Xi, King Philippe celebrate 50th anniversary of China-Belgium diplomatic ties
Chinese President Xi Jinping and Belgium’s King Philippe on Monday exchanged congratulatory messages on the 50th anniversary of bilateral diplomatic ties. In his message, Xi said he attaches great importance to the development of China-Belgium relations and stands ready to work with King Philippe to take the 50th anniversary of the establishment of diplomatic ties as an opportunity to push for new achievements in China-Belgium relations and make new contributions to the development of China-Europe relations.
China’s ying and yang battle as Beijing faces tough economic choices
China wants its economic growth to decelerate and it wants to cut carbon emissions, but the slowdown cannot be too fast and coal must remain affordable These seemingly contracting goals present a problem for Beijing as it treads the fine line between suffering short-term pain to ensure its long-term success
Understanding the Significance of China’s Sixth Plenary Session
Plenty of media talk – much of it inaccurate – so what’s it really all about and why does it matter to China invested businesses? China is shortly to hold the ‘Sixth Plenary Session of the 19th Communist Party Central Committee‘ in November, a title that says little other than suggesting it is the latest in a long line of political conferences. Yet this event is garnering a lot of media attention. In this article I try and explain its significance and why this meeting is of interest to both political analysts and China investors. According to the Chinese government, the event is being held in Beijing from November 8th to 11th. In fact, what for ease of reference I will now refer to as the ‘Sixth Plenum’ will contain a great deal that will be of interest to China political analysts and corporate investors alike.
GLOBAL FREIGHT RATES DECLINE ON SELECT ROUTES AS TRAFFIC CONGESTIONS EASE
After over 17 months of a continuous surge, freight rates on select global routes have started moderating since early October due to an ease in traffic congestion and eventually container availability on those bilateral or multi-lateral operational routes. Port infrastructure has improved in the last few weeks on account of a sustained fall in the number of new Covid cases. The benchmark Baltic Dry Index which measures movement of industrial commodities in bulk has reported 21 per cent decline in the last three weeks. After hitting the highest level in 13 years at 5561 points on September 27, the benchmark Baltic Dry Index steadily plunged to 4410 points on October 22. The Baltic Dry Index had set its lifetime record of 11482 in March 2008. The Index fell by 5.2 per cent on Friday alone to hit its lowest level since September 21 and the steepest decline since January this year amid weakness in the capesize vessel segment. Overall, the Baltic Dry Index witnessed a decline of 9.1 over the last week.
Country’s production capacity, consumption potential will carry the day
Even though the COVID-19 pandemic has created a massive impact on the industry chains of various countries, and impelled many multinationals to reconsider the value of efficiency-oriented supply chain management practiced in China, there is still no sign the country’s position as the world’s core production center has been weakened. It is true that China’s labor cost advantage is shrinking, but that doesn’t necessarily mean it’s now more expensive to innovate and manufacture in China. Labor cost can be determined by a country’s resource endowment, but it is only one component of the overall cost. The supply of raw materials, the completeness of capital resources and the proportion of high-quality labor force can all determine the production cost. Apart from resource endowments, a number of factors－technological progress, economic scale, industrial agglomeration and so forth－can drive the product cost down. Compared with other emerging markets, China still has some obvious advantages in these aspects. This means that even if Chinese companies are excluded from the supply chain, there is no space for substantial reduction in the overall cost of manufacturing businesses across the world. Pushed by accelerated restructuring of the global value chain, China may lose its comparative advantage in certain products or industries, but as a whole, its production capacity and consumption potential are still hugely attractive to multinational companies. After all, it’s hard for them to ignore the fast-growing Chinese market and its huge consumer base.
