China Press Review – October 26, 2021

China, US ‘to up economic coordination’ as Evergrande crisis casts shadow
The sides hold ‘constructive’ economic talks with global recovery ‘at crucial stage’, according to Chinese statement. Beijing raised concerns about Washington’s tariffs, it says, after the second such talks of the Joe Biden presidency
https://www.msn.com/en-xl/news/other/china-us-to-up-economic-coordination-as-evergrande-crisis-casts-shadow/ar-AAPWYfY

China outlines strategy to meet economic challenges, from power crisis to Evergrande woes
Chinese state media have released a 10 point article outlining how the government is managing economic risks. The report, based on interviews with experts, covers areas such as power outages, trade and regulatory tightening
https://www.msn.com/en-xl/money/other/china-outlines-strategy-to-meet-economic-challenges-from-power-crisis-to-evergrande-woes/ar-AAPWgv3

Evergrande fallout: Modern Land defaults on US$250 million bond as some investors question Chinese developers’ willingness to pay
Chinese developer cites liquidity issues for defaulting on a US$250 million bond, after scrapping a repayment proposal last week    Default risk mounts for Chinese developers as a 30-day grace period ends this week for Evergrande on interest payment for a US$1 billion bond
https://sg.news.yahoo.com/evergrande-fallout-modern-land-defaults-073355221.html

EU Wants Clarity From China on Its Emissions-Cutting Ambitions
The European Union wants to see what more China will do to step up its climate ambitions and when it plans to have its carbon emissions stop rising, the bloc’s climate chief Frans Timmermans said Tuesday. Timmermans is set to meet with China’s special envoy on climate change Xie Zhenhua in London on Wednesday in an effort to build momentum ahead of the United Nations talks known as COP26 in Glasgow starting Oct. 31.
https://www.bloomberg.com/news/articles/2021-10-26/eu-wants-clarity-from-china-on-its-emissions-cutting-ambitions

CHINA, CLIMATE POLITICS AND COP26
Success at the Glasgow climate change conference relies on China accelerating its energy transition, and the United States and other rich countries making an effective alternative appeal to the developing world.
https://www.lowyinstitute.org/publications/china-climate-politics-and-cop26

China, the World, and the Mantle of ‘Green Leadership’
Every energy crisis or instance of market volatility in history has been the product of both inevitability and happenstance. Although we are currently experiencing dramatic market fluctuations, I see no reason to panic. Fluctuations in the energy market are cyclical. The key to overcoming them lies in developing comprehensive and balanced approaches to advancing long-term strategic objectives without sacrificing short-term goals, something that will truly put the political wisdom of national leaders to the test.    In conclusion, I would like to emphasize that green leadership requires international cooperation, rather than confrontation. Although I personally remain cautiously optimistic, I have spent the past 22 months painfully watching the major nations of the world fail to put aside their prejudices and unite to resolve the challenges posed by the COVID-19 pandemic. So, for as full of hope as I am about the prospects for international cooperation on climate change in the future, I also continue to have a lot of concerns.
https://www.sixthtone.com/news/1008772/China,%20the%20World,%20and%20the%20Mantle%20of%20%E2%80%98Green%20Leadership%E2%80%99

How green are electric vehicles?
A policy paper dissecting existing life cycle assessments of electric vehicles and identifying potential future trends in the different stages of the vehicle life cycle, especially for batteries.   Globally, transport is responsible for 24 percent of CO2 emissions from fuel combustion. Hence, decarbonisation scenarios (e.g., IEA, IRENA, WEF) regularly stress the importance of electrifying the transport sector to achieve global climate targets. Although the vast majority of life cycle assessments attribute electric vehicles (EVs) with less life cycle greenhouse gas (GHG) emissions than conventional combustion engine vehicles, some studies, for example, by the German General Automobile Club or the ifo Institute for Economic Research, disagree. A common second criticism of EVs focuses on the resource-intense and environmentally damaging mineral mining and battery manufacturing processes. To objectively inform policy, it thus appears important to dissect existing life cycle assessments of EVs and identify potential future trends in the different stages of the vehicle life cycle, especially for batteries.   
https://www.bruegel.org/2021/10/how-green-are-electric-vehicles/

