China Press Review – May 2, 2019

Press review

As US-China deal nears, Beijing relaxes rules for foreign banks and insurers, in concession to Washington
China announced a dozen new measures on Wednesday to further open up its US$44 trillion financial sector to foreign banks and insurers Analysts are viewing the move as a clear concession to US negotiators and a sign that a deal to end the trade war is imminent

China, U.S. hold ‘productive’ trade talks in Beijing
China and the United States held “productive” trade talks in Beijing on Wednesday and will continue discussions in Washington next week, U.S. Treasury Secretary Steven Mnuchin said, as the two try to end their trade war.

US-China trade deal may be close, but global trade recovery likely to lag behind, TS Lombard says
Research firm TS Lombard foresees a ‘sharp downturn’ in Chinese export growth in April ‘Downside risks’ to global trade remain

China and United States focus on progress before fresh round of trade war talks
But even if the two countries seal a deal, further conflict is on the horizon, observers say

As Trade Talks Continue, China Is Unlikely to Yield on Control of Data
Negotiations appear to have done little to resolve an emerging rivalry over data that the tech industry says is key to industries of the future.

As US-China trade talks continue, US slaps duties of up to 460 per cent on Chinese yarn for unfair subsidies
US Department of Commerce imposes preliminary duties on Indian and Chinese imports, final decision due in September Duties of between 32 and 460 per cent on Chinese producers, while Indian producers will face duties of between 7.1 and 20.5 per cent

‘China is going to eat our lunch?’: Joe Biden dismisses Beijing as threat to US
Biden claims no world leader would trade the problems the United States faces for those confronting China Some Republicans, however, have argued that Biden is underestimating the world’s second-largest economy

U.S. and China Surprise With Economic Growth But Weak Imports
The U.S. and China both surprised with strong expansions in the first three months of 2019, yet their imports remained weak, meaning a limited growth cascade onto export powerhouses Germany and South Korea.

No, The China Trade War Has Not Destroyed U.S. Trade
Even the U.S. China Business Council (USCBC), a lobbying firm for U.S. multinationals doing business in China, could not paint over the fact that trade with China, at the state level, is still on a growth trend. While many states saw a decline over 2017 export numbers, the same could have been said for almost any two year comparison over the last 10 years.

Investment Screening in the EU: Impact on Chinese FDI
Investment screening in the EU has been strengthened through new policy directives that encourage greater scrutiny of investments in sectors considered sensitive.

Corporate China hit by worst earnings on record in 2018, as trade war bites
Losses related to goodwill soared to a record 166 billion yuan (US$24.65 billion) last year Technology among sectors worst hit, but construction materials, defence make gains

From starving pigs to disappearing chairmen: Chinese companies offer some bizarre excuses for plunging profits, missed deadlines amid worst earnings season on record
Chinese companies have come up with some bizarre explanations for their worst earnings season on record

China’s army of migrant workers is becoming older and less mobile, new government data shows
Annual survey by Beijing shows China’s migrant workers are less inclined to travel long distances for work, with governments offering grants to stay locally The average age of migrant workers is rising, with a new generation of workers less content to work in factories or construction sites

Green Shoots In China
Our view was that global growth would likely “re-synchronize” this year, following 2018, when fiscally induced economic strength in the U.S. offset weaker economic conditions in China. In our most likely scenario, the U.S. and Chinese economies stabilize in coming quarters, with good potential for moderate re-acceleration during 2019. On the whole, China’s March figures point to broad-based strength across both consumer and industrial activity, as well as in key credit data.

David Cameron’s $1bn UK-China fund hit by reluctance from potential investors
David Cameron’s proposed $1bn (£765m) UK-China investment fund has reportedly faced reluctance from investors and could be set to fail in meeting its target.

Export-Import Bank Is Not the Way to Fight China
Unless Congress wants to try to out-China China on economic nationalization, revitalizing Ex-Im would do nothing to counter the Belt and Road Initiative—or to halt China’s theft of intellectual property and other practices that constitute actual trade problems.

Export-Import Bank Is Not the Way to Fight China

Why China’s belt and road loans may not be the debt trap other countries fear
Study by US-based Rhodium Group finds only one confirmed case of asset seizure and says Beijing is more likely to renegotiate burdensome debts

Assessing the Belt and Road Initiative
We should not play down the geopolitical consequences of the Chinese-led globalization that BRI v.2.0 represents.

