fronts and in an increasingly aggressive way

US-China tensions expected to escalate further after Donald Trump promises action over Hong Kong
Relations between the two sides are likely to carry on worsening after the US President said he would end the city’s preferential status after Beijing ‘smothered its freedom’     Observers predict spiral of retaliation will continue and question whether trade negotiations will be able to carry on

China eyes ‘diversified’ relations as US becomes increasingly hostile, Beijing economic adviser says
Cai Fang is a vice-president of the Chinese Academy of Social Sciences and an academic adviser to the Chinese Economist 50 Forum   The US-China trade war, the US entity list and the fallout from the coronavirus outbreak have accelerated the decoupling of the world’s two largest economies

Chinese banks stampede to offer perpetual bonds as incentives spur risky debt issuance
Banks, including smaller ones without easy access to capital markets, increasingly issuing riskier bank debt   Bond holders get hit first if banks go into trouble

Trade-war collateral damage: destruction of $1.7 trillion in U.S. companies’ market value
New York Fed report backs earlier evidence that American companies have continued to pick up the tab for Trump-initiated tariffs

China adviser says reviving consumption is key to growth
Chinese policymakers are looking to achieve economic growth this year through consumption and high-tech investment instead of rushing to finance wasteful infrastructure projects, an influential Chinese economist at a top state think-tank said.

Environmentalists Cautiously Optimistic About China’s Economic Policy Plan
In late May, the National People’s Congress (NPC) meeting was held after a two-month delay. China’s annual parliament meeting is a chance for thousands of the country’s lawmakers and top government officials to gather in Beijing to review the past year’s economic policies and achievements and make plans for the current year.

How the coronavirus has exposed the global economy’s pre-existing vulnerabilities – an overdependence on easy money
While lockdowns and other pandemic-related restrictions have hit economies hard, the world was already grappling with record levels of debt, asset inflation and an over-reliance on monetary stimulus

How the coronavirus pandemic will push developing countries to delink their economies from China
Many developing countries have adopted an export-oriented economic model that hinges on demand from China    As China’s imports from these countries decline due to Covid-19, they may shift away from export reliance and from the influence of the Communist Party

A COVID-19 debt shock in Asia?
Even before the outbreak of COVID-19, the level of global debt was high by historic standards. According to the Institute of International Finance, by late 2019 global debt (including private and public debt) was more than US$250 trillion. Public debt, in particular, has increased everywhere since the global financial crisis of 2008.

China steps in to defend the yuan, as US tensions and Hong Kong uncertainty send currency tumbling
The onshore central parity – the midpoint of the yuan’s permitted daily trading range – was set at 7.1316 against the US dollar on Friday morning    Facing downward pressures from Hong Kong’s loss of autonomy in the eyes of the US and geopolitical turmoil, China has signalled it will defend the currency

China asks EU to remain flexible on negotiations for joint investment deal
Beijing is ‘very serious about this agreement and has put a lot of effort into the negotiations’, Chinese ambassador to EU Zhang Ming says    As EU foreign ministers stop short of imposing sanctions on China over Hong Kong, Zhang says two sides are ‘always in communication’ on key issues

Alibaba Attempts to Replicate Taobao Model Overseas
On May 28, Alibaba debuted a most ambitious plan: they want to mobilize 100,000 global influencers — growing this number to over one million within three years — to create original content to increase users and engagement on their B2C marketplace platform AliExpress Connect. According to the company, it’s a first step to replicate Taobao’s model in the West.   Here’s how it works. Whether you’re a consumer or influencer, as long as you utilize your network to sell, you can register on AliExpress. It’s essential to choose a brand to promote, and based on your exposure and sales performance, you’ll commission will be adjusted accordingly.

Can Voice Shopping Become China’s Favorite Retail Hack?
According to Alibaba Group’s news hub, Alizila, “Chinese consumers are increasingly turning to smart speakers to shop online, instead of their phones.” During Alibaba’s last 11.11 Global Shopping Festival, more than 1 million orders were placed and paid for via Tmall Genie’s voice-shopping feature, and data from Canalys shows that Alibaba sold 3.9 million smart speakers in Q3 2019. Both Alibaba and Baidu increased their market share during Q3 2019. Alibaba’s market share increased from 11.1 percent to 13.6 percent year-on-year while Baidu grew from 4.9 percent to 13.1 percent over the same period

Examples Of Successful eCommerce Models During The Pandemic
eCommerce has been the most prolific business sector during the past couple of months. With people forced to buy from online retailers, many eCommerce colossuses have approached new pieces of technology, developed a number of different funnel strategies and, most importantly, outscale competitors. Other than Amazon, what were the most prolific eCommerce businesses in this 2020? Let’s find out.

China’s solar giants forced to cut prices as coronavirus curbs demand
This is bad news for the companies that make solar components and could lead to consolidation among some of the smaller players in the industry    Chinese manufacturers comprise at least 73 per cent of the global capacity in every step in the global solar power supply chain

Indian unicorns bridle as New Delhi looks a Chinese gift horse in the mouth
In a move that appears aimed squarely at China, India is tightening the reins on investment from neighbouring countries   For billion-dollar tech firms that have grown fat on Chinese funding, it’s ‘like a shakeout taking place in slow motion’

China building secure facilities to fast track coronavirus vaccine production
The country currently has five candidate vaccines undergoing trials, four of which will need high levels of biosecurity to manufacture them safely    The Chinese authorities are keen to begin mass production as quickly as possible

Coronavirus: first post-lockdown flight from Europe lands in China
Charter flight from Frankfurt in Germany was carrying about 200 workers and their families   Two months after closing its borders, China is beginning to lift restrictions on foreigners

