China Press Review – June 25, 2019

Press review

China, US agree to resume trade talks in phone call ahead of Xi-Trump G20 meeting
Chinese Vice-Premier Liu He speaks to US’ Robert Lighthizer and Steven Mnuchin on Monday, Chinese state media says Presidents Xi Jinping and Donald Trump are expected to meet on the sidelines of this week’s G20 summit in Japan

Trump’s Trade War Is the Wrong Way to Compete With China
Focus On Renewal, Not Protectionism The rivalry between the United States and China is here to stay. But the Trump administration is bringing the wrong tools to the contest, applying blunt trade-war tactics reminiscent of the nineteenth century instead of crafting a strategy to keep the United States the world’s economic and technological leader in the twenty-first. Defensive protectionism will not meet the China challenge; only domestic revival can do that. Restoring the United States’ global standing and revitalizing its economy will require an ambitious strategy that doesn’t rely solely on changing Chinese behavior so much as on preparing the United States to compete.

Analysis: The Politics Of National Humiliation In The Trump-Xi Meeting
Humiliation. In China, it is a word laden with history and identity that is playing a role in the high-stakes trade war between the U.S. and China…But, given the country’s image of itself, Xi has to avoid anything that has the semblance of humiliation even though he is meeting a world leader who has shown no qualms about humiliating others. Allowing the trade war to escalate even further would likely damage China’s already slowing economy. What complicates all of this is that Trump’s own image is also fragile. He can’t come out of any meeting with the Chinese with the impression of being taken advantage of. If Xi caves in to Trump’s threats, he risks not just looking weak but as bowing to humiliation rained down from the West once again. But the cost of angering Trump could jeopardize the economic miracle that is China

Yuan appreciation might be the unintended consequence of interest-rate cuts in the US and Europe
Both the US dollar and the euro came under pressure after announcements by the Fed and European Central Bank chiefs that interest-rate cuts could be in the offing If the Bank of Japan eases monetary policy further, the yen would be less attractive to currency investors

What you need to know about the Chinese supercomputer firms added to US trade blacklist
China dominates the Top 500 supercomputer list with 219 systems, or 43.8 per cent of the total, followed by the US with 116

China ponders blacklisting FedEx after Huawei delivery errors
China’s commerce ministry announced the creation of a so-called unreliable entities list in late May

How America’s biggest companies made China great again 
The U.S. Chamber of Commerce is a staunch opponent of Trump’s tariffs. And a recent survey of American companies by AmCham Beijing showed that more than forty per cent of respondents said they simply wanted a return to the “pre tariff status quo.” That fact, make no mistake, will put smiles on the faces of Xi Jinping’s trade negotiators whenever they next meet their American counterparts. China knows that the recent history has been that the U.S. government will dance to U.S. business’s tune. Trump and his team of advisers may not be inclined to do that. But their problem is, there are no easy solutions to resolving the trade issues that beset U.S.-China relations. Lighthizer has been telling Trump to hang tough and if necessary increase the tariffs on Beijing, arguing that that will force China to a deal sooner or later. But corporate America hates that idea, and, problematically for Trump and his re-election prospects, so does the U.S. stock market. Increasing costs to U.S. businesses and consumers from goods made in China isn’t a winning formula on Wall Street, nor in 2020.

podcast : Who really pays in a tariff war?
US President Donald Trump has declared himself “Tariff Man”, in his bid to use tariffs to shift more production and jobs back to the USA. While Mr Trump insists it will be others who foot the bill, as the BBC’s Karishma Vaswani points out when it comes to higher tariffs – both sides can end up paying.

Not every economist thinks the trade war is a huge deal; ‘look at the numbers’, says CME executive director
‘I think this is a time for bargain hunting in Chinese stocks,’ says CME’s Erik Norland But the real impact is not actually that severe and investors should continue to bank on the strength of China’s economy, which is unlikely to suffer a hard landing this year, some economists said.

As global growth slows, the world needs a new Marshall Plan, not lower interest rates
Central banks cutting rates will only feed the addiction to cheap money. Instead, the US, Europe and Japan must contribute more to global efforts, like infrastructure-spending plans, to reboot recovery and worldwide trade

Securing Thunder Power production in Gosselies
Sogepa, the investment branch of the Walloon Region, is heavily negotiating with Thunder Power. It wants to take risks to start the production of the electric Chloé city car as soon as possible. It will be built on the former Caterpillar site in Gosselies, near Charleroi.

Securing Thunder Power production in Gosselies

China’s breaking up the EV battery monopoly it carefully created
As China phases out subsidies for electric vehicles next year, it’s also ending a related policy that effectively shut out foreign battery makers, creating the domestic monopoly we see today. China’s Ministry of Industry and Information Technology (MIIT) announced yesterday (June 25, link in Chinese) it is dropping its practice of publishing lists of battery makers that met technical standards. The policy, put in place in 2015, was meant to help develop the industry. Supplying the information to get on the list was supposedly voluntary (link in Chinese), but in reality, using the batteries on the ministry’s lists made it more likely car makers would qualify for government subsidies. As of 2016, the last time the list was updated, it included a total of 57 companies—none of them foreign firms.

