China Press Review – October 14, 2019

Press review

China’s export growth in biggest drop since February, as US trade war continues to hammer economy
Both exports and imports fell by more than expected in the world’s second largest economy in September, with US tariffs causing serious issues for China’s trade US President Donald Trump said China agreed last week to resume buying US farm goods as part of a deal that will also delay a tariff increase set for Tuesday Shipments fell by 3.2 per cent during the month compared to a year earlier, after dropping 1.0 per cent in August in dollar terms. This was worse than the 2.8 per cent decline expected by analysts in a Bloomberg poll. It was also the biggest fall in exports since February, when they fell 20.7 per cent. In addition, imports during the month fell by 8.5 per cent, well below the 6.0 per cent decline expected, showcasing weaker domestic demand. Imports have declined in every month this year apart from one – April. The country posted a trade surplus of US$39.65 billion, above the US$34.83 billion recording in August, according to China’s General Administration of Customs. The new data will have been affected by a 15 per cent tariff on roughly US$112 billion of Chinese goods applied by Washington on September 15.

China’s sharp drop in imports led by weaker demand for aircraft, soybeans and smartphone screens
China’s imports fell by 5 per cent in the first nine months of 2019, reflecting disruption to global supply chains amid ongoing US-China trade war Purchases of aircraft plunged 41.6 per cent, while imports of soybeans dropped 7.9 per cent

China Wants More Talks Before Signing Trump’s ‘Phase One’ Deal
China wants further talks as soon as the end of October to hammer out the details of the “phase one” trade deal touted by Donald Trump before Xi Jinping agrees to sign it, according to people familiar with the matter, Bloomberg News reports

US, China Reach Partial Trade Deal; Avoid Tariff Increase
U.S. President Donald Trump announced Friday that Washington and Beijing had reached a substantial phase-one trade deal, covering agricultural purchases, currency and some aspects of intellectual property protections. A current 25% levy on $250 billion of Chinese goods was targeted to increase to 30% October 15, and a second set of taxes of 15% on more than $150 billion in goods was set to go into place December 15.

Can the U.S. Hit the Reset Button with China?
The White House may have struck a temporary truce, but the conflict won’t go away anytime soon.

US-China ‘partial’ trade deal sees tariff rise halted, progress on technology transfers
Donald Trump advises US farmers to ‘get bigger tractors’ as Beijing promises to buy more American agricultural products US Treasury Secretary Steven Mnuchin has ‘very good discussions’ on opening up of China’s financial services markets

Trump Says China to Boost Farm Spending to Up to $50 Billion
China will at least double its spending on U.S. agriculture as part of a partial trade accord between the two countries that’s likely to be well received by crop traders when markets reopen.

Beijing warns of more uncertainty in trade war negotiations despite ‘constructive’ talks in Washington
Final outcome depends on ‘whether the US can walk together with China, and create the necessary conditions to push ahead’, People’s Daily says ‘Talking while fighting could become the norm, and we should adapt to the norm as soon as possible’, says Taoran Notes

Trade War With China: What Is America Up To?
The lack of clear direction of what the American side wants from China gives Beijing an upper hand in trade negotiations. And that could explain why they are winning the game thus far, as evidenced by the most recent reports coming out from Washington. “Reports that the White House is prepared to sign on to a limited trade deal suggest that the Chinese have achieved a comprehensive victory in the trade war,” says Bauman.

Alleged US-China “Micro” Deal Does Not Mean a Thing for Most
Since the very beginning of US-China trade negotiations we have been unequivocally negative on the likelihood of a deal and we have just kept saying that foreign companies (especially those that sell their products to the United States) need to work on reducing their China footprint. Today’s micro-deal between the United States and China has not changed our position one iota.

