China Press Review – October 22, 2019

Press review

As a financial crisis looms and refugee crises worsen, the world seems to have forgotten the lessons of 1945
Global growth is unlikely to recover soon, given not only the US-China trade war but also geopolitical tensions Around the world, the number of forcibly displaced people has hit a record high

The US, Britain and China are leading the retreat away from austerity. It’s time other economies, especially in Europe, followed
Deficit spending among major economies steadily declined in the years after the global financial crisis ended. With economies around the world slowing, major players – Germany in particular – should abandon austerity now

Economic fundamentals remain solid
China’s economy, though facing headwinds, has maintained steady growth over the first three quarters of this year, as the country’s economic structure continued to optimize, said the country’s top economic regulator.

China’s Slowdown: Will Trump Get Better Terms?
Trump’s trade war might have accelerated China’s slowdown. Moreover, experts believe that the business cycle is in its final stages. In the past few decades, China’s growth mainly depended on trade. Plus, domestic consumption also contributed to its rise. However, the US economy depends on the stronger consumer sector.

Chinese Foreign Minister Wang Yi ‘confident’ of investment deal with EU as US-China trade was rages on
Top diplomat presses for talks on free-trade accord with Europe as US President Donald Trump’s trade war takes its toll Wang says ‘big number’ of contracts, ‘between 30 and 40’, will be signed between China and France when Macron visits in November

Trump praises US-China trade talks, despite ongoing WTO case
Officials from Washington will speak with Chinese counterparts Friday, as Beijing seeks $2.4bn in retaliatory sanctions.

China to use ‘legitimate’ WTO retaliatory tariffs as ‘bargaining chips’ in US trade war negotiations
Scale will be minuscule compared to those levied during 15-month trade war, but are backed by the World Trade Organisation stemming from an Obama-era trade dispute Experts say that while any tariffs may take a year to be finalised, they could upset US President Donald Trump, a known WTO critic, and in turn ‘upend’ the trade talks

World wants Beijing and Washington to get on and resolve their differences, Chinese diplomat says
Cooperation must replace rivalry, foreign vice-minister Le Yucheng tells Xiangshan Forum ‘China doesn’t want to displace or threaten anyone,’ he says

Can China break shackles of its old economic systems, scale greater heights?
The advent of Xi as the President of China in 2013 marks a discontinuity in the direction and thrust of state policies followed since the time of Deng Xiaoping, and is now a significant factor imparting uncertainty to China’s future prospects.

Can China break shackles of its old economic systems, scale greater heights?

US trade war could impact China’s ability to manufacture rival to Airbus, Boeing, designer says
The Commercial Aircraft Corporation of China (Comac) relies on US suppliers for the C919, but they could be placed on China’s unreliable entities list Chief technology officer also denies report from CrowdStrike alleging China used hacking and spying to obtain technology for the twin-engined single-aisle aircraft

China tops world in unicorns as Ant Financial, ByteDance, Didi Chuxing lead US$1.7 trillion market
China had 206 tech start-ups valued at more than US$1 billion, moving ahead of the US with 203 Sequoia Capital ranked as the world’s top unicorn investor, followed by Tencent Holdings and SoftBank Group Corp

Fake data scandal rocks Chinese ads giant
It’s an open secret in China that marketers, especially those in the key opinion leader (KOL) sector, will inflate user engagement figures to please their bosses and give off a positive aura. With this in mind, Chinese customers, as well as brand operators, are often skeptical when figures appear too good to be true. Yet, we still tend to believe there’s at least some truth when companies release user data. A recent scandal has shone an even brighter spotlight on the legitimacy of these metrics.

Fake data scandal rocks Chinese ads giant

UBS to seek full control of Chinese securities joint venture by 2020
UBS became first foreign lender to receive approval to take majority stake in its securities joint venture in December Move comes as China has relaxed rules on foreign ownership of financial companies ahead of schedule

Asia-Pacific banks must make radical changes to survive the coming slump, as late-stage economic cycle looms
Nonbank players putting ‘significant pressure’ on business models for lenders in Asia, according to McKinsey Asian lenders ‘ripe for consolidation’ as they seek scale, McKinsey says

China investigates fintech firm 51 Credit Card for harassing borrowers in latest crackdown on peer-to-peer lending market
Shares of Hong Kong-listed fintech firm have plunged after police made `on-site investigation’ on Monday following complaints from borrowers Company issues apology over the case, saying assets are not frozen and key company executives are assisting the police in ongoing probe

China criminalises loans with annual interest rates above 36 per cent in crackdown on private lending
China’s Supreme Court and police authority issue joint ruling that criminalises any lending rates higher than 36 per cent per year The new ruling, which came into effect on Monday, could deal a heavy blow to China’s underground banking system

As Chinese Preferences Shift, A Wakeup Call Awaits Luxury Brands
The Wall Street Journal recently published an article by Julie Wernau on how dramatically Chinese preferences are shifting from Western brands to Chinese brands. Look at smartphone sales, where foreign brand shares have dropped by 78 percent in ten years. In China, Apple only has a market share of 8.6 percent, ranking fifth behind Huawei, Oppo, Vivo, and Xiaoimi — brands most Westerners have never heard of. Other categories aren’t dropping as radically, but the share of foreign cars has dropped by 13 percent during that span, and the share of watches by 6 percent. It’s a trend that should concern all Western companies.

