China Press Review – May 9, 2019

Press review

No, There Is No US-China ‘Clash of Civilizations’
It’s important to resist oversimplified narratives about U.S.-China relations. There is no clash of civilization between these two giants. While conflicts between the U.S. and China remain in certain areas, cooperation and interdependence should be noticed as well. There will be no help to fundamentally resolve the issue if the U.S. keeps overemphasizing and fixating itself on contradictions.
thediplomat.com

China, Russia and the return of the civilisational state
Such states define themselves not as nations but civilisations – in opposition to the liberalism and global market ideology of the West. One plausible scenario is that the decisive conflicts will not be between the West and Asia but among oligarchic and demagogic forces on each side. The world is sliding into a soft totalitarianism based on surveillance and social control. Liberal universalism is fragmenting, and a new global “culture war” is pitting conservative nationalists against liberal cosmopolitans. The new pivot of geopolitics is civilisation.
www.newstatesman.com

Trade war: Trump says China ‘broke the deal’ in trade talks
US President Donald Trump has said China “broke the deal” in trade talks, ramping up hostilities ahead of negotiations between the two sides
www.bbc.com

Trade war: US-China trade battle in charts
The trade war between the US and China – which seemed to be nearing an end – has suddenly escalated with the threat of new tariffs.
www.bbc.com

Why US-China talks should focus on technology as the greater threat, instead of trade
A trade deal is unlikely to achieve US hawks’ objectives and might even make American companies in China more beholden to the Communist Party’s influence Balancing market openness on technology with national security threats is the policy challenge of our time
www.scmp.com

US upping the ante but China ‘still has trade war cards it can play’
Beijing has several options to put the squeeze on Washington if new threatened tariffs come into effect, observers say But China could be ‘too optimistic’ about riding out the storm
www.scmp.com

US demand that China commits to reforms in writing threatens to scupper trade talks
Washington refuses to accept verbal assurances but China is reluctant to make further structural reforms Some government advisers in Beijing believe it would be better to accept higher tariffs than make ‘suicidal’ changes to country’s economic model
www.scmp.com

The US-China Cold War Starts Now: What You Must do to Prepare
And then, for the first time, we wrote about how no matter the resolution to the US-China trade war, things would NOT revert back to the way they had been. We dubbed the present tense situation between China and the United States as the New Normal.

The US-China Cold War Starts Now: What You Must do to Prepare

The ‘Rashomon effect’ of the US-China trade negotiations expose the different universes that the envoys and their nations live in
Reports about who “broke the deal” over the past week seem to have been filed from two different universes Starkly different interpretations of the same event, known as the ‘Rashomon effect,’ though not unusual, are astonishing to see after a year of talks
www.scmp.com

The US-China Trade War: The New Tariffs, Coming TOMORROW to a Port Near You
But it is still unclear how China will modify its negotiation position, if at all, in reaction to President Trump’s additional tariffs tweet. Maybe the additional tariffs will cause China to concede on all key US demands. Or perhaps China will dig in and not give in on any of the key U.S. demands. Maybe China will find other ways to retaliate against US interests, such as initiating actions under Chinese laws (e.g., antimonopoly, labor, customs, corporate, etc.) to target U.S. interests in China or — potentially even worse — by doing whatever it can to make life difficult for American companies in China. Or maybe (hopefully) both sides will concede enough for the negotiations to get back on track so as to eventually achieve resolution.