BREAKING: Alleged US-China “Micro” Deal Does Not Mean a Thing for Most

U-turning China’s current account balance
Since the start of the US–China trade war, the market has seen no shortage of trade measures engineered to reduce China’s bilateral trade surplus with the United States. With renewed trade tensions, China’s current account surplus is back in the spotlight, despite the surplus dropping significantly from its peak during the 2007–2008 global financial crisis (GFC). A narrower current account balance may ease global concerns about China’s export machine, but with less foreign reserves it also means that China will have less room to respond to unexpected external shocks.

Expect a U-shape for China’s current account balance

Xi, Modi agree to trim trade deficit, boost mutual trust amid US-China tensions
The leaders agreed to set up a mechanism to boost economic ties and tackle India’s trade deficit with China after their second informal summit As 2020 is the 70th anniversary of diplomatic ties between both countries, India and China will hold 70 events next year to promote relations

China’s hidden capital flight soars to record high
CHINA’S hidden capital flight surged to a record high in the first half of this year, suggesting that residents wanting to move money abroad are using unrecorded transactions to evade tight capital controls. That’s according to the Washington-based Institute of International Finance, which said the “net errors & omissions” in China’s balance of payments, widely seen as an indicator of concealed capital flight, rose to a record high of US$131 billion in the first six months of this year. That was larger than the average US$80 billion recorded during the same period in 2015 and 2016, when outflow pressures intensified, it said.

Amid headwinds, Greece gives Cosco green light for partial Piraeus port upgrade
In a tale of two new eras, Athens walks a fine line between Chinese investments and a US defence pledge The decision comes soon after US Secretary of State Mike Pompeo visited Athens and warned about Chinese influence in Europe

Podcast : US vs. China “Digital Iron Curtain”
Deemed the new ‘Cold War’, the US and China are in a race for technological dominance, amid Donald Trump’s trade war. Huawei Telecommunications equipment company has been banned from buying or acquiring American parts and technologies With China already operating on a different system, this technological break-up could split the world further along two sides of a digital iron curtain.

Why US businesses should be worried about China’s corporate social credit system
Though it hasn’t been formally launched, the system has already been used to force international firms to adopt Chinese values on politically sensitive issues Punishments could include being denied access to cheap loans, higher import and export taxes and key personnel being prohibited from leaving China

American companies are taking enormous risks to do business in China
American companies doing business in China are navigating an unprecedented array of risks, from slowing growth to the trade war and pro-democracy protests in Hong Kong. But that hasn’t stopped many of them from pushing deeper into the vast Chinese market.

Top Japan retailer taps China for lessons in 21st-century shopping
Aeon to invest $4.6bn in the country in an attempt at self-transformation

China’s Chemicals Industry Struggles to Move On After Deadly Blast
Seven months on from a factory explosion that killed 78 people, China’s chemicals industry faces an unprecedented safety clampdown.

China counts the environmental cost of its construction boom, as 1.5 billion tonnes of waste created every year, report says
Only 100 million tonnes are properly processed and even household rubbish gets more attention from local governments In comparison, developed nations like the US and Japan recycle between 90 and 95 per cent of their construction waste, magazine report says

China’s truck drivers say they are forced to overload vehicles to survive despite fatal road collapse
Authorities in Jiangsu launched a crackdown after a flyover collapsed in Wuxi city, but many hauliers say they are forced to cut corners to survive
Many of China’s 30 million truck drivers are facing rising costs but have to reduce their prices in order to remain competitive

Going, going, still no takers? China’s small, indebted local banks fail to attract buyers at auction, even at half price
Chinese banks are trading at a distressed level in Hong Kong, at an average of 0.6 times their forecast book value Stocks and bonds of smaller banks – companies that UBS estimated are facing a potential capital shortfall of 2.4 trillion yuan – are struggling to find buyers

Beware of this China Scam: The Commodity Bait and Switch
We are contacted regularly by overseas buyers who are about to purchase a commodity product from a Chinese manufacturer, and it is nearly always a very risky situation for the buyer as switching out an order of commodities to a cheaper commodity at the last minute is an all too common China scam.

