China Press Review – November 26, 2019

Press review

BioWin attended the Belgian Economic Mission to the People’s Republic of China!
BioWin flew to China to attend the Belgian Economic Mission to the People’s Republic of China. The cluster is part of a record delegation, with a number of participants never registered so far. Indeed, 632 Belgians are attending; never seen in the history of Belgian economic diplomacy! In total, 53 Brussels companies and 80 Walloon companies in addition to academic institutions and public bodies.

Is China’s Growth Overstated? Don’t Rely on Lower Tax Revenue Growth as Evidence
China’s stellar economic expansion since 1978 has no doubt run into some problems recently, and some critics have argued for years that its growth has been overstated. The basis of the criticism ranges from charges of outright data falsification to accusations that price deflators used to account for inflation are flawed. A new analysis of the accuracy of GDP statistics emphasizes a third factor: overreporting by local officials. This last theory is bolstered by expert agreement that local officials, whose careers are on the line if they fail to meet growth and investment targets, have an incentive to exaggerate their performance.

A divided Europe’s China challenge
China’s complex relationship with the European Union is symbolised through the events of November 2019. Chinese President Xi Jinping flew to Greece almost as soon as French President Emmanuel Macron concluded his 3-day state visit to China on 6 November. China boasts a successful investment here — the Piraeus harbour of Athens. The divisions leave France, Germany and the new European Commission in a difficult situation. European leaders have started thinking collectively about ‘the China problem’, at least on the economic and technological fronts. China has clearly become a major issue, illustrated by Macron’s recent state visit. It will not be easy to strike a balance that unites the European Union — China has in the past managed to divide the European Union among regional subgroups. As China’s cash machine shows signs of slowing down, pragmatic Europeans should regroup and offer China alternatives to US President Donald Trump’s zero-sum approach to economic relations. The European Union is still China’s top trading partner and it is said that the BRI was aimed at the EU consumer market. Instead of playing Beijing’s game, the European Union should take advantage of the situation. It should demand reciprocity with China, stick with European values and the rule of law while leaving an open door for cooperation with China on global issues outside EU borders.

US should rethink its China policy so both countries can benefit
President Donald Trump and American politicians in general portray Beijing as a danger, but China is not an economic enemy or a threat; good ties in the past have helped both nations

China trade deal close, sticking points remain – White House adviser
The United States and China are close to a trade agreement, White House adviser Kellyanne Conway said on Tuesday, but three of the biggest sticking points remain.  “We’re getting really close,” she said in an interview with Fox News. “We continue to negotiate. But those forced technology transfers, the theft of intellectual property, the trade imbalance of a half a trillion dollars a year with the world’s second largest economy, China — this makes no sense to people.”

US-China trade war: Liu He, Robert Lighthizer and Steven Mnuchin hold phone call on core concerns over phase one deal
The two sides agree to continue communication about an agreement, Beijing says    Call suggests China is keeping trade negotiations separate from other disputes with Washington

Yale’s Stephen Roach says US manufacturers won’t move out of China so easily
Several American firms have made plans to diversify their productions out of China, but few have said they intend to completely leave China – or move all of their manufacturing back to the U.S.   “Clearly some components … part of the source can be pulled out of China and into other countries. But to take an iPhone and bring the iPhone back home, forget it, just not going to happen in a way that would provide affordable product for American users of that device,” said Stephen Roach, a senior fellow at Yale University.

Americans, not Chinese, paying for Donald Trump’s tariffs, study by New York Fed shows
Prices charged by Chinese firms have barely budged, suggesting US companies and consumers are absorbing about US$40 billion in annual costs   However, China’s share of US imports of machinery, electrical equipment and electronics has fallen

China’s Economic Clay Feet
China’s spectacular economic rise over the past 30 years has generated fear in the United States that our economy will soon be eclipsed as the world’s largest. This has motivated the Trump administration to see China more as a strategic economic threat than as an economic partner.  It is also one of the key reasons why the administration is engaging in a trade war with Beijing.

