Belgian-Chinese Chamber of Commerce (BCECC)

China Press Review – November 10, 2021

Cainiao Network launches central hub for European market at Liege airport
Alibaba Group logistics arm Cainiao Network has announced the opening of the first warehouse of the Liege eWTP hub. It is located at Liege Airport in Belgium and will play a key role in Cainiao serving the European market. The smart logistics hub is a cental part of an agreement made in 2018 between Alibaba Group and the Belgian government to join the global Electronic World Trade Platform (eWTP) initiative. It aims to lower barriers to global trade for small and medium-sized businesses via ecommerce.

China trade: surging export prices mask falling volumes, but turning point looms as Christmas orders dry up
China’s exports in October again beat expectations by growing 27.1 per cent from a year earlier. But analysts say surging prices have propped up the value of exports and concealed declining export volumes for some products

China inflation: consumers set to feel ‘stronger’ knock-on effect of rising factory-gate prices
China’s producer price index (PPI) rose by 13.5 per cent in October from a year earlier, while the consumer price index (CPI) rose by 1.5 per cent last month    Higher raw material prices, which have plagued mainly the metals-dependent industries, are now starting to spread to consumer goods

China’s factory inflation hits 26-year high as power crunch bites
China’s factory gate inflation hit a 26-year high in October as coal prices soared amid a power crunch in the country’s industrial heartland, further squeezing profit margins for producers and heightening stagflation concerns.

Xi Jinping’s crackdown on Chinese tech firms will continue
Xi Jinping is rewriting the rules for how China’s economy works. Expect two big shifts in 2022

Weibo sued for monopolistic practices limiting access to its data as China’s antitrust crackdown invites new challenges
Eefung Software is suing the microblogging platform for ‘directly destroying’ its business model by restricting access to data used to analyse public opinion    The case is China’s first civil antitrust lawsuit, showing an increased awareness among small firms of Beijing’s antitrust scrutiny   Strengthening antitrust enforcement and “preventing the disorderly expansion of capital” has been at the top of regulators’ agenda this year, with crackdowns expected to continue as Chinese President Xi Jinping pursues “common prosperity”, a government buzzword used to represent China’s push to narrow the wealth gap.    The State Administration for Market Regulation is now boosting the headcount of its antitrust division, and a draft amendment of China’s 13-year-old Anti-Monopoly Law suggests more scrutiny of the technology sector. The amendment, expected to go into effect next year, says businesses shall not “exclude or limit” competition by abusing data, algorithms, technology, capital advantages or platform rules. A dominant player engaging in these activities is considered to be abusing its market power.    Still, Eefung faces an uphill battle, according to Zhang, because the burden of proof is very high for winning a “refusal to deal” case.   The company would need to establish that Weibo possessed a dominant position, a debatable charge given the many social media platforms in China, and that the platform abused its dominant position without justification, Zhang said.

China’s Singles’ Day shopping fest muted amid tech crackdown
The market watchdog in the southern province of Guangdong cautions e-commerce platform operators against business malpractice     This year’s Singles’ Day shopping spree is the first one since Beijing fined Alibaba and Meituan over monopolistic behaviour

TSMC and Sony team up on US$7 billion semiconductor fabrication plant in Japan
TSMC is investing an initial US$2.12 billion in a new Japanese subsidiary, with another US$500 million from Sony to take a 20 per cent stake   The two companies said the project has “strong support” from the government amid efforts to ease the global chip shortage

China shipping: from its monopoly on containers, to its critical role in the global supply chain
Behind China’s economic might is the world’s biggest shipping industry, and 2021 has seen it tested like never before     China has seven of the world’s top 10 container ports, plus about 400 smaller ones

From climate change to unemployment, blaming China won’t help the US solve its problems
The solution to growing inequality in rich countries is neither freer trade nor protectionism, but retraining workers and social redistribution    Globalisation’s social consequences can only be addressed by domestic policy initiatives

Can China’s Singles’ Day Go Green?
For e-commerce giants to reach sustainability, they first need to be transparent about their climate footprints.    A huge challenge for platform companies is how they can decarbonize their business ecosystem. Alibaba,, and Pinduoduo are marketplaces where much of the climate footprint comes from suppliers, sellers, and customers. Looking at their U.S. counterpart Amazon, for instance, three quarters of GHG emissions are from indirect emissions that occur in their value chain, or scope three emissions. Nothing short of a fundamental paradigm shift in how platform companies view and conduct environmental sustainability management will solve this. But the journey must start with collecting data that reflect the status quo.   The 2020 Singles’ Day Shopping Festival saw Alibaba and rake in $115 billion in sales. This year, the number is expected to grow, as the COVID-19 pandemic has accelerated the growth of the e-commerce sector worldwide. Growth, it seems, is not such a big issue for them. But for this Singles’ Day and many more to come, sustainability is their real challenge

Xiaohongshu raised $500 million, with a new valuation of over $20 billion
On 8 November, media reports said that Xiaohongshu (or Little Red Book) had raised $500 million in a new round of funding from existing shareholders, including Temasek (a state-owned Singaporean investment company), Tencent, and Alibaba.

