China Press Review – September 13, 2018

Press review

Beijing welcomes goodwill gesture from Washington for talks in sign of de-escalation of trade war
Chinese government moves swiftly to welcome an invitation to the table from the United States

US proposing new round of trade talks with China in near future
Reports of the US outreach to China follow threats by US President Donald Trump over the past week to ratchet up the bilateral trade war with tariffs on all imports from the country

China, HK stocks climb on hopes of fresh U.S. trade talks
Stock markets rallied in China and Hong Kong on Thursday and the Chinese yuan firmed after the Trump administration invited Beijing to restart trade talks, offering some hope the two sides could pull back from the brink of a full-blown trade war.

Trade war pushes China to go on charm offensive over free-trade credentials
Beijing will seek to outline its stance at next week’s ‘Summer Davos’

Half of US firms in China foresee acute pain from new tariffs as trade war escalates, AmCham survey finds
The American Chambers of Commerce in Beijing and Shanghai found that US firms there expect to lose profits as high production costs and lower demand for products kick in

China Is Not America’s Next Great Enemy
The Chinese just aren’t as threatening to Americans as the Soviets were.

What Does The U.S. Want From China?
The US government wants the Chinese to respect US intellectual property and a lower bilateral trade deficit. Unleashing a trade war isn’t likely to bring these goals closer, in fact it could very well result in the opposite. It risks doing great damage to the US and world economy and denies the considerable progress China has actually already made. For investors, there are few if any upsides here, and quite a few downsides.

Beijing is holding firm, but many Chinese firms acknowledge they’re worried about the trade war
Several of China’s largest companies are acknowledging that they’re concerned about risks from a trade war with the U.S. In the face of tariffs on the bulk of exports to its largest trading partner, Beijing has maintained a resolute position that it will respond with countermeasures. But some local corporations, many owned or influenced by the state, have voiced worries about the rising trade tensions in their latest earnings releases and other financial documents.

‘Too little to dent US-China trade war costs’: Guangdong’s tax cuts leave export manufacturers cold
Ten-point plan to reduce burden on business won’t be enough to offset American tariffs and the general decline in economic activity, industry players say

China may use its property markets to defend against Trump’s trade war offensive
Wong said that rising property prices can help stimulate the economy in several ways, such as by encouraging buyers to accelerate purchases before the cost goes up, thus bringing forward future demand. Another positive result of costlier housing, she said, is that savings will move out of banks and into the real economy

Is this China’s lost decade? The economy is slowing, and now’s the time to focus on quality of life
Richard Harris says China’s decade of development was in the 2000s and as its economic growth inevitably slows, the real target for Beijing is to keep improving its GDP per capita to enhance quality of life for ordinary citizens

HNA Needs Help. China Inc. Doesn’t Need Deutsche Bank
Even if Berlin approved such a deal, there would be good reason not to do it.

China’s Belt and Road Initiative: Grand or Grandiose?
The Belt and Road Initiative is a spectacular success as a brand name. But on the ground, matters are less clear. For example, Hillman carries out an exercise of looking at six geographic “corridors” that have been identified with the Belt and Road Initiative, and then asks whether most of the BRI projects are actually happening in those corridors. He writes: “For five of the six corridors, there appears to be no significant relationship between corridor participation and project activity …” The exception is the China-Pakistan corridor, which is also the only corridor which connects China with a single country. Again, the Belt and Road Initiative will unfold over time, and it’s far too early for lasting judgments. But in these projects, China’s conduct as a business and foreign policy partner is being judged by other nations across the region–and often found wanting.

China hasn’t changed belt and road’s ‘predatory overseas investment model’, US official says
China is just partnering with other countries on infrastructure projects ‘to grab their assets’, says US agency that oversees financing for international development

China’s soft-power seduction
What do China’s manoeuvres in Latin America add up to? The idea of a clash between the US and China as a growing superpower inevitably focuses on China’s military capabilities, but this ignores the other means at Beijing’s disposal. The legendary Chinese strategist Sun Tzu said that “subduing the enemy without fighting is the acme of skill” – China’s foreign policy strategies seem focused on such a goal.

China’s soft-power seduction

Germany urges EU to rival China in Western Balkans
“It’s important that we offer these [Western Balkan] countries a European perspective, and a reliable one, because they’re otherwise turning to other countries, such as China, which are already ready and don’t have the values we have,”

The political significance of China’s latest commitments to Africa
If there is any political takeaway from the 2018 FOCAC Beijing Summit, it is that China’s bid for Africa has heightened. More than ever before, Africa is emphasized as the “foundation of the foundations of China’s foreign policy” to rally support of developing countries. Such coalition building is not just done through economic reward, but increasingly through the indirect, implicit, and sophisticated campaigns to win the hearts and minds of today and tomorrow’s African elites.

