China Press Review – June 15, 2020

Press review

Markets expecting an early coronavirus recovery are ignoring the global economic and political mess
The knowledge that a V-shaped recovery is off the table has not dissuaded markets from surging in expectation of further injections of central bank liquidity    Political leaders are selling snake oil to secure power and central bank governors are pandering to their whims

Coronavirus: China’s industrial engine revved strongly in May, but consumption weak as slow recovery continues
Industrial production grew at the strongest rate since December 2019, but retail and investment remained negative, even as gradual improvement continues     Weak demand at home and abroad tempers analysts’ outlooks for China, while fears of a new outbreak in Beijing also a reminder of the fragility of economic recovery

Foreigners in China worry about their future as Beijing, Washington clash
‘I fear the political environment will deteriorate to such a degree that … I’ll face hostility or just won’t get my visa,’ businessman with Chinese wife says    ‘If Trump bans graduate students, then China could ban graduate students too,’ American researcher says

China’s foreigner ban leaves global businesses in limbo
China’s coronavirus travel ban is wreaking havoc among foreign companies and international schools, with many fearing for their future as executives, teachers and students are left stranded in their home countries.     A ban on most foreigners entering the country was implemented in March as the outbreak gathered pace overseas — leaving families separated and firms struggling without key employees

EU Challenges China’s Trade Expansion With Landmark tariff
The European Union fired a warning shot at China over its global trade ambitions with an unprecedented tariff decision to counter Chinese subsidies to exporters. For the first time, the EU on Monday took aim at alleged market-distorting aid granted by a

China confirms more than 40 per cent of population survived on just US$141 per month in 2019
Last year, the bottom 40 per cent of Chinese households ranked by income, totalling more than 600 million people, had a per capita disposable income of 11,485 yuan (US$1,621)c The data confirmed the surprising claim made by Chinese Premier Li Keqiang at the end of the National People’s Congress in May

Why EU-Vietnam free-trade deal can’t topple China as world’s factory
Agreement to slash tariffs should boost European investment in Asia’s ‘export rock star’, but is no silver bullet for post-coronavirus recovery, experts say    And don’t expect an exodus of manufacturers from China to Vietnam, they add. Hanoi relies on its neighbour and can’t replicate its scale even if it tried

American Express wins bank card clearing licence for China’s US$27 trillion market
American Express becomes the first foreign payments network to be allowed to process local currency transactions in China    AmEx is required to start the clearing service within six months, according to a statement

China’s coronavirus recovery plan falls back on old playbook of debt and construction
China’s industrial recovery in May was sparked by local government spending and an imminent construction boom, analysts said    Coronavirus recovery remains disjointed, with retail and investment still negative, even as analysts revised up annual economic growth forecasts

Coronavirus impact: China’s auction of 1 trillion yuan of special treasury bonds to begin this week, sources say
China announced plans in May to sell 1 trillion yuan of special treasury bonds to help fund economic stimulus in the wake of the coronavirus pandemic    According to the sources, 70 per cent of the bonds will have a 10-year term, 20 per cent will have a maturity of five years and the remainder will be seven-year bonds

PBOC Liquidity Stance Leaves Banks Looking for More Action
The People’s Bank of China supplied banks with 200 billion yuan ($28 billion) in fresh liquidity Monday while letting some previous loans expire, leaving the financial system needing further injections if a looming cash crunch is to be avoided

China opens $45 trillion financial market as US closes
China took a concrete step over the weekend to further open up its $45 trillion financial market to foreign investors, as the country’s central bank issued a license to US credit card company American Express to clear transactions in the Chinese mainland, the first of such licenses for any foreign institution in line with the country’s long-term opening-up policies.

Germany, preparing EU presidency, wants more reciprocity with China
Germany has signalled it will push for a tougher EU line towards China, adding language to a draft document that would see a stronger demand for “reciprocity” – seen as code for access for European firms — and a new emphasis on “values”.

Merkel’s pending departure adds uncertainty to China’s European relations, observers say
The question is whether German chancellor’s successor will continue to cooperate with Beijing or favour closer ties with Washington, Chinese researcher says    China has increased its engagement with Europe in recent months as its relationship with the United States has nosedived

You Win Or Lose In Luxury With Brand Experiences
Fifty percent of luxury brands won’t make it through the pandemic. The ones that fail will charge a lot but won’t offer value through their in-store experience