A new era of demand: how batteries are creating investment opportunities
The world is on the cusp of a revolution in low-carbon technologies, and they are set to reshape many of our supply chains.  The not-so-humble battery sits at the heart of this shift: the growth of electric vehicles (EVs), and renewable power generation/storage, will increase demand for a range of raw materials.    It’s estimated that the global EV stock will reach 245 million vehicles by 2030 – more than 30 times above today’s level1.  Installed wind capacity is expected to rise almost fourfold in the same period, from around 700 gigawatts today, to around 2000 gigawatts in 20302. A rapid ramp-up of such technologies will require a concurrent increase in the materials used in them. Significant investments in mining and technology will be required to meet the needs of the burgeoning battery market.  This article outlines the key materials required for battery production, and their related investment opportunities.
https://www.livewiremarkets.com/wires/a-new-era-of-demand-how-batteries-are-creating-investment-opportunities

Tesla completes Shanghai data centre, innovation hub as carmaker joins elite US$1 trillion valuation club
Tesla has finished building a data centre and research hub in China, quickening its localisation pace in the world’s top EV market and complying with regulatory demands    The carmaker delivered 56,006 units in September, a near fivefold increase from a year ago
https://www.msn.com/en-xl/money/other/tesla-completes-shanghai-data-centre-innovation-hub-as-carmaker-joins-elite-us-1-trillion-valuation-club/ar-AAPXNpg

Buffett-backed EV maker BYD gets approval from Hong Kong bourse for semiconductor unit spinoff in Shenzhen
BYD is seeking to list the semiconductor business on Shenzhen Stock Exchange’s ChiNext board    Spinoff will allow more equitable assessment of business units in the group, still needs approval from Shenzhen bourse, Chinese regulators
https://www.msn.com/en-xl/money/other/buffett-backed-ev-maker-byd-gets-approval-from-hong-kong-bourse-for-semiconductor-unit-spinoff-in-shenzhen/ar-AAPX0gg

China’s Autonomous Driving Industry – An Introduction for Foreign Investors
China’s self-driving car industry has taken off over the past decade. Previously a small and fringe sector, it is now receiving backing from both the government and industry heavyweights, cultivating a new generation of tech start-ups hoping to be the first to get a viable product on the road. Despite an uncertain timeline for real-world application, investors and developers alike remain optimistic that laying the technological foundation now will reap huge rewards in the future. In this article, we take a look at the industry’s development outlook, government regulations, and which areas of the industry are open to foreign investment.
https://www.china-briefing.com/news/investing-in-chinas-self-driving-car-market/

China: Daily crude steel production reaches 3-yr low
On Monday, Oct. 25 the China Iron and Steel Association (CISA) stated that average daily production of crude steel in China logged a three-year low last month. CISA vice chairperson Qu Xiuli noted at a press meeting that the average daily production in September plunged 21.2 percent year over year hitting 2.46 million tonnes.    The decrease in production is a must, as China kept managing the production and energy price of the steel sector.
https://menafn.com/1103044989/China-Daily-crude-steel-production-reaches-3-yr-low

China is facing its worst power crisis in years due to a coal shortage.
Australia has the coal Beijing needs, but the world’s second-largest economy is unlikely to reverse an unofficial ban on Australian coal imports anytime soon, analysts told CNBC.   China stopped buying coal from Australia late last year, after Canberra backed a call for an international inquiry on how Beijing handled the Covid-19 outbreak.
https://www.cnbc.com/2021/10/26/china-energy-crisis-beijing-not-likely-to-lift-coal-ban-on-australia.html

