China Press Review – June 5, 2018

Press review

Why the White House’s approach to China trade talks may make it harder to reach a deal
Internal divisions may hamper chance of agreement while tariffs on close US allies could embolden China to take a tougher line

Chinese investment restrictions on table when US President Donald Trump meets senators, sources say
Lawmakers want leader to understand that unilateral curbs are not popular in Congress, according to people familiar with issue

Yes, Beijing will stick to US government bonds, no matter what happens on the trade front
China is unlikely to sell off its huge US debt holdings because they are the most liquid and secure place for its foreign exchange reserves

Why Trump’s Trade War Isn’t Worrying Wall Street Economists, Yet
President has infuriated trading partners with tariff moves Economists say real risk would be sliding business confidence

U.S. Tariffs Put China’s Economy to a New Test
Significant U.S. tariffs on trade goods and restrictions on tech investment will complicate China’s ongoing economic rebalancing process.High national debt levels will constrain Beijing’s ability to pump investment funds into the economy in the case of a significant trade blow, which will affect companies and industries that rely on U.S. markets and are already operating on thin profit margins. The acute pressure China is facing is only going to harden Beijing’s resolve to rapidly develop self-sufficiency in sensitive technological supply chains.

Brace Yourselves: The US-China Trade War Is About to Begin
With less than 2 weeks before tariffs are rolled out, the latest effort at negotiations has come and gone.

Is it time Beijing ditched ‘Made in China 2025’ and stopped upsetting the rest of the world?
Ambitious scheme for industrial upgrading has sparked universal concern, but it was only ever meant as a guideline, academic says

American companies in China don’t care about the trade deficit — they want equal market access

U.S. officials are in negotiations with their Chinese counterparts to stave off a potential trade war, as the Trump administration pushes a reduced trade deficit with Beijing. American investors in China describe structural reforms as far more important than the trade deficit, which they said was “not good barometer for the health of the U.S.-China relationship.” Among G20 countries, China remains the most restrictive in terms of openness to direct investment.

China shows faster pace of economic restructuring, analysts say
But Beijing continues to face external risks such as punitive US trade measures, as it is reliant on technology from advanced economies

China shows faster pace of economic restructuring, a credit positive – Moody’s
China’s economic restructuring is picking up pace, with its manufacturing sector showing signs of a shift to higher value-added areas – a credit positive, analysts at Moody’s Investors Service said on Tuesday.

Why thrifty Asia’s growing appetite for debt could be its undoing, given the lessons from the 1997 financial crisis
Anthony Rowley says rising debt levels around the world, but particularly in Asia, are of concern even though efforts have been made to address the missteps of the pas In China, for example, corporate debt has soared to 166 per cent of GDP – and China’s GDP is now the world’s second largest after the US. In Japan and South Korea, the ratio is 100 per cent of GDP. Hong Kong and Singapore also have very elevated corporate debt ratios but that is partly because of the relatively small size of their economies.

China probes dominant DRAM chip makers – Samsung Electronics, SK Hynix and Micron
China remains the largest importer of memory products despite efforts to bolster domestic industry

Tencent and ByteDance Take Ongoing Feud to Court
A Beijing court has accepted lawsuits filed by the two Chinese internet companies, each accusing the other of unfair competition.

China should seize the day and push on with tough economic reforms, says IMF
Beijing urged to push on with important measures such as shutting ‘zombie’ enterprises after annual economic health check paints positive picture

China’s debt crackdown to hurt emerging markets, oil, metals
China’s debt crackdown is a key risk to the country’s economic growth and will have significant knock-on effects for the global economy, particularly emerging markets with high commodity dependence or close Chinese trade links, Fitch Ratings said.

Moody’s raises view on China life insurers as regulatory tightening cuts risk
Moody’s Investors Service has raised its outlook on the life insurance industry in China, citing a lowering of risk due to Beijing’s tightening regulation over the sector as well as steady economic growth that is fuelling demand for policies.

China shows faster pace of economic restructuring, but still relying on credit: Moody’s
China’s economic restructuring is picking up pace, with its manufacturing sector showing signs of a shift to higher value-added areas – a credit positive, analysts at Moody’s Investors Service said on Tuesday.

EU investment director: China of fundamental importance to EU
China is of fundamental importance to the EU and its member states, Maria Martin-Prat, director of the European Commission Directorate General for Trade, said at the Lennart Meri Conference in Tallinn on Sunday.

Alibaba Incubates a Health Risk for Investors
Its online pharmacy unit is showing signs of contagious stock fever.
Ali Health shares are hot, surging 58 percent in two weeks. Jack Ma just sowed the seed of another decacorn – a startup worth more than $10 billion – on the Hong Kong stock exchange.

China Revives Its Push to Make the Yuan Go Global

Yuan strength, rising foreign reserves give officials room China’s currency accounts for just 1.7% of global payments

China: RMB to Dominate USD
China’s Belt and Road Initiative, which is also known as the Silk Road Economic Belt and 21st Century Maritime Silk Road, will also promote the renminbi, analysts say. “BRI trade and investment would definitely increase currency flows between China and other Belt and Road countries,” said Ben Yuen, Hong Kong-based fixed-income chief investment officer at BOCHK Asset Management Ltd, as quoted by the media. China has been increasing the share of yuan with its key trading partners, especially with Iran and Russia, which are exposed to US sanctions. China and Russia have an investment fund, worth over $10 billion, denominated in yuan.