The US-China Trade War: The New Tariffs, Coming TOMORROW to a Port Near You

China Has More Reasons to Stimulate Economy Beyond Trade Tension
The case for China to keep up stimulus to the economy strengthened, with further incoming evidence that the recovery is not yet self-sustaining as negotiators attempt to stave off an escalation of the trade war with the U.S.
www.bloomberg.com

China censors Trump and boosts propaganda ahead of vital trade summit
China’s strictly-controlled state media still has not reported the detail of the tweets, nor the stern remarks by top US trade negotiators accusing their Chinese counterparts of “reneging” on previously agreed measures. Instead, TV, newspapers and online media sites are suddenly full of good news about the Chinese economy, potentially steeling citizens for any bad news ahead of Trump’s tariff deadline on Friday.
edition.cnn.com

SWIFT to intensify localization efforts in China
The Society for Worldwide Interbank Financial Telecommunication (SWIFT), a global financial messaging platform based in Belgium, is stepping up its localization strategy in China to meet domestic financial institutions’ growing demand for cross-border financial transaction services, a senior executive said.
www.chinadaily.com

Donald Trump’s trade tweets and the Federal Reserve chief’s missteps are sending markets on a roller-coaster ride
Trump’s choice to spend political capital on tough trade tactics and Powell’s mixed signals on interest rates may be temporary, but they are playing havoc with the markets. Will investors be willing to wait them out?
www.scmp.com

Shanghai, Hong Kong stocks slide lower as credit data, trade war dim growth outlook
Shanghai Composite Index slides 1.5 per cent to 2,850.95, while Hong Kong’s Hang Seng Index hit for a 2.4 per cent loss to close at 28,311.0
www.scmp.com

China’s Export Story Is Everyone’s Economic Base Case
The first time the global economy was all set to boom, officials were at least more cautious. In five years, exports have grown by a little more than 3%. Not per year, total. The economic data keeps confirming the downturn scenario, which in the wider context of false booms means more than just immediate concerns.
seekingalpha.com

Commentary: What if China’s 6% growth is the new normal?
It’s not easy for the country got to balance growth and needed structural adjustment, says Yu Yongding.
www.channelnewsasia.com

China’s state-backed private equity starts a fund to buy out distressed debt, take advantage of nation’s deleveraging campaign
Citic Capital, the PE arm of the Citic Group, is raising US$500 million in its first buyout fund for distressed assets in China, making a bet on opportunities available in the country’s campaign to shed debt
www.scmp.com

P2P lending in crisis as regulatory bubble pops
Chinese peer-to-peer (P2P) lender Dianrong, once hailed as the “LendingClub of China,” appears to be in crisis following an announcement that it is closing around two-thirds of its offline branches and laying off as many as 2,000 employees. At around the same time, it was accused of falling behind on wages and severance payment. In mid-April, the company reportedly sought $100 million in investment to meet new capital requirements.

INSIGHTS: P2P lending in crisis as regulatory bubble pops

Mike Pompeo takes aim at China during London visit, warning UK over Huawei and 5G security
US secretary of state says Beijing aims to ‘divide Western alliances through bits and bytes, not bullets and bombs’ In wake of leak on limited role for Huawei in UK network, Pompeo warns of risk to intelligence sharing between US and Britain
www.scmp.com

Huawei case puts two-way strain on Canada-China business confidence
Survey finds Canadian companies hardest hit but Chinese firms operating in Canada also report negative impact Tensions date from arrest of Huawei executive Sabrina Meng Wanzhou
www.scmp.com

China plays a waiting game on the economy – and bets everything on the belt and road plan
China’s stimulus measures have stabilised the financial system and helped struggling local governments, rather than kick-started another growth cycle Expect similar measures in the coming years, as Beijing seeks to maintain stability while exporting its economic model via the belt and road initiative
www.scmp.com

China: A loan shark or the good Samaritan?
Beijing has been accused of strong-arming poor countries through predatory lending as part of its Belt and Road Initiative. A new analysis seeks to debunk claims surrounding China’s “debt-trap diplomacy.”
www.dw.com

China charts a path into European science
As the Belt and Road Initiative spreads to central and eastern Europe, China’s investments in research and technology are raising concerns in the West
www.nature.com

China says ‘fed up’ with hearing U.S. complaints on Belt and Road
China is “fed up” with hearing complaints from the United States about its Belt and Road program to re-create the old Silk Road, the government said on Thursday, following stinging criticism from U.S. Secretary of State Mike Pompeo.
www.reuters.com

