China Press Review – May 18, 2020

Press review

China trying to divide and rule in Europe, EU foreign policy chief Josep Borrell says
Member states must ‘maintain the necessary collective discipline’ as China looks to take advantage of their different views on diplomacy, Spaniard says Borrell also questions Beijing’s insistence on ‘telling the world’ about its aid efforts during the Covid-19 pandemic and its unique take on multilateralism

Europe should temporarily ban Chinese takeovers: Germany’s Weber
The European Union should impose a temporary ban on Chinese takeovers of companies that are currently undervalued or have business problems because of the coronavirus crisis, the leader of the bloc’s largest political alliance said on Sunday.

Editorial: China Shouldn’t Sacrifice Fiscal Discipline to Revive the Economy
The law of the People’s Bank of China stipulates that the central bank must not permit fiscal overspending and must not directly pledge to buy or underwrite national debt or the debts of other governments. China is on the road to improving the problems of inefficient monetary policy that have plagued the country for years. But there are no signs that fiscal policy is moving in the same direction. Under current circumstances, it is of no value to demand money for fiscal overspending.
Instead, our most pressing fiscal policy concern is to offer targeted relief for the individuals and small-to-midsized businesses affected by the epidemic. Reviving the economy is important, but we mustn’t sacrifice financial discipline to achieve it.

QE or not QE? China’s central bank grapples with policy dilemma
China’s plans to step up stimulus support for the virus-ravaged economy have promoted a heated debate among economists and advisers over whether the central bank should monetize its fiscal deficit through quantitative easing.

China sees inflation slow as coronavirus weighs on consumption
Production resumes as lockdowns ease, but falling demand pushes down price

Donald Trump’s tariffs are costing Americans billions when they can least afford it, but he’s not backing down
As US unemployment spikes, lower tariffs would bring relief to consumers and companies bearing the brunt of the trade war amid the Covid-19-induced recession   Yet the Trump administration seems set on a course of destructive protectionism not seen since the 1930s

US plans to further restrict Huawei’s development of semiconductors using American technology
US Commerce Department said it would target Huawei’s acquisition of chips made with American software and technology    Restriction on Huawei comes as Taiwan Semiconductor Manufacturing Company announces plan to invest US$12 billion to build a chip factory in Arizona

Huawei is confident it’ll find a way around the new US chip ban
A high-level executive of Huawei said Monday the company will find a solution to a new rule announced by the Trump administration that effectively cuts the Chinese telecommunications equipment maker off from global chip suppliers. This is Huawei’s first official response to the new rule change made public on Friday. The company said it is still evaluating the impact of the new restrictions

China will ‘nuke bomb’ Apple with endless investigations in retaliation for Huawei penalties, state media says
The Chinese government may enforce several “countermeasures” against U.S. companies—including Apple—in retaliation for the Trump administration’s plans to crack down on shipments of semiconductors to Chinese telecommunications giant Huawei from chipmakers worldwide.
According to analysts cited in the state-run Global Times, such retaliatory measures from China towards large American companies such as Apple, Cisco and Qualcomm could be akin to a “nuke bomb.”

China hits back at America’s ‘unreasonable suppression’ of Huawei
After Washington announces new restrictions on technology giant, Beijing says it will ‘firmly uphold Chinese firms’ legitimate and legal rights and interests’   Observers say China is likely to retaliate, but exactly how remains to be seen

Huawei will ‘inevitably be impacted’ by ‘arbitrary and pernicious’ US restrictions, it says
The US Commerce Department announced new restrictions on Huawei’s ability to develop semiconductors using American technologies last week    The new rule will directly affect Taiwanese wafer foundry TSMC, the world’s largest contract chip maker and a key Huawei supplier

China muted on Huawei retaliation, Australia dispute amid ‘unprecedented’ trade challenges
China’s Commerce Minister Zhong Shan says no ‘smart entrepreneurs’ will give up opportunities in the world’s second biggest economy    Despite acknowledging trade challenges, Zhong stays silent on Washington’s new restrictions on Huawei

This is China: Delivery for literally everything
In fact, long before the epidemic, delivery industry in China has developed diversified services tailored for different needs.    The widespread popularity of mobile internet and the diverse demands of customers further foster the growth of the industry, while it is the epidemic that brings the industry to the spotlight as people made orders ranging from food, medicines to kitchenware, books and home fitness equipment via internet to help them go through the difficult time.

