China Press Review – March 11, 201

Press review

More Chinese industrial firms are building their factories in Europe, says head of Germany’s Exyte
Plans for expansion in Europe are becoming particularly popular among firms in China’s biotech and pharmaceutical sectors, says Mark Garvey, Exyte’s president for Asia-Pacific

Trade war is killing overseas investment by Chinese, US tech companies, analysts say
Clash over tech could lead to future research split between Silicon Valley, Shenzhen Chinese investment in US semiconductor, hardware segments dropped by nearly five times in 2018

US-China trade war: an elephant in the room for Li Keqiang’s NPC work report
Li Keqiang’s 100-minute report included US$298 billion in tax and fee cuts to shore up the economy, and a promise to leave more to market forces But it also contained plenty of acknowledgement of US pressure, such as not mentioning ‘Made in China 2025’ and sweeteners for private businesses

Hamburger and stir-fry diplomacy: how China and the United States showed goodwill in trade war talks
Senior Chinese official says delegations from both countries are working around the clock for a deal to scrap extra duties on billions of dollars in imports Vice commerce minister does not respond to question about whether expected summit between Donald Trump and Xi Jinping has been delayed

Trump’s 4 Weaknesses As A Negotiator With China
Chinese leaders think in decades while Trump is pretty much looking for his next (or any) “win” This could be Trump’s biggest weakness since he can’t afford a deal to not be made

Donald Trump says he won’t sign China pact to end trade war unless it’s ‘great’ – and US will do well ‘with or without a deal’
‘I am confident but … if this isn’t a great deal, I won’t make a deal’

Don’t Underestimate China’s Low-Inflation Headache
Price gauges are retreating, as they are in many economies. It’s a challenge with global dimensions.

What’s Causing China’s Economic Slowdown And How Beijing Will Respond
Last year, China experienced its slowest economic growth in nearly three decades. The trouble seemed to start in the fall. Wage growth has cooled. Surveys show that companies in the manufacturing sector have begun shedding jobs. And imports are down, hurting other major exporting economies. There’s more than one reason for the slowdown. A rapidly aging population, a falling birth rate, a tightening Federal Reserve, and a slowing global economy have combined to put the brakes on China’s economy. Yet Beijing cannot risk a recession. The Chinese government will not allow growth to slow significantly, even if that means storing up problems for the future.

China spreading ‘positive news’ of strong export rebound in early March after February plunge
Exports in the first nine days of March surged 39.9 per cent after February showed the largest drop in three years, led by a large fall in trade with the United States China Customs chief Ni Yuefeng expects import-export growth to continue after February’s Lunar New Year holiday

China has made a clear effort to keep yuan exchange rate stable, says central bank
People’s Bank of China governor Yi Gang says Beijing will not devalue yuan to boost exports or ease trade tensions amid the US-China trade war China’s foreign exchange intervention has long been a political target in the United States and Donald Trump vowed to declare China a currency manipulator in 2016

China’s yuan ‘may already be overvalued’ and is set to move lower, Nomura says
The Chinese yuan may “already be overvalued” against the U.S. dollar and will likely move lower, Japanese financial firm Nomura says. The United States reportedly wants to mandate a “stable” yuan as part of a deal to end its trade war with China — but Nomura says that strategy is “neither sensible nor practical.”

Donald Trump should know to give up on his trade or currency wars because they are easy to lose and impossible to win
Japan could be next on Trump’s hit list for a trade deal, and there may be a currency element in it Any attempt by Team Trump to regulate the yen’s value – or the renminbi for that matter – will prove as futile as it is risky

China’s new bank lending falls sharply in February from record high
Chinese banks made 885.8 billion yuan (US$131.8 billion) in net new yuan loans in February, down from the record 3.23 trillion yuan in new lending in January People’s Bank of China says combined data for first two months of the year stable given Lunar New Year holiday effect

China may be banking on market reforms rather than interest rate cuts to boost growth, analysts say
Comments by People’s Bank of China governor Yi Gang seen as giving no hint of imminent benchmark interest rate cut Analysts continue to see government relying on tax cuts and infrastructure spending, rather than easier monetary policy, to stabilise growth