Taiwan’s industrial production remains strong
Taiwan’s industrial production slowed in September but mostly due to base effects. Semiconductors continued to play a key role. Going forward, it’s not clear that we’ll see faster growth rates as capacity has reached its limit. Chip shortages for the world should continue into 2022
Climate change: China’s power crisis may cast a shadow over its new climate commitments expected to be announced at COP26 in Glasgow
The crisis may invite some resistance from sceptical delegates at the upcoming UN Climate Change Conference (COP26) However, China is still on track to meet its 2025 goal of peak coal consumption despite its worst energy crisis in decades, according to analysts Concerns about higher emissions have been raised further by local news reports that some factories are using less efficient and more emission-prone diesel generators to keep production going before the coal and power shortages are fixed. Still, analysts think China will remain on track to meet its coal targets. “I haven’t seen any official statements or convincing arguments that the current power shortages and the resultant measures to alleviate the shortages will result in the 2025 target being delayed or the objective being missed,” said Fishman.
He believes an accelerated reduction of coal use is likely to be among China’s new commitments to COP26. The electricity crisis has, paradoxically, prompted some positive changes in China’s power sector, according to analysts. On October 12, major changes were announced to the pricing arrangements for coal-fired power, as well as the way in which commercial and industrial customers buy their power. Electricity prices will be allowed to rise by as much as 20 per cent against government benchmarks, compared with the current cap of 10 per cent. The timing is undeniably related to the ongoing coal supply crunch and resultant power outages that have been making news in and out of China for the last few weeks, according to analysts. “Besides being very embarrassing, the widespread breakdown of power security served to highlight just how vulnerable the Chinese power sector was in its half-liberalised state, a chimera of wholesale power markets with controlled outcomes, of fairly freely-traded coal but regulated on-grid pricing … it became very clear that the time to take the deeper plunge into market reform had arrived,” said Fishman.
China to cut fossil fuel use to below 20% by 2060
Despite pushing ahead with dozens of new coal power plants, China has a new plan to increase wind and solar power in its march towards carbon neutrality
Careful planning to reduce risks for China on road to carbon net zero
Top economic planning official says the country’s green transformation must avoid ‘excessive’ response to be safe and secure He Lifeng’s comments follow the release of China’s guiding document towards peak emissions and carbon neutrality According to the document, China’s carbon dioxide emissions will peak, stabilise and then decline by 2030. By 2060, it says, China will be carbon neutral and have a fully established green, low-carbon economy with equal emphasis on domestic and external investment and trade. The share of non-fossil fuels in China’s energy consumption will increase from less than 16 per cent in 2020 to more than 80 per cent by 2060. He, who is also a member of the Communist Party’s Central Committee, said a systemic change in the economy and society would be needed to achieve the country’s climate targets. This would involve multidimensional relationships, including the government and the market, to achieve continued development and security alongside short and long-term targets in emissions reductions, he said. China’s ambitious pledges amounted to the world’s largest reduction in carbon intensity, with an ambition to make the leap from peak carbon emissions to neutrality in the shortest time, He added. “It reflects the greatest ambition and requires hard effort.” China is expected to submit its updated emissions reduction commitments, or its Nationally Determined Contributions (NDCs), to the United Nations this week.
China to investigate energy index providers in bid to tame coal prices
NDRC urges coal firms to strictly meet contractual obligations China said on Monday it will investigate energy price index providers as it urged coal industry participants to “strictly” meet contractual obligations, in its latest bid to tame prices that have hit record highs. The most-active thermal coal futures contract on the Zhengzhou Commodity Exchange, for delivery in January, fell more than 8% – their fourth straight daily decline – but recovered to close down 7% at 1,305.6 yuan ($204.51) per tonne The contract was down more than 34% from Tuesday’s record of 1,982 yuan. Thermal coal futures have risen more than 150% this year.
