China Press Review – March 29, 2019

Press review

Trade talks in China ‘constructive’, says US treasury chief
Chinese and US negotiators have adjourned trade talks in Beijing with US treasury secretary Steven Mnuchin saying they were “constructive”.

US-China trade talks resume in Beijing with pleasantries but much work to do
US’ Robert Lighthizer and Steven Mnuchin meeting Chinese Vice-Premier Liu He on Friday after working dinner the previous evening, with plenty of ground still to cover Both sides had expressed caution before the talks, with White House adviser Larry Kudlow saying the US could wait months ‘to get a great deal’

Why US and Chinese trade teams have to mind their language as talks get serious
Negotiators are now said to be pouring through documents ‘word by word’ to ensure there will be no misunderstandings One Chinese report that the two sides recently spent two hours arguing over a single word – and still couldn’t reach a consensus

Trump’s China trade ‘win’ takes shape in Beijing
Chinese officials said to talk about forced technology transfer as ‘they’ve never wanted to talk about before’

podcast: US, China trade negotiators all smiles in Beijing – but no results
US and Chinese trade negotiators have been meeting in Beijing, to try to end their on-going trade dispute. Friday was the second and last day of the talks. They want to iron out major differences, over US accusations that China has been using unfair trade practices for years

Corporate Boards Are Pessimistic About Trade Between the U.S. and China
The U.S. trade fights and UK’s Brexit are the most salient and recent symptoms of a decade of retreat from globalization that has international business apprehensive about the future. One of the most worrying developments today is the rising tension between the U.S. and China on everything from trade to military posturing. My research has shown that many corporate leaders believe this strategic rivalry could develop into a situation reminiscent of the Cold War in which much of the world is divided into two spheres of influence, this time centered around either the U.S. or China. In this scenario, trade and investments between the opposing spheres would likely be highly limited, and strategic goods such as high technology components and products would be subject to stringent export controls. (Huawei’s growing isolation is a recent case in point.) This scenario would leave multinational firms with unpleasant options for how to handle any assets or operations that fall into the opposing sphere’s territories.

How safety and optics could push Boeing out of China-US trade deal
This latest twist further complicates the task for Chinese negotiators seeking a landing zone for a deal to end the trade war that can be sold to both President Trump and the domestic audience.
It has been reported that China is already finding it challenging to come up with an additional $1.2 trillion of US exports over six years to eliminate the trade deficit. If the 737 Max is dropped from the deal, finding other imports to make up the value will be difficult. However, safety—and optics—will weigh more in Beijing’s calculus. Any deal seen to put the public at risk will just not fly.

How safety and optics could push Boeing out of China-US trade deal

Next China: Xi’s European Charm Offensive

Guy Verhofstadt: Europe Must Unite on China
The Italian government’s decision to endorse China’s “Belt and Road Initiative” is antithetical to European and Italian interests alike, and plays directly into Chinese President Xi Jinping’s hands. While the European Union should pursue a closer relationship with China, it must do so as a single bloc – and thus on a co-equal footing

Why 2019 could be the year of living dangerously for Chinese banks
Mainland banks are under instructions to boost lending to small businesses 30 per cent this year Banks caution proper credit assessment is needed to keep non-performing loans at a

China’s final fourth quarter current account surplus at $54.6 billion – FX regulator
China had a final current account surplus of $54.6 billion for the fourth quarter, the foreign exchange regulator said on Friday. China posted a final capital and financial account surplus of $15.8 billion for the same period, the State Administration of Foreign Exchange said in a statement. The final current account surplus for 2018 came in at $49.1 billion, while the final capital and financial account surplus was $111.1 billion.

Why ageing China won’t overtake the US economy as the world’s biggest – now or in the future
Growth trajectories must take into account that China is ageing faster than the US. The experiences of Japan, Taiwan and South Korea bear out the correlation between growth and demographics, and economists optimistic about China’s growth prospects should take note

podcast : China’s Banks Will Be Cautious on Small Business Loans, Says Creditsights’s Marshall
David Marshall, senior analyst for Asian banks at Creditsights, discusses the PBOC’s call on banks to increase lending to small and private business and his outlook on non-performing loans. He speaks on “Bloomberg Markets: China Open.”

