China Press Review – September 10, 2019

Press review

China’s affluent middle-class growing increasingly anxious as prices rise and yuan drops
The ‘Lucky Generation’, those who grew up in the midst of China’s spectacular economic rise and opening up, are worried about their shrinking purchasing power Beijing is counting on consumer spending to help bolster economic growth amid the trade war with the United States, but purchasing power is under threat
www.scmp.com

Are Foreign Companies Really Leaving China in Droves?
President Donald Trump, in defending his trade war with China, has yet again let his Twitter fingers get ahead of reality. He tweeted in late August that “China wants to make a deal so badly. Thousands of companies are leaving because of the Tariffs. They must stem the flow.” This supposed exodus of foreign firms is another element informing his view that China is under increasing economic pressure and thus anxious to accept US terms for a trade agreement. As is the case with Trump’s claim that the US tariffs are slowing China’s economy and increasing its unemployment, the facts fail to support his view.
www.piie.com

How to Evaluate Your China Risks
Should I stay in China or should I leave? Should I enter the China market or is it too risky? The answer to these questions is simple: it depends. The secret is understanding what those dependencies are and how your company strategically fits within them.

How to Evaluate Your China Risks

Global economic slowdown is China’s opportunity to take the initiative in settling the trade war and easing tensions
China should set a new range for its currency and use the rest of its reflationary tools to reach its 2019 growth target It should also lead the way in seeking reconciliation at a time when the trade war is hurting everyone
www.scmp.com

Hong Kong protests and US trade war no longer China’s top priorities as spiralling pork prices dominate agenda
Vice-Premier Hu Chunhua heading Beijing’s efforts with latest data showing pork prices rose 46.7 per cent in August compared to a year earlier Issue could even undermine next month’s 70th anniversary of the founding of the People’s Republic
www.scmp.com

China will win the trade war and wean off American technology in 7 years, strategist says
China will win the Sino-U.S. trade war, said the president of Independent Strategy on Monday.
“China will never trust the United States again, and it will achieve its technology independence within seven years,” he told CNBC’s Squawk Box. Chinese tech firms have traditionally been reliant on American suppliers for semiconductors, modems and jet engines. But recent developments in the trade war have called this relationship into question.
www.cnbc.com

Huawei and Samsung show off rival 5G ambitions in Berlin
Politics take back seat to technology at IFA consumer electronics show
asia.nikkei.com

Trade war helping Germany-based SAP pull ahead of US rivals: CEO
SAP, one of the world’s largest enterprise software companies, could outperform its US rivals during the trade war because it is free to trade with China, the company’s CEO Bill McDermott said in an interview at a TechCrunch event on September 6. The trade war has created a binary hurdle for American rivals including Microsoft and Cisco: not only has the US banned trade with Chinese businesses, China’s state-owned firms will not let them bid on their procurement tenders. “The fact that Germany has excellent relations at the public and the private-sector level in China, it’s no question it’s a help to us.”

Trade war helping Germany-based SAP pull ahead of US rivals: CEO

This tiny chip is playing a big role in the trade war 
While supportive of the administration’s goals, the U.S. semiconductor industry has urged a balanced approach that will protect its intellectual assets from theft and preserve U.S. national security while not unduly hamstringing innovation and growth that is in part derived from international collaboration. Current technologies and methods of fabrication proprietary to incumbent firms keep them in the lead, for now. But in the near future, chips will run on light rather than electricity. Artificial intelligence and quantum computing will be applied to gain computing speed. Breakthroughs like these will determine who are the future industry leaders, and China has an opportunity to gain entry on the ground floor of those frontiers.

THIS TINY CHIP IS PLAYING A BIG ROLE IN THE TRADE WAR

Jack Ma steps down in final departure from Alibaba
Jack Ma, the legendary Chinese entrepreneur behind Alibaba Group, is handing his board chairman title over to CEO Daniel Zhang on Tuesday as he retires from the company he founded 20 years ago.

