China Press Review – September 12, 2018

Press review

China’s economic crises continue to pile up
Investors captivated by emerging market woes shouldn’t lose sight of that
But China has had a different experience. Its GDP growth has slowed, but investment remains robust, and there is no strain on its banking system….A common explanation for China’s apparent invulnerability is that it has large pools of domestic savings and enormous foreign exchange reserves (over $3 trillion), which can be spent down to head off financial panics. And because the government’s balance sheet is still strong enough to bail out unviable financial firms, it can address any emerging sources of stress in that crucial sector. Another common explanation for China’s resilience is political. Highly centralised decision-making allows for swift, concerted action, such as official clampdowns on foreign exchange outflows. And in such a uniquely controlled — and controllable — society, the normal social stresses that arise from economic disruptions are eminently manageable.

China is “one of the bigger risks” to global economy – BoE’s Carney
China’s financial system poses one of the bigger risks to global financial stability, Bank of England Governor Mark Carney said in an interview with the BBC to mark the 10th anniversary of the global financial crisis.

US consumers are the victims of Trump’s China tariffs
Ex-commerce chief Gutierrez sees trade war as inflationary with no end in sight

China puts off licences for US companies amid tariff battle with Washington, says US-China Business Council official
Cabinet-level officials told US-China Business Council representatives they are putting off accepting applications ‘until the trajectory of the US-China relationship improves and stabilises,’ says an official from the business group

As trade war escalates, China intensifies role of state-owned enterprises
Beijing conference affirms commitment to state-owned firms, even though they are a key sticking point with Washington

China’s Imperial Growth Delusion Just Won’t Die
State enterprises are back in the ascendancy. Pity the private sector.

Why US trade war is less to blame for China’s economic slowdown than the home-grown deleveraging campaign
The Chinese economy is confronting a double whammy of stiffening domestic conditions and the trade war with the US. Economic growth has slowed noticeably in recent months, particularly in infrastructure investment and credit supply, while financial markets have suffered setbacks, with both equities and the yuan retreating to near 2016 lows. Talk of an economic hard landing has resurfaced, amplifying the recent sell-offs in Chinese and wider emerging markets.

Is the Trade War Hurting Xi Jinping Politically?
Having consolidated his power at the 19th National Congress of the Chinese Communist Party in October 2017 and at the National People’s Congress in March 2018, President Xi has no apparent domestic challengers. However, Chinese society has been torn over how to comprehend Trump’s motivation for starting a trade war with China. Some blame Chinese scholars who exaggerated China’s power so as to invite President Trump’s attention to China as the United States’ challenger. Others insist that the United States will try to sabotage China’s dream of becoming a strong nation again in the world regardless of what China does or does not do.

Ray Dalio: China is more concerned about avoiding a ‘warlike’ relationship with the US
Billionaire Ray Dalio argued Tuesday that President Donald Trump’s imposed tariffs on China aren’t “that big of a deal” for the world’s second-largest economy. Dalio, the billionaire founder of the world’s biggest hedge fund, said China will be able to manage its economy even with a “few bumps” in the short term. China is likely more concerned about the nature of its relationship with the United States going forward, he said.

Shinzo Abe and Xi Jinping ‘pledge Japan and China will deepen cooperation’

Abe says after the two leaders meet at Russia’s Eastern Economic Forum plans are advancing for a first visit to Beijing by a Japanese prime minister since 2011

China’s Xi Jinping, Russia’s Vladimir Putin agree to boost ties amid growing US unilateralism
Two nations will ‘build a new type of international relations and shared human destiny’, Chinese leader says

Russia is much closer to China than the US now, the head of Russia’s wealth fund says
“So yes, of course Russia and China are much closer now than Russia and the U.S.” He put the schism with the U.S. down to “geopolitical difficulties” and said, “we believe we need to overcome this and do more great joint projects together, even with the U.S.”

Russia-China to invest in hi-tech development
The Russia-China Investment Fund (RCIF) and China’s Tus-Holdings on Tuesday announced joint investment plans focusing on developing technology, which would see $1.28 bln invested in the Russian Tushino Project Technology Park.

