Belgian-Chinese Chamber of Commerce (BCECC)

China Press Review – September 15, 2021

China’s retail sales growth plunged in August, impeding economic recovery
Retail sales and industrial production rose by 2.5 per cent and 5.3 per cent, respectively, in August from a year earlier.  Fixed-asset investment grew by 8.9 per cent in the January-August period, while the surveyed jobless rate stood at 5.1 per cent in August, unchanged from July

China’s retail sales grew 2.5% in August, far slower than 7% expected
China’s retail sales grew a disappointing 2.5% in August from a year ago as the country dealt with the worst outbreak of Covid-19 since its initial spread in early 2020. Data on consumer spending released by the National Bureau of Statistics on Wednesday came in well below the 7% growth forecast by analysts polled by Reuters.   Industrial production growth was also slightly below expectations, up 5.3% in August versus predictions of 5.8% growth.

Covid, chips shortages and government policies hit China’s economy
Covid has led to unexpectedly weak retail sales growth, while chip shortages continue to put pressure on automobile investment, production and sales. Government policies are adding even more stress to the economy. We expect a cut in the Reserve Requirement Ratio in October

China slowdown worsens as Covid outbreak exposes consumer weakness
China’s financial slowdown worsened in August as coronavirus outbreaks exposed lingering weak spot in consumer investing and forged better uncertainties about the country’s advancement prospective clients.  Retail profits rose just 2.5 per cent in August year-on-calendar year, much down below economists’ forecasts of a 7 per cent increase, and the slowest enhance in 12 months.  Industrial generation, which was one particular of the most important engines powering China’s planet beating recovery in 2020, also skipped targets to incorporate 5.3 for each cent, formal details showed on Wednesday.

Climate financial risk is real and, like in 2008, the deniers are wrong
Unlike the 2008 global financial crisis – when banks were bailed out and global financial regulation overhauled – unmitigated climate change will lead to a crisis with irreversible outcomes. Climate-related financial regulation is urgently needed

EU launches ‘Global Gateway’ to counter China’s Belt and Road
“We want to create links and not dependencies,” said Commission President Ursula von der Leyen.

EU Proposes New Infrastructure Programme To Rival China
The EU plans to step up its challenge to China through international spending on infrastructure and other projects as it seeks to rival the economic and political influence that Beijing has won through its Belt and Road Initiative.

What Next for Evergrande?
The media has been full of speculation about the fate of Evergrande, the ailing Chinese property developer. With its share prices having tanked by 75 percent since warnings of large debts – estimated to be as high as US$300 billion, Evergrande has some 1.4 million properties that it has committed to complete – around 1.3 trillion yuan (US$200 million) in pre-sale liabilities, as of the end of June. But those developments and debt repayments have been cast into doubt as it has struggled to sell properties, meaning it does not have the cash to complete other projects to then sell. It has also failed to offload assets including its Hong Kong headquarters as well as subsidiaries such as China Evergrande New Energy Vehicle Group. Yesterday, the company filed a statement to the Hong Kong exchange warning of the “tremendous pressure” it faces. “There is no guarantee that the Group will be able to meet its financial obligations,” the statement said, as the property giant falters under its huge debts.

China Evergrande’s liquidity crisis deepens, report flags interest payment miss
China’s major banks have been notified by the housing authority that Evergrande Group won’t be able to pay loan interest due Sept. 20, Bloomberg reported, underlining the broadening impact of the property developer’s liquidity crisis. The troubles ailing the nation’s no. 2 property developer has already sparked social anger among investors and homebuyers and raised risks for China’s vast financial system. Ministry of Housing and Urban-Rural Development (MOHURD) held a meeting with the banks this week, the Bloomberg report said on Wednesday, citing sources familiar with the matter. It added that Evergrande is still discussing with banks the possibility of extending payments and rolling over some loans. The indebted property developer is scrambling to raise funds to pay its many lenders and suppliers, as it teeters between a messy meltdown with far-reaching impacts, a managed collapse or the less likely prospect of a bailout by Beijing.