Should Luxury Leverage Street Shopping in China?
The Chinese government chose not to set a GDP goal this year — only one in a series of moves to reinvigorate the national economy. Most recently, the government implemented policies that encourage consumers to shop at night and also become street vendors. 
Since the COVID-19 pandemic, the economy has been on a dip leading local government officials to devise new ways to stimulate employment and encourage spending. During ‘Two Sessions’ — the National People’s Congress and Chinese People’s Political Consultative Conference — Premier Li Keqiang championed the ‘street vendor economy.’ This has been greeted positively by several cities including Shanghai, Nanjing, Qingdao, and Chengdu

Break the China habit? Lobsters, lights and toilets show how hard it is
The risks of relying economically on the Asian superpower have never seemed clearer. But as the world tries to get moving again, it needs China more than ever As the coronavirus pandemic amplifies long-standing concerns over the world’s economic dependence on China, many countries are trying to reduce their exposure to Beijing’s brand of business.  .The last time German industry faced a severe downturn, relief came from China. The country’s explosive growth and hunger for Western technology helped German exporters bounce back quickly from the deep recession a decade ago. “In 2008, there were two markets that I ran to: China and the Middle East,” said Olaf Berlien, Chief Executive of Osram, one of the world’s largest lighting companies, which is based in Munich. But he does not expect Chinese sales to save German industry again. “China is still a market,” Berlien said, “but it’s not a growth market.

Asia’s electronics sector booms, bucking global economic slump
The electronics industry is holding up relatively well, as companies adopt new technologies such as 5G and automation tools     Some of the boom is specific to the health crisis, amid a global scramble for medical equipment and demand for videoconferencing and other remote working technologies

Fears for Volvo Expose Sour Turn in Sweden’s Ties With China
When a Chinese manufacturer swept in to save the Swedish car marque, it was warmly welcomed. A decade later, plans for a fuller merger are being debated in a frostier atmosphere

Tencent plans futuristic neighbourhood in Shenzhen inspired by the internet’s distributed network
The planned 132.6-hectare Net City in Shenzhen’s Dachanwan port area is slated to start construction by the end of this year    With tech companies wielding increasing influence globally, many are making their mark physically on the urban landscape with sprawling projects

Tencent acquires stake in newly public Warner Music Group
At current prices, Tencent’s investment is worth more than US$246 million   The music industry is enjoying a long-running financial renaissance, thanks to the popularity of streaming services

The world’s first 5G mobile networks are still more patchy than powerful
Independent tests using 5G smartphones and speed-measuring apps showed that gaps in coverage can leave most early adopters waiting for networks to reach full speed  Where it is available, even without hitting its maximum theoretical speeds, 5G is an impressive upgrade for most consumer applications

China Home Prices Up Most in Seven Months as Economy Reopens
China’s home prices rose at the fastest pace in seven months in May, as the property market continues its rapid recovery from the coronavirus shutdowns.

China’s tourism sector was already in a ‘death spiral’ – and now Beijing reports a new cluster of Covid-19 cases
50 people in Beijing test positive over the weekend for the virus    Most mainland Chinese people say they are worried about travelling and their finances, survey finds

Coronavirus: Beijing lockdown spreads in race to control outbreak
Chinese capital reports 36 new infections in single day, locks down 10 more communities    Market boss and local officials sacked for negligence as widespread testing around Xinfadi market continues

China halts European salmon imports over suspected link to virus outbreak
China has halted imports from European salmon suppliers amid fears they might be linked to a coronavirus outbreak at a Beijing market, although experts say the fish itself is unlikely to carry the disease.

China in brace position as Five Eyes form united front
Beijing can expect more concerted efforts against it from the US, Australia, Britain, Canada and New Zealand, observers say    The willingness of the alliance’s members to speak out ‘is a sign that China’s Wolf Warrior diplomacy has backfired’

After the National Security Law: What Next for Hong Kong?
On May 28, China’s primary legislative body, the National People’s Congress (NPC), announced a new law that, if imposed, will allow Beijing to tighten its authoritative hold over Hong Kong. Passed in the NPC by a vote of 2878 to 1, the national security law has bypassed Hong Kong’s own legislative procedures, and could have serious and lasting political and economic repercussions.   The list of potential ramifications of China’s national security law for Hong Kong continues: restricted travel, filtered social media content, prosecution for exercising human rights, and more. The future of Hong Kong’s political and economic autonomy remains uncertain. However, the residents of Hong Kong historically have not allowed Beijing to implement laws that they find unjust without putting up a fight. Already we have seen the bill spark the type of protests that it intends to eliminate.

Troubled Hong Kong, China’s gateway to markets, could prove too costly
Chinese money slips out through Hong Kong while the SAR shrinks as a piece of China’s GDP pie    As long as the city remains open it will continue to be the pipeline to the dollar. How long before Beijing fixes the plumbing?

