China Press Review – May 21, 2019

Press review

The US will lose badly in the trade war with China and imperil the world economy if both countries don’t cooperate
US exports to China are down much more dramatically than China’s exports to the US. China has also sold more Treasury bonds in March, putting pressure on the already large US fiscal deficit

US-China war of attrition over trade could slow global economic growth to 2016 levels, says OECD
International forum’s biannual report says economies will benefit in 2020 – if Beijing and Washington settle their differences without resorting to tit-for-tat tariffs

Trump’s China trade war risks damaging US economy, says OECD
Intensification of tariff dispute also likely to knock almost $600bn off world economy

Xi Jinping calls for ‘new Long March’ in dramatic sign that China is preparing for protracted trade war
Xi Jinping told cheering crowds in Jiangxi: ‘We are now embarking on a new Long March, and we must start all over again!’ Xi comments come amid an increasingly sour mood in official Chinese media, which have become more forceful in anti-US rhetoric since trade war talks collapsed

The U.S.-China Trade War Enters Uncharted Waters
In this sense, the negotiators on both sides are truly between a rock and a hard place. It is going to take a very creative compromise to bring the talks to a successful resolution, and the world may have to wait some time for such an agreement to appear.

The U.S.-China Trade War Enters Uncharted Waters

China Has a Big Currency Decision to Make
Allowing the yuan to weaken beyond seven per dollar could mark a huge shift in the international terms of trade. Also, actively responding to passive aggression.

PBoC reveals first step to unifying benchmark, market rates
China’s interest rate liberalization is now focused on unifying the “two tracks” of lending rates, the People’s Bank of China (PBoC) reported in its latest quarterly report, said Caixin.

PBoC reveals first step to unifying benchmark, market rates

As Trade War Hits, China Looks Unsteady as $1.1 Trillion Treasury Investor
Some traders have speculated that China might liquidate its $1.1 trillion of U.S. Treasury bonds as a way of striking back against President Donald Trump’s tariffs on imports from the country. But such a scenario might hide the real urgency: The Chinese government might need the cash, according to the wealth manager deVere Group.

More Tariffs On China, More Head Scratching From Economists
President Trump isn’t the first president to try tariffs. And tariffs have been much higher in American history. But Irwin, whose has written multiple books on this subject, believes this escalating trade war is “historically anomalous.” “We have the two world’s largest economies — which had been for the past 20 years very highly integrated — now all of a sudden kind of decouple from one another,” Irwin says. “That’s a big break in terms of the history of the world economy and certainly the usual path of U.S. trade policy.”

More Tariffs On China, More Head Scratching From Economists

‘Still bullish’: Beijing hits back at Trump claim that US tariffs are forcing manufacturers out of China
Chinese foreign ministry says US ‘menace’ has not dented investor confidence US chamber of commerce survey says members favour Trump’s tariff policy

US Commerce Department scales back restrictions on Huawei, allowing Chinese firm to maintain existing networks and provide phone updates
Rollback, which is in effect for 90 days, suggests changes to company’s supply chain may have immediate, far-reaching and unexpected consequences US added Huawei to export blacklist last week, making it nearly impossible for firm to buy goods made in America

Huawei founder Ren Zhengfei says clash with the US was ‘inevitable’
Huawei CEO said he foresaw the confrontation with Washington because its aim to be global leader threatened US interests Ren Zhengfei said US trade restrictions have no impact on Huawei’s 5G plans as rivals cannot catch up within two to three years

Special report: Hobbling Huawei – Inside the U.S. war on China’s tech giant
In a keynote speech, Guo Ping, a deputy chairman at Huawei, took aim at America’s own spying operations. “Prism, Prism on the wall. Who’s the most trustworthy of them all?” he said. Guo was referring to a mass U.S. foreign-surveillance operation called Prism that was disclosed by former NSA contractor Snowden. The barb drew laughter from the audience. Europeans pushed back, too. During one closed-door session, senior representatives from European telecom operators pressed a U.S. official for hard evidence that Huawei presented a security risk. One executive demanded to see a smoking gun, recalled the U.S. official. The American official fired back: “If the gun is smoking, you’ve already been shot. I don’t know why you’re lining up in front of a loaded weapon.”

