China reveals its plan for a great future at the ‘two sessions’, and it includes Hong Kong
Its policy blueprint to sustain growth in the wake of the pandemic and prepare the economy for the next leap is a huge confidence booster. With China on the cusp of great change, Hong Kong should use its unique advantages to actively take part in this grand national development scheme.
Boosting consumption an economic priority in new five-year plan
China’s stable development depends on a “dual circulation” economy, in which domestic consumption shoulders a lot of the growth presently generated by manufactured exports
Chinese economy continues its pandemic bounce back
Key economic data in China surged dramatically in the first two months of 2021, pointing to a continued recovery for the world’s second largest economy. China’s industrial output grew 35.1% in January and February compared to the same months last year.
China’s economic grand plan falls short on how to enrich people and enlarge middle-income group
Beijing laid out its 14th five-year plan and the 2035 Vision at the ‘two sessions’ meetings in Beijing But both contain assumptions that China is experiencing an unstoppable rise against the West, and that its consumers will create a domestic market big enough to guarantee its continued growth The biggest factor behind China’s weak domestic consumer demand is perceptions of current income and expectations of future income. While China’s economic boom in the last four decades has significantly increased average incomes, it has also created a yawning wealth gap. China now mints more billionaires than any country in the world, but around 200 million people are also struggling to make ends meet.
Beijing has pointed out the direction, but the path to that destination is still unclear To be sure, the government’s plans do include a statement that China will enlarge its middle income group, but it is more of a wish than an action plan. By China’s definition, China’s middle-income population is now around 400 million people, and a number of state researchers have suggested that China needs to at least double its size to 800 million. If, after the eradication of absolute poverty, China can successfully bring the bulk of its population into the middle class, China’s bright economic future can be secured and the vision of common prosperity will be achieved. For now, Beijing has pointed out the direction, but the path to that destination is still unclear.
As e-commerce starts to mature in Asia, retailers must rise to new challenges
How to retain customer loyalty amid market fragmentation and increasing demand for ever faster delivery will be the key challenges for all retailers In the next 20 years, retail will be less about logistics and more about pushing the envelope on personalised discovery and curation, Those who rest now will sleep through perhaps the most formative time of growth for e-commerce. Asia’s e-commerce success story lies in the deep understanding of the ever-changing consumer behaviour and the quickness in providing innovative ways to make consumer lives easier and better. It will continue to be the most critical part of any business, especially as consumer needs become more polarised. If you think you know e-commerce in Asia, think again. We stand at the end of the beginning of e-commerce and the best is yet to come.
China’s market watchdog to slap new rules on e-commerce platforms and online shopping festivals
The State Administration of Market Regulation (SAMR) has vowed to clarify the responsibilities of e-commerce platforms Big Tech companies have been facing increased scrutiny from regulators over their internet businesses since December The new rules come after regulators raised their scrutiny on Big Tech and their internet businesses, including e-commerce. On Christmas Eve last year, SAMR announced an antitrust investigation into Alibaba Group Holding over alleged monopolistic conduct, including the practice of forcing merchants to work with only one e-commerce platform. Alibaba owns the South China Morning Post. A few days later, the SAMR said it fined the operators of Alibaba’s Tmall, JD.com and Vipshop for pricing irregularities after consumers complained that the platforms raised prices before introducing discounts, engaged in fraudulent promotions and induced consumers into purchases during the Singles’ Day shopping festival. Last week, the SAMR fined some of the country’s largest technology companies, including social media and gaming giant Tencent Holdings and search engine giant Baidu, for failing to disclose to the government their acquisitions of smaller competitors or establishment of joint ventures.
