China Press Review – June 12, 2020

Press review

China must prioritise innovation to avoid being ‘strangled’ by US in next five years, top researcher says
China Academy of Social Sciences (CASS) researcher Zhang Xiaojing says China ‘needs to rely more on itself’ to create growth drivers and combat decoupling  Current trade and technology disputes are the US ‘kicking away the ladder’ which China used to become the world’s second largest economy

Angela Merkel presses Chinese premier Li Keqiang over economic reform
German Chancellor tells China’s premier that better market access and equal treatment for foreign firms are key to reaching EU-China investment deal    Merkel also raises situation in Hong Kong, but no details of that conversation have been made public

China’s economic recovery to accelerate: experts
China’s economy is expected to revive in the second half of this year as the country retains huge market potential and ample policy room, experts said Thursday.

Big data allows tax authorities to collect on ‘brushed’ e-commerce sales
Chinese e-commerce shop owners reliant on “order brushing,” a practice of falsifying sales numbers, may now be required to pay taxes based on the inflated figures with the implementation of a new tax law. The new rule is likely to bring more order to the industry over the long term, but an immediate implementation could deal a heavy blow to small online merchants, many of whom are struggling to recover from the impact of Covid-19

Live-streaming Scams & Struggles in China
The allure of live-streaming e-commerce in China is undeniable, and the COVID-19 pandemic only amplified the trend. The format has exploded in popularity across all customer segments and demographics. Essentially, every major social platform now has live-streaming features with seamless e-commerce integration. Most brand marketers are salivating because star live-streamers are claiming to sell thousands of units in minutes. However, when something appears too good to be true, it probably is. So, we did some digging to uncover the live-streaming scams and struggles facing this emerging space.

Technology’s Potential to Make Your Brand Sustainable
Environmental concerns are becoming important to young Chinese consumers. But how can brands use sustainable technology to meet this emerging demand?    As the global luxury fashion industry takes stock after the impact of COVID-19, sustainability has emerged as an important lifestyle factor for China’s citizens. Yet environmental concerns, particularly with younger shoppers, have been growing for a number of years. An article from McKinsey 2019 stated that 9 out of 10 Gen-Z customers believe that companies have a responsibility to address environmental and social issues. Industry leader, Shawey Yah, the group style editorial director at Modern Media, told Jing Daily that “Chinese millennials will pay more for sustainable goods.”

China-US tensions drive Beijing’s push of yuan in belt and road nations, but challenges remain
China is stepping up efforts to internationalise the use of the yuan in Southeast Asian nations taking part in its Belt and Road Initiative   Despite growing China-Asean trade, use of the yuan in global trade is limited and its share of currency reserves is still below 2 per cent

Should the U.S. refuse to pay back its $1 trillion debt to China?
Analysts say the proposal would throw the entire U.S. financial system into disarray — especially amid a pandemic-driven recession and a massive increase in the national debt.

Petroyuan’s stature grows on Shanghai exchange, helping world’s largest energy importer cut dependence on US dollars
Crude oil contracts traded in Shanghai accounted for 10.5 per cent of the global volume at the start of June compared to 6.2 per cent in the second quarter of 2018    Traders appear to embrace yuan oil futures contracts, pricing them similarly to the Brent and WTI benchmarks, says analyst

Retail investors heartily join’s ‘homecoming’ as they oversubscribe to Hong Kong public offer 179 times’s institutional tranche was also multiple times oversubscribed   The shares are due to start trading in Hong Kong on June 18

UK chip firm Arm wrestles for control of Chinese joint venture amid public boardroom spat
Arm owns 49 per cent of the China joint venture, and investors led by Chinese equity fund Hopu Investment hold the rest

Are European stocks the next big opportunity as economic recovery takes hold?
European equity indices have not bounced back in the same way as their US counterparts, indicating there is room for gains, especially as European officials have taken strong measures to boost recovery

China may punish Australia with trade curbs — but it can’t stop buying iron ore from Down Under
Bilateral ties between China and Australia have hit recent lows, and came after Canberra called for an international investigation into the origins of the coronavirus.  Beijing suspended some beef imports, slapped hefty tariffs on barley and is reportedly considering more actions on products from wine to fruits. However, China has not targeted its biggest commodity import out of Australia — iron ore.
China is the world’s largest iron ore consumer. It depends heavily on Australian iron ore, which is “critical” to the Chinese economy, said Gavin Thompson, Asia Pacific vice chairman for energy at Wood Mackenzie.

What to Make of China’s Debt Relief Announcement
China is instituting the G-20’s temporary debt suspension, but how will Beijing reframe the debt narrative in the long term?

Hong Kong security law: US may restrict capital flows through city, Treasury Secretary Steven Mnuchin says
President’s Working Group on Capital Markets is developing response to protect US investors from China firms that do not follow US accounting rules     Plans for the new law, which critics say will erode Hong Kong’s autonomy, have already prompted US President Donald Trump to begin withdrawal of Hong Kong’s special treatment

Hong Kong: City of two masks faces a new crisis
One year ago, black-clad youth of Hong Kong gathered outside parliament. Bricks and projectiles met rubber bullets and tear gas. Many protests and one pandemic later, the territory is facing another existential challenge. Will it survive?

