China Press Review – May 20, 2020

Press review

The big splash: China’s 2020 Two Sessions
Next on the foreign-interest agenda comes reform. Will reforms accelerate? Will China open its markets further with enactments of new regulations? Among foreign analysts, there has been a sense that state-owned enterprises, SOEs, have been playing an increasing role in the economy – a trend apparently confirmed during the pandemic, when SOEs enabled rapid-response logistics, production and construction, which some say exemplifies the capacity and commitment of China’s system. What about support for the private sector?

China’s industrial economy needs time for recovery – minister
Chinese companies’ production and operations are still facing great difficulties amid the coronavirus pandemic and recovery of the industrial economy needs time, the industry minister said.

China trade growth is up, but not sustainable
China’s exports saw a surprise increase in April after closures to control Covid-19, but the country will have to ‘rapidly activate domestic demand’

China’s large-scale testing for COVID-19 may pave the way for a strong economic recovery
The latest data show that China’s industrial output in April saw its first positive year-over-year growth in 2020, but the service sector was recovering more slowly. Widespread testing is critical for avoiding a second wave of infection, which would lead to renewed lockdowns with their associated economic costs. Confidence generated by widespread testing that shows that the number of asymptomatic cases is quite limited is also a precondition for citizens to resume traveling, shopping, dining out, and so forth—all essential for the hard-hit service sector to recover. 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. As of April 15, 3.65 million tests had been administered in Guangdong Province, which has a population of 115 million. In Guangzhou, the capital of the province, all 208,000 students, teachers, and staff were tested just before the third year of middle school, and third year high school students returned to class on April 27. Some school districts in the United States hope that universal student testing will be available by the fall of 2020, but it is far from clear that this goal can be achieved.

About 91% of SMEs in China have resumed operations
About 91 percent of China’s small and medium-sized enterprises (SMEs) had resumed operation as of Monday after disruptions caused by COVID-19, reported Xinhua news agency, quoting official data.

Export ban II: Huawei’s harsher, higher-stakes sequel
New export ban rules announced by the US Department of Commerce could be the blow that finally incapacitates Huawei, cutting off its ability to create advanced semiconductors.

Investment in China as the economy bounces back
Investment in China is looking attractive as the economy rallies but can one trust the macro numbers coming out from the region? Andy Rothman of Matthews Asia writes.

In a post-pandemic economy, Asian businesses will think smaller and safer, with worrying implications for many workers
Asia’s business leaders now start almost every discussion by talking about digital transformation     Human labour is a business risk, given the possibility of a future outbreak. Factories may become more automated, with fewer workers

Coronavirus: China, US consumers turn on each other’s goods as pandemic drives commercial nationalism
Deutsche Bank survey shows 41 per cent of Americans will not buy ‘Made in China’ products again, while 35 per cent of Chinese will avoid US goods   Trump’s election-year broadsides and China’s assertive diplomacy boost distrust between the two powers

US semiconductor giant shuts China factory hailed as ‘a miracle’, in blow to Beijing’s chip plans
US chip giant GlobalFoundries confirms it has ceased operations at its only Chinese facility, with industry experts saying the poorly-planned project was doomed to fail   Closure deals blow to China’s plans to move up semiconductor value chain, amid increasingly hostile tech rivalry with the United States

China’s private firms demand tighter oversight of local governments as virus causes spike in late payments
Private firms in China are calling for tighter monitoring of local governments that fail to pay contractors on time    Tax cuts to support growth and higher spending to combat the coronavirus pandemic have weakened fiscal positions of regional authorities

Exclusive: JD is getting ready for an affiliate IPO spree
Chinese online retailer JD is setting up tentative timetables to take its affiliates public over the next two years, a source with direct knowledge of the matter told TechNode.    The company will focus on its secondary listing in Hong Kong this year, JD Logistics in 2021 and then JD Digits in 2022, according to the source who declined to be named as the information is confidential.

Coronavirus: WTO warns global trade on the brink as pandemic wreaks havoc on supply chains
The World Trade Organisation’s leading trade index showed that global trade faced unparalleled challenges in the first quarter thanks to the coronavirus pandemic     Beijing is braced for a demand shock later in the second quarter, with job losses and shutdowns in Western markets set to cripple imports from China

Coronavirus: face masks, ventilators with fake certificates pushed by scammers as demand for Chinese medical supplies booms
Desperate buyers are forking out huge sums for medical supplies from China to help fight the coronavirus pandemic    Con artists are feeding off the boom, luring in unsuspecting buyers with false paperwork and promises of quick shipments

podcast U.S.-China trade war is ‘less shocking’ on global growth than pandemic: Natixis
Nothing collapses global trade, growth and mobility more than the coronavirus pandemic, says Trinh Nguyen, senior economist at Natixis.

