China Press Review – June 21, 2019

Press review

China has become the happy hunting ground for European asset shoppers as trade war drags on, saps US acquisitions
The number of deals involving European firms in China increased by 32 per cent to 49 last year, while value jumped 856 per cent to US$9.94 billion. Heineken’s 40 per cent stake in CR Beer for US$3.1 billion was one of the biggest inbound investments from Europe last year

China-EU investment treaty talks ‘better than expected’ as Beijing woos US allies
Meetings about Comprehensive Agreement on Investment go ‘deeper than normal’, European diplomat says China also signs significant deals with Britain as it shores up alliances during trade war with US

Europe continues to welcome Chinese investment in its ports, despite US concerns about Beijing’s global maritime ambitions
The hard reality for Trump is that Chinese businesses are modernising European port infrastructure and creating jobs as part of belt and road integration. Many in Europe see US fears about the Chinese navy gaining greater strategic access as overblown

China and US negotiating teams scramble to make a plan for Xi Jinping and Donald Trump’s G20 Osaka summit
China, US trade teams may meet in Osaka as early as Tuesday, sources say, while top negotiators are set to speak on the phone ahead of the trip Negotiators have not spoken since the talks collapsed in early May but a call between Xi and Trump confirmed the meeting in Japan

Chinese companies are spending millions on lobbyists to fend off threats from Donald Trump and shield themselves from effects of trade war
Chinese companies’ decisions to hire lobbyists have been driven in part by looking at what has happened to Huawei and ZTE over the last year

US-China trade deal ‘within reach if Xi Jinping and Donald Trump show courage’ at G20 summit in Osaka
Craig Allen from the US-China Business Council tells event at Renmin University that setbacks in negotiations are to be expected Seminar hears that addressing America’s concerns will also be good for China in the long run

Global economic growth is already slowing. The US trade war is making it worse.
The effects of Trump’s trade war have been particularly hard on Germany, Europe’s largest economy, which has been bracing for a decision about whether the United States will impose tariffs on auto imports.

US runs risk of backfire with trade war tariffs, Chinese banking chief warns
Central bank’s top party official insists that American duties will have minor impact on his country’s economy

US tariffs on China goods would have ‘striking’ affect on women, families, JC Penney says
Proposed tax increase ‘disproportionately hits women’s and girls’ apparel’, JC Penney says American consumers will ‘pay higher prices,’ according to US retailer

Storm in a teacup? Trump goes after all the tea from China with latest tariff push as trade war threatens to boil over
China was the largest exporter of tea – one of the latest products to face 25 per cent tariffs – to the US in 2018, according to trade data The proposed tariffs would increase prices for consumers and mark the latest escalation of a trade war between the world’s two biggest economies. The US is heavily reliant on imports as it produces almost no tea of its own, according to the Tea Association of the USA. America is the world’s third largest importer after Russia and Pakistan, the trade group said.

Soy milk, toothbrushes and hair conditioner are biggest winners as more Chinese consumers opt for premium brands, says study
Milk made from soybeans saw annual sales grow by half on average between 2016 and 18, according to a report by consultancy Bain & Company

Has Sourcing Product From China Become TOO Risky?
For many, the short answer is yes. Let me explain…. First there are the tariffs, which come and go and come and go, but are always a risk for any company that buys product from China for sale in the United States. They are a risk because the $10 widget you buy from China today may cost you $12.50 if you end up having to pay a 25% tariff on it in the end. Yes, there are all sorts of things that can be done (and my firm’s international trade lawyers seem to be spending half their waking hours doing these things for our clients), but in the end your product prices from China will almost invariably go up. Will the Trump-Xi meeting in Japan at the end of this month solve this problem? Highly unlikely.

Has Sourcing Product From China Become TOO Risky?

Analyst who made correct call on China’s market this year now favours Chinese government bonds over stocks
Chief economist at Soochow Securities, Chen Li, lays out bull case for Chinese government bonds The yield on the nation’s 10-year sovereign bonds recently stayed at 3.25 per cent

China, Hong Kong stocks boosted by thaw in trade war, possibility of US rate cuts and deregulation of M&As by Beijing
Shanghai Composite Index rises 0.5 per cent to close at 3,0001.98 Hang Seng Index dips 0.3 per cent to close at 28,473.71, but records 5 per cent weekly gain

Hong Kong faces a perfect storm
China’s leaders do not want to kill the goose that lays the golden egg, says Sweeney. Hong Kong accounted for about 12% of the mainland’s exports last year and is the single largest source of “realised foreign direct investment” to China. Its stock exchange gives mainland firms “an independent channel to international capital outside… New York or London”

Hong Kong faces a perfect storm

Citi China bets on country’s huge personal banking sector
After recording rapid growth in the wealth management and credit card sectors in the past two years, Citi China is confident to replicating the sustained success in the personal banking segment in the world’s second largest economy.

