China Press Review – October 18, 2019

Press review

White House economic advisor Kudlow says there’s ‘a lot of momentum’ to finish China trade deal
Top White House economic advisor Larry Kudlow sees trade negotiations with China accelerating toward a more complete agreement. “For the skeptics out there, I appreciate that and I respect that but I’m telling you that there’s a lot of momentum and there’s agreement on both sides,” Kudlow said. Representatives for President Donald Trump’s administration are expected to meet with top Chinese trade negotiations in the next couple of weeks.

Chinese Premier Li Keqiang promises ‘tremendous opportunities’ for US firms
‘Door of opening up will only open even wider,’ he tells American business leaders on Beijing visit, repeating a pledge made at latest trade talks in Washington Decoupling of world’s largest economies ‘not in our interests’, chairman of US-China Business Council says

After trade talks in U.S., China ramps up Brazilian soy purchases
Chinese importers have been busy booking fresh purchases of soybeans from Brazil this week, despite the White House announcement that China had agreed to buy up to $50 billion (38.75 billion pounds) of U.S. farm products annually during trade talks last week.

The pattern of US-China trade talks has been predictable, but markets’ reaction may not be
History seems to repeat itself, with a de-escalation before trade tensions inevitably flare up over unresolved issues. Investors, however, should avoid assuming that familiar government steps will lead to similar reactions in the market

China’s leadership is ‘not scared of Donald Trump’ on trade: Susan Rice
A partial trade deal reached between the U.S. and China last Friday sent markets soaring. While the tentative deal is set to be signed in the coming weeks, Chinese negotiators have said a final accord will require the removal of all new tariffs. In a newly released interview taped last Tuesday, before the partial deal, a former top national security official under Barack Obama said Chinese leaders will not be intimidated by President Donald Trump. “They’re not scared of Donald Trump, not under this Chinese leadership, at this point in their history and development,” says Susan Rice, who served as National Security Advisor over Obama’s second term. “It’s not what they want, but if that’s what we bring, they’re going to play to win. And we need to understand that.”

China’s economic growth worse than expected, sinking to new low of 6.0 per cent in third quarter amid US trade war
Economic growth was the lowest since records began in March 1992 and below expectations of 6.1 per cent Other figures released on Friday showed that industrial production grew by 5.8 per cent in September, while retail sales grew by 7.8 per cent last month

China economy set to sink further, with US trade war and pork crisis to drive record low growth lower still
The economy grew by 6.0 per cent in the third quarter, and analysts expect it to slow further in the final quarter and into 2020, as tariffs compound the issue Trade war just one of many problems facing China, with pork crisis and consumption issues also expected to weigh on growth in the world’s second largest economy

China: After 6% GDP Growth In Q3, We Raise Our Q4 Forecast
Infrastructure projects are the pillar of growth. Retail sales grew on essential items. Looking forward in 4Q19. Trade war is still an uncertainty.Monetary policy will loosen in 4Q19.

Six warning lights flashing for China’s slowing economy
China’s $13 trillion economy is slowing and indicators showing that range from freight shipments to factory power generation and from employment to expenditures on entertainment.

China stocks lose most in a month as lowest GDP growth on record fuels fears of long-term slowdown
China’s third-quarter GDP growth, at 6.0 per cent, was the lowest on record and fuelled doubts about the efficiency of government stimulus measures Property companies and banks pulled the Hang Seng Index lower, but the Hong Kong benchmark still gained 1.5 per cent on the week

State Capitalism? No, The Private Sector Remains the Driver of China’s Economic Growth
In truth, China is a mixed system that combines capitalism and socialism—just like every other country in the world.

How China’s Central Bank Digital Currency will help Renminbi to challenge dollar
China has been working on a Central Bank Digital Currency (CBDC) since 2014, but Facebook’s Libra seemed to create a new urgency. On the surface it appears the CBDC will be for domestic use, but a CBDC will simplify cross border transactions. For a long time, the country has been dissatisfied with the U.S. Dollar’s (USD) ongoing role as the global reserve currency and is committed to extending its currency’s reach. It even has an initiative to denominate international trade credit in Renminbi (RMB) rather than dollars. And the Belt and Road Initiative has seen China extend more than $1 trillion in foreign loans, often with terms that many claim are not repayable without help.