China ready to turn its attention to Europe in 2020, as US trade deal gets closer
After a year of intense focus on its relations with Washington, Beijing is preparing for a renewal of its ties with the EU     A series of engagements are planned with Brussels next year, starting with a bilateral summit in April

Huawei’s British prospects dented as BT seeks new broadband supplier
Optic fibre vendor evaluation process has begun as phone company tries to reduce reliance on Chinese telecoms company    Move underscores pressure to curtail Huawei’s dominant position in communication networks following warnings that firm may be a security risk

People’s Bank Of China: Hundreds Of Country’s Banks At Risk
This past year has been difficult for Chinese banks, and the country’s central bank, People’s Bank Of China, said that about 13 percent of the country’s financial institutions were considered “high risk,” according to Bloomberg.  People’s Bank Of China ran a report — its 2019 China Financial Stability Report, published on Monday (Nov. 25) — and found that about 586 banks and financial institutions were highly risky, and in need of some sort of change. Though no specific banks were named, one got a score of “D,” meaning it was taken over or it went bankrupt

China’s Premier Li: China’s economy is facing greater uncertainties, challenges
China’s economy is facing greater uncertainties and challenges, China’s Premier Li Keqiang told the state media on Tuesday and added that they will keep the economy operating within a reasonable range.    On a similar note, the People’s Bank of China (PBoC) on Monday stated that the downward pressure on the Chinese economy was increasing and potential risks and problems for the economy were difficult to eliminate over the short term.

As recession fears recede in the US, the golden days might be over for government bond markets
With US economic data suddenly looking brighter and positive noises being made in the trade war, risk reversals could be round the corner. After years as sanctuaries for investors, government bonds may finally lose their mojo in 2020     But if the trade war drags on, Beijing could wield a very powerful weapon in the shape of a buyer’s strike against Treasury bonds or by dumping US government debt in the open market. The bond market would panic and US bond yields could surge. It would be a weapon of last resort.

New IP enforcement guidelines take aim at e-commerce, semiconductor sectors
China’s top decision-making bodies on Sunday set out goals to improve the country’s beleaguered intellectual property (IP) enforcement channels, promising alternatives to overloaded courts so that victims can resolve issues more quickly and cheaply.

Alibaba shares rise in Hong Kong debut, creating city’s biggest stock with HK$4 trillion market capitalisation
Shares close at HK$187.60 on first day of trading in Hong Kong, handing investors a 6.6 per cent gain over the HK$176 offer price     Alibaba is the most traded stock with HK$14 billion of shares changing hands, accounting for 10.5 per cent of main board turnover

Alibaba’s US$11 Billion IPO Proves Why Hong Kong Remains a Money-Making Machine for Foreign Investors Connected with China
Alibaba Group, the Chinese owned online retailer, raised US$11 billion today in its IPO in Hong Kong in a listing that was oversubscribed 40 times. The shares finished six percent higher on the day following their Hong Kong debut this morning.

Alibaba shares jump in blockbuster Hong Kong debut
Shares in Chinese e-commerce giant Alibaba have surged in its Hong Kong trading debut in one of the year’s most anticipated stock offerings.

Hang Seng Index falls, as Alibaba debut and trade war progress fail to reassure investors worried Hong Kong unrest will return
E-commerce giant Alibaba rises 6.6 per cent in debut   China Mengniu Dairy jumps 3 per cent

US-based chip-tech group moving to Switzerland over trade curb fears
The RISC-V Foundation sets standards for the core chip architecture and controls who can use its trademark on products     The organisation has more than 325 members, including Qualcomm, Alibaba and Huawei

All crypto trading platforms in China have been shut down: PBOC
China has shut down all cryptocurrency trading platforms and more than two-thirds of online lending platforms as a result of continuous crackdown efforts against illegal and risky practices in the internet finance space, according to a recent central bank report China’s internet finance space may face yet more challenges as the county steps up its cleanup efforts amid greater economic headwinds.

