China Press Review – May 20, 2019

Press review

Doing Business in China in 2019 Harder for European Firms
EU Chamber of Commerce in China releases annual survey report European companies operating in China said doing business became harder over the last year, with slowing output, rising wages, the trade war and other factors adding to challenges in the world’s second-largest economy. Fifty-three percent of respondents said operations in China had grown more difficult, according to the survey of business confidence released Monday by the European Chamber of Commerce in China. That compares to 48% who said the same last year.

China needs to change, European firms say – but many doubt it will
Forced technology transfer affects fifth of European firms in China, poll finds – double that of 2017 Tackling this and state firm reform while improving market access can resolve issues driving trade war, EU Chamber of Commerce in China says

European firms say forced tech transfers rising in China
European businesses in China have reportedly been facing greater pressure to transfer technology to local companies. The European Union Chamber of Commerce in China said on Monday that 20% of the 585 participants reported forced technology transfer to maintain market access in an annual survey, a 10% increase from two years ago. In certain “cutting edge” industries the incidence of reported transfers was as high as 30% in chemicals and petroleum, for example, and 28% in medical devices

Briefing: European firms say forced tech transfers rising in China

What comes next in the US–China trade war?
The risk is a quagmire with no easy way out. Despite a superficial deal focusing on the bilateral trade imbalance, the structural conflict over technology is likely to endure. This points to what can be called an economic cold war — a protracted period of charges and counter-charges, including tariffs and other sanctions, that will sap the vitality of both combatants. Resolution ultimately comes only by strength from within. For China that means successfully implementing reforms that promote the economic rebalancing it has long sought. For the United States that entails rebuilding the domestic saving it needs to restore competitiveness by investing in infrastructure, productive capacity, and human capital. With that shared strength comes a renewed opportunity for constructive engagement. Is that really asking too much of the world’s great powers?

‘Not on my watch’: China won’t be number one in the world, says Donald Trump
US president tells Fox News he is ‘very happy’ with trade war

Who Will Win the Trade War? Some Say China, Others Say Trump
Trump won’t “win” a trade war. Neither will China. Nobody wins them. If anything, Trump’s belligerence and poor negotiating style will prolong a lose-lose situation.

Does Trump Deserve Credit on China?
The president’s approach is different than his predecessors’—but that doesn’t mean it’s working.

Will the escalating US-China trade war and its catastrophic aftermath push the global economy into its next recession?
The risk of a recession will rise if the trade dispute is prolonged and escalates further, economists and portfolio managers said The world’s two largest economies had appeared closer to a trade deal earlier this month

US-China trade war: What could Beijing do next?
Donald Trump’s book The Art of the Deal could give you some insight into how he is negotiating with China amid the current trade war.

Xi Jinping Should Capitulate, Not Because US Is Right, But For China’s Own Vulnerability
A camel, though dead, is still bigger than a horse—so goes a Chinese proverb. Such is an accurate depiction of the current US-China relationship.

Xi Jinping Should Capitulate, Not Because US Is Right, But For China’s Own Vulnerability

China Is Not the Problem. Capitalism Is.
Tom Friedman and Steve Bannon are, as usual, wrong. Hardship in the United States can’t be blamed on China’s “economic war” on democracy. It’s the fault of American corporations and elites.

A Politically Neutral Examination Of The Tariff On China
Tariffs impact GDP in a myriad of ways. We break those down into qualitative relationships to get a better sense of what the GDP delta will be. Understanding the mechanism of impact will help make better trades in the coming environment.

Will the escalating US-China trade war and its catastrophic aftermath push the global economy into its next recession?
The risk of a recession will rise if the trade dispute is prolonged and escalates further, economists and portfolio managers said The world’s two largest economies had appeared closer to a trade deal earlier this month

US trade talks with China have stalled: Sources
Trade talks between the U.S. and China appear to have stalled. China has not shown willingness to revisit past commitments it made that it reneged on earlier this month. Sources say scheduling discussions have not taken place since the Trump administration ratcheted up its scrutiny of Chinese telecom companies.

