Could China’s model of growth be its biggest export to the world?
Beijing’s combination of authoritarianism, capitalism and infrastructure has proved appealing to some countries weary of Western neoliberalism. But that approach is a product of its past and could struggle to gain a real foothold elsewhere, observers say. “The 2020s will be a telling decade. China needs a much more stress-free commercial, economic and financial engagement with the rest of the world to realise its ambitious goals, but the chances of this happening look slim,” he said. He noted the wrangling over the China model was at the heart of the rivalry between Beijing and the West, which was rooted in their ideological differences. “Neither side is accommodating of the other, and many countries and indeed companies are caught in the middle, having to make awkward choices. A bipolar world is pretty much where we are now, and will be for the foreseeable future,” Magnus said. Gennady Rudkevich, a political scientist at Georgia College, also said the vast differences between the two countries’ type of government have made it very difficult to resolve the US-China feud through diplomacy, with each seeing the other as their biggest threat. Noting that American political parties and a large part of the American public had become more anti-Chinese in the past 10 years, he said some conflict seemed inevitable considering there was little sign that China may scale back its assertiveness. “Instead of seeing the economic challenge from China as something natural and therefore something to be resolved through skilled diplomacy, people think China must be deliberately trying to hurt them. This, in turn, makes it easy for certain politicians to blame China for their own country’s economic problems. This will likely lead to greater global tensions in the future,” he said.
China is facing its worst power shortage in a decade. That’s a problem for the whole world
China is in the middle of a huge power crunch as extreme weather, surging demand for energy and strict limits on coal usage delivers a triple blow to the nation’s electricity grid. It’s a problem that could last for months, straining the country’s economic recovery and weighing on global trade. Nearly a dozen Chinese provinces have said they are facing a power crunch in recent weeks, including some of the country’s most important engines for economic growth.
EU-US Trade and Technology Council will be a litmus test for transatlantic coordination on China
The EU-US summit held in June signaled the transatlantic partners’ ambition to reinvigorate their cooperation – including on issues pertaining to China. The two sides explicitly noted plans to “closely consult and cooperate on the full range of issues in the framework of our respective similar multi-faceted approaches to China”. However, it is the technical Trade and Technology Council (TTC) that may prove to be the most efficient channel for developing common responses to systemic challenges posed by China. Initially proposed by the European Council in December 2020, the TTC will cover a plethora of issues that will shape the future of global economic and digital governance, from technical standards and collaborative innovation to the security of information and communications technologies.
Chinese carmakers see overseas sales double as global chip shortage hits US, European rivals harder
Mainland China’s vehicle manufacturers exported 760,000 units between January and May, up 103 per cent from a year ago Their performance was buoyed by a strong recovery in production after the Covid-19 pandemic was largely contained
America’s Lack Of Chips Is More Than A Blip
Throughout my career, the United States has faced many competitiveness challenges, but few have alarmed me more than the ramifications of the recent semiconductor shortage. Our society is totally reliant on microelectronic technologies. They are fundamentally integrated into every industry, government, mode of transportation, energy supply and hospital, with bits of data and information constantly moving from one place to another. This exponential increase in their use is also causing a corresponding increase in the total energy consumption in microelectronics. Unfortunately, with the current semiconductor shortage, 169 American industries are now impacted, according to estimates from Goldman Sachs — and this is just the tip of the iceberg. Our capabilities in microelectronics are eroding and under severe threat, due to both our national overdependence on manufacturing overseas, as well as our lack of policies and effort to make semiconductor production a competitive venture in the U.S. Without significant policy changes and increased investment into a rapidly growing sector of the global economy, the U.S. risks falling behind even further. China’s Rise in Manufacturing Microchips. That expansion is already well underway, especially in China. In 2019, four of the six new semiconductor fabs in the world were in China — with none in the U.S. — and government-financed fabs in China are estimated to grow from about 24 to 70 in just the next two years. China is implementing a major, state-led effort to develop a domestic semiconductor industry that leads across all segments of the supply chain by 2030, with the government planning to spend $100 billion to achieve that goal. They are poaching talent from around the world, luring industry experts with exorbitant salaries and acquiring foreign intellectual property, through both licit and illicit means, to advance the country’s capabilities.
