China Press Review – May 21, 2020

Press review

China GDP: Beijing abandons 2020 economic growth target, Premier Li Keqiang confirms at NPC
China will not set an economic growth target for 2020, Premier Li Keqiang confirmed at the National People’s Congress (NPC) on Friday in Beijing    China has set a target of creating 9 million new urban jobs, while the target for consumer price index (CPI) growth is around 3.5 per cent

Coronavirus or not, China must focus on the big picture: economic reforms
For China, the short-term coronavirus shock is coming on top of an economic slowdown. Policymakers now gathered at the annual NPC session remain cautious about an all-out stimulus, and will be eyeing long-term reforms to improve economic structure and boost productivity

Why knowledge about China’s business market proves vital for success of international companies
China, a rising global superpower, leads conversation about regional economic development through its Belt and Road Initiative    Entrepreneurs and global senior executives hope to benefit from detailed understanding of Chinese business practices

China has new US$1.4 trillion plan to seize the world’s tech crown from the US
The tech investment push is part of a fiscal package waiting to be signed off by the National People’s Congress, which convenes this week    This initiative will reduce China’s dependence on foreign technology, echoing objectives set forth previously in the ‘Made in China 2025’ programme

Coronavirus shines light on our unfair economy as millions join the ranks of the jobless and hungry
The scale of the destruction of people’s livelihoods, from China and India to the US, shows that for too many, job and income security was only a mirage    Policymakers, who already have a tough job balancing lives with livelihoods, must go one step further to ensure, once the crisis is over, a fairer economy can be built

Weak demand now stands in the way of China’s economic recovery from the coronavirus crisis
With supply disruptions stabilising after the initial plunge in economic activity, China has entered the third phase of its battle to recover from the Covid-19 shock   Other countries that are starting to ease their own lockdowns should heed China’s ‘first in, first out’ experience, and expect recovery to be uneven and drawn-out

As the coronavirus pandemic decimates economies worldwide, we all need to make sacrifices
Businesses, employees and consumers should all be prepared to shoulder some of the losses to get through this difficult time   Meanwhile, offering customers simple value-added services, in exchange for those lost due to social distancing rules, could go a long way

Podcast : Chinese economy maybe 1st to rebound from pandemic: Belgian official
A Belgian official has expected a swift comeback of China’s economy, saying it might be the first to bounce back from the COVID-19 pandemic.

Why investor optimism about the post-lockdown economic recovery is premature
The news of a promising vaccine trial, and the easing of lockdowns in leading economies, have played into an increasingly optimistic narrative in markets    But a market rally that is almost entirely based on hope might soon evaporate

Commentary: Four reasons why post-pandemic world can be confident in China’s economy
Just as the president of Washington-based think tank Peterson Institute for International Economics Adam Posen told Xinhua, “China’s objective economic status will rise” in the post-coronavirus era. In today’s world of hyper interconnectedness, a rising tide either raises or sinks all boats. As a dynamic Chinese economy is in every way good news for the world economy, members of the global community should jointly make sure that they will be the rising boats amid the turbulent waves.

China drops out of top three foreign investors in Germany
China last year dropped out of the top three foreign investors in Germany for the first time in more than a decade, official German data seen by Reuters showed on Wednesday, as the Chinese government focuses on boosting the domestic economy.

Chinese investment in US tech companies hits new low as bilateral relations remain tense, report says
There were 11 deals for Chinese investments into US tech companies in the first quarter, compared to 18 in the same period last year    Chinese investment in European tech firms has caught up with that in US tech firms for the first time in at least two years, according to a report

China approves more American imports, US trade office says
‘These are difficult times for both our countries. It is important that we each continue to work to make our agreement a success,’ US Trade Representative Robert Lighthizer’s office says     Beijing has opened its markets to blueberries, avocados, barley and other livestock feed grains, and approved more meat imports, statement says

If the US seeks ‘to contain China’, the country will firmly defend its interests, top Chinese legislature official says
‘China never starts trouble and never flinches when trouble comes its way,’ says Zhang Yesui
The country will firmly defend its sovereignty, security and development interests, the official adds

When Companies ‘Share’ Staff, Workers Lose Out
Loaning out employees helped a number of Chinese businesses weather the COVID-19 storm, but it shouldn’t be the new normal.

China’s industrial economy to continue recovery in second quarter
China’s industrial economy is expected to continue recovery in the second quarter with progress on business resumption and policy incentives in place to unleash domestic demand, an official said on Wednesday. Miao Wei, Minister of Industry and Information Technology, said 99.1 percent of Chinese industrial enterprises with an annual business turnover of at least 20 million yuan (about 2.82 million U.S. dollars) had resumed production as of Monday.

