China: Revising GDP and yuan forecasts
China’s recovery has started and looks sustainable because domestic demand has returned amid fewer Covid-19 cases. This leads us to revise our GDP forecast up to 2.5% year-on-year and our yuan forecasts up to 6.70, but the technology war is still the biggest risk to the economy.
How Shenzhen became China’s Silicon Valley
It took the once sleepy fishing village of Shenzhen just four decades to turn itself into a thriving technology hub, arguably eclipsing its neighbour, Hong Kong, in the process. Here’s how the two cities compare. In recent years Shenzhen’s imports and exports have been powered by the city’s booming hi-tech enterprises. In 2018, foreign trade volume of the southern Chinese metropolis increased by 7 per cent to 3 trillion yuan (US$442 billion) catapulting 12 private companies into the top 100 foreign trade enterprises in China. Hong Kong however, has been recording trade deficits since the late 1990s, as imports grew more than exports. Until recently, the city has been reluctant to invest in innovative technology or other emerging industries and continues to rely on its core industries of finance, shipping, tourism and professional services despite diminishing returns.
Japanese business rethinks high-tech deals with China
Nearly 50% of 3,000 people surveyed back Trump’s hard-line policy. The survey found nearly half the respondents supported U.S. President Donald Trump’s tough China policy. Fully 43.7% cited “high tech that can be diverted to military purposes” as an area where Japan should restrict dealings with China. The results suggest businesspeople are growing more concerned about the risk of technology leaks and financial losses from dealing with China than they are excited by the country’s vast market.
As US-China decoupling threat mounts, Beijing looks to open up market for foreign services trade
Ministry of Commerce is compiling ‘negative lists’ for the services trade, outlining sectors and industries that are restricted to foreign firms. ‘There will be no additional restrictions imposed in the areas outside the negative lists,’ ministry researcher says.
US sanctions drive up Huawei handset prices as company grapples with impending chip shortage
Prices of Huawei handsets at Shenzhen wholesale market Huaqiangbei have gone up 100 yuan to 300 yuan as dealers expect the firm’s access to chips to run dry. Huawei CEO Guo Ping says that US sanctions affecting the firm’s high-end Kirin chips will ‘cause certain difficulties’ but he is optimistic about resolving them.
China reiterates right to review tech export deals amid confused TikTok US sale
Beijing asks companies to ‘consult provincial-level commerce administrations’ for overseas transactions that involve technologies banned or restricted for export. The Ministry of Commerce last month added 23 items, including technologies that power TikTok’s personalised short video feed, on its restricted list.
Chinese foreign minister sees only limited diplomatic gains from European trip
Wang Yi calls on EU to resist US efforts to decouple economically from China.
But tour is filled with signs of diplomatic ‘promise fatigue’ with Beijing and Europe’s own wariness of dealing with China.
Germany has told China to stop threatening Europe as Merkel hardens her stance toward Beijing
German Foreign Minister Heiko Maas warned his Chinese counterpart “threats have no place here” amid growing tension in Taiwan.
China has changed the way it talks about Taiwan, reflecting rising tensions that could pull the US into a war
China has raised its pressure on Taiwan, using harsh rhetoric and flexing military muscle around what it sees as a breakaway province.
How Will China Respond to the Czech Senate President’s Visit to Taiwan?
The visit met with harsh rhetoric from Chinese officials. Beijing’s responses to European countries in previous cases offer possible scenarios for how China might react.
European Parliament’s China chair urges caution in research collaborations with Beijing
Reinhard Bütikofer is wary of the growing power of China and the reach of companies seen as beholden to the Communist government. His views are typical of the more hawkish approach emerging in Brussels.
Chinese University Cracks Top 20 in Times Higher Ed Rankings
Six schools from the Chinese mainland were ranked in the top 100 internationally, up from just half as many last year. For the first time, a Chinese university has cracked the top 20 in the prestigious World University Rankings from Times Higher Education. The British publication released its annual rankings Wednesday, with Oxford University retaining the top spot from last year and Tsinghua University in Beijing rising to come in at joint 20th.
Why China’s subprime credit crisis would benefit from a debt amnesty
The recently announced lower interest rate ceiling on non-bank credit will force lenders to vet borrowers more carefully. In the longer term, a debt amnesty could provide a clean slate upon which China could construct Western-style credit infrastructure.
Reimagining emerging ASEAN in the wake of COVID-19
Although the pandemic hit the Asian region first, its countries—including emerging ASEAN—have to date recorded significantly lower transmission and fatality rates per capita than other regions. As of August 20, 2020, transmitted cases per million people stood at approximately 582 across emerging ASEAN countries compared with 16,737 in the USA, 4,121 in the Eurozone, and 9,924 in Latin America. ASEAN countries also experienced lower death rates—16 per million across versus 524 in the USA, 368 in the Eurozone and 388 in Latin America. If this trend holds, ASEAN countries could emerge from the COVID-19 pandemic with a significantly lower toll on lives compared with other regions. So far, the lower fatality toll has not translated into a rosier economic outlook for many ASEAN countries. In emerging ASEAN, governments generally weren’t able to mount the same magnitude of stimulus programs as developed nations to cushion the pandemic’s blow. Moreover, their significant informal economy and large unbanked population have hindered the distribution of relief aid. As emerging ASEAN leaders look to the next phase of the recovery, forecasts indicate that these countries could take a bigger hit to growth and face less certain prospects in the coming years.
