China Press Review – June 19, 20

Press review

Xi Jinping and Donald Trump to broaden agenda beyond US-China trade war for meeting at G20 summit in Osaka
Osaka summit intended to pull bilateral ties away from brinkmanship that has dragged relations to lowest point in decades Trade war just one of the items on the agenda, analysts say, along with principles of relationship, North Korea, and Huawei

China, Hong Kong shares surge on news of Trump and Xi’s agreement to talk trade at G20
Trade talk derailment last month led to steep fall in Chinese, Hong Kong markets Electronic and telecommunication stocks shoot up

Donald Trump and Xi Jinping confirm G20 meeting and restarting of US-China trade war talks
Trump tweets that he and Xi will meet at the G20 summit, while Xi is quoted as saying he will meet Trump to ‘exchange opinions’ on Sino-US relations Measured remarks from Beijing suggest efforts to protect Xi “from being seen as too eager to reach a truce”, says a former US trade official

Xi Jinping targets ‘fundamental China-US issues’ in Japan meeting with Donald Trump
Meeting at G20 could bring first positive development after setbacks in talks to end the two countries’ trade war But former US trade negotiator says expectations of the presidents’ discussions should be ‘kept in check’

Hopes in China rise for a Trump-Xi trade deal
Analysts with ties outside China see major obstacles, notably on how both sides can come to terms over the treatment of Chinese telecom giant Huawei. But the calculus of some with ties to the Chinese government is that President Donald Trump is ready to move toward an agreement. The Office of the U.S. Trade Representative began Monday a planned seven days of public hearings on proposed tariffs on $300 billion worth of Chinese goods.

China signals currency war truce ahead of Xi Jinping’s meeting with Donald Trump at G20 in Japan
US president confirms first meeting between the two world leaders since December will take place next week in Osaka The People’s Bank of China will sell 30 billion yuan (US$4.3 billion) worth of short terms bonds in Hong Kong next week to facilitate propping up the yuan

With Trump-Xi summit set, US and China to restart talks Wednesday
News of G-20 sit-down lifts trade deal hopes and stocks

Is China’s concern over a possible US dollar shortage risk forcing companies to sell overseas assets?
China’s need for US dollars to repay debts, pay for imports and fund Belt and Road initiative projects may exceed its US$3.1 trillion in foreign exchange reserves Anbang Insurance Group, Dalian Wanda Group and HNA Group have all been pressured to sell assets amid the trade war with the United States

Trade war drags on business sentiment in Asia-Pacific, reaches 10-year low: report
Business confidence among top companies in the Asia-Pacific region has fallen to its lowest point since the 2008-2009 financial crisis, according to the Asian Business Sentiment report, a survey by Thomson Reuters and Singapore’s INSEAD business school. The business sentiment index fell to 53 in the quarter ended June from a rating of 63 held in the two previous quarters. The measurement tracks companies’ outlook for the next six months and a score above 50 indicates an overall positive outlook.

Trade war drags on business sentiment in Asia-Pacific, reaches 10-year low: report

Guangzhou: Industry, Economics, and Policy
Guangzhou, the capital city of Guangdong province, is an important political, economic, industrial, and cultural center in the South China region.

Why China’s ‘world’s low-cost factory’ status is under threat
A growing number of global firms are pivoting production out of China in reaction to the trade war.

US-China trade war: Vietnam might get Apple, but Indonesia can get a bite of the action, too
Countries like Vietnam stand to benefit as companies like Apple leave China for more profitable markets But for Indonesia to benefit, some innovative, outward-looking policy decisions will be needed

Harley-Davidson strikes deal to make smaller bikes in China
Harley-Davidson Inc will partner with China’s Qianjiang Motorcycle Co to produce a new smaller model bike, making good on promises to build more motorcycles outside the United States that have angered President Donald Trump.

Germany seeks ‘level playing field’ in China
The German economy minister has described China as a partner and competitor. He said it is time to establish better trade rules that don’t put European companies at a disadvantage.

China has the most supercomputers, output lags US
Hosted in Frankfurt, Germany, the 2019 ISC High Performance conference announced the 53rd list of the world’s “Top500” supercomputers. Every six months, the Top500 project releases a list of the 500 most powerful commercially available computer systems in the world. China has the most supercomputers on the list with 219, the fourth consecutive time it has topped the list in number of machines. Quantity does not equal quality, though: the United States leads in terms of performance, with 38.4% of total computational output versus China’s 22.9%.

Briefing: China has the most supercomputers, output lags US

How China is counting on 5G to improve health care
Major telecoms firms are driving 5G initiatives in tele-diagnosis, remote surgeries and smart hospitals across China

As China cuts support for its electric carmakers, auto firms could face a ‘war of attrition’
China has become the biggest electric car market in the world, thanks to government support in the form of subsidies — but things may change as subsidies are being reduced. Experts and industry insiders warn that there could be consolidation in China’s electric vehicle market and weaker investor sentiment. Still, Chinese electric carmakers like Xpeng and WM Motor are remaining bullish despite potential short-term blips in the market.