China keeps interest rate unchanged for 11th straight month, rolls over 100 billion yuan of medium-term loans
The rate on 100 billion yuan (US$15.37 billion) worth of one-year medium-term lending facility (MLF) loans to financial institutions is being kept steady at 2.95 per cent The People’s Bank of China (PBOC) also said the operation was a rollover of the same amount of maturing MLF loans due on Tuesday
How China achieved its poverty alleviation goal by seasoning its ‘stone soup’ strategy
The country launched an explicit and focused campaign, which tracked poverty at the household level, with incentives and resources for local governments The ‘stone soup’ approach involved mobilising non-government sources to bring their skills and resources to the table In China, working alongside government is a requisite component to operating one’s business. With its poverty alleviation strategy, the government created a structure which aligned incentives. Everyone could contribute their own skills and resources to the campaign, with the contributors’ return on investment being improved relationships with local and national government. In last week’s announcement on the success of the programme, companies were recognised for their efforts. Alibaba, which had been under increasing scrutiny and whose Ant Financial IPO was pulled by regulators, was praised highly. In fact, it was cited as a “model” of “national poverty alleviation” in a certificate the company posted on its Weibo account.
By not sticking to a particular recipe, aligning incentives and getting everyone to pool their resources, Xi was able to declare victory by the end of the 2020 deadline. The effort is now moving into a more challenging and longer-term “rural revitalisation” phase. We will see over time if the lessons and strategies from the poverty alleviation campaign can be deployed over the longer term. In his speech this week, Xi declared: “There is no other country that could achieve such remarkable poverty alleviation progress within such a short time.” China, like all countries, can be criticised for many policies but success in eradicating absolute poverty is not one of them.
Cash-strapped Chinese local governments urged not to ‘blindly expand’ infrastructure projects
China’s top leadership has issued a warning about the ‘heavy debt burden’ of some local governments, saying greater monitoring is needed. China’s top legislature has urged the nation’s cash-strapped regional governments not to “blindly expand” infrastructure projects due to concern about mounting financial risks stemming from trillions of yuan worth of coronavirus stimulus last year, reported South China Morning Post (SCMP).
China’s listed companies substantially ramp up R&D investment
A majority of China’s A-share listed firms have allocated more funding to R&D investment since 2019, to be in lockstep with the nation’s 14th Five-Year Plan (2021-25) which prioritizes on home-technology innovation.
China’s plan to trim debt makes stock-market reforms more urgent
China’s policymakers, spurred to act by ballooning debt, are trying to get the country’s US$10.7 trillion stock market to play a larger role in funding the economy. Top officials meeting in Beijing last week said they would push ahead with more equity-market reforms in 2021, accelerating a campaign aimed at encouraging more share sales from local firms. Initiatives like new hedging tools or widening the daily price limit on stocks could boost liquidity and help attract foreign capital, at a time when China’s mutual fund investors are being blamed for rising stock volatility. Capital-market reforms will promote a more “mature investment culture”, local media reported on Friday, citing delegates of the National People’s Congress.
China regulator fines Tencent, Baidu, others over investment deals
China’s antitrust regulator fined a dozen companies, including Tencent Holdings and Baidu, over a number of past investment deals, the latest sign of Beijing’s broad crackdown on the internet sector, reported the Wall Street Journal. China’s State Administration for Market Regulation said Friday that the 12 companies didn’t properly report past deals and fined them each RMB 500,000, equivalent to about $77,000. Though the fine is relatively small given the size of the companies being punished, antitrust experts said the move serves as the latest reminder that authorities are intensifying scrutiny over China’s powerful technology giants. Friday’s announcement follows a wave of fines and investigations into alleged monopolistic practices, including a continuing probe into Alibaba Group, over whether it abused its dominant market position, said the WSJ. “Antimonopoly laws for now will be reinforced more intensively,” James Gong, a Beijing-based lawyer with Herbert Smith Freehills said. “Previously, this was an area that authorities had taken a more laid-back attitude toward.”
