Belgian-Chinese Chamber of Commerce (BCECC)

China Press Review – November 22, 2021

China’s Singles’ Day sees surge in ‘nationalist’ spending as home-grown brands storm sales charts
Chinese designed and produced products dominated sales during Singles’ Day, the world’s biggest online shopping event. The popularity of Chinese-made goods is part of a trend known as ‘Guochao’, which reflects growing interest in local brands

China’s e-commerce crackdown: timeline of Beijing’s actions to bring tech giants in line with national policy
Big Tech firms, led by Alibaba, Tencent and Meituan, are under the spotlight in China’s campaign to bring order to the world’s biggest e-commerce market    This crackdown signalled policymakers’ heightened concerns over the growing power, influence and risks of these digital platform operators   China has long been recognised as the world’s biggest e-commerce market, driven by technology giants that helped revolutionise consumer spending behaviour in the second-largest economy behind the United States.The value of these Big Tech companies – led by e-commerce stalwarts Alibaba Group HoldingJD.comMeituanPinduduo and Tencent Holdings – continued to rise last year, despite the disruptions caused by the Covid-19 pandemic. Benefiting from a global stock market rally among tech firms as the pandemic receded, they each added more than US$100 billion in value over the year, according to a Hurun Research Institute report, which was based on data up to October 2020.  Still, not everything was as it seemed.  On November 6 last year, the Cyberspace Administration of China (CAC), the State Administration for Market Regulation (SAMR) and the State Tax Administration (STA) discussed with 27 major internet companies – including Tencent, Baidu, Meituan, ByteDance and Alibaba – ways of bringing order to the digital economy and solving problems like monopolistic practices, unfair competition and counterfeiting. Four days later, SAMR released its draft antitrust guidelines to rein in internet-based monopolies. It signalled policymakers’ heightened concerns over the growing power, influence and risks of digital platforms and their market practices in the economy. Monopolistic practices by internet platforms, such as demanding vendors to transact only on one platform exclusively, or providing differentiated prices to customers based on their shopping history and profiles, are to be outlawed, according to the guidelines.

China central bank adviser warns about ‘quasi-stagflation’ risk
China’s economy could enter a period of “quasi-stagflation” with relatively slow growth and excessively high producer-price inflation, said Liu Shijin, an adviser to the nation’s central bank. Such a scenario is “very likely” if demand remains weak, producer prices stay high, corporate profits are squeezed, and existing risks in the economy are “released too quickly,” he told an online forum, the China Macroeconomy Forum, on Sunday (Nov 21). Such a possibility needs close attention as once it happens, it will last into next year, he said. China’s economic growth has slowed noticeably after September, and judging from the current situation, especially the two-year average growth rate, economic growth “is very likely to come in below 4 per cent in the fourth quarter,” he said.

What Xi and Biden forgot to mention on the economy
According to the official readout, in their virtual summit this week, US President Joe Biden and Chinese President Xi Jinping discussed ‘managing competition responsibly’. For Biden, the talks were a chance to press Xi on China’s actions in Hong Kong and its assertive posture in the Taiwan Strait, as well as human rights abuses in Xinjiang. Xi, for his part, warned Biden against leading the United States into a new Cold War against China.  Though he touched on it only lightly in the summit, President Xi and his advisers would be well aware of the possible impact on the Chinese economy of policy tightening in the United States and other advanced economies: among other things, a depreciation of the yuan, which would make it harder for Chinese borrowers, like troubled real estate giant Evergrande, to service dollar-denominated debts. Had Trump won last year’s election, he might have gloated at the thought of a hard landing for the Chinese economy: Biden’s team is smart enough to know that a recession in China would knock the wind out of the global economy, too.  The failure of the two presidents to come up with a strategy to drag the world out of the economic doldrums during their summit may be hardly surprising, given the political constraints, but it is a major missed opportunity. Australia, and the world more generally, is best served by managed political and economic cooperation between Chinese and American leaders and intense trade competition between their businesses.Instead, the small victories of the summit notwithstanding, we seem to be in line for more political competition and trade collusion. The hard heads in Asian capitals should not be fooled by policy illywhackers purveying managed trade solutions in Washington or Beijing.