China has gone ‘too far’ in clamping down on big tech — that will hurt economic growth, says analyst
The Chinese government has gone “too far” in cracking down on large technology companies, said Scott Kennedy of the Center for Strategic and International Studies. That will hurt innovation in the private sector and slow down China’s economic growth, said Kennedy, who is senior advisor and trustee chair in Chinese business and economics at CSIS. Kennedy said China will likely “primarily depend” on state-led investments to boost economic growth in the next decade.
China’s Love-Hate Bitcoin Drama Ends Badly
Watching the cryptocurrency game play out in China, it’s hard not to think about Charlie Brown, Lucy and the football. Charles Schultz’s “Peanuts” cartoon says more about the herd behavior of crypto enthusiasts than meets the eye. Every time, Lucy convinces Charlie she’ll hold the ball for him to kick. Each time, she yanks it away at the last second, with Charlie landing flat on his back pondering his gullibility. Bullishness on bitcoin and its peers often seems that way. China, of course, is Lucy here. In recent years, no country seemed more enthusiastic about crypto assets—both mining and trading—than China, where the first wave of important exchanges popped up. Time and time again, though, President Xi Jinping’s regulators have yanked away the market’s growth and potential—often quite suddenly. The use of private currencies that could be used to evade detection, taxation and overseas capital flows are a foundational risk to Beijing’s sense of control. As China’s Big Tech industry expands into every corner of mainland finance, it will collect reams of data—and influence—in a nation where the government is used to doing the surveillance. This threat explains why it’s no longer just Ant in harm’s way. Dozens of Davos-attending Chinese tech billionaires have also been put on notice. This dragnet includes WeChat operator Tencent, internet search giant Baidu and myriad other household names. Nothing threatens China’s top-down system more than cryptocurrencies which are essentially encrypted money flows. So expect Lucy–China—to continue to play with crypto asset enthusiasts for the time being. But there should be no confusion about how Beijing’s love-hate drama with bitcoin will end. Badly.
China digital currency: e-yuan part of ‘triangle of risks’ challenging international role of euro
China’s plan to create a digital version of the yuan has drawn scrutiny from governments and central banks alike European Central Bank Governing Council member Francois Villeroy de Galhau urged policymakers in Europe to act quickly on their own equivalent efforts “The risk is clearly that Europe will lose momentum not just in its drive to strengthen the international role of the euro, but even in preserving it,” he said at an event in Paris on Tuesday. “The challenge here is also a geopolitical concern.” China’s plan to create a digital version of the yuan has drawn scrutiny from governments and central banks alike, with the administration of US President Joe Biden studying its potential threat to the US dollar. The People’s Bank of China has tried to allay fears by saying its goal is not to replace currencies, and that its efforts are aimed at domestic use.
Blockchain ambitions: geopolitical implications of China’s pioneering digital currency spread far and wide
To see how China’s blockchain ambitions are being put in place, look no further than Xiongan, 100km from the Chinese capital Xiongan brings together many of China’s development initiatives: fiat digital currency, Belt and Road infrastructure, underpinned by blockchain
podcast worldbank China Economic Update – June 2021
China’s economy will post strong growth in 2021. Assuming the continued suppression of COVID-19, growth is projected to reach 8.5 percent this year. For next year we expect growth to slow to 5.4 percent, as low base effects dissipate, and the economy returns to its pre-COVID trend growth.
Two of China’s Belt and Road projects reveal a flaw in the G-7′s new global financing plan
For some countries, megaprojects have political and infrastructure goals At their summit in Cornwall, England, President Biden urged fellow G-7 leaders to offer billions of dollars in aid to form an alternative to China’s Belt and Road Initiative. Since 2013, Beijing’s global infrastructure drive has poured Chinese money into energy, mining, port, railroad, telecommunications and other projects across the world.
