Belgian-Chinese Chamber of Commerce (BCECC)

China Press Review – September 2, 2021

China facing demographic, inflation risks ‘Japan never faced’, Beijing urged to act to avoid ‘big surprise’
China’s once-in-a-decade census released earlier this year highlighted the challenges ahead for a rapidly ageing population. Manoj Pradhan’s book, The Great Demographic Reversal: Ageing Society, Waning Inequality, and an Inflation Revival, has caught the eye of Beijing policymakers.

Xi Jinping’s drive for economic equality comes at a delicate moment for China
President wants to spread ‘common prosperity’ but Covid and material shortages could spell trouble

Has Covid ended the neoliberal era?
The year 2020 exposed the risks and weaknesses of the market-driven global system like never before. It’s hard to avoid the sense that a turning point has been reached

EU foreign ministers set for first talks on China since sanctions blitz six months ago
Beijing’s recent diplomatic row with Lithuania over Taiwan expected to be high on the agenda    The talks are designed to take stock of the EU-China relationship at a time of global geopolitical upheaval

China’s changing role in the world economy
It was inevitable that the pace of the global recovery from the coronavirus pandemic would slow. Reopening an economy may often happen in stages but it can only happen once. The sudden surge of growth that follows a resumption of economic activity after a lockdown cannot be repeated, and the easing of less stringent restrictions will not lead to the same sort of boost. But recent softening in some key data is a concern. Not only does it reflect the spread of the more infectious Delta variant and supply chain worries but also a slowdown in China.   Across the board, China’s government is not prioritising growth as it once did but instead trying to rein in unbridled capitalism, whether the power of big technology companies or rising economic inequality. That may be understandable — a slowdown in aluminium production has been blamed on a determination by the government to cut pollution — but it will mean the country is not the engine of global growth it was after the 2008 financial crisis. This time the rest of the world will have to find other engines to power the recovery

Biotech in China: Prospects for the Biopharmaceuticals and Biomaterials Industries
Developing China’s biotech industry is a strategic objective for the government, enabled by recent regulatory reforms and greater R&D spend in key segments. China’s development of homegrown COVID-19 vaccines has drawn attention to the country’s rapidly developing biotechnology sector.
Chinese companies developed three COVID-19 vaccines in wide circulation – one by the private biopharmaceutical company Sinovac, and two by the state-owned enterprise Sinopharm. While the efficacy of these vaccines lag behind some of their foreign counterparts, their distribution to populations around the world will be essential in eradicating the pandemic.   The long-term potential of China’s biotech industry, however, extends far beyond the pandemic. Biotech, an industrial sector that applies biology to develop products, is a key part of China’s economic development strategy, as the country looks to become a global leader in emerging technologies.    China’s leadership designated biotech as a “strategic emerging industry” in the 14th Five Year Plan covering the years 2021-25. Between 2016 and 2020, the number of biotech science parks in China grew from about 400 to 600, reflecting the government’s priorities to develop the sector.
In this article, we look at the market prospects and regulatory environments affecting foreign investors in the biotech subsectors of biopharmaceuticals and biomaterials.

Top 10 Chinese cities by consumption in first half of 2021
Domestic consumption has become a strong force driving economic growth in China. Consumer demand contributed 7.8 percentage points of the 12.7% economic growth in the first half of the year, according to a press conference held by the State Council Information Office last month.  Shanghai topped the country’s consumption list in the first half of 2021, with total retail sales of consumer goods reaching 904.84 billion yuan (about $139.7 billion), up 30.3% year on year.   Beijing came in second with total retail sales of 722.75 billion yuan (about $111.59 billion), while Chongqing ranked third with 689.3 billion yuan (about $106.43 billion).    The combined retail sales of consumer goods of the top 10 cities in China exceeded 5.22 trillion yuan (about $804.42 billion) in the first half of this year, accounting for 24.9% of the country’s total.    Here is a list of the top 10 Chinese cities based on total retail sales of consumer goods in the first half of 2021.

US says Chinese private equity fund’s acquisition of South Korean chip maker poses a ‘national security risk’
The Treasury Department identified such national security risk in the US$1.4 billion deal involving Wise Road Capital     The inter-agency Committee on Foreign Investment in the United States will refer the Magnachip review to US President Jose Biden for final decision

China drives John Kerry talks beyond climate change to US relations
Washington’s climate envoy held talks with vice-premier Han Zheng and will meet top diplomat Yang Jiechi via videoconference      Ahead of talks, Foreign Minister Wang Yi makes it clear cooperation on global warming depends on meeting Beijing halfway

China warns US that tensions threaten fight against climate change
China has warned the US that its “strategic miscalculation” had stoked bilateral tensions that risked derailing high-level talks aimed at combating the global threat of climate change. John Kerry and Xie Zhenhua, the climate envoys for the world’s two largest economies, are meeting in Tianjin, north-eastern China, with the Biden administration calling for Xi Jinping’s government to boost its efforts towards cutting carbon emissions.