US-China phase-one trade deal gets a reality check after nearly two years
USTR Katherine Tai has said the US intends to hold China accountable to the two-year phase-one trade deal while exploring weaknesses in Beijing’s performance     Analysts expect high tariffs to persist in China-US trade in the long term

Foreign Investors Putting Billions into China’s New Electric Vehicles Market
Billions of dollars being invested by US, EU, Japan, and South Korea into a new production wave of EV and AV auto tech in China.

China distances itself from private firms posing as SOEs
The state-owned Assets Supervision and Administration Commission (SASAC) has produced a list of several hundred private-sector firms pretending to be state-owned enterprises (SOEs), in an attempt to make it easier for investors to avoid scams, reports Caixin. The names of the 353 companies on the list were first disclosed by some central government-supervised SOEs, and then compiled by the SASAC. The watchdog called for the public to report to the police as soon as possible if they find any illegal behavior by the companies. “Those companies and their subsidiaries are fake SOEs and have no affiliation or equity relationship with central government-supervised SOEs, nor any investment, cooperation or business relationship,” SASAC said in a recent statement. “All their behaviors are irrelevant to the central SOEs.”The issue of “fake SOEs” is a long-standing one. Unscrupulous privately owned companies pose as SOEs by including Chinese characters in their names often linked to government-owned companies, such as “Zhong” (中), “Guo” (国) or “Hua” (华), which can all mean “China.” They also establish opaque ownership structures that conceal their actual controllers

China’s latest fines on Alibaba, Tencent and Baidu show Beijing’s anti-monopoly commitment
Violations announced by the country’s antitrust watchdog on Saturday dates back as early as 2012  Beijing is committed to scrutinising business deals by tech giants, said an analyst

China fines tech giants as anti-monopoly crackdown continues
China’s State Administration of Market Regulation imposed fines on several major Chinese tech firms on Friday for failing to disclose 43 deals in violation of anti-monopoly legislation. Some of the biggest names in China tech such as Alibaba, JD, Tencent, Baidu, ByteDance, and Meituan were fined RMB 500,000 ($78,000) for each violation. Tencent and Alibaba were the worse hit in this latest regulatory crackdown, with 13 and 12 deals included on the list respectively. [SAMR press release, in Chinese]

The lone bear on Alibaba sees ‘no point catching a falling knife’ as tech investors not rewarded for embracing China risk
Members of the Hang Seng Tech and Nasdaq Golden Dragon China indices lost US$163 billion in market value last week   Analysts at Citigroup, Morgan Stanley, CLSA, Mizuho and others have lowered their price targets again after earnings miss, weaker guidance   “What happened is not surprising. There is a very unfavourable mix of ad-revenue weakness, regulation, a significant uptick in costs, increasing competition and in turn increasing investments that has significantly impacted operating margins across the board,” Muhl said. “Overall the whole earnings season was quite a letdown and thus, we find it hard to see how sentiment could improve from there.”    Poor tech earnings is a reflection of slowdown in the economy, with growth fast losing its momentum over the past two quarters. Consumer sentiment has ebbed amid lacklustre retail spending, with liquidity issues afflicting the nation’s property developers. Managements have downplayed the impact of regulation in earnings calls but it’s quite clear that there is a very distinct correlation. Upticks in corporate investments and a rising cost base will pressure margins and cash flows well into the first half of 2022, Muhl added.  “From a top down perspective, the risk-reward profile is still not very favourable for the [tech] sector,” Muhl said. “For someone who can freely allocate across sectors and countries, we really do not see much of a point in catching a falling knife right now.”

Alibaba’s home city fines top online influencers for tax evasion amid live-streaming e-commerce crackdown
The Hangzhou tax authority said Zhu Chenhui and Lin Shanshan illegally filed personal wages as company income, evading more than US$6.5 million in taxes   The fines come as Beijing has been cracking down on tax evasion and the booming live-streaming e-commerce industry, limiting what can be sold  The national government has also been cracking down on other elements of live-streaming e-commerce this year. In August, the Ministry of Commerce released a draft regulation for the industry that spelt out which items can no longer be sold during live streaming. Sex toys, spy devices, foreign newspapers and medicine are all banned.  This followed another set of guidelines the ministry unveiled in April with the Cyberspace Administration of China, the State Administration for Market Regulation and four other regulators. Those rules require platforms to create lists of unlawful products and hire moderators to “maintain the safety of live-streaming content

