China Press Review – September 3, 2019

Press review

China’s Xi says country facing a period of ‘concentrated risks’
China is entering a period where it faces “concentrated risks” – economically, politically and diplomatically – and the country must be able to fight and win against those who challenge China’s bottom lines, President Xi Jinping said on Tuesday.

German Chancellor Angela Merkel expected to use China visit to push EU trade deal
Two sides likely to seek progress on trade and investment during three-day trip, but sensitive issues may be a stumbling block Beijing may test Berlin’s commitment to strict investment screening rules

Can Anyone Hold the Global Economy Together?
We are trapped between an erratic Trump, a dysfunctional Europe and an authoritarian China. The fact that the world has not yet tipped into recession must in large part be credited to China. This is not to impute superhuman powers or monolithic unity to Beijing. The Chinese government has its hands full managing a nasty combination of slowing growth and a dangerous credit boom. China’s shadow banking sector is a worry, as are the country’s growth-addicted regional governments. China’s corporations piled up cheap dollar debt and are now subject to the erratic upward trajectory of the dollar. And behind the scenes, there are persistent rumors of tension between President Xi Jinping’s clique and that of Premier Li Keqiang. And yet, in handling both its internal and external problems, China, unlike the United States, at least appears to have a playbook. It is not only synchronizing fiscal and monetary policy but is also using banking regulation and foreign exchange controls to contain the risk of capital flight. Once criticized for resisting the upward pressure on the value of its currency, Beijing is now expected by Washington to pull every lever to stop the yuan from devaluing. And even setting aside the contradictory noises from the Trump administration, there are few in the West who would want to see China liberalize its balance of payments and risk the kind of capital flight that rocked global financial markets in 2015 and 2016.

Is Donald Trump being brave or crazy in China trade war? US president should pick a stance and stick to it
Donald Trump berates American companies doing business with China, and in the next breath showers ‘great leader’ Xi Jinping with praise Instead of a Jekyll and Hyde act on China trade, the US president should just go all out, in any one direction

A strong US dollar worries Trump, but it’s no use blaming the Fed or China
It is Donald Trump’s own policies that have helped to create the right conditions for continued greenback strength With intervention a risky idea, unless those policies change, there is little to be gained from the blame game

Trump may be able to order US firms out of China — but it will cost him politically, says business leader
The U.S. president took to Twitter on Aug. 23, ordering American companies to “immediately start looking for an alternative to China” and urging them instead to start making their products in the U.S.
Trump cited the International Emergency Economic Powers Act (IEEPA) — passed in 1977 to deal with “any unusual and extraordinary threat … to the national security, foreign policy, or economy of the United States.” However, Timothy Stratford, chairman of the American Chamber of Commerce in China, said there would be “huge push back” across the board in the U.S. if the president takes this “extreme step.”

Trump ‘doesn’t necessarily need a deal’ with Beijing to be reelected, says US-China Business Council
U.S. President Donald Trump “doesn’t necessarily need a deal” with Beijing in order to be reelected in the 2020 presidential race, says Anna Ashton of the U.S.-China Business Council. Still, the new tariffs that went into effect on Sunday — along with those that will take place in December — will “hit every consumer product that Americans buy,” she said. Regardless of the outcome of the 2020 U.S. elections, she said she expects “any American administration henceforth is going to be tougher on China.”

China in new growth push to fight prolonged US trade war, top policy body indicates
Financial Stability and Development Commission, chaired by Vice-Premier Liu He, says Beijing is ready to step up help for the growth amid escalated trade tensions But there is no indication that it will engage in all-out stimulus to support the economy despite latest round of tariffs from US President Donald Trump

China seeking moral high ground against Donald Trump with WTO complaint over latest US tariffs, analysts say
Beijing has filed a lawsuit with the World Trade Organisation after Washington imposed the first batch of new tariffs on US$300 billion of Chinese imports It is unlikely to solve the dispute, but Beijing is showcasing its support for multilateralism compared to unilateralism, analyst said

China’s economic growth to slow to 4.6% over the next decade
The country’s productivity growth is expected to face headwinds. The growth of the world’s second largest economy is set to moderate at an average annual pace of about 4.6% over the next ten years due to demographics, deleveraging, rebalancing from manufacturing to services, and less room for catch-up, according to an S&P Global Ratings report. Although growth will slow, the report stated that the reasons are natural and mostly healthy. However, prolonged trade and technology tension with the US could make China’s slowdown harder to manage.

