China Press Review – June 21, 2021

China’s Trade Relationship with its Neighboring Countries: A Snapshot
A look at China’s trade relationship with its 14 neighbor countries: Afghanistan, Bhutan, India, Kazakhstan, Kyrgyzstan, Laos, Myanmar, Mongolia, Nepal, North Korea, Pakistan, Russia, Tajikistan, and Vietnam.
As the largest trading nation in Asia, China has significant trade relationships with several of its 14 neighboring countries.
In 2020, China’s foreign trade volume was worth US$4.65 trillion, an increase of 1.5 percent year-on-year, according to statistics from the General Administration of Customs. Exports grew by 3.6 percent for a total of US$2.59 trillion, while imports fell by 1.1 percent to just over US$2 trillion. Overall, China registered a trade surplus of US$535 billion. With its neighbors, China’s total imports and exports are worth about US$288.4 billion. Among China’s neighbors, Vietnam (US$182.4 billion) has the largest trade volume, followed by Russia (US$105.1 billion), and India (US$84.1 billion).

podcast : Will China become the centre of the world economy?
The global economy is shifting away from the US and Europe towards Asia. The FT’s global China editor James Kynge and FT economics commentator Martin Sandbu discuss whether China will dominate global commerce or whether the world economy could split along regional lines

What China needs to do if it wants to achieve its ambitious economic goals by 2049
Given its success since the beginning of economic reform in 1978, this kind of transformation is certainly possible. But it is difficult and not guaranteed. China faces serious domestic challenges such as an aging population, a rural-urban divide, an underdeveloped financial system, insufficient innovation and reliance on carbon-based energy sources. Furthermore, China’s external economic relations have become contentious with a number of major partners, resulting in growing trade and investment barriers in both directions.

How the politics of China-centred supply chains is weighing on global economic recovery
Prices are rising as stimulus-fuelled consumer demand runs up against supply chain constraints      While inflation sceptics expect the problem to go away as supply systems reopen, there are signs that all is not well on the global factory floor   Central banks are faced with an awful dilemma. If cost-push factors continue to put upward pressure on prices, they must respond. Hence recent indications that the US Federal Reserve will probably need to start hiking rates sooner rather than later in the light of probably persistent inflation.  That may still seem a distant threat but the whole edifice of stock prices and debt levels could come toppling down now that markets are smelling blood, threatening the nascent global economic recovery and triggering a long-predicted financial market crisis.  All this is madness when the trauma of the pandemic is still with us. World leaders, not least US President Joe Biden and those joining his unholy alliance against China, must end their vendetta and look at the creaking foundations of China-centred global supply chains.

How Comac could change the ABCs of commercial aviation in China
The Chinese manufacturer is preparing its C919 for the runway to eventually rival to Airbus’s A320 and Boeing’s B737Aircraft won’t be a game changer but might capture market share, analyst says

China’s anti-sanction law won’t free tech companies from stranglehold from US restrictions, experts say
The new law will not lead the US to reverse course on sanctions, but it could force foreign firms to think twice about enforcing them or face lawsuits in China   New legislation passed in China and the US could further entrench moves towards long-term technological decoupling, experts say

Foreign Businesses Hope China Tax Relief Will Curb Expected Expat Exodus
Foreign business in China this month are hoping city and provincial governments will announce new incentives to ameliorate an expected exodus of expats in connection with changes in tax rules.    China’s central government decided two years ago to end tax-free status for rent, tuition and other “benefits in kind” for foreign residents at the end of 2021, exposing more of their pre-tax income to the country’s 45% top income tax rate. Chinese nationals don’t get the same tax break, which has helped the country attract foreign capital.