China pork crisis far from over, despite green shoots of recovery in pig inventory, analysts say
On Friday, China’s agricultural ministry said inventory of breeding sows showed the first monthly increase since April 2018, suggesting a ‘bottoming out’    But analysts are convinced the problem will continue to plague China into next year, with further falls in pig population and surges in pork prices expected

China pork crisis far from over, despite green shoots of recovery in pig inventory, analysts say
On Friday, China’s agricultural ministry said inventory of breeding sows showed the first monthly increase since April 2018, suggesting a ‘bottoming out’But analysts are convinced the problem will continue to plague China into next year, with further falls in pig population and surges in pork prices expected

Why China Must Protect Its Informal Recycling Sector
For years, China’s recycling industry has been powered by informal workers. Any reforms must take their interests into account.

Why Luxury Brands Need Artificial Intelligence
Given the growing importance of influencers — especially in the Chinese social shopping environment — a brand’s ability to monitor and manage those influencers is indispensable I’m often asked why I think Artificial-Intelligence (AI) tools are key for luxury brands’ success in the 21st Century. I think that’s because AI is one of the most overused buzzwords today, and many people use the term very loosely. In fact, most people discuss AI without really understanding it or what the benefits are. First off, one must know that AI is just a small part of what I call advanced data querying technologies. These technologies also include machine learning and advanced data analytics. AI is part of a state-of-the-art digital infrastructure that I suggest all brands implement. An advanced digital toolset is the game-changer for managing luxury brands. In my view, it’s not optional — it’s a necessity for luxury brands to remain competitive in a rapidly changing market environment.

4 Intellectual Property Guidelines that are Crucial for Luxury Brands
Trademark squatting is one of the biggest and most common IP issues Western brands encounter when entering the Chinese market.

LVMH Confirmed Acquisition of Tiffany for $16.2 Billion
The acquisition happened at a time when Tiffany’s sales are being challenged by the decline of Chinese tourists shoppers due to the continuing trade war and the depreciation of Chinese currency. Last year, however, Tiffany experienced significant growth thanks to CEO Alessandro Bogliolo and creative director Reed Krakoff’s innovative plan, but so far this year things have continued to slow down. According to Tiffany’s Q2 revenue call, Bogliolo stated that sales from mainland China experienced double-digit growth, showcasing the growth potential of the brand in China. Bogliolo also claimed that they are bullish about their investments in

Five ways China must cultivate research integrity
A swift increase in scientific productivity has outstripped the country’s ability to promote rigour and curb academic misconduct; it is time to seize solutions.

Singapore better for entrepreneurs, Lion City-based ‘gov-tech’ firm Osome says as it eyes Hong Kong’s larger market
Companies can be incorporated within an hour in the Lion City, a process that can take up to a day in Hong Kong    Hong Kong requires that some documents be signed and filed in person

China’s relationship with Canada remains deadlocked as fate of detainees continues to cast a long shadow
New Canadian Foreign Minister Francois-Philippe Champagne insists that the release of Michael Kovrig and Michael Spavor is an ‘absolute priority’ for Ottawa    However, Beijing shows no signs of changing its view that releasing Huawei executive Meng Wanzhou is a precondition for better relations

China overtakes US to claim world’s widest diplomatic network
Beijing adds embassies and consulates while Washington makes cuts
US ambassador Terry Branstad expressed ‘grave concerns’ about Hong Kong after Chinese protest over human rights act
Foreign ministry summoned envoy to lodge protest about American ‘meddling’ in China’s internal affairs    Beijing has now issued three official complaints about Hong Kong Human Rights and Democracy Act, which is currently awaiting Donald Trump’s signature

Explaining China’s Assertive Approach to the Hong Kong Protests
The CCP’s hardline on Hong Kong risks a global backlash, but it is in line with the Party’s central goal: survival.

Hong Kong’s protest-hit retail property market hasn’t seen the worst yet. Will shopping mall landlords finally slash rents?
In addition to the global trend of stiff competition from online retailers, Hong Kong shops have faced a sharp drop in mainland visitors and protest vandalism     Stocks of retail property owners are not yet at historic lows, showing the sector has not hit rock bottom

Alain Gillard
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