Alibaba anti-counterfeiting alliance now protects 450 brands 
With nearly three years of rapid growth, experience and actions on multiple fronts, the Alibaba Anti-Counterfeiting Alliance has evolved into a full-fledged “IP-protection ecosystem,” Alibaba Senior Vice President Michael Yao said Thursday.

Trade deal aside, Sino-US rivalry is far from over: China’s Communist Party-driven economy is incompatible with the global order
The World Trade Organisation has never before dealt with an economy like China’s, where the party picks winners and compels firms to toe the line Increasingly, when called on to punish foreign entities, Chinese firms have little choice but to show their loyalty, the NBA row just the latest example

TSMC’s US$15 billion splurge galvanises hope of a 5G-led rebound
The world’s largest contract chip maker said the advent of 5G smartphones will result in more chips in devices than before

China’s electronics exporters desperately look for an escape from US trade war nightmare
Exhibitors at the Hong Kong Electronics Fair said American buyers were thin on the ground, with trade war tariffs killing much of the market Some companies have joined the exodus of manufacturers from China to Vietnam, while others are absorbing tariff costs, but trade war fatigue has set in

Does Huawei’s future lie with India after US ban?
The US says Huawei equipment has back doors that would enable Chinese surveillance
Chinese tech giant Huawei, which has been banned from selling 5G equipment to US telecom companies, is making an aggressive push to market itself in India.

Chinese State-Backed Companies To Launch $4B Innovation And Tech Fund In Beijing
Two companies under state-owned firm Zhongguancun Development Group (ZGC Group) are to jointly set up a fund of funds (FOF) with more than RMB30 billion (US$4.24 billion) in initial capital to back tech companies, announced by ZGC Group on Thursday in the 2019 ZGC Forum. The new fund, Zhongguancun innovation fund, is launched by Zhongguancun innovation and development fund, taking up RMB20 billion (US$2.8 billion) and Zhongguancun international innovation fund, accounting for US$2 billion.

Data labelling jobs are coming to China’s underdeveloped regions, but are they sustainable?
Guizhou, one of the poorest provinces in China, is morphing into a big data hub for major hi-tech companies

Do Chinese Consumers Care about Sustainable Fashion?
The Chinese luxury market has been noticeably slow-moving on sustainable fashion, with consumers often treating luxury as a separate sphere to other sustainable sectors. Recently, however, marketers are claiming that sustainability will play a key role in purchasing decisions in 2020 and beyond. But how much do Chinese consumers really care about ethically-sourced or sustainable goods? Or are they simply looking for the best deals on designer brands?

Do Chinese Consumers Care about Sustainable Fashion?

Asia behind in sustainable investments, but attitudes are changing, industry leaders say
Sustainability a ‘slow-moving, unstoppable train’ for investor portfolios, according to Willis Towers Watson China to require listed companies, bond issuers to disclose environmental, social risks beginning next year

China Is The World’s Largest Oil & Gas Importer
Everybody knows that China has been leading the world in new oil and natural gas demand, except for last year when the U.S. did it. But, what is not so commonly known is that China is now the largest oil and natural gas importer.

China’s worldwide investment project is a push for more economic and political power
The European Union is also unsure about China’s political intentions. Some of its members have joined individually, but others have expressed concerns that Chinese plans often overlook environmental and social sustainability – and that its bidding process is not sufficiently open to the public. There is some general European concern that China is seeking to divide Europe politically. Recent reports suggest that Chinese investment in the Belt and Road Initiative – and international interest in Chinese funding – is slowing. In part that may be because, predictions and analysis aside, nobody knows for certain what China is aiming for – except to boost its own side in its rivalry with the U.S.