Two ways Hong Kong must transform to achieve carbon neutrality
The ambition of the Hong Kong Climate Action Plan 2050 is laudable, but to realise it, the city needs more transformational thinking Building on the new blueprint, Hong Kong should open up its electricity market and move energy-intensive industrial activities out of the city
China EV war: Xpeng plans to upstage Tesla, local rivals with first full-scenario driver assistance tech system in 2023
Xpeng plans to unveil its updated Xpilot 4.0 system in 2023, providing drivers with full-scenario support by then The Chinese EV maker ranked first in a JD Power survey in August of car owners on their experience with 42 in-vehicle technologies
Volvo cuts the size of its initial public offering by a fifth to US$2.3 billion amid soaring oil cost, supply chain disruptions
The carmaker, owned by China’s Zhejiang Geely Holding Group, is now selling shares to raise about 20 billion kronor (US$2.3 billion), Volvo said The carmaker also set a price of 53 kronor a share, at the low end of its initial range
Central banks should resist hitting the panic button on inflation
A return to tougher monetary policy is not the answer as higher inflation this year will eventually subside in 2022 This is a different world from the high inflation 1980s when annual consumer price rises reached 14.6 per cent in the US and interest rates surged to 22 per cent There is nothing to be gained from bashing global demand to fend off a transitory spike in global commodity prices which are beyond the central banks’ reach. There is a case for interest rates to be gently coerced from zero, but only when global demand conditions can cope. For the US, non-inflationary, sustainable interest rates are probably closer to 3 per cent. In the long run, central banks must be patient. We need higher interest rates for the right reasons, to re-educate the world about a more responsible cost of money. We must move on from near-zero interest rates but a false dawn in global inflation risks should not be the excuse for an overreaction
What Is Wrong With Protecting China’s Personal Data?
The main purpose of anti-monopoly legislation is to bring more competitors into an industry to facilitate its healthy growth. When China first began to speed up its development, regulatory policies were comparatively relaxed to encourage innovation in industrial development. But now that some industries have become well developed, strengthening supervision is inevitable in order to encourage such industries to move towards higher quality development. Nevertheless, in view of the government’s efforts to rein in Ant Group last year shortly before its IPO and the more recent shake-up of the for-profit education and training institutions, some now question whether China is deliberately suppressing the giants of the internet sector that delivered so much innovation over the years. For those of us witnessing China’s development firsthand, we can see that this is natural requirement of the government’s pursuit of common prosperity for its society. The guiding principle of seeking “common prosperity” does not mean “robbing the rich to help the poor,” rather it refers to the need “for those who have already become rich to bring along others to prosperity as well.” Therefore, the purpose of the Chinese government acting to supervise internet technology giants like Didi is to protect personal information and let the development of the industry become more stable and secure with better regulations. So long as this is done within a legal framework, what is there for people to worry about?
Chinese economy risks deeper slowdown than markets realize
China’s economy risks slowing faster than investors realize as President Xi Jinping’s push to cut its reliance on real estate and regulate sectors from education to technology combine with a power shortage and the pandemic.
Hamburg Is at the Heart of Germany’s Growing Dilemma Over China
The biggest German port risks being caught between trade and politics. COSCO is one of more than 550 Chinese companies that have set up offices in Hamburg. Among them is XCharge, a Beijing-based maker of fast-charging stations for electric vehicles. Certainly, the expectation among businesses in Hamburg is that the next government will be tougher on China when it comes to issues such as market access and intellectual property, as well as on social and environmental compliance, said Hillger at the chamber of commerce. “China is and will remain important for Hamburg’s companies, so we need to deal with China in some way or another, everybody agrees on that,” she said. Still, that imperative is complicated by “a complete shift in public perceptions and discourse.” It’s the direction of travel already under way in Berlin and Brussels, with tighter investment screening and new trade defense mechanisms. A supply chain law aimed at bolstering resilience was already enacted by Germany and is set to be introduced at EU level this fall. None are aimed exclusively at China, but each measure has China in mind. “Merkel was seen by Beijing as honest and straight,” said Joerg Wuttke, head of the European Union Chamber of Commerce in China. “There wasn’t this kind of being nice in Beijing and being bitchy in Berlin and I think that’s what the Chinese leadership appreciated.” Scholz, he said, “is the same guy.”