HSBC says blockchain could ease small firms’ financing woes, with Greater Bay Area key to success
Bank says it recently completed the world’s first yuan-denominated letter of credit blockchain transaction Quick exchange of information could make letters of credit more attractive, open more financing to smaller firms, HSBC’s head of trade for Asia says

With a $2 Billion Factory From China, a German City Lets Others Worry
Arnstadt’s embrace of a giant new battery plant for electric cars illustrates Europe’s ambivalence toward Chinese investment: Jobs trump geopolitics.

Factories From Europe to Asia Reel Under U.S.-China Trade War
Manufacturing across vast parts of Europe and Asia remain deeply mired in a crisis that took another turn for the worse over the weekend. One day after the U.S. and China enacted new tariffs on each other’s imports, factories from Germany and Italy to Japan, South Korea and Taiwan sent a gloomy reminder that they are suffering badly from increased global trade hostility. Purchasing managers’ indexes for all those countries, as well as the 19-nation euro area, signal a contraction in activity.

US and Poland sign 5G security agreement as part of effort to block Chinese telecoms giant Huawei from European networks
US Vice-President Mike Pence and Poland’s Prime Minister Mateusz Morawiecki signed the deal on Monday

AI may help speed up drugs development and could have ‘immense’ impact in China, study finds
Artificial intelligence took three weeks to identify six substances that block an enzyme responsible for fibrosis and other illnesses, according to paper But ethics expert warns it is ‘a long-term innovation with a complicated learning curve’ and developers and investors ‘should proceed with cautio

China’s Installed Capacity of Hydrogen Fuel Cell Soars Sixfold in First Seven Months
China’s installed capacity of hydrogen fuel cells surged 642.6 percent year-on-year to 45,876.9 kilowatts in the first seven months of this year despite a subsidy withdrawal from the new energy vehicles (NEVs) sector, according to industry data. The output and sales of the hydrogen fuel cell vehicles soared 8.8 times and 10.1 times to hit 1,176 and 1,106 units, respectively, the Power Battery Application Branch of China Industrial Association of Power Sources (CIAPS) said in a report. The hydrogen fuel cells are still mainly used for powering buses and special purpose vehicles instead of passenger cars, due to the high cost and a lack of technical support facilities such as hydrogen stations, the report said.

China’s Installed Capacity of Hydrogen Fuel Cell Soars Sixfold in First Seven Months

China’s gas demand growth rate to slow in 2019, government report shows
China’s natural gas consumption growth rate is expected slow to around 10% in 2019, from 17.5% last year, amid easing economic growth and pressure on the country’s production, storage and sales network, a government report showed. China’s growth prospects are being overshadowed by the lengthening dispute with the United States that has seen the world’s two biggest economic players apply tit-for-tat tariffs on each other’s goods, making trade more expensive and difficult.

The Luxury Sector Has a Talent Problem
According to a new report titled Minding the Talent Gap: Fashion and Luxury’s Greatest Challenge for the Next Decade, the luxury industry is suffering from a talent shortage. The challenge, it says, is finding “professionals with true creativity who can blend their right-brain talents with the left- brain demands of a range of roles in the increasingly complex fashion business.” Moreover, a study by The Boston Consulting Group and Business of Fashion finds that surveyed luxury executives are anxious about finding talented workers, and “50 percent of respondents believe that they lack access to the best creative talent.” Consequently, tackling this talent shortage has become a big priority for luxury retailers.