China’s home-price growth weakens to eight-month low on cooling measures while Evergrande’s struggles keep buyers away
The average price of new homes across 70 major cities rose 0.2 per cent month on month in August, the slowest since February’s 0.4 per cent gain    Negative news surrounding China Evergrande hits sales at indebted developer

Chinese firms should face faster US stock delisting over audit rules, SEC chairman Gary Gensler tells lawmakers
The top US securities regulator says he supports a bill in Congress that allows for faster removal from American markets for not complying with disclosure rules    Lawmakers and the financial industry have pressed the SEC to force Chinese companies to improve disclosure standards

Macau’s casino stocks tumble in US$17 billion wipeout on plans to overhaul the world’s gambling hub
An index that tracks six gambling stocks in Hong Kong and New York tumbled by 23 per cent, bringing its plunge this year to 45 per cent   Sands China led the carnage, tumbling by 33 per cent while Wynn Macau, MGM China and Galaxy Entertainment fell by at least 20 per cent each

Huawei’s Ren Zhengfei emphasizes innovation, basic sciences after one-year chip ban
The details of a conversation between Ren Zhengfei, Huawei’s founder and CEO, and members of the company’s research team was released on Tuesday. During the meeting Ren stressed the company’s firm ambition of continuing to grow its HiSilicon branch and chip unit despite the current US economic crackdown. He also called for more theoretical innovations through the global platform.

China’s bitcoin mining crackdown reaches northern province surrounding Beijing
The cyberspace watchdog of Hebei province announces a clampdown on cryptocurrency mining and trading    Chinese authorities have intensified their scrutiny into cryptocurrency mining this year, after the country vowed to reach carbon neutrality by 2060

Huawei founder Ren Zhengfei vows to recruit more global talent as firm seeks to overcome US sanctions
Huawei must pursue this international recruitment drive amid ‘a critical period of strategic survival’, according to Ren Zhengfei    The Huawei founder also indicated that the company will continue to fund various research and development programmes

5 Key Consumer Trends for the Post-COVID-19 Era
Luxury brands need to pursue the domestic Chinese traveler because Chinese consumers made only 14 percent of all luxury purchases abroad in 2020 compared to 56 percent in 2019.    The pandemic has necessarily accelerated the adoption of digital luxury, and livestreaming is a new digital territory for luxury brands that cannot be ignored. The COVID-19 pandemic has also led consumers to reassess personal values and priorities, with more than 50 percent of respondents planning to spend more on wellness service categories.

China’s NIO eyes second European market, plans to sell its ET7 luxury car in Germany from next year
‘Entering Germany is an objective that we’re striving for,’ says William Li, NIO’s co-founder and CEO   Germany will be NIO’s second European market after Norway

Alibaba urges online shoppers, content creators to start ‘planting grass’, kicking off new marketing campaign ahead of Singles’ Day
Alibaba’s 40-day Zhongcao campaign will start on October 1 across Taobao’s different channels, including live-streaming platform Taobao Live  This initiative shows how China’s e-commerce market is now enhanced with a mix of promotions, social media content and live-streaming sessions

Beijing pushes stricter online content controls, including review by national ‘rumour debunking’ mechanism
Party states all levels of government should strengthen their governance to bring ideology, culture, moral standards and online behaviour under control    Chinese authorities have recently upped their efforts to control online narratives, deciding what counts as truth as opposed to falsehood  Chinese authorities have recently upped their efforts to control online narratives, deciding what counts as truth as opposed to falsehood. In one case, local police in Wuhan lectured eight people, including Dr. Li Wenliang, for spreading “rumours” about a coronavirus outbreak in the city. But the early warning from people like Li, who died in February 2020, has been seen by many in China as a missed chance to contain Covid-19 in its early stages.   The guidelines also state that the government should push ahead with an online crackdown, and fix “uncivilised problems” in areas including live streaming e-commerce and public accounts. Public accounts, meaning social media accounts run by content producers, should be graded and classified and managed accordingly, the guidelines state.

Is the CCP About to Rehabilitate the Cultural Revolution?
The official historical narrative – as defined by Xi Jinping – is set to feature prominently at the CCP plenum in November.    The backdrop to the announcement of the Sixth Plenum’s focus on history and “struggle” includes a firebrand essay published in official media earlier in the month, titled “Everyone can sense that a profound transformation is underway.” The piece, written by ultra-leftist Li Guangman, praised the CCP’s crackdown on what Li described as “capitalist cliques” and “sissyboy celebrities.” It first appeared on an obscure blog but was republished in edited form by outlets including The People’s Daily, the CCP’s official mouthpiece.   Talk of a “Cultural Revolution 2.0” is underway on Chinese discussion forums beyond the reach of China’s censors.  According to Deng Yuwen, a “New Cultural Revolution” is the wrong label for Xi’s program as it ignores the fact that the maintenance of stability remains a high priority.“A more appropriate description for what Xi thinks he is doing is ‘Creating a Clean Society’,” said Deng in a YouTube broadcast on Tuesday. “He doesn’t want to hand over an ‘unclean’ society to the next generation of the CCP.