China to ‘strike a balance’ between good and bad shadow bankers to halt fall in growth
Shadow banking refers to financial activities conducted by unregulated lending institutions or off-balance-sheet activities by traditional financial institutions Wang Zhaoxing, vice-chairman of the China Banking and Insurance Regulatory Commission, considering ‘benefits the real economy’

China banking regulators tell banks to boost support for rural economies
China’s banking and insurance regulators have issued a notice to commercial banks to boost financial support for the country’s rural areas

Shenzhen’s economy is bigger than Hong Kong’s. But does size matter?
Hong Kong’s economy grew 3 per cent last year compared with Shenzhen’s 7.6 per cent growth, but it is an inadequate measure of progress For the likes of per capita income, and social, cultural and educational development, the former British colony is still on top

Swallowing Hong Kong
The phrase “Just another city on the Pearl River” looks increasingly accurate

Swallowing Hong Kong

China’s GDP growth could be half of reported number, says US economist at prominent Chinese university
US economist Michael Pettis of Peking University says China gross domestic product is overestimated as bad debt is not written down Best way to solve problem would be to transfer wealth from state sector to consumers, Pettis said

China must punish officials for ‘cooking the books’ to improve data credibility, top lawmaker says
Analysts have long had doubts over whether official Chinese government economic data accurately reflects what is going on in the world’s second largest economy Recent study found China overestimated its nominal and real growth rates by about 2 full percentage points on average between 2008 to 2016

It’s Time to Find Out How the World’s Number 2 Economy Is Faring
Investors will this week finally get a comprehensive read of how China’s economy is faring this year as worries mount over the outlook for the rest of the world. Retail sales, investment, credit and industrial production data for January and February are all scheduled for release just as the National People’s Congress is set to wrap up with a speech on Friday from Premier Li Keqiang.

China plans law to make reviving rural areas a priority in modernisation push
Lawmaker Chen Xiwen says committee is drafting legislation to set out status of Xi Jinping’s campaign to develop countryside Rural areas, where incomes and living standards are significantly lower, have been left behind in China’s urbanisation drive

China says state-owned enterprises are ‘independent market players’
State assets oversight agency denies any ‘systematic arrangement for extra subsidies’ for firms controlled by central government Sasac chief Xiao Yaqing also calls for more cooperation with foreign firms

A black Friday in China as exports shrink, stocks plunge and homeowners face new taxes
Overseas shipments down by a fifth in February, stock market loses 4 per cent and lawmakers move a step closer to taxing property owners Figures challenge widely held assumption that a likely trade deal with the US and Beijing’s policy easing moves will be enough to stabilise China’s economy

Nightmare in northeast China: why investors still tread warily in the country’s rust belt
One businessman’s long and costly legal battle with the city authorities who once wooed him highlights the perils of doing business in this part of China

China set to vote on new law aimed at levelling playing field for foreign investors
Members of the foreign business community say the legislation is being pushed through in response to the trade war with the United States Chinese analysts say it reflects China’s desire to improve its economy and legal system

The truth about the US-China clash of civilisations? There isn’t one
Ignore the hype about Eastern versus Western values. Chinese philosophers were advocating individual rights and freedom many centuries before America was indulging in the slave trade

China expands switch from polluting coal heating in 2018 -environment minister
China expanded its coal-to-gas and coal-to-electricity projects to 35 cities in 2018 from 12 cities the previous year, China’s environment minister, Li Ganjie, said on Monday, as the world’s second-largest economy stepped up its fight against smog.

China says air pollution dropped in 2018
China’s air quality improved substantially last year, the environment ministry said Monday, following a government crackdown on pollution and a weakening economy.

Why JD is tripping up in new retail race
JD, China’s largest retailer and second largest e-commerce company, had a tough 2018. Its stock plunged about 50% on concerns about slow economic growth, rising competition, shrinking profits, and a rape allegation against founder and CEO Richard Liu. Adding insult to injury, Pinduoduo, an e-commerce upstart focused on consumers in lower-tier cities, overtook JD to become China’s second-largest e-commerce platform by monthly active users.

