China Press Review – March 12, 2019

Press review

Chinese Vice-Premier Liu He discusses trade deal text with US’ Robert Lighthizer and Steven Mnuchin
Xinhua reports phone call with US counterparts on Tuesday morning in which the two sides ‘make plan for next stage of work’ Conversation comes after uncertainty over presidents’ summit and Donald Trump hinting he could walk away from a deal

US, China must avoid a dangerous new cold war
Compromise by both sides — and bigger changes from Beijing — are key

Will China fold on structural issues? An algorithm says not any time soon.
Want to predict China’s policy changes? A new machine learning algorithm, called the Policy Change Index (PCI) for China, looks at the state-run paper People’s Daily and is a leading indicator of China’s policy shifts from 1951 to the most recent quarter.

Will China fold on structural issues? An algorithm says not any time soon.

China economy enjoys ‘good start’ to 2019 despite slumping car and mobile phone sales
Mobile phone sales plunged 19.9 per cent in February, while total vehicle sales fell for an eighth straight month in the world’s biggest car market National Bureau of Statistics is expected to release industrial production, retail sales and fixed-asset investment data for January and February on Thursday

China, Hong Kong stocks stay on positive roll on optimism about foreign inflows
Traders gauge possibility of increased foreign buying on availability of hedging tools and regulatory comment on ownership cap Xinhua reports key China-US officials talked on phone in morning about ‘specific issues’ related to trade

China stocks climb, economic concerns cap gains
China stocks ended higher on Tuesday as Beijing and Washington appeared to edge closer to a trade deal, but worries about economic headwinds at home tamed the market’s rise

China should be free to let its currency function as a safety valve, regardless of what US trade negotiators want
Major economies around the world, from Canada and Japan to the euro zone and Australia, reserve the right to let their currencies depreciate if conditions weaken. Beijing should not give up its right to do the same as part of any trade war settlement

What China’s $30 Trillion Credit Pile Doesn’t Tell You
Investors are at it again, sorting through the heap of China’s credit data. Last month’s aggregate social-financing numbers, released Sunday, show the flow of new credit in (and around) the financial system fell 41 percent in February from a year earlier. Looking for signals of economic recovery in such noisy data is a fool’s errand. Just a month earlier, the same figure surged 51 percent. The total stock of debt across the system remains 205.6 trillion yuan ($30.6 trillion) and is still growing at 10 percent, just below the average in previous years. The problem is that China’s so-called “flow” data don’t align with business cycles.

Chinese private firms ‘being held back by prejudice as a result of government support for state-owned enterprises’
Negative stereotypes mean private companies are finding it hard to get the credit they need, warns pharmaceutical boss Private enterprises are a mainstay of the country’s economy but state-owned enterprises are often seen as more reliable, says Renhe’s Yang Wenlong

China Proposes Luxury Tax Increase to Rein in Millennial Debt
China seeks to increase the luxury goods tax rate to curb Millennials’ irrational spending on luxury brands and bring back a culture of frugality. China should increase the luxury goods tax rate as a way to curb younger generations’ irrational spending on luxury brands, a Chinese official proposedat the country’s annual “Two Sessions” last week in Beijing. The “Two Sessions,” which typically convenes in the first week of March each year, amasses a group of China’s social, economic and political elite in Beijing to discuss urgent problems the country faces and their potential solutions.

China Proposes Luxury Tax Increase to Rein in Millennial Debt

Italian PM Giuseppe Conte ignores US warnings and pushes for closer cooperation with China’s belt and road plan
US official says deal with Beijing could damage Italy’s international standing Conte going down path forged by earlier Rome governments by giving Chinese companies more access to the port of Trieste and pushing energy sector collaboration

Italy’s MOU with China on Belt and Road project ‘storm in a teacup’ – Tria
Italy’s Economy minister Giovanni Tria said on Tuesday that the deal with China on the Belt and Road Initiative (BRI) would not have any major impact on trade rules and has raised unjustified concerns.

China’s ‘Debt Diplomacy’ Is a Misnomer. Call It ‘Crony Diplomacy.’
The debt trap isn’t a national strategy. Instead, unchecked profit motive is driving Chinese firms to exploit poor nations.

If Taiwan is Hong Kong’s past, Guangzhou is our future
The mainland city impresses with its buzzing centre, clean streetside air and a people full of optimism and drive. More than Taiwan, which in many ways has stood still in time, Guangzhou should be the growth model for Hong Kong

Goodbye Hong Kong: Territory sees rise in prospective emigrants
Political qualms and bad living conditions drive young people overseas Many other Hong Kongers share Chan’s dream. According to a 2018 survey by Chinese University of Hong Kong, 51% of people between the ages of 18 and 30 said they are thinking about leaving the territory, up 5.5 percentage points from 201

Donald Trump’s warning against socialism is nonsense – just look at Hong Kong, Singapore and China
Socialism is a misleading label for the rhetoric emerging in the US. Democrats are just trying to rethink access to health care and education. Here, it may be instructive to consider freewheeling Hong Kong versus interventionist Singapore

In letter on ‘untrusted vendors’, US warns Germany a Huawei deal could hurt intelligence sharing
Use of such vendors could prompt Washington to scale down information exchanges, according to US Ambassador Richard Grenell German Economy Minister Peter Altmaier confirms receipt of letter and says he will ‘respond quickly’

The West’s dangerous lack of tech strategy
Unless democracies take action, China will set the terms of the next industrial revolution.