If China’s Economy Keeps Stumbling, It Won’t Just Take Down Beijing – The Whole World Will Collapse With It
China’s economy – the 2nd-largest in the world – is teetering on the brink of disaster.
Since this spring, Beijing has canceled initial public offerings, fined tech companies billions for antitrust violations, forcibly shut down China’s entire for-profit education industry, and sent CEOs running for the exits to avoid the government’s ire. Even more dire, the Chinese megadeveloper Evergrande recently started missing payments on its more than $300 billion in debt, shaking global markets. The convulsions have woken the world up to a startling new possibility – that Beijing may be willing to allow some of its private corporate behemoths to collapse in a bid to reshape the economic model that made China a superpower     In an attempt to revive the Chinese dream, Xi is pushing the idea that China is moving toward “common prosperity.” But exactly what that means is hard to say. It could mean higher taxes for the high-income citizens who benefited most from privatization – the generation of supertycoons who were allowed to “get rich first,” as Deng Xiaoping urged. Or perhaps it’s simply an attempt, using the socialist rhetoric of old, to steel citizens for more volatile times ahead. But either way, it won’t help matters if Xi’s common-prosperity agenda turns out to hurt the country’s new middle class.  The only certainty is that China is returning to extreme state intervention, private industry be damned. In the starkest example of state control, China wiped out its entire for-profit education sector in July, sending markets in the US, where some of the companies were listed, into a tailspin. “They took it to nearly zero in a matter of days,” Chu said. “It shows a willingness to tolerate a lot more volatility and pain than people expected.”  Part of the upheaval, it’s important to note, is also about power. By moving to rein in China’s wealthiest citizens, Xi is effectively hoarding power for himself and the CCP. Jack Ma, the billionaire founder of Alibaba, was once a ubiquitous presence in Chinese society. But since the government started clamping down on his businesses, he’s largely disappeared from view. The founder of ByteDance, the company that owns TikTok, also stepped down as CEO, saying he preferred “solitary activities.” Even online fan clubs for pop stars are being regulated to encourage devotion to the party. Last month, the former chair of China’s top liquor maker was sentenced to life in prison for taking bribes. There is danger to this lack of power sharing and pluralism of opinions. Historically, the CCP has been a tug of war between openers and closers – those who want to welcome outside market forces and those who seek to restrict foreign access. But now the balance of power has shifted. Xi is a defiant closer, and his consolidation of power – including a lifetime appointment to the presidency – has left no pro-opening opposition to push for a course correction should things go awry.
https://tinyurl.com/rtur3d8w

China coking coal futures fluctuate wildly on market intervention fears
Dalian coking coal and coke futures moved in and out of positive territory on Tuesday, mirroring market unease over regulatory intervention in China to tame surging prices of coal in particular.    The most-traded January coking coal on China’s Dalian Commodity Exchange rose as much as 3.9per cent before falling by up to 3.4per cent within the first two hours of trading. It was up 0.2per cent at 2,956 yuan (US$463) a tonne by 0300 GMT.
https://www.channelnewsasia.com/business/china-coking-coal-futures-fluctuate-wildly-market-intervention-fears-2268857

China’s vast high-speed rail is a big emitter but down the line leads to greener freight: study
When passengers opted out of slower trains in favour of high-speed rail, road freight moved to fill the much greener conventional trains    Beijing-Shanghai line led to the highest overall drop in greenhouse gas emissions – more than 3 million tons per year on average – according to paper   Corresponding author Qin Yu, an associate professor in the department of real estate at the National University of Singapore, said the high-speed rail network would continue to be key to China’s economy.  “High-speed rail is more than an important form of transport in China. It also boosts the economy by encouraging investments and attracting talents to different parts of the country. As China expands the network it should take its environmental impacts into account, which our study shows are positive.  For example, the opening of the Wuhan-Guangzhou HSR line lifted the annual freight capacity of the parallel conventional railway by 87.6 million tons, and 84 million tons on the Shanghai-Nanjing HSR line, which combined translates to 5 per cent of national freight volume in 2010, according to the study. Among high-speed railways, the Beijing-Shanghai line led to the highest overall drop in greenhouse gas emissions – more than 3 million tons per year on average – the study found   “With cleaner electricity conditions, the network can contribute more to, rather than hinder, carbon reduction from the transport sector,” she said, referring to China’s goals of hitting peak carbon emissions by 2030 and carbon neutrality by 2060.
https://www.scmp.com/news/china/science/article/3153767/chinas-vast-high-speed-rail-big-emitter-down-line-leads-greener