ByteDance eyes e-commerce expansion with app that makes it easier for sellers to manage TikTok stores
The TikTok seller’s app, developed in Singapore, was launched around the time ByteDance founder Zhang Yiming visited the city state, said company sources     Currently, the app is mainly used by merchants in Southeast Asia, according to Chinese media

China’s historical resolution helps Xi hold power: 5 things to know
Rising risks at CCP leadership as president strengthens his position   Chinese officials have in the past signaled their preference for quality over speed in developing the economy. Citing “imbalanced, uncoordinated and unsustainable development” as a result of an undue emphasis on growth rates by provincial governments, the resolution puts on record a so-called “new normal development.” This refers to China’s transition to a stage of high-quality development, from high-speed growth.  It further warns of “painful structural adjustments” as China grapples with a growth slowdown. This entails an inward-oriented policy of reliance on science and technology, while strengthening regulations to prevent financial risks. Money worship was singled out as a misguided idea and the resolution sets out the CCP’s task of rectifying this. As seen in the government’s recent clampdown on e-commerce operators under anti-monopoly regulations, the CCP vowed to pursue common prosperity to improve wealth distribution and raise the share of middle-income earners. Foreign companies with a presence in China should demonstrate their support to initiatives under the common prosperity drive, cautioned Benjamin Cooper, a senior consultant with public relations company H+K China. “Otherwise, they could face serious risks to their future business prospects in China,” said Beijing-based Cooper

Climate change: BASF, Covestro clinch renewable energy deals in China to achieve emission-reduction goals
Germany’s BASF wants at least 50 per cent of its power requirements for its new Chinese plant to come from renewable sources by 2025     BASF to buy wind power from China Resources Power, while Covestro signs deal with solar power producer Datang Wuzhong New Energy    
Beyond 2030, BASF expects to implement new carbon-free technologies to produce hydrogen and deploy electrically heated steam cracker furnaces, which will significantly increase its demand for renewable power.   The company has set up a pilot reactor in Germany that breaks down methane – a greenhouse gas 25 times as potent as carbon dioxide – to produce hydrogen and solid carbon, preventing the release of carbon dioxide into the atmosphere. Hydrogen is used to remove sulphur out of crude oil to improve fuel quality.   To secure renewable energy for its plant in Belgium, BASF in June agreed to take a 49.5 per cent stake and commit €1.6 billion (US$1.8 billion) to complete a 1.5GW offshore wind farm in Holland, which will be the world’s largest when commissioned in 2023.  It has also joined German utility RWE to develop a 2GW offshore wind project to provide electricity to BASF’s chemical site in Germany from 2030. Some 20 per cent of the energy generated will be used to power a green hydrogen plant. Covestro, another German chemicals maker which aims to slash its global carbon emission by half by 2025 from 2005, signed a deal in September to buy power from solar farms in northern China from Datang Wuzhong New Energy from next year.   The volume, purchased at a higher cost than the power supplied by the local grid, amounts to 10 per cent of the annual needs of its Shanghai plant. The deal serves to swap out the carbon footprint of the grid-supplied power consumed at the plant. In China, state-backed oil refining and petrochemicals giants PetroChina and China Petroleum & Chemical (Sinopec) are also investing in wind and solar energy and green hydrogen projects to help achieve net-zero carbon emission by 2050.  Sinopec was studying feasibility to install offshore wind farms to meet the power needs of its refining and petrochemical sites in coastal provinces, senior vice-president Liu Hongbin said in August.

China’s clean coal financing tool balances energy needs with emissions reduction, analysts say
China’s cabinet said that it will set up a special relending facility worth US$31.4 billion to support the clean and efficient use of coal      China plans to cap the use of coal by 2025 as part of its goal to become carbon neutral by 2060

Here’s how Hong Kong’s deep capital pool and access to China puts city in good stead to be the green finance regional hub
Hong Kong could pick “the lowest hanging fruit” by launching carbon credit derivatives accessible to both mainland Chinese and international investors  A range of credits-backed investment products can also be created to help investors diversify their portfolios and hedge against inflation

China’s exiled crypto machines fuel global mining boom
Chinese Prohibition of cryptocurrency mining May triggered a spill of miners and a global competition to relocate millions of clunky, power-intensive machines used to solve complex puzzles and earn Bitcoin. rice field.    According to data collected by the Financial Times, 14 of the world’s largest crypto mining companies have moved more than 2 million machines from China in the months following the ban. Most of the machines were rushed to the United States, Canada, Kazakhstan and Russia.

