China Press Review – June 24, 2020

In the US, China-bashing is rooted in myths of Western superiority
Across the centuries, Europe propagated anti-Chinese stereotypes as a response to the perceived threats to European might    In the US today, dehumanising myths about Chinese continue to drive the cultural belief that China is the enemy

China to buck global economic downturn in 2020 as coronavirus continues to drive down activity, says IMF
The IMF’s World Economic Outlook Update says China’s economy will grow 1 per cent this year and 8.2 per cent in 2021    Global economic output is forecast to fall 4.9 per cent, 1.9 percentage points below the estimate in April

Don’t Believe the China Hype
When it comes to assessing Chinese power, things aren’t always as they seem.   Of course, none of this means that China is not a threat to the United States—economically, strategically, and ideologically. Beijing will continue to expand its political clout and beef up its military capabilities. But its grand ambitions could be hamstrung if its economic miracle falters.   The economic challenges facing China have possible implications for U.S. policy. Rather than worrying so much about what Beijing is up to, Washington might be better off focusing on the home front and enhancing American advantages over China, by, for instance, strengthening the education system and investing in research and development.   “Is China going to displace the U.S. as the dominant economic power? No,” AEI’s Scissors told me. “If we handle our own policies correctly, the Chinese can’t catch us.”

Intellectual property theft: what Chinese and British firms should worry about
Chinese companies are more vulnerable to data leaks through social media communications than foreign state-sponsored intellectual property theft    Meanwhile, British companies should discard the belief that transparency buys trust

Steven Mnuchin says US-China decoupling will occur if American firms cannot compete fairly
Treasury secretary says he has ‘every expectation’ that China will live up to terms of phase one trade deal

In U.S.-China Trade War, New Supply Chains Rattle Markets
As the trade war between China and the United States intensifies, supply chains are starting to see the impact. But U.S. protectionism may be backfiring.

Can Xi Jinping revive China’s dream of turning its poor west into an economic powerhouse?
Despite two decades of investment and preferential policies, China’s western regions still lag far behind east coast provinces   Western regions have struggled with dwindling populations, diminishing jobs and ballooning debt

Shadow banking back in vogue in China as assets grow for the first time since 2017
Shadow banking assets grew 100 billion yuan (US$14 billion) to 59.1 trillion yuan (US$8.4 trillion) in the first quarter of 2020, according to a report from Moody’s     China had been tightening its control over off-balance sheet lending by banks since 2016 to curb financial risks, but credit growth is needed to rescue the coronavirus-hit economy

China opens more industries to foreign investment
China announced on Wednesday (Jun 24) it was expanding the number of sectors open to foreign investment, relaxing international ownership caps on brokerages, futures companies and life insurance firms.

Much needed big numbers from 618 shopping festival
China’s online shopping festivals are usually about racking up the biggest sales, but things were slightly different for this year’s 618 festival, the mid-year shopping frenzy that ended on Thursday of last week. In China, shopping festivals have become landmark events that are used to build a “new normal” for sales volumes and to test e-commerce infrastructure. “This year’s peak volume [for Singles’ Day] will become the norm for the next year,” Alibaba’s Jack Ma once boasted.

Cainiao Network vows to halve cross-border air delivery time
Cainiao Network, the logistics arm of Alibaba Group, has announced that it would ramp up investment to double cross-border air-freight efficiency.    The announcement is Cainiao’s latest initiative to build its global logistics infrastructure since Alibaba Group increased its stake in Cainiao in 2019, with the goal of delivering packages throughout China within 24 hours and within 72 hours elsewhere in the world.

Fosun looks to reap the gains of its early investment in logistics giant Cainiao with a US$1.3 billion stake sale to Alibaba
The Chinese conglomerate plans to sell its Cainiao stake to Alibaba and other investors   E-commerce giant Alibaba is upgrading its logistics network globally   Cainiao announced on Tuesday a three-year initiative to ramp up efficiency so it can deliver packages within 24 hours in China and 72 hours globally. The affiliate of Asia’s largest e-commerce platform said the company will invest at least 1 billion yuan in its logistic network to increase chartered flights, build warehouse facilities and expand partnerships with customs authorities around the world.

E-Commerce Logistics and Supply Chains: Journey to the Future
The transition of commerce to an electronic format is a well-established and economically sound process which is in its prime. Shopping and paying online has already become an integral part of modern life. Conversion of e-commerce platforms is more than 7% versus just 3% in the retail sector. But how has the transformation of e-commerce affected logistics?  The transportation of products remains a physical process that cannot be realized through the Internet. However, electronic administration of logistics processes is available now, and advanced technologies help optimize the product movement along the supply chain. How does this all happen and what are the current trends – let’s understand.