As Chinese Preferences Shift, A Wakeup Call Awaits Luxury Brands

Luxury Brands Gear Up For a Tough Year Ahead in China
2020 is shaping up to be a very murky year for the luxury sector. The effect of general economic conditions will have a fragmented effect on luxury consumption in China

Luxury Brands Gear Up For a Tough Year Ahead in China

China Mobile, China Unicom growth flattens ahead of 5G rollout
China Mobile and China Unicom both reported on Monday declining profits for the first three quarters of the year as the country’s race to roll out 5G commercial networks takes its toll. Why it matters: Costs related to 5G network construction are pressuring profits for China’s telecommunications companies amid flattening revenues as a result of market saturation in the world’s largest mobile market.

China Mobile, China Unicom growth flattens ahead of 5G rollout

China blocks 23 per cent of 215 accredited foreign news sites, watchdog says
Citizens denied access to 31 per cent of news organisations that publish primarily in English, according to research by and Foreign Correspondents’ Club of China Digital blockade ‘runs counter to the ethos of internet openness’, FCCC says

Understanding China’s Video Streaming Services: Part One
Netflix doesn’t operate in China. Instead, the bulk of the domestic market is split between iQiyi, Youku, and Tencent Video (known collectively as Aiyouteng, 爱优腾), which are respectively controlled by the country’s “big three” internet companies, Baidu, Alibaba, and Tencent (aka “BAT”).

Understanding China’s Video Streaming Services: Part One

Decline in China’s NEV sales sharper than expected: report
After years of expansion, new energy vehicle (NEV) sales in China have stalled. Annual deliveries are expected to remain flat to last year’s, according to a report by a leading Chinese investment bank released on Tuesday. China has bet big on NEVs as a strategically important industry but prospects for the sector look uncertain after government subsidies were slashed and sales have dropped off

Decline in China’s NEV sales sharper than expected: report

U-turn: China is letting Hyundai buy out a joint carmaking venture
The rare action comes as Beijing has pledged to provide fairer competition for foreign corporations in the Chinese market South Korean companies have been leaving the country, with Samsung closing its last mobile phone production line in China last month

The China Factor
Still, notwithstanding its own production of raw materials, China’s role as the main economic driving force in Africa is unmistakeable, especially for commodity-exporting countries (Sheldon et al, 2017; Gu and Kitano, 2018). China has become Africa’s single largest source of FDI, the fastest-rising source of trade, as well as a significant supplier of foreign aid and grant-based infrastructure (Bello-Schuneman et al, 2017; Sheldon et al, 2017; Gu and Kitano, 2018). Environmentally, its mega-projects are already having a major impact, including planning for the largest dam ever conceived – at Inga on the Congo River – and numerous coalfired power plants, as well as mineral and oil extraction projects.

Hong Kong protest violence being fanned by foreign forces, China’s Wang Yi claims
Protests encouraged from abroad to destabilise the city and wipe out historic progress of ‘one country, two systems’, foreign minister says Unrest is ‘violence, pure and simple’, he says after 20th successive weekend of unrest

As Hong Kong protests hit business, landlords offer HK$1 rents in city’s most expensive office towers
Only 14 per cent of the office space in Central was leased to mainland Chinese tenants in the first three quarters of 2019, down from 58 per cent in 2018 and 57 per cent in 2017 Average office vacancy rates jumped to a 14-year high of 7.4 per cent in September across Hong Kong, up from 4 per cent a year earlier

China’s pork shortage puts dog and rabbit meat back on the menu in rural communities
The price of pork continues to surge across China because of supply shortages driven by the poor handling of African swine fever Chinese people are looking for alternatives, including dog and rabbit, as the country’s most popular meat becomes unaffordable

China Loosens Its Grip on Soccer. What’s Next?
The government seems to be accepting that state ownership of sports leagues doesn’t work. It should ask why. That effort hasn’t been notably effective. Now China’s soccer reformers appear to be waking up to the fact that a corrupt, government-controlled A-league isn’t going to inspire or attract much talent from outside the traditional sports bureaucracy. Without an honest and competitive pro league, China can have little hope that its national team — currently ranked 68th in the world — will be internationally competitive. For Xi, that presents a choice: privatize soccer, or accept the mediocre way things have been going for decades. In some ways, the path has already been set. In 2017, after a year-long battle with China’s basketball bureaucracy, former Shanghai Shark and Houston Rocket Yao Ming became chairman of the Chinese Basketball Association, with a mandate to remodel it after the NBA. Among other early reforms, he shifted league ownership from the government to team owners, and instituted a professionalized amateur draft. It’s too early to say if it’s working. But it’s unlikely that anyone will want to return to the bad old days.

Lack of trust between US and China means minor incident could become a ‘nightmare’, security analysts warn
Growing tensions between two sides means clash in South China Sea could spiral out of control, Xiangshan Forum is told Taiwan also identified as a potential flashpoint as relations deteriorate

Alain Gillard
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