Two Sessions 2020: China’s shaken millennials look to state incentives to recharge auto industry spending
China’s auto industry seeks pick-me-up from delegates at the ‘Two Sessions’ amid early signs of rebound from pandemic    Incentives can fuel ‘revenge spending’ by millennials shaken by the worst economic crisis since the twilight of Mao era

Coronavirus: China set to push economic policy to new limits as National People’s Congress begins
China is expected to reveal unprecedented fiscal support for its virus-hit economy at the National People’s Congress this week   China’s fiscal deficit, gross domestic product growth target still subject of heated debate on eve of annual gathering

Infrastructure Will Be a Top Priority for China in 2020
China is pushing ahead with major investment in new infrastructure, assigning it top importance this year, according to a government work report released Friday. “Priority will be given to new infrastructure and new urbanization initiatives and major projects,

Alibaba sees 2021 sales topping US$91 billion on back of China recovery, more enterprises going digital
The Chinese e-commerce giant beat estimates to post a 22 per cent increase in revenue to US$16.1 billion in the March quarter    Net income, however, was down 88 per cent to US$447 million

Beijing needs to create jobs fast. Here’s what it could do
Creating jobs has a lot of political significance for China’s Communist Party leaders, who see employment as key to ensuring social stability. Some experts estimate that roughly 80 million people could already be out of work in the country, equivalent to nearly double the official rate of unemployment. The government could take several approaches to dealing with that issue, as well as work toward its goal of eliminating poverty by the end of 2020. For example, major national projects, such as plans to build new roads or railways, could prioritize employing the poor, according to economists at BNP Paribas.

Face masks and a solemn mood as China’s ‘two sessions’ begin under coronavirus cloud
Gathering of top political advisory body opens with a minute’s silence for Chinese who have lost their lives to the disease   CPPCC chief Wang Yang speaks generally on Taiwan, saying it will deepen exchanges with political parties and social groups

China to enact first civil code, as it looks to private sector to help revive virus-hit economy
Legislative package includes strengthening protection of property rights and it will be a centrepiece of annual parliamentary session    But analysts say its impact may be limited as it is largely an amalgamation of existing laws, and enforcement is also uncertai

Hang Seng Index falls furthest in five years, with banks and builders leading losses, as Beijing moves to tighten grip on city
The Hang Seng Index capped the biggest decline in almost five years as China’s legislature is set to vote on a security law that will increase Beijing’s control over Hong Kong   All 50 members of the city’s benchmark fall, with developers and banks being the worst-performing industry groups

Hong Kong’s Saddest Day
Things are going to get ugly. More than ever before, I hope my prediction is way off. But hope is not a strategy and the strategy for most companies should be to leave.

Two Sessions 2020: Beijing will announce resolution for national security legislation for Hong Kong to proscribe secession, foreign interference and terrorism
Draft resolution for Hong Kong law to proscribe secessionist and other activities in city to be presented as motion to National People’s Congress on Friday, sources say   Move would represent major shift from Beijing’s earlier position of allowing Hong Kong government to enact the long-awaited law itself through Legislative Council

Coronavirus offers Hong Kong an opportunity to turn its back on protest violence and heal its political rift
Resolving continuing clashes between protesters and police will require accepting the reality that ‘two systems’ is constitutionally subsidiary to ‘one country’   Beijing’s move to enact national security legislation in Hong Kong shows it will not allow the city to become a political chess piece in its strategic competition with the US

China’s Harsh New Security Law Likely to Spark HK Protest
Beijing puts definitive end to ‘one country, two systems’

Does new national security legislation signal the end of Hong Kong?
In opposition to a proposed extradition law, later expanding their demands to call for full democracy and an end to Beijing’s encroaching power over the territory. In the Washington Post, pro-democracy lawmaker Dennis Kwok called the new law “the most devastating thing to happen to Hong Kong since the handover

US investors weigh Beijing’s power play in Hong Kong: ‘If they’re not careful, they will kill the financial golden goose’
‘It is reasonable to be deeply concerned about Hong Kong’s future,’ US analyst says    Predictions that corporations could leave the city for Singapore, Korea, Taiwan or Vietnam

Hongkongers rush to download VPN tools amid fears of Beijing upping surveillance with national security law
After China announced it would pass a new national security law for Hong Kong, NordVPN received 120 times more inquiries about its service than the day before   News of the law has sparked fears among some netizens of increased surveillance and censorship from Beijing

Hong Kong’s resistance is ‘deeply embarrassing’ to China’s President Xi, says expert
China’s President Xi Jinping finds Hong Kong’s resistance “deeply embarrassing” and “infuriating,” says Orville Schell, the Arthur Ross Director of the Center on U.S.-China Relations at Asia Society. He adds that Taiwan is likely to drift further than Hong Kong from the ‘One China’ complex, which risks a cross-straits situation with potential future military conflict.