Biden’s team, members of the former Trump administration and senators from both sides of the aisle have expressed concerns that Beijing uses the Belt and Road Initiative to serve China’s interests. As a U.S.-led effort, the new Build Back Better World plan announced earlier this month aims to mobilize private capital to address the infrastructure demands of low- and middle-income countries.But do borrowing countries turn to Chinese financing because they lack global funding options, or because China wields its influence to pressure them? My research in the Philippines illustrates that’s not the full story — some leaders choose to work with Beijing because these projects give them greater control over the ventures. In my work, I studied Kaliwa Dam and the Chico River Pump Irrigation Project, two major Chinese projects in the Philippines. Between 2018 and 2020, I interviewed Chinese policy bank officials, Philippine government officials and representatives of nongovernment organizations. My research suggests that Philippine President Rodrigo Duterte moved forward with these projects because Chinese officials were open to expediting the work to ensure the projects would be completed during Duterte’s current term. These interviews also suggest Duterte planned to leverage both projects to reward local political leaders, maximizing his political clout ahead of the 2022 Philippine elections.
China’s US trade deal commitments more than 30 per cent short of year-to-date target, report says
China’s total purchases of US goods in 2021, as of the end of May, reached only 69 per cent of the pledged total, according to Chinese import data Energy purchases reached just 34 per cent of China’s five-month target, based on US export data, but Chinese import data put that figure at 54 per cent
Shenzhen tamps down wages with eye on China’s manufacturing exodus
City plans first rule change in 17 years as companies chase cheaper labor abroad The Chinese city of Shenzhen will overhaul its rules on worker pay for the first time in 17 years, looking to curb surging labor costs and stem the exodus of companies to cheaper markets in Southeast Asia and elsewhere. Monthly pay for manufacturing workers in China came to $531, according to a survey of about 6,000 companies with operations in Asia and Oceania conducted by the Japan External Trade Organization last year. That was significantly higher than the $447 in Thailand and $431 in Malaysia. The average was even lower in Vietnam, whose manufacturing sector excels in many of the same fields as China, at $250. But the growing wage gap has pushed many companies to shift production from China to Southeast Asia, in a blow to the country’s reputation as the world’s factory. Roughly 43,700 foreign-owned manufacturers with 20 million yuan or more in revenue operated in China as of April, according to the statistics bureau, dropping 24% from its peak in 2014.
Shenzhen, China’s Silicon Valley, plans to turbocharge local AI development with first-of-a-kind regulations
The document singled out healthcare AI, encouraging medical institutions to come up with simpler review systems for faster approvals of pilot AI products At stake is China’s US$23.2 billion AI industry, which is expected to see rapid growth to surpass 400 billion yuan by 2025
E-commerce giant Alibaba’s home province wants to become a global digital trade hub by 2025
By 2025, the province expects the digital economy to contribute to 60 per cent of its GDP The digital economy has been Zhejiang province’s calling card for over a decade, making it a leader in related policy changes.
China’s Economy Flashes Hints of Weakness
Expansion in the factory sector slowed in June, while the services sector softened as Covid-19 outbreaks dampened consumer sentiment
China’s economy faces increasing pressure as key indicators hit four-month lows
China’s official non-manufacturing purchasing managers’ index (PMI) fell to 53.5 in June from 55.2 in May China’s official manufacturing purchasing managers’ index (PMI) fell to 50.9 in June from 51.0 in May
China’s economic approach to protecting its ecology
Ecotourism could provide an alternative income for those who risk losing their livelihoods when areas are given national-park status.