US-China trade war: here are Beijing’s options – and not one looks any good
Hit by a hike in US tariffs China could: respond with equal tariffs (impossible); dump US Treasury bonds (ineffective and impractical); let the yuan weaken (expensive) Or it could give in to Trump and lose face (for Xi, unthinkable)

Could the US-China trade row become a global cold war?
If Donald Trump and Xi Jinping slide into ongoing animosity, the world will pay the price

U.S. intellectual property complaints a ‘political tool’: China state media
Chinese state media on Monday criticized the United States for its complaints about intellectual property theft, calling them a “political tool” intended to suppress China’s economic development.

US-China trade war: Moving to Vietnam to avoid sanctions
Companies operating in China are facing stiff increases in tariffs on exports to the United States as the trade war between the two countries escalates.

Ignore the bravado, a US-China trade deal is still possible. But it’ll take a Xi-Trump one-on-one
Tough talk after latest setback looks like a negotiating tactic Next window for a breakthrough is at the G20 summit in Japan

China ‘in no rush’ for another trade war talks trip by US Treasury Secretary Steven Mnuchin
There is no point in further discussions until the United States is prepared to give some ground, Chinese analysts say

A $19 Billion Test Is Coming Straight for China’s Battered Yuan
Offshore-listed Chinese firms will buy FX to pay dividends Trade dispute has dragged the yuan to weakest level of year

Hong Kong stocks fall to lowest level since January as trade war weighs down risk appetite
Foreign funds could be on track to record their biggest monthly outflow from China’s A-share market ever Tencent Holdings led Hong Kong declines to lowest price since March 1

Google confirms that its app store will continue to function for existing Huawei device users
Google’s statement follows a Reuters report that the US internet giant had halted business that involves transfer of hardware, software and tech services to Huawei Huawei has said it has developed a ‘plan B’, should US restrictions jeopardise its business relationship with Google

Huawei set to find out if consumers will still buy its phones without Google services under US trade ban
The Chinese company is scheduled to launch new budget Honor smartphone in London on May 21 Google said to suspend some business with Huawei after US adds Chinese telecoms company to trade blacklist

The Huawei Sales Ban: Brrrrr.
For example, right out of the gate, Google has announced it will cease licensing its proprietary Android software to Huwei. This will likely mean owners of Huawei phones and tablets will not receive Android OS updates from Google. Huawei will probably fight back by providing its own Android updates and by in the future providing its own operating software for its phones and tablets. But let’s face it, if Huawei had been able to develop its own operating software remotely as capable as Android, it would have done so long ago. So its now being cut off from Android will almost certainly lead to the overally quality of its phones and tablets declining and an eventual lowering of its prices and its sales. Will this lead to increased sales of Google Pixel phones and iPhones in China? Difficult to say. Will this lead to increased sales of Google PIxel and iPhones and Samsung phones around the world, at the expense of Chinese-branded phones and tablets? Very likely.

The Huawei Sales Ban: Brrrrr.

Trump’s Huawei ‘ban’ gives Asian tech firms 70 billion reasons to worry
The US move has sent Huawei’s suppliers scrambling to see how they will be affected, particularly those who rely on it as their main customer More than half of the company’s core global suppliers are from Asia, and many see their shares tumble after the announcement

Huawei does not need US chips: CEO on Trump export ban
Chinese telecom giant will resist Washington pressure, Ren Zhengfei says

Google confirms that its app store will continue to function for existing Huawei device users
Google’s statement follows a Reuters report that the US internet giant had halted business that involves transfer of hardware, software and tech services to Huawei Huawei has said it has developed a ‘plan B’, should US restrictions jeopardise its business relationship with Google

Intel, Qualcomm, and other chipmakers reportedly join Google in Huawei ban
Huawei has been stockpiling chips to prepare for this eventuality

Tall chip tale? Huawei’s backup plans leave experts unconvinced
Chip experts are calling out Huawei for its claims that it could ensure a steady supply chain without U.S. help, saying the technology the Chinese telecoms network gear maker buys from American companies would be “hard to replace”

Macron: Blocking Huawei ‘not best way to defend national security’
‘France and Europe are pragmatic and realistic,’ French president says.

