China Press Review – November 28, 2018

Press review

Xi continues diplomatic charm offensive in Europe with cooperation calls to Spain, France and Germany
Chinese president celebrates relations with Spain as ‘best in history’ In Germany, Vice-Premier Liu He calls for unity against protectionism

Larry Kudlow plays up prospect ‘a deal can be made’ on trade between Trump and Xi
The White House economic adviser walks back US President’s comments that it is ‘highly unlikely’ tariffs will be eased in trade war A sense of urgency grows about the need to resolve the stand-off ahead of talks this week at the G20 meeting in Argentina

Global recession a real possibility if US-China trade war intensifies, says Janus Henderson Investors
Janus Henderson sees trade tensions rumbling on beyond G20 meeting

US-China trade war is political and short-term, says Chinese private equity fund
Relations between China and the U.S. have the potential derail global economic growth, but the ongoing tariff fight is a political matter between American President Donald Trump and Chinese President Xi Jinping, Duo Yuan, founder and chairman of Blue Stone Asset Management. Despite the ongoing trade tensions between the two economic giants, there are plenty of reasons for them to work together in the longer term, said Duo. Duo, like many experts, said he expects the Chinese economy to moderate to around 6 percent in 2019.

Podcast : US-China trade war, or trade deal?
In this first episode of the new Brookings trade podcast Dollar & Sense, Senior Fellow David Dollar speaks with Senior Fellow Eswar Prasad, the Tolani Senior Professor of Trade Policy at Cornell University and a leading expert on the Chinese economy, about a range of issues in the U.S.-China relationship. The conversation includes topics such as U.S. and Chinese trade practices, bilateral trade balances, China’s economy and currency, the U.S.-China trade war, and whether Presidents Trump and Xi can make a deal at their meeting during the G-20 summit in Buenos Aires.

US-China trade war, or trade deal?

Why Trump tariffs on China not stopping theft of trade secrets
The theft of U.S. intellectual property, mostly by the Chinese, costs the U.S. an estimated $225 billion to $600 billion a year and represents “an assault the likes of which the world has never seen,” analyst Richard Ellings said.

China’s President Xi Jinping vows to better protect intellectual propertyWorld
China’s President Xi Jinping told Spanish lawmakers on Wednesday his country would boost protection of intellectual property ahead of a G20 meeting where he faces a trade showdown with the United States. Xi is due to meet his US counterpart Donald Trump at the gathering in Argentina this week, with Washington threatening to ramp up a trade war with Beijing if it doesn’t allay US concerns over intellectual property theft and China’s forced technology transfers.

What will China offer the United States to break the trade war deadlock?
Beijing needs economic stability offshore to be able to tackle problems at home, source says

China’s economy became No. 2 by defying No. 1
China may also have become complacent. Its four decades of success under the China model may have persuaded the country’s leaders that the Communist Party, rather than the country’s entrepreneurs, drove its success, and it has little reason to let go.“The China model concept misleads China,” said Zhang Weiying, a prominent pro-market economist, “so we’re going backward.” China, of course, has changed course in the past. Pragmatism has often won out. China’s leaders received a subtle reminder of that in September — from a son of Deng, the architect of reform. In a speech to top leaders, Deng Pufang praised their work but cautioned that once China’s opening had begun, it could never go back. “Reform and opening up is the liberation of people,” he said. “It encourages the recognition of people’s desire and pursuit of a happy life, it stimulates the wisdom and strength of the masses, and it provides opportunities and platforms for every ordinary person to improve their lives and change their destiny.

China Faces Two Traps as Trump-Xi Meeting Looms
Wall Street is looking to ancient Greek history to game out the U.S.-China trade conflict. Also, consumers are confident and Fedspeak.

Deleveraging is the wrong way to fix China’s economy, when it doesn’t even have a debt problem
Chen Zhao says Beijing has embraced the mistaken view that China’s economy is overleveraged. A large part of China’s high debt-to-GDP ratio is actually cheap credit given to the state sector. In fact, the private economy is underleveraged

Journey to prosperity: how a generation climbed China’s social ladder through 40 years of luck, talent and economic growth
Beijing’s move towards a market-oriented economy helped open doors for people like Chen Chaogen, who grew up a poor villager but now lives a middle-class life Chen attributes the dramatic changes in his life to good fortune rather than his ability and hard work

Inside China’s test zone: the eyewitnesses to Shenzhen’s rise
Taking a chance on a city’s potential, young workers moved to the new economic zone at a time when inconveniences were still rife Conditions in housing, transport and other basic necessities have all drastically improved under the opening-up policy

How cheap labour drives China’s AI ambitions
In China, long the world’s factory floor, a new generation of low-wage workers is assembling the foundations of the future. Startups in smaller, cheaper cities have sprung up to apply labels to China’s huge trove of images and surveillance footage. If China is the Saudi Arabia of data, as one expert says, these businesses are the refineries, turning raw data into the fuel that can power China’s AI ambitions.