Chinese firms questioned by market regulators after they jump on the metaverse bandwagon
ZQGame, whose shares shot up more than 300 per cent after announcing a metaverse game in September, is being probed by the Shenzhen Stock Exchange    The letter sent to ZQGame last week was not the first time the company has been asked to respond to questions regarding its involvement in the metaverse    However, the recent scrutiny has not dampened investment interest in the company, with its shares climbing more than 50 per cent since the October statement.    State-owned newspaper the Securities Times warned in a commentary last month that if people “blindly invest in such grand and illusionary concepts as the metaverse, they will be burned in the end”.  A state-run think tank in China also warned of national security risks involved with the metaverse in a note published on October 30. One risk cited by the China Institutes of Contemporary International Relations, which is affiliated with China’s Ministry of State Security, was “technological hegemony”, as the gap in metaverse development widens between developed countries and emerging economies.   Gary Ng, senior economist for Asia-Pacific at investment bank Natixis, said Chinese regulators have no strong reasons to oppose the development of the metaverse but they are worried that the concept may be used by companies to elude regulators and engage in speculative activities.   “Regulators would also try to rein in speculative behaviour in funding and investing activities related to metaverse, especially as there is no clear definition of the concept yet,” he said.

ASEAN supply chain links with China and the perils of decoupling
China’s global value chain (GVC) links with ASEAN are both less dominant and more beneficial than they appear at first sight. But there are major challenges ahead for ASEAN. With ASEAN public opinion seeking more alignment with the United States and less with China, ASEAN’s GVC dependence on China might be seen as a cause for concern. When intra-EU trade — Europe’s regional value chain — is taken into account, the European Union accounts for a greater (albeit declining) share of ASEAN exports incorporated into other countries’ exports (28 per cent) than China (12 per cent). ASEAN, through its forward linkages, is more integrated with the EU GVC than with that of China — particularly in technologically advanced sectors like electronics.  Despite these formidable challenges — and AUKUS-heightened ambivalence about links with China — ASEAN should not seek to decouple from the supply chain. OECD modelling suggests that ASEAN decoupling, by reducing exposure to upstream supply shocks, would slightly improve ASEAN economic stability (by 0.02 per cent of GDP) but massively reduce growth (by over 10 per cent of GDP). Growth loss occurs precisely because of reduced backward linkages — the same backward linkages that also help explain why only Asian countries have been catching up with the rich world.

Fantasia’s shares sink after developer founded by former Chinese vice-president’s niece defaults on bond payment
Shenzhen-listed developer missed repayment of US$205.7 million bond that was due on October 4    The developer has nearly 50 billion yuan of loans and bonds due before June 30, 2022

Shanghai Marathon Postponed Due to COVID-19
The 2021 Shanghai Marathon has been postponed due to the current COVID-19 situation.  “Considering the severe pandemic situation, we decided to postpone the event. A new date will be announced later,” organizers announced on Tuesday.    The event had been scheduled for Sunday, November 28, with some 18,000 runners having signed up for the race.

China Year-End Bonus: Prepare for 2022 Income Tax Policy Change
Some individual income tax (IIT) benefits in China will end from January 1, 2022 after the policy transition period. These include tax exemption for some fringe benefits for expatriates as well as the preferential IIT treatment for the annual bonus for all tax residents (including expatriate staff that are regarded as tax residents for a particular tax year in China). Employers and employees should be clear about the coming changes and make adequate preparation to reduce extra tax burden.   The individual income tax (IIT) calculation method for China tax residents’ annual one-time bonus is going to change from January 1, 2022 for some taxpayers. All tax residents who obtain annual one-time bonuses will have to combine their annual bonuses into the yearly comprehensive income for computation and payment of IIT. For some taxpayers who currently choose to calculate and pay IIT separately on their annual bonuses, the policy change may lead to an increase in their income tax burden, although situations may vary from person to person. Higher-earning workers who derive a large percentage of their income from annual performance bonuses should especially pay attention to the new policy.   This article breaks down the calculation of IIT under the existing (transition period) and upcoming new policy and possible impact on an individual’s tax burden. We also provide suggestions on how taxpayers in China can prepare for the IIT policy change.

China ready to help bring US relations back on right track, Xi Jinping says ahead of key Biden call
Cooperation is the ‘only right choice’, Chinese president says in letter read out by ambassador Qin Gang in New York      Comments come days ahead of a virtual summit with US President Joe Biden where Taiwan, trade and military issues are expected to dominate   n expert on Taiwan studies in Beijing said the US was rendering its one-China policy “an empty shell”, which would damage the cornerstone of bilateral relations.  “What the United States is doing is implementing its version of the one-China policy and supporting Taiwan’s secession, which will erode the foundation of Sino-US relations,” said the expert, who asked to remain anonymous.  “The United States has acknowledged that there is only one China and it cannot say one thing while doing another,” the expert said.   “The US is seeking ‘guardrails’ with China, but there is a basic issue here, which is that the US must make explicit its position on Taiwan, that the one-China policy cannot be shaken.”