SMIC’s new Shenzhen semiconductor plant offers glimpse at China’s effort to fight global chip shortage
Semiconductor Manufacturing International Corp’s next chip fabrication plant covers nearly 35,000 square metres and will focus on mature technologies    A document from a district government in Shenzhen revealed new details about the plant, which is part of China’s effort to boost domestic semiconductor capacity   While the new TSMC plant will employ the advanced 5-nm node process, the SMIC plant will be using processes from 150 nm to 28 nm.   China still has strong demand for these more mature technologies, according to the document from Shenzhen Pingshan District Investment Service Bureau. China’s supply gap for 12-inch wafers was 102,000 per month in 2019, and that gap is expected to grow.   However, there are signs that trade tensions are easing. Between November 2020 and April of this year, suppliers to SMIC received 188 licences worth US$42 billion to sell to the Chinese chip maker, according to a Reuters report.   SMIC co-chief executive Zhao Haijun has previously said the construction of new chip fabrication plants in Beijing and Shenzhen was “on track” despite lingering risks of “uncontrollable factors”, including US restrictions that remain in place, preventing the acquisition of production equipment, and supply chain disruptions. In addition to the Shenzhen plant, SMIC revealed plans in September for another US$9 billion fab in Shanghai, where the company is based. That plant will also focus on the 28-nm process.
https://www.scmp.com/tech/big-tech/article/3153736/smics-new-shenzhen-semiconductor-plant-offers-glimpse-chinas-effort

China achieves significant progress in quantum computing, 10 million times faster than supercomputers
Chinese research teams have achieved a significant progress in superconducting quantum computing and light-based quantum computing, making China the only country in the world that has reached quantum advantage in both physical systems.      The research team from CAS Center for Excellence in Quantum Information and Quantum Physics has constructed a 66-qubit programmable superconducting quantum computer prototype naming it “Zuchongzhi 2.1,” after the noted 5th century Chinese mathematician and astronomer, CCTV reported on Tuesday.
https://www.globaltimes.cn/page/202110/1237312.shtml

Will China’s Spending Jump Boost Luxury Brands?
China’s National Bureau of Statistics’ recent report is spreading optimism among luxury brands, as average national spending saw an impressive 15.8-percent year-on-year growth.  China’s National Bureau of Statistics’ recent report is spreading optimism among luxury brands hoping to maintain their sales growth in the Chinese market. According to the data released, Chinese consumer sentiments are very positive: The country’s average national spending saw an impressive 15.8-percent year-on-year growth.   Shanghai’s average spending topped the ranking, with individual spending for the first three quarters of 2021 reaching $5,563 (35,499 RMB), followed by Beijing $4,981 (31,781 RMB), which was almost double the national average of $2,707 (17,275 RMB). Other regions that exceeded the national average were Zhejiang, Tianjin, Guangdong, Jiangsu, Fujian, and Chongqing
https://jingdaily.com/china-national-spending-shanghai-luxury/

China Adds New Billionaire Couple From Medical Industry
China, home to the world’s largest number of billionaires after the United States, added a new billionaire couple from the growing medical device field this week. Chairman Zhang Min and his wife, vice chairman Nie Juan, held shares in Cofoe Medical Technology worth the equivalent of $1.15 billion at the close of trade on debut at the Shenzhen Stock Exchange yesterday. The fortune was worth more than $1 billion even though Cofoe shares slid by 4.4% from their IPO price to close at 88.97 yuan. They recovered to trade above 93 yuan today. Cofoe’s products include blood pressure monitors, blood glucose meters, nebulizers and hearing aids, according to the company’s website. Zhang, Cofoe’s founder, started out in the medical device business as a sales agent in 2000; he launched the Cofoe brand in 2009.     The global medical device market will reach $745 billion by 2030, growing by 5.0% annually over 2020-2030 owing to an aging population worldwide, technological innovation and better penetration of healthcare insurance, according to a research report published by Research and Markets in August.   Rising incomes are also likely to help growth in China, according to a recent report by Deloitte China.
https://www.forbes.com/sites/russellflannery/2021/10/26/china-adds-new-billionaire-couple-from-medical-industry/