Evergrande crisis: work resumes on 10 projects as developer restores calm, buys time to repay more creditors
Company says in WeChat post that projects in six mainland cities have restarted and pledges to fulfil its responsibility to homebuyers Homebuyers, creditors may have seen ‘a ray of hope’ but Evergrande faces more repayment tests ahead, consultant says
Evergrande: Hong Kong banks report third-quarter results as concerns swirl over world’s most indebted developer
HSBC, Standard Chartered previously said they have little to no direct exposure to Evergrande About 45 per cent of Hong Kong bank loans are deployed to Chinese entities for use in the mainland, according to Citigroup
China’s new property tax may prompt owners of multiple homes to sell down their holdings before prices take a hit, say analysts
With the new levy bound to undercut house prices, agents said those investors might need to offer steep discounts if they want to sell fast The proposed property tax is part of a wider ‘common prosperity’ programme to enhance housing affordability and rein in galloping property prices
Alibaba, Tencent rebrand NFT offerings as ‘digital collectibles’ amid Beijing’s scrutiny of new virtual asset market
The rebranding moves by Alibaba and Tencent reflect their efforts to steer away from any potential conflict with Beijing, which has cracked down on Big Tech firms Chinese state-run media recently warned of a potentially ‘huge bubble’ in the NFT market
Chinese developers’ overseas spending spree dries up as Beijing tightens screws to restore order at home
Chinese developers’ overseas investments fell to US$1.9 billion this year versus a record high of US$17.5 billion in 2017, according to Real Capital Analytics Despite pressure from regulators companies like Guangzhou R&F Properties and Greenland Holdings continue to invest in the UK and Australia, respectively
China moves to ease rules on government procurement for CPTPP
Foreign suppliers not to be excluded, but national security exception remains
The timing of the instructions, which came after China announced a bid in September to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), suggests Beijing is laying the groundwork for negotiations that will test how willing it is to open up its economy.The stakes are high. The Chinese government nearly doubled in value over the five years to 2020, reaching roughly 3.7 trillion yuan ($579 billion), or 3.6% of gross domestic product. According to the finance ministry’s notice, local governments must not restrict suppliers’ participation by setting conditions on the composition or location of their shareholders. Complaints about tenders or outcomes must be handled fairly, regardless of whether they come from foreign or domestic companies, the ministry said. The ministry also ordered local governments to revise lists of supplier candidates that are seen as a de facto barrier to foreign participation. China’s government procurement law stipulates that local authorities and state-owned companies buy Chinese-made products. Yet Japanese companies have complained of losing out on government tenders despite offering products made in China at prices comparable to those of Chinese rivals. China is also weighing legal changes on government procurement. Proposed amendments opened to public comment in December 2020 call for the creation of a security screening process for government contracts. Meanwhile, the U.S. has taken steps to shut Chinese suppliers out of American government deals. Federal agencies were prohibited in August 2019 from buying products from telecommunications equipment maker Huawei Technologies and four other Chinese companies. In August 2020, any contractors using equipment or services provided by these five companies were barred from participating in government contracts.
Chinese companies blame “misinformation” for difficult political climate in EU
62% of Chinese companies in Europe believe that the political climate has deteriorated for them. In a recent survey, they blame “media disinformation” among other factors, a line commonly used by the Chinese Communist Party to discredit criticism. Currently, EU policy on China seems to focus more on human rights than on the promotion of trade. In her speech on the state of the European Union this September, commission president Ursula von der Leyen announced that the commission would propose a ban on products made by forced labour.
The Chinese century: China is not only at our borders but is building a ring of relationships around us
Confirming what all of us know by now, Frances Haugen, the most recent whistleblower from Facebook testified to the US Congress that the company’s longstanding behavior patterns were “hurting children and harming democracy by promoting social divisions”. And while Facebook may be the most egregious, it is certainly not alone amongst the other Western technology plutocrats for whom profits are a much higher—the only?—priority than societal norms and citizens’ rights.
