China Press Review – October 10, 2019

Press review

US and China make no progress on key trade issues in two days of deputy-level talks, sources say
The Chinese delegation refuses to talk about forced technology transfers, a core US grievance in the negotiations, a person with knowledge of the meetings says Vice-Premier Liu He and his team may leave earlier than expected

China’s growth outlook cut by World Bank as US trade war continues to weigh on economy
The Washington-based World Bank cuts China’s 2019 gross domestic product forecast to 6.1 per cent, just above the bottom-end of the government’s target range China’s headline growth forecast for next year is also cut by 0.3 percentage points to 5.9 per cent, with the World Bank predicting a drop to 5.8 per cent in 2021

Hopes for progress in trade talks leads to gains for Hang Seng, mainland China benchmarks
Big winner of the day was 360 Ludashi, which closed up a whopping 218.5 per cent in its trading debut Report Trump will let some US companies sell to Huawei also lifted spirits

Dim prospects for deal as China and US resume trade war talks
Negotiators might find agreement on currency pact but bigger differences remain, observers say New strains over Xinjiang and Hong Kong mean ‘tiny’ possibility of breakthrough is ‘even smaller’

China urges U.S. to halt pressure on Chinese companies, including Huawei
China has urged the United States to stop unreasonable pressure on Chinese companies, including Huawei Technologies, foreign ministry spokesman Geng Shuang said at a daily press briefing on Thursday.

August worldwide air cargo shrinks for the 10th month, in longest losing streak since 2008, as trade war crimps shipments
The world’s air freight, measured in freight-tonne kilometres, fell 3.9 per cent in August from a year ago, according to data by the International Air Transport Association (IATA) Hong Kong’s airport, the world’s busiest air cargo hub, handled 5.1 million tonnes of cargo last year

China slimming down Belt and Road Initiative as new project value plunges in last 18 months, report shows
The value of new projects across 61 countries fell 13 per cent to US$126 billion in 2018, with the figure falling a further in 2019, according to Gavekal Dragonomics The project was launched in September 2013 by President Xi Jinping, but China’a access to available funds has since diminished

EU report warns of 5G threat from ‘hostile’ states
A new EU report published on Wednesday warned that “hostile third countries” may force 5G suppliers to facilitate cyberattacks serving their own national interests, but refrained from singling out China and its telecommunications equipment giant Huawei.

EU report warns of 5G threat from ‘hostile’ states

EU cybersecurity report says members can ban firms from 5G networks – but declines to name China or Huawei
Commission identifies ‘state-backed’ actors from outside EU as major security threat but declines to ‘jump to a conclusion’ about Chinese tech giant Report echoes Washington’s warnings about Huawei by warning there is a risk products will have ‘back doors’ inserted into them

China Hit by EU Tariffs as High as 66%
The European Union imposed tariffs as high as 66.4% on steel road wheels from China, targeting manufacturers such as Zhejiang Jingu Co. and Xingmin Intelligent Transportation Systems Co.
The duties punish Chinese exporters of steel wheels for vehicles including cars, tractors and trailers for allegedly having sold them in the EU below cost, a practice known as dumping.

Trump to allow some exports to Huawei as trade talks resume
The US government will soon issue licenses allowing a select few American companies to supply goods to Chinese telecommunications equipment maker Huawei, the New York Times cited people familiar with the matter as saying on Wednesday.

Trump to allow some exports to Huawei as trade talks resume

The US is whispering about financial war against China. Investors must brace themselves
The possibility of Washington restricting US investment in China shouldn’t be taken lightly. US-China financial interconnections have increased in the past decade, and a financial decoupling would be even more damaging than the trade war

Insilico Medicine nabs $200 million AI-powered drug discovery deal
Creators of a new machine-learning drug discovery platform Insilico Medicine has inked a dual-program drug discovery deal with Jiangsu Chia Tai Fenghai Pharmaceutical (CTFH) worth up to $200 million.

Insilico Medicine nabs $200 million AI-powered drug discovery deal

Establishing a FICE in China: What Foreign Investors Need to Know
Foreign-invested commercial enterprises or FICE allow companies based in China to directly access its local consumer market, businesses, and submit public tenders. FICE enjoy a much wider business scope and can be set up via different types of corporate structures – either as a JV or a WFOE, depending on what is most suitable to the business. Foreign investors should note that given the wider remit of its operations, there are some limitations, such as the time taken to establish a FICE, the process to secure appropriate import-export licenses, and acquiring authority to issue VAT.

Fewer super rich individuals in China as fortunes shrink amid raging trade war, slowing economy, Hurun list shows
Although 1,819 mainland individuals made it to the Hurun Rich List, 40 per cent of the people on the list two years ago failed to make the cut this year First time the number of wealthy individuals has fallen for two consecutive years because of a slowing economy

China court approves personal bankruptcy ruling that could pave the way for further debt cases
A court in Wenzhou, Zhejiang province, says a local man only has to repay 1.5 per cent of his 2.14 million yuan (US$300,000) of debt to creditors China is in the process of establishing personal bankruptcy rules amid a surge in the household debt-to-gross domestic product ratio

China to further open up mining sector: official
China will further open up its mining sector and improve its business environment to offer a level playing field for all market entities at home and abroad, said an official with the Ministry of Natural Resources.

