Belgian-Chinese Chamber of Commerce (BCECC)

China Press Review – November 25, 2021

Wallonia, the land of sustainable innovation
TV spot : Wallonia’s capacity for research and innovation, particularly in the field of sustainable development.

China to roll out trade support amid ‘increasing pressure’ behind the scenes
Beijing has promised new policies to stabilise trade, including credit support for small firms and help diversifying markets   Exporters face high raw materials prices and shipping fees, and more competition as other economies recover from Covid-19

China’s zero-Covid policies causing ‘major’ knock-on effects for snarled global supply chains
China has continued to prohibit crew changes for foreign crew and recently imposed as much as a seven-week mandatory quarantine for returning Chinese seafarers     Shipowners and managers have to divert ships, delaying shipments and crew changes, adding to the global supply chain crisis

China calls for ‘strict accountability’ at local government levels where funds are misused
State Council says it is forbidden to use public funds for ‘luxurious office buildings and halls, vanity projects and unnecessary landscaping works’   In recent weeks, top Chinese officials have expressed concerns about mounting headwinds facing the world’s second-biggest economy

12 more Chinese companies are placed on US export blacklist
The newly sanctioned entities include quantum computing companies, semiconductor firms and Chinese businesses that have contributed ‘to Pakistan’s unsafeguarded nuclear activities’    The Commerce Department’s move effectively blocks US businesses from selling materials and equipment to the companies

US targets Chinese hi-tech and defence sectors in ‘deepening crackdown’
Washington has added a dozen firms to its export blacklist in the latest move, which observers say could lead to a technology decoupling   They include quantum computing and semiconductor companies and businesses that have contributed ‘to Pakistan’s unsafeguarded nuclear activities’

U.S. crackdown targets China’s quantum computing, navigation tech
Quantum computing companies, memory chipmakers and suppliers of navigation chips are among the Chinese businesses hit by the latest U.S. blacklisting action, in a sign that Beijing’s tech ambitions remain in Washington’s crosshairs as tensions between the two countries rise. The U.S. Commerce Department on Wednesday added eight Chinese companies and state-backed research organizations to its so-called Entity List, which restricts their access to American technologies, citing national security concerns. Among them are QuantumCTek, which went public on China’s STAR Market last year, and its subsidiary Shanghai QuantumCTeck. QuantumCTek bills itself as a Chinese pioneer in the quantum computing field and leader in its commercialization. The company recently signed an agreement with iFlytek, China’s top provider of artificial intelligence-powered voice recognition technology, to jointly explore the introduction of quantum computing technologies into AI products. iFlytek is also blacklisted by the U.S. Another company added to the list is Hunan Goke Microelectronics, which is headquartered in Changsha and listed on the Shenzhen Stock Exchange. Goke Microelectronics is one of the key Chinese chip developers offering storage controller chips, video chips for surveillance cameras and GPS chips for navigation and positioning use. “The blacklisting move also shows that tension between U.S. and China continues to rise,” Pu added.   Many Chinese companies still rely on U.S. technologies including design tools and equipment, as well as intellectual properties to develop chips and other technologies.

US-China tech war: Beijing draws up three-year plan to revamp state technology system
The new blueprint approved by President Xi Jinping calls for an improved state system to help China achieve self-sufficiency in technology    Efforts to revamp the country’s tech system gains urgency after US sanctions limited China’s access to advanced chips

China’s 5 big tech issues for 2022
China’s technology sector has taken a wild ride over the past year, facing tighter regulations and a push from Beijing for greater self-sufficiency at the same time.    Beijing is pushing the development of economically strategic technologies such as semiconductors and electric vehicles, while simultaneously reining in domestic tech firms.    Those are among the important themes that will be addressed at CNBC’s annual East Tech West event in the Nansha district of Guangzhou in southern China.