China considers unwinding rules put in place after the last equity market crash; proposed change to help ease company fundraising
CSRC has invited public comment on proposals to scrap M&A profitability requirements and other measures implemented following 2015 market crash Easing signal helps send ChiNext Index up 1.7 per cent to close at 1,523.8 on Friday

Front-loading not an option for US firms looking to avoid Trump’s looming tariffs on Chinese imports
Import traffic at America’s busiest port, the Port of Long Beach in California, dropped in May, suggesting minimal front-loading to beat possible tariff increase on June 1 Companies have not been able to make early purchases due to capacity issues in US warehouses and stocked inventories from previous front-loading

Foxconn chairman steps down ahead of presidential run
Terry Gou, founder and chairman of Foxconn, announced today he is handing the reigns of the world’s largest electronics contract manufacturer to a new operations committee. Gou, 68, was expected to withdraw from the daily operations of Foxconn since he announced his bid for president of Taiwan, where the company is based. He is expected to keep a seat at the board, but the company said at its first investors relations conference today that his presidential candidacy will affect his future role there.

Briefing: Foxconn chairman steps down ahead of presidential run

China’s virtual reality market set to expand, driven by increased policy support, 5G network roll-out
The country’s VR market is forecast to reach US$7.9 billion by 2021, as 5G mobile networks are deployed nationwide China is already an important production base for VR devices in the world, according to an MIIT official inks deal to handle cross-border logistics for Carrefour
Chinese e-commerce giant has reached a partnership with the Chinese unit of French retailer Carrefour to offer cross-border logistics services. As part of the deal, Carrefour has set up a store on JD’s international marketplace to sell imported goods, following last year’s opening of a store which sells the retailer’s domestic goods on the platform. JD will import the goods and arrange customs clearance, sorting, and distribution for Carrefour. The company’s cross-border import logistics network has established more than 10 trade ports in China, as well as three direct ports in Beijing, Shanghai, and Guangzhou.

Briefing: inks deal to handle cross-border logistics for Carrefour

Trump offers ‘anything’ to help Canada in rift with China
Canadian PM Justin Trudeau has left Washington DC with assurances from President Donald Trump that he will assist Canada in its rift with China.

Xi Jinping and Kim Jong-un present united front against ‘serious international changes’
Stronger ties can protect region’s stability and interests of both China and North Korea, the two leaders say Further talks taking place on second day of Xi’s first state visit to Pyongyang

China’s Xi in North Korea: It’s the economy
Speaking at a banquet in his honor, Chinese President Xi Jinping wrapped up his visit to North Korea by praising economic development. However, he also issued a warning over efforts to denuclearize the peninsula.

The Shanghai Cooperation Organization: A Vehicle for Cooperation or Competition?
The SCO reflects shifting power dynamics in this subregion, particularly between China and Russia. Russia has taken over the SCO’s chairmanship for the next year, and the July 2020 SCO summit will be one to watch as Russia plays host. The central question in the years to come will be whether Beijing and Moscow capitalize on their political partnership or cede to regional competition that could drive a deeper wedge between the dynamic neighbors and stymie the evolution of the SCO.

China’s Education Authority Calls for More Electives, Choice
Sweeping new guidelines aim to reform the country’s test-centric approach to secondary education.

China’s top talent now wants to work for rising domestic tech stars, not big brand multinationals
China’s talent is turning away from multinationals and towards domestic tech champions in the search for a more fulfilling career Change in sentiment comes amid raging US-China tech war and perceptions of ‘bamboo ceiling’ in the West

China to enhance industrial internet security
China will step up efforts to enhance the security of industrial internet as the technology concerns the safety of the real economy, said an official with the Ministry of Industry and Information Technology (MIIT) on Friday.

Chinese women continue to face discrimination in the workplace, court says
Despite small decline last year, number of legal cases involving violation of female workers’ rights in southern city of Guangzhou has been steadily rising Expectant and new mothers are most common victims, court report says

Hong Kong extradition protests reveal deep-rooted problems that need addressing. How will Carrie Lam and Beijing respond?
The government has failed to account for people’s mistrust of China, lack of faith in the ability of Hong Kong’s leadership to make independent decisions and the demographic complexity of the community

Be on alert for external ‘hostile forces’, Chinese security chief warns cadres
Rising political star Chen Yixin says China needs to strengthen its guard against online-aided threats to public opinion Comments come after series of protests in Hong Kong and underline Beijing’s determination to stop the city’s civil society influencing the mainland, observers say

Zhang Xiaolei, founder of Chinese fintech firm Qbao, to serve 15-year jail firm for fraudulent fundraising
Zhang Xiaolei founded the online fundraising platform Qbao in 2012 Court confiscates 100 million yuan worth of Zhang’s assets for his role in the illegal fundraising scheme

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