China Press Review – June 29, 2020

Expect the coronavirus pandemic bankruptcy tsunami to be worse than predicted
The global economic recession will be worse than forecast, with bankruptcies in Hong Kong likely to exceed those during Sars and the global financial crisis   Quick and cheap online dispute resolution systems are urgently needed across the region to reduce the pain

Prepare for the U.S. and China to Decouple
While Covid-19 has dominated news for much of the year — and understandably so, as people and businesses fight for their survival — a larger, longer-lasting problem has been unfolding in the background, which many businesses will soon need to contend with: As de-globalization accelerates, two hostile economic blocs are emerging, one centered around China and the other around the United States.   Arguably, we’ve been headed towards this moment for a long while. De-globalization has been under way for more than a decade: At best, international trade was stagnating before the pandemic hit, and foreign direct investment had fallen by 70 percent in 2018 from its peak in 2007. Never easy, Sino-U.S. relations have taken a more confrontational turn under Xi Jinping. By 2018 we were already witnessing the opening skirmishes of a new Cold War.

The US and China have been on a collision course for some time, and their conflict could have big ramifications for investors.

Why China’s economy will continue to grow and attract investment
It is naive to believe that technological decoupling, trade sanctions or forced supply chain changes will end China’s economic expansion. The world has yet to appreciate the significance of China’s inward shift of economic gravity

Coronavirus: China’s industrial firm profits increase for the first time in May
China’s industrial firms’ profits in May increased 6 per cent year on year after a four-month slump  Further observation is needed to see if profit recovery could continue, according to the National Bureau of Statistics

Hong Kong exports continue to slump, falling 7.4 per cent in May, as pandemic and China-US ties hammer demand
Exports drop to HK$317.6 billion against a year ago, while imports tumble 12.3 per cent   Covid-19 and worsening ties between two economic superpowers weakening demand, census department says

China’s Exporters Find Virtual Trade Fair Is No Match for Real Thing
China’s attempt to shift the world’s largest trade fair online this month has demonstrated that for some things, it’s hard to replace meeting face-to-face.   The Canton Fair, usually held in the southern megacity of Guangzhou twice a year, managed to get some 25,000 exhibitors to sign up for an online opportunity to ‘meet’ global buyers. This took place through a virtual architecture built by Tencent Holdings Ltd featuring live streaming, translation and conferencing technology.

Can Paris Fashion Week Break The Cycle Of Online Fashion Shows?
Although Paris Fashion Week has confirmed to go ahead this fall, things could change between now and late September, depending on how the virus progresses. Photo: Fall 2020
As the industry pivots to digital thanks to the COVID-19 pandemic, one significant industry event boldly announced a comeback this week.  The organizer of Paris Fashion Week, Fédération de la Haute Couture et de la Mode, confirmed it is going to hold its Womenswear Spring 2021 show from September 28 to October 6. The event “will comply with the recommendations of public authorities,” the organizer said in a statement, adding that there will also be an official online platform for the show. Helps SMEs Worldwide Go Global has launched a new initiative to scale up global recruitment and training efforts for businesses in the wake of Covid-19. Dubbed “Project Sprout Up,” the program will see the B2B trade platform double down on efforts to help connect sellers with business opportunities beyond their home countries and provide direct assistance to boost their online trade capabilities.    The project is part of Alibaba Group’s ongoing Spring Thunder initiative, which launched in April to help  small and medium-sized enterprises stay afloat during the coronavirus outbreak. The project rolled out its first phase of support earlier this month in  Singapore, Korea, Italy, Russia, Indonesia and Vietnam.

What Are China’s New Market Demands After COVID-19? executives discussed post-COVID-19 market trends, and the company’s consumer knowledge reinforced the belief that shoppers now have different needs. n June 18, celebrated a milestone of 17 years in business with its Grand Promotion sales event. According to the e-commerce giant, the occasion represents a “pulse check on consumption in China” over the first six months of 2020. Since the first half of the year was defined by unexpected turbulence, investors and retailers are turning to to help them understand the direction of the market for these upcoming months. Considering the significance of the date, organized a media event on June 12, where the company’s top executives discussed future market trends and current outcomes post-COVID-19.

China’s big three airlines take delivery of domestically made ARJ21 aircraft
China’s three biggest state-owned airlines on Sunday took delivery of their first ARJ21 aircraft, a short haul 90-seater aircraft made by state-run Commercial Aircraft Corporation of China (COMAC).