Xi’s ‘resolution on history’: 3 things to know
The Chinese leader is widely believed to have three key goals in mind. First, he wants to become China’s third leader to have issued a resolution on history, after Mao and Deng. Second, he wants to position himself as a charismatic figure on par with Mao by producing a resolution of a similar length and quality as the latter’s. And third, he wants to establish a hierarchy of historic Chinese leaders with him and Mao at the top, followed by Deng, then by Jiang and Hu, preparing to eventually hand the reins to Jiang’s faction. The move is expected to all but ensure Xi wins a rare third term at the Communist Party congress next fall. Mao had also used historical narratives as a tool to solidify his grip on power.
But there are stark differences between the past resolutions issued under Mao and Deng. Mao used his document to pave the way for authoritarian rule. Deng, on the other hand, called for prohibiting personality cults in any form and enshrined the idea of collective leadership, based on China’s lessons from the Cultural Revolution. Xi, who has often been compared to Mao, could rewrite the party’s narrative once again to play down Deng’s warnings. Past resolutions on history have not only reshaped power structures within China, but have had extensive effects on the world beyond as well. It remains to be seen what impact Xi’s new take on China’s history will have.
China’s army of migrant workers waits for Xi Jinping’s ‘common prosperity’ to touch their lives
China’s dazzling growth since opening up four decades ago has raised living standards but also created a wide wealth gap, made worse by the pandemic Migrant workers hope the president’s vision of a ‘well-off’ society will finally end miseries caused by exclusion from the urban social security system China’s wealth gap is close to the level of the US, which recorded a reading of 0.48 in 2020, and much higher than levels for Japan, South Korea and most of Europe. China had 600 million people living on a monthly income of 1,000 yuan or less, Premier Li Keqiang said last year. That means more than 40 per cent of the nation’s 1.4 billion people live on less than US$5 a day. The Covid-19 pandemic has only exacerbated the inequality. Lower-income workers bore the brunt of labour-market dislocations as many small and medium enterprises collapsed. Meanwhile, high-end malls saw sales grow 25 to 35 per cent last year compared with 2019, official data showed, as rich Chinese had a wider and more stable source of income. China’s hukou system is based on the birthplace of one’s parents. This means that without official urban residency, many migrant workers have no access to social welfare benefits or government services, from pensions to public education. China does plan to loosen residency restrictions in most urban areas and launch a points system to replace the hukou system, according to a draft of the government’s 14th five-year plan released in March.
What is ‘lying flat’, and why are Chinese officials standing up to it?
China’s Gen Z and its youngest millennials are finding solace in lying flat amid a collective swell in antipathy toward working themselves to the bone Lying flat, or tang ping in Chinese, means doing the bare minimum to get by, and the ethos poses a threat to President Xi Jinping’s ‘Chinese dream From white-collar workers in China’s bustling cities to university students, an army of frustrated young people took to social media and internet message boards in recent months to declare themselves “‘lying flat youth”. And across the country, T-shirts printed with “Do nothing lie flat youth” have become hot selling items. Authorities have been scrambling to suppress the phenomenon, fearing that it could challenge the established social and economic order. In the long run, lying flat could not only affect Chinese consumption and growth, but also lower the birth rate that is already eating up the country’s demographic dividend and threatening its social welfare system, according to economists and social commentators. Psychologists and doctors also warn that prolonged inactivity raises the risk of life-threatening physical and mental disorders, including heart disease and depression. But the trend is more worrying in China than in other countries, he explained, because China’s economic development is not as advanced. “The significant difference is that [similar] movements occurred when the United States and Japan had already entered the stage of advanced economies, with per capita disposable income much higher than the current level in China,” he said. “China is now at a crossroads of becoming a high-income economy or finding itself stuck in the middle-income trap. The lying-flat movement would negatively affect China’s efforts to escape the middle-income trap.”So it’s little wonder that Xi and the rest of China’s leadership are so intent on stamping out this lying-flat ethos that has become such an outsized threat.
Taiwan Says it is ‘Preparing For War,’ but Are Taiwanese Mentally Ready?