EV maker CHJ to restructure into VIE, seeking overseas funds
Chinese electric vehicle (EV) maker Chehejia (CHJ) is planning to restructure into a variable interest entity (VIE) and register an offshore holding company for a possible listing overseas. According to an announcement released Tuesday by major shareholder Zhejiang Leo Company Ltd, one of its Hong Kong subsidiaries will subscribe approximately 68.6 million shares of Leading Ideal Inc, a Cayman Islands corporation which will be jointly owned by CHJ shareholders.

EV maker CHJ to restructure into VIE, seeking overseas funds

Electric dreams in danger as funding dwindles for China’s Tesla challengers
Last year, Wei Qing and his private equity investment team visited more than 20 Chinese electric vehicle manufacturing startups.The end result? They decided not to invest in any. “There are too many uncertainties from when a company tells a story in the early stage, to when it produces a sample car and raises funds, to the eventual mass production,” said Wei, managing director at Shanghai-based Sailing Capital.

Why Blacklisting Huawei Could Backfire
Another advantage is China’s enormous domestic market. Few companies outside the United States are able to turn down opportunities to sell in China, and even fewer governments are willing to stomach the economic pain of turning away Chinese demand at Washington’s say-so. The Trump administration’s unsuccessful campaign to get Europe to ban Huawei from building its 5G network should have been a warning sign of the limited tolerance of U.S. allies for Washington’s brinkmanship. Instead, the administration is doubling down on a strategy that anticipates allies toeing the U.S. line. It didn’t have to be this way. The United States could have maintained the rift between government and industry in China if it had ensured China’s continued dependence on U.S. technology. Instead, the Trump administration’s actions against ZTE and Huawei have turbocharged China’s self-reliance drive, aligning the interests of government and industry. Although in the short term the pain imposed on China’s tech industry by the blacklisting might appear to vindicate the administration’s move, over the long term its actions will pave the way to a more technologically formidable China

Huawei promises consumers in the Philippines a full refund if Gmail and Facebook won’t work on its devices
During China’s midyear e-commerce shopping spree, Huawei’s two smartphone brands were No 1 and No 3 in terms of sales volume

India to overtake China as the world’s most populous country: UN
is set to overtake China as the world’s most populous country in less than a decade, according to a new United Nations report. China and India currently account for about 37% of the entire global population of roughly 7.7 billion, with China currently home to about 1.4 billion people and India to 1.3 billion.

China wants Asia free trade pact without India
Beijing’s proposal seen as counter move to Washington’s Indo-Pacific push

Hong Kong Isn’t Just Another Chinese City
The U.S. is also an important patron. Consider the territory’s inflow of dollars, which soared after the global financial crisis.

One year after GDPR, China strengthens personal data regulations, welcoming dedicated law
China has since accelerated legislation on the issue, with more than 200 laws, rules, and national standards being brought up by the country’s legislative bodies, government agencies, and cyberspace watchdogs. A dedicated law that emulates the General Data Protection Regulation (GDPR) of the European Union, which will potentially bring tech companies in line with stringent personal data regulations, is also in the works.

One year after GDPR, China strengthens personal data regulations, welcoming dedicated law

China seeks to build ‘responsible AI’ with newly issued industry principles
China has issued a series of principles on Monday to regulate the research and application of artificial intelligence (AI), in an attempt to ensure the “safe, controllable, and responsible use” of the technology amid rising privacy concerns in the country.

China seeks to build ‘responsible AI’ with newly issued industry principles

As artificial intelligence and fintech come knocking, half of Asia-Pacific finance professionals fear for their jobs
Performance analysts, traders, accountants and sales agents to lose out over next decade, according to CFA Institute survey But CFA members also expect number of finance professionals to grow 16 per cent over same period

Housing policy easing, falling yuan to attract young Hongkongers to ‘Greater Bay Area’ cities of Zhuhai, Zhongshan and Guangzhou
Inquiries from Hong Kong for apartments in 70-year-lease projects have gone up Better sales forecast as the yuan is expected to weaken further

What’s New with China’s Luxury Spending?
Here are five surprising findings from the Tencent x BCG 2019 Luxury Playbook that demonstrate the fast-changing nature of affluent Chinese consumers. With a large pool of luxury players currently diving into China’s market, the country has become one of the most competitive business environments in the entire industry. The intensified competition requires brands to stay abreast of quickly-evolving Chinese shopping behaviors if they want to win the market’s daily battles — and, ideally, the long-term war.

