China Press Review – September 13, 2019

Press review

From the trade war to Brexit and the Hong Kong turmoil, simmering political issues remain a threat to global growth
Recent positive developments in some of the major issues weighing on markets, including the US-China trade war and Hong Kong’s protests, offer a welcome respite. But economic fundamentals remain weak and policymakers’ toolboxes are limited

EU goods trade surplus with U.S. and deficit with China widen
The European Union’s trade surplus in goods with the United States and its deficit with China both increased in the first seven months of 2019, figures that could add extra strain to global tensions. The European Union’s surplus with the United States grew to 90.9 billion euros ($100.8 billion) in Jan-July 2019 from 80.0 billion euros in the same period of 2018, EU statistics office Eurostat reported on Friday. With China, the EU’s trade deficit expanded to 109.2 billion from 98.6 billion euros.

US, China tariffs could lower global economic output by 0.8% in 2020: IMF
In the past year, the index jumped 10-fold from previous high in the wake of escalating tensions between US and China

China to exempt US pork and soybeans from additional trade war duties, in response to Trump’s tariff delay
Xinhua News Agency reported exemption is in response to the US’ decision to postpone planned tariff increase from October 1 to October 15 It comes after US President Donald Trump spoke on Thursday of the possibility of an ‘interim trade deal’ over the coming weeks

U.S.-China trade war risks driving Fed policy, not Trump’s carping: economists
The U.S.-China trade war will worsen or at best stay the same over the coming year, according to economists in a Reuters poll who expect the Federal Reserve to cut interest rates next week for the second meeting in a row.

Liu outlines China’s trade talks strategy
President Xi’s economic confidant singles out ‘trade balance, market entry and investor protection’

China’s lead negotiator puts ‘trade balance’ at top of agenda as Trump flirts with idea of ‘interim deal’
Vice-Premier Liu He says said ‘the whole world is expecting to see progress in China-US negotiations’ in a meeting with the US-China Business Council Liu welcomed Donald Trump’s decision to postpone tariffs from October 1 to October 15, described by US president as ‘goodwill gesture’

Donald Trump’s team rushes to find escape hatch for China tariffs as trade war goes on
Hoping to avoid further economic damage, US president’s top advisers are trying to resurrect terms they were previously negotiating with Beijing Goal is to forestall October tariff increases and next round of tariffs expected to take effect in December

4 steps for Trump administration to resolve the China trade war
The future of U.S.-China relations is critical to the economic well-being of Washington state. China is our state’s most important export destination, source of investment, and trade and commercial partner. The members of the Washington State China Relations Council are deeply concerned with many of the issues and grievances underpinning the current impasse between our two countries. However, we fundamentally disagree with the approaches being taken to address these challenges and the long-term trajectory of the U.S.-China relationship.

Economists see no end to US-China trade war: Poll
Economists polled by Reuters are expecting the U.S.-China trade war will worsen or, at best, relations will stay the same in the near term. Close to 80 percent of the economists said they didn’t expect any improvement in relations between the two countries by the end of next year, Reuters reported. They’re lacking optimism about the trade situation as more tariffs are scheduled to take effect in October and December.

Full Service Outsourcing in China: NOT Smart
Somewhat paradoxically, increasing tension and tariffs between the United States and China seem only to drove more companies to want “to go into China.” See Why NOW Is a Good Time to Double Down on Doing Business in China. Most of these companies looking to go into China are companies that sell something to China — either goods or services — and are looking to go into China to “solidify” their relationship with their Chinese customers.

Full Service Outsourcing in China: NOT Smart

Central banks like the Fed and the ECB can’t save the global economy when governments refuse to play their part
Fed and ECB actions after the 2008 crisis have been crucial, but they have reached the limits of what they can achieve If governments like Germany won’t stimulate and Italy won’t reform, it’s unreasonable to expect more from central banks

Trade war is spurring China’s hi-tech innovators into overdrive
Trump’s campaign to contain China’s rise has galvanised its hi-tech sector to accelerate design and invention

US is losing the 5G war to China
Asia holds the key, favoring cost over fears of potential Chinese spying

Speak softly, make tough decisions: An interview with Alibaba Group chairman and CEO Daniel Zhang
The chairman and CEO of China’s e-commerce giant describes Alibaba’s approach to innovation and how he balances analytics and instinct to push himself to spot hidden opportunities.