China, Pakistan agree to open economic corridor to investment from other countries
Deal comes as Beijing tries to adjust its approach amid backlash over global infrastructure strategy

China’s trade with Belt and Road countries up 12 percent in Jan-Aug
China’s trade with countries covered by the Belt and Road initiative increased faster than the country’s overall trade during the first eight months of the year, according to the latest official figures.

Asian exports face headwinds from US-China trade war: PMI survey
Overseas demand weakens as August index for ASEAN falls to 20-month low

U.S.-China “trade typhoon” could impact 7 pct of HK exports
Around 7 percent of Hong Kong’s total exports could be impacted if the United States imposes a new round of trade tariffs on China, the city’s commerce and economic development secretary told Reuters on Wednesday.

China is ready for int’l investors: European banker
As China’s policy incentives further open the country’s financial market and encourage more cross-border investment, these steps help boost the international use of the renminbi (RMB) and recognition of the RMB as an investable currency, according to a European banker.

Dutch chip maker NXP, getting past failed Qualcomm merger, sees China as biggest growth market
Company CEO told investors that tariffs were ‘not a major issue’ and that the Chinese automotive market was a major source of revenue

Hong Kong Ups Support To Start-Ups As Government Increase Capital Allocation To Tech Firms
Hong Kong government has significantly increased policy support to start-ups, as the city continues its effort to turn itself into an innovation-led economy. “Hong Kong is serious in promoting its technology innovation,

Hong Kong Ups Support To Start-Ups As Government Increase Capital Allocation To Tech Firms

What would entice developers to turn vast farmland holdings in New Territories into nearly 280,000 low-income flats?
A public-private partnership under which developers agree to build public flats in return for a sweet deal allowing them to build lots of private flats would enable the government to quickly reach its 10-year goal for new affordable housing, consultancy Knight Frank suggests.

Bargain hunters are nowhere to be seen as Chinese stocks trade near 2016 lows
Even dip buyers do not want to wager on Chinese stocks right now. The benchmark Shanghai Composite Index dropped by 0.3 per cent to 2,656.11 at the close on Wednesday, just above a low of 2,655.66 set in January 2016 on the back of a rout that erased US$5 trillion in market capitalisation. A breach of that level will take the gauge to a four-year low.

China’s Pummeled Stock Market Is Now Worth Only Five Apples
At its peak in 2015, China’s market cap was more than $10 trillion. It’s almost halved in size since then, to $5.73 trillion as of Tuesday. That’s 5.3 times Apple’s $1.08 trillion value, the lowest ratio since 2012, data compiled by Bloomberg show.

What is the most lucrative job in the world’s costliest property market? A sales agent, of course
A toxic combination of rising interest rates, a looming vacancy tax on empty flats and the sharp decline in the city’s stock market is making developers jittery

Nanjing property market U-turns as government cooling measures take hold
City’s land authority cancels three of five planned land sales expected during a two-day period ending last Friday, while the remaining two were auctioned off for less than nearby sites

Jack Ma’s untidy departure typical of impulsive Alibaba boss
Visionary leader succeeded despite lack of technology expertise

Alibaba to expand e-commerce business in Russia
What happened: China’s tech giant Alibaba is setting up a $2 billion joint venture with Russia Internet Company Group, further strengthening Alibaba’s e-commerce marketplace in Russia. Alibaba’s deal with is backed by the Kremlin through the Russian Direct Investment Fund. The venture could better compete with local rivals Wildberries and Yandex in Russia.

Briefing: Alibaba to expand e-commerce business in Russia

Putin asks Jack Ma: “You are still so young, why are you retiring?”
Ma’s planned stepping down in his 50s is a rare case in the Chinese business world, where tycoons often remain in control well into old age. Ma also made several suggestions to Putin, according to mainland China media reports, including the use of online trade road to drive efforts in the Belt and Road Initiative, strengthen Sino-Russian technology cooperation, develop trade, tourism, technology and training, as well as increase support for small-and-medium sized businesses and training for young people

Austin and the Midnight Pitch: Building Export Business with China
The city of Austin, Texas has developed a partnership with Chinese internet giant Alibaba to boost exports of US-produced goods to Chinese consumers.