Tax Incentives Offered in Specific Regions of China
China has been introducing different tax incentive schemes in certain regions. Some regions, such as the Hainan Free Trade Port (FTP) and the Guangdong-Hong Kong-Macao Greater Bay Area (GBA), are part of the country’s economic development strategy, where tax incentives are there to help achieve ambitious development goals. Other regions are encouraged due to their lack of geographical and legacy industrial advantages and need policy support to lure investments for economic development like the vast western regions.    In this article, we present tax incentives offered in different Chinese regions. We also compare the differences and similarities of some tax preferential policies across regions.

Time for fresh look at China’s unique global donor-borrower role: report
Centre for Global Development says China is second in voting power in development banks and made large contributions to United Nations agencies    ‘It’s taken its place as a major donor alongside countries like the US and Japan, but it’s still benefiting from the system,’ an author of the report says

Taiwanese giant slapped with fines over mainland regulatory violations, Xinhua says
Far Eastern Group subsidiaries in Shanghai and four provinces punished over issues ranging from environmental protection to staff and fire safety rules    The conglomerate, a major election donor, funded a mayoral campaign for one of three top Taiwan officials on Beijing’s ‘separatist’ blacklist

Middle power diplomacy essential to secure Asia against big power rivalry
There will be no resolution of the big problems of our age without the big powers, notably the United States and China, being willing parties to their settlement. And success will depend critically on the trust that each puts in the other’s stake in the game.    On the problems of climate change and the transformation of the global energy economy and technologies that are needed to effect a reduction in man-made global warming; on arms control and limiting the spread of weapons of mass destruction; on revamping global trade and economic governance to make it fit to manage the hyper-interdependent and digitally wired economy of the 21st century: if the United States and China don’t both buy into the solutions, there will be no solutions.   The dangers are immediate and real. US Trade Representative Katherine Tai last week said that she has a plan for Indo-Pacific trade that will lock the United States into Asia. If that plan is anything else like what the United States currently has on display, it’s likely to be the policy product of an illywhacker, as Westland concludes, and no self-respecting nation in the region should fall for it.  In our second feature article this week, Shiro Armstrong proposes an agenda for cooperation between Australia and Japan, Australia’s closest partner in Asia, that recognises these realities and urges a partnership to craft a regional path toward comprehensive security that deals with them by engaging but not playing second fiddle to Washington or Beijing.‘The US alliance framework remains the bedrock of Australian, Japanese and regional security and stability’, Armstrong says. ‘The Quad, which includes India alongside Australia, Japan and the United States, reinforces that. But it is through open economic engagement that Australia needs to entrench US interests in Asia where US policies have been less supportive of the multilateral rules-based system. Japan shares those interests and brings serious economic heft to the task’.   The multilateral trading system is a vital strategic and security interest in the region. It is through open economic engagement that the region needs to entrench US interests in Asia and that is exactly where US policies have been less supportive of the multilateral rules-based system. Tai’s plan for the region promises to limit arrangements to allies and partners and that would be a huge mistake, missing the need and opportunity to wrap the large Chinese economy in more rules and markets.   The substantial agenda for middle powers will need careful and proactive diplomacy and leadership. It will need close cooperation and coordination. This week the Australia–Japan Research Centre at the ANU launches a major report on Reimagining the Japan Relationship that sets out such an agenda for Australia in its engagement with Japan, as the leading edge of Australia’s broader Asian engagement.