Modi is right to reset China-India relationship
Other benefits of a closer China-India economic and geopolitical relationship include a possible rapprochement between India and Pakistan. China, being the “all-weather friend” of Pakistan, could mediate a truce between the two South Asian nuclear powers. With India, Pakistan and China at peace working with one another, the region’s economic development and growth could be assured. Of course, a close relationship with India benefits China as well. Adding India to its BRI could increase China’s investment and trade prospects, thereby weaning it from the West and Japan. A market with a huge proportion of the world’s population brings enormous economies of scale and therefore competitiveness, enabling China, India and other countries that are participating in the BRI to compete effectively with the developed world. Modi and Xi should be applauded for putting the China-India relationship on track. The potentially large numbers of lives it would improve or save will make them more deserving of the Nobel Peace Prize than all of the US presidents who have received it.

Thailand reopens free trade talks with EU to reduce reliance on China
China accounted for 14 per cent of Thailand’s total foreign direct investment in 2018 Talks had been on hold since 2014, when a military coup in Thailand ousted the democratically elected government of Yingluck Shinawatra

Thailand says ‘good feeling’ over China-backed trade pact
Thailand has a “good feeling” that a China-backed free trade pact for countries with nearly half the world’s population will be agreed this year after years of delay, a Thai official said on Friday

Despite China’s Slowing Economy, Credit Demand Still Strong
Chinese online finance giant Ant Financial, headed by billionaire Jack Ma, is seeing an uptick in the desire for credit among small and medium businesses despite the economic slowdown in China, Bloomberg reported on Thursday (Oct. 17). Chairman Eric Jing told Bloomberg that the private sector continues to be healthy due to new technology like mobile payments and digital loans.

Despite China’s Slowing Economy, Credit Demand Still Strong

China’s regulator tightens supervision on banks’ structured deposit products
China’s banking and insurance regulator issued rules on Friday to further regulate commercial banks’ structured deposit products, aiming to rein in the rampant growth of the sector. The new regulations will come with a grace period of 12 months. During the transition period, banks can still issue the products but the size should be gradually reduced, the China Banking and Insurance Regulatory Commission (CBIRC) said.

Hong Kong remains key gateway as China’s FDI rises 2.9 per cent in first nine months of 2019 despite protests
Overall, foreign direct investment in China rose to US$100.8 billion amid sustained government efforts to offset the economic slowdown Inflows from Hong Kong, which account for two thirds of China’s overall foreign investment inflows, increased by 8.1 per cent between January and September

Hong Kong hedge funds’ US$1 billion redemptions in the third quarter one of the largest since 2009 global crisis: Eurekahedge
The US$1 billion in redemptions ‘not very significant’ when viewed against the US$121 billion that has flowed out of hedge funds globally over the course of this year, according to data provider Eurekahedge Small to medium-sized hedge funds ‘bore the brunt’ of the outflows this year

NBA’s chief admits the China crisis set off by Morey’s tweet led to ‘substantial’ losses in a market it’s spent decades cultivating
The NBA is the most popular US league in the world’s most populous country – with some 800 million Chinese viewers – and its business there is already a billion-dollar enterprise Tencent Holdings has a US$1.5 billion, five-year deal to stream league games online in China

US diplomat David Stilwell says Washington must shed its myths about China to check Beijing’s growing influence
Amid rising bilateral competition, the speech by a State Department official appears to be an effort to stake out a position in the global battle for ideas David Stilwell stresses the importance of reciprocity and access in China

China’s Maritime Strategic Challenge
China is working to end U.S. military predominance in Asia, and likely beyond. This forces U.S. officials to rethink how military security relates to trade and investment. U.S. officials are urging friends around the world to join the reexamination.

Cult-like Restaurant Exposes China’s Appetite for Ponzi Schemes
Filmmaker Zhou Mingying discusses his surreal encounter with an authoritarian restaurateur while making his documentary ‘The Land of Peach Blossoms.’

In China, AI helps sort rubbish, catch criminals and improve traffic – now it’s used to stop toilet paper theft
Facial recognition for toilet paper dispensing first appeared in 2017 in a public restroom in Beijing

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