Investors need to come back down to earth before the stock market bubbles over
Given the risk that vaccines may not roll out fast enough to sustain economic recovery and prevent a fiscal crisis, a stock bubble burst now could be disastrous
Chinese utilities’ ambitious renewable energy targets raise questions about costs, delivery
Uncertainty about whether other infrastructure will be there to support the increased capacity, says Xiamen University’s Lin Boqiang Growth in renewables entails the expansion and upgrade of the national grid, both in terms of hard infrastructure and IT systems
Ant Group Pledges to Go Carbon Neutral by 2030
Ant Group, Alibaba’s sister unit – and the company behind the e-wallet Alipay – has laid out a blueprint to reach “net zero” in carbon output by 2030. To reach that target, the company plans to set up a carbon-neutrality fund, which will finance the research and development of renewable technologies and other innovations to curb climate change. It will also explore ways to apply its proprietary technologies to climate efforts, including leveraging its blockchain solutions to record and track its carbon-reduction progress. Ant said it will step up measures to reduce emissions across its campuses, as well as ensure that future workspaces would be built to meet widely recognized green-architecture standards. The plan includes introducing more environmentally responsible guidelines for its sourcing and supply-chain management, including promoting the use of low-carbon technologies to power its facilities. If any unavoidable emissions remain, it will consider investing in carbon offsets, such as tree plantation or forest management projects, the company said.
EU deal cements China’s advantage in media war
Beijing has closed its market to European media investors, while EU keeps doors open to Chinese propagandists.
One Belt One Road project stalls as China’s economy fights out Covid-19
‘20% projects seriously affected, 30-40% adversely impacted’; new investments cut bac
US–China competition after RCEP
In November 2020, 15 countries signed the Regional Comprehensive Economic Partnership (RCEP) amid a backdrop of deglobalisation and trade protectionism. While RCEP demonstrates the success of ASEAN’s middle-power diplomacy and promotes regional trade and economic development, it also serves China’s national interests and will make the region’s largest economy more powerful economically and politically. China is estimated to see the largest export benefits from RCEP of US$244–248 billion by 2030, followed by Japan (US$128–135 billion) and South Korea (US$63–64 billion). This means that the increase in Chinese exports will account for nearly 50 per cent of the total export growth of all RCEP members. Although these benefits may not offset the total losses of a persisting US–China trade war, they help soften the blow to China and reduce export reliance on the United States.
Quad summit: US, India, Australia and Japan counter China’s ‘vaccine diplomacy’ with pledge to distribute a billion doses across Indo-Pacific
Promise to help fight against Covid-19 could help security grouping counter Beijing’s influence in the region US President Joe Biden has made the region and the growing rivalry with China a major focus of his foreign policy
Biden recalibrates Trump’s approach to East Asia
President Joe Biden has much repair and restoration work to do in East Asia. Donald Trump seriously degraded the United States’ role in the region, helping Beijing to escalate the most hostile and confrontational US–China relationship in 50 years. Simultaneously, Trump undermined US credibility with the allies and partners that Biden will rely on to confront the strategic challenge of China. Much of East Asia has already adapted to a new regional security dynamic, so the United States cannot simply ‘catch up where it left off’. Washington must work closely with its allies and partners to understand where it now fits in East Asia’s balance of power and use that as the foundation for a renewal of American leadership in the Asia Pacific
Antony Blinken and Lloyd Austin head to Asia before US-China meeting in Alaska
China and North Korea loom as US secretary of state and Pentagon chief head to Japan and South Korea for talks Antony Blinken and Joe Biden’s national security adviser Jake Sullivan will meet Chinese officials in Alaska on Thursday
Biden builds bridges to contend with Beijing
In 1949, American strategists feared that Soviet advances were generating an intensifying threat to the free world. That August, the Soviet Union broke the United States’ nuclear monopoly by successfully detonating an atomic device. Washington worried that Moscow’s build-up of military forces could be a prelude to an offensive against western Europe and the Middle East. Given this reality, the United States will need to give allies space to pursue their own interests with China, even while they partner with the United States on priority issues. Washington will also need to demonstrate — through its own words and actions — that it supports developing a constructive relationship with China, even as it prepares to push back strongly against problematic Chinese behaviour. Somewhat counterintuitively, the more Washington is seen as responsibly working to develop durable relations with Beijing, the more diplomatic space it opens for cooperation with others on China. Washington’s partners will feel more comfortable working with the United States on issues relating to China when doing so is not perceived as an expression of hostility towards China. The Biden administration’s approach to China reflects a subtle but significant departure from the Trump administration’s more direct approach of confronting China. President Biden and his team recognise that the results of their strategy may not be visible for some time and do not harbour illusions of changing China overnight. They intend to play a long game. If their approach bears fruit, the United States will fortify its capacity to compete with China from a position of strength.