Assessing the Belt and Road Initiative

China’s Belt and Road Initiative: Why the price is too high

Wharton’s Marshall W. Meyer and Minyuan Zhao discuss the setbacks facing China’s Belt and Road Initiative.

China’s Belt and Road Initiative: Why the price is too high

New Silk Road: US is pushing a false narrative
Mike Pompeo, America’s globetrotting secretary of state, has been meeting with leaders in Africa and Latin America to warn them of China’s Silk Road-styled Belt and Road Initiative (BRI). Watch out for predatory financing and debt traps, he tells them.

ADB urges caution on China’s ‘Belt and Road’ scheme
While China’s Belt and Road Initiative (BRI) would help fill the massive global infrastructure gap, it is not without risk such that the head of the Manila-based Asian Development Bank (ADB) on Thursday urged borrowers to be cautious amid fears of a Chinese debt trap.

ADB urges caution on China’s ‘Belt and Road’ scheme

Central Bank Chief Says China Will Guard Against Belt and Road Debt Risks
The Belt and Road was first proposed by President Xi Jinping in 2013 with the stated aim of developing global transport and trade infrastructure using Chinese expertise and financing. The initiative has been praised for promoting global trade — an October World Bank report estimated that it will reduce the world’s average shipment time by up to 2.5% and lower aggregate trade costs by 1.1% to 2.2%. However, it has also triggered concerns over the debt burden it may add to investors who jump in without adequate research and to countries receiving the credit-driven investments.

China must follow global norms for the Belt and Road
At the second Belt and Road Forum, held in Beijing on April 25-27, Chinese President Xi Jinping indicated the need to take into account the debt sustainability of the countries it partners with on infrastructure projects. If China’s push to build a massive, continent-spanning economic zone is to yield true benefits for all involved, Beijing must shift its policy course and embrace internationally accepted norms.

Trump spoils Xi’s Belt and Road Forum, without even attending
Beijing’s infrastructure initiative becomes symbol of US-China power struggle Xi was clearly not talking to those in attendance, including Russian President Vladimir Putin, but to another set of ears, 11,000 km away in Washington. He also said that China “will increase the import of goods and services on an even larger scale,” “will not resort to the beggar-thy-neighbor practice of yuan devaluation” and “will overhaul and abolish unjustified regulations, subsidies and practices that impede fair competition and distort the market.” These are all central topics in the U.S.-China trade talks. They were not related to China’s external aid policy, which would have been a more natural focus of attention at the summit.

How China is redrawing the map of world science
The Belt and Road Initiative, China’s mega-plan for global infrastructure, will transform the lives and work of tens of thousands of researchers.

China Is Wasting Less Solar and Wind Power
With the government no longer subsidizing renewable energy, curtailment has been driven by better infrastructure and competitive costs compared with coal.

China Installs 5.2 Gigawatts Of Solar As Government Unveils 2019 Feed-in Tariffs
China’s National Energy Administration announced Monday that a total of 5.2 gigawatts (GW) of solar was installed during the first quarter while, at the same time, the Price Bureau of China’s National Development and Reform Commission finally published its solar Feed-in Tariff policy for 2019 on Tuesday.

Alibaba’s grand strategy to feed China’s middle class
During last year’s record-breaking Singles Day online shopping extravaganza, there were some surprising top-selling products among the usual suspects of electronics, cosmetics and apparel: In the first hour of 11/11, T-Mall reported (Chinese link) that it had sold 13.6 million Ecuadorian shrimp, 140 thousand Mexican avocados, 920 thousand Southeast Asian lobsters and 1.4 million kilos of Australian beef. JD, meanwhile, boasted a 270% year-over-year increase (Chinese link) in online sales of fresh produce.

Alibaba’s grand strategy to feed China’s middle class

Frank Huang discusses the travel platform’s recent developments, its relationships with customers and travel & hospitality brands and what the future will look like.