Chinese Metals Win U.S. Tariff Waivers With Little Resistance
The Trump administration has granted nearly 3,000 exemption requests, surprising even some companies that are asking for them.

Spain rejects China’s Silk Road plan
Spain will not sign on to China’s ambitious “One Belt, One Road” initiative that seeks to better link Asia and Europe, a senior government official said Tuesday ahead of a visit by President Xi Jinping.

China’s economy: Xi Jinping’s u-turn
Government abandons its campaign against financial risk as private companies queue for a bailout

China’s economy: Xi Jinping’s u-turn

China’s Politics, Production, People Meld Together
Everywhere, as President Xi Jinping tightens his grip, it becomes increasingly difficult to separate the individual and the company from the party and the state in China. And more difficult to separate the notion off being Chinese to loyalty to that entity. It must now be assumed that other top executives at Alibaba are also members of the party cell, and hence decisions of significance must accord with Beijing’s perceptions of the national interest. Thus Alibaba’s huge international operations, and corporate governance of a New York listed company, are subservient to the party. These operations now include Hong Kong’s South China Morning Post broadsheet daily into which Ma has poured large sums to expand its on-line presence. That Ma himself is to stand down from day-to-day management of Alibaba may suggest that, though a party member, his profile (not to mention wealth) is too high to be easily compatible with the party’s current ethos under the supreme leader, Xi. There is a red line which links Xi Jinping and the Communist Party to the Chinese state, to Chinese foreign policy to Chinese ethnicity and hence the position of Chinese overseas. Many of the latter need to make it clearer where their loyalty and identification lie.

China’s Politics, Production, People Meld Together

China sets about putting house in order, steps up supervision of financial institutions seen as too big to fail
Financial regulators issue guidelines for ‘systemically important’ institutions Improved supervision comes in response to current downward pressures on economy

New Financial Rules Could Allow China’s Smaller Banks to Fail. That’s a Good Thing.
Chinese investors have come to expect that Beijing will step in to help any bank when troubles mount. That may not remain the case.

Chinese Titan Tencent Plays an Aggressive New Game: Luxury
Calling Tencent Holdings a “video game giant” in China could soon be a thing of the past. The internet company has embarked on a transformation and diversification of its business model following the government’s crackdown on the video gaming sector last year. Since then, Tencent’s reliance on luxury brands to drive growth has reached a new level—as has the stiff competition it will face to dominate that sector.

Chinese Titan Tencent Plays an Aggressive New Game: Luxury electric vehicle company denies production problems
Battery and electric vehicle manufacturer Yinlong Group has been the subject of media reports claiming that factories in Tianjin and Handan, Hebei, halted production earlier this year. In October, its parent company Jiangmen Kanhoo Group Industry Co. Ltd. said that operations at Yinlong’s Tianjin and Chengdu sites had been “not normal.” When a reporter checked out the sites in Tianjin and Hebei, however, workers said only that manufacturing was continuing as usual, although a request to tour one factory was denied.

Briefing: electric vehicle company denies production problems

After Taiwan polls, Kaohsiung’s new mayor will lead charge on mainland-friendly policy
Beijing has discouraged trade and tourism with the city because it’s long been a pro-independence stronghold – but Han Kuo-yu wants that to change Other KMT-controlled cities and counties in Taiwan are expected to follow suit

From the one-child policy to online shopping: the catchphrases of 40 years of Chinese slogans
Painting slogans on walls has long been a valued messaging practice in China

Officials in Chinese online fraud blackspots spray-paint suspects’ homes to shame them into surrendering
Cultural Revolution-style denunciations aim to pressure suspected internet scammers into handing themselves in to the authorities

South Korean ports deal with North ‘could be step towards broader cooperation’ involving China
Incheon and Nampo at heart of commercial and passenger sea traffic proposal as UN dials down sanctions on Pyongyang to encourage trade ties between Koreas

podcast video : As smog war weighs on economy, China coal city bears the brunt.
Despite efforts to close dozens of local collieries and chemical plants, many cities in China are still failing to meet environmental targets set by the central government. Ryan Brooks reports