Not possible for S’pore, many countries, to choose between US and China, PM Lee tells BBC
It will not be possible for Singapore to choose between the United States and China, given the extensive ties the Republic has with both superpowers, said Prime Minister Lee Hsien Loong on Sunday (March 14).
Chinese factories set on fire and at least 38 killed in Myanmar’s deadliest day since coup
Myanmar security forces killed at least 38 people Sunday in one of the deadliest days since the military seized power in a coup, and declared martial law in six areas after Chinese-funded factories were set on fire. The heaviest casualties were in an industrial suburb of the largest city Yangon, where military and police opened fire on unarmed protesters, killing at least 22, according to the advocacy group the Assistance Association for Political Prisoners (AAPP), which said Hlaingthaya district “became like a battlefield.”
Trade war fallout: how reliant is Australia’s economy on China?
China’s importance to the Australian economy has exploded in recent years – but data shows Australia is not nearly so important to China
Hong Kong’s ‘alarming political deterioration’ criticised in scathing EU annual report
Annual review on Hong Kong says national security law has ‘chilling effect’ on civil society EU policy response on Hong Kong has been minimal, but report could help fuel clamour for more action in European Parliament
China’s commercial space sector shoots for the stars
The past decade has witnessed explosive growth in the number of domestic companies involved in China’s ‘commercial space’ sector. By November 2020, China was home to over 160 commercial space companies, over half of which were founded in the last seven years. These companies boast a range of offerings from satellite manufacturing to rocket launch.
China’s internet was hailed as a path to democracy but the Communist Party reshaped it in its own image
The internet age has brought a sense of community for Chinese citizens but also greater surveillance and more control for the party President Xi Jinping saw a need to control the power of the internet and a use for digital tools to take China’s message to the world “The future will be decided by whether China can create a stable and prosperous environment and whether it can successfully attract high-end talent to come to China,” he said. But for many people, any concerns about how content on the internet could be shaped or filtered by political forces are secondary to its entertainment value. Tang Feng, a 32-year-old food delivery worker, said that other than the fact that his job relied on the internet – which facilitates everything from receiving food orders to navigating to restaurants – he watched “funny videos” on his phone to pass the time between deliveries. “I’m on call 12 hours a day. Without the internet, I’d be killed by the boredom,” he said. “It’s good enough to have a portable entertainment device. I can’t imagine anything better.
China briefs European envoys on WHO coronavirus origin quest
Liang Wannian says bats and pangolins may not be to blame for the virus emerging in humans The briefing was an attempt by Beijing to address ‘misunderstandings’ and ‘discriminatory remarks’ about China by the West, say commentators
China’s single mothers fight for their rights to public benefits
Country’s family planning policy does not explicitly forbid unmarried women to have children, but says ‘the state encourages a husband and wife to have two children’ ‘I just want to know in the national policy, as an unmarried woman … do I have the right to give birth?’ says woman who was sacked for fighting for her right to a full salary and maternity leave benefits
Northern China Hit by Worst Sandstorm in 10 Years
Six people are dead and dozens remain missing in neighboring Mongolia.
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