The political significance of China’s latest commitments to Africa

Chinese electric vehicle maker Nio closes 10 per cent up in New York IPO debut
Early investors hold onto their stakes in what is seen as a potential rival to Tesla

Meet the legal watchdog who’s keeping ZTE in line with US export control laws
Former US federal prosecutor is now the most powerful man at ZTE. Here’s all you need to know about the man, his role and what he can do to China’s second-biggest telecoms provider

Life after Jack Ma: meet the next generation of leaders who are commanding Alibaba’s troops
A key part of the management continuity lies in the Alibaba Partnership, set up in 2010 to ensure that the organisation was not overreliant on just one or two senior executives

Smeg’s stylish Italian kitchenware makes China Debut on Tmall
Smeg, an Italian high-end kitchen appliances manufacturer known for its vivid colors and retro designs, has opened a flagship store on Tmall.The company debuted its latest collection, created in partnership with luxury fashion house Dolce & Gabbana exclusively on the Alibaba-owned B2C e-commerce site.

Bank of East Asia expands retail banking in China through internet partnerships
Teaming up with mainland Chinese internet partners including a Tencent-backed banking unit and online travel platform Ctrip has been a major boost to Bank of East Asia’s retail banking operations in the mainland, according to deputy chief executive Brian Li Man-bun.

Blockchain changing the world’s jewellery landscape, and Chow Tai Fook joins the revolution
Backed by the Gemological Institute of America, digital-savvy diamond shoppers can now ascertain the origin and authenticity of stones sold by the Hong Kong jewellery chain using an app

Chinese luxury e-commerce platform Secoo’s active customers almost doubled in Q2 2018
The leading Chinese luxury e-commerce platform Secoo’s active customers almost doubled in Q2 2018 to 255.5 thousand from 129.3 thousand for Q2 2017. Its GMV reached 1,653.4 million yuan (US$249.9 million), representing an increase of 44.7% from 1,142.6 million yuan in Q2 2017.

Alibaba-backed internet car startup Banma secures RMB 1.6 billion in first financing round
Banma Network Technologies (斑马网络), a joint venture between Alibaba Group and SAIC Motor Corp, has completed its first financing round raising over RMB 1.6 billion, according to local media 36Kr (in Chinese). The funding round was led by SDIC Innovation Investment Management, with participation from Jack Ma’s Yunfeng Capital and SAIC Motor’s investment management platform Shangqi Capital. Banma hinted it has reached the coveted unicorn status, but did not disclose its post-funding valuation. The new investment will be used in talent recruitment and technology development.

Alibaba-backed internet car startup Banma secures RMB 1.6 billion in first financing round

China’s tech is addicted to debt
The growth of China’s tech industry over the past few years has truly been impressive. As liquidity begins to dry up, it can serve as a corrective mechanism, allowing the underperforming and irresponsible firms to fail while the strong, well-managed ones can thrive. However, given the vulnerabilities in the rest of the Chinese economy, it may not work out so neatly or fairly.

China’s tech is addicted to debt

Alibaba’s food delivery unit may acquire more funding than Meituan Dianping’s IPO
What happened: Alibaba has just recently formed a new overarching company for its food delivery platforms and Koubei and already insiders are saying that the unit’s initial funding could exceed the amount its rival Meituan Dianping raised through its IPO. The unit received financing worth $3 billion from Alibaba and SoftBank and might raise even more while Meituan’s IPO raised $4 billion.

Briefing: Alibaba’s food delivery unit may acquire more funding than Meituan Dianping’s IPO

The Chinese Streetwear Brands Hoping to Reign Supreme
Domestic streetwear brands are on the rise — but their slogan T-shirts and sneakers haven’t gained traction internationally.

China’s Sportswear Company Anta Seeks $5.3B Buyout Of Wilson Racket Maker Amer Sports
China’s sportswear company Anta Sports Products Limited and private equity firm FountainVest Partners are seeking for a €4.6 billion (US$5.3 billion) takeover of Finnish sports equipment maker Amer Sports Oyj. The consortium is planning to acquire Amer’s entire share capital for cash. The deal is subject to a number of conditions including approval of investors holding at least 90% of Amer’s shares.

China’s Sportswear Company Anta Seeks $5.3B Buyout Of Wilson Racket Maker Amer Sports

Fintech Companies Can ‘Leap’ Forward To Broader Markets Via Hong Kong, Says City’s Fintech Regulator
Asia’s financial hub Hong Kong is seeking to promote city’s prominence in the world’s fast-evolving fintech industry by acting as a “springboard” to help companies leap forward to broader markets, especially mainland China.

Fintech Companies Can ‘Leap’ Forward To Broader Markets Via Hong Kong, Says City’s Fintech Regulator

China’s first drug-releasing heart stent passes clinical trials in Europe
Device developed by Shanghai company performs on par with global leader in clinical trials

Suspect in deadly car attack on Chinese town square ‘wanted to take revenge on society’
Man described by local authorities as ex-convict who harboured a grudge against society

The American with a dream of becoming a Chinese citizen
‘I don’t hate America or dislike America,’ new Chinese green card holder Brent W says. ‘I just love China and Chinese people a lot more’ In 2016, the Ministry of Public Security, the only government body to approve green card applications, said it granted 1,576 foreigners permanent residency – a 163 per cent jump over the previous year. Figures for last year have not been released. So are individuals who invest at least US$500,000 in western China or poorer regions, US$1 million in the central part of the country or US$2 million in other areas for three straight years.

Alain Gillard
Information Officer
Service Asie Pacifique
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