Xi says China will not seek dominance over South-East Asia
China to prioritise Southeast Asia with upgraded relations, development aid

China to prioritise Southeast Asia with upgraded relations, development aid
President Xi Jinping tells Asean summit that China is a good neighbour, as he pledges US$1.5 billion to help pandemic control and economic recovery     Beijing’s ties with the region are complicated by South China Sea dispute and competing Indo-Pacific strategies of US and EU

Middle power diplomacy essential to secure Asia against big power rivalry
There will be no resolution of the big problems of our age without the big powers, notably the United States and China, being willing parties to their settlement. And success will depend critically on the trust that each puts in the other’s stake in the game. ‘Australia’s experience in the face of Chinese trade coercion demonstrates to the world that the open and contestable markets that the multilateral system helps to guarantee significantly blunt the effect of intervening in markets for political or economic gain because it offers alternative markets and suppliers’.  China’s bid to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and the Chile–New Zealand–Singapore Digital Economic Partnership Agreement signal its intent to sign up to US-led and advanced economy rules. This offers an opportunity to sort out what’s wrong with China’s trade policy not only towards Australia right now. The multilateral trading system is a vital strategic and security interest in the region. It is through open economic engagement that the region needs to entrench US interests in Asia and that is exactly where US policies have been less supportive of the multilateral rules-based system. Tai’s plan for the region promises to limit arrangements to allies and partners and that would be a huge mistake, missing the need and opportunity to wrap the large Chinese economy in more rules and markets.  The substantial agenda for middle powers will need careful and proactive diplomacy and leadership. It will need close cooperation and coordination. This week the Australia–Japan Research Centre at the ANU launches a major report on Reimagining the Japan Relationship that sets out such an agenda for Australia in its engagement with Japan, as the leading edge of Australia’s broader Asian engagement.

The Quiet China-Africa Revolution: Chinese Investment
While loans take the lion’s share of the focus, Chinese FDI in Africa has also been growing at a rapid clip.    Assuming a 5 percent annual growth rate from 2020 levels – as has been experienced over the last five years – Chinese FDI stocks in Africa could reach $90 billion by 2035. A 10 percent growth rate would imply stocks of $181 billion by 2035, which could quickly make China Africa’s largest foreign investor, unless the pace of investment by others picks up. This is not unrealistic. Over 2011-2015, China’s FDI to Africa grew by 21 percent annually.  But the distribution and quality of FDI will also be important to track. If China’s FDI spreads to more countries, and diversifies into other sectors, while continuing in the construction sector and even some aspects of mining (for example, processing and value addition) this could have significant impacts. For example, in the wake of COVID-19, African countries have called for investment into local pharmaceutical manufacturing, and investment into digital connectivity – both hardware and software. If Africa is to become the world’s manufacturing hub by 2063, investment in renewable energy to power both Africa’s homes and factories needs to scale up fast.There are now over 100 operational industrial parks across the continent that could act as anchors for Chinese firms to invest into modernizing and scaling up existing factories or creating new joint ventures with African firms to create more jobs. African countries could also work with their own private sectors to develop bespoke Chinese FDI attraction or marketing plans, pitching ideas with the highest local benefits and returns. China has already published new guidelines aimed at encouraging Chinese firms to do better in terms of Environmental, Social, and Governance (ESG) impacts. While the actions of Chinese investors in Africa have been virtually ignored compared to loans from China’s banks, after FOCAC Dakar the former will almost certainly become more important. The question will be whether the quality and diversity of that investment can simultaneously be driven up.

China-Africa forum: Covid-19 vaccine deals tipped to be on the table
Fresh financing could also be in the pipeline but Beijing is more cautious about debt distress, observers say    Gathering faces some challenges, including the lack of coordination on key goals   The Development Reimagined study said China considered Africa an important new market for Chinese products because of the continent’s potential growth, with the population projected to reach nearly 2.5 billion by 2050.     It was also a market in which Chinese players could often outdo other foreign competitors, the report said.   Development Reimagined said the main exports of African economies to China included minerals, metals, agricultural products, and crude oil. However, more recently, trade flows of agricultural products from several African countries to China had risen. These products included tea, coffee, avocados, chillies, oilseeds, oil meals and grains, and wine.  From the African perspective, Development Reimagined said China has been a source of loans for projects that often would not be financed by other bilateral partners and even many multilateral development banks. Further, China is an important source of machinery and technology transfer for African countries. And China may well play a geopolitical role for African countries, such as at the United Nations.   But the forum faces some challenges, including the lack of coordination on key goals. The report said that since the establishment of FOCAC, there had not been enough initiatives from the African countries to coordinate the forum’s activities. There was also a lack of data to track and evaluate FOCAC outcomes

US promises fairer treatment for Africa as it seeks to counter Chinese influence
The United States has promised to treat Africa more fairly as it seeks to revitalise its relationship with the continent and counter Chinese influence.