Baidu, Chery launch electric car with face-scanning payment, AR navigation features
A new smart version of Chery’s Exeed TX electric sports utility vehicle will run Baidu’s AI platform, DuerOS was embedded into more than 200 million devices with voice-command functions at the end of last year, according to Baidu’s recent corporate filing. Baidu’s work with Chery comes after the Beijing-based online search giant led a 3 billion yuan (US$446 million) funding round in WM Motor Technology, an electric car start-up founded by the former China head of Volvo Car Corp.

Baidu and auto firm Chery launch AI-enhanced electric vehicle
Search giant Baidu has launched a production model electric vehicle (EV) with car manufacturer Chery Automotive, featuring an AI operating system that supports facial recognition payments, augmented reality navigation, and control of home devices while in transit. It also provides personalizations such as driver-specific greetings and automatic seat and light adjustments.

Briefing: Baidu and auto firm Chery launch AI-enhanced electric vehicle

Barry Callebaut expands distribution in China
Barry Callebaut has opened a new office and a Chocolate Academy center in Beijing. The center will assist the company’s customers with onsite training and application support. Zurich-based Barry Callebaut in China already operates a Chocolate Academy in Shanghai.

The Curious Explosion of Pinduoduo in Chinese E-Commerce Arena
Pinduoduo is the fastest growing e-commerce app in China’s history, which took out the competition ranking second among most used shopping apps, behind only to Taobao. Its strength? The customers from lower-tier cities and rural areas

The Curious Explosion of Pinduoduo in Chinese E-Commerce Arena

‘Tech constraints’ may slow China’s 5G rollout, says Jefferies
Analysts cut forecasts for China’s overall 5G capital expenditures (capex) by 8% or RMB 57 billion ($8.49) in 2020 to 2022 and pushed expectations for peak capex out to 2023 from 2021 to 2022 in a recent report that re-evaluates 5G timing and rollout following a critical development in December. The government allocated radio frequency spectrum to China’s three telecommunications companies, enabling final trials before wide commercial implementation in 2020, spurring a round of financial re-assessments. Other factors influencing the forecasts changes include recent 2G re-farming indicators and signs of moderating mobile data price pressure from the government.

‘Tech constraints’ may slow China’s 5G rollout, says Jefferies

As patenting grows, an era of big IP lawsuits is coming for Chinese startups
Bull Group (Gongniu Dianqi), one of China’s biggest household electronics firms, was well on its way to an IPO last week, when it was hit by a patent suit (Chinese link) for RMB 1 billion (about $149 million). In China, it was a novelty—the tech world here isn’t used to blockbuster intellectual property fights. But as more Chinese startups go to market, we’re going to have to get used to them. How many startups are ready?

As patenting grows, an era of big IP lawsuits is coming for Chinese startups

‘We will keep your secrets’, China promises foreign companies with new law
Updated foreign investment law due to come into effect from January 1, 2020 Equal treatment stipulated for overseas firms selling goods and services

Navigating the Internet in China: Top Concerns for Foreign Businesses
Internet in China is notoriously difficult for foreign businesses due to centralized controls and complex regulations. China Briefing looks at how companies can develop an effective internet strategy for doing business in China.

Web inventor Tim Berners-Lee calls for drastic changes to the internet amid concerns over data privacy, hacking, misinformation
Berners-Lee and the World Wide Web Foundation are advocating for a universal online social contract He envisions this initiative as evolving into something like the Universal Declaration of Human Rights Balkanisation, whether in the form of countries fighting over who dominates advanced 5G mobile infrastructure or restrictions on internet access like China’s Great Firewall – will serve to greatly divide the internet and reduce its value, according to Berners-Lee.

Gaming the US-China deal
US chipmakers rally on trade speculation; volatility in China explained by rising market leverage

China’s top fingerprint chipmaker says trade war hurting growth
Foreign acquisition plans have been put on hold for the world’s largest fingerprint sensor chip maker. With the exception of Apple, Shenzhen Goodix Technology supplies fingerprint sensor chips to most of the world’s smartphone giants, but according to Chief Operating Officer Pi Bo, “Under the current conditions, it has become very unlikely for Chinese tech companies like us to acquire companies in the US” to buttress research and development efforts.

Briefing: China’s top fingerprint chipmaker says trade war hurting growth

Xiaomi-backed trading firm Tiger Brokers to raise $91 million in US IPO
Xiaomi-backed online trading platform Tiger Brokers plans to raise up to $91 million in its US initial public offering (IPO), issuing 13 million American Depository Shares (ADS) at $5 to $7 per share, according to the prospectus updated on Monday. The China-based online brokerage firm will launch the roadshow for its global offering this week, and is targeting end-March for its Nasdaq listing.