US-China trade skirmishes obscure the start of tech cold war
Huawei dispute shows how Washington is seeking to counter Beijing’s use of technology to gain geopolitical supremacy

Nike, Adidas and other footwear giants urge Trump to remove tariffs immediately and end trade war with China
173 companies sign open letter to the US president, and post it on the Footwear Distribution and Retailers of America’s website Trade association says the tariffs on shoes made in China will be catastrophic on the ‘American economy as a whole’

US warns companies of security threats posed by Chinese-made drones
Department of Homeland Security issues alert over ‘risks’ associated with such devices, urges firms to ‘be aware’ of whether data is being stored by vendor Latest warning over threat from Chinese-manufactured equipment comes after US added Huawei to trade blacklist citing security issues

Shanghai to give tax incentives and funds to nurture home-grown chips industry as China enters next battlefront over technology
Shanghai’s government will offer tax incentives and funding to nurture China’s home-grown industry of producing semiconductor chips

Explainer: Used from iPhones to guided missiles, does China’s dominance in rare earths hold potential leverage in trade war?
The little known minerals are used in a variety of industries and hi-tech devices China has accounted for more than 90 per cent of global production since the late 1990s

Rare earth, telecom stocks lift up China markets after Xi, Huawei boost
President Xi Jinping visited JL Mag Rare-Earth, a producer based in the southeastern province of Jiangxi, on Monday One rare earth stock surged 108 per cent in Hong Kong

China’s Xiaomi pushes global smartphone expansion as it monitors US trade ban on Huawei
Beijing-based Xiaomi shipped 27.9 million smartphones worldwide in the first quarter

China’s iceberg of hidden debt shows the biggest risks in provinces dominated by local authorities and state enterprises
Local government financing vehicles (LGFVs) have sold 7.5 trillion yuan (US$1.1 trillion) of debt The highest yields on these debt had been sold in provinces where the public sector dominates the economy

Hello Transtech: Alibaba’s other, other unicorn
First there was Alibaba, which boasted an IPO bigger than Google, Facebook and Twitter combined. Then there was Ant Financial, spun off, but owned by, Alibaba Group, which has raised almost as much cash as all US and European fintech firms combined. Now there’s Hello Transtech (formerly Hellobike), which may be valued at $4 billion if a rumored fundraising round (in Chinese) is successful. It’s the other, other unicorn in Alibaba’s sprawling business empire.
In a two-part series, I’ll lay out how Hello is bidding for profits amid the bikesharing meltdown—and its importance in Alibaba’s battle for mobility.

Hello Transtech: Alibaba’s other, other unicorn

China calls out big state firms, others on pollution violations amid slowing economy fears
China has publicly accused dozens of firms, including some of its biggest state enterprises, of exceeding pollution limits and breaching monitoring standards, as concerns rise that the slowing economy is undermining a five-year war on pollution.

China’s SOE reform questioned after Beijing appoints inexperienced official to head assets watchdog
Hao Peng will assume the role of chairman at State-owned Assets Supervision and Administration Commission (Sasac) State-owned enterprises are an issue at the centre of the US-China trade war, with Washington demanding a level playing field for its businesses in China

What Does China Want From WTO Reforms?
Within China, arguments rage about how to shape the future of the World Trade Organization.