China pours more money into cheap loans to help regions deal with debt pile and aid economy
China Development Bank is providing low-interest rate loans to help local government financing units roll over maturing debt, including loans Local government financing vehicle debt is estimated to account for 34 per cent of gross domestic product, according to China International Capital Corporation

Daimler is finalising plan to make all-electric, 5G-enabled Smart micro cars in China for export with largest shareholder Geely
Plans for the 50:50 venture will be finalised by the end of this year, with the aim of putting the first vehicles on the road by 2022 The all-electric, 5G-enabled micro cars will be made at a new factory in China for exports, while Daimler continues making its current range in Europe

Australia seeks to rekindle China ties with ‘turbo charged’ US$31 million foundation after Huawei ban, foreign interference claims
Prime Minister Scott Morrison’s government announced the formation of the national body, which will use the private sector, industry lobby groups, and organisations in engaging China

China’s Huawei sees little impact on sales from U.S. broadside
The U.S. campaign against China’s Huawei is having little impact on the company’s sales and it is unlikely many countries will follow the United States in banning Huawei from building next-generation mobile networks, its rotating chairman, Eric Xu, said

Huawei sales cross US$100 billion mark in 2018 as smartphones offset flat network equipment business
Shenzhen-based Huawei has joined the ranks of multinational technology companies in the US$100 billion revenue club Road ahead likely to be complicated by US-China trade war and efforts by Washington to block company from key 5G markets

Huawei’s revenue tops $100 billion on strong phone sales, carrier business drags
Is Huawei facing global scrutiny over the security of its 5G gear? Hard to tell with the strong results the telecommunications giant saw in 2018, based on its 155-page annual report released Friday. Despite troubles that began with an August ban of its equipment by the US government, Huawei revenue grew 19.5% year-on-year to RMB 721.2 billion (around $107.3 billion) in 2018. Net profits surged 25.1% year-on-year to RMB 59.3 billion.

Huawei’s revenue tops $100 billion on strong phone sales, carrier business drags

Niche is the New Black in China’s Luxury Landscape
As luxury consumers become younger and more discerning, niche luxury brands have found ways to attract more customers, particularly in China. “Chinese customers are very dynamic,” said Sara Wong, Director of Merchandising for Hong Kong-based Pedder Group, the accessory specialist part of the Lane Crawford Joyce Group. “They are traveling and are very connected on social media, so they know what is trending globally. Traditionally, they would be attracted to brands with distinct logos, but now it’s all about hunting down brands that are new, unique, and relevant.”

Niche is the New Black in China’s Luxury Landscape

Shopping While Chinese: Real Stories of Discrimination
Chinese shoppers abroad are usually expected to spend more than others at luxury stores

Shopping While Chinese: Real Stories of Discrimination

SF Express shutters grocery stores amid slowing e-commerce growth

Chinese logistics company SF Express is shrinking its new retail business by closing offline stores in a number of Chinese cities, a move that is aimed to cut costs amid an economic slowdown and pressured margins in the logistics sector.

SF Express shutters grocery stores amid slowing e-commerce growth

Has Hainan’s free-trade zone lived up to expectations in its first 12 months?
China’s southernmost province, which hosted this week’s Boao Forum for Asia, was designated as China’s 12th free-trade zone by President Xi Jinping in April last year From November to March, it has attracted US$27.6 billion of investment, with contracts signed for a further US$42.4 billion

China plans ‘zero-waste city’ pilot program
China is taking bold steps in tackling environmental pollution and protecting blue skies, clean water and soil.