Xi Jinping visits rare earth minerals facility, amid talk of use as weapon in US-China trade war
China produces 90 per cent of the world’s rare earth minerals, used in hi-tech production such as electric vehicles Rare earth minerals one of the few goods not hit by incoming US tariffs on US$300 billion of Chinese goods as trade war escalates

How a Chinese company targeted by US tariffs for the last 10 years has adapted and thrived
Hilong Holding changed US business model and looked to newer markets after being hit by anti-dumping duties Hong Kong-listed provider of oilfield equipment and services now tapping opportunities opened up by Xi Jinping’s Belt and Road Initiative

Japan and India to develop Colombo port, countering Belt and Road
With Sri Lanka, partners take on China’s expanding Indian Ocean presence

China declaring AI ambitions wasn’t ‘wisest decision’ as it alarmed the US, former secretary of state John Kerry says

The AI arms race between US and China could leave smaller nations unable to compete, Kerry says Kerry spoke of ‘great danger’ of ending up with a new cold war

Tencent expands in Europe with WeChat Pay tool in Amsterdam airport
Chinese internet giant Tencent and Amsterdam Airport Schiphol have jointly launched the first flagship WeChat Pay Smart Airport in Europe. Chinese tourists will soon be able to use WeChat to pay for goods in shops at Schiphol Airport, as well as to place orders and make purchases via the airport’s mini program. Coupons for preferred currency exchange rate and discounts will also be offered to WeChat Pay users at the airport.

Briefing: Tencent expands in Europe with WeChat Pay tool in Amsterdam airport

Wall Street gripped by fear that Donald Trump’s China tariff escalation will disrupt Apple’s tech supply chain
Even China bulls are shunning the firm, fearful that new tariffs could damage the tech ecosystem and deliver a ‘gut punch’ to the industry, an analyst says Recent White House actions indicate the US president is inclined to follow through with further punitive duties

China says economic impact of U.S. trade tensions ‘controllable’
China’s state planner said on Friday trade frictions with the United States has had some impact on China’s economy, but it was “controllable” and countermeasures would be rolled-out when needed to “keep economic operations within reasonable range”.

China has a willing partner in India on the belt and road, but only on fair and open terms
Cooperation between the two on the infrastructure plan would benefit both, but will remain a step too far as long as Indian fears over the initiative’s aims and financing are not assuaged

Why China’s ‘Debt Trap Diplomacy’ Critics Are Wrong
China’s critics, led largely by the United States, are determinedto warn developing countries about the risks of borrowing too much money from Beijing. They contend China will use these loans to financially entrap economically vulnerable countries as part of a broader effort to exert political influence and control.

US-China trade war, financial transparency to spur more belt and road projects, says Standard Chartered
China’s commitment to adopt key elements of financial practices used by World Bank and IMF to ensure projects’ debt sustainability will lead to more lending opportunities in countries covered by belt and road, says banker

The Arctic is the next geopolitical hot spot that the US wants to freeze China out of
As countries race to benefit from a new shipping route and other resources in the Arctic, the US, viewing the region through a national security lens, is pushing back against Russia and China

EU to use China as guinea pig to monitor bilateral summit deals
EU member states have decided to set up a new mechanism to monitor China’s progress in implementing agreed commitments, with the aim of extending such controls to other bilateral relations and European Council conclusions,

What is the China Model? Understanding the Country’s State-Led Economic Model
Massive state-owned enterprises rule sectors such as power and banking. But today, nine-in-ten new jobs come from the private sector, Huang added. Last year, Chinese state media reported the private sector drives the majority, over 60 percent, of GDP growth.

Continuing China’s economic miracle for another 40 years
Most important in the future for China will be to keep the politics out of economic decision-making. China would need to align the “China Dream” with the “International Dream” of common people around the world.

popdcast : Alibaba and others are becoming the ‘chaebols’ of China, investor says
People in China cannot live without the various products and services from those Chinese internet giants, according to Catherine Yeung from Fidelity International.

Beijing ranks ahead of Shanghai and Shenzhen in list of world’s most innovative cities
Hong Kong does not feature in JLL’s ranking of the top 20 cities worldwide San Francisco, a magnet for start-ups, heads the list

Extended US-China trade war may see Hong Kong employers hold back on hiring, say recruiters
Hong Kong’s employment market has yet to take a hit from the US-China trade war, but could suffer in the event of an extended dispute Technology and financial services sectors appear likely to grow, regardless of trade tensions

Is China banning Bitcoin mining?
Since April the media has been talking about China banning mining. This is because of a draft proposal from China’s economic planning commission, which labels bitcoin mining as an industry that needs to be “eliminated”. It’s not surprising that China’s policy catches so much attention. Three quarters of all crypto mining facilities are in China, any government regulations will greatly impact the global mining industry.