The national security law could turn Hong Kong into Asia’s Monaco
The city may soon say goodbye to its port and welcome posh yachts, redomiciled Chinese stocks and even more upmarket property     Cantonese communities overseas will blossom as they did pre-1997 and BN(O) passport-holder arrivals could be a boon for the British economy

National security law: could Singapore take Hong Kong’s finance crown? It’s keeping mum
City state has been clear it does not want to be seen as taking advantage of Hong Kong’s political turmoil    Yet its similar tax rates, lower rents and safe streets are likely to appeal to any businesses that do decide to relocate

China to impose new visa restrictions on US citizens over Hong Kong row
The restrictions would be for US citizens who have “behaved egregiously” regarding Hong Kong. They are a direct response to the US’ move to restrict visas for Chinese officials.

National security law: could Japan or South Korea take Hong Kong’s finance crown?
Japan and South Korea want to tempt businesses considering an exit strategy in the wake of Beijing’s national security law for Hong Kong   But Tokyo’s high tax levels and South Korea’s complex regulations are hard to overlook, especially when compared to competitors such as Singapore

Is Taiwan the answer for firms leaving Hong Kong? It’s complicated
As Beijing tightens its grip on the city, Taipei says it will help Hongkongers who move over – though there are few details for foreign companies   The island has a similar culture to the city and cheaper labour, but barriers include scarcity of finance-sector talent and a lack of clarity over incentives

Hong Kong slams US’ Autonomy Act, urges Washington to refrain from measures that could affect financial institution operations
Any sanctions imposed under the act ‘will not create an obligation for financial institutions under Hong Kong law’, spokesman says    Local observers, meanwhile, say targeted sanctions likely to affect those with property or large amounts of assets tied up in the US

When Hong Kong’s lawmakers can’t get their own house in order, no wonder Beijing is stepping in
Toxic politics has crippled Hong Kong. While Beijing officials act with lightning speed on important legislative work in the shape of a new national security law, we cannot even enact a waste disposal charge, vacancy tax on property or an extension to maternity leave

China vows action against US visa rules aimed at Hong Kong national security law
Chinese foreign ministry office in Hong Kong demands a stop to Washington’s ‘bullying actions’ in harsh statement   Analysts predict no immediate action or impact as high-level talks between the two powers at a standstill

How coronavirus bailouts can kick off a ‘Great Reset’ – for a fairer, greener economy
Governments must use today’s short-term rescue measures to encourage more responsible business practices, save jobs, address inequality and climate change, and build resilience against shocks

China plans to grant investment banking licenses to lenders: Caixin
securities regulator plans to grant investment banking licenses to commercial lenders as part of efforts to breed industry behemoths in the face of fiercer foreign competition, business magazine Caixin reported.

China to Study New Ways to Stabilize Trade, Foreign Investment
Premier Li Keqiang said China should increase support to protect smaller and labor-intensive companies and help key trade enterprises solve problems to stabilize jobs, according to a statement on the central government’s website.,on%20the%20central%20government’s%20website.

US bill aiming to delist Chinese companies could claim American investors, businesses as unintended victims
If Chinese firms continue their exit from US exchanges, funds will lose easy access to shares of companies in the world’s second-largest economy      The Holding Foreign Companies Accountable Act would require foreign companies to submit audits for inspection, which Beijing has long refused to do

US downgraded to ‘medium risk’ for China investment as relations turn sour amid ‘higher uncertainties’
The world’s top economy dropped nine places from last year to 27th on the list of 114 countries assessed by the Chinese Academy of Social Sciences (CASS)  Luxembourg is ranked as the best place for Chinese investment, followed by Germany, Australia and Sweden

Inside China Tech: are the chips down for Huawei?
The world’s largest telecommunications equipment vendor has stockpiled chips for its 5G base stations to last until the first half of next year   Chinese chip foundry Semiconductor Manufacturing International Corp may become a major supplier for Huawei  “Huawei has no domestic substitutes for chip making in the short term,” said a Shanghai-based economist, who requested anonymity because of the sensitive nature of the topic. “It would take not only money, but require joint efforts of generations of engineers and scientists slogging away at basic scientific research to make progress in the semiconductor sector.”