Companies rush to replace ‘just in time’ supply chains with ‘just in case’ contingencies as Covid-19 upends global manufacturing
Industry players and supply chain experts said the shifting of the supply chain model is most likely in the production of essential goods such as food and medical devices    Even as some firms look to disentangle their production networks from China, the country’s role in the global supply chain is too big to be replaced, say analysts

Two Risks Ahead For China’s Economy
There are two risks in play here. The first one is that Chinese economists under-estimate the size of the shock and recommend an underwhelming relief package. More experienced China hands are likely to be pricing in a much bigger stimulus. The second risk is that nationalist forces — in retaliation for what may be days and days of China bashing here in the U.S. — decide to push Xi Jinping to drop the phase one deal even as Liu He and Robert Lighthizer seemed to have had a good call two weeks ago.

Coronavirus: Asian companies seek emergency cash via rights issues to plug holes in balance sheets
Companies from Singapore to India raises billions via rights issues   Hong Kong-listed property developers, brokerages raise US$583.7 million from 10 rights issues in first four months of year

China steps up the long march to 5G
Despite much of the country still being under coronavirus restrictions, China has doubled down on its’ national roll-out of fifth-generation (5G) wireless connectivity, with central government direction to ‘forcefully advance 5G network construction’.  With economies around the world hobbled by the pandemic, China’s state-led drive to deploy 5G is stoking fears that next-generation telecommunications and the applications built upon it will be dominated by Chinese firms.

China injects US$2.2 billion into local chip maker SMIC
The investment comes as Washington restricts the ability of telecoms gear maker Huawei to develop chips using American technologies    SMIC, mainland China’s biggest chip maker, plans a share sale in Shanghai that could raise more than US$3 billion

China’s once-resilient tech economy starting to crack under pressure from coronavirus economic carnage
In the first quarter of 2020, the number of Chinese recruitment postings across all industries fell 22.6 per cent compared with the same period last year   A survey found that 5.4 per cent of tech firms experienced job cuts while 12.9 per cent have reduced contractors, interns and part-time employees

How brands have embraced digital transformation during COVID-19
Covid-19 may be challenging brands and retailers across the world but those that have invested in building out digital capabilities are continuing to generate sales and engage with customers at a time when commerce has otherwise ground to a near-complete halt.

Chinese President Xi Jinping shifts focus to ‘affluent society’ goal, but warns Covid-19 threat remains
Communist Party chief has been on the road to promote the message that time is ripe to get the economy back up and running, as deadline on first ‘centenary goal’ looms    Provincial visits have also provided with a platform for Xi to advance a new narrative, reinforce party’s policy agenda

Coronavirus: could China’s rural land reform plan unleash a new round of economic growth?
Beijing is being urged to press on with land reform to offset the economic impact of the coronavirus  China’s household registration system and land-use laws have faced criticism for worsening the nation’s urban-rural divide and dragging on growth

EU calls for coronavirus investigation to focus on animal-to-human transmission
Josep Borrell had previously said bloc would push for inquiry into ‘origins of pandemic’ but World Health Assembly resolution concentrates on how it entered human population in first place  Bloc also pushes for evaluation of World Health Organisation’s performance and calls for better pandemic prevention measures

Exclusive: Lack of immunity means China is vulnerable to another wave of coronavirus, top adviser warns
China still faces the “big challenge” of a potential second wave of Covid-19 infections, the country’s top respiratory authority has warned, with the lack of immunity among the community a serious concern as the race to develop a vaccine continues.    Dr. Zhong Nanshan, the Chinese government’s senior medical adviser and the public face of the country’s fight against Covid-19, also confirmed in an exclusive interview with CNN on Saturday that local authorities in Wuhan, the city where the novel coronavirus was first reported in December, had suppressed key details about the magnitude of the initial outbreak

How Bad Assumptions Derail Epidemic Prevention
Increased population mobility helped COVID-19 spread across China, but so did outdated and misleading notions about who travels.    It’s been less than half a year since the novel coronavirus was first identified. In that short span of time, it’s already reached six continents, infected over 4.4 million people, and contributed to more than 300,000 deaths worldwide as of May 15.