China’s US soybean and pork imports down 55.3 per cent due to trade war, African swine fever
Ministry of Agriculture shows that China’s imports of US soybeans shrank by 70.6 per cent year-on-year to 4.31 million tonnes in the first five months of 2019 Reduced orders of agricultural products from the United States could be on the agenda this week at the G20 summit in Japan

Europe’s 5G challenge and why there is no easy way out
The current debate about whether Chinese mobile network equipment vendors pose a threat to European security is messy, and heavily driven by a US perspective and agenda. Compared to the United States, however, the situation here in the European Union is much more complicated.
Some facts to keep in mind: Huawei has been in Europe for almost 20 years, employs more than 12,000 people, and has research collaborations with roughly 150 universities. Since 2016, Huawei has consistently been one of top three patent applicants at the European Patent Office. Almost every EU member state has at least one mobile network operator deploying Huawei (and/or ZTE) equipment—especially in Radio Access Network (RAN). As an example, roughly 50% of Germany’s 75,000 base stations come from Chinese vendors.

Europe’s 5G challenge and why there is no easy way out

ZTE secures more than 25 commercial 5G network contracts as it steps up turnaround efforts
Chinese telecoms gear maker also has 5G partnership commitments with more than 60 carriers worldwide

Benefits of US-China trade war for ASEAN only temporary: Expert
ASEAN may stand to benefit from the trade tensions between the United States and China but these advantages will only be temporary, as the members of the bloc, including Indonesia, could become the trade war’s next victims, a scholar associated with the Chinese government has said.

India plans to offer tax breaks to companies moving away from China as trade war forces the world to rethink supply chains
Financial incentives such as preferential tax rates and the tax holiday provided by Vietnam to lure companies are among measures being considered

Greater Bay Area diversity will drive property markets across Hong Kong, Shenzhen and Guangzhou
Demand for residential and office space will see a strong growth across the three key Greater Bay Area growth engines of Hong Kong, Shenzhen and Guangzhou.

China’s retail sales expected to slow as trade war looms: eMarketer
China’s retail sales is expected to grow at a slower-than- anticipated pace and would now overtake the United States only in 2021 as the trade war between Beijing and Washington takes a toll on demand in the Asian country, according to market researcher eMarketer.

Why Chinese Consumers Love Luxury Products
While Western-style consumerism interprets luxury consumption as a “way of life” in China, the love of luxury has a Confucian essence. Although China’s appetite for luxury brands is well documented, misconceptions and stereotypes involving the Chinese consumer are still being widely disseminated. Every so often, young Chinese shoppers are presented as “label-obsessed” buyers who are addicted to luxury shopping, but the reality is far more complex.

Why Chinese Consumers Love Luxury Products

Can Virtual Influencers Make Luxury Brands’ Dreams Come True?
Key Opinion Leaders (KOLs) and online influencers have established themselves as premier players in the luxury sector and now command significant fees and build celebrity-level profiles from collaborating with big-name brands. But now they’re facing increasing competition from a whole new cast of characters: virtual influencers. Born out of the enduring consumer enthusiasm for ACG (anime, comics, and games), these animated models, performers, and brand ambassadors have become a fast-growing trend that hasn’t escaped the attention of luxury retailers wanting to attract young consumers. With virtual influencers in China taking part in everything from holographic concerts (tickets for a concert featuring China’s first virtual pop star Luo Tianyi sold out in minutes) to online talent shows (virtual idol HeZ sparked a debate about animated characters competing against real people), brands have quickly seen the advantages of hiring them to help promote their products.

Can Virtual Influencers Make Luxury Brands’ Dreams Come True?

Hong Kong’s local malls seen as a solid investment bet thanks to solid yields, reliance on domestic spending
Hong Kong neighbourhood malls are seen as a stable, long term investments, insulated from the vagaries of tourist spending, analyst says

Takashimaya to close Shanghai store
Japanese retailer to quit China amid trade war and shift to online shopping

China retail steps into data-driven future with Carrefour sale
Once powerful foreign players sidelined as customer information becomes

JD Logistics raises $218 million to invest in startups
JD Logistics, the logistics arm of Chinese e-commerce giant, announced Monday it had raised $218 million in a RMB-dominated industrial fund. JD Logistics and parent company will be limited partners of the fund with participation from several listed companies, government-led funds, reputable Fund of Funds, and asset management platforms, according to the company. It said that it will focus on investment in early and growth-stage startups in the supply chain, asset management, finance, technology, and intelligent manufacturing sectors.