Cross border ecommerce: how to effectively enter the Chinese market
China is the number one ecommerce market in the world, and as such, more and more retailers are looking to sell in this very lucrative market. By 2018, China expects sales of 871 billion euros, accounting for 40% of the total e-commerce market. By 2020, the market is expected to be larger than the USA, Japan, the UK, Germany and France combined.

Cross border ecommerce: how to effectively enter the Chinese market

Where do China’s newly rich invest their money?
Given increasing uncertainties in the global market, the newly wealthy make savings as one way to fend off risks China’s newly-wealthy people have after-tax monthly income of about 18,000 yuan (US$2,529.72), a new survey shows, and 94% of them have properties, The Paper reported. They prefer traditional investments, such as bank deposits and real estate investment, according to the China Rising Affluent Financial Well-Being Index, released by the Shanghai Ad

Despite Trade War, Ralph Lauren Gains Momentum in China
For FY2019, China represented roughly 30 percent of the revenue growth in the Asia segment, and was a major focus for new store openings. Of the 94 Ralph Lauren stores opened in Asia in FY2019, 39 were in China. Analysts expect this trend to continue in FY2020, driven by the launch of the directly owned Ralph Lauren e-commerce site last year, which is poised to benefit as the online apparel market in Asia reaches an estimated $1.4 trillion in 2020.

Despite Trade War, Ralph Lauren Gains Momentum in China

China’s new digital currency could encourage worldwide use of the yuan, says CEO
The People’s Bank of China (PBOC) last month said it’s close to launching its own digital yuan, arguing that the rationale behind the move is to “protect” its foreign exchange sovereignty. “This becomes a mechanism by which (the yuan) can be used in everyday transactions all around the world,” said Circle CEO Jeremy Allaire.

Politics, among other concerns, stands in the way of HKEX’s bid for the London Stock Exchange
Stock exchanges trying to stay competitive in the wake of technological advances and structural changes may have profit on their mind, but they should expect regulatory and geopolitical considerations to take precedence

Hong Kong ‘not a trade issue’ says Mnuchin ahead of US-China talks
Next month’s trade talks between the US and China will not include discussion of Hong Kong disturbances

Hong Kong developers urge government to defer roll out of vacancy tax as they fear it will intensify market slowdown
The introduction of the vacancy tax at the moment certainly will add fuel to the fire, the Real Estate Developers Association of Hong Kong said on Friday Home prices have fallen since June after rising for the first five months of the year

Backlash could cost Xi Jinping’s belt and road $800 billion, report says
The most pessimistic scenario is investment might only reach around $560 billion, as per a report

US Marines ‘remind China of America’s military edge’ with Asia-Pacific drills
Operations aimed to caution Beijing that US forces can carry out amphibious campaigns far from home Washington has power to intervene directly in territorial disputes between its allies and China

7 women in tech making waves in China
A list of America’s most innovative leaders included no women, but many women are having a big influence on tech in China

Luxury Mooncake Gift Boxes: Winners & Losers
The Mid-Autumn Festival has transformed from a regional holiday to a world-recognized festival and eating mooncakes remains the most rooted tradition. Who says no to a tasty cake delivered in a gorgeous gift box? The correct answer: no one. On the eve of the Mid-Autumn Festival, which is celebrated on September 13 this year, many Western luxury brands have created their own specially designed mooncake gift boxes for valued customers and business associates. As part of their globalization strategies, brands are increasingly paying more attention to local holidays, like the Mid-Autumn Festival, especially those heavily reliant on the lucrative Chinese market.

Luxury Mooncake Gift Boxes: Winners & Losers

Country Report: Wallonia
A century ago, Wallonia was one of the richest regions on earth, and one of Europe’s premier manufacturing centres. But after recent decades of industrial decline, it’s re-establishing its place at Europe’s top table in areas like aerospace, biotech & pharma, chemicals and fintech. In the newest edition of our Country Report series, we meet the business leaders and cultural ambassadors, who are helping drive a new generation of innovation and interest, in the Made in Wallonia brand.

Alain Gillard
Information Officer
Service Asie Pacifique
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