Hong Kong’s Economic Future
If conventional wisdom held that China would never risk Hong Kong’s market, that was predicated on a specter of a foreign financial exodus. When the national security law was promulgated, experts warned of an international withdrawal and an end to Hong Kong’s status as a global financial capital. Thus far, that seems not to have come to pass. Hong Kong’s economy shrank a record 6 percent last year, due to the pandemic, but is forecast to recover significantly by the end of 2021. Even as the political restrictions are growing tighter, Hong Kong—with its successful COVID-19 response and strong export markets—looks to be on an economic upswing. Is it? What are key factors shaping the city’s economic future? —The Editors
For Your Consideration: Motions Proposed at China’s ‘Two Sessions’
During the past week’s political meetings in Beijing, delegates talked about banning surrogacy, awarding more compensation to domestic violence survivors, and instituting shared parental leave, among other topics.
With New Five-Year Plan, China Aims to ‘Walk Strong’
Unlike previous iterations, this week’s monumental policy document does not set specific economic growth targets. China’s top legislature approved the country’s next five-year plan on Thursday, laying out a strategic blueprint for domestic development through 2025.The National People’s Congress (NPC) rubber-stamped a draft of the 14th Five-Year Plan on the final day of the annual “two sessions” political meetings in Beijing. During the weeklong gatherings, NPC delegates had put forward several motions for lawmakers to deliberate. One major feature of the country’s previous five-year plans, a policy tradition that began in 1953, is a projection of the country’s gross domestic product, or GDP. But such a target was omitted from the 14th Five-Year Plan. Instead, the document states that China’s annual economic growth rate will be maintained at “a reasonable level,” without giving any specifications.
China’s ‘two sessions’: ambitious but practical goals in five-year plan target high-quality growth
Innovation and technological development are the foremost drivers of productivity growth and thus are the top priority in the new five-year plan Investment in frontier fields, R&D, new infrastructure, green manufacturing and more form the core of China’s plans for long-term growth Finally, green development is central to technological development and people’s welfare. Last year, China announced a target of reaching peak carbon dioxide emissions before 2030 and carbon neutrality by 2060. The government work report also mentions that energy consumption and carbon dioxide emissions per unit of GDP should be lowered by 13.5 per cent and 18 per cent respectively during the 14th five-year plan. New technologies and stricter enforcement of regulations are essential to achieve these goals. The above goals look ambitious, but they are practical. China has already established a comprehensive and competitive industrial system to form a solid base for further technological development. Meanwhile, the efficiency of making and implementing policy is improving, which is reflected by the recent progress in environmental protection. As a result, these goals in the five-year plan and the long-term outlook can be achieved.
China ‘two sessions’ 2021: Beijing shifts country’s basic research and development, tech innovation into overdrive
The move follows the approval of the country’s 14th five-year plan and Vision 2035 development strategy China will raise tax deductions for research and development expenses of manufacturing firms up to 100 per cent China spent a record US$2.2 trillion yuan (US$339 billion) on R&D in 2019, which represented 2.23 per cent of China’s GDP – another record high. That marked a big improvement since 2000, when the country’s R&D expenditure made up 0.9 per cent of GDP. In the same period, US R&D spending accounted for 2.6 per cent of its GDP, according to Chinese government data and the Organisation for Economic Cooperation and Development.
China debt: government bonds defy global turbulence as US Treasuries lose ‘safe haven role’
Chinese government bonds have defied the turbulence rocking peers from Australia to Europe, offering a port in the global reflation storm. Foreign fund bought 93.6 billion yuan (US$14.4 billion) worth of Chinese debt in February, after adding positions at a record pace the previous month
China’s ‘two sessions’: first mention of blockchain in five-year plan boosts still-nascent industry
China’s 14th five-year plan sets the policy direction for the world’s second-largest economy in the next half-decade Blockchain plays key role in the country’s digital economy under President Xi Jinping’s Vision 2035 strategy
EU Touts China Investment Deal as Way to Boost European Firms
The European Union’s top trade official said that newly published details of its investment agreement with China underscore how businesses are set to benefit from increased access.
China Jan-Feb FDI up 31.5% y/y in yuan terms -commerce ministry
– Foreign direct investment (FDI) into China in January-February jumped 31.5% to 176.76 billion yuan ($27.21 billion) compared with a year earlier, China’s commerce ministry said on Friday. The data comes amid a low base last year when FDI into China fell 8.6% as a result of the coronavirus pandemic.
How COVID-19 Changed Asia
A year after the official declaration of a global pandemic, how has the novel coronavirus reshaped the Asia-Pacific?
