China Press Review – October 2, 2019

Press review

China’s one-sided capital account controls face backlash as US weighs curbs on investment
Beijing’s policy of strict controls on outbound capital is facing backlash in Washington and causing potential investors to drag their feet, analysts say White House is reportedly discussing ways to restrict US capital flows into China amid ongoing trade war

Communist China Turns 70. Who Shares Its Economic Growth?
“If there is such a thing as a social contract in China, it is based on the presumption of continued prosperity under Chinese Communist Party rule,” Dickson says. As long as people believe the government will continue to make their lives better, hope will pacify them. But if growth and wages stagnate, that hope could turn to resentment, he says. And resentment could turn into action. Then again, he says, the U.S. has often underestimated the Chinese government’s ability to survive over the 70 years of its existence.

6 things to know about China’s historic rise
As China marks 70 years of Communist Party rule, its economy shows signs of slowing but remains among the fastest-growing in the world, with huge investments in technology and innovation.
The country has “experienced the fastest sustained expansion by a major economy in history,” according to the World Bank. Now the world’s second-largest economy is transitioning to what President Xi Jinping has referred to as the “new normal,” where consumption and services become more important drivers of expansion than investments and exports.

Amid economic challenges, China displays ‘a military show of strength’ at its 70th birthday bash
China’s 70th anniversary celebrations were a display of the country’s military strength, said a professor Tuesday. The celebrations, which boasted one of Beijing’s largest military parades, took place amid rising inflation and challenges to the Chinese economy. In the equipment portion of the parade, 160 aircraft and 580 pieces of military equipment, including drones and missiles, were on display.

Trade war, intellectual property theft among top risk worries for companies in China, Kroll report finds
Ninety-four per cent of companies in China see IP theft as their top risk priority, Kroll says Adversarial social media activity a rising risk in China, survey finds

China at 70: The Growing Pains of a Rising Power
Seventy years after the founding of the People’s Republic, significant tasks still lay ahead for China.

A shortage of pork and oil raises the spectre of inflation, and China should be afraid
A double whammy of the African swine fever outbreak and an attack on oil facilities in Saudi Arabia, a major supplier for China, could send prices of both vital commodities soaring at a vulnerable time for the Chinese economy

China’s outbound investments have hit a snag, but its M&A in Asia and Oceania show it’s still the face of globalisation
At first glance, China’s declining outbound investment appears to confirm the seeming retreat from globalisation. Yet, while M&A has declined in Europe and the US, look to its activity closer to home for a glimpse of the future

China is nearing a record number of state-backed investments in private companies
As strains on the second-largest economy pile up, the Chinese government is increasingly taking up stakes in private companies. The Wall Street Journal reported Tuesday that government-backed buyers in China purchased 47 stakes in listed private companies in the first half of the year The past two years marked a sharp break from much of the past decade, when those annual totals have amounted a dozen or fewer stakes.

Why this $35 billion private equity firm is still bullish on China — despite the trade war
As the war of words escalates in the U.S.–China trade dispute, the future of crossborder investment is now in the crosshairs. The Trump administration has threatened to find ways to limit U.S. investors’ portfolio flows into China, but Chinese authorities announced Monday they are accelerating efforts to open their market to foreign investors. Despite the trade war, General Atlantic, a $35 billion private equity firm, is committed to investing in China.

Foreign investors have already pulled back from China
Investment in Chinese assets fell significantly this year as a combination of the trade war and increasingly attractive opportunities elsewhere spread money across a variety of locations in the emerging world.

In-house chips power Huawei’s 5G drive beyond China
Huawei Technologies’ miniaturization of base station antennas aims to help carriers transition to 5G more easily. Chinese telecom equipment makers claim they have overcome technical and standards-related challenges to establish themselves as global leaders in 5G, drawing customers from around the world even amid a challenging geopolitical environment.

Samsung ends mobile phone production in China
Samsung Electronics Co Ltd (005930.KS) has ended mobile telephone production in China, it said on Wednesday, hurt by intensifying competition from domestic rivals in the world’s biggest smartphone market. The shutdown of Samsung’s last China phone factory comes after it cut production at the plant in the southern city of Huizhou in June and suspended another factory late last year, underscoring stiff competition in the country.

4th Int’l Hydrogen FCV Congress held in Rugao, Jiangsu
The 4th International Hydrogen Fuel Cell Vehicle Congress was held in Rugao of Jiangsu Province, east China during September 26-28, exploring global cooperation and commercial development paths in hydrogen and fuel cell sectors.

Hyundai nets 100% buyout of Sichuan JV
South Korean firm becomes China’s first foreign-invested commercial car company to achieve full overseas ownership Hyundai Motor Group plans to buy all the shares held by its Chinese partner in their Sichuan province-based joint venture by next year, with a view to hydrogen fuel car production in the province, an executive at Hyundai Motor told Yicai Global.

