China Press Review – June 6, 2019

Press review

China and Russia to close ranks in united front against American pressure following Xi Jinping’s meeting with Vladimir Putin
Moscow and Beijing could be about to upgrade their relationship to something close to an alliance as both try to fend off pressure from the West, sources say After meeting with Xi Jinping, Vladimir Putin tells Tass that the two nations’ agreement on global issues is at ‘an unprecedentedly high level’

China’s Huawei signs deal to develop 5G network in Russia
Huawei welcomes agreement in area ‘of strategic importance’ after meeting between Xi Jinping and Vladimir Putin

Trump threatens China with tariffs on a further $300 billion of goods
U.S. President Donald Trump threatened to hit China with tariffs on “at least” another $300 billion worth of Chinese goods but said he thought both China and Mexico wanted to make deals in their trade disputes with the United States.

China must be careful in riding a nationalist tide towards a trade deal with the US, analysts say
Change in China’s tone is result of ‘a serious erosion of trust’, says Oxford University specialist

Will Steven Mnuchin’s meeting with China’s central bank chief at G20 help break US-China trade impasse?
The scheduled meeting with People’s Bank of China governor Yi Gang would be the first face-to-face discussion since negotiations collapsed a month ago It could provide an indication of whether Xi Jinping and Donald Trump will meet at the G20 leaders summit in Osaka later this month

China has ‘ability and confidence’ to meet any challenge posed by trade war, Xi Jinping says
Despite slowdown in global growth, China’s economy has achieved steady expansion, president tells Russian media ahead of state visit As trade talks with US stall, Chinese leader travels to Moscow to meet Russian President Vladimir Putin

China’s ‘New Long March’
While American negotiators focus on trade and tariffs, President Xi is preparing his country for a painful economic retreat. The U.S. must plan accordingly.

In China’s industrial hinterlands, state subsidies run deep and appetite for reform is low despite US demands
In protracted US-China trade war talks, Washington has demanded that Beijing stop subsidising state-owned enterprises (SOEs) Deyang and Liuzhou, two cities reliant on SOE employment, highlight why fears of social unrest make the demands untenable for China’s authorities

Trade war? No, the US and China are vying for technological supremacy, and the markets are catching on
The US implemented tariffs because it sees China as its long-term rival for technological supremacy. This not only means ongoing restrictions on companies like Huawei, but a stark global realignment

Why is US dollar access so restrained in China as trade war rages on?
Foreign financial institutions increasingly reluctant to lend US dollars to Chinese banks given worries about financial risks amid the trade war China holding onto US dollars by increasingly restricting business and individual transfers out of the country

How Are China-Dependent Economies Performing?
Fears about a deceleration in the Chinese economy continue to weigh on financial markets. When looking at GDP growth in China-dependent economies, growth has not fallen off a cliff, but it is the slowest since 2009.

Sinotech: U.S.-China Tech Conflict Deepens as China Creates ‘Unreliable Entities’ List
On Friday, China’s Ministry of Commerce announced the establishment of an “unreliable entities” list. Gao Feng, a ministry spokesman, said that “foreign enterprises, organizations and individuals that do not comply with market rules, violate contracts, block or cut supplies to Chinese firms with non-commercial purposes, and seriously damage the legitimate rights and interests of Chinese enterprises, will be added to the list of unreliable entities.”

Trade war? No, the US and China are vying for technological supremacy, and the markets are catching on
The US implemented tariffs because it sees China as its long-term rival for technological supremacy. This not only means ongoing restrictions on companies like Huawei, but a stark global realignment

US-China trade war: IMF’s Christine Lagarde warns of ‘self-inflicted wounds’ to global economy
IMF calculates that the tit-for-tat tariffs will cost US$455 billion in lost output next year – more than the size of South Africa’s economy Donald Trump has so far ignored warnings from the IMF and other international organisations about the impact of his trade measures

Boeing and Chinese airlines in talks for US$30 billion mega-deal that trade war could derail
US manufacturer is negotiating one of the largest orders ever of widebody aircraft Discussions are focused in particular on the US$442.2 million 777-9, Boeing’s costliest plane

Pentagon eyes rare earth supplies in Africa in push away from China
US Department of Defence has held talks with Malawi’s Mkango Resources and other rare earth miners across the globe about supplies of strategic minerals Push comes as China threatens to curb exports to US rare earths, which are used in a range of military equipment and hi-tech consumer electronics

US moves to reduce reliance on Chinese rare earths exports after Beijing threatens to cut supplies
Commerce Department outlines series of measures to boost domestic supply and end dependence on Chinese imports Beijing has threatened to use the metals, which are vital for modern consumer goods and military equipment, as a weapon in the trade war

Can China stop rare earths exports to the US?
As China looks for ways to retaliate against the US amid an escalating trade row between the two giants, speculation is rife that Beijing could slash the export of rare earth metals as a counterstrike to US tariffs.