Copper’s Record Rally Prompts China To Trigger Worst Selloff In 15 Months
As the world’s largest buyer and hoarder of commodities, China is uniquely positioned to let prices of raw materials rise when they don’t hurt its economy, and crack down on them when the opposite is the case. We’re seeing now what this means for copper—which reached record highs in May, only to be forced into its worst correction this month since May 2020 by a Beijing determined not to be overwhelmed by inflation in the price of the number one industrial metal. State-owned Chinese companies have been ordered to control their risks and limit exposure to overseas commodities markets, Bloomberg said in a recent commentary. In a related move, government stockpiles of copper, as well as aluminum and zinc, will be released to
China-US relations: Washington and Beijing set out competing visions of international cooperation at G20 meeting
Secretary of State Antony Blinken tells the foreign ministers meeting that ‘effective and accountable’ international mechanisms are needed Chinese Foreign Minister Wang Yi hits out at ‘high-sounding slogans’ and attacks Covid-19 vaccine ‘hoarding’
Beijing challenges US multilateralism call at G20
Appearing virtually at the Matera meeting, Chinese Foreign Minister Wang Yi did not name the United States but suggested ulterior motives in the rhetoric as he called on the G20 to show “true multilateralism”. “China calls on able countries to avoid export restrictions or excessive hoarding” of vaccines, Wang said.
China’s control over Sri Lankan infrastructure reignites fears
First foreign company to own highway highlights rising Chinese influence Sri Lanka’s giant neighbor India has been wary of China’s creeping influence on the island. Early this year, India reportedly expressed concern after China’s Sinosoar-Etechwin Joint Venture won a bid to install hybrid renewable energy systems in several islands north of Sri Lanka’s main island and close to India. Meanwhile, Sri Lankan television channel News First reported seeing Chinese men in military-like attire cleaning an old irrigation tank south of Sri Lanka. In response to the report, the Chinese Embassy in Colombo tweeted that camouflage clothing can be purchased online. However, as per Sri Lankan law, wearing or even being in possession of a military uniform when not serving in the military is a punishable offense. As India remains anxious about China’s presence, CHEC Port City Colombo has invited Indian companies and others to invest in the offshore city. Yamuna Jayaratne, director of sales and marketing at the company, said the project is a good play for Indian investors due to Sri Lanka’s proximity to India. “Port City Colombo offers a compelling investment opportunity and the project welcomes investment from anywhere in the world,” she said. “Indian investors are welcome to invest and grow their investments through the port city. In doing so, we do believe that it will contribute to bridging any tension.”
Coronavirus vaccines, chips on agenda as Taiwan, US resume trade talks
Negotiations had stopped under the Trump administration because of focus on broad trade agreement with Beijing Deal with United States has long been an aim for the island since it may encourage other countries to follow suit
China urges Japan to clarify ties with Taiwan island, condemns politician’s statement aimed at ‘military deregulation’
China has lodged solemn representations with the Japanese government and urged it to clarify on the matter and make ensure it will not happen again, Chinese Foreign Ministry said on Tuesday, after Japan’s deputy defense minister vowed to protect the island of Taiwan “as a democratic country.” Chinese observers said the Japanese deputy defense minister’s remarks were an obvious interference in China’s internal affairs and a challenge to China’s bottom line, which were very rarely seen before.
China-Australia relations: Beijing ‘erred’ and ‘failed’ on wine, Canberra says in formal WTO complaint
Move involves China’s duties on Australian wine and marks the second dispute Canberra has launched at the World Trade Organization (WTO) against Beijing in just over six months Both sides have 60 days to confer, and a WTO dispute panel may be set up if they fail to do so Australia’s trade minister, Dan Tehan, said Canberra had been taken by surprise by China’s complaint. “The normal course of events would be that you would get some notification of their concerns about the measures we put in place, through the relevant WTO committee or through officials raising it through bilateral channels,” he told reporters in Canberra. “We haven’t seen any of that.” Tehan also questioned why China had taken so long to lodge its appeal when Australia imposed two of the three duties in 2014 and 2015, with the third in 2019.