Decoupling is the very last thing on enterprise leaders’ minds
IF YOU WANT to grasp how Asia’s view of the world order has modified, contemplate the remarks of Lee Hsien Loong, Singapore’s prime minister. Requested not too long ago if China was rising and america was declining, he replied in a professional manner: “If you happen to take a protracted view, you actually should guess on America recovering from no matter issues it does to itself.” Throughout the area corporations and politicians are adapting to a brand new geopolitical actuality, as was evident on the Bloomberg New Financial system Discussion board in Singapore final week.One response to estrangement is separation. America’s Trumpian proper and progressive left would love their nation to be extra self-sufficient, whereas Mr Xi’s “dual-circulation” marketing campaign is geared toward producing extra items at house. There are some indicators on the bottom of Asia’s funding patterns shifting and turning into much less centred on better China. India’s greatest enterprise, Tata Group, is investing in electrical automobiles and battery manufacturing at house. On November ninth TSMC, the world’s largest semiconductor firm, stated it could construct a brand new plant in Japan in co-operation with Sony. Most banks are cautious of increasing in turbulent Hong Kong. However the total image remains to be one in all intense interdependency. China has 75% of world battery manufacturing capability. Even after its new investments, TSMC can have over 80% of its plant in Taiwan, which China claims as its territory. The impossibility of Asia decoupling from China is introduced house by a tech boss who reckons 80% of products offered on South-East Asia’s booming e-commerce platforms are from the Center Kingdom. Had been multinational corporations to spend as they’re at this time, they would wish 16 years to switch the cumulative inventory of cross-border funding in Asia. Even when they may, few corporations need to exit China’s financial system. If the worst relations between China and America for many years haven’t prompted decoupling in Asia, what would possibly? The confrontation might but escalate however each side appear eager to keep away from that for now. Wang Qishan, China’s vice-president, declared that “isolation results in backwardness”. Regulatory and technological shifts might finally finish American dominance in finance and drag Asia extra firmly into China’s orbit. One boss reckons the opening of China’s capital markets will in the end be as consequential in finance as its membership of the World Commerce Organisation in 2001 was for commerce. However for now traders and corporations—and Singaporean prime ministers—face years of fastidiously straddling the divide.

Taiwan chip production on track for record in 2021, even bigger 2022
Taipei and TSMC urge Japanese investment in island’s semiconductor supply chain   Taiwan’s semiconductor production is expected to jump by more than a quarter this year to a record high, a new estimate shows, marking the biggest rise in the past decade as suppliers rush to ease a global chip shortage.   Output will grow 25.9% in 2021 to a 4.1 trillion New Taiwan dollars ($147 billion), according to a new report published this month by the Industry, Science and Technology International Strategy Center, a government think tank.

China’s Evolving Food Security Strategy
China’s food security is part of its new national security strategy in the new “dual circulation” era.   Food security has always been a top priority for China’s leaders and this is no exception for the current generation, for whom it remains as “eternal task,” as shown by the recent inclusion of food security as an additional dimension of the national security strategy. The central government’s three key tactics may achieve varying degrees of success. The first approach, increasing and diversifying food supplies, can be achieved by the government and various policies it implements. For instance, the establishment of “red lines” for farmland throughout the country are well within the government’s reach and control, and rely heavily on the support of local governments. In comparison, the second plan, reducing domestic demand and consumption, is more difficult. This approach requires strong citizen participation, which may be beyond the reach of government at times, in order to achieve success. The third method, however, represents the establishment supportive environment through legal and institutional frameworks by which the central government seeks to achieve the first and second strategies.  In addition, the implementation of these approaches shows increasing opportunities in terms of monitoring as well as changes to China’s institutional responses and governance structures. Other possible or partial solutions to China’s food insecurity concerns include reducing food wastage by recycling food waste in waste treatment centers (turning it into animal feed, soil enrichment, or energy generation), substituting potato for key staples such as grains and rice, and transitioning toward a circular economy in food consumption. Whether or not these efforts are successful in terms of ensuring food security, they present many opportunities in many sectors. However, questions may be asked over the likelihood of the success of the three approaches. For instance, can people’s consumption habits really be changed? How can the “Anti-Food Waste Law” be applied at home or even through food delivery services? Who monitors this food consumption?
Questions may also be asked about China’s climate change commitments and food security. With Xi having promised that the country will reach peak carbon emissions by 2030 and achieve carbon neutrality before 2060, how could these targets impact domestic agricultural production and food security measures when simultaneously trying to satisfy China’s food demand? At the same time, China, like many other nations, is facing pressure on its agricultural industry from various domestic concerns. These include limited farmland and water supplies, which are required for agricultural production, as well as a smaller workforcerapid urbanizationshifting demographics, balancing competing urban and agricultural water demands, as well as climate change and extreme weather events. China is also facing challenges from external pressure such as rising Sinophobia and trade tensions with other countriesglobal backlash against China in response to COVID-19, and uncertainty over the global food market. In the face of such challenges, are China’s current food security strategies actually realistic?