Number of new China unicorns surged in Q1 2019: report
Hurun Research Institute, which also creates China’s wealthiest individual lists, released its country-wide unicorn index for the first quarter of 2019 on Tuesday. According to the group, China added 21 new unicorns in the first quarter, twice as many as in Q4 2018. The top two fields for new unicorns were AI and logistics, and which included hot autonomous vehicle startup Pony.ai. Hurun calculates that China now has 202 unicorns, possibly the highest number in any country. Of that figure, 42 are in the internet services sector, with Alibaba’s Ant Financial, Bytedance, and Didi leading the overall rankings in terms of value.

Briefing: Number of new China unicorns surged in Q1 2019: report

China’s rust belt starting to shine with new economy firms, but the prosperous south still leads the way
The provinces of Liaoning, Jilin and Heilongjiang began China’s industrialisation in the 1950s, but they now must modernise to boost the economy State-owned enterprises slowing beginning to work with start-ups and research and development institutes to modernise their technology
www.scmp.com

China Economy: Could Slowdown Impact Germany, Europe In 2019?
As China’s economy stalls due to its aging population, rising wages and trade war with the Trump administration, Germany and Europe as a whole could be negatively affected.
www.ibtimes.com

US-China trade war is a gift that keeps on giving for Vietnam
Southeast Asian country’s manufacturing and export boom shows no sign of letting up as businesses try to offset cost of tariffs on Chinese-made products
www.scmp.com

China’s state-backed private equity starts a fund to buy out distressed debt, take advantage of nation’s deleveraging campaign
Citic Capital, the PE arm of the Citic Group, is raising US$500 million in its first buyout fund for distressed assets in China, making a bet on opportunities available in the country’s campaign to shed debt
www.scmp.com

Alibaba launches its own China brands revival, with a global emphasis
Chinese e-commerce giant Alibaba announced Wednesday an initiative to promote domestic brands globally by enlisting its cross-border and international-facing platforms. The e-commerce giant said its plan it will help 200 heritage Chinese brands realize an annual sales goal of more than RMB 100 million ($14.8 million) each. The company will also throw its weight behind another 200 domestic brands by selecting 200,000 large Taobao shop owners through which to sell their goods with a goal of RMB 1 billion in annual sales. Domestic businesses were 71% of total brands on Alibaba’s platforms last year. A total of 46 official time-honored Chinese brands brought in more than RMB 100 million sales last year, according to the company.

Briefing: Alibaba launches its own China brands revival, with a global emphasis



China tech giants secure Hong Kong virtual banking licenses

Hong Kong Monetary Authority (HKMA) today issued four more licenses for operating virtual banks. The new permits have been granted to Ant Financial, Tencent’s Tenpay, Xiaomi subsidiary Insight Fintech, and Ping An’s fintech arm OneConnect.

Briefing: China tech giants secure Hong Kong virtual banking licenses

China’s rust belt starting to shine with new economy firms, but the prosperous south still leads the way
The provinces of Liaoning, Jilin and Heilongjiang began China’s industrialisation in the 1950s, but they now must modernise to boost the economy State-owned enterprises slowing beginning to work with start-ups and research and development institutes to modernise their technology
www.scmp.com

The Greater Bay Area: Writing Hong Kong into the national narrative
In November 2018, when meeting with representatives from Hong Kong and Macao, China’s President Xi Jinping said that the two cities have made ‘enormous contributions’ and played ‘irreplaceable’ roles in the motherland’s reform and opening-up.While their special administrative region (SAR) status sets them apart from the rest of China, Xi stressed that they must integrate into national development through participation in the Belt and Road Initiative and Guangdong–Hong Kong–Macao Greater Bay Area.