Biden, Taiwan, and Strategic Ambiguity
Even U.S. presidents apparently need a primer on the U.S. stance on Taiwan’s defense.   Criticisms of U.S. policy hold some merit. But the current policy allows for flexibility that might otherwise be lost: options remain open. For example, the flexibility enables the United States to assist in the defense of Taiwan if it chooses to do so – but a U.S. response is not guaranteed. The TRA also enables Washington to establish a linkage between U.S. policy and the actions of other states. Depending on circumstances, U.S. military support can increase or decrease. Finally – and most important – the TRA encourages both Beijing and Taipei to behave responsibly. In other words, uncertainty breeds restraint.   From time to time, the United States makes some modest adjustments in its relationship with Taiwan. Many of these are largely symbolic. But some are more meaningful, particularly ramping up U.S. support for Taiwan’s drive to gain a voice in the World Health Organization (WHO). This is one initiative that deserves increased American attention. But any change in the U.S. security commitment to Taiwan may very well prove disruptive to the dynamics of the U.S.-China-Taiwan triangle.   It is likely that the current policy – albeit ambiguous and contradictory – will continue to serve American interests. As R. Nicolas Burns, Biden’s pick to be U.S. ambassador to China, observed during his confirmation hearings, strategic ambiguity is “time tested” and “the smartest and most effective way” to prevent a war across the Taiwan Strait.
https://thediplomat.com/2021/10/biden-taiwan-and-strategic-ambiguity/

China-Japan ties: foreign minister asks Tokyo to work with Beijing, but ‘don’t step out of line’
Beijing-Tokyo Forum told of China’s hope for mutual exchanges with Japan and cooperation on supply chain stability and carbon emissions    Survey by forum organisers finds growing negativity in China and Japan in the public’s view towards the other nation over the past year
https://www.msn.com/en-xl/news/other/japan-s-foreign-minister-says-ties-with-china-remain-in-a-difficult-situation/ar-AAPVVAN

Australia still caught up in Biden’s China blame game
The spectre of Donald Trump stalks Joe Biden’s White House and other corridors of power in Washington.  Rosen asked how ‘an inherently bilateral agreement that has no regard for the multilateral consequences of how those Chinese commitments are fulfilled’ squared with Tai’s emphasis on the wellbeing of allies and other market economies.   Tai recognised the question but left it unanswered. This was about ‘stabilising rising tensions’ in the US-China relationship, she said, so that it could be ‘realigned’. There was no concern about how the shrapnel of the deal rained down on allied budget bottom lines or on the whole trade system.  And for all the expression of seeming confluence in US trade and security objectives, Biden continues to turn down the idea of American entry to the CPTPP, at the very moment China seeks to join. This is the equivalent of the US shooting off one of its geopolitical feet.  Washington might have Canberra somewhat miffed. Biden binds Australia closer than ever militarily yet totally abandons it and other allies economically. But it would be sheer folly for Australia not to grasp, and think through, how the roots of both its economic prosperity and national security lie in a continuation of the open, multilateral trading regime that has been the very staple of the post-war international order.
https://www.eastasiaforum.org/2021/10/26/australia-still-caught-up-in-bidens-china-blame-game/

Tech hub Shenzhen calls off new trade shows in city amid rising Covid-19 infections in other parts of China
Authorities in China’s Silicon Valley suspended new trade shows this fourth quarter at the city’s two biggest conference and exhibition venues     While there were no reported infections in Shenzhen as of Monday, the city’s action reflects efforts to bolster China’s zero-tolerance approach to Covid-19
https://sg.news.yahoo.com/tech-hub-shenzhen-calls-off-120656847.html