China’s Greater Bay Area in 2020: Opening up the Financial Industry, Promoting Integration
On May 14, 2020, the People’s Bank of China, along with three other central authorities, unveiled new guidelines to support the financial reform and opening-up of the Guangdong-Hong Kong-Macao Greater Bay Area (“GBA”).

Overseas Obstacles For Chinese Companies in a Post-COVID-19 World
Fosun Fashion Group, which controls Lanvin and Wolford, has been known as going on overseas acquisition spree. While COVID-19 poses new challenges to Chinese companies operating in international markets, it certainly won’t diminish their desire to go global. In 2019 and the first quarter of 2020, the Chinese economy grew at a rate of 6.1 percent — its lowest growth rate in 29 years. Growth is expected to be even weaker over 2020, so Chinese companies are expanding their footprints to overseas markets to offset slowing domestic economic prosperity. That could mean more cross-national M&A or market expansion in the fashion sector.

Samsung takes another step in US$116 billion plan to take on chip maker TSMC
South Korea’s largest company has started building a new fabrication plant for its made-to-order chip foundry business    The fab’s output is expected to go toward applications that range from 5G wireless networks to high-performance computers

SMIC to the rescue? Huawei shouldn’t hold its breath: experts
As the US moves to cut Huawei off from global chip manufacturing, experts say the domestic market doesn’t offer a replacement. Flagship domestic semiconductor fabrication company SMIC can’t handle state of the art products, and itself is vulnerable to being disrupted by a US export ban. Guo Ping, the rotating chairman of Huawei, told reporters Monday that the rule would “inevitably harm Huawei’s business to a great extent” and that the company is confident that it would find a solution soon. “If Huawei finds no way around this and TSMC closely follows the US ban, this would be a severe blow to Huawei’s business—which is exactly what the US administration is aiming for,” Jan-Peter Kleinhans, director of the project IT Security in the Internet of Things at the Stiftung Neue Verantwortung, told TechNode.

US Senate passes bill to boost oversight and delist Chinese companies from exchanges
A Republican sponsor of the legislation says aim is to stop Chinese firms from ‘cheating’ on US stock markets    Move comes amid rising tensions between Washington and Beijing over trade and the coronavirus pandemic

How green can China’s recovery package be?
As China emerges from lockdown, it should learn the lessons of 2008 and embrace a greener stimulus, writes Wu Yixiu

COVID-19 makes waves for international shipping
The impact of the COVID-19 crisis on the cruise ship industry has attracted much attention in recent weeks. But the associated global economic slowdown means that the impact of the crisis on other parts of international shipping will be even more severe.

‘Strong immune response’: Chinese Covid-19 vaccine team reports promising results
Single dose of candidate medication yields antibodies in mice, researchers say  Developers looking to partner with pharmaceutical company after a few more months of study

Coronavirus researchers warn 2-metre distance rule may not be far enough
A light wind can carry an infected cough three times further in just five seconds, study finds     More research needed into effects of temperature and humidity

China’s large-scale COVID-19 testing may pave way for strong economic recovery, U.S. economist says
“Although there are no official national data on the number of tests that have been carried out in China, press reports suggest that China, at least in certain localities, has tested widely and strategically for COVID-19,” Nicholas Lardy, senior fellow at the Washington D.C.-based think tank Peterson Institute for International Economics, wrote Tuesday.

China, better prepared for the post-COVID world
There are good reasons why the pandemic is unlikely to end Beijing’s ambitious power outreach, a point India must note

Coronavirus: China’s pandemic lifeline for small firms draws lukewarm response from business owners
At the National People’s Congress in Beijing, Premier Li Keqiang announced support for SMEs, including delayed loan repayments and more bank loans   Policies drew mixed responses from small business owners, some of whom are sceptical about whether they will work in practice

Coronavirus: China unveils US$500 billion fiscal stimulus, but refrains from going all-in
China will increase its budget fiscal deficit to a record 3.6 per cent of gross domestic product this year, up from 2.8 per cent in 2019    Beijing will also issue special treasury bonds for the first time since 2007 and increase the local government bond quota as it fights the pandemic

Japan to offer $112bn safety net to companies hit by pandemic
Goal is to prevent credit downgrades and help businesses get private financing The Japanese government will provide 12 trillion yen ($111.62 billion) in aid to companies to help them cope with the effects of the new coronavirus.  The remaining 6 trillion yen will come through investments and other frameworks. For large and midsize companies, along with doubling the existing 100 billion yen investment framework set up by the Development Bank of Japan, the government will prepare funding for investments in growth and restructuring through the Japan Investment Corporation.  For small and medium-size businesses, it plans to use the Regional Economy Vitalization Corporation of Japan to expand regional funding and revive companies. The government will also set up a fund to purchase bonds.