Galeries Lafayette Bets Big on Hip and Edgy Brands in Shanghai
By eschewing mainstream luxury brands and focusing on niche labels, Galeries Lafayette has created a unique selling point for itself in Shanghai, although one that also comes with risk

Galeries Lafayette Bets Big on Hip and Edgy Brands in Shanghai

Huawei to challenge Samsung, Apple electronics lead with 5G TV
Chinese tech company also aims to be a top PC maker in three years The TVs will be equipped with a 5G module as well as a high-end 8K resolution display, sources familiar with the plan told the Nikkei Asian Review. This means they will be able to use the new generation network to download data-heavy content, such as 360 degree videos in which viewers can watch in every direction, and virtual reality programs. There are questions, however, over how soon the wider ecosystem for such services will be available.

Who controls Huawei? Chinese telecoms leader’s ownership structure explained in more detail
Huawei goes on the offensive after research paper questions ownership structure

Huawei says alleged router ‘backdoor’ is standard network tool
Vodafone found security failings in firm’s internet routers a decade ago

Theresa May sacks British defence minister Gavin Williamson over Huawei leak
In letter to Williamson, May says she has ‘compelling evidence’ he is behind ‘unauthorised disclosure’ of plan to let Huawei build parts of UK’s 5G network Denying he was involved, Williamson said he was offered chance to resign but turned it down as it would have been an acceptance of guilt

Tech standards and China’s rise

Hilary McGeachy: Increasing competition between the United States and China over tech standards It’s difficult to get beyond the headlines about the race between the United States and China to set 5G standards, and competition over the future global market for emerging technologies.

Briefing: Super Micro tells suppliers to move production out of China
Server maker Super Micro Computer has asked its suppliers to stop manufacturing parts in China, according to Nikkei Asian Review. The California-based company’s U.S. customers have reportedly requested motherboards that were not produced in China, following claims in October that malware-infected chips were planted by Chinese spies in motherboards that made their way to U.S. government servers.

Briefing: Super Micro tells suppliers to move production out of China

VC Han Bing: The problems with China’s corporate services industry
The corporate services industry requires entrepreneurs to have a “deep understanding of the entire industry and not just general knowledge about the internet industry,” Han said, adding that those who do not perform due diligence could make “costly mistakes.” According to Han, American companies have matured and are already aware of the strategies their competition might deploy. At this stage, Han said, companies must save costs, and outsourcing their work becomes “inevitable.” In contrast, he said, Chinese companies are not yet at a stage where they have a “desperate need to maximize efficiency.”

VC Han Bing: The problems with China’s corporate services industry

A Guide to Shutting Down Your China WFOE
Shutting down a China WFOE is more complicated than just “getting out while we’re young.

A Guide to Shutting Down Your China WFOE

German automakers differ on strategies as China relaxes JV laws
Germany’s three major automotive groups are adopting different strategies for controlling their local joint ventures in China. The Volkswagen Group, for example, thinks the rapid market developments in a technologically progressive country such as China require the automaker to at least rethink its entire ownership structure. By comparison, Daimler sees no need to act, while the BMW Group already has seized the opportunity to secure a greater share of profits from its joint venture last October

China Railway net profit up 12.42% in 2018
The China Railway Corp. saw its profit after tax increase to 12.42% year on year in 2018, reaching a record high level of 2.045 billion yuan (US$303.56 million). Revenue for the year was 1.1 trillion yuan, up 7.89% year on year, according to an official statement. Passenger revenue climbed 11.64% to 357 billion yuan, and freight revenue increased by 11.46% to 353.2 billion yuan.

China’s nationwide new home sales storm ahead in April, extending rebound for second month
Data tracking the nation’s 100 biggest developers showed contracted sales of 779.8 billion yuan ($115.8 billion) for April, in line with pickup in March

Hong Kong’s bubble has protected it from the disruptions of the digital revolution, but this won’t last forever
Due to unique features of its economy and politics, Hong Kong has missed the tech upheaval rearranging the outside world. This won’t last, and our young people need to learn new life and business skills to thrive

China has a nascent plus-size fashion market that is still largely underserved. This presents opportunities for international brands to leverage their expertise in this vertical from other markets to fill this white space in the world’s second-largest economy.

China set to build major offshore salmon industry, DNB says
China has the technological expertise and financial muscle to build a major offshore salmon farming industry, Norway’s banking lender DNB said. The key development has been the mastering of submersible cage technology which allows companies to install salmon farms in China’s Yellow Sea, DNB analyst Alexander Aukner said at a seminar held by Multiexport Foods. Companies can secure financing in China on projects with a long-term return on investment, he said at the meeting in Santiago, Chile, last week.