Leaders of China and the US set for same virtual stage at Apec trade forum this week
Host New Zealand is talking up opportunities for leaders to discuss and tackle challenges such as the pandemic and climate change     While Taiwan intends to lobby for admission to CPTPP trade pact, the virtual nature of the forum allows no room for sideline diplomacy, academic says

Taiwan is safe until at least 2027, but with one big caveat
China is not ready to attack island territory   Six years. That is how long Taiwan might have left before suffering a Chinese military attack. At least that was the estimate according to outgoing commander of U.S. Indo-Pacific Command, Admiral Philip Davidson, back in March during open Congressional testimony.     Since then, observers have seized on Davidson’s comments — which apparently reference the 100th anniversary of the founding of China’s People’s Liberation Army (PLA) in 2027 as an event worth celebrating with the conquest of Taiwan — to support their respective positions on whether Beijing is poised to make a dangerous move soon   For those aligning with Davidson’s view, the unprecedented number of warplanes challenging Taiwan in its air defense identification zone, nearly 150 over the first few days of last month, is the latest proof that something is afoot.   Although Chinese President Xi Jinping clearly seeks to bring Taiwan to heel, and by force if necessary, he also continues to promote “peaceful reunification” as Beijing’s preferred means. Xi likely would have toughened up his language by now if he thought war was a real possibility. Rather, Xi has moved to quiet speculation of a potential attack by tamping down rumors on Chinese social media that Beijing has mobilized PLA reserves and instructed civilians to stockpile food.    That said, much can happen between now and 2024, and we should resist jumping to lazy conclusions. In the meantime, Taiwan would benefit from additional U.S. support to enhance deterrence against China. Taipei would further benefit from American reassurances to China that Washington has no plans to encourage or recognize Taiwan independence.

China could launch its third aircraft carrier ‘in next 3 to 6 months’
Assessment by US think tank is based on satellite images showing changes in the vessel’s appearance    Catapult-assisted launch capability is major leap forward, report says – although the ship is years from being commissioned into the navy

Hong Kong’s future — the pearl and the dragon
Two years ago, when Hong Kong’s anti-government demonstrators staged a sit-in at the international airport, one of them explained what it was about the authorities that he disliked to the journalist and entrepreneur Stephen Vines. “I just wish they’d leave us alone,” the young protester said.

Xi Jinping cements his power with resolution on history
As the CCP’s 19th Central Committee meets at its sixth plenum in Beijing, all eyes are on party chief and China’s president Xi Jinping to see how he influences the wording of the “Resolution on History”. MERICS analyst Valarie Tan explains the role this key document plays and what the wording means for the future of the party and Xi himself.

Xi’s Biggest Wins and Losses After Nearly a Decade in Power
Here’s a look at the Chinese president’s policy hits, misses and works in progress   When Xi Jinping became leader of the Communist Party in 2012, he pledged to spearhead the “great rejuvenation” of the Chinese nation.   Nearly 10 years on, China has an economy on course to topple the U.S. as the world’s biggest, boasts the largest navy of any country, and has invested billions of dollars in international infrastructure projects, displacing traditional Western lenders from Latin America to Africa.   Domestically, Xi’s eliminated extreme poverty, largely contained a pandemic that’s ravaged other nations, and put the party back at the center of public life. He’s also tightened controls on free speech, spearheaded a crackdown on ethnic minorities in Xinjiang that’s been branded a genocide by some foreign governments, and fueled rising nationalism. As Xi publishes a doctrine this week at a landmark Communist Party summit that sets him up to potentially rule for life, we look back at the hits and misses of his first near-decade in power, judged against the ambitions he laid out early in his term.

COVID-19 Complicates China’s ‘Football Dream’
China’s men’s national team has remained firmly stuck in the lower echelons of international football, as evidenced by its current long-shot quest to reach the World Cup.  Xi’s high hopes for Chinese football encouraged a raft of investments – including a $1.7 billion football stadium under construction in Guangzhou. At the height of the boom, the Chinese Super League famously spent over $400 million signing foreign players in the 2016-17 transfer window. The influx of cash was designed to support the Chinese Football Association’s stated goals for China to host the World Cup, win the World Cup, and become a global “football superpower” by 2050.

EU lawmakers raise alarm on China’s efforts to ‘interfere in European democracies’
Committee urges the bloc to set up a task force to monitor perceived threats     Confucius Institutes accused of asserting strict control over research and teaching on China

Canton’s Unease: As Mandarin Spreads, Locals Face Identity Crisis
Amid the push for linguistic unity, languages across China stare at irrelevance. Cantonese is no exception.

Alain Gillard
Information Officer
Service Asie Pacifique
Place Sainctelette 2
1080 Bruxelles
Tél 02 421 85 09 – Fax 02 421 87 75
Copyright © 2020 awex, All rights reserved