China’s coronavirus-hit Canton Fair closes first virtual edition to mixed reviews
Organisers cancelled a press conference to mark the closure of the first virtual Canton Fair, with the coronavirus forcing the trade event online     Some buyers voiced frustration at lack of interactivity, alleged fake images and poor user experiences, while others said it was a ‘good first effort’

China renews NEV quotas with eye on 2025 target
China will gradually raise its mandated production quota for new energy vehicles over the next three years, a move that the top industry regulator said would support its ambitious 2025 sales target.  The Corporate Average Fuel Consumption and New Energy Vehicle (CAFC/NEV) credit program is seen as the key policy stimulus from Beijing to drive EV adoption after a years-long subsidy scheme.

Huawei ranks first in China’s wearable market
Huawei wearable VR Glass on display in Shanghai on Dec 13, 2019. [Photo/Sipa]
Huawei has ranked first in the country’s wearable market with solid performance of wearable watches, showing strong growth momentum despite the downward trend of China’s wearable market in the first quarter of this year, Sina Finance reported on Tuesday.

Will China’s Shopping Festivals Save The Luxury Market?
To offset COVID-19 losses, brands joined China’s three-week shopping holiday, 618, including many luxury brands that have long shied away from discounts. Although domestic retail sales have yet to recover in China, the country’s current three-week shopping holiday — which was created by and is known simply as 618 — should be an opportunity for brands to offset losses accrued during COVID-19.  That includes luxury brands, most of which have avoided discounts thus far. 618’s duration and sales volume have yet to catch up with the Double Eleven shopping festival. But with the addition of JD rivals such as Alibaba and Pinduoduo, 618 has quickly become China’s second-most successful shopping festival.

The world’s top liquor brand is now also mainland China’s biggest public company
The world’s most valuable liquor company has just claimed another first.   Kweichow Moutai, the Chinese company known for making the popular national spirit, baijiu, is now the biggest public company in mainland China by market cap after its shares gained 23% so far this year, according to data from Refinitiv.    It’s currently valued at more than 1.8 trillion yuan ($259 billion), surpassing one of the country’s top banks, the Industrial and Commercial Bank of China (IDCBF), which is worth just under 1.8 trillion yuan ($253 billion).

China Announces More Fee Cuts, Companies Expected to Save RMB 310 billion in 2020
On June 17, Premier Li Keqiang presided over an executive meeting of the State Council, which announced a series of fee reductions for businesses in order to stabilize their economic outlook and to shore up market confidence.The latest cuts include reductions and waivers to electricity fees, port costs, highway tolls, telecommunication rates, and oil liability insurance. If taken together with the cuts introduced since the outbreak started, companies are expected to save around RMB 310 billion (US$44 billion) over the course of this year.

Why dreams of easy coronavirus recovery crumble in face of reality
The first wave of the global pandemic is not yet over but politicians worldwide are declaring victory and rushing to reopen their economies   Instead of channelling taxpayer money into corporate welfare schemes and bailouts, governments should be sustaining households and small businesses

China’s COVID-19 Vaccine Makers Are Going Abroad for Human Trials
With dwindling coronavirus cases at home, Chinese biomedical companies are cooperating with Brazil and the UAE for phase three clinical trials.

How China Is Tightening Its Grip on Hong Kong’s Economy
China is not only tightening its political grip on Hong Kong to rein in the restive city, it’s pushing harder to deepen its influence over the international finance hub’s business life. From real estate to initial public offerings, debt issuance and telecommu

Can we believe China will reform its economy this time, given the empty promises of the past?
The government cannot pursue stimulus like it did in the 2008 global financial crisis as piling on more debt would aggravate the current risks to the economy    Significant economic reforms within China will be key to levelling the global playing field and preventing many foreign players from packing up and leaving

Is Trump sticking to the China trade deal? – Shaun Rein
Chaos reigns the White House as US presidential advisor Peter Navarro said the China trade deal was dead and was promptly corrected by US President Donald Trump who said the opposite. Business analyst Shaun Rein says at the BBC Trump cannot control his lieutenants, as they prefer to blame China for anything that goes wrong

Trade disputes: the state of play between China, Europe and the US as tensions continue to escalate
Disputes between the US, China and Europe continue to dominate the global trade agenda, with potential deals between the global powers hitting stumbling blocks in the last week.   In what the FT is calling ‘a fast-approaching transatlantic trade conflict’, the US has suspended talks with the EU over digital taxes, while negotiations for greater EU access to the China market are reportedly “lagging”. Meanwhile the White House has found itself denying claims the current deal between the US and China is “over”.  We have a look at the latest developments in each relationship.