China’s answer to Aukus alliance? More rhetoric, more intimidation tactics and more weapons
A core strategy, say military experts, is to raise the cost of US defence of Taiwan by consolidating the Chinese grip over contested South China Sea islands   Despite Beijing’s criticism of new or revived American coalitions, its own belligerence has played a big role in moving Western and Asian allies closer together

Chinese foreign minister says countries should not be forced to pick sides in rivalry with US
Wang Yi tells a conference competition between nations should be ‘positive and benign’ rather than a ‘zero-sum game’     China has a range of territorial disputes with neighbouring countries, but Wang says it is willing to manage its differences

Diplomatic crisis will mostly hit Lithuania’s food exports to China – body
China’s recent decision to downgrade its diplomatic relations with Lithuania to the chargé d’affaires level will lead to a drop in bilateral business cooperation and many projects might be frozen, the head of the Lithuania-China trade association says.
Lithuania’s food industry’s exports to China might bear the brunt of the situation, Rokas Radvilavicius says.

Taiwan: could public opinion in China bring war a step closer?
Discussion of a potential attempt to take control of the self-ruled island has grown louder and more confrontational     But having fuelled the discussion, Beijing has reasons to continue to manage public expectations    A graduate of Harvard University’s public policy school, Ren has a sizeable following, including among government officials. His Taiwan article, published on WeChat, was viewed more than 100,000 times.   He argued that public discussion could be used to prepare the way for a change in strategy.   “Once the use of force has become inevitable, people will be prepared for it since intense discussions have already taken place,” Ren wrote.   But stoking nationalism can backfire, said Maria Repnikova, an assistant professor in global communication at Georgia State University.  “I think such online discussions can be helpful for Beijing in instigating a more unified national identity that is grounded in the leadership of the Communist Party,” she said.   “At the same time, nationalism is always a double-edged sword. If not contained, it can also translate into critiquing the regime if it fails to satisfy the demands of nationalistic public opinion. Such nationalistic spikes also leave less space for diplomatic solutions.”

South China Sea: will Aukus affect Asean’s code of conduct talks with Beijing?
China is eyeing gains in its negotiations with Asean for a code of behaviour in the resource-rich waters, as President Xi Jinping meets bloc leaders on Monday    Beijing’s assertive tactics in the disputed waters, the Aukus alliance and Cambodia’s chairing of Asean are factors that will shape the meeting outcome, analysts say

China’s bullying of tiny Bhutan risks South Asian stability
David and Goliath struggle exposes Beijing’s expansionist intent  In doing so, Beijing has sought to simultaneously advance its designs against Bhutan and India. Its maps already show the entire area of Arunachal Pradesh — more than two times larger than Bhutan — as being part of China. To be sure, this is not the first time that Xi’s regime has targeted Bhutanese territory to bolster China’s military advantage over India. In 2017, China occupied most of Bhutan’s Doklam Plateau overlooking India’s Chicken Neck, following a 73-day military standoff with India, the de facto guarantor of Bhutanese security. In fact, China is currently locked in another standoff with Indian forces that was triggered more than 19 months ago by Chinese    Xi, however, is giving Bhutan ample reason to resist subordination to China. The MOU was signed at a virtual event by the Bhutanese foreign minister and an assistant Chinese minister, as if Bhutan were a client state.   More fundamentally, by employing its South China Sea tactics to unilaterally change facts on the ground, China is presenting a territorial and military fait accompli to a helpless Bhutan.

Peng Shuai: Video claims to show tennis player at tournament
Chinese tennis player Peng Shuai has reportedly appeared as a guest at a tennis tournament in Beijing, according to state media footage.