A persistent perception gap between public and policymakers may undermine government efforts to build the island’s resilience. Yet a lot more than mere media hype is afoot given that Taiwan’s own government, including both ministers appointed by the ruling party and the military leadership, now shares the same grave assessment. It underscores the need for the government to bring the public on board by investing in psychological as much as material readiness if it is serious about readying for such a conflict. Though the government is spending big on new weapons upgrades, the increased capabilities these purchases bring need to be better communicated to the Taiwanese public. Currently, three-quarters of the population view the country’s defense capacity as static or worsening, per the Brookings survey. If such low confidence persists, it could prove a major problem for Taiwanese war planners betting on strong public will to resist an eventual assault on the island. Considering that Taiwan prides itself on democratic governance, it would be hard for the leadership to justify holding out against China if the majority of the population saw it fighting a losing battle. Restoring confidence in Taiwan’s military might be the key to the country’s survival.
China’s 50 years at UN: Xi Jinping says international rules and order must not be dominated by one power
China’s president takes a veiled swipe at US and calls for peaceful coexistence while marking 50th anniversary of Beijing assuming a seat at the UN Speech comes after US State Department says it discussed with Taiwanese foreign ministry expanding island’s participation in international forums such as UN
How China’s past shapes Xi’s thinking – and his view of the world
Heightened tensions with Taiwan have focused attention on China, with many wondering where President Xi Jinping sees his country on the world stage. Perhaps the past can provide some clues, writes Rana Mitter, a history professor at Oxford University.
Communist Party number 3 hails superiority of ‘Chinese democracy’ and warns against Western influences such as multiparty elections and independent judiciary
Comments by Li Zhanshu, head of the country’s top legislative body, are seen as a sign of Beijing’s growing confidence in its political model It is the first time a senior party leader has called for members to ‘tell the story of China’s democracy’ and signals a rhetorical shift
China Covid crackdown: All travel into Beijing BANNED- panic as outbreak ravages nation
CHINA has implemented a sudden coronavirus lockdown, with all travel into Beijing being banned. BBC China correspondent Stephen McDonell tweeted: “There are now new travel restrictions for the Chinese capital following the recent coronavirus Delta outbreak in China. “Internal travel into Beijing has been banned for anyone coming from another area which has covid infections.”
Beijing and Wuhan marathons postponed as China battles Delta outbreak
Authorities warn Covid cases likely to rise after cases were detected in 11 provinces
Coronavirus: we need to make sure health systems are ready for more surges, WHO official says
Global health body is working with countries to plan for endemic Covid-19, according to regional director for Western Pacific Focus needs to shift to how risk can be reduced over long term and limiting emergence of new strains, Takeshi Kasai says order restrictions have been heavily relied on by a number of countries in the WHO Western Pacific region, which covers 37 nations and areas from China, Mongolia and Japan across Vietnam, Cambodia and Laos to Australia and New Zealand. The administrative area, home to around 1.9 billion people, has seen only 4 per cent of the 240 million Covid-19 cases reported, as per the WHO’s latest situation report last week Several of these countries have recently signalled they will begin to ease border controls or “zero Covid” policies, though China – which is battling a growing outbreak in its northern provinces – is still trying to totally suppress the virus.
Countries should manage their borders based on their individual risk assessments and response capacities, Kasai said. A document published on the committee meeting website outlined two potential trajectories for the pandemic, based on discussions from a WHO regional public health emergencies advisory group.One scenario involved Covid-19 becoming an endemic disease, “with transmission stabilised at a lower level as the virus continues to circulate in certain countries and areas, with occasional outbreaks”. In the second scenario, the virus could evolve into new, more transmissible or dangerous variants, which could even render existing vaccines ineffective, creating a “pandemic within a pandemic”. Some intermediate or alternative scenarios were also possible, the group said.
The outcomes would depend on a range of factors, including the evolution of the virus, but also how well governments respond and prepare, the extent of vaccine coverage, and whether there can be both global solidarity and individual actions to control the spread, the document said. “Nobody can predict when this pandemic will end, but actually half of the answer to that question depends on actions that we take,” Kasai said.
Amnesty International to close Hong Kong offices due to national security law
Human rights watchdog cites staff safety among reasons over decision to leave city for first time in 40 years
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