China Press Review – October 8, 2019

Press review

Under threat of impeachment, Trump should aim for a win on the economy – by ending the US-China trade war
There’s no better way for Trump to fight off the threat to his presidency and increase the chances of his re-election by focusing on improving the American economy and global outlook. The damaging trade war must end

Donald Trump says ‘bad’ developments in Hong Kong could affect trade negotiations
US leader says ‘bad’ developments in Hong Kong could impact trade negotiations Trump issues warning days ahead of high-level trade talks in Washington

One Year Into Trade War, China Has Given Up Nothing
Trump to Xi: What have you done for me lately? Not that China owes the U.S. a favor, but over a year into the trade war, Beijing has given up absolutely nothing to warrant the removal of tariffs.

China tones down expectations ahead of US trade war talks as Vice-Premier Liu He leads team to Washington
The 13th round of talks will take place this week, but a source says that the Chinese delegation is already planning to cut short its stay in Washington by one night The US is scheduled to raise tariffs on Chinese imports next week, while the issues surrounding Joe Biden and the Hong Kong protests also hang over the talks

From US-China trade war to ‘foreign interference’, the nation-state system is ailing and needs a reset
Donald Trump’s call for China’s assistance to investigate a political rival, at a point when bilateral relations are at a critically low ebb, raises alarm bells, and more questions about the sustainability of the Westphalian nation-state order

Chinese trade talks team hints at broad agenda as October 15 tariffs deadline looms
Liu He heads delegation to meet US’ Robert Lighthizer and Steven Mnuchin on Thursday and Friday Fresh US tariffs on Chinese goods are due to take effect next week

US adds Chinese surveillance giant Hikvision to trade blacklist
Move bars companies and other entities from buying parts and components from US companies without US government approval

US adds Hikvision, Sensetime, and Megvii to trade blacklist
The move came just three days before the visit of Chinese vice-premier Liu He to restart high-level trade talks with Washington to end a yearlong trade war between the world’s biggest economies.

US adds Hikvision, Sensetime, and Megvii to trade blacklist

Tencent leads E-round funding in Chinese online educator Vipkid
Tencent has led E-round funding in Vipkid, one of China’s largest online English-language tutoring platforms, according to a statement on WeChat.

Tencent leads E-round funding in Chinese online educator Vipkid

China GDP likely to slow to 6.1% in July-Sept: survey
Median estimate forecasts lowest quarterly growth since 1992

How China Can Build a Better Biopharma Industry
China’s pharmaceutical companies are attempting to position themselves as global innovators, and government officials want to help.

What is a KOC? Behind China’s Latest Influencer Trend
Key Opinion Leaders — better known as KOLs — have long been used by luxury brands in China to promote products and influence sales. However, in an ever-changing consumer climate, experts are now claiming that a new form of influencer may be even more beneficial for building a brand’s image. Introducing, the KOCs, China’s Key Opinion Consumers.

What is a KOC? Behind China’s Latest Influencer Trend

China’s online retail sales growth slows in 2019
China’s online retail sales growth weakened in the first eight months of this year, official data from the National Bureau of Statistics (NBS) showed, amid a slowing national economy, said Caixin.

China’s online retail sales growth slows in 2019

China’s service sector growth slows to seven-month low in September, despite increase in new orders
Caixin/Markit service sector purchasing managers’ index (PMI) fell to 51.3 in September, down from 52.1 in August Sharp rise in input costs for labour and raw materials put pressure on companies, restraining business confidence, analyst says

What Do Most luxury Brands Lack in China? Insights
Without deep insights, any measures a brand would take to fix the store’s traffic, profitability, and relevance with young consumers would surely be unsuccessful. A well-known fashion brand was struggling with its most important flagship store in China, which was losing money, didn’t draw enough people, and saw customers buying fewer items. Additionally, the brand wasn’t resonating with younger consumers, who seemed to be less loyal, showed less interest, and bought lower priced items than the older consumers. The brand’s management team was aware of these issues but had no explanation for them. They assumed that younger consumers simply had less money to spend, and therefore, only bought cheaper items. They also concluded that their store wasn’t attractive enough and decided to invest in a property upgrade.

What Do Most luxury Brands Lack in China? Insights

China’s ‘golden week’ loses some of its shine as consumers show reluctance to spend amid US trade war
Retail and catering sales rose 8.5 per cent, decelerating from a 2018 growth rate of 9.5 per cent, marking the slowest growth since the comparison was published in 2001 Number of tourists who stayed in China during the seven-day holiday rose 7.8 per cent from a year ago to 782 million, but the growth rate was the lowest in a decade

Trump economic adviser says delisting Chinese firms ‘not on the table’
U.S. President Donald Trump’s chief economic adviser on Monday said the administration had begun studying U.S. investor protections in China, but that delisting Chinese companies traded on U.S. exchanges “is not on the table.”

Chemist warehouse signs on to deepen Alibaba partnership
Australia’s largest pharmacy retailer, Chemist Warehouse, is extending its partnership with Tmall Global and broadening its presence across Alibaba Group’s ecosystem, including new flagship stores and a possible launch in Southeast Asia, the companies said Tuesday.

Trade War: Why manufacturers are not rushing into India, Indonesia
As the US-China trade war continues, tariffs are making exports from China expensive for US importers

Vietnam’s vulnerability to the US–China trade war
There are growing fears that the US–China trade war will spread to Vietnam. A logical way to approach the issue would be to start by examining the logic behind the US–China trade war and then assessing whether the same logic could lead to a US–Vietnam trade war. The problem with this approach is that the US–China trade war defies economic logic.