Baidu-backed maker of self-driving vehicle sensors said to be in talks to go public
Velodyne Lidar, in which Baidu and Ford invested US$150 million in 2016, makes radar-like systems used in autonomous vehicles    Its technology is used by carmakers including Daimler’s Mercedes-Benz and Ford

Pandemic takes the shine off China’s Belt and Road Initiative as African partners struggle with coronavirus
Projects are hit from both ends as Chinese banks strictly scrutinise potential lenders and African nations are squeezed by Covid-19 and economic constraints    Xi Jinping’s pet project is criticised at home where many believe money is better spent on economic recovery in China

Belt and road projects can’t be written off
CHINA’s recent survey shows that 60% of the world’s Belt and Road projects have been hit by the Covid-19 pandemic, but it will be misreading Beijing if one believes that the infrastructure ventures will be placed on the backburner.   Briefing the media in Beijing on June 19 on the outcome of the “High-level video-conference on Belt and Road international cooperation” held on June 18, a senior Chinese official said a survey showed that about 20% of projects under the Belt and Road Initiative (BRI) are “seriously affected” by the pandemic while 30%-40% are impacted at various degrees.

Is the coronavirus pandemic entering a second wave?
Unclear whether Covid-19 will have similar trajectory to 1918 flu pandemic, which is infamous for its more lethal later surge    Experts say the term is ambiguous but people’s behaviour and government actions will be critical

Coronavirus may have a weak point – and hand washing, face masks ‘may help block transmission chain’, study says
Chinese non-peer reviewed paper suggests virus has a narrow bottleneck, meaning the number of particles passed on from a host to others    Scientists did genetic sequencing on viral strains from 13 patients in Guangdong province to reconstruct how it spread

India can be the next China, but only if it is more open to foreign investment
While India’s forex reserves and investments have increased, PM Modi’s Atmanirbhar Bharat is harking back to a protectionist past.

 ‘Boycott China’ is trending in India, but turning rhetoric into reality may be easier said than done China-India relations
The Make in India movement is gaining ground amid rising anti-Chinese sentiment but with Indian companies heavily dependent on Chinese capital, Narendra Modi’s push for self-reliance could be self-destructive

Will India’s Anti-China Alliance With the US work?
The enemy of my enemy etc.Following recent military clashes between the Indian and the Chinese forces in the Ladakh region, many Indian political pundits,  including the proponents of a “strong” Indian response to China, have started arguing for an even deeper Indian alliance with the US to counter what are regarded as Chinese expansionist and hegemonic regional designs.

Coronavirus: How Delhi ‘wasted’ lockdown to become India’s biggest hotspot
With more than 77,000 cases of Covid-19, India’s capital, Delhi has become the country’s biggest hotspot. The BBC’s Aparna Alluri explains how this appears to be an opportunity missed.

China ‘has scope to hit back’ at any Indian economic sanctions
Beijing has so far showed no signs of responding to calls in India for boycotts of Chinese goods but it has some room for retaliation if needed, economist says   ‘Indian businesses and consumers likely to be main parties harmed’ by punishment of China

Thousands checked as coronavirus testing spreads to Beijing universities
Students, faculty and staff from nearly 100 institutions line up on Sunday for tests with results expected by midnight   More than 7 million people in Chinese capital have now been tested as part of efforts to control latest outbreak

When will it end? The mirage of normal life in coronavirus-hit Chinese capital
Beijing had lowered its public health emergency level and people were starting to feel more at ease. Then the city was hit with an outbreak    Health workers felt a noticeable surge in patients, but they were more prepared than earlier this year

Chinese county sealed off after coronavirus spike linked to Beijing market
About 400,000 residents in Hebei province have been placed under severe restrictions reminiscent of earlier lockdowns     There have been 13 cases in Anxin, just 140 kilometres from the capital where the latest outbreak began

International flights to China resume as coronavirus restrictions ease
Lufthansa, Delta lead the way with more airlines preparing to restart services in coming weeks   Change of policy follows dispute between Beijing and Washington over aviation travel

Cheap flights for the next two years on long-haul routes likely amid low demand for tickets, as domestic trips in Asia lead aviation’s weak recovery
Facing losses of US$100 billion over two years, airlines will do everything to raise demand for long-haul travel. But trade body IATA says some won’t survive   Demand for domestic flights in China, Vietnam and South Korea is nearly back to normal, but more passengers book at the last minute, hitting airlines’ cash flow
Prepare for India border row to escalate, Chinese strategists warn Beijing
Frontline troops should have authority to respond to ‘intrusions’ by Indian forces, hawkish observers say   Deployment of non-lethal weapons such as stun grenades ‘should also be an option’