Briefing: JD Logistics raises $218 million to invest in startups

Trade war uncertainties, probe in US spotlighting Chinese banks spook investors, sending China and Hong Kong stocks tumbling
Three Chinese banks spotlighted in US sanctions probe, sending shock waves through the sector Gold-linked stocks rare winners as investors embrace the safe haven

Beijing launches China-Japan stock connect scheme, showcases it as a move to defy rising protectionism
Four exchange traded funds each from China and Japan given access to shares on their respective bourses

A look at Xi Jinping’s ‘Third Revolution’
As Xi Jinping’s power grows in China and abroad, what American scholar Dr Elizabeth Economy has termed his ‘Third Revolution’ continues to take shape. Sam Sachdeva spoke to Economy about Xi’s vision, the US response, and the obstacles in his way.

China and the Major Powers
Beijing is able to work effectively within regions where power is diffuse. However, one of the greatest challenges in completing China’s ascending vision of victory will be outmaneuvering, coopting, or breaking the power of other major nations, especially the United States.

Is a Sino-Russian world order possible?
The recent Shanghai Cooperation Organisation has triggered a debate among several Western circles claiming that Moscow and China are trying to create a new world order reflecting the interests of these two giant nuclear states.

Why Asia-Pacific nations don’t want to take sides in the US-China trade war at the G20
Various countries in the region are under pressure to support Washington or Beijing as their tariff dispute bleeds into bigger issues But wariness of putting one offside means most will try to wait for the two giants to work through their differences

China’s Belt and Road of Science
China’s ambitious infrastructure initiative is also about building knowledge and not just things.

China’s Belt and Road of Science

China Unicom to build 5G networks on Belt and Road
The company will strengthen its ties with foreign telecommunication service providers

The Hidden Challenges of China’s Booming Medical AI Market
At an estimated market size of RMB 20 billion in 2018, China’s medical artificial intelligence (AI) market promises vast opportunities for US companies with innovative AI products and solutions. Yet, businesses that do not have the foresight and resources to deal with complex regulatory challenges may struggle to thrive in this competitive market. If US companies want to succeed, they must position themselves strategically and mitigate regulatory risks through clever partnerships and targeted policy advocacy.

The Hidden Challenges of China’s Booming Medical AI Market

Huawei staff banned from US offices as research arm Futurewei seeks split from Chinese parent after trade-war blacklist
Futurewei moves its employees to a new IT system and forbids them from using Huawei’s name or logo in communications Huawei-owned US firm has hundreds of employees at offices in Silicon Valley and the greater Seattle, Chicago and Dallas areas

China’s leading scientists advised to keep a low profile in their work as US steps up pressure on tech firms
Xi Jinping’s top economic adviser, Liu He, issues advice during visit to Chinese Academy of Sciences
United States continues to target Chinese tech firms with supercomputing firms added to blacklist over the weekend

DJI denies sending drone data to China
False claims that its drones are used to collect and share data “put the entire US drone industry at risk,” the company says.

US judge holds three Chinese banks in contempt for refusing to comply with probes into violations of North Korea sanction
According to court rulings in a 2017 civil forfeiture action, the banks were Bank of Communications, China Merchants Bank and Shanghai Pudong Development Bank Pudong Bank stands at risk of losing access to US dollars, the lifeblood of global finance

Huawei CFO Meng Wanzhou’s lawyers urge Canada’s justice minister to halt extradition case in name of ‘human decency’
Statement urges minister David Lametti to withdraw the proceedings because they are without merit Says ending the protracted legal battle would be ‘in Canada’s national interests’

Will Trump Rescue China’s Communism?
China now needs America’s acceptance for Xi’s policies. Three times, American presidents rescued Chinese communism. Nixon did so in 1972, near the end of Mao Zedong’s Cultural Revolution, essentially a civil war. George H. W. Bush threw Deng Xiaoping a lifeline after the brutal Tiananmen crackdown in 1989. Finally, there was Clinton’s WTO deal.

book review : China, Trade and Power
Few people could tell you what happened on December 11, 2001, yet China’s accession to the World Trade Organization (WTO) will define the geopolitics of the 21st century. What were Western leaders thinking at the time?This book tells the story of the most successful trading nation of the early 21st century. It looks at how the Chinese Communist Party has retained and cemented its monopoly of political power, producing unimagined riches for the political elite. It is the most extraordinary economic success story of our time, and it has reshaped the geopolitics not just of Asia but of the world

‘We have no other choice’: as China erodes democracy Hong Kong citizens prepare to leave
Many Hong Kong people were considering leaving before the recent political turmoil because of exorbitant property prices, high cost of living and notoriously intensive education regime. But the crisis which emanated from the controversial bill has stiffened the resolve of those like Wong to make serious plans to emigrate.

China’s War on Western Names
“A rose by any other name would smell as sweet,” declares Shakespeare’s Juliet in that moving balcony scene of famous English play. Her words question and reject the notion that she and her lover, Romeo, should be separated by the age-old rivalry between their two houses. “‘Tis but thy name that is my enemy,” she says.

China’s War on Western Names

Alain Gillard
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