Hong Kong’s days of ‘cash is king’ may be in peril as fears of Covid-19 infection boost digital payments
The outbreak has made people worry about touching cash, which has accelerated a shift towards digital payments, according to transaction data and Visa’s local boss. BOC Life found online sales of insurance products up 60 per cent in the first half, while HKMA digital payments also shot up 60 per cent, between December and the end of March.
Governance, the G in ESG, is critical to businesses seeking capital to survive coronavirus crisis and US-China conflict
The pandemic and rising US-China tensions have thrown boardrooms into crisis mode – but rather than run and hide, directors should openly engage stakeholders in dialogue, says a panel of experts. Family-owned businesses lag behind on governance, says Credit Suisse report.
Zhaoqing’s high-speed railway connections with Greater Bay Area cities put property prices on the fast track to growth
Zhaoqing has the lowest home prices in the Greater Bay Area at 7,000 yuan per square metre, around 28 per cent of the prices in Shenzhen and Guangzhou. Improved transport connections with Foshan, Guangzhou and Hong Kong will attract buyers to go the garden city.
Foreign investors most pessimistic on Hong Kong property market in survey across Asia-Pacific markets
About one-fifth of investors planned to reduce their holdings in the city, compared with only 1 to 8 per cent in other Asia-Pacific cities: JLL survey Hong Kong’s economy is on course for first back-to-back annual decline since records began in 1961, according to official forecasts.
Does HSBC need its US business? Bank says yes, some investors call for a break-up
Navigating worsening US-China relations, CEO Noel Quinn says there is still a place for global international banks with large footprints. Some brokers in Hong Kong have called for HSBC to focus on its Asia business over other troubled markets.
For Hong Kong’s sake, the judiciary must regain Beijing’s trust
How did it come about that Beijing has developed such mistrust of the Hong Kong judiciary? The courts have put a slant on the Basic Law, by applying obscure norms and values from overseas which are totally unsuited to Hong Kong’s circumstances.
China’s Hottest Trend, Ins Style, Was Influenced By Banned Instagram
The photo-sharing platform Instagram has been blocked in China for years, but that doesn’t mean tech-savvy Gen Zers can’t access what the app has to offer. Gen Zers are always finding new and exotic things attractive, but Golden has seen recent signs of Ins Style exhaustion. “I think brands should do their own thing, as the Chinese are too smart and will identify brands that are ‘trying too hard’ to win China and will avoid them,” he explains. “They want original brands, whether foreign or Chinese.” International brands should understand that every app — whether Western or Chinese — inevitably builds different impressions on different user groups, and it’s essential for them to stay abreast of domestic perspectives. As such, maybe the time is right for a local competitor to take over Instagram’s reign. “We have to admit that there is a certain hard-to-define but easy-to-identify style on Little Red Book or Douyin, as well,” Qiu suggests. Therefore, the challenge is not only for luxury brands to keep creating fresh design aesthetics for their core customers but also to keep an eye on domestic competitors. Because as local apps keep maturing, foreign attractions may no longer satisfy Gen Z’s ever-changing demands.
China’s cabinet approves two new nuclear power plants in push to boost economy, cut pollution
After three nuclear plants were approved in June 2019, government approvals had ground to a halt until this week. The pandemic, mounting tensions with the United States and a determination to cut reliance on fossil fuels have provided new impetuses for China to approve more nuclear reactors.
China’s Sinochem boss hits out at anti-globalisation forces after US puts state firm on watch list
Sinochem Group chairman Ning Gaoning says US sanctions put ‘political purposes ahead of economic ones’ and ‘are unfavourable to the whole world’. The company and 10 other Chinese firms were blacklisted by the Pentagon last week because they are ‘owned or controlled’ by the People’s Liberation Army.
India bans another 118 Chinese apps including PUBG Mobile, Alipay as tensions escalate
India’s Ministry of Electronics and Information Technology cites national security and data security concerns as reasons for the latest ban. Apps affected include games such as PUBG Mobile and MARVEL Super War, as well as payments app Alipay.
7 Manufacturing Challenges Due To Lack Of Transparency In China & How To Mitigate Them
The situation in Hong Kong, the US/China trade war, mistrust of China and attempts at decoupling, and other news stories are rightfully a cause of concern for importers with Chinese suppliers. But the manufacturing challenges you should be concerned the most about are those that may prevent you from receiving the products you expect from your suppliers. These challenges can be categorized into 7 different areas and often occur due to a lack of transparency which is either intentional or a cultural phenomenon. So let’s discuss what the challenges are and how to mitigate them.
Chinese foreign minister sees only limited diplomatic gains from European trip
Wang Yi calls on EU to resist US efforts to decouple economically from China. But tour is filled with signs of diplomatic ‘promise fatigue’ with Beijing and Europe’s own wariness of dealing with China.
China’s services sector remains strong, boosted by first employment increase since January
The Caixin/Markit services purchasing managers’ index (PMI), which focuses on smaller, private firms, fell slightly to 54.0 in August from 54.1 in July. The official non-manufacturing PMI, released by the National Bureau of Statistics on Monday, was 55.2 for August, up from 54.2 in July.
Coronavirus: Beijing opens up to inbound flights as city gets back to normal
Nine incoming flights from eight countries will be allowed to land in the Chinese capital from Thursday. Easing of restrictions imposed in late March over fears of imported cases.
Booming domestic travel demand during summer holidays proves to be a bright ray of sunshine for China’s aviation sector
Domestic flights in August were nearly at the same level as a year earlier Outbound flights at Sanya Phoenix International Airport rose 12 per cent last month from a year earlier.
‘