China is paving a Belt and Road 2.0
At the second Belt and Road Forum (BRF) in Beijing held from 25–27 April 2019, China acknowledged the criticisms levelled against the Belt and Road Initiative (BRI) and pledged reform. We could see a ‘BRI 2.0’ emerge if these reforms are implemented and cooperation with development partners and stakeholder countries increases. In light of pushbacks and criticisms during the BRI’s first five years, China has pledged reform. This could lead to the emergence of a BRI 2.0. If China implements these reforms effectively and cooperation with development partners and stakeholder countries increases, this new BRI 2.0 will be better positioned to lead to shared prosperity for all participants.

China is paving a Belt and Road 2.0

3 Ways China Can Make the Belt and Road Initiative More Successful
China’s BRI can be more successful if it prioritizes these three measures.

China’s Digital Silk Road
China’s Belt and Road Initiative is best known for big infrastructure projects such as train lines and ports, but in this age of omnipresence online, there is a communications counterpart running in parallel, known as the Digital Silk Road. But as with the physical manifestations of China’s big ambition, questions remain about how this digital goal will fit with the existing structures of international governance.

Argentina’s Financial Crisis Creates an Opportunity for China
There’s a one-word answer to why the South American nation is bucking the trend: China. Argentina is in the grips of a financial crisis that has all but locked it out of credit markets and paralyzed investment.

Singapore, Bangalore beat Hong Kong in Deutsche Bank’s worldwide quality-of-life poll. Beijing is in second-last position
Tokyo and Seoul too ahead of city in ‘Mapping the World’s Prices 2019’ survey Hong Kong better than Tokyo, Singapore for start-ups, says online gaming developer

Luxury Skincare Brand Strikes Gold with Spas for Beauty-Obsessed Chinese
Foreign prestige beauty brands that offer exclusive spa visits for Chinese clients can earn their loyalty and create a stronger connection The Chinese saying “白遮九醜” translates to “smooth, white skin can hide nine uglinesses.” It’s true: For centuries, Chinese women have been striving for light, bright, luminous skin, traditionally by eating strange delicacies like bird’s nests or fish maw. But more recently, they’ve turned to the science of Western luxury skincare and can’t seem to get enough of it.

Luxury Skincare Brand Strikes Gold with Spas for Beauty-Obsessed Chinese

Why the US-China Trade War is Actually an Opportunity for Some Luxury Brands
The current U.S.- China trade war will create winners and losers in the luxury industry.

Why the US-China Trade War is Actually an Opportunity for Some Luxury Brands

China’s GMO Paradox
For all its power, the Chinese government can’t get people to trust genetically modified crops.

Finding a Higher Level of Talent in China
How does recruiting turn up a higher level of talent in China? Find appropriate resumes and hope that means talent? Interview to see if they can tell good stories? Gut feel? Train candidates how to gain a gut feel with the hiring manager? I see we need to look deeper to get people with better character, so they do not use talent to steal from us. After digging deeper, I saw we find a higher level of talent in China.

Finding a Higher Level of Talent in China

China is plugging pension hole by tapping into US$25 trillion in equity in state-owned enterprises
Beijing wants to invest more of the national pension fund in China equity market to generate better returns than banks or government bonds SOE transfers and higher investment income are two of several methods government pursuing to plug hole in pension system

China names and shames major state enterprises for breaching pollution limits
Heavy industry among companies fined up to US$1 million amid fears economic slowdown is undermining war on pollution Environment ministry fines business for exceeding limits and says some regions have used slowing economy as excuse to backslide on curbs

Secondhand shopping becoming a first choice in China
Everything old is new again. At least in China, where the popularity of shopping for pre-owned products online is on the rise. The trend is being driven by a new consumer focus on sustainability and the rise of “recommerce” super apps, which integrate all possible functions related to shopping for secondhand goods.

A Chinese Millennial Looks Back on Her Life
In her memoir, “Under Red Skies: Three Generations of Life, Loss, and Hope in China,” Karoline Kan personalizes the great changes occurring in her country.

No excuse for ancient Chinese treasures to be hoarded in Western museums any longer
China’s scientific advances mean the claim that ancient artefacts are best preserved in the West no longer holds water

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