Why JD is tripping up in new retail race

Ant Financial reportedly preparing to IPO on Shanghai tech board
Alibaba’s financial arm Ant Financial is reportedly preparing for an initial public offering (IPO) on China’s new Nasdaq-style equity board, said state-owned media on Monday citing a delegate from the Chinese People’s Political Consultative Conference (CPPCC).

Ant Financial reportedly preparing to IPO on Shanghai tech board

Introducing Alibaba’s FlyZoo future hotel
Enter the FlyZoo Hotel. Located in Hangzhou, China, the 290-room FlyZoo Hotel was built by Alibaba’s online travel platform, Fliggy, along with other Alibaba Group business units, such as Alibaba A.I. Labs and Alibaba Cloud. Its purpose? To leverage cutting-edge tech to help transform the hospitality industry, one that keeps the sector current with the digital era we’re living in.

China’s digital evolution can be model for others
In less than 10 years, China has leapfrogged more-developed nations to become the world’s leader in e-commerce and mobile payments, according to a newly released report from Luohan Academy, a think tank launched last year by Alibaba Group. And many of the country’s demographics are taking part in digital transformation, as more than half of China’s online entrepreneurs are women and about 160,000 people with disabilities now run their own internet businesses. These achievements are proof that digital technology can drive inclusive growth, says Dr. Chen Long, who heads the Academy.

China’s technology revolution is leaving its senior citizens behind
According to a study by the Tencent Research Institute and Shenzhen University, the best way for the older generation to learn about new technology is to be taught by their families.

China knows artificial intelligence is rewriting the geopolitical rules, but the rest of the world looks unprepared
Power is being redefined by data, leaving states unprepared for the global consequences of the AI revolution and individuals vulnerable to new techniques of control

China’s supremacy in Artificial Intelligence may be greatly exaggerated
In today’s geopolitical landscape it is very easy to become wrapped up in the “China vs. US” narrative. The most visible manifestation of this tension lies in global trade, where discussions between the two countries have been ongoing amidst some “political theatre.” None of us knows today where the result of these discussions will go, but there is no question that there will be many headlines to come.

Alibaba to buy stake in parcel delivery firm STO Express for 4.6 billion yuan
Alibaba will pay US$693.3 million for a 49 per cent stake in a new unit that will control 29.9 per cent of STO STO shares jump by 10 per cent daily limit in Shenzhen

Chinese Travelers Opt for Luxury Across Europe: Ctrip
From the French countryside, dotted with idyllic small towns and inviting vineyards, to the iconic cultural institutions in London and Rome, Europe is blessed with an unending roll call of travel possibilities. And for Chinese tourists, particularly the ones that are traveling more and more to Europe, there’s a growing trend to venture beyond its greatest hits and into the hidden corners, which is not only spreading the reach of Chinese tourists, but also their spending dollars.

Chinese Travelers Opt for Luxury Across Europe: Ctrip

Is Grey the New Black? President Xi Is China’s New Fashion Icon
Xi, the most powerful man in China, is more than a political leader. He is also China’s most influential fashion icon, though he maintains a limited online presence, his style will be copied and followed by millions of Chinese citizens.

Is Grey the New Black? President Xi Is China’s New Fashion Icon

China’s funding for science and research to reach 2.5 per cent of GDP in 2019
Country will hit its target a year ahead of schedule, but scientists say they still don’t get enough funds for basic research China has been closing the gap on spending in recent decades as it pursues ambition of becoming a global tech superpower

China aims to be ‘country of innovators’: science minister
As China pushes forward efforts to become a high-value economy, it will retain “unswerving” focus on strengthening scientific research capacity to catch up with the US to be “a country of innovators,” said Wang Zhigang, head of China’s Ministry of Science and Technology (MOST) on Monday. “Fundamental research capabilities have been one of our weaknesses and should see more emphasis across the technology landscape,” Wang said on Monday in a press conference during the Two Session meetings in Beijing. Shoring it up will be “one of the main national strategies in technological development” in the coming days, he added. China’s total spending on research and development (R & D) rose a robust 11.6% year-on-year to RMB 1.96 trillion (around $293 billion) in 2018, of which about 5% was fundamental research, according to the National Bureau of Statistics this month.