China locks down city of 4 million after six Covid cases detected
Residents in Lanzhou, Gansu, told to stay at home as buses, taxis and key rail routes suspended
https://www.theguardian.com/world/2021/oct/26/china-locks-down-city-lanzhou-gansu-covid

The world will have to learn to live with Covid-19 in a rational way
Scientists have said vaccines won’t be a silver bullet, and public health measures will still be needed     As immunity wanes, tough virus control measures could continue in China, the holdout on ‘Covid zero’    Scientists have always warned that vaccines would not be a silver bullet, and that public health measures would be needed even with mass immunisation.    We now see two extremes: China keeping its borders tightly shut, the holdout on “Covid zero”, while other countries with high vaccination rates pay a human cost for reopening.    All nations will eventually have to learn to live with this virus in a rational way, through both vaccination and mitigation measures, including, if it is developed, an effective treatment.
https://www.msn.com/en-xl/news/other/the-world-will-have-to-learn-to-live-with-covid-19-in-a-rational-way/ar-AAPY63Q

Jack Ma visits Dutch research institutes as Alibaba’s founder pursues post-retirement passion in agriculture technology
Jack Ma was photographed visiting a number of research institutes in the Netherlands for a study tour of technology related to agriculture   The founder of Alibaba Group Holding, who retired as chairman in 2019, is undertaking the personal trip, according to sources familiar with his plans  Alibaba, now managed by a team of partners headed by chairman and chief executive Daniel Zhang, has doubled down in aligning the company’s development with a number of priorities championed by China’s government, including the environment, sustainable development and social equality under the “common prosperity” mantra. The company, one of China’s largest technology behemoths, last month earmarked 100 billion yuan for a “common prosperity” fund to promote investments in technology, support small businesses and foster rural develop Jack Ma was photographed visiting a number of research institutes in the Netherlands for a study tour of technology related to agriculture   The founder of Alibaba Group Holding, who retired as chairman in 2019, is undertaking the personal trip, according to sources familiar with his plans  Alibaba, now managed by a team of partners headed by chairman and chief executive Daniel Zhang, has doubled down in aligning the company’s development with a number of priorities championed by China’s government, including the environment, sustainable development and social equality under the “common prosperity” mantra. The company, one of China’s largest technology behemoths, last month earmarked 100 billion yuan for a “common prosperity” fund to promote investments in technology, support small businesses and foster rural development. Farm technology remains a growth prospect for a company that has since diversified into cloud computing, artificial intelligence and big data analysis. This year’s Singles’ Day online shopping gala on November 11 – Alibaba’s signature annual event – will focus on social responsibilities, sustainability and inclusiveness instead of the typical showcase of sales, marketing and consumption, according to company officials Farm technology remains a growth prospect for a company that has since diversified into cloud computing, artificial intelligence and big data analysis. This year’s Singles’ Day online shopping gala on November 11 – Alibaba’s signature annual event – will focus on social responsibilities, sustainability and inclusiveness instead of the typical showcase of sales, marketing and consumption, according to company officials.
https://www.scmp.com/tech/big-tech/article/3153741/jack-ma-visits-dutch-research-institutes-alibabas-founder-pursues

In Their Eyes 50 years China-Belgium – Wang Haichen
On the occasion to celebrate the 50th anniversary of the establishment of diplomatic relations between China and Belgium, China Media Group (CMG) Europe has joined forces with URTI (International Radio and Television Union) to co-produce a mini-documentary series titled “In Their Eyes 50 years China-Belgium.”. The series follows the lives of six people – three Belgians in China and three Chinese in Belgium, whose stories exemplify how relations between the countries have deepened over time.
https://news.cgtn.com/news/2021-10-26/In-Their-Eyes-50-years-China-Belgium-Wang-Haichen-14G4DUS8ZK8/index.html

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