China Policy Change on Expatriates’ Tax-Exempt Benefits: Case Study and FAQs
Starting 2022, China will roll back tax exemption on some fringe benefits for expatriates (including housing rental, children’s education costs, and language training costs), which is expected to result in larger tax liability for those earning higher incomes. This article with case studies and Q&As helps you understand how serious the tax burden could hike up in 2022 and how to prepare for the policy change. However, starting from January 1, 2022, they will no longer be entitled to IIT exemption on the first three kinds of fringe benefits – namely, housing expense, education expense for children, and language training expense. As to the remaining five categories of benefits (meal fee, laundry fee, relocation expense, business travel expense, and home leave expense), the policy is not clear about whether they will continue to be tax-exempt.    Instead, from 2022, foreigners who are resident taxpayers in China will be able to enjoy the following six special additional itemized deductions when they pay IIT on their comprehensive income, which are:

China tech crackdown: Tencent’s app update suspension seen as a shot across the bows of other app developers
Analysts say authorities want to send a message to app developers that they must comply with new laws and regulations on user data     Ministry of Industry and Information Technology has been engaged in a broad campaign to ensure compliance with China’s new data laws

China emissions fall as economy buffeted by property downturn
Carbon dioxide emissions in China have fallen for the first time since last year’s lockdown, the latest signal the property sector downturn and energy shortages have hit industrial demand in the world’s second-biggest economy.    Emissions declined by about 0.5 per cent in the three months to the end of September, according to data published by Carbon Brief, a climate research and news service. “The reasons [for the decline] are the clampdown on runaway real estate lending, resulting in a sharp reduction in steel and cement output, and the sky-high coal prices,” said Lauri Myllyvirta, an analyst at the Centre for Research on Energy and Clean Air, an independent research group based in Helsinki.

China sets sights on coal, petroleum and waste sectors to bring down methane emissions
Beijing encourages firms to use market mechanisms to reduce methane, including a voluntary emissions trading system, according to climate official     He says developing countries should not have to reach carbon neutrality at the same time as developed nations

‘Battery arms race’: how China has monopolised the electric vehicle industry
Chinese companies dominate mining, battery and manufacturing sectors, and amid human rights concerns, Europe and the US are struggling to keep pace

China Regulator Seeks to Avoid U.S. Delistings of Chinese Firms
Chinese authorities are working with U.S. counterparts to prevent Chinese companies being delisted from U.S. stock exchanges, a Chinese regulatory official said on Thursday, as a lengthy dispute about auditing standards rumbles on.

Chinese official warns about fake virtual currency, provinces keep cracking down on mining: Blockheads
Local officials in Shanghai warned about fake virtual currency cases. Chinese authorities reported the country’s first money laundering case involving digital yuan. Several authorities in local Chinese districts and provinces vow to continue the crackdown on crypto mining.

Central Asian elites choose China over Russia
Since 2019, more than 40 protests were held against ‘Chinese expansion’ in Central Asia. Yet Central Asian elites have hardly had a bad word to say. On the contrary, they suppressed these protests, denied that China’s goal was expansion and even requested their publics be grateful to China. No wonder some Russian commentators are worried about Russia’s waning influence.   The rationale to explain these Central Asian elites’ choices is that they may be better off embracing China while subtly distancing themselves from Russia, as Beijing increasingly aligns with its Central Asian counterparts with greater success than Moscow. Despite Central Asian countries being independent for three decades, it is common to find Russian assertions that they still effectively own the region. Some Russian officials have even publicly claimed that the entire territory of Kazakhstan was a gift from Russia, which was denounced severely among Kazakh elites. The dubious benefits of alignment with Russia’s stagnating economy pale in comparison to China’s economic might. With the implementation of the Belt and Road Initiative (BRI), China was a larger trading partner than Russia for most Central Asian nations by 2019. As Alexander Grishin noted, Chinese investment has now surpassed Russia in almost all Central Asian countries. Russian investment in Kazakhstan in 2016 was just over US$12 billion, whereas Chinese investment, according to official data, exceeded US$20 billion. Unofficial figures of Chinese investment ranged from US$55 billion to US$80 billion.  As Benno Zogg argued, compared to the economic power of China, ‘particularly the volume of funds for infrastructure in the framework of the BRI, Russia and its rigid, protectionist, and politicised Eurasian projects pale’. Russia is a direct competitor to Central Asia’s natural resources exports to the Chinese market, which may push Central Asian elites to the Chinese side.   The leadership shift in Central Asia may reflect their willingness to negotiate more with Beijing. Kazakhstan President Kassym-Jomart Tokayev is a fluent Mandarin speaker with diplomatic experience and connections in China. Former deputy prime minister Dariga Nazarbayev, the eldest daughter of the first president of Kazakhstan, extolled the virtue of learning Chinese, arguing closer ties to China is Kazakhstan’s destiny. The incumbent Kyrgyzstan President, Sadyr Japarov, was purportedly supported by many China-linked businessmen. Japarov’s father was born and educated in China and his family business has been long connected with China.   China has become the second-most popular destination for overseas studies in Central Asia, behind Russia. As Julie Yu-Wen Chen and Soledad Jiménez Tovar observed, university students, future elites in Central Asia increasingly support Beijing’s rising influence and the majority believe strong ties with China benefits Central Asia.