A US-Europe rare earths partnership is sandwiched by China
Last week, two North American companies announced a partnership to establish a US-Europe rare earths supply chain, part of a broader push to reduce reliance on China for the critical minerals.
But though the firms’ efforts will help diversify rare earth supplies, a closer look at their business operations reveals deep ties with China that show how complicated it is to further Washington’s goal of building more secure and independent rare earth supply chains. The joint initiative will see a rare earth supply chain spanning from the desert plateaus of Utah, US, to the small coastal town of Sillamäe in Estonia—an example of the kind of international collaboration that industry experts have advocated in order to secure the global rare earth supply chain. Rare earths are a group of 17 metals that are critical for the production of many electronic products that power the global economy, including military systems, electric vehicles, aircraft engines, and wind turbines. For now, China dominates the global production of these critical materials.
US imposes new 5G limits on Huawei suppliers
The rules, effective as of this week, create a more explicit prohibition of the export of components like semiconductors for the Chinese firm’s devices The move is a sign that Biden plans to move forward on Trump’s export controls and indicates officials are following through on pledges to be tough on China
China’s young consumers are spending big — and 3 stocks could be winners
Millennials will fuel China’s consumption growth in the coming years and their spending habits will determine which consumer stocks could be winners, said Japanese investment bank Daiwa. The bank identified three stocks that could ride on this trend, and has a target price for one that’s close to 40% higher than its latest closing price. Consumer spending in China is forecast to grow by an average of 5% annually from 2020 to 2025, Daiwa said in a Monday report.
China’s electric vehicle battery supply chain dominance enhanced with nickel production innovation
Tsingshan Holding Group said last week that it will be able to provide a new flow of nickel matte from its Indonesian operations Nickel is a key metal needed in the production of lithium-ion batteries used in electric vehicles
Ant Group CEO Simon Hu said to resign
Ant Group CEO Simon Hu unexpectedly resigned, sources tell Bloomberg, as the financial services giant grapples with a Chinese government regulatory crackdown
Ant Group vows to be carbon neutral by 2030, setting a goal post three decades earlier than China’s ambitious clean energy target
Alibaba-affiliated fintech giant joins other Chinese tech companies in pledging to vastly reduce carbon emissions President Xi Jinping promised last year to bring China’s net carbon emissions to zero by 2060
Baidu seeks up to US$3.6 billion in Hong Kong share sale as fundraising in city reaches a record in first two months of the year
Baidu sets the top-end of its Hong Kong share sale at HK$295, a 12 per cent premium to its US closing price The tech giant plans to use share sale proceeds on investing in its AI technologies, including cloud and autonomous driving
American Rescue Plan: China worried about economic impact of Joe Biden’s US$1.9 trillion coronavirus bailout
US President Joe Biden’s US$1.9 trillion American Rescue Plan received final approval from the US Congress on Wednesday It was signed into legislation on Thursday, but concerns have been raised about its potential to cause further financial market turmoil
Quad leaders will talk Covid-19 vaccines, 5G as well as China: US officials
Washington plays down Beijing focus for agenda of first meeting of government heads in informal alliance Friday’s discussion will also cover shared trade concerns of US, Japan, India and Australia
Quad leaders ready for landmark summit but what can they really do about China?
The meeting of the heads of state of the US, Japan, India and Australia will discuss maritime interests, climate and vaccines – but ‘no single competitor’ Experts are weighing in on how much the Quad can do and whether, in a crisis they would really step in to help each other
China trials of Canadians Kovrig and Spavor will start soon: state media
The men have been detained for two years and were charged last year over suspected crimes undermining China’s national security Covid-19 pandemic blamed for delay in hearings getting under way for the pair, described as diplomatic hostages by Canada and US
The disinformation tactics used by China
The Chinese embassy in London has criticised the BBC following a documentary about Chinese disinformation campaigns.
The Polar Policies in China’s New Five-Year Plan
The inclusion of Arctic and Antarctic policies within the new FYP represents the emerging importance of the two poles to China
The Belt and Road, and the pandemic detour
An important book illustrates the different hopes and dreams of partners to Beijing’s big infrastructure drive. Overall, however, this book succeeds in bringing “badly needed scepticism” to the analysis of the BRI. The authors find “little that is altruistic about Beijing’s investment blitzkrieg and much that could be called transactional, hardball investment tactics to get the best deal possible”. However, as they also note, “it is more complicated than that”. This complexity lies partly in the “many dreams” of the countries which have signed up to the BRI. Their perspectives are naturally different to those of Beijing’s elites – or opponents.
Service Asie Pacifique
Place Sainctelette 2
Tél 02 421 85 09 – Fax 02 421 87 75
Copyright © 2020 awex, All rights reserved