Beijing orders ride-hailing firms to end ‘vicious competition’ as Didi Chuxing’s cybersecurity investigation continues
Chinese regulators told 11 ride-hailing platforms, including Meituan and Didi Chuxing, to stop ‘disorderly expansion’ and using ‘false publicity’ for recruiting      Didi’s rivals have been trying to grab more market share while the industry giant remains preoccupied by Beijing’s cybersecurity probe

China steps in to regulate brutal ‘996’ work culture
Chinese tech tycoon Jack Ma famously said it was a “blessing” for anyone to be part of the so-called “996 work culture”- where people work 9am to 9pm, six days a week.

China vows ‘protection’ of small businesses, with US$46 billion worth of new loans on tap
China is again granting financial institutions billions in cheap capital to be loaned out – a strategy employed last year when 1.8 trillion yuan worth of such ‘relending funds’ were offered Move is in line with Beijing’s ‘cross-cyclical’ economic policy offering support for essential parts of the economy rather than massive stimulus

Increased lending for China’s small businesses, self-employed, students
China’s central bank will increase relending quotas by RMB 300 billion ($46.4 billion) to help banks provide loans to small and medium-sized companies and self-employed individuals, reports Caixin.

Nationalization Is Coming to China’s Data Centers
Beijing is taking steps that will give the government not only access to, but purported ownership of, the vast amounts of information that companies collect     In August, the government approved a broad privacy law that’s somewhat modeled on Europe’s General Data Protection Regulation. Beyond restricting the data that organizations can collate, the new rules open the door for the government to have deep access to whatever information is held by any entity in the country. But having data delivered upon request isn’t so helpful. The very definition of data is open to interpretation, while knowing what is collated and available is as important as being able to access it. Beijing doesn’t want to drink from a fire hose of data when instead it can elect to have a fridge full of bottled water within arm’s reach.    To get there, though, we may see more and more data repositories, like Ant and its credit-scoring service, fall under direct or indirect government control, including the real-time processing and analysis that comes with it. Beijing’s message to companies is clear: Your data belongs to us. Right now that edict is merely figurative. Before long, it could be literal.

Chinese tech stocks log longest win streak in two months as values tempt investors
Tech stocks have rebounded by 15 per cent from their August 20 low as valuations begin to appeal to fund managers who recently turned bearish    Kuaishou surged by as much as 11 per cent after the short-video platform operator was admitted to the Connect trading scheme

Hungary, Poland, Serbia: China’s backdoors to Europe
China benefits from divisions that prevent the EU from forming a unified front against it. That is why relations with EU members Hungary and Poland, as well as with the Western Balkans and Serbia in particular, are getting stronger, writes Antonia Colibasanu

The case for Hong Kong joining RCEP
Hong Kong expressed a strong interest as early as 2018 in joining the Regional Comprehensive Economic Partnership (RCEP) and has received positive responses RCEP member states.     RCEP, usually claimed as the ‘largest free trade agreement’ in the world, launched negotiations in November 2012 with the aim of facilitating the creation of an integrated market and making the goods and services more accessible for signatory states. The first round of negotiations in the lead up to this agreement between the 10 ASEAN nations, Australia, China, India, Japan, New Zealand and South Korea began in May 2013 and the deal was signed in November 2020.   RCEP may also benefit Hong Kong’s offshore and third-party logistics services. It may also eventually foster strong trade and investment relations between Hong Kong and RCEP nations, and these nations may begin to demand financial and professional services in which Hong Kong maintains strong competitiveness. RCEP has the potential to serve as a major global platform for trade, especially in the post-COVID-19 world. But whether or not this dream will be realised depends on whether or not the ratifying nations are successful in promoting the spirit and intent of the agreement. Smoothing the way for Hong Kong’s accession would be one way to demonstrate such intent.

China’s new ambassador to the U.S. goes full wolf in first major speech
Qin Gang warns of “disastrous consequences” if the U.S. seeks to suppress China using a “Cold War playbook.”

US says new Chinese rule that vessels register for South China Sea access threatens freedom of navigation
Maritime regulations ‘must not infringe upon rights enjoyed by all nations under international law’, says Pentagon spokesman     New rule is supposed to apply to the South China Sea, the East China Sea, and the islands and reefs dotted across the water that Beijing claims as its territory

Europe and the South China Sea
More warships in disputed waters may cause instability. But the presence of navies from afar sends a clear message, too.