Coronavirus: Japan shows our faith in lockdowns and working from home is misplaced
Crowded Japan found itself unable to embrace either measure, leading to dire predictions. Yet it now has one of the lowest infection rates in the world   This suggests another force is at work. Asian hygiene standards, take a bow

Who Will Replace China- India or Vietnam?
Over the past two decades, China has served as the global production hub for companies in multiple industries, such as electronics, textile, medical devices, and automotive. The key factors have been the high availability of raw material, technological innovations, business-friendly laws, and accessibility to skilled labor. However, the scenario changed in 2019, when increasing cost of labor, as well as tensions created by the US-China trade war, clouded China’s perception as a favorable production center.

Deputy PM ‘very concerned’ over reports China’s power plants warned not to buy Australian coal
Michael McCormack says trade minister and diplomats are trying to fix the issue

China-US diplomatic backchannels dry up, making it harder to communicate in tough times
Deteriorating relationship falters without behind-the-scenes meetings and messages between Beijing and Washington   Coronavirus travel restrictions and a more belligerent diplomacy style on both sides make constructive communication difficult

A New U.S. ‘Consensus’ on China May Not Be as Solid as It Appears
The COVID-19 pandemic has brought ties between Washington and Beijing to their lowest level since the countries normalized relations in 1979, with many observers warning that they have entered into either “a new Cold War” or at least “a new type of Cold War.” A last point demonstrates how difficult it will be to fashion a coherent response to China’s resurgence. Individuals may agree strongly on what form it should take in the abstract but diverge quickly when asked to articulate what expression it should take in practice. The United States Institute of Peace’s Jacob Stokes notes that most China analysts converge upon a familiar set of policies: “strengthen US alliances, maintain an effective military deterrent, uphold democratic values, foster domestic renewal, and seek out pragmatic cooperation with China. When it comes to implementing those broad strokes, however, a number of difficult questions arise.”  Given that observers disagree over how to evaluate U.S. policy from the Nixon administration through the Obama administration; how to assess China’s character, intentions, and trajectory; and how to enhance America’s strategic competitiveness, the putative new consensus would seem to be an impoverished one. A sustainable framework must do more than vocalize anxiety, after all; it must articulate a vision.

U.S.-China Relations 2020: Coronavirus and Elections
China is facing growing international scrutiny due to its initial mishandling of the coronavirus outbreak. Countries are increasingly questioning the motives underlying Beijing’s recent international aid efforts, and there is growing concern over developments in the South China Sea, Taiwan Strait, and Hong Kong. In this episode, Paul Haenle spoke with Xie Tao, Dean of the School of International Relations and Diplomacy at Beijing Foreign Studies University, to better understand China’s perspective on recent pushback against Beijing, the implications of regional security developments, and China’s role in the 2020 U.S. presidential election.

‘Cold War echoes’: United States accuses China of face-off on all fronts
White House policy paper defines US president’s ever-hostile stand on Beijing as Trump makes a bid for re-election    Era of playing down ideological differences to avoid derailing relations is over, analyst says

Two Sessions 2020: China increases defence spending by 6.6 per cent but sets no GDP target, focuses on Hong Kong national security law
China’s top leaders come together for condensed version of annual meeting after two-month delay because of the Covid-19 pandemic   Government’s plans for reviving the economy, alleviating poverty and fiscal reform top the agenda

Mike Pompeo rips into Beijing with a litany of US grievances
China’s domestic and foreign policies ‘make it more difficult to assess that Hong Kong remains highly autonomous from mainland China’, secretary of state says   Also cited in a press briefing are Huawei, 5G, Taiwan, the South China Sea and the coronavirus response, among other topics

It’s amateur hour in Washington
Beijing has double-dared the US with new security law over Hong Kong and leaves it with no good options on how to respond  Alternatively, Washington can say developments in Hong Kong are not satisfactory but still acceptable.The wise, right and practical thing to do is to let Hong Kong’s special status continue. But then all those Washington politicians from Trump and Pompeo on down would look like liars, hypocrites or fools. Of course, they could declare they couldn’t in good conscience accept Hong Kong’s erosion of freedom and must end its special status, effectively rendering it as “just another mainland city”. With friends like Pompeo, Hong Kong’s opposition doesn’t need enemies.

