China Press Review – May 19, 2020

Press review

China: Economic recovery expected to remain uneven – UOB
“The economic data releases for April continued to show an uneven recovery in China. The largest improvement was in the industrial production (IP) which turned in the first expansion since the start of the year, coming in above consensus expectation at +3.9% y/y which was led by manufacturing of specially-used equipments (+14.3% y/y) and telecommunication equipments/computers (+11.8% y/y).”

China debt: how big is it, who owns it and what is next?
The Institute of International Finance (IFF) estimated that China’s total debt hit 317 per cent of gross domestic product (GDP) in the first quarter of 2020    In May 2020, the IFF also said the debt owed to China by the rest of the world had risen to more than 6 per cent of global GDP

China can show the world what a green economic recovery looks like
China is banking on infrastructure to build its way to recovery. How it does so will decide whether it forges a green revival or a carbon-intensive future. Beijing has a chance to show it can be a responsible environmental steward

With COVID-19 Controlled in China, Report Warns of Air Pollution Rebound
Official data suggests several pollutants linked to burning fossil fuels are higher than they were a year ago, potentially signaling a “dirty” recovery after the outbreak.

A weak yuan will help strengthen China’s coronavirus-battered economy, but only for now
Beijing has the strong US dollar to thank for making its exporters happy by keeping the renminbi soft   But economic and political risks in the US may yet end the dollar’s rally, which would leave Beijing in a dilemma about whether to intervene. It should not

Poor Countries Borrowed Billions from China. They Can’t Pay It Back.
Nations want Beijing to forgive or renegotiate loans as their economies suffer. Doing so would be costly. Saying no could hurt China’s global image.   As the coronavirus spread around the globe, Pakistan’s foreign minister called his counterpart in Beijing last month with an urgent request: The country’s economy was nose-diving, and the government needed to restructure billions of dollars of Chinese loans.Similar requests have come flooding in to Beijing from Kyrgyzstan, Sri Lanka and a number of African nations, asking to restructure, delay repayments or forgive tens of billions of dollars of loans coming due this year.With each request, China’s drive to become the developing world’s biggest banker is backfiring. Over the last two decades it unleashed a global lending spree, showering countries with hundreds of billions of dollars, in an effort to expand its influence and become a political and economic superpower. Borrowers put up ports, mines and other crown jewels as collateral.

China’s expensive bet on Africa has failed
Coronavirus crash in commodity prices has wasted $200 billion in investment and loans

Coronavirus cuts a swathe through Asia’s garment industry, leaving thousands out of work
Lockdowns, cancelled orders and closed factories have seen hundreds of thousands of workers laid off across Bangladesh, Cambodia and Myanmar   Many of the factories that have reopened are struggling to enforce social distancing and good hygiene practices in often cramped conditions

Alibaba-backed Xpeng gets go-ahead to assemble its own electric cars, heating up Tesla challenge
Guangzhou-based Xpeng’s newly opened electric car factory runs more than 260 industrial robots   The roll-out and delivery of Xpeng’s new P7 sports car is expected to start at the end of June

Coronavirus: China’s ‘cherry freedom’ vanishes as consumers cut discretionary spending
Merchants at Jiangnan wholesale fruit and vegetable market in Guangzhou – China’s largest fruit market – say demand has plummeted due to consumer worries    Lack of orders from hotels, restaurants, clubs and karaoke lounges also shows how China’s service sector is struggling

Global luxury market – once aiming to rival Indonesia’s US$1.1 trillion economy – heads for 18 per cent drop, as coronavirus grounds Chinese travellers
The sector was worth US$1.06 trillion in 2019 and had been forecast to reach US$1.09 trillion this year: Euromonitor      Asia-Pacific likely to see the most declines, as sales fall in China

What Is The Millennial Post-COVID-19 Consumer Sentiment?
These days, consumers like Yufei are paying more attention to a brand’s make-up line, and domestic brands that have a compelling brand story. The latest luxury report from consulting firm Bain & Company shows that millennials around the globe will consume more than half of all luxury production by 2025, and the wealthy middle class will be the main force behind that consumption. But that segment will remain cautious about luxury spending, putting more emphasis on brand values and shopping experiences. This change in consumer mindset occurred before COVID-19, but the pandemic has amplified the shift. Therefore, overseas brands that are struggling in the Chinese market must pay attention to these changes and the social dynamics surrounding them.