China aims to be ‘country of innovators’: science minister

Tied up in red tape, Chinese scientists seek bigger say over research funding
Researchers say they spend so much time on grant applications that they get no time to do science Funding applications are said to be too onerous and inflexible

Chinese Luxury Cars!? Yes, But How Can They Succeed?

If you ask anyone in Europe what they think about Chinese car brands, you’ll probably get a muddled answer — even more so when it comes to luxury Chinese cars. In fact, you’ll most likely hear, “Are there any?” But the début of Arcfox at the Geneva Auto Salon has ushered in a new era of luxury automaking, and we might have to challenge what we thought we knew about the category.

Chinese Luxury Cars!? Yes, But How Can They Succeed?

Two major Chinese carmakers say lower tariffs on US-made cars aren’t a speed bump for their sales
Great Wall, GAC Group say reduced tariffs on US-made imports are affecting luxury rather than less pricey models China, the world’s largest car market, is undergoing sales slump, massive change

Coming to America: GAC Group to rename its Trumpchi SUV for export to the US as soon as trade war with China ends
GAC Group, China’s fifth-largest carmaker, said it would revive a plan to export vehicles to the US once the trade war ends GAC, which launched the Trumpchi SUV in 2010, will rename the marque on the recommendation of US dealers, its chairman said

China vehicles sales falls for eighth straight month in February, damping hopes of economic upturn
The world’s biggest car market sold 1.48 million vehicles in February, a 13.8 per cent drop, said the China Association of Automobile Manufacturers Sales of new energy vehicles surged 53.6 per cent with grants and subsidies aimed at fighting pollution and lifting industry up the manufacturing value chain

Tesla decides to keep some China stores, passes bill to consumers
But there’s a catch: To compensate for the less-than-planned cost savings, the company also announced it would pass some of the costs on to consumers, raising vehicle prices globally by around 3% on average, beginning March 18. In China, Tesla currently runs 40 retail stores and 24 service centers, according to the company’s website. Now the company says it will retain some retail stores in high-traffic locations, a spokeswoman for the luxury brand in China told TechNode. She declined to provide specifics.

Tesla decides to keep some China stores, passes bill to consumers

Three reasons to think twice about China’s stock slump
Are the grisly figures from China’s stock markets the start of a long overdue correction – or a blip in a bull market that is set to run and run? Here’s what the smart money says

Embattled Chinese conglomerate HNA to sell its Hong Kong-listed construction unit to Times Holdings for US$890 million
The sale is part of HNA’s ongoing effort to cut its mountain debt

China set to vote on new law aimed at levelling playing field for foreign investors
Members of the foreign business community say the legislation is being pushed through in response to the trade war with the United States Chinese analysts say it reflects China’s desire to improve its economy and legal system

Chinese civil aviation regulator grounds nation’s 737 Max 8 fleet after Boeing’s newest jet suffers second crash in five months
The CAAC ordered all Chinese carriers to stop flying their Boeing 737 Max 8 aircraft by 6pm on Monday, pending further investigations More than a dozen Chinese carriers operate the 737 Max 8 aircraft, with 246 domestic routes and 355 domestic flights scheduled using the model on Monday

Would the Last Company Manufacturing in China Please Turn Off the Lights, Part 2
If you are going to up and leave China for another country, you will need the very same protections in whatever country you go as you need for China, but specifically tailored for whichever country to which you are going. This may include the following:

Would the Last Company Manufacturing in China Please Turn Off the Lights, Part 2

China becomes graveyards for Korean firms
China was once the land of milk and honey for Korean companies, which briskly made inroads into the world’s most populous country and chalked up handsome profits. However, the promising territory has turned into a desert due to a diplomatic feud between the two countries after Korea decided to deploy an advanced U.S. missile defense system in 2016.