Over 100 Million in China’s Northeast Face Renewed Lockdown
Some 108 million people in China’s northeast region are being plunged back under lockdown conditions as a new and growing cluster of infections causes a backslide in the nation’s return to normal.   In an abrupt reversal of the re-opening taking place across the nation, cities in Jilin province have cut off trains and buses, shut schools and quarantined tens of thousands of people. The strict measures have dismayed many residents w

British experts worry that the new coronavirus is adapting to humans and affecting vaccine development
The European Union ’s comprehensive British Guardian newspaper and other media reported that British scientists have found evidence that certain strains of the new coronavirus are mutating, indicating that after the pathogen spreads from bats across species, it may Constantly adapt to humans.

As death toll passes 300,000, US-China discord hampers search for Covid-19’s origin
The WHO has been in the thick of previous outbreaks to contain infectious diseases  But this time is different – the toxic relationship between Beijing and Washington is getting in the way

Coronavirus: Xi Jinping defends China and WHO response at World Health Assembly
Chinese president says country did all in its power to help others and China supports review when pandemic over    WHO made major contribution to the global fight against Covid-19, Xi says

China announces $2 billion in coronavirus help at WHO assembly
China will provide $2 billion over two years to fight the coronavirus pandemic and the economic fallout from it, President Xi Jinping said Monday, rallying around the World Health Organization even as the United States has slashed funding for the U.N. health agency and sought to undermine its credibility.

Wuhan economy faces long, slow road to recovery after coronavirus lockdown
The economic impact of the Covid-19 outbreak is only beginning to be felt by the city where the disease first emerged   The effects are being felt by everyone from farmers to kindergarten workers, and even working for the local government may no longer offer any security

Wuhan faces brutal economic blow from the pandemic as China’s unemployment soars
WUHAN, the Chinese city where Covid-19 was first reported, is seeing the impact that its extensive lockdown has had on its economy.

Lufthansa Cargo adds more flights to mainland China, ferrying urgent supplies to Europe
There has been strong demand for air freight services since April, when Chinese factories got back to work   Cargo flights have become critical in moving protective health equipment across the globe

HSBC, Citi speed up digital push to ward off Asian upstarts
Banking giants are rolling out new video services and fresh mobile features for everything from wealth management to insurance     The heightened digital activity amid the coronavirus crisis comes just as traditional banks were contemplating how to fend off competition from virtual banking start-ups

Why Luxury Will Never Be The Same?
Most luxury brands have lost a staggering amount of earnings during this crisis, but a lot of these drastic results could’ve been avoided with brand audits. In recent weeks, we saw practically all luxury brands posting negative numbers. Some brands lost a staggering 80 percent or more during the first quarter. I spoke with the CEO of a high fashion luxury brand that’s in the market for 30 years, and their company won’t survive the year without a drastic change to their business model. That’s 30 years of brand equity erased in a few months! A luxury food retailer that usually has high-yield airport sales saw its revenues plummet by more than 95 percent. This brand may not survive through the summer. Even some of the world’s top-10 luxury fashion brands have started silently firing staff. But many of those drastic results could’ve been avoided if brands had made more decisive actions in the past.

The greening of China’s industrial strategy
China is forging ahead to dismantle its fossil fuel dependence and build its renewables and circular economy

Coronavirus: Can India replace China as world’s factory?
With Covid-19 infecting millions across the world, China is facing an unprecedented global backlash that could destabilise its reign as the world’s factory of choice.

Japan’s economy enters recession for 2nd quarter after virus-hit decline
Japan’s economy shrank for a second straight quarter in the January-March period and entered a technical recession as a result of the adverse effects of the coronavirus pandemic, the government said in a report on Monday.

Japan sinks into recession with forecasts of worse to come as support for Abe hits two-year low
Japan has been hit less hard than most advanced economies by the pandemic, but consumer spending has still nosedived as people stay at home   Surveys show many Japanese seeing the government of Prime Minister Shinzo Abe as slow and out of touch in its coronavirus response

Confucius institutions close as China relations deteriorate
Deteriorating relations between Sweden and China have prompted the closing of Confucius institutes and classrooms in the Scandinavian country and the ending of city partnerships. The moves have been prompted by growing concern in Sweden over security, human rights and the jailing in China of a Chinese-born publisher with Swedish citizenship.