Coronavirus, US-China decoupling prompt Beijing to unveil new western development plan
Beijing’s new ‘Go West’ plan calls for development of central and western provinces to offset the risk of geopolitical isolation  Policy blueprint includes long list of new energy and infrastructure projects, providing more ‘leeway for strategic manoeuvring’

A US-China trade war is the last thing the world economy needs now
Mutual blame over the coronavirus pandemic has reignited tensions between the United States and China, threatening to break what was already a fragile truce on trade between the world’s biggest economies.   But the pandemic has left the global economy in a much more precarious position than it was when the two countries began sparring over trade two years ago. And neither can afford the damage another full-blown trade war would inflict.

How US must rise to China’s challenge
Almost nothing is bipartisan in US politics today – except confronting China. Despite the very different styles and worldviews of President Donald Trump and leading Democrats, Washington’s conventional wisdom has rapidly converged on the threat of its superpower rival.

Managing COVID-19 transmissions in post-lockdown China
COVID-19 emerged in Wuhan in December 2019, a few days before the Chinese Spring Festival. The three billion trips via China’s mass transit system during the Spring Festival travel rush may have contributed to its spread across the country. But in late March, China declared its COVID-19 peak over as Wuhan reported zero new cases for seven consecutive days. This was followed by the lifting of Wuhan’s lockdown on 8 April. However, a majority of China’s new cases are now imported, prompting a two-pronged strategy to control both imported cases and potential domestic transmission after lifting lockdown.

Vietnam set to thrive on China’s misery again as US, Japan goad companies to relocate manufacturing bases
Foreign direct investment rose for seventh straight year as suppliers to Apple, Nintendo, Samsung build new bases    Vietnam remains a priority for private equity fund EXS Capital, which has invested in an upmarket residential developer

Why India Won’t Be Able to Compete With China in the Post-COVID-19 World
The RSS/BJP ideologues must unlearn their ‘cultural nationalism’ and re-learn ‘productive nationalism’ with a massive focus on the dignity of labour.  Challenging China means unlearning many things and re-learning many new things which are not seen as nationalist now. Conducting a cold war with China with an ideology of ‘Namaste Trump’ will not help India develop its rural industry. Trump is a businessman with an election at hand. If he gets re-elected, he is likely to share steak with Xi, not dal-roti with Modi.

Hong Kong to relax social-distancing measures for religious groups, but other rules extended over risk from new local coronavirus cluster
Government sources say city plans to maintain restrictions for two more weeks       But gatherings of up to 50 per cent of capacity will be allowed at some places of worship

India’s pivot to the United States
The rise of China has become the single most important challenge facing India. Although India has a long record of befriending China, it has found Beijing largely unresponsive to Indian concerns. And as the gap in comprehensive national power widens in favour of Beijing, the traditional perception in Delhi of a broad parity with China has become unsustainable.   It is being replaced by the recognition that China is bound to expand its influence in India’s near and extended neighbourhood at Delhi’s expense. Meanwhile, the wider the gap, the less the incentive for China to settle the dispute over the long and contested frontier between the two nations in Tibet and Xinjiang.  China has not been responsive to India’s demands for more balanced bilateral trade (the trade deficit with China was running at around US$50 billion in 2019). More broadly, Delhi is coming to terms with the fact that it can no longer rely on Russia to balance China as it did from the 1960s to the 1990s. Delhi now sees Moscow drifting into a tighter embrace with Beijing.

Coronavirus: warnings of second wave of infections as China fights ‘long-term war’
Authorities are battling to contain cluster in the northeast, imposing strict lockdowns on residents of Shulan and Jilin city    Experts say many people have ‘no background immunity’ and country is still facing big challenge

Prepare for a summer of coronavirus, researchers warn
Effects of temperature may help map future outbreaks but without immunity Covid-19 will continue its deadly spread, study finds    Tropical and temperate locations should ‘prepare for severe outbreaks’