Hong Kong stocks rise for a third straight day, as investors remain optimistic of a global economic recovery
Mainland markets slip as investors tread cautiously ahead of the annual parliamentary meetings    China Metal Resources Utilization surges after it issues a statement to refute short seller’s allegations that it is a ‘zombie company’

China’s health care companies rush to raise capital during fight against coronavirus pandemic
Health care firms have raised US$7.9 billion in Hong Kong, Shanghai and Shenzhen so far this year, up from US$2.7 billion a year ago   More biotech companies are pursuing dual listings in Hong Kong and mainland markets,says 3H Health Investment

China supports investigation of WHO and coronavirus pandemic
European-led resolution is adopted by member states of the international health body
Beijing says decision in line with the wishes of most countries around the world

Medical journal The Lancet says Donald Trump’s letter to World Health Organisation is ‘factually incorrect’ in key claim
Trump says the WHO ignored ‘reports of the virus spreading in Wuhan in early December 2019 or even earlier, including reports from The Lancet medical journal’      The Lancet’s editor-in-chief challenges the claim on Twitter

US coronavirus lawsuits pick at the scabs of China’s ‘century of humiliation’
The emotional scars of the opium wars and bullying by colonial powers resonate among ordinary Chinese in a way the West does not fully appreciate     The lawsuits, which have little hope of succeeding in a US court but are filed anyway for domestic political reasons, are a dangerous provocation

Australia vows to stand up to China amid reports wine and dairy exports could be targeted next
Tensions simmer over coronavirus inquiry as Canberra draws up plans to take Beijing to the WTO over barley tariffs

Australia’s return to prosperity depends on mending China ties
The global economy has taken a huge hit as the world’s major economies shut down activity in turn to fight the spread of COVID-19. The GDP of China, Australia’s largest trading partner, dropped 6.8 per cent in the first quarter this year. Its total trade fell 6.4 per cent (exports 11.4 and imports 0.7 per cent). In that period, Japan’s gross domestic product dropped 3.4 per cent and the United States’ fell 4.8 per cent. The crisis hit China first and hard.

Jacinda Ardern says a 4-day workweek could help New Zealand’s economy recover from the coronavirus downturn
Tourism is key to New Zealand’s economy. Ardern encouraged employers to switch to four-day workweeks, saying they could encourage domestic travel.

Perfect Diary: Strategies For Winning The Chinese Beauty Market
Local beauty brand Perfect Diary is now a challenger to the international industry giants in China Ambassador Established in 2016, Perfect Diary became a beauty disruptor and one of China’s shining success stories in a relatively brief amount of time. The young brand targets millennial and Gen-Z consumers who have higher disposable incomes and are known for their enthusiasm for advanced skin-care routines. The success of the brand wasn’t built through big marketing campaigns, but through a savvy digital marketing strategy that increased brand awareness and generated high engagement, traffic, and conversions. With only 40 physical stores, which are mostly used to drive consumers to e-commerce portals, Perfect Diary maintains momentum primarily through its digital footprint. Currently, it has a  powerful presence on Little Red Book, Bilibili, Weibo, WeChat, Tmall, and Douyin.

Alibaba invests RMB 10 billion to expand Tmall genie ecosystem
Alibaba Group will invest RMB10 billion ($1.4 billion) this year to strengthen its artificial intelligence of things ecosystem surrounding its flagship smart speaker, Tmall Genie, the company said during a Wednesday press event

TikTok-owner ByteDance said to surpass US$100 billion in private market value
ByteDance’s valuation has risen at least a third to more than US$100 billion in recent private share transactions, people familiar with the matter say   The Chinese company has grown into a potent online force in recent years, propelled in part by TikTok, a short video platform that has taken teenagers by storm

Why Tsai Ing-wen’s success in containing Taiwan’s coronavirus outbreak could trigger a backlash from Beijing
Taiwan’s effective management of Covid-19 and its ‘mask diplomacy’ have raised its global profile   However, Beijing’s distrust of the Taiwanese president is growing, while tensions in the Taiwan Strait have been rising

Pompeo congratulates Taiwan’s Tsai Ing-wen who starts second term with firm ‘no’ to one country, two systems
US Secretary of State Mike Pompeo has warm words for Tsai at her inauguration ceremony   Leaders from around the world send pre-recorded messages

How close has the coronavirus pandemic brought China and the US to military conflict?
US President Donald Trump’s provocative rhetoric raises questions about how far he is willing to go in his confrontation with China     While countries and businesses are reluctant to pick sides, the spectre of a US-China military conflict might force them to

China’s military seeks bigger budget amid growing threat of US conflict
Insiders say the PLA will want to match or exceed last year’s 7.5 per cent growth rate as tensions mount on several fronts    While relations with Washington worsen, Beijing says it also faces threats from pro-independence forces in Taiwan, separatists in Tibet and Xinjiang

US Air Force ramps up flyovers near China in sign of rising tension and risk of conflict between world powers
B-1B Lancer bomber flyovers accompany US Navy and Air Force operations in region   South China Sea grows ‘tense and turbulent’ with military actions linked to political and diplomatic issues, says analyst

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