Tesla registers Shanghai construction unit in acceleration of China plans
U.S. electric vehicle maker Tesla Inc has registered a construction company in China, a business registration filing shows, the latest sign Tesla is pushing ahead with its plans in the world’s biggest auto market. California-based Tesla has opened a wholly-owned construction unit in Shanghai with registered capital of $1 million, according to China’s National Enterprise Information Publicity System.

Italian politicians push for Huawei 5G ban after Pompeo warning
They want Italy’s Parliament to use its “golden powers” to block the Chinese company, according to a report.

Belt and Road to bring 1 GW of solar to Italy
Chinese state-owned PV manufacturer Jetion Solar says it has signed a deal with Italian government-owned oil and gas major Eni to develop a slew of new solar projects across five regions in the next three years in a deal worth €2 billion.

Belt and Road to bring 1 GW of solar to Italy

China’s Guangzhou rides economic change but keeps traditions
China’s southern city of Guangzhou is at the heart of plans to link a cluster of cities in the Pearl River Delta, including Hong Kong and Macau, into a Greater Bay Area rivalling Silicon Valley and Greater Tokyo as an economic hub by 2035. Sprawling over 56,000 sq km (21,600 sq miles) with a population of more than 70 million, the Greater Bay Area is the centrepiece of a drive by China’s ruling Communist Party to establish a hub of advanced manufacturing and technology.

What fast-ageing countries such as China tell us about our economic future
Similarly, China’s policymakers have been explicitly aware of shifting comparative advantage over time. In the 1980s and 1990s, when China’s wages were low and the labour supply abundant, policymakers offered incentives for foreign investment in labour-intensive manufacturing. As those advantages have faded, incentives have similarly shifted toward the services sector and higher-tech sectors, as well as towards research and development. In other words, China’s policymakers did not just have an economic strategy, but an economic demography strategy. That is, China had realised early on that economic and demographic change are cointegrated – something all countries, rich and poor, young and old, might learn from.

State Capitalism? No, The Private Sector Was And Is The Main Driver Of China’s Economic Growth
A working paper from the World Economic Forum stated that “China’s private sector – which has been revving up since the global financial crisis – is now serving as the main driver of China’s economic growth. The combination of numbers 60/70/80/90 are frequently used to describe the private sector’s contribution to the Chinese economy: they contribute 60% of China’s GDP, and are responsible for 70% of innovation, 80% of urban employment and provide 90% of new jobs. Private wealth is also responsible for 70% of investment and 90% of exports.” Today, China’s private sector contributes nearly two-thirds of the country’s growth and nine-tenths of new jobs, according to the All-China Federation of Industry and Commerce, an official business group.

Public opinion on China turns negative in Western Europe and Asia-Pacific, survey finds
In US and Canada, meanwhile, more than 60 per cent and 67 per cent of those polled hold unfavourable views on China – the worst results since 2007 Beijing’s controversial efforts to expand the country’s influence seen in split across 32 countries included in poll by Pew Research Centre

Rising corporate debt could spell trouble for Asia’s banks if economy falters, Moody’s says
Asia-Pacific companies could face more challenging operating environment as US-China trade war rages, economies slow, Moody’s says Debt levels remain high relative to gross domestic product in many Asia-Pacific economies

China’s August forex reserves rise to $3.1072 trillion
China’s foreign exchange reserves rose unexpectedly in August, even as the yuan posted its biggest monthly drop in 25 years amid escalating trade tensions with the United States.

The BoF 500 2019: The 6 Chinese Figures Helping to Shape the Fashion Industry
The number of Chinese nationals earning a spot on the list suggested a shift towards greater recognition of China on the world fashion stage. Since its inception in 2013, The BoF 500 has been regarded as the definitive index of the people shaping the world’s $2.4 trillion fashion industry. This year saw six Chinese individuals added to the list, in a radical reimagining of its format.

The BoF 500 2019: The 6 Chinese Figures Helping to Shape the Fashion Industry

Tmall China Cool Makes its Paris Fashion Week Debut 
After successful shows in New York and Milan, Tmall wrapped up its “China Cool” tour on Sunday at one of the industry’s most anticipated events of the year: Paris Fashion Week.

At PFW, Which Brands Connected With China’s Millennials?
The Jing Daily Fashion Week Score evaluates a range of parameters to assess how a brand’s collection resonates with Chinese audiences. Shows have become a powerful tool for brands to speak directly to their fans, bypassing the filter once held by editors. This means fashion week now presents a major opportunity for brands to connect with the Chinese community and set the tone for the success of their collections.

At PFW, Which Brands Connected With China’s Millennials?

Here Are How Luxury Brands Celebrate Chinese 70th Anniversary
It was only a short time ago that the Versace, Coach, Swarovski, and Givenchy T-shirt controversies agitated Chinese netizens regarding the brands’ ambiguous attitude towards Hong Kong and mainland China territorial issues. Many Chinese celebrities volunteered to resign from their brand ambassadorships, and Chinese consumers chastened the brands on social media or scratch them out of their shopping list. However, learning from the D&G previous disaster, the brands immediately apologized and claimed to respect the sovereignty of China’s territorial state.