How China’s expanding footprint puts it on a collision course with Trump’s America, raising the spectre of a new cold war
From mask diplomacy and leadership at UN agencies to power projections particularly in the South China Sea, Beijing’s expansion brings it increasingly at odds with Trump’s America, pulling the world towards a new cold war

A Brief History of Chinese ‘Health Diplomacy’
Foreign aid should be about helping other countries “stand up,” as Zhou Enlai once said, not political gamesmanship. The COVID-19 pandemic is in many ways unprecedented, and everyone is still searching for effective solutions. Complicating matters, countries that might once have led the global response have instead abdicated their responsibilities. In the resulting vacuum, China’s every action has been put under the microscope in ways the country may not have been prepared for: European media outlets have blasted China for over-hyping its foreign aid, and even sending medical teams to African countries has been characterized by local media as somehow belittling the professional competence of the continent’s doctors. Rather than allow itself to be frustrated by what it perceives as unfair criticisms, China needs to understand and sympathize with dissenting voices in the course of upholding its international responsibilities. And a more low-key approach to publicity might be in order. Historically, China itself has associated receiving aid with weakness, so it should come as no surprise that other countries might feel the same way. Besides, even if China’s earlier success in controlling the coronavirus was facilitated by aid and supplies from abroad, it ultimately came down to its own hard work and sacrifices made by millions of Chinese. The same is true of Italy, South Korea, Germany, and all the other countries that have “flattened the curve,” thanks to the work of their policymakers and residents. There is still a long way to go to before anything like victory against the coronavirus can be declared, and international cooperation will remain vital to global health initiatives for the foreseeable future. China is working hard to show its sincerity and commitment to international cooperation, but assuaging other countries’ doubts will take empathy, understanding, and effective communication.

The power and limits of China’s ‘mask diplomacy’
Despite initial missteps surrounding COVID-19, particularly in releasing timely information and providing accurate updates, China has largely contained their coronavirus outbreak. As a result, Beijing has turned its attention to helping other countries through the provision of medical supplies, test kits and technical expertise. China hopes to build goodwill in recipient countries and garner positive international media attention.

Two sessions 2020: China cuts science budget by 9 per cent but national R&D still tipped to grow
Spending by local governments expected to buoy investment in the area despite the tough times  Authorities show strong commitment to innovation as the country weathers fallout from the coronavirus pandemic, observer says

How Will Historians Look Back at the Coronavirus Outbreak?
Imagine, for a moment, that the pandemic is over—or at least that it has abated sufficiently to allow time for reflection. Imagine, now, that a historian decides to reflect on the pandemic, asking quite simply, “How did it come to this?” There would be many ways of telling that story (and there will be many books on COVID-19). But one way would be to chart a series of off-ramps on the road to disaster. Some of these off-ramps can be located in China, at least one in the World Health Organization, and then several in the United States. Some are structural. Some are tied to specific decisions. Had any one of them been navigated differently, the pandemic would have been easier to handle.

Chinese government drops references to ‘peaceful’ reunification with Taiwan
The rhetoric towards the self-ruled island has hardened in Premier Li Keqiang’s annual work report   Beijing regards Taiwan as one of its core national interests and says it ‘resolutely opposes’ any separatist activity

4 Things Everybody Gets Wrong When Starting a Business in China
Starting a business is a brave and bold move. It requires effort and you may even have to sacrifice an average of 70 hours a week, for probably the next 2-3 years, in order to get the thing running smoothly. This, in essence, is what most startups fail to recognize and understand. Some say success doesn’t come overnight and to some extent this holds water. So, if you are looking to open a new chapter in life and start a business, here are some problems faced by startups that are considered wrong when starting a business.

Chopstick Revolution
Changing centuries-old dining norms to fight the spread of Covid-19 “Divide food, not love” runs a slogan on a billboard in central Shanghai, while on the Beijing subway a screen shows a cartoon pair of chopsticks dancing to the “Song of the Communal Chopstick.” These metropolises, like many other cities across China, have launched a “tongue-tip hygiene” campaign to encourage a “dinner table revolution” in response to Covid-19.The campaign aims to change aspects of China’s dining culture and etiquette, some of it centuries old, that might contribute to the spread of infectious diseases. At Chinese meals, communal dishes of food are generally placed on the table and shared by all, with diners using their chopsticks to pick out food for themselves and others; often the same chopsticks one uses to eat.

Alain Gillard
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