The Greater Bay Area: Writing Hong Kong into the national narrative

Hong Kong’s property market has 10 more years in its bull run as population inflow from Greater Bay gives it sustenance
Hong Kong’s median home prices will keep spiralling upwards for the next 10 years because demand for abodes will outpace supply in the city, UBS said The world’s most expensive urban centre will face an annual shortage of about 15,000 homes, UBS said
www.scmp.com

International investment banks: It’s all about China
International IBs pride themselves on the diversity of their business in Asia Pacific, but a bank without a decent China business in this region is nowhere. It is the engine of both regional and global growth.
www.euromoney.com

JPMorgan poised to be first foreign company to own majority stake in China mutual fund venture
Firm currently owns 49 per cent of China International Fund Management and could snap up 2 per cent stake for sale by Shanghai International Trust Lack of access to China market for foreign companies is a major area of contention in US-China trade dispute
www.scmp.com

AI startup Megvii raises $750 million in new round of funding
Artificial intelligence (AI) startup Megvii has raised $750 million in a new round of funding. The fundraising brings the company’s valuation to more than $4 billion prior to a Hong Kong IPO later this year. Bank of China’s equity arm led the fundraising with $200 million. Also involved were Macquarie Group, ICBC Asset Management, Alibaba, and a wholly-owned subsidiary of the Abu Dhabi Investment Authority, one of the world’s largest sovereign wealth funds.

Briefing: AI startup Megvii raises $750 million in new round of funding

There is “no stopping” China’s car design industry says Peter Horbury
Chinese car companies are putting their history of copying behind them and now have the confidence to create their own designs, says Peter Horbury, head of design for automotive brand Geely.

There is “no stopping” China’s car design industry says Peter Horbury

China investigates truckmaker JAC over pollution control devices
Chinese authorities have launched an investigation into JAC on whether it was using unqualified pollution control devices on its truck engines, in the first such investigation by Beijing into a major Chinese automaker.
www.euronews.com

China’s Robocars Are Being Lapped By Their U.S. Competitors
The autonomous Lincoln MKZ started turning left at a Beijing intersection when a speeding truck aggressively cut in front of it. Sensors in the car detected the approach and instantly froze it in place.
www.bloomberg.com

IPO pipeline still vibrant despite US-China trade war, Baker McKenzie says
Three-quarters of private company executives surveyed expect to pursue a listing in the next five years, according to the law firm Companies are waiting longer to list as private equity, venture capital money is readily available
www.scmp.com

Chinese court delays ruling on Canadian Robert Lloyd Schellenberg’s death penalty appeal
He was sentenced to death in January after a court ruled his 15-year prison sentence for drug smuggling was too lenient The resentencing – which Canada called arbitrary and inhumane – followed the arrest in Vancouver of Huawei executive Sabrina Meng Wanzhou
www.scmp.com

‘Game for Peace’ changes draw ire from ‘PUBG Mobile’ players
Screen shot of the promotion page for Tencent’s “Game for Peace.” (Image Credit: TechNode)
Players aren’t pleased with the changes Tencent made in “Game for Peace,” the patriotic replacement of “PUBG Mobile” in the Chinese market, castigating the game on social media and app stores.

‘Game for Peace’ changes draw ire from ‘PUBG Mobile’ players

Traveling in China – Business Etiquette and Culture
For those looking to do business with or in China, even a basic understanding of this history and culture can pave the way for better communications and successful agreements. Those who have traveled the breadth of China know that any attempt to define China in simple terms is foolish. Every region of China has its own sub-culture and, in many cases, even its own language or dialect. Doing any sort of business in China requires flexibility, cultural intelligence, and quite a bit of humility. If you’re willing to explore the craziness of China’s business culture, you’ll not only be rewarded with the potential to tap into a massive market, you’ll also come to appreciate how China has been able to establish itself as a global economic powerhouse over the past few decades.
www.china-briefing.com

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Information Officer
Awex
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a.gillard@awex.be
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