Reinventing Asia’s Tourism Sector
Long after the Covid-19 emergency restrictions and lockdowns have been lifted, one of the last industries that will recover is international tourism, which has been decimated by border closures, leaving air transport and airports to grind to an almost complete halt. The China factor is very important to those countries which want to attract mass tourism. However, its likely China will punish those countries by restricting travel to countries which showed racial hate towards China when Chinese tourists can once again travel. India may now begin using its outbound tourism power as a diplomatic tool in the future as well. Asian capacities to accommodate international tourism are diminishing with the forced rationalization of the tourism industry. Airlines are collapsing, both Thai and MAS are in deep financial trouble. SIA needs assistance, and Air Asia is financially strained. Many hotels and resorts will never open again. Many up-market and high volume restaurants will also shut down, where the new social distancing regulations will hinder the ability to be profitable. Its likely two segments of the hotel industry will survive. Those owned and managed by large corporations and those small to medium hotels and resorts that are unencumbered by loans and borrowings. New banner brands will emerge as will new innovations.

Coronavirus: China asks foreign diplomats to stay away until June 1
Beijing extends travel advisory for envoys and other mission workers for two weeks as nation remains on high alert to risk of importing new infections from overseas   China hopes embassies ‘continue to understand and cooperate’ with its control measures, foreign ministry says

Battle looms at WHO meeting as pressure mounts on China over coronavirus inquiry
Countries including US expected to pursue investigation into Beijing’s handling of pandemic when decision-making body meets  It could refer the dispute to the International Court of Justice, but experts say that’s unlikely – and the ICJ wouldn’t be able to enforce a decision

All eyes on China as World Health Assembly meets to tackle coronavirus response
More than 100 countries reportedly support the push for an independent inquiry into Covid-19’s origins   WHO decision-makers must also decide whether to allow Taiwan to be an observer at its gatherings

The Great Decoupling
Washington is pressing for a post-pandemic decoupling from China. But the last big economic split brought on two world wars and a depression. What’s in store this time?    “If you try to stymie the system in one area, the forces of globalization—whether pandemics or migration—they are not going to go away,” he said. Gum up the global trading system, and you dampen growth prospects for the developing world. Lower growth leads to more migration. More migration leads to more political stresses in the developed world. “It’s like squeezing a balloon,” he said.

How will China’s annual legislative meetings affect the stock investor? Five key industries to watch
The annual general assembly session of the legislature, known as the National People’s Congress (NPC), will kick off on Friday after an unprecedented delay of more than two months due to the Covid-19 outbreak     The government will make public a raft of key economic targets, agenda and policies through its yearly work report and national budgets, for the thousands of political elites gathering in Beijing to review and approve

China’s aggressive approach to coronavirus criticism ‘not working’
Observers call for Beijing to reflect on shortcomings of its engagement with the rest of the world as international sympathy fades  Mask diplomacy and bellicose statements need to go if global relations are to improve, they say

China’s Revolution in Military Affairs with Chinese Characteristics
China’s political leadership had ascribed the first two decades of the 21st century as a “period of strategic opportunity.” After considerable and due evaluation of the prevailing international conditions, China’s politburo determined that the weather was conducive to conduct domestic development and expand Beijing’s “comprehensive national power,” a term that embodies all components of state power in addition to economic capacity, military prowess, and diplomacy. The Chinese Communist Party (CCP), had engineered a successful model to utilise the paradigm of national power to cater to Beijing’s overarching strategic aspirations, as well as to guarantee the protection of the CCP’s control in the state while ensuring domestic political stability.  As China’s rivalry with America and its neighbouring countries keeps intensifying, it will be interesting to observe the manner in which China will tackle its modernisation challenges and technological shortcomings in the coming decades, in order to challenge the American military might and to displace their global hegemonic status.

Why is the US escalating its presence in the South China Sea amid the coronavirus pandemic?
Both US air force sorties and freedom of navigation operations have risen substantially in the region in the first quarter of the year  Reasons range from an overall deterioration in US-China relations to the US’ need to show allies that its capabilities have not weakened despite the pandemic

Masked, Sanitized, 1 Meter Apart: Shanghai Goes Back to School
Strict sanitation and social distancing rules are the norm as local schools resume classes.

Alain Gillard
Information Officer
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