The Luxury Sector Has a Talent Problem

Could China Soon Demand More Say on Luxury Leadership?
As the protests that have roiled Hong Kong for months deepen, Beijing is taking unprecedented measures in an effort to reclaim control without looking too overtly involved. This month, pressure from the central government in Beijing took the form of open pressure on private companies and their CEOs in Hong Kong to demand their loyalty to the mainland and against the protestors — or any narrative that goes against the one-China principle.

Could China Soon Demand More Say on Luxury Leadership?

Meituan tests delivery robots in Beijing and Shenzhen
Lifestyle services giant Meituan is testing robot food delivery in Beijing and Shenzhen, as the company seeks to reduce operational costs, the South China Morning Post reported.

Meituan tests delivery robots in Beijing and Shenzhen

AI could help China’s farmers combat swine fever
The inefficiencies of small-scale farming, aggravated by the spread of swine fever, threaten the viability of pig rearing in China. Moving to larger-scale operations could address efficiency, but bigger facilities are even more vulnerable to disease. Tech firms, including Alibaba, believe they can square the circle with smart farming technology that they claim will reduce labor costs and can detect disease early by listening out for coughing piglets.

AI could help China’s farmers combat swine fever

China’s pork supply worries increase as local authorities offer discounts to quell rising anger over soaring prices
Nanning city in the Guangxi autonomous region and two cities in Fujian province offer residents discounts after African swine fever limits supply Pork prices have doubled since July, reaching record highs of 30 yuan (US$4.2) to 33 yuan per kilogram, surpassing analyst expectations

Is it a bird, is it a plane? No, it’s Ehang’s flying taxi
The two-seater, electric-powered Ehang 216 autonomous flying vehicle can cover a distance of about 30 kms at speeds of up to 130km per hour

Weibo testing new social lifestyle app, Oasis
Chinese microblogging platform Weibo on Monday launched a new lifestyle platform, Oasis, that combines social media and forum functionalities. launch of the new app may help microblogging platform Weibo fend off competition from Xiaohongshu, which has been facing criticism over misleading content in recent months.

Weibo testing new social lifestyle app, Oasis

Chinese buyers pile into French luxury property, unhindered by ownership restrictions
In the first quarter of the year, Chinese supplanted Italians as the biggest group of foreign buyers of homes in Paris

Abandoned €1 homes for renovation in Italy are attracting the attention of Chinese, Hongkong investors
Abandoned homes in need of a makeover are being sold for just €1 (US$1.10) under a scheme seeking to revitalise depopulated villages in rural areas of the country Many Chinese buyers see the potential to turn a profit by converting them into inns or Airbnb properties, say agents

Senior Chinese leaders lay down law in southern China amid ongoing protests across Hong Kong border
Vice-President Wang Qishan emphasises the Communist Party’s connection to Chinese history during a weekend visit to Guangdong Officials also stress the importance of fighting ‘foreign subversion’ amid ongoing clashes between Hong Kong police and protesters

Hong Kong’s Hang Seng extends losing streak to second day amid uncertainty over trade war, end to protests
MTR closes with small gains, but has fallen about 20 per cent in six weeks Hang Seng would enter bear market if it drops another 5.5 per cent

Carrie Lam: Hong Kong leader ‘never tendered resignation to Beijing’
Hong Kong leader Carrie Lam has denied ever offering to resign, after audio was leaked of her saying she would if she could.

China supports Hong Kong’s efforts to end unrest
China’s office on Hong Kong said that Beijing supports Hong Kong government in using all necessary laws to stop the violent protests. Xu Luying, spokesperson for the Chinese State Council’s Hong Kong and Macao Affairs Office, said in a news conference on Tuesday the situation in Hong Kong is the most difficult since its handover from Britain to China.

Stars, luxury brands and China’s perilous patriotic tightrope
A few words on a T-shirt or misjudged meme in heightened political times can be enough to stir up the outrage of internet users and attract unwanted official attention Celebrities and brands are increasingly nailing their one-China colours to the mast to guard against a backlash

Alain Gillard
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