China, Afghanistan, and the Belt and Road Initiative: Diplomacy and Reality
China will face a number of difficulties in implementing the BRI in Afghanistan.     Beyond the diplomatic portrayal of the smooth flow of Chinese investment in Afghanistan via the BRI lies a far more rocky and uncertain reality. Political instability, the ongoing presence of militant Islamist organizations pursuing transnational objectives, and the comparative weakness of pre-existing social ties and bonds of trust between the two countries are just some of the issues that policymakers will face in the days, months, and years to come.

China’s ambassador Zheng Zeguang banned from UK Parliament
China’s ambassador to the UK has been told he cannot come to Parliament while sanctions remain in place against a number of MPs and peers.

China to take necessary response to UK Parliament’s ban of ambassador: FM
Possible counterstrikes including suspending or terminating trade & other exchanges: observers

The Logic and Limitation of China’s Zero-COVID Policy
China’s strategy of mass mobilization can be astonishingly effective – but only for a short period of time.   Furthermore, people started to question the effectiveness of the zero-tolerance policy after a COVID-19 outbreak started at a COVID-19 mass testing site in Yangzhou. As a Yangzhou resident asked, aren’t mass testing events, a signature component of the zero-tolerance policy, a COVID-19 incubator? As a result, Dr. Zhang Wenhong, China’s most vocal medical expert during the pandemic, openly advocated “coexistence with the virus” and received both support and criticism from Chinese netizens. The public debate on the zero-tolerance policy makes forging unequivocal support of the policy, a key to sustaining mass mobilization, extremely difficult.Furthermore, suspicions of corruption and rent-seeking further deteriorate the effort of forging a common goal. In the Yangzhou example, there were fresh, cheap vegetables in the nearby market, but people were forced to buy expensive and rotten vegetables from the official deliveries. While complaining about the expensive, rotten foods, some people questioned whether local officials were using the deliveries to line their own pockets. Furthermore, the government lifted the lockdown at Zijin Wenchang neighborhood, a neighborhood for government officials, earlier than other neighborhoods. A widespread rumor among Yangzhou residents held that the government lifted the lockdown to allow the children of officials to leave for study abroad on time. Regardless of the validity these rumors, the narrative of officials enriching themselves and abusing power to advantage their family members at the expense of Yangzhou residents made building a common goal impossible.As Joseph Fewsmith has said, the United States does not have China’s mobilization capacity in crisis management. The strictly enforced zero-tolerance policy demonstrates the institutional strength of the CCP as a Leninist party. However, the recent developments illustrate that such a mobilization is not sustainable indefinitely. A successful mobilization requires the careful construction of a common goal among all participants. Everyone in society must endure sacrifices and work toward that same goal. However, a protracted mobilization faces the danger of losing this goal as different actors start to place their own interests ahead of the common objective. The perception of government rent-seeking during the crisis further deteriorated popular support. As a result, the mass mobilization started to crumble, and its effectiveness diminished.  The CCP might view mass mobilization as its secret weapon. However, mobilization is never a panacea.

The Personal Information Protection Law in China: A Legal Analysis
 China’s Standing Committee of the National People’s Congress announced the Personal Information Protection Law of the People’s Republic of China(hereinafter referred to as “PIPL”) on August 20, 2021, which will soon come into effect on November 1, 2021. As China’s first law specifically regulating the protection of personal information, the PIPL will have a direct and far-reaching impact on the protection of personal information rights of individuals, as well as data privacy compliance of enterprises.   Moreover, together with the Cybersecurity Law of the People’s Republic of China and the Data Security Law of the People’s Republic of Chinathe PIPL is building up a more complete, comprehensive, and systematic legal framework in China’s information protection and cybersecurity fieldThe PIPL includes eight chapters and 74 articles, clarifying the rights and obligations in personal information processing activities and stipulating specific rules for personal information processing. The vital points to be noted are as follows.

Alain Gillard
Information Officer
Service Asie Pacifique
Place Sainctelette 2
1080 Bruxelles
Tél 02 421 85 09 – Fax 02 421 87 75
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