Briefing: Xiaomi-backed trading firm Tiger Brokers to raise $91 million in US IPO

IPR protection improves business environment in China
The protection of intellectual property rights is a key tool China is using to improve the business environment for both domestic and foreign enterprises, according to a British legal expert.

China still facing an uphill struggle in fight against pollution, warns environment minister
Li Ganjie says that while the situation is improving, the hardest part of the challenge still has to be tackled Cleaning the country’s notoriously dirty air is a major priority for government, but minister warns task remains ‘very challenging’

It’s what they didn’t say – phrases dropped from ‘two sessions’ point to easing of China’s property curbs, according to analysts
No mention of Xi Jinping’s famous ‘houses are for living in, not for speculation’ in Government Work Report signals policy change, say analysts

If you invested $1,000 in Alibaba when it went public, here’s how much you’d have now
An investment into Alibaba at the close of its first day of public trading would have increased in value by about 92 percent as of Mar. 11, 2019, according to CNBC calculations. Analysts said that the economic slowdown in China will affect Alibaba in the short-to-medium term, especially if it results in a pullback in domestic consumption.

Chinese entrepreneurs’ pessimism stands out as Fidelity survey points to a gloomy 2019
Weaker consumer and increasing costs of doing business are the core drivers of this year’s pessimism, says Michael Sayers, equities research director at Fidelity Fidelity’s sentiment index in China at -0.4 compared to 0.6 for rest of the world

China’s MoBike Shutting Some International Operations
Chinese bike-sharing startup Mobike is shutting down operations in Australia and South and Southeast Asia, months after rival Ofo began winding down its international division.

Disillusioned Bureaucrats Are Fleeing China’s Ministries
As President Xi consolidates control, many fear making a career-ending mistake.

China-funded Confucius Institutes targeted under new foreign influence scheme
Thirteen Chinese government-funded and administered education centres based at Australian universities are facing increased scrutiny from the federal government, which has warned they might be subject to the new foreign influence transparency scheme.

China’s New Gender Employment Discrimination Laws: Just to be Perfectly Clear….
A few weeks ago, China’s Ministry of Human Resources and Social Security and its Ministry of Education (and seven other departments) released a notice regarding women’s employment. Here is a quick overview of this important notice.

China’s New Gender Employment Discrimination Laws: Just to be Perfectly Clear….

China lawmakers urge freeing up family planning as birth rates plunge
Delegates to China’s parliament are urging the overhaul or even scrapping of controversial family planning rules and say radical steps are needed to “liberate fertility” and reverse a decline in births and a rapidly shrinking workforce.

Mystery Chinese database lists ‘BreedReady’ status of 1.8 million women, along with phone numbers, addresses and Facebook profiles
Insecure cache discovered by Dutch internet expert Victor Gevers, who earlier identified surveillance database tracking 2.5 million residents in Xinjiang Other information recorded includes age, education, marital status, and a field labelled ‘political’

People’s Daily website becomes top stock pick as it ratchets up censorship to new level, fuelling revenue expectations shares have surged 325 per cent in 2019 as traders cash in on increasing government censorship ‘Content risk control’ becomes new growth engine for party mouthpiece

China’s great firewall and the war to control the internet
The West thinks China’s internet is all about firewalls and censorship, but as a new book shows, the battle for control is full of dubious motives

China sells arms to more countries and is world’s biggest exporter of armed drones, says Swedish think tank SIPRI
But arms exports grew by just 2.7 per cent in 2014-18 from the previous five years, according to Stockholm International Peace Research Institute report China has expanded its customer base to 53 countries

Passengers ground Chinese flight by throwing ‘lucky’ coins at plane – yet again
Incident is the fourth in two years, this time involving two women believed to be in their twenties The ritual is believed to bring good luck, but in this case the passengers ended up in detention

Beijing will increase pressure on Taiwan if it rejects ‘one-China’ principle, warns government adviser
President Tsai Ing-wen is ‘delusional’ and is leading the island down a dead end, says Beijing adviser on cross-strait issues Taipei government recently set out a series of measures to try to counter Beijing’s increased push for reunification

China Isn’t Hearing Asia’s Fears About Its Military Buildup
The response to the country’s new defense budget suggests that Beijing continues to be tone deaf to regional anxieties.

China’s Secret Weapon to Control Its Near Seas: Enter the Maritime Militia
A mysterious fleet of militarized fishing vessels is the front-line force in China’s escalating efforts to seize territory from neighboring countries.

China says Xinjiang has ‘boarding schools’, not ‘concentration camps’
China is running boarding schools not concentration camps in the far western region of Xinjiang, its governor said on Tuesday, as the United States called conditions there “completely unacceptable”.

Mapping Chinese Memories
Artist Qiu Zhijie tackles both world and Chinese history at new exhibit Paper maps may sound antiquated in the digital era, but Qiu Zhijie’s attempt to map the world’s knowledge in his new solo exhibit at Beijing’s Ullens Center for Contemporary Art is anything but. On display until May 5, “Mappa Mundi” is an exhibit that is overwhelming to both the eyes and the mind—and leaves you feeling small in the vast world.

Mapping Chinese Memories

Alain Gillard
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