EU extends human rights sanctions, including on Chinese officials
-European Union ambassadors approved the renewal of sanctions on four Chinese officials and one Chinese entity on Wednesday as part of an extension of a human rights blacklist, two diplomats said.    The decision, which will formally be adopted early next month, puts in jeopardy a Chinese-EU investment agreement signed in late December 2020.     China’s envoy to the bloc said last week there could be no ratification of the deal until the EU lifted its sanctions, which Beijing sees as internal interference

Asia-Europe summit to boost cooperation, as EU won’t blindly heed US containment of China
Chinese Premier Li Keqiang attended the 13th Asia-Europe Meeting (ASEM) Summit via video link and delivered a speech on Thursday, in which he called for enhancing collaboration over the research and development of vaccines and drugs as ways to deal with the COVID-19 pandemic, as well as efforts to boost connectivity.   The economies of Asia and Europe, especially China and Europe, cannot be unhooked from each other, Ding said. European companies do not want to politicize economic issues or blindly follow anti-China politicians, he noted.    China became the EU’s top trading partner in 2020. Their trade in the first three quarters of 2021 reached $599.3 billion, an increase of 30.4 percent year-on-year, official data shows.

The US and China are already at war. But which kind?
Early in November, the esteemed Harvard professor Graham Allison went down to Washington’s Senate to deliver a Greek history lesson. The topic was the Athenian historian Thucydides who, of course, penned the account of war between Sparta and Athens in the fifth century BC. This kind of conflict used to only excite students of the classics. But in 2017 Allison wrote a tome called Destined for War: Can America and China escape Thucydides’s Trap?, and it became a surprise bestseller. Those three “Ps” are on display right now, and insecurity, belligerence and misunderstandings keep bubbling up. “When a rapidly rising power seriously threatens to displace an incumbent one you have a predictable dynamic,” Allison says. “If you look at China and the US as a rising and ruling power, they seem to be doing everything possible to stay on this script.” The question is, were the four a fluke? Or a sign that humans are getting wiser? Might the globalisation ties that bind us together, such as the internet or those capital flows, mean that the Thucydides trap is not so relevant in a digital age? We do not know (yet). However, Allison has one final encouraging nugget to share: since his book was published, it has not only become a bestseller in the US but has been extraordinarily popular in translation in China too. “I never ever expected that,” he chuckles, explaining that the most popular passage with Chinese readers is a description of how Britain and the US avoided a Thucydides moment in the early 20th century by not going to war. Even a trap can sometimes be escaped from.

China warns off new German government over Taiwan, Hong Kong and Xinjiang
Coalition agreement of Olaf Scholz’s incoming government signals willingness to challenge Beijing on sensitive topics     Chinese foreign ministry urges Berlin to ‘continue its pragmatic China policy’

Chinese companies line up to exploit rich resources of Afghanistan
Representatives of several Chinese companies have arrived in Afghanistan on special visas

After 4 Years as Pawn in China-US Game, Seattle Man Is Home
China’s ability to make deals by effectively taking people like Daniel Hsu hostage has raised concerns.  Hsu said he is grateful to everyone who worked behind the scenes to bring him home. He said he is happy to be in a free country but thinks often about his relatives. “I hope all is well with my family in China,” he said.   His final departure was so sudden, Hsu said he hasn’t had time to think about what comes next, beyond trying to recapture time with his family and get back to the life and the freedom that he lost.    “I’m tired. Just tired,” he said. “I haven’t seen my parents for four years. I haven’t seen my wife for a year and a half. We have a lot of things to talk about.”

Shanghai Extends Maternity Leave and Grants Childcare Leave
Shanghai has decided to extend local extra maternity leave from 30 to 60 days, which will increase female employees’ total maternity leave to 158 days. The city has also begun offering childcare leave to couples with children under the age of three for the first time. Businesses in Shanghai should adjust their HR policies accordingly.

Wuhan long Covid study gives rare insight into pandemic’s lingering effects in China
Many patients found to suffer sleep issues, shortness of breath, fatigue and joint pain almost a year after infection, despite never having serious symptoms   Persistent symptoms in recovered Covid-19 patients have become a global public health concern

Alain Gillard
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