Are Virtual Influencers the Future of Luxury Retail?
Oscar Wilde famously said, “One should either be a work of art or wear a work of art.” According to Fashion and Imagination: About Clothes and Art, since the 1960s, we have obscured the boundaries between the two. Imagination and fantasy are components of any art form, so it shouldn’t come as a surprise that the retail world is moving further away from realism, while it embraces the realm of imagination. And today, modern technology is transforming the luxury world as we know it, bringing consumers closer to brands through the use of retail intelligence and analytics, Artificial Intelligence-powered software, gamification reality, augmented reality, and even virtual influencers (VI).

Are Virtual Influencers the Future of Luxury Retail?

Chinese fake goods seller caught after her mother used ‘Louis Vuitton’ bag to do her shopping
Officers said they became suspicious when they saw a woman putting pork and vegetables in a bag they did not think she could afford Online trader was detained after police investigating sale of fake Chanel bag found 400 counterfeits in her house

China’s auto sales sink 6.3% in September
China’s auto sales sank 6.3% from a year earlier in September, putting the market on track to shrink for a second straight year at a time when brands are spending heavily to meet government targets to develop electric cars. The China Association of Automobile Manufacturers, an industry group, reported Monday sales of sedans, SUVs and minivans in the global industry’s biggest market declined to 1.9 million.

China’s auto sales sink 6.3% in September

Will China’s revised cybersecurity law put foreign firms at risk of losing their secrets?
Companies are concerned they may have switch to Chinese service providers and equipment to meet Beijing’s demands on the protection of sensitive data ‘Chinese government is putting in place new tools that make it much more difficult for companies to keep their information private,’ cybersecurity expert says

China’s Cloud Computing Market To Reach $42 Billion by 2023
The domestic industry has seen strong growth but still lags behind that of the U.S., according to a white paper from China’s Cabinet.

Investors’ loss of confidence in monetary easing comes at a worrying time for the world economy
In Europe and America, central bankers are divided over the need for loose monetary policy. More importantly, market regard for their ability to boost a flagging economy has fallen dramatically, undermining the effectiveness of such policies

How China is relying on Russia to achieve ‘strategic stability’ with the US
Mathieu Duchâtel writes that a shared ambition to change the international order and a concern for the nuclear balance of power with the US are helping China get what it needs from Russia

70 Years of China’s Economic Growth in One Chart
From agrarian economy to global superpower in half a century—China’s transformation has been an economic success story unlike any other.

The People’s Republic of China: 70 Years of Economic History

Ignore US conspiracy theories. Khan needs China-Pakistan Economic Corridor now more than ever
Work has slowed to a trickle on the China-Pakistan Economic Corridor, a jewel in the crown of Xi Jinping’s Belt and Road Initiative Claims of US interference are nonsense; the truth is Khan’s distracted government has realised the project is its best hope amid a tanking economy

Avoiding Friendly Fire Amid Economic Tensions With China
Summary: Washington and Tokyo should continue to consult with each other to ensure that trade frictions with China do not disrupt their economic relationship.

China trade with B&R countries sees steady growth
Official data showed on Monday that the trade of China with countries along the Belt and Road (B&R) saw strong growth in the starting 3 quarters of the current year. The General Administration of Customs (GAC) said that the trade with B&R countries stood at a total of USD940.3 billion in the period, increasing 9.5 percent since the past year.

How China can help rescue the WTO, at a critical time for global trade
The World Trade Organisation is floundering. Its trade dispute settlement system is falling apart, and it can’t seem to seal a minor deal on global fishing subsidies. This is the hour for China to honour its commitment to multilateralism

Asia-Pacific needs the WTO to stay relevant in an increasingly uncertain world
Bilateral negotiations never favour smaller economies and losing the WTO’s multilateral dispute settlement channel would be a major loss for the Asia-Pacific. We cannot afford to take the WTO for granted, weakened as it is and in sore need of reforms.