Op-Ed: How U.S.-China ‘competition’ could lead both countries to disaster
Both sides would incur massive losses in blood and treasure if their rivalry intensifies untempered by any sense of shared interests, and leads to war. Ditto the rest of the world. Trade between China and the U.S. totaled $615 billion in 2020. Two-way foreign direct investment that year was $162 billion, $124 billion from the American side. The shock waves generated by a U.S.-China collision would quickly course through the global economy given that an estimated $3.4 trillion in trade passes through the South China Sea annually — between a fifth and a third of global seaborne trade, including 30% of all crude oil commerce, and that China and the U.S. have the means to launch cyberattacks on each other’s financial systems. The military consequences would be catastrophic. Beijing insists that unification with Taiwan is a national imperative. U.S. commanders are calling for funding boosts to beef up American forces in the Pacific. President Biden states that the United States would defend Taiwan, even though the 1979 Taiwan Relations Act contains no such firm obligation. Nationalistic Chinese media assert that the U.S. would be trounced in a war over Taiwan.Though Biden understands that real face-to-face summitry isn’t a cure-all, he has also long been a believer in the value of direct meetings between leaders. His virtual conversation with Xi is a start, but it’s time for the U.S. and Chinese leaders to meet in person— over a few days — to prevent military exercises and verbal jousting from morphing into war.
Each side may assume that it would prevail. But what would victory look like, and would it be worth the price?

podcast video : The state of China’s economy and US-China relations
Eswar Prasad, Brookings senior fellow and a professor of economics at Cornell University, joins host David Dollar to discuss the state of China’s economy and U.S.-China relations. Prasad addresses a range of issues, including why China’s economy is slowing, whether China’s currency might be used as an international reserve currency, and what happened at the recent online summit between President Joe Biden and Chinese President Xi Jinping.

Where Xi’s China is heading
Imagine, for a moment, what the world looks like to people living in China today — say, to an average couple.     Their country, home to one of the greatest and most ancient civilizations in the world, long a leader in science and technology, was largely isolated from the great wave of military and technological advancement that began in the West in the 16th century. It was late coming to the powerful economic gains that began with the industrial revolution in the 18th century. It was dominated by outside powers during the 19th century.

China’s Birth Rate Lowest in 43 Years, Official Data Shows
The annual demographic data reveals concerning trends for a rapidly aging country.  China’s latest statistical yearbook showed strong indication of the country’s looming demographic crisis, as birth rates and marriage registrations continue to decline — a trend that has long worried authorities amid an increasingly aging society. According to figures in the annual data released by the National Bureau of Statistics, the country reported its lowest national birth rate — calculated by the number of births in the total population — in over four decades. The seventh census data released earlier in May showed there were 12 million births in 2020, for a fertility rate of 1.3. The China Statistical Yearbook involves a collection of statistics that comprehensively reflects the country’s demographic, economic, and social development, with the data dating back as early as the founding of the People’s Republic in 1949.

Quarantine in China: why so long and does science back it up?
Chinese authorities have a zero-tolerance strategy on Covid-19, with isolation periods of four weeks in some places   Rules vary abroad, with some countries allowing vaccinated people to skip quarantine   Local governments in China have not announced plans to shorten their quarantine periods. Some, such as Guangzhou, have made isolation measures stricter because of an outbreak that started in October.
The Chinese government has also not said when it will relax border restrictions. But respiratory diseases specialist Zhong Nanshan has said China could reopen if the Covid-19 case fatality rate – the proportion of those infected who die from the disease – is controlled at 0.1 per cent and an infected person infects only an average of 1 to 1.5 people.   The global case fatality rate fell to around 2 per cent in November, according to data from Johns Hopkins University, while countries with high vaccination rates have a much lower case fatality rate.   The case fatality rate of Delta variants for vaccinated people in Britain, for example, is between 0.14 to 0.18 per cent, according to Jin.    Some travellers from Hong Kong, however, are expected to be able to enter mainland China quarantine-free from December, although there will be a limited quota of a few hundred people per day to start with.

For Luxury, Is India the Next China?
Euromonitor International forecasts that India’s luxury goods market will be worth $8.5 billion in 2022.    China is undergoing a historic transformation, and its “capitalist smackdown” has alarmed global brands, particularly in a time when supply chain chaos has created even more uncertainty. And while leaving China for good is unrealistic, looking to India as a strategic way to expand could be a winning strategy for luxury brands.   For years, analysts have projected the rise of India as a global superpower, and not even the COVID-19 pandemic has thwarted faith in the country’s long-term economic growth and stock market potential.

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