China set to build major offshore salmon industry, DNB says

China blocks imports from two Canadian pork producers in spat since December 2018 arrest of Huawei’s CFO Sabrina Meng
China suspends imports from Canada’s Olymel, Drummond Export Customs document said companies were suspended on April 30

We need China more than they need us’: Canada’s options limited for quelling tensions with Beijing
Chinese court sentenced a Canadian to death on international drug charges

China’s ‘charming towns’ plan turns into a nightmare for investors, amid legal crackdown
Initiative was to dot the countryside with themed villages, like Crayfish Town, Poetry Town, Fairyland Town, and Happy Town Collapse of a funding company has seen senior executives detained by police, and thousands of investors scrambling for answers

China’s biggest online health care platform fires back at short-seller report that labelled the firm ‘Ponzi scheme’
Ping An Healthcare and Technology tumbled 1.3 per cent in Hong Kong on Thursday, adding to a 5.2 per cent decline on the prior trading day Company’s management hosted a conference call with institutional investors on Thursday afternoon; In an exchange filing they called the short-seller report “malicious defamation”

China’s population to peak in 2023, five years earlier than official estimates, new research shows
Findings suggest Beijing waited too long to abandon the one-child policy, founder of one of the firms behind the report says

China’s cultural industry sees robust revenue growth in Q1
The combined revenue of companies in the sector rose 8.3 percent year on year to reach 1.98 trillion yuan (294.25 billion U.S. dollars) in the first three months, according to the National Bureau of Statistics (NBS). In breakdown, revenue from news and information services increased the most during the period, up by 20.9 percent from one year earlier, while cultural investment, creative design, cultural dissemination channels and production of cultural content also saw double-digit growth.

China’s long march to space superpower
China is pushing deeper into space, but its human spaceflight goals don’t directly compete with the U.S.

Chinese family reportedly paid US$6.5 million to ‘fixer’ for admission into Stanford
Wall Street Journal and Los Angeles Times say the Beijing family has not been charged The payment was made in the ‘Operation Varsity Blues’ college admissions case, which ensnared families, coaches and administrators across the US

Ex-CIA agent Jerry Chun Shing Lee admits spying for China
An ex-CIA agent has pleaded guilty to spying for China, the US justice department says, in a case believed to be linked to the dismantling of a US espionage network.

China ends sanctions on Lotte two years after South Korean retailer cedes land to US missile defences
Shenyang grants Lotte permission to complete US$2.6 billion leisure development Company angered Beijing by agreeing to give land to US military for missiles

China’s furtive underwater nukes test the Pentagon
Satellite imagery reveals the regular presence of nuclear-powered ballistic missile submarines at the strategic base near the resort city of Sanya. Specialized surface warships and aircraft designed to protect the subs are prowling key waterways off the coast. Facilities at the base appear to have been built to store and load ballistic missiles. Antenna arrays that support the hunt for foreign submarines have appeared on Chinese-held islands in the hotly contested South China Sea. And a veteran submariner has been appointed to command Chinese forces in the south of the country.

China is building a powerful navy to take on the US in the Pacific — Here’s what their arsenal looks like
China’s naval force is growing at an incredible rate, not just in size but also in combat capability. It’s reportedly growing faster than any other great power navy. The Chinese People’s Liberation Army Navy is fielding a variety of new warships and submarines, as well as new weapons, to tip the scales in its favor in the region. Here are some of the vessels the PLAN is adding to its expanding arsenal.

China’s powerful navy has a challenge on its hands –persuading others it is to be used for peace
Under Xi Jinping’s stewardship, China has overhauled the navy and overtaken the US in the number of vessels launched yearly. But instead of focusing on the goal of building an invincible armada, China should convince the world of its peaceful intentions

Could this new material help China break the hypersonic weapon heat barrier?
Researchers say they have developed a ceramic-metal composite that can withstand temperatures up to 3,000 degrees Celsius

China’s roads jammed as millions take Labour Day holiday
Major highways gridlocked for hours at start of four-day break Chaos at railway stations as ticket-holding passengers turned away

Alain Gillard
Information Officer
Service Asie Pacifique
Place Sainctelette 2
1080 Bruxelles
Tél 02 421 85 09 – Fax 02 421 87 75
Copyright © 2019 awex, All rights reserved