China-Russia: A Strategic Partnership Short on Strategy
The most recent Putin-Xi summit inadvertently showcased the lack of positive agenda items underpinning the two nations’ relationship. The Sino-Russian relationship, nothing like an “alliance,” will continue to endure and in some ways deepen. Chinese firms are still interested in Russia’s human capital and natural resources and Russian firms and investors want to find growth in China’s market. The Putin-Xi meeting, however, emphasized performance over substance, limited by domestic political considerations and the scope of the two countries’ mutual interests. There’s a sense that there is no clear consensus over what order in Central Asia and Eurasia more broadly ought to look like, nor any attempt to show that it’s not just the world’s democracies talking a mean game about coordinating climate efforts. Instead, China and Russia continue their repeated focus on presenting a united front against the dominance of American and transatlantic power – without reflecting on what that power is actually doing right now.
China’s fresh graduates are freaking out at living costs in tier-one cities as rents outpace starting pay in jobseekers
Millions of graduates compete for jobs and flats in coveted tier-one cities only to push up rental costs, analyst says Rents in Beijing and Shanghai have risen 14-18 per cent since 2016 while the starting pay for new graduates rose 10.4 per cent from 2015 to 2020
China’s UN envoy calls for equality in shaping cyberspace governance
‘Small circles’ should not decide cybersecurity governance, and interference in nations’ internal affairs should be avoided, Zhang Jun tells UN Security Council Countries should be more inclusive in the development of information and communication technologies, he says
Chinese economist Gao Shangquan’s death a blow to pro-market camp within Communist Party
Economist Gao Shangquan was one of the architects behind China’s opening up in the late 1970s and Hong Kong’s handover Gao is said to have influenced top Chinese economic officials including Vice-Premier Liu He and central bank governor Yi Gang
China beats malaria, eliminating disease after decades of effort
China has become the 40th country to be certified malaria-free by the World Health Organization.
China is officially malaria-free, according to the World Health Organization, following a decades-long battle against the disease. Beijing submitted a certification request to the agency in November, after four years of recording zero local cases. In May, members of the Malaria Elimination Certification Panel – an independent WHO advisory body – travelled to China and verified it was free of the disease and had the appropriate resources to prevent retransmission
Xi Jinping recognises ‘foot soldiers’ as Communist Party looks to grass-roots power base
New medal awarded to cadres working in areas ranging from defending Beijing’s claims in the South China Sea to environmental conservation Recipients represent almost all policy priorities and the list shows president sees danger of the party losing touch with the people, according to analyst
Why China’s Communist Party celebrates anniversary on July 1, earlier than first official meeting
The party held its first national congress in July 1921 but the political confusion of the times left exact day unclear Date of the inaugural gathering was lost through incomplete records, a police raid and the country’s civil war
From Mao to Xi: how China’s Communist Party leaders have shaped its ideology
Across ‘five generations’ they all developed their own doctrines that have been enshrined in the party charter They progress from a peasant-led revolution to market reform and economic development, to Xi’s new era Since taking power in 2012, Xi has emphasised that China has entered into a new era. Jiang and Hu’s ideologies have rarely been mentioned in state media during Xi’s time, except via speeches evoking all of the ideologies enshrined in the party charter. Xi’s own political doctrine, known as Xi Jinping Thought, is a complex 14-part national blueprint meant to help the country achieve moderate prosperity by the party’s 100th anniversary on July 1, and for China to become a “strong, democratic, civilised, harmonious and modern socialist country” by 2049 – 100 years after the People’s Republic was founded.Studied in schools across the country, Xi Jinping Thought emphasises the need to strengthen the party’s rule over all aspects of Chinese society, and strict party discipline.
It also sets out goals such as making China a nation with pioneering global influence, turning the military into a “world class” force, eradicating extreme poverty, and continuing to open up the country’s markets and provide a level playing field for businesses. Xi’s signature policies also include a sweeping anti-corruption campaign, a greater emphasis on environmental protection and more assertiveness in diplomacy.
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