‘China’s rise’ cannot be blamed for regional job losses in developed countries, IMF finds
Competition from China is not the primary reason for regional job losses in rich countries, new International Monetary Fund (IMF) research finds Study finds technological advancement is bigger driver of unemployment, undermining populist argument China is stealing manufacturing jobs

How must the savvy investor prepare, if the world turns bipolar and splits into economic halves around US and China by 2030?
Owning both US, Chinese assets would led to a “more robust portfolio” in the future, Julius Baer’s Yves Bonzon said Trade war could accelerate acceptance of yuan as a global reserve currency

Luxury Brands Face a Grim Golden Week in Hong Kong
According to the South China Morning Post, the upcoming Golden Week holiday will be a black-and-white gauge of how badly the ongoing protests have dented business in Hong Kong and will most likely show that the city needs to come to the aid of badly impacted tourism industry: Confidence might rebound when unwelcome visitors like Sars go away. That cannot be taken for granted in severe, home-grown political turbulence. It all depends on how it ends. Lingering perceptions of political risk and uncertainty will do nothing to restore confidence or attract the investors, businesspeople, and talent Hong Kong needs. With no end in sight, the protests are testing the principle of big market, small government. The government should be prepared to do what it can to save otherwise viable businesses and jobs from going under.

Luxury Brands Face a Grim Golden Week in Hong Kong

What Luxury Brands Can Learn from Golden Week 2019
October 7 marked the official end of China’s 7-day Golden Week holiday, one of the country’s longest holidays and a barometer for the ever-shifting consumption habits and behaviors of Chinese consumers. The weakened Yuan, a domestic economic slowdown, and a heightened level of patriotism were just a few of the factors forming this year’s consumption trends. But what were some of the other trends that luxury brands and retailers should be aware of? Here, we summarize four that were unique to this year’s Golden Week holiday.

What Luxury Brands Can Learn from Golden Week 2019

China Vows to Clean Up Shady Practices in Its Tourism Industry
The country’s tourism regulator aims to crack down on sources of complaints within the industry, such as big data-backed algorithms that charge loyal patrons more than first-time customers for the same service.

Hong Kong’s start-up scene is still a man’s world even if city tops the global ranks for gender diversity, women investors say
Women entrepreneurs in Hong Kong invest more of their own funds into businesses than other markets, according to a finding by HSBC Private Banking Hong Kong had the best gender balance when it comes to having men and women on investment panels, according to the survey

Unconvertible yuan is a drag on Shenzhen’s race to supplant Hong Kong’s unique role as China’s offshore financial centre
Hi-tech hub is likely to play a larger role in making yuan a global currency, analysts say, but mainland Chinese capital controls will keep it from becoming a magnet for global investment Hong Kong’s freely convertible currency ensures its unique position as China’s window to the world

Hong Kong’s spiral of violence needs to end, for the sake of our young people and our future
The two police shootings of teenagers are a wake-up call to stop the violence and protect our young people. Hong Kong has changed irrevocably. The government needs to respond to demands and make fundamental changes or the violence will linger for a long time

Apple’s China App Store pulls US news app that covered Hong Kong protests
Boss of American media firm Quartz says company is being targeted for reporting on dispute and providing information on how to bypass China’s Great Firewall Product removed on grounds it ‘includes content that is illegal in China’, CEO Zach Seward says

Hong Kong’s dollar is immune to protests, in a blow to short sellers gunning for a rematch of their 1997 takedown of the currency
The Hong Kong dollar hasn’t once reached the weak end of its trading band against the US dollar since the protests began four months ago The currency rose 0.04 per cent to 7.8426 per US dollar as of 11:31am on Thursday

Taiwan or the Republic of China? Island grapples with question of identity as Double Tenth celebrations play down nationalism
Flag-waving displays of nationalism and military parades are a thing of the past as the island prepares to celebrate the 108th anniversary of the republic that gives it its official name Many younger islanders are turning away from association with the mainland in favour of a specifically Taiwanese identity

Will Trump’s tariffs forge a new EU-China alliance? Not unless Beijing bridges the gap on human rights and investment
Europe has concerns over Hong Kong, Huawei and barriers to China’s market that Beijing will have to assuage But while an anti-Trump front is unlikely, cooperation in other areas, including climate change and infrastructure investment, is possible

How NBA crisis crystallises US-China culture clash better than the trade war
Wrath felt by US basketball over Houston Rockets employee’s tweet exposes pitfalls of doing business in China Incident brings home to Americans the realities of issues such as censorship and the Communist Party’s demands on private companies

US official presses for review of Bytedance’s acquisition
US Senator Marco Rubio on Wednesday requested that the Committee on Foreign Investment in the United States (CFIUS) review Bytedance’s 2017 acquisition of short video app, citing concerns that Bytedance apps are increasingly used to censor content, Reuters reported.

US official presses for review of Bytedance’s acquisition

Why China Should Embrace the Power of International Students
Boosting international education will strengthen Chinese schools at home — and the country’s perception abroad.

Moment of truth on China is coming for rest of corporate America
For US companies including Nike and Starbucks, China is a crucial market that is only growing in importance.

Xi has an eye on Kashmir. Is Modi watching Hong Kong, Xinjiang and the South China Sea?
In a dig at India’s leader, opposition politician Manish Tewari has asked if Modi will raise the sensitive issues during his informal summit with the Chinese president But analysts say it is a political move to pressure Modi’s BJP, and his stance does not reflect the Congress party’s position on Beijing

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