Vietnam’s vulnerability to the US–China trade war

New Foreign Investment Restriction Regulations Cement CFIUS Reform
Effective February 13, 2020, CFIUS will be authorized to review “covered control transactions,” (all foreign acquisitions resulting in direct control in a U.S. business, which CFIUS already had jurisdiction over), as well as non-controlling “covered investments” by a foreign person in a U.S. critical technology, critical infrastructure or sensitive personal data company. The new rules refer to these as “TID U.S. Businesses” (Technology, Infrastructure and Data), or to be more specific, a company that engages in one of the following categories of activity

5G pre-registrations close to 10 million in China as the country aims to be a leader in new network technology
All three major Chinese carriers have offered incentives to encourage consumers to sign up for 5G services early

The Social Credit Shadow Looming Behind the Trade War
What we do know is that the SCS for corporations (“Corporate Social Credit System”) will be used more broadly to regulate the commerce sector. In June, the State Council released a guidance document that calls for establishing three components—a credit commitment system, a credit report mechanism, and a classified credit regulation—as the basis for inspecting businesses, but little is known beyond that these mechanisms will eventually exist. While we cannot predict how liberally or conservatively credit ratings will be calculated, here is how the publicly available information adds up so far:

The Social Credit Shadow Looming Behind the Trade War

How BRI Participants Can Build a Cleaner ‘New Silk Road’
Fighting corruption along China’s Belt and Road Initiative will take close international collaboration and a respect for local laws. Domestic corruption in partner countries not only affects BRI investment, but can also leave Chinese enterprises operating abroad facing government defaults, tax or environmental disputes, and rent-seeking or bribe-seeking behavior. Going further, corruption cases may become politicized, tarnishing China’s national image abroad and harming bilateral economic and diplomatic ties.

China Risks Imperial Image With Belt and Road Initiative
The Sino-US trade war is pushing Chinese investments towards countries covered by China’s multi-trillion-dollar “Belt and Road” plan to connect Asia, Middle East, Russia, Europe, Africa and Latin America through infrastructure projects. But the Middle Kingdom must avoid looking like an empire or risk pushback against Chinese investments in other nations. The difference between international welcome and rejection runs in the hundreds of billions of dollars. “China’s BRI has evolved significantly since its early inception; today’s projects look very different to those signed five years ago and they will look different again five years from now,” said Ben Simpfendorfer, founder and chief executive officer of Silk Road Associates. “After an early focus on core infrastructure, I expect the private sector, global capital, and manufacturing will play a growing role in the future of BRI,”

China Risks Imperial Image With Belt and Road Initiative

Hong Kong bourse drops bid to buy London exchange, shelving its ambition to create one of the world’s biggest financial markets
HKEX had faced a deadline of Wednesday to make formal offer for the London bourse operator The Hong Kong stock exchange operator will be unable to make a new bid for another six months

China’s ambassador to France hits out at Emmanuel Macron’s team for backing ‘hypocritical’ EU stance on Hong Kong protests
Lu Shaye, who had a history of making hardline remarks while based in Canada, expressed ‘deep contempt’ for Brussels ‘glorifying’ violence Diplomat’s accusation comes ahead of French president’s planned visit to China next month

Modi-Xi bonhomie to be tested by ‘irritants’, but global pressures may yet prompt tighter embrace
The Indian and Chinese leaders are expected to meet this weekend for their second informal summit in little more than a year Though military drills and Kashmir threaten to sour the event, wider geopolitical challenges could push the pair closer together

Opinion | The lead China has taken over India in the past two decades
In economic terms, it’s around a dozen years ahead of us but the gap is much larger when social indicators are considered

Hong Kong leader Carrie Lam may reach out to China as economic crisis looms
Lam said protests were severely damaging Hong Kong’s economy. “Hong Kong’s various sectors will enter a severe winter season,” she said.

Meet the mainland Chinese who are living in fear in Hong Kong
Recent immigrants to the city say they are becoming increasingly anxious after seeing a protest against an extradition bill mutate into a violent campaign against all things Chinese In a city where Cantonese is the local language, Mandarin speakers say they are keeping quiet in public and even telling their children to speak English to avoid being targeted

Traditional Chinese companies’ shares are a safe bet amid Hong Kong unrest, says Citic Securities
Hong Kong-traded shares of Chinese companies such as ICBC are attractive in valuation and potential dividend payout, says China’s biggest brokerage

We too love money more than freedom’: South Park’s humorous apology
The famous cartoons were censored because they compared President Xi Jinping to Winnie the Pooh and for sarcastically recounting the existing repression in the country’s forced labor camps. The Houston Rockets coach expresses support for Hong Kong protests and NBA matches are censored, despite an official apology.

Prague cuts sister-city ties with Beijing amid ‘tangible anger’ over pro-China policies
City council votes to pull out of partnership agreement after mayor’s unsuccessful bid to remove ‘one China’ pledge Relations have been strained since Zdenek Hrib took the job a year ago

China rejects US President Donald Trump’s call to investigate Democrat rival Joe Biden and son
Beijing will stick to ‘principle of non-interference in internal affairs of other countries’ Former vice-president in embattled Trump’s sights over Hunter Biden’s business ties in China and Ukraine

Chinese business partner of Joe Biden’s son yet to decide whether to comment after Donald Trump’s call for investigation
US president urged China to review the activities of the son of former vice-president though a similar call to Ukraine triggered an impeachment inquiry State-backed BHR Equity Investment Fund Management says it is conducting an ‘internal study’ about whether and how to explain the younger Biden’s role

China’s tourists cut back foreign travel over ‘Golden Week’, choose patriotic destinations at home
Chinese mainland tourists cut back on trips and spending abroad during the long “Golden Week” holidays in early October, with a weaker yuan, political turmoil in Hong Kong and global tensions dampening their enthusiasm to travel too far from home.

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