Banks cut prices on foreclosed properties in Hong Kong as buyers turn cautious amid distress, market correction
About one-third of 98 foreclosed properties on the market have had their prices trimmed in June, according to Century 21 Surveyors    Business sentiment is at a multi-year low and Hongkongers are filing bankruptcies at the fastest pace since 2016

BCG: The most innovative Chinese companies in 2020
Huawei has ranked the top Chinese company in Boston Consulting Group’s Most Innovative Companies 2020 list, or the sixth globally, followed by Alibaba, Tencent, Xiaomi, and JD

Manufacturing in China can be risky! 10 Examples of China IP Theft
Depending on your product, it may make a lot of sense to manufacture in China (for example, for complex products that need to be developed fast). But the risks of China IP theft haven’t gone away. I wanted to share a few examples here.  As many manufacturers there start to feel the pinch due to orders slowing down, as their customers tighten their belts during the global coronavirus pandemic, it’s only likely to get worse as some unscrupulous characters try to make a quick buck out of unwary importers.

Opinion: Shenzhen Passes Milestone With Personal Bankruptcy Regulation
Policymakers have been talking about creating a personal bankruptcy system in China for more than a decade.Shenzhen recently released a draft personal bankruptcy regulation for public comment, a major milestone for personal bankruptcy legislation, which has been under discussion in China for over a decade. for individuals, those who are honest but unfortunate will be able to avoid unlimited transfer of corporate debt to themselves or their families. However, the personal bankruptcy system should never protect those who maliciously repudiate debts.

With Medical Gear as Lifeline, Export Textile Industry Faces Uncertain Future
China’s export garment industry has withered as people around the world remain indoors and shun department stores to avoid catching Covid-19.    The textile producers that underpin it have found a lifeline in massive demand for medical gear to fight the virus. But the boon won’t last, industry insiders say.   In the first five months of 2020, the value of China’s garment exports dropped 20.3% year on year to 267.81 billion yuan ($37.9 billion). A recovery looks far off.

Chinese Footwear Brands Scrutinized Over Toxic Chemical
Three major companies were found to have excessive amounts of phthalate in their slippers

Locked In, Locked Out: The Foreign Students Stuck in Limbo
As COVID-19 spread across China, international students faced a tough choice: Flee the country, or hunker down on campus. Months later, they’re still living with the consequences of that decision.,%20Locked%20Out:%20The%20Foreign%20Students%20Stuck%20in%20Limbo

Nationalism, heroism and media in Vietnam’s war on COVID-19
While many countries around the world are struggling with the COVID-19 pandemic, 11 May 2020 marked the end of the ‘longest New Year (Tet) holiday ever’ for students in Vietnam. When the nationwide lockdown was lifted, Vietnamese students at all levels returned to school. Shops and restaurants reopened, and local markets were busy again. Despite sharing a border with China that spans almost 1.5 million kilometres and being situated just 1900 kilometres away from the Chinese city of Wuhan where COVID-19 was first identified, Vietnam’s pandemic response has been one of the most successful interventions so far.

 ‘Fake news’: China dismisses Indian media reports it lost 40 soldiers in border fighting
‘I can tell you responsibly that it is false information,’ foreign ministry spokesman says    But senior security officers from the two sides are working to resolve tensions, he says

Risk of military conflict between US and China higher than ever, experts say
Tensions rose after near-collision between American and Chinese destroyers, according to president of National Institute for South China Sea Studies    Existing communication mechanisms might not be sufficient to keep every encounter under control, Nanjing University professor says

The end of ‘one country, two systems’?
US–China relations have been deteriorating as the US government and public are re-assessing the nature of their relationship with China. Indeed, US engagement with China has been replaced by containment. It perceives China as a threat to US values and global leadership. Hong Kong is now high on the agenda of this bilateral relationship. It appears that the Trump administration is the only Western government ready to impose sanctions on China on behalf of Hong Kong. Further, the 2020 US presidential election campaign may help to maintain the US public’s attention on Hong Kong.    The short-term future for Hong Kong is bleak and many people are prepared to emigrate. But the political struggle will continue and the pro-democracy movement will try to minimise the cost of this struggle in the ‘one country, two systems’ context, denying the HKSAR government its legitimacy. Apparently, Chinese authorities still hope to maintain the functioning of Hong Kong as an international financial centre, but without respect for the rule of law and human rights.

Beijing and aging: have all the children you want; put off retirement
By 2035 there will be 314 million people aged 65 or over (181.6 million in 2020); 10 active people will have to support at least 3 retirees. The “two child” policy is not successful. Now the government is scrambling to promote more children, even through artificial insemination. The pension fund crisis. Learning from the west.

Alain Gillard
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