Green revolution for the world’s shipping fleet comes not a moment too soon
New regulations restricting the use of high-sulphur fuel have oil markets in a panic. But shippers are coming up with innovative solutions to power their vessels – essential for the future given that ships account for 90 per cent of world trade

Taiwan to block Tencent and Baidu streaming sites on security risk
Taipei fears Beijing ramping up ‘cultural infiltration’ ahead of 2020 election

EV startup WM Motor to build autonomous driving tech hub in Sichuan
WM Motor plans to establish an autonomous driving technology hub in Mianyang, Sichuan Province, to form a closed loop that covers the entire process from R&D to mass production and speed up the mass production of autonomous driving R&D achievements, the EV startup announced on March 27.

Australia’s Huawei 5G ban is a ‘hedge’ against future Chinese aggression, says former prime minister Malcolm Turnbull
Huawei and fellow Chinese company ZTE were both banned from supplying 5G equipment to Australia’s wireless network in August on national security grounds Failure to compete with Huawei and ZTE on 5G a ‘big oversight on the part of previous American administrations’

China home price outlook recovers as credit conditions improve: Reuters poll
Home prices in China are expected to rise more this year than predicted just a few months ago, as Beijing urges banks to ramp up lending and lower interest rates to boost the slowing economy, a Reuters poll showed.

Tax Residency in China: Six-Year Rule Clarified
China recently clarified how it will implement the “six-year rule” to determine foreign workers’ tax residency in China, following the introduction of a new Individual Income Tax (IIT) Law last year.
On March 16, 2019, China’s Ministry of Finance and State Taxation Administration published the Announcement on the Criteria for Determining the Residence Time of Individuals without Domicile in China (see here for the official announcement), which explains how the tax residency of foreigners in China will be calculated.

Alibaba accuses Meituan CEO of libel for questioning founder’s integrity
Following controversial comments by the CEO of Meituan about Alibaba founder Jack Ma for “an integrity problem,” the two Chinese internet giants are engaging once again in a public spat, with Alibaba leaders accusing the Meituan executive of defamation.

Alibaba accuses Meituan CEO of libel for questioning founder’s integrity

What Does the Punishment of a Prominent Scholar Mean for Intellectual Freedom in China?
This week, Xu Zhangrun, a law professor at Beijing’s Tsinghua University who in recent months has penned a series of essays critical of policies of the Chinese Communist Party and of its current leader, Xi Jinping, was banned from teaching, relieved of his academic duties, and put under investigation. While Xu has not been fired, many fear this week’s actions may be a prelude to more severe moves to silence a witty and prominent political critic and further chill an already wintry environment for scholarship and free expression in China. We asked contributors for their thoughts on the significance of Xu’s suspension and its possible consequences for political and intellectual life in China. —

Wife of Meng Hongwei, missing ex-Interpol chief, slams ‘political nature’ of his arrest in China and rejects corruption claims
Grace Meng blasted a statement by China’s anti-corruption watchdog, which said Meng Hongwei had spent ‘lavish’ amounts of state funds and abused his power Speaking from France, she said the CCDI had made ‘vague, general, uncorroborated statements’ about her husband

How China’s ‘Silk Road Urbanism’ is Changing Cities Across Globe
Amid this geopolitical competition, Silk Road urbanism will exert significant influence over how cities develop into the 21st century. As the transcontinental trade established by the ancient Silk Road once led to the rise of cities such as Herat (in modern-day Afghanistan) and Samarkand (Uzbekistan), so the BRI will bring new investment, technology, infrastructure and trade relations to certain cities around the globe.

How China’s Techno-Imperialism Is Reshaping Global Economies
China’s Belt and Road Initiative expands the superpower’s economic and social influence to countries across the globe. Along with technology exports and infrastructure investments, China is also exporting its model of internet control.

China’s island-building and ‘Belt and Road Initiative’ are part of same defence strategy, says US Secretary of State Mike Pompeo
Overseas infrastructure deals and building in South China Sea are both about national security, he says, drawing closer link between the two US is working to ensure countries ‘understand the threat’ of signing up for projects on Beijing’s terms – and Asia is waking up to it, he says

Highlights of China Fashion Week in Beijing

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