The ‘Trump Factor’ in the US–Japan trade deal
‘Win–win’ is the phrase du jour for both Prime Minister Abe and chief trade negotiator Toshimitsu Motegi when describing the recent US–Japan trade agreement. Both have emphasised how the deal has delivered positive outcomes for Japan as well as for the United States. But the result on the most critical issue for Japan — US tariffs on Japanese cars and car parts — was a negative.

The ‘Trump Factor’ in the US–Japan trade deal

Do Africa’s emerging nations know the secret of China’s economic miracle?
Sino-African two-way trade hit US$204 billion in 2018, but is it economics or politics that is driving development on the giant continent? The absolute authority of China’s Communist Party has long been a lure for some African rulers but observers say they are now more interested in Beijing’s billions

How a China Slowdown Would Affect Your Business
China’s integration with the world economy has benefited several multinational businesses and national economies, providing access to its vast domestic market and competitive industrial and labor productivity. While China may not suffer a prolonged economic stagnation, the country’s express growth rates will not return, settling instead between an estimated five to six percent. Investors based in the country must track the economic performance of respective sectors and regions more closely to hedge against risks effectively. All industries do not suffer equally in a slowdown; as consumers cut back on discretionary spending, the expenditure on essential items like food and beverage products, alcohol, cosmetics, education, and healthcare will continue.

China using economic muscle to bend Western companies to its will
LONG before Daryl Morey’s fateful tweet – the one that set the NBA on a collision course with China – the country already had a history of employing economic might to twist corporate arms in Asia.

How the NBA’s rift with China laid bare the cost of free speech
The world’s premier basketball league has spent decades cultivating the multibillion-dollar Chinese market, but the fallout from a single tweet has threatened to upset it all

Can American Values Survive in a Chinese World?
A new book looks at the China challenge for the United States—and China itself. China’s Vision of Victory is a useful antidote to the popular delusion that Chinese leaders seek nothing more than to roll back U.S. hegemony in the Western Pacific—or that they will be sated by becoming the dominant East Asian power. Despite presenting modest and peaceful ambitions to foreigners, the Chinese Communist Party leadership transparently communicates its desire for primacy to internal audiences. By guiding readers through a barrage of official documents, excerpted liberally throughout the book, Ward shows just how wide-ranging these ambitions are.

Can American Values Survive in a Chinese World?

Chinese President Xi Jinping warns that anyone trying to split any part of country will be crushed
Comments made during Xi’s visit to Nepal being seen as aimed at trouble spots from Tibet and Xinjiang to Hong Kong President’s remarks are also wider warning to US not to meddle in China’s domestic issues, such as Hong Kong, academic says

China and US wage duelling ‘hearts and minds’ campaigns
Chinese leaders say that they are still inspired by the teachings of Chairman Mao Zedong As the battle between the US and China over tariffs goes on, an age-old ideological feud is being waged, pitting Beijing’s Communist Party against Washington-style

For Xi Jinping, the biggest danger to the Communist Party is itself
The Communist Party’s most influential members will be meeting this month to discuss how to strengthen and legitimise their power Nearly 40 years after Deng Xiaoping embraced reform, it’s time for Beijing to make another monumental shift and embrace the rule of law

Hunter Biden’s China investment firm is small fish in China’s private equity pond
Chinese-backed firm linked to former US vice-president Joe Biden’s son is a small player in China’s private equity market Filings show the company shifted focus to yuan investments in China soon after it started because of capital account controls imposed by Beijing

Japan, Thailand and Singapore benefit as Chinese tourists skip Hong Kong over golden week
The likes of Saudi Arabia also saw an upswing in travellers from the mainland after the release of its new visa programme But fewer Chinese tourists went abroad this year, with a 15 per cent drop from 2018 attributed to more opting to visit local historical sites

Why China’s fevered dream of World Cup domination has no boundaries
China’s upsurge in fortunes follows the decision to redefine what being a Chinese footballer actually means

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