How the ‘Women’ Got Taken Out of International Women’s Day
As China’s companies and party organs celebrate ‘Goddess Day,’ why is ‘woman’ being treated like a bad word?

Chinese central bank gives advice on how to win over a future mother-in-law
More people are asking for financial details before they give permission for their daughters to get married, according to PBOC vice-governor Chen Yulu He says this is one example of how the bank’s credit record – part of China’s controversial experiment in social management – can be used

China’s wealthy families are turning to long holidays abroad as efforts to emigrate halted
Foreign lifestyle experiences are becoming more popular as citizens seek to escape pollution, food and medicine safety worries and authoritarian government controls Citizens encountering more barriers to their dreams of travelling abroad, with severe limits on moving money overseas and restrictions on visiting foreign countries

Moody’s Seeks Control of China’s Biggest Rating Firm
Moody’s has reached a framework agreement to increase its holding in Chengxin to more than 50 percent, from 30 percent, the people said. The companies have approached the People’s Bank of China for feedback on the plan, according to the people, who asked not to be identified as the information is private.

Son of former Chinese president Hu Jintao parachuted into top job in scandal-hit Xian
Hu Haifeng to be promoted to Communist Party boss of Xian as his father’s successor faces challenges at home and abroad Xian is the most important economic centre in China’s northwest, but is reeling from a political scandal

Beijing Ramps Up Propaganda During NPC
The annual Two Sessions political conference is now underway in Beijing. As is commonly the case during this type of occasion, there has been an uptick in related propaganda. The Guardian’s Lily Kuo reports that the propaganda effort this year is focused to a greater extent on English-language material and original content in an effort to engage both Chinese youths and a larger international audience.

Beijing Ramps Up Propaganda During NPC

China’s institutions and banks need help from the world’s civil society to ensure the Belt and Road Initiative remains green
A massive dam in northern Sumatra, financed by the Bank of China, threatens to wipe out the natural habitat of the Tapanuli orangutan The orangutan, discovered only in 2017, is the rarest species of apes

The Chinese quotient behind the financing of the world’s longest undersea tunnel
The Chinese footsteps into European territory have also been well-documented. The Chinese shipping giants Cosco Shipping and China Merchants Port Holdings have opened up their deep pockets to take over the terminal in Zeebrugge, the second-biggest port in Belgium after Antwerp. The Chinese also operate the Greek port of Piraeus, one of the largest ports in the Mediterranean region and the maritime gateway to Europe. China is now financing the construction of a high-speed railway between Budapest and Belgrade, the capitals of Hungary and Serbia respectively. The multi-billion dollar investment across Europe’s most impoverished region could possibly be another episode in the debt-trap diplomacy series, unless the European Union (EU) bails out the countries in the event of a financial catastrophe.

Caution needed with Chinese tunnel investors, says expert
Chinese investors interested in backing the propsed Tallinn-Helsinki tunnel need to be treated with caution, according to China expert Leslie Leino.

Italy signs up for belt and road infrastructure summit in China
Giuseppe Conte says initiative could benefit his country’s economy as it struggles to recover from yet another recession

China says multinational lenders are to blame for debts of belt and road partners like Pakistan
Qian Keming, vice-minister of commerce, issues latest defence of controversial scheme, saying it’s not a ‘one-way street’ He says 42 per cent of Pakistan’s debt is from multilateral institutions, and ‘only around 10 per cent’ comes from China

Beijing ‘won’t allow Taiwan reunification to be postponed indefinitely’
Cai Peihui, representing self-ruled island at legislative session, also says mainland will not hesitate to ‘liberate’ Taiwan if it declares independence Another delegate, Huang Zhixian, tells panel independence-leaning parties ‘are not qualified’ to talk to Beijing about ‘one country, two systems’

Arctic ambitions of China, Russia – and now the US – need not spark a cold war
While competition over access to resources is inevitable, security concerns aside, the three share many common interests. Recent US investment in the Arctic to counter Chinese and Russian influence heightens the need for partnership

China as Tourist Haven — NOT
Why is China not a popular tourism destination for Westerners? The following 14 reasons immediately spring to mind

China as Tourist Haven — NOT

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