Jack Ma steps down in final departure from Alibaba

Alibaba marks 20th anniversary with new company values 
Alibaba Group’s values, the fundamental beliefs upon which the company’s business and behaviors are based, were created when the tiny Hangzhou upstart was still just a startup. Management knew early on that they and their growing staff needed more motivation for running a business than making money.
www.alizila.com

China Factory Deflation Deepens Signaling Worsening Economic Slowdown
China’s producer price index fell further into contraction, signaling a worsening economic slowdown that threatens to add deflationary pressures to the global economy.
www.bloomberg.com

Nio’s ES6 sales doubled in August: report
Sales of Nio’s new ES6 SUV model doubled in August following a lackluster first full month on the market, trade figures show. Despite the growth, Nio will almost certainly miss its original annual sales target of 40,000 units as the embattled electric vehicle maker had achieved only 20% of the goal at the end of July.

Nio’s ES6 sales doubled in August: report

China Faces Another EV Subsidy Scandal
Generous government subsidies have been behind China taking the lion’s share of global electric vehicle sales in recent years — but now they’re being called to question and face another scandal.
oilprice.com

Environment becomes a trade-war victim as China ramps up industrial production to offset economic slowdown caused by commerce conflict
A rise in activity of dirty industries is a ‘smokestack stimulus’, part of a ‘desperate effort to keep GDP humming along’, says CLSA analyst
www.scmp.com

China has a choice between the ‘grey rhino’ risk of rising debt or the ‘black swan’ threat of an economic slowdown
Beijing changes course on macroeconomic policy to cope with slowdown pressure amid the trade war with the United States China’s renewed easing of credit conditions on Friday is set to amplify the country’s debt problem
www.scmp.com

China to become more selective in supporting distressed banks, say Moody’s and Fitch
State support for the Chinese banks will vary as the authorities try to share some of the losses with large creditors, say analysts at Moody’s and Fitch Up to 10 per cent loss sharing by wholesale creditors of Bank of Baoshang, and Bank of Jinzhou skipping its coupon payment on dollar bonds are some examples
www.scmp.com

Germany’s Angela Merkel ‘still a strong voice for Europe’ in China
Merkel makes the case on sensitive issues in Beijing without being offensive, observer says
www.scmp.com

Hong Kong-China ‘insurance connect’ plan on hold as trade war, protests hit business environment
Sales of Hong Kong insurance policies to mainlanders have fallen as the protests have hit tourist numbers The Insurance Authority had been in talks with its mainland counterparts to establish a channel modelled on the stock connect schemes
www.scmp.com

China Daily newspaper criticised over claim Hong Kong protesters planned 9/11 terror attack
State-run newspaper’s Hong Kong edition made claim in Facebook post illustrated with photograph of attack on New York in 2001 State-run English language outlet said ‘anti-government’ fanatics had been threatening to kill people if their demands were not met
www.scmp.com

Why China went on a global media blitz over the Hong Kong protests – and why it probably won’t work
Chinese envoys around the world embarked on an unusually broad propaganda push to promote Beijing’s line on the extradition bill demonstrations But foreign audiences are unlikely to be receptive to the message, analysts say
www.scmp.com

Apple and Foxconn admit to Chinese labor law violations
Apple and its manufacturing contractor Foxconn admitted to breaking Chinese labor regulations by the excessive use of temporary staff in the world’s largest iPhone factory, according to Bloomberg. The accusation came in a report by non-profit advocacy group China Labor Watch (CLW), which also said that Apple’s Taiwanese manufacturer subjected staff to other illegal and harsh working conditions.

Apple and Foxconn admit to Chinese labor law violations

Apple responds to iPhone factory criticism
Apple has responded to a report by a campaign group which criticised working conditions at a factory where iPhones are made.
www.bbc.com

The Silent Cries of China’s Depressed Netizens
A student posted a digital suicide note. Thousands replied, shedding light on the lives of millions of Chinese living with depression.
www.sixthtone.com

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Alain Gillard
Information Officer
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