Asian cooperation should start with financial stability
‘Stand your ground, don’t retreat’ is how to survive a bear attack. The same is true for surviving COVID-19. Countries that retreat into themselves will face worse health outcomes, deeper recessions and slower recoveries than open ones. Whatever misguided comfort people may get from closing their country, it cannot overcome the basic arithmetic of national accounting: closed economies will see living standards collapse. Governments understandably were first preoccupied with domestic priorities, but a regional response will now make domestic challenges easier to manage. A lack of cooperation will make them harder.

EU won’t ally with US against China, foreign policy chief says before Pompeo meeting
The bloc will not pick a side in the escalating US-China conflict, Josep Borrell says    Instead, the EU would go its own way, working with both Beijing and Washington on areas of mutual interest

China and US can still cooperate as competitors, Beijing’s former top trade negotiator says
Long Yongtu says the two economies are too intertwined to decouple and it’s more important than ever to work together     Head of team that steered China’s WTO entry in 2001 says post-pandemic relationship can be based on search for common ground

China in Central Asia: Is China winning the “new great game”?
This paper takes issue with the U.S. narrative that Chinese activities in Central Asia are, on balance, damaging to the interests of those countries. It notes that these states leverage China’s involvement to address development and security challenges that would otherwise be under-resourced, and that availing themselves of such leverage comports with U.S. interests in the region. It recommends that U.S. policy focus on elevating its diplomatic presence and on assisting institution-building that would improve project assessment and governance capacities.

Revealed: Canada spy report written hours before Meng Wanzhou’s arrest predicted ‘shockwaves around the world’ once Huawei CFO was taken in
Meng’s lawyers say the report written by the CSIS intelligence agency provides evidence of ‘coordinated state misconduct’ between the US and Canada against her   They say the report provides a timeline for Meng’s impending arrest and is ‘troubling’ evidence that CSIS knew she would be interrogated by border officers

China’s anti-graft watchdog investigates police chief of scandal-ridden Chongqing
Deng Huilin, who also served as megacity’s deputy mayor, suspected of “serious violations” of the code of conduct     Deng’s predecessor also removed from office on corruption charges

Japan’s triple economic shock
Japan’s economy has experienced three consecutive shocks over the past year-and-a-half. The first shock struck Japan in early 2019 when the US–China trade war and slowing economic growth adversely affected Japan’s manufacturing sector. This economic effect was exacerbated by a second demand shock caused by the consumption tax hike from 8 to 10 per cent on 1 October 2019. Just as Japan’s economy was recovering, a third shock caused by COVID-19 dealt the most severe blow, plunging Japan into a full-blown recession.

Xi Jinping’s Japan visit ‘unlikely to go ahead’ after mood turns sour towards China
Growing concern over Hong Kong and increasing wariness about Beijing’s aggressive diplomacy mean it is ‘not a good time’ for the visit, Japanese diplomat says   The Chinese leader’s trip had been scheduled for April after improving relations, but had to be delayed because of the coronavirus outbreak

China, US planning to hold top-level talks in Hawaii, source says
US Secretary of State Mike Pompeo expected to lead American delegation, with Politburo member Yang Jiechi set to head Chinese team, insider says    Meeting would be first face-to-face talks between top officials from the two sides since January and comes as tensions near boiling point

Coronavirus: Chinese activists held for posting censored articles to face trial on criminal charges
Chen Mei and Cai Wei have been in detention since April but case is expected to go to court soon    Activists ran online project that published material about sensitive issues like #MeToo movement, eviction of migrant workers in Beijing

South China Sea: Beijing must learn to lead and share in disputed waters, experts say
China says its island-building in the Spratlys and other areas will benefit the world, but its closest neighbours are not so sure   While use of the so-called public services offered by Beijing has been limited, clashes between fishermen have been steadily rising, academic says

China boosts its nuclear arsenal as world’s stockpile shrinks
China, India and Pakistan are modernising their weapons while Russia and the US shed old nuclear arms, say monitors    New threats such as chemical and biological weapons emerge, adding to global instability, finds peace research institute

And now some questions for China’s TikTok
In a week of firsts last week, a high-level European Commission communication named China as responsible for targeted influence operations and disinformation campaigns around Covid-19.
In parallel, the most globally successful video sharing platform owned by a Chinese company – TikTok – signed onto the EU’s Code of Practice on Disinformation.    European Commission vice-president Věra Jourová announced on Wednesday (10 June), TikTok will join Google, Facebook, Twitter, Microsoft, and Mozilla as a signatory to the Code of Practice.
Alain Gillard
Information Officer
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