Anti-China sentiment is rising in Washington and Beijing needs to pay attention, former US official says
Even though the current administration is the one that has led the charge on the trade war with China, he said, “almost all” the 24 Democrats running for president in 2020 have “some sort of anti-Chinese sentiment,” says Tim Adams of the Institute of International Finance. Similarly, he is concerned that Washington does not understand the rhetoric from Beijing. He pointed out that there could be “miscalculations” in Washington and Beijing, where trade and nationalism are concerned, and that could “potentially trip us into a lower growth trajectory.”

Three reasons the ‘Trump bump’ can no longer be counted on to prop up financial markets
Standing up to China is now a bipartisan political strategy and the US president’s unpredictable trade policies are taking a toll on market confidence. So, investors should be cautious, especially as Fed rate cuts are not guaranteed

China awards 5G licences to country’s major telecoms network operators, cable network giant
Hong Kong-listed carriers China Mobile, China Unicom and China Telecom, as well as China Broadcasting Network, were granted licences Move comes after US government put telecoms gear provider Huawei Technologies on trade blacklist

Huawei cuts orders to key suppliers after US blacklisting
Supply chain strain tests Chinese group’s preparations for trade war

China Resorts to Electric-Vehicle Stimulus as Auto Industry Flails
China released policies Thursday aiming to spur the purchase of electric vehicle (EV) amidst historically bad times for the auto industry. The policies demand that local governments cease restrictions on EV sales or driving, according to an official plan co-released by the National Development and Reform Commission, the Ministry of Ecology and Environment, and the Ministry of Commerce.

China rolls out new measures to spur car sales
China said on Thursday it is stopping local governments from imposing new restrictions on car purchases and cancelling existing ones that apply to new energy vehicles, as it looks to spur consumption amid a slowing economy.

China consumer retail sales grew by 8% from Jan to Apr in 2019; 23.7% online
In April 2019, China’s total retail sales of social consumer goods reached 3,058.6 billion yuan (US$442.82 bn), up by 7.2% year-on-year nominal growth rate (excluding the real increase of 5.1 percent in price factors,the follows are nominal growth rates). The retail sales of the enterprises (units) above designated size reached 1,112 billion yuan (US$160.99 bn), up by 2.0%.

EV maker Aiways invests RMB 1.75 billion in Chinese OEM to accelerate production
Chinese electric vehicle (EV) company Aiways will invest RMB 1.75 billion (around $246 million) in domestic automaker Jiangling Holdings for a 50% stake to shorten the time to market for its first commercial model. China’s gasoline vehicle market has shifted to a lower gear. With the introduction of new strategic investor, Jiangling Holdings will speed up heading into the intelligent, new energy vehicle market,” (our translation) shareholder Chang’an Automobile said Wednesday in an announcement.

EV maker Aiways invests RMB 1.75 billion in Chinese OEM to accelerate production

First-quarter foreign funds in Guangzhou, Shenzhen real estate top 2018 total as global investors find allure in Greater Bay Area
Foreign interest in commercial property in two cities expected to continue after overseas investors pour US$1.09 billion in first quarter

‘No way to stop it’: millions of pigs culled across Asia as swine fever spreads
Experts say region is losing the battle to stop the biggest animal disease outbreak the planet has ever faced

Amid US-China rivalry, Canada holds fast to own principles and is beholden to neither country
Canadians believe in the supremacy of the rule of law and won’t be swayed by the ‘us or them’ attitude of the two powers fighting for global dominance

How did Canada and China end up here? How does it end?
In today’s Big Story podcast, the past six months have seen a brutal deterioration the Canada-China relationship. It all began because we did a favour for that other Superpower—the one to the south of us. Now China is using all of its levers—from detention of Canadians to trade and economic pressure—to push the Canadian government to cave. Meanwhile, America is urging Canada to escalate things by banning a Chinese telecom from our 5G networks.

How did Canada and China end up here? How does it end?

New rule, shadow banking crackdown will increase Chinese banks’ non-performing loan ratios, warns Alvarez & Marsal
New ‘window guidance’ requires loans to be reclassified as non performing after 60 days without payment, more stringent than the 90-day rule in Europe

China May bank lending seen up, more stimulus expected as trade war risks rise: Reuters poll
New bank loans in China likely picked up modestly in May after slowing the previous month as the central bank tries to spur faster credit growth in the wake of a sharp escalation in the U.S.-Sino trade war

Did Japan and India just launch a counter to China’s Belt and Road?
India and Japan are to help Sri Lanka develop Colombo Port – prompting speculation of a challenge to Beijing’s signature infrastructure programme Is it just a case of two countries throwing their hat into the ring – or part of a deeper challenge to Chinese influence in the region?

Germany may join US in opposing China by sending warship through Taiwan Strait, breaking decades of military non-confrontation
Beijing claims the body of water, but the West regards it as an international waterway US sent two destroyers into strait in April to demonstrate ‘commitment to a free and open Indo-Pacific’

US ‘prepares to sell over US$2 billion worth of tanks and weapons to Taiwan’
Taiwan has been interested in refreshing its existing US-made battle tank inventory The potential sale includes 108 General Dynamics M1A2 Abrams tanks

Last go at exam success for China’s ‘gaokao grandpa’
An 84-year-old man is making his fourth attempt at the gruelling university entrance exam Since the rules changed in 2011 more people are taking the test multiple times

Alain Gillard
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