‘Nothing but a joke’: China hits out at Australia’s claims of vindication over coronavirus inquiry
Chinese embassy says draft resolution on probe at World Health Assembly ‘totally different’ from Canberra’s proposal    As tensions mount, Australia’s trade minister says country is ‘not going to engage in cheap politicking’ over Covid-19
In Indonesia, gravediggers’ heavy workload points to under-reported death toll
At least 2,107 people have been buried under Covid-19 safety protocols in the epicentre of Jakarta alone – nearly double the reported national toll
Other cities have also seen unusually high burial figures in recent months and government officials acknowledge data is patchy and incomplete

China Levies Over 80% Tariffs on Australian Barley
China’s Commerce Ministry levied tariffs of more than 80% on imports of barley from Australia late Monday as tensions escalated between the two nations.   The ministry said the duties were the result of an 18-month anti-dumping investigation which ruled subsidies on Australia’s barley industry had harmed China’s domestic industry.

Baidu weathers Covid-19 slump better than expected, sees rebound
The Chinese internet search giant has moved to diversify its advertising revenue sources amid stiff competition from Tencent and ByteDance    Once the runaway leader in desktop search, Baidu is now struggling to stay relevant in the mobile era

Why China’s post-lockdown recovery won’t work as a test case for reopening Europe and America
In China, landlords and occupiers are taking stringent measures to help workers return safely. But many of the health and safety protocols enforced in China are much more difficult to implement in economies that value privacy

International air travel is starting to creep back, complete with a patchy network of destinations, virus tests and quarantines
This month, China and South Korea opened a tightly controlled travel corridor between Seoul and 10 Chinese regions, including Shanghai.    Estonia, Latvia and Lithuania lifted travel restrictions between the three Baltic states on May 15, while Australia and New Zealand are also working to resume flights between the two countries

Xi Jinping’s China needs a foreign policy worthy of the ‘Asian century’
Beijing should leave the painful past behind and rise above Western demonisation to seize China’s moment in history. A rethink of its aggressive foreign policy, over-the-top propaganda and tight grip on Hong Kong and Taiwan is in order Why would the Communist Party risk so much for two relatively small annoyances? There’s a fine line between principle and stubbornness, and just as I sometimes am not sure where that line is in my own affairs, sometimes neither does Beijing. My guess is that more often than not, stubbornness rules. So, yes, two decades into the 21st century, it would appear, by virtue of current decisions and priorities, that China may not be cut out for the role of transformative leader. Those who obsess about their past risk repeating it.Only great nations, with great leaders, manage to rise above. So, there is a silver lining in the global-pandemic pause: a bit of time to reflect. We should all use this time wisely, especially Xi. China has big decisions to make: what to do next while the unsteady American president lusts for re-election – purging enemies, sowing confusion about the pandemic, and baiting Beijing. Maybe this is China’s chance to show depth?

Why China’s post-lockdown recovery won’t work as a test case for reopening Europe and America
In China, landlords and occupiers are taking stringent measures to help workers return safely. But many of the health and safety protocols enforced in China are much more difficult to implement in economies that value privacy  Privacy issues are an even bigger concern in the US. Tellingly, in a survey of chief financial officers carried out by PwC earlier this month, while 83 per cent of respondents said their firms planned to change workplace safety rules once a critical mass of employees returned to the office, only 28 per cent said they would evaluate new tools to support workforce location tracking and contact tracing. It is too soon to say how successful China will be in reopening its economy. What is clear, however, is that comparisons with Europe and America are unhelpful and, for the most part, misplaced. The Shanghai office market’s response to Covid-19 is not about to be replicated in London and New York.

China sets out stall ahead of NPC with pledges for market-oriented, local government finance reforms
List of reform promises by the ruling Communist Party and the State Council largely reiterates Beijing’s earlier reform pledges announced in a blueprint in late 2013    The rescheduled National People’s Congress (NPC) will take place on Friday with China’s economy slowing amid the fallout from the coronavirus outbreak

Belgium confirms inquiry into Malta-China spy threat
Investigation centres on claims Beijing has spied on EU from Malta’s embassy in Brussels China is building a five-storey embassy in Malta on a 19,000 sq metre site and concerns have been raised about the abuse of the so-called golden visas being sold to wealthy Chinese citizens allowing free movement across the EU.A spokesman for the Chinese embassy in Belgium said the espionage claims were false.

Alain Gillard
Information Officer
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