Austin and the Midnight Pitch: Building Export Business with China

JD to build 30 international supply chain sites for cross-border commerce
The goal is to be capable of transferring goods from China to cross-border destinations in 48 hours. “JD set up the plan at the beginning of this year. Generally speaking, we’ll complete it in 2 to 3 years,” Huang Xing, JD’s vice president said. Interestingly, Richard Liu, JD’s NO.1 person, who holds control of the company, did not appear in Russia, while Jack Ma attended the event as Alibaba’s head.

JD to build 30 international supply chain sites for cross-border commerce

Clock’s ticking for China’s emerging electric car start-ups to raise capital as market gets white-hot
Competition intensifies as Beijing’s subsidy policy tightens and foreign car makers entice buyers away from domestic marques

EV maker NIO lowers its IPO target
What happened: Chinese electric vehicle startup NIO has lowered its expected fundraising at the NYSE from $1.8 billion expected in August to $1.518 billion. The company plans to sell 184 million shares between $6.25-$8.25. Existing investors have committed to investing $250 million into the IPO, according to NIO. So far, the company has been backed by Tencent, Sequoia Capital, Hillhouse Capital, and a private equity fund established by Baidu.

Briefing: EV maker NIO lowers its IPO target

New energy vehicles “on fire”: Beijing urges the industry to launch strict safety checks
China’s Ministry of Industry and Information Technology (MIIT) is urging new energy vehicle (NEV) manufacturers to closely monitor their products’ safety performance and will begin random national quality checks with its affiliates. To set up state regulation for the industry’s product design and operational management, the department will soon circulate documents regarding the government’s new guidance and comments on the NEV industry.

New energy vehicles “on fire”: Beijing urges the industry to launch strict safety checks

Hong Kong High-Speed Rail Connecting with Mainland China Opens September 23
On September 23, the final phase of the Guangzhou–Shenzhen–Hong Kong express rail link (XRL) will be completed, connecting Hong Kong with mainland China’s high-speed rail system.

Chinese government powerless vis-à-vis failing shadow banks
Fearing regulations, hundreds of shadow banks declare bankruptcy or their bosses disappear with the cash. Some of the lending institutions promised returns of up to 20 per cent.

Lockers could be the rental economy’s next big hit
What happened: A practical, if unexciting, concept has entered China’s rental economy since last year: self-serve lockers. Baoxiaocun (包小存) has placed lockers across several higher-education campuses in Nanjing. Lockers can be opened via QR code or WeChat mini-program, and are rented out on a daily, monthly or yearly basis.

Briefing: Lockers could be the rental economy’s next big hit

Opinion: Why China’s Fracking Hopes Will Hit the Rocks
That may mean a decent chance of hitting those production goals — something that China badly needs if it wants to brighten its winter skies with a shift from coal-fired to gas-fired power. But if it happens, it will be the opposite of a commercial outcome. Unconventional gas hasn’t failed in the People’s Republic because of lazy state behemoths, but because of intractable geological challenges. China is the future of fracking — and it always will be.

China breaks the Arctic ice with launch of new research vessel
Icebreaker could pave the way for nuclear powered super ship but for now it’s all about exploration and scientific surveys

China steps up transport ban to stem spread of African swine fever
Price turmoil expected to worsen for world’s largest pork consumer

China’s military learns the art of the counter-attack at Russian war games as US tensions rise
Participation in Vostok 2018 indicative of growing strategic trust and military cooperation between Beijing, Moscow, defence ministry says

Concerns missing Chinese actor Fan Bingbing has fallen foul of authorities
Rumours abound that the Chinese star, who has not been seen in two months, has been detained for tax evasion
Alain Gillard
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