What’s New with China’s Luxury Spending? Read Tencent x BCG 2019 Report

Big Data: The Vital Tool for Luxury Brands in China
As millennials and Gen Zers further drive sales in the luxury market, brands will become more and more preoccupied with understanding these consumers and their shopping habits. For the second year in a row, China’s luxury market has seen robust growth powered by digital transformation and a tailored approach to customer service In a country that boasts the most advanced digital platforms where young, upwardly mobile consumers are socially connected, online shopping still didn’t reach its full potential. According to the consulting group McKinsey, “only 7 percent of Chinese luxury sales occur in official online channels.” Still, McKinsey also stated that, “as luxury brands further develop O2O initiatives that bridge the online and offline worlds to create a seamless experience, it is likely that more luxury sales will be conducted online.” Even though young consumers demand full digital transformation, they still need the store-based retail experience.

Big Data: The Vital Tool for Luxury Brands in China

What’s in a name? It’s a big deal for China’s hoteliers and real estate developers, if the brand is too ‘big, foreign or weird’
Chinese authorities are cracking down on property projects and hotels to get rid of names that were ‘big, foreign, weird’ or based on homonyms Vienna Hotel Management of Shenzhen said the trademark of its namesake hotels in Hainan are protected by the law and is appealing the decision

Luxury high-rises buck property slowdown in China
In the southwestern city of Chongqing, investors are rushing after Beijing banned capital outflows

Will the trade war mean US pig farmers miss out on their ‘single greatest sales opportunity’ in China?
China’s pig population is down by 20 per cent due to African swine fever, with predictions that it will need to import 41 per cent more pork to meet demand But the tariff battle between Beijing and Washington is leaving American farmers on the outside as European producers like Spain and Germany take advantage

China halts pork imports from third Canadian firm as dispute deepens
Frigo Royal shipment contains a feed additive banned in China, customs agency says Imports from Olymel and Drummond Export were blocked in April

Debt-Saddled China Railway Announces Restructure
The beleaguered company says it wants to adopt a more market-oriented corporate structure.

Will Narendra Modi’s snub of Xi Jinping’s belt and road derail China-India ties?
The Indian prime minister refused to back the Chinese leader’s ambitious global infrastructure vision at a summit last week, but the apparent snub is not getting in the way of amicable ties between Asia’s two biggest economies BRI and border issues have not managed to overshadow the remaining business between the two countries

Italy’s Waltz with China: Business as usual for Rome
Nonetheless, in the Italian perception, the Belt and Road Initiative agreement did not have the same relative weight that Beijing and Washington, for different reasons, attached to it. In fact, Italy’s subsequent endorsement of Abe’s project proves that Rome is merely playing Asian diplomacy according to its historical diplomatic playbook. A structural shift is not in sight, at least not yet. Endorsing two projects theoretically incompatible is simply business as usual for Italian diplomacy; it is basically a way to keep options open. Participation in the Belt and Road Initiative does not entail any strategic or systemic swing in its global political preferences. Italians will retain a role in both projects and see how they evolve. At a later time, each plan could be either pursued or abandoned, according to the evolution of Rome’s interests and needs and the changes in the international landscape. More than 100 years after von Bülow’s remarks, Italy remains true to itself and its consistently inconsistent foreign policy, in Asia and the world.

Italy’s Waltz with China: Business as Usual for Rome

World Bank: Managing the Risks of the Belt and Road
The Belt and Road represents an enormous opportunity — particularly for countries that have long been at the periphery of the world economy. It should not be squandered.

Beijing’s Growing Influence in Europe
Fewer Chinese Investments Could Benefit the EU Chinese investments in Europe have reached dizzying heights in the last two decades. While they present appealing opportunities for economic growth in some countries, they are also pose direct threats to some of the continent’s wealthier states.

Beijing’s Growing Influence in Europe

Chinese President Xi Jinping gives North Korean leader Kim Jong-un his full support
‘Traditional friendship’ between two nations will continue whatever the future brings, Xi says ahead of two-day trip to Pyongyang Visit comes amid rising tensions between Beijing and Washington, and stalled negotiations on the denuclearisation of the Korean peninsula

The Human Cost of China’s One Child Policy – A Must See Documentary
Masterfully directed and powerfully curated, One Child Nation finally gives the Chinese people their voice. And what they are saying – that denying them their dignity could never be worth it – is not something the Chinese government wants to hear, especially as it peddles abroad its model of economic development above all other human rights.

The Human Cost of China’s One Child Policy – A Must See Documentary

Vietnam has a new partner in its old rivalry with China – the US
A mutual suspicion of Beijing’s rising clout, particularly in the South China Sea, has led to deeper military cooperation between Hanoi and Washington But non-aligned Vietnam’s foreign policy doctrine still places constraints on its defence ties, and precludes any formal alliance

Business sector’s opposition to Hong Kong’s extradition bill should have sounded the alarm
International businesses have a strong role to play in China’s Belt and Road Initiative and Greater Bay Area. That the sector, which tends to be pro-government and opposed Occupy, voiced concerns should have been a wake-up call for government

Donald Trump ‘right’ to stay out of Hong Kong extradition bill dispute, Beijing says
US president showed the ‘right attitude’ by saying problem can be resolved by governments in Hong Kong and Beijing Trump describes protesters as ‘very effective’ in interview with Time magazine

Alain Gillard
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