How Luxury Brands Celebrated China’s 70th Anniversary

Property technology has the potential to create a multibillion dollar market as China looks for new growth engines
Better use of proptech will eventually help increase the contribution of China’s real estate sector to the overall economy, says industry expert Proptech plays an important role in building smart cities amid the rapid penetration of digital technologies in the world’s second-largest economy

France’s Emmanuel Macron to meet Xi Jinping in China next month with focus on climate change and trade, source says
The trip comes amid growing resistance from European leaders over what they see as China’s failure to change long-term practices unfair to foreign investors French President’s trip to Beijing follows Chinese leader’s visit to France in March

We Need to Pull U.S.-China Relations Back from the Brink. Here’s How.
Like it or not, the U.S. and China are in the process of “decoupling.” The two countries find themselves drifting dangerously back into a state of growing distrust, and even antagonism. This comes after almost a half century of relying on some version of the “engagement” policy that began in 1972, when President Richard Nixon and Henry Kissinger met with Chairman Mao Zedong and Premier Zhou Enlai in China in a historic break-through that ended the Cold War stand-off.

China’s Sharing Economy Matured When It Seemed to Be Wilting
Sharing creates affordable infrastructure for start-ups through co-working spaces and for food and beverage businesses by allowing them to share a massive fleet of delivery guys instead of owning one. Even power bank sharing has its societal upsides, ridding people of the fear that they could be left without a functioning phone – a real disaster, especially in a smartphone dependent Chinese environment. It is hard to imagine that a generation of Chinese youth growing up on sharing could ever backtrack to buying. Datu, the translator from Beijing, can pick up and drop off a power bank wherever he wishes, he can bike to work from the subway, without worrying about smuggling the bicycle on the train, he can drive a car to Ikea, and order a car with a driver to reply to work emails on the way back, and he can rent out the empty room in his apartment on weekdays only to have his friends stay over on the weekends. The freedom that comes with sharing is addictive, and this might be one of the few addictions worth yielding to.

China’s Sharing Economy Matured When It Seemed to Be Wilting

China’s ‘awkward silence’ as lack of family planning slogans from 70th anniversary parade could signal policy shift
Beijing dropped family planning slogans and delegates from its National Day parade in a move that could signal a change to its controversial policy China abandoned its one-child policy in 2016 to allow couples to have two children, as its birth rate slows and population ages

Has China-Pakistan Economic Corridor lived up to the hype?
The China-Pakistan Economic Corridor has been touted as a “game changer” for Pakistan’s economy. Four years since launching, its implementation faces serious challenges, and the future course remains uncertain

China’s state broadcaster urges Hong Kong’s youth to work with Beijing to make their city great
‘When you are on the right track, positive changes will occur’, overseas arm of CCTV says in YouTube video ‘Embracing the Greater Bay Area, Hong Kong’s future will be better’, it say

Hong Kong stocks world’s worst performers in third quarter, as investors lose ‘patience and confidence’ amid protests, trade war
Hang Seng Index drops 8.6 per cent in third quarter Politics ‘a core factor’ weighing on Hong Kong stock market, asset manager says

Hong Kong leader Carrie Lam sought Xi Jinping’s approval to formally withdraw extradition bill that triggered anti-government protests
Revelation comes three weeks after chief executive said she had decided on her own to withdraw the legislation in bid to break the political impasse Source close to Hong Kong government says proposal was submitted to Xi’s office for deliberation and approval shortly before September 4 announcement

China is growing fed up with British private schools ‘creaming off’ the best pupils, headteachers warned
The Chinese government is growing fed up with British private schools “creaming off” the best pupils, a conference has been told. Institutions which have set up sister schools or franchises in China now face a “backlash” for party officials, according to Richard Gaskell, schools director at ISC Research which specialises in analysing data on international schools. There are now 47 campuses in China operated by British schools. The £41,580-a-year Wellington College runs schools in Tianjin, Shanghai and Hangzhou while the £44,346-a-year Dulwich College has two schools in Shanghai, one in in Beijing and Suzhou

Beijing’s massive military parade shows exactly why the Pentagon just set up a dedicated China office
Appointment of former marine officer Chad Sbragia as deputy assistant secretary of defence for China affairs will be a ‘stabilising force’ in military-to-military relations, senior official says The ‘unfolding long-term strategic competition with China is the defining challenge of our generation’, says Randall Schriver, assistant secretary of defence for Indo-Pacific security affairs

Mainland tourists skip Hong Kong for Singapore as city misses out on golden week bonanza
Analysts say Singapore is reaping the rewards of long term planning and investment Hong Kong’s tourism industry will take at least two years to recover after the situation in the city returns to normal, says lawmaker

Alain Gillard
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