China: RMB to Dominate USD

China’s New Silk Road

That, and Intelligent Logistics, Dominated the Agenda at transport logistic China 2018 Logistics 4.0 and the new Silk Road were the dominating topics at transport logistic China 2018, which took place in Shanghai from May 16 to 18, 2018. Participants from all over the world presented their products and services as well as official pavilions from Germany, the Czech Republic, Italy, Spain, Latvia, Malaysia, and Lithuania

China’s New Silk Road

Social, environmental impact of Belt and Road will take years to play out: SMU professor
The Belt and Road Initiative will bring trillions of dollars in infrastructure investments around the old Silk road route. But the social and environmental impacts from what is easily the biggest infrastructure and investment project in Asia to date are significant and will likely take many decades to play out.

China’s Belt and Road Initiative and aviation
But in each case, it appears that aviation is either an implied part of the BRI future or is already becoming relevant.

China’s Belt and Road demands to dominate Shanghai summit
The centrality of the Belt and Road Initiative in China’s favourable view towards Russia is no secret to either side. The Chinese ambassador to Russia, Li Hui, told Russian news that the two regional powers can look forward to stronger trade prospects in agriculture, investment and finance, “relying on the cooperation in the cooperation of ‘Belt and Road’ with the Eurasian Economic Union.” Moscow itself has labelled its economic relationship with China as a foreign policy priority.

China’s Belt and Road demands to dominate Shanghai summit

Carrefour Sees China as Testing Ground for New Retail Methods
French retailer Carrefour , which opened its first high-tech store in Shanghai last month in partnership with tech giant Tencent <0700.HK>, sees China as the ideal location to develop new methods for attracting shoppers. More such stores were on the cards in China, including two in Shenzhen in the coming months,

Wei Zhou: Chinese Millennials Will Become World’s Biggest Spenders Online

For Chinese venture capitalist Wei Zhou, founding managing partner of China Creation Ventures, the changes he has witnessed in China during his professional life have been awe-inspiring.

Wei Zhou: Chinese Millennials Will Become World’s Biggest Spenders Online

Is China Changing Postwar Consensus Or Enhancing It? – Analysis
In sum, while Xi’s era will promote domestic stability and foreign policy continuity, it will undoubtedly pose challenges to the Western-led world order that has changed little since the postwar period. But before responding to these challenges in both the economic and security domains, the West may see value in looking at the order it had built and championed over the years to evaluate the shortcomings that made Chinese initiatives gain traction. Finally, although China’s disruption tends to be overly seen in the prism of great power competition, its positive but still nuanced impact, especially in the developing world, and its potential complementary role remains underappreciated.

Is China Changing Postwar Consensus Or Enhancing It? – Analysis

After US withdrawal, Iran embraces China
On 8 May 2018, US President Donald Trump withdrew his country from the Joint Comprehensive Plan of Action (JCPOA) that had provided Iran with relief from economic sanctions in return for a freeze on its program of uranium enrichment. Although there is a grace period for US companies presently operating in the Islamic Republic to wind down their operations, economic sanctions will follow, putting pressure once again on the Iranian economy.

After US withdrawal, Iran embraces China

In China: Doing is Better than Saying
doing is better than sayingI recently went on a plant tour of Atlas Copco’s impressive facility in Wuxi China. I noticed in Chinese and English on a meeting wall the following words: Doing is Better Than Saying. So well said. Great notice. It is hard to get there in China.

GM gears up for rapid new-energy vehicle expansion
US car giant predicts a ‘substantial’ share of its 20 new all-electric vehicles to be introduced by 2023, will be sold in China

China is Using This, Not Renewable Energy, to Replace Coal
The country grew year-over-year imports of this crucial energy source 58% in the first four months of 2018. It’s a huge opportunity for investors.

7 Rules on China WFOE Registered Capital
What is it about registered capital that makes it so consistently confounding? We hear so many half-truths and misconceptions about registered capital that it’s hard to keep track of them all, let alone dispel them. Not for lack of trying, though: seeChina Company Law Myths: Registered Capital and Personal Liability, How To Start A Business In China. The Minimum Capital Requirements For A WFOE, Part II — The Goldilocks Rule, and Registered Capital For Chinese Companies. Overrated. Without further ado, following please find 7 rules (both formal and informal) about the registered capital requirement for WFOEs.

7 Rules on China WFOE Registered Capital

The New Foreign Permanent Resident ID Card in China
Last July, the Ministry of Public Security started issuing a new generation of China’s Green Card. The new ‘Foreigner’s Permanent Resident Identity Card’ (FPRID) will gradually replace the old ‘Foreigner’s Permanent Residence Card’ (FPRC). While changes to the national legislation relate merely to the design and functionality of the card, cities like Shanghai and Beijing have adopted further policies that expand the eligibility criteria and shorten the overall application time.

The New Foreign Permanent Resident ID Card in China

The Sign the Contract in China Scam Revistited
The below is an amalgamation of a couple recent emails our China lawyers have gotten from foreign companies (both in Europe) that were taken in by what is probably the oldest and most common China scam out there. The one where the China company convinces you to go to China to sign a contract, planning to rip you off once you get there. The two stories were incredibly similar, even regarding the money lost — which is actually considerably less than is typical. Anyway, I do think it important to pass this on in the hopes that it will stop others from falling for this scam

Fancy a stay at China’s ‘creepy’ terracotta warrior holiday flat? It’s just US$47 a night

Replica soldiers hold up sinks and lampshades, line the walls and even serve as headboards

Alain Gillard
Information Officer
Service Asie Pacifique
Place Sainctelette 2
1080 Bruxelles
Tél 02 421 85 09 – Fax 02 421 87 75
Copyright © 2018 awex, All rights reserved.