China jobs: unemployment rate dips, but numbers mask structural problems keeping graduates out of work
Analysts point to several factors that are draining number of blue-collar workers   Anecdotal reports suggest a mismatch between jobs and skills in the economy, which could prevent jobless rate from falling further

China jobs: unemployment rate dips, but numbers mask structural problems keeping graduates out of work
Analysts point to several factors that are draining number of blue-collar workers   Anecdotal reports suggest a mismatch between jobs and skills in the economy, which could prevent jobless rate from falling further   China’s government is now stepping up its vocational skills training as a way to alleviate the structural problem in employment, with Premier Li Keqiang addressing the issue at a meeting earlier this month. Authorities also vowed to expand jobs for college graduates, provide better career-counselling services and facilitate information flow between jobseekers and employers.  “The overall jobs pressure is still there,” the NBS’s Fu said. “As the next step, we’ll need to maintain necessary support for the economic recovery, push for the creation of new jobs, implement a jobs-first policy and expand employment” for key groups of workers.  Beijing had set a target by the end of this year to train more than 50 million people – including migrant workers, high school graduates, furloughed workers and former soldiers – using government subsidies. Skilled workers should account for more than 25 per cent of the total workforce by the end of 2021, according to the plan.  With the labour force shrinking and getting older, China’s next phase of growth will need to come from productivity gains driven by improved skills and innovation, McKinsey Global Institute said in a report released in January. It estimates that, by 2030, about 220 million workers, or 30 per cent of the workforce, may need to move into higher-skilled jobs.

China’s proposed ESG disclosure rules could go further to meet foreign investors’ needs, asset managers say
Better ESG disclosure would facilitate allocation of more funds to mainland-listed shares as sustainable investing continues to gain traction among investors, fund managers say      China’s markets watchdog closed a consultation on June 7 on draft revisions to listed companies’ disclosures in annual and semi-annual reports

Global cryptocurrency crackdown looms as governments enter digital currency race
Cryptocurrencies, which threaten state control over currency circulation, have gained traction only because governments were slow to act     With China pushing the US and Europe into action, a digital currency battle is shaping up, and cryptocurrencies will be the losers   Global cryptocurrency crackdown looms as governments enter digital currency race  The key factors in play today in the cryptocurrency space are the governance of these assets, how they have been used and the impact they are having on society and the environment. Because of hacks, fraud and mismanagement of networks, some governments have growing concerns and are pushing for the creation of central bank digital currencies.  The  People’s Bank of China  has decided to introduce its project to bolster people’s confidence in its financial institutions and undermine the use of bitcoin and other cryptocurrencies. Beijing has long been an opponent of cryptocurrencies, especially bitcoin, for many reasons.    One concern is the negative impact  cryptocurrency mining  has on the environment and how it hampers the goals established by many countries, including China, to reach  peak carbon emissions  by 2030 and  carbon neutrality   in 2060. Therefore, many regulators are requesting a change.   China’s accomplishments are pressuring the rest of the world to move forward on their own digital currencies. Beijing is aiming to reach as many people as possible through its commercial banks to further test the product and make the digital yuan officially tradeable by 2022, in time for the Beijing Winter Olympics.The objective is to be the first digital currency traded internationally, thus making the renminbi the new global currency and another currency of choice for international trade.

Bitcoin crackdown sends graphics cards prices plummeting in China after Sichuan terminated mining operations
Graphics cards from companies including Nvidia and Asus saw prices fall by as much as two-thirds on e-commerce platforms amid China’s sweeping bitcoin crackdown    Sichuan, which relies heavily on renewable hydropower, has ordered cryptocurrency mining operations to close down, following Inner Mongolia and Xinjiang

China’s Annual 618 Shopping Event Shows Consumers Are Back
China just concluded its mid-year e-commerce shopping festival known as 618 (June 18). It’s the second-largest e-commerce shopping day in China—second only to Single’s Day (November 11)—and possibly the second-largest shopping day in the world.    The data from this year’s event along with a few quiet phone calls allows me to draw some key conclusions.    China is back. China’s economy is roaring along and its consumer sector is outpacing the overall economy. First quarter GDP was up 18.3% year-on-year. Admittedly this number is inflated because of the initial Covid lockdowns of 2020. Nonetheless, it is a remarkable figure and it tells us that China is returning to the status quo ante faster than perhaps any other major economy.