National security law: Beijing targets Joshua Wong in condemnation of ‘referendum’ on class strikes
Hong Kong and Macau Affairs Office says activists are trying to use pupils as ‘tools’ in their bid to derail legislation    Unofficial referendum asking secondary school students to strike against the national security law moved to June 20

Coronavirus travel restrictions will have to give way soon to the economic imperative
Policymakers may be reluctant to take the step, which would risk a second wave of infections, but the first green shoots of recovery are apparent and must be nurtured    With a viable vaccine still months away, governments must study precedents, make sense of the conflicting advice, and begin to ease restrictions

Thailand says China, Japan are interested in travel bubbles
Bubbles with countries deemed to have the virus under control could allow visitors to return without being subject to quarantine requirements. Thailand said a number of countries, including China and Japan, are interested in discussions about travel bubbles, as the nation considers protocols for the eventual return of foreign tourists.

The Singapore-China Fast Lane to Facilitate Business Travel: Key Features
The Singapore-China fast lane came into operation on June 8, 2020, which will allow for essential business and official travel between six provinces in China and Singapore. An early example of this being implemented is the corridor established between China and South Korea on May 1.The initiative involves creating a ‘travel bubble,’ which enables travelers to cross borders with minimal or no quarantine required. Travelers will have to undertake a polymerase chain reaction (PCR) test for COVID-19 before flying as well as after arrival to their destination. Travelers going through this corridor will have to undergo stringent health checks prior and post arrival in Singapore or China, and their work itinerary will be closely monitored.
Singapore began easing lockdown restrictions from May 5, although health check measures still apply to all businesses, such as maintaining social distancing and the wearing of masks and observing good hygiene.

China and Covid-19: Preparing for a ‘Post-WWI World’
The world is likely to emerge from the pandemic with no benign hegemon   As the source of the Covid-19 outbreak, China initially faced a situation similar to the Soviet Union’s 1986 Chernobyl nuclear power plant explosion: an authoritarian state’s lies, cover-ups, and utter lack of openness and transparency leading to unnecessary loss of life domestically and internationally. Chernobyl—by some accounts—was the first step of the collapse of the Soviet Union. Could the Covid-19 pandemic be China’s Chernobyl?

Over 3 per cent of people in Wuhan may have had Covid-19, possibly with no or mild symptoms, studies say
Researchers carried out antibody tests on samples from health care workers, family members and hotel staff from the outbreak epicentre in China   Separate study concludes that results of nucleic acid testing may reflect just a fraction of infections in the city

Coronavirus: wheels come off China’s mask-making gravy train, as low-end manufacturers count their losses
Tens of thousands of opportunist manufacturers entered China’s mask-making industry to capitalise of the boom during the coronavirus pandemic   But the gravy train has ground to a halt for some producers of meltblown and nonwoven fabric, who have been forced to shut their factories

Under COVID-19, China’s Mask Market Surged. Now It’s Gone Bust.
Entrepreneurs say it’s becoming more difficult to recover their investments due to dwindling demand and plummeting prices.  The fabric is currently worth just 18,000 yuan per tonne, 15 per cent of what Mo paid for it, with his stockpile gathering dust in a warehouse. He has not received a single order for the KN95 masks he was making since mid-May, even though the price has fallen to 2 yuan apiece.

Key Takeaways from the Webinar “Acceleration with Technology for Fashion”
Jing Daily and Parsons School of Fashion hosted a webinar on how the implementation of technology has disrupted the fashion industry since COVID-19.

US is waging financial war to stop China’s rise, says veteran politician
Speaking to a group of business students at a webinar organised by the Xiamen University alumni association on Wednesday, Huang warned that while some steps taken by the US might appear chaotic, they were in fact highly calculated.

South China Floods Now Affecting One-Third of Country
An official casualty figure has not been updated since Monday, when 9 people were reported dead.

Twitter removes 23,750 China-linked accounts for spreading disinformation
The accounts, most of which had no followers, were ‘spreading geopolitical narratives favourable to the Communist Party of China’, Twitter said     One in three tweets were about Hong Kong, while others were about dissident Guo Wengui, the US civil unrest and Covid-19, according to an analysis

Zoom shut down of activists’ accounts over Tiananmen events was demanded by Chinese government
Zoom says it did not provide any user information or meeting content to the Chinese government  The videoconference giant will not allow further requests from China to impact users outside the country in the future, it says

US military ban locks two Chinese universities out of popular software
Students at the colleges in northeast China have been denied access to the American MATLAB platform after US authorities put the institutions on an ‘entity list’ over ties to the Chinese armed forces   Students say they have other options, including open-source technology

Chinese military officer arrested, charged with visa fraud as he tries to leave United States
Scientific researcher Xin Wang accused of making false statements on his visa application, faces 10 years in prison if found guilty    US customs officials say Wang was trying to take university research out of the country to share with military colleagues in China

China, a troubled giant, poses growing risk to the world
Facing growing frustration at home, Xi may be apt to act with least composure

podcast : Caixin China Biz Roundup: Netizens Slam ‘Two-Husband’ Policy
In today’s episode: Economics professor touts a two-husband solution to the demographic challenges caused by the One-Child policy; EU launches probe into teen sensation TikTok; and new mutual aid programs fill gap in national health care coverage, but critics call for more regulation

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