Japan’s supplies to US Coast Guard aimed at testing Beijing, observers say
American coastguard patrol vessel was serviced by a Japanese supply ship during joint exercise, Japan reveals      ‘Improved interoperability’ hailed by Japan, while Chinese observers say the announcement is a challenge to China

9/11, 20 years later: did the tragedy give US-China relations a respite?
Beijing saw the opportunity to reset its relationship with Washington, which needed its support and agreed to label ETIM a terrorist group      More recently, analysts say, the US focus on other theatres has emboldened China’s aggressive moves in the South China Sea and elsewhere

China’s Hydropower Plan on the Brahmaputra
Climate goals and local interests are driving Tibet’s hydropower boom, which will have implications far beyond China.

Club Med owner Fosun Tourism bullish about return to pre-coronavirus levels
Hong Kong-listed company expects performance between July this year and June 2022 to match full-year earnings for 2019  Prospects for travel industry appear to be rosy, as pent-up demand is released: analyst

How China’s Worldview Took Over Hong Kong
Hong Kong’s changing stance on sensitive issues like Tiananmen is a cautionary tale for the rest of the world.  Beijing has already built a firewall around its intranet, shutting out the West and banning its citizens from the Western digital platforms. However, Beijing is letting the Chinese army of keyboard warriors roam freely over the Great Firewall to promote it narratives abroad. Should the West change the fundamental openness of its internet to keep China’s nationalists at bay? This would eventually split the virtual world into two: China’s intranet and the global internet for the rest of the world. As the West is pondering over the economic or philosophical arguments, the clock is ticking. The Chinese-speaking virtual world is already going down. Once auto-translation technologies have matured, the language barrier for the keyboard warriors will be broken through – and by then it might be too late to keep the Chinese propaganda machine in check.    An authoritarian regime revising public understanding with fabricated narratives, through the use of technology – does this dystopian vision unfolding in Hong Kong foreshadow the future for the rest of the world?

China’s Ghost Cities Are Finally Stirring to Life After Years of Empty Streets
Vast new urban districts that stood vacant are gaining residents and businesses.

Don’t expect an easy life and be ready to struggle, Chinese President Xi Jinping warns officials
The Chinese leader tells cadres at the Central Party School that the ‘risks and challenges we face are conspicuously increasing’  Xi’s comments about the the need to fight to protect national security come amid ongoing tensions with the United States  He added that failing to fight for matters of principle was letting down the people and may even be a crime.  Xi also told the cadres to toe the party line and said they should feel proud to be sent to work in remote parts of the country and tackle problems at the grass roots level.

Weibo bans 52 accounts, some with millions of followers, in campaign against financial misinformation on social media
The microblogging giant said it removed the user accounts under the Cyberspace Administration of China’s latest guidelines    Weibo said the results of its rectification efforts will be posted every week

WHO starts data-sharing effort to prevent pandemics. Will nations cooperate?
WHO Hub for Pandemic and Epidemic Intelligence opens in Berlin backed by initial US$100 million from Germany      It aims to pool global disease data, and produce tools to predict outbreaks – but is reliant on countries taking part     “The WHO as an international institution can only be as good as the … member states let it be,” said German Health Minister Jens Spahn. “We need to give the transparency and the data that is needed.” Spahn urged China to become “fully cooperative” and “transparent” in research into Covid-19’s origins.     Beijing has denied any lack of transparency, saying it could not share early patient data because of confidentiality issues. It also rebuffed the WHO’s call for an audit of Wuhan laboratories researching coronaviruses to understand whether the Covid-19 pathogen could have emerged from such a facility.

How Luxury Brands Can Connect With Aging Chinese Millennials
Can luxury brands leverage the striking parallels between China’s millennials and its senior demographic to gain a stronger foothold in the county?   As the oldest millennials approach middle-age, they are developing new consumer mindsets, shopping habits, and spending patterns.    Luxury brands should take a page out of JD’s playbook by analyzing the consumption patterns of the silver generation to understand how their habits might influence millennials.   Marketers should create advertising campaigns that strengthen their connections with the aging millennial population and engage with their newfound interests.

China bans reality talent shows to curb behaviours of ‘idol’ fandoms
Broadcasters ordered not to promote ‘sissy’ men in attempt to reshape country’s entertainment industry

China’s Hottest New Rental Service: Men Who Actually Listen
Chinese women are fed up with dating self-absorbed men. Now, “butler cafés” are offering them more attentive male company — for a fee.

Alain Gillard
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