Singapore, China agree on ‘fast lane’ arrangement for essential travel from early June
Business and official travel will initially be allowed between Singapore and Shanghai, Tianjin, Chongqing, Guangdong, Jiangsu and Zhejiang   It will gradually be expanded to include additional areas, and Covid-19 prevention and control measures will remain in place

The next pandemic might come from a factory farm in China or the US. Is the world prepared?
Modern intensive farming could well be a cause of future pandemics. As the world’s appetite for meat grows, the food industry is contributing to the overuse of antibiotics, and turbocharging the spread of antibiotic-resistant diseases

China’s National People’s Congress: soft on the outside, hard at the centre
China’s convening of its annual parliament, the National People’s Congress (NPC), delayed due to COVID-19, finally took place from 22 to 28 May. It delivered predictably mixed messages. On the economic front, the tone was almost conciliatory and focussed on the tried and tested message of delivering growth, opening up to the world and regaining the momentum of reform. On the political front, however, the message on Hong Kong showed a totally different aspect. Beijing reaffirmed, starkly and unequivocally, that the statement President Xi Jinping had delivered last November on the need to make the city stable and loyal was actually a command.

National People’s Congress reveals the disconnect in China’s global authority
China’s National People’s Congress (NPC) convened last week, as part of the annual ‘Two Sessions’ meeting designed to enact national laws previously deliberated upon by the Chinese Communist Party.

China battles to control nationalist narrative on social media
Embassy in France removes ‘false image’ on Twitter in latest online controversy amid accusations of spreading disinformation  After months of aggressive anti-US posts by Chinese diplomats Beijing is cracking down on ‘smear campaigns’ at home

China-India border dispute fuelled by rise in nationalism on both sides, observers say
As the global economy has slumped, ‘nationalism and sovereignty’ have replaced Xi Jinping’s ‘Chinese dream’ as the primary focus for Beijing, co-director of the Institute for the Analysis of Global Security says   ‘Both countries have politically beleaguered governments … [that] need a good diversion’, chairman of New Delhi think tank says

‘Lack of transparency’: Liu calls out Andrews on Belt and Road
Federal Parliament’s first Chinese-born lower house MP says the Andrews government’s deal with Beijing on the trillion-dollar Belt and Road Initiative has been shrouded in secrecy, and called on the state to release full details of the scheme’s benefit to Victoria. Gladys Liu said although Australia was open to entering into global trade agreements, “the reality is we do not trade off our values for business”.The comment is a direct swipe at Premier Daniel Andrews, who signed up to the Belt and Road agreement despite opposition from the federal government and Department of Foreign Affairs and Trade.

China finds manufacturing opportunities in low-wage Africa
Belt and Road Initiative leads to ready access from the continent to Europe and the United States   Industrial estates are springing up funded by Chinese investors attracted by cheap labour and an abundance of raw materials

Chinese state media says US demonstrations are ‘beautiful’ as it hits back at American support for Hong Kong protests
Official news outlets offer blanket coverage of anti-police protests after death of George Floyd and focus on country’s racial divisions    State media uses clashes to target politicians who expressed support for Hong Kong’s anti-government demonstrations

China accuses US of double standards over Hong Kong protests
Foreign ministry spokesman in Beijing says Washington hailed Hongkongers as heroes for taking to the streets, while protesters at home were labelled rioters    US has been hit by wave of demonstrations after African-American George Floyd died in police custody

For the first time in 30 years, Hong Kong will not hold a mass vigil commemorating the Tiananmen square massacre
An annual vigil commemorating the 1989 Tiananmen Square massacre will not take place in Hong Kong this year, after police refused organizers permission to hold a mass gathering during the coronavirus pandemic.

China’s virus backlash targets India and Hong Kong
Chorus of international anger prompts Beijing authorities to ditch diplomacy and lash out at their critics

Coronavirus: nearly half of China’s cinemas in danger of permanently closing due to pandemic
The boom times are over for China’s huge cinema industry, with the coronavirus pandemic forcing prolonged closures   A new industry survey suggests that 40 per cent of cinemas, almost 5,000 in total, could go bust because of losses stemming from the Covid-19 lockdown

How a local start-up used location tracking and geofencing tech developed for retailers to help Hong Kong control the spread of coronavirus
SagaDigits usually deploys the technology in supermarkets to keep track of popular items and to guide shoppers to their favourite products    Hong Kong’s electronic wristband project is an important breakthrough for us: CEO

New law requires 30-day cooling-off period before Chinese couples can divorce
The clause in the new Civil Code, which will take effect on January 1, does not apply to families with a history of domestic violence or extramarital affairs    The move generated anger and concern, with one commenter saying: ‘It’s not helpful in protecting women’s rights’

From keep fit craze to online dating boom: how coronavirus could change Chinese people’s lifestyles
The Covid-19 pandemic could result in a fitness boom as people emerge from lockdown determined to live a fitter and healthier live   Online dating sites have also reported a surge in new users

Criminal Law And Business In China: Too Often the Twain do Meet
If you are involved in a business dispute in China, you should immediately consider the risk it will be transformed into a criminal matter. If the other side in your business dispute threatens criminal sanctions against you, you should take this very seriously. You need to be completely sure that what you consider to be an entirely innocent commercial dispute is not in fact a potential crime under the wide application of economic crime applied in China. Above all else, if you think you might be subject to criminal claims in China, do not go there and, if already there, leave as soon as you can

Alain Gillard
Information Officer
Service Asie Pacifique
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