Why Marketing Teams are Critical to Corporate Growth in the New Normal Post-Pandemic, Explains Alibaba’s CMO
The coronavirus pandemic is transforming the way consumers shop, the products they buy and what they can afford, upending the world of marketing and advertising.  
In a state of flux, retailers are turning to their marketing teams to help them talk to consumers and adapt their messaging as economies slowly recover, Alibaba Group’s Chief Marketing Officer (CMO) Chris Tung said on Friday.    Tung was participating remotely in the annual Viva Technology conference, one of the largest start-up and technology events in Europe. “I see the role of CMO being more important than ever in driving growth and helping the rest of the organization adapt to a new world,” Tung told a live audience in Paris and virtual viewers worldwide, many of whom were marketing professionals.

Could Evergrande, which owed US$104.1 billion at the end of last year, collapse like HNA Group?
Concerns mount after provincial government speaks to developer about diluting Evergrande’s controlling stake in regional bank   Reports of banks rejecting IOUs issued by Evergrande to suppliers go viral on Chinese social media

China market still sluggish for Central and Eastern European goods
Despite Beijing’s efforts to boost imports from countries in the 17+1 framework demand from Chinese consumers remains low      A trade expo aimed at showing China’s commitment to the region fails to quell frustration over the slow rate of progress

China’s Hainan boosts supervision of free-trade port to prevent island becoming ‘tax haven’
Governor Feng Fei says Hainan will strengthen supervision of business registration and operations to keep bad players out     Province reduced income tax rate for selected individuals and companies to 15 per cent last June, far lower than the mainland

How the pandemic is turning cold-storage logistics into a hot niche industry
Demand for the facilities that maintain the shelf life of perishable products from vegetables to vaccines is likely to outlive the pandemic    Investors are drawn by higher rental yields and longer leases due to the scarcity of high-quality and suitable assets, but the sector is not without its challenges

US-China tech war: Xi Jinping’s right-hand man Liu He to test whole-country approach on ‘next-generation’ chips but obstacles remain high
China to integrate resources of universities, research institutions and private businesses to seek chip breakthroughs      Many analysts say country faces uphill struggle to take a lead in new, chip materials science

G-7 Hands a Victory to China by Doing Little on Climate Change
If there’s a chance to slow global warming anytime soon, the world desperately needs a green alternative to the Belt and Road initiative, China’s $1 trillion infrastructure project that touts digital connectivity and blockchain ledgering while dropping coal-fired power stations on poor nations.    In one case, Chinese engineers dismantled an aging coal plant in Hunan province as part of the country’s domestic clean-up effort, and then reassembled it next door in Cambodia. Hunan residents were able to breathe easier while Cambodians got smog. Global emissions were unchanged.  The Group of Seven was supposed to have a plan to counter Chinese investments that purport to advance underdeveloped economies while inflicting environmental damage. But the G7 just punted on that. Instead, the world’s richest countries now have a plan to make a plan.

Europe powers up electric car battery drive
As electric car sales soar, Europe has started to build up its capacity to produce batteries on the continent but it remains far from reducing its dependence on Asia.

HSBC takes US$2.3 billion hit with sale of French retail bank to Cerberus-backed My Money Group
Latest sale follows a similar move last month by the UK-based lender to pull out from the US retail banking business   Cerberus’ My Money unit to acquire HSBC’s business for a token €1, and absorb 244 branches, around 3,900 staff and €24 billion of assets

Amazon bans Chinese merchants for alleged attempts to bribe customers to write good reviews
Offering gifts to customers to write positive reviews is a common practise in the Chinese e-commerce world but considered an abuse of the review system by Amazon    Sunvalley, which operates six brands from electronics to home appliances, generated US$697 million in sales from Amazon last year