China’s online streaming users exceed 600 mln
The use of latest technologies, such as big data and virtual reality, has pushed forward the upgrading of China’s online video market

China’s online streaming users exceed 600 mln 

Will 2018 Be An Inflection Point For China’s Auto Sales?
This year may be shaping up to be a transition year for China autos. It may be the year that marks the end of the industry’s nearly 20-year growth phase, and the beginning of a mature phase, where vehicle sales grow in line with overall economic factors. According to the China Association of Automobile Manufacturers (CAAM), vehicle sales fell by 11.6% to 2.4 million units in September, the third straight monthly decline this year. Even SUVs, the best performing category in recent years, saw unit sales drop by 10.1% in the month.

Chinese Wi-Fi tech company to send 272 satellites to space
LinkSure, Chinese private Wi-Fi tech unicorn, announced on November 27 that the company will launch 272 satellites to improve connection coverage and speed. The company’s ultimate goal is to prove free Wi-Fi globally by 2026. In 2019, LinkSure will send the first satellite of the plan to space at national Jiuquan Satellite Launch Center. The satellite will also be China’s first private Wi-Fi satellite. A budget of RMB3 billion ($431.6 million) will be allocated for the project. By August, 2018, global monthly active users of LinkSure’s network reached 900 million, the company claims.

Briefing: Chinese Wi-Fi tech company to send 272 satellites to space

It’s all going dark again in the gambling capital of the world
We know that China’s economy is slowing dramatically, and one of the places where you can see that very clearly is Macau, the gambling capital of the world. Wall Street was reminded of that on Wednesday, when Wynn Resorts reported earnings. While the third quarter didn’t look that bad — Macau revenue was up over $200 million from the same time a year before — the casino giant had a dark outlook for the fourth quarter. Wynn projected earnings 20% below what Wall Street expected.

China to investigate whether ‘shocking’ gene-edited twin experiment by He Jiankui broke the law
Science ministry promises to report back on findings after Shenzhen researcher claims world first
Hospital where the trial purportedly took place denies the children were born in the facility and says it has filed a complaint with police

JP Morgan says more ‘unicorns’ are coming to China — and investors are going to like them
There will be “a number of unicorns and super unicorns” in China in the next few years, said Jing Ulrich, managing director and vice chairman for Asia Pacific at J.P. Morgan Chase. Ulrich said she was “hopeful” for a de-escalation in trade tensions between the U.S. and China as President Donald Trump and his Chinese counterpart Xi Jinping prepare to meet at the G20 summit.

iFlytek removes politically sensitive terms on Android translation app
Chinese artificial intelligence company iFlytek has removed political sensitive terms such as “Tiananmen” and “independence” from showing up as results in the Android version of its popular translation app. The results on iOS version of the iFlyTranslate app were not affected.

Briefing: iFlytek removes politically sensitive terms on Android translation app

Chinese chemical factory blast kills 22, injures 22
Investigators looking into the explosion overnight in Hebei, which local officials tell media was caused by a vehicle carrying dangerous chemicals Witnesses describe ‘fireball’ engulfing 50 vehicles

China to allocate $13 billion for poverty alleviation in 2019
The world’s most populous nation has already lifted over than 500 million people out of poverty. Beijing has vowed to completely eliminate poverty in rural areas by 2020.

China’s cashless economy threatens to leave its elderly—and their money—behind
Such snafus are poised to become all the more common as China’s population of 1.3 billion ages. The population over 60 is expected to grow by 100 million between 2015 and 2030 to over 300 million, according to Feng Wang, a professor at Shanghai’s Fudan University. Feng wrote in a paper for the Brookings think tank that the change will “test the government’s ability to meet rising demands for benefits and services.”

China’s Aging Migrant Workers Are Facing a Return to Poverty
As first-generation rural migrants near retirement age, many find themselves back in economic straits.

The forces needed to protect the Belt and Road
Last week’s attack on the Chinese consulate in Karachi by Baluchi separatists underlines China’s growing vulnerabilities in connection with its Belt and Road Initiative (BRI). These are likely to get worse and may ultimately lead to China assuming a new and quite different security role in the region.

China’s Untested Military Could Be a Force—or a Flop
It’s been decades since the PLA fought a war. Does that matter?
China’s Untested Military Could Be a Force—or a Flop

Alain Gillard
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