China’s green efforts hit by fake data and corruption among the grass roots
Local officials have devised creative ways to cover up their lack of action on tackling pollution

Unmoved by trade war escalations, China’s commercial real estate market outperforms competitors
Asset turnover, the Greater Bay Area and Beijing’s economic stimulus have all helped China’s real estate market defy global trends and the broad slowdown in its own economy

Four more Chinese cities warned over pace of home price growth
China’s housing regulator has urged four more cities to prevent their residential property markets from overheating in the latest sign that authorities are not about to relax their grip on the real estate business in order to spur the economy.

China set to pick new head for state-owned enterprise regulator amid growing calls for reform
Shake-up at the top of State-owned Assets Supervision and Administration Commission comes as US trade war increases pressure to overhaul sector

China’s ban on scrap imports revitalises US recycling industry
US paper mills are expanding capacity to take advantage of a glut of cheap waste materials Some facilities that previously exported plastic or metal to China have retooled so they can process it themselves

Canadian pork exports to China soar thanks to swine flu fears and Beijing’s tariffs on US hogs
Canada importing pork from US and shipping its own produce to China, which has turned to overseas markets because of deadly pig disease China received 33,456 tonnes of Canadian pork in March, compared with 18,628 tonnes a year earlier

Eight+ Things to Read About China and Other Things, Part 1

Eight+ Things to Read About China and Other Things, Part 1

In the Name of Love: How These 6 Luxury Brands Capture Consumers’ Hearts in 520 Holiday
520 is now marked on luxury brands’ calendar, and they spend significant marketing dollars to help promote exclusive products

In the Name of Love: How These 6 Luxury Brands Capture Consumers’ Hearts in 520 Holiday

Recharging economies: The EV-battery manufacturing outlook for Europe
Thus far, the EV-battery situation in Europe has been something of a paradox: while European carmakers have struggled to secure sufficient battery supply, investments in battery manufacturing have been concentrated in Asia. Of the 70 announced gigafactories globally, 46 are based in China. Unlike China, Europe does not have a coherent industrial strategy to attract large-scale battery manufacturing. The resulting challenges for this incumbent industry and problems with planned investment have even led some of Europe’s homegrown battery manufacturers to set up shop elsewhere—namely, China. Netherlands-based Lithium Werks, which already has two plants in China, announced plans in September for another. The company says it prefers to build plants in China because the infrastructure is better, and it is easier to get the permits needed to build a factory.

China and European Union sign landmark aviation deal – Chinese state media
China and European Union regulators have signed landmark agreements in aviation, which will boost cooperation in the sector between both regions, Chinese state media CCTV said on Monday.

Li Hejun, once China’s richest man, gets approval from shareholders to take troubled Hanergy unit private
Hanergy Thin Film’s shares were suspended four years ago when they suddenly shed about half their value in an hour The firm’s chairman, Li Hejun, was banned from being a director in 2017, for failing to disclose loans between the Hong Kong-listed unit and its parent

CHINA MEDIASurprise Attack:
CCTV6 Unexpectedly Airs Anti-American Movies as China-US Trade War Intensifies “They have no new anti-American films, so they’re showing us the old ones instead.”

Chinese retiree writes anti-US trade war hit song
Anthem set to the tune of a 1960s anti-Japanese chant takes off online Broadcasters also switch programme schedules as China-US talks falte

Labor Costs: Why It’s Unfair to Expect Women to Have More Kids
His ‘669’ comments attracted all the attention, but Jack Ma’s repeated references to childbirth as the true purpose of marriage are far more disconcerting.

China’s former securities regulator Liu Shiyu is probed over family members’ alleged insider trading and favouring hometown IPOs, sources say
Family members were able to buy bonds at below-market prices, source says
Six rural commercial banks from Liu’s hometown in Jiangsu province went public during his tenure, drawing scrutiny, source says

Shanghai Bund’s historic buildings saved from demolition … for now
Experts win reprieve for two out of three heritage houses but fear their success is only temporary Authorities plan public cultural facilities for the site

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