How China broke the Asian model
Beijing has challenged the geopolitical order that enabled the rise of east Asia  China has just become The world’s leading recipient New foreign direct investment. Chinese companies are expanding globally. The economies of the United States and China are so closely intertwined that true decoupling will be extremely difficult—not to mention unpopular among many companies on both sides.
Even so, Xi Jinping took a big risk and openly challenged the strength of the United States. In the first few decades of China’s rise, Washington’s consensus was that as China became richer, it would also be politically liberalized. Therefore, the United States has adopted an encouraging and tolerant attitude toward the rise of China–similar to its attitude toward other East Asian Tiger economies.
As far as China is concerned, the US “license” has now been withdrawn. The United States is restricting China’s access to certain advanced technologies and is organizing its allies to counter Beijing. In this new geopolitical environment, if China’s rise is to continue uninterrupted, Xi Jinping really needs to find a new “Chinese model”—different from the East Asian model.

Relations may be too tense for Xi-Biden talks
White House national security adviser Jake Sullivan has suggested direct talks may be on the cards     But Chinese observers say Beijing might not be keen and there is little room for compromise on key issue

The bad news and good news for China in Biden’s trip to Europe
The US president’s European tour was meant to forge a united front against Beijing on various issues    But there are signs that there is room to manoeuvre, observers say

‘To Americans, the arrival of the Chinese delegation seemed like the sudden appearance of aliens.’

Apple Daily to shut unless Hong Kong police release frozen funds
Board of Next Digital to decide Friday on closure of outspoken newspaperEmbattled Hong Kong pro-democracy newspaper Apple Daily will cease to operate on Friday unless authorities unfreeze assets linked to the arrest of its top editors and executives, according to a decision by the board of its parent company announced to employees.

China is logically cracking down on its private tutoring sector, but why is Beijing taming it now?
China’s Ministry of Education has created a department to oversee the country’s booming off-campus tutoring market  It will bring regulatory oversight to private teachers and curriculums, but it spells trouble for an industry that has proven attractive to venture capital

Japan urges Europe to have stronger military presence in Asia to tackle China
Tokyo and Brussels must confront authoritarianism together, Japanese defence minister says    Japan is taking tougher line on China but might not get its wish of a united front with EU, analyst says

China ‘risks international isolation’ over investigation into coronavirus origin: Biden aide
US national security adviser Jake Sullivan said the US will ‘get to the bottom of how this virus came into the world and who has accountability for that’  China has rejected the theory that the virus originated in a lab in Wuhan, the Chinese city where the first cases were reported

What is driving China towards its coronavirus vaccination targets?
The national inoculation campaign got off to a slow start but has picked up speed, with millions getting the shots each day   Various factors have combined to send members of the public in their droves to vaccination centres

Coronavirus: China says up to 85 per cent of population needs to be vaccinated for herd immunity
New estimate from CDC expert comes after country reaches milestone of administering 1 billion Covid-19 doses   Shao Yiming says it is based on transmissibility of the virus and protection rate of jabs

Taiwan considers expanding Covid-19 vaccine programme after US ups donation to 2.5 million
Washington had already pledged 750,000 doses, but has now dispatched a larger consignment to the island   Health Minister Chen Shih-chung and President Tsai Ing-wen thank Washington for the donation

Taiwan says needs full review of pandemic handling as cases drop
Taiwan needs a thorough review of how it handled the COVID-19 pandemic once it is over, President Tsai Ing-wen said on Monday as case numbers dropped below 100 for the first time in more than a month, admitting they had been caught off guard at first.

To improve its image, China must tell a story that appeals to people’s emotions
Xi Jinping understands the importance of branding, and his call to party cadres to present a good image of China is timely, in view of the increasingly negative perceptions of the country in the West     Impersonal facts and dry statistics, plus matter-of-fact reports on its achievements, may not easily touch the hearts of ordinary people

Behind the scenes at China TV: soft power and state propaganda
The primetime English-language information present by China’s state broadcaster was about to go on air when a duplicate editor in Beijing was handed a script that wanted an pressing last-minute polish.

Alain Gillard
Information Officer
Service Asie Pacifique
Place Sainctelette 2
1080 Bruxelles
Tél 02 421 85 09 – Fax 02 421 87 75
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