Can Beijing ease the US-China trade war through Asia-Pacific cooperation?
As tensions between Washington and Beijing grow more toxic, East Asia is adopting a regional approach to economic integration    The CPTPP and RCEP agreements offer hope in a dangerously divided world, and a path for China to shape the future global trading system

Asean leaders stick to 1982 UN treaty in South China Sea dispute
The leaders of the 10-nation bloc say the UNCLOS agreement should be the basis of sovereign rights in response to Beijing’s claim The statement comes a day after Asean members held their annual summit, with the coronavirus pandemic and the maritime disputes high on the agenda

South China Sea: US Air Force ‘heads out again on search for Chinese submarines’
Taiwanese security source says American forces may have been responding to intelligence about the PLA Navy     Waters in the area may become the focus of more military attention, analyst says

China’s gaokao exam fraud: victims learn the worst after cheats steal their grades and university places
Students denied college admission after seemingly doing poorly in the entrance test learn that others used their identities to gain degrees    Investigation last year revealed 242 instances of such cheating in eight academic years in one province alone

China’s Largest Air Carriers to Fly Domestically Made ARJ21 Jets
With a combined order of 105 of the COMAC-manufactured single-aisle planes, Air China, China Eastern, and China Southern are aiming to better serve the country’s remote areas.

Chinese coast braces for flooding as storms move east
Heavy rain has already caused US$4bn of damage and left 78 people dead or missing in the southwest of the country     Central and eastern regions, many of which lie along the Yangtze and are historically prone to flooding, are now set to bear the brunt

Coronavirus and floods destroy China’s Dragon Boat Festival holiday plans
Tourism revenues down nearly 70 per cent with only half of last year’s trip numbers taken during three-day break    New wave of infections in Beijing, severe flooding in southern provinces and sluggish income growth combine to keep people at home

Chinese embassy lashes out at Canada over Spavor, Kovrig cases
Embassy accuses Canadian government of irresponsible comments about the detention of two men and demands the release of Huawei executive Meng Wanzhou   Meng’s case ‘completely different’ from those of Kovrig and Spavor

China’s charmless offensive
The shine has come off what was once seen as China’s deft ability to make friends and wield influence.  China’s leaders seem to have squandered the limited and hard-won soft power they managed to cultivate, for reasons that remain rather mysterious.

Xi Jinping made personal appeal to Trump to lift Huawei sanctions, Bolton claims
The former US national security adviser John Bolton’s memoir says China’s president suggested he would owe Trump a favor if he eased restrictions on the Chinese tech giants Huawei and ZTE.

Chinese professor in US convicted of stealing tech secrets, economic espionage
Zhang Hao was accused of conspiring with a colleague from the University of Southern California to steal and sell US secrets to the Chinese government and military   He was charged during a crackdown on Chinese theft of intellectual property that began under former President Barack Obama has continued under the Trump administration

Why is the US worried about a Chinese-language radio station in California?
The US regulator has ordered URadio to close, and said it failed to disclose its owner, Phoenix Radio, which has ties to the Chinese government   It came on the day that the US designated four Chinese state media outlets as ‘foreign missions’

webinar  Is Covid-19 a geopolitical game-changer?
The overall impact of the Covid-19 pandemic on Asia’s markets and economy is difficult to assess – but it is a near certainty that the impact will be felt throughout many industries for a long period of time. As the situation continues to change at an unprecedented and rapid pace, business leaders and investment managers need to stay informed of the latest news, analyses and forecasts. Which industries and markets are best positioned to not only weather the storm, but to thrive once the pandemic is put to rest? With China experiencing its first economic contraction in decades, how can its GDP recover, and what are the reverberations on global trade and supply chains? How will business strategies evolve in the coming years as a result of these changes? Where should savvy investors be looking to ensure balanced and prosperous portfolios in the years to come?    Our latest webinar series, SCMP Conversations: Covid-19 and the Economy – sponsored by Credit Suisse – will dive deep into analysing Asia’s current economic position amidst the global pandemic, while forecasting where the region may find itself in the coming months and years. Financial industry experts and thought leaders will come together to discuss the pandemic’s impact on crucial industries and some of the vital investment opportunities that could develop as a result, while discussing the evolution of businesses strategies as organisations are forced to adapt to a new global reality.

All’s Not Fair in China Amid Face-Whitening Product Rebrands
The mood on Chinese social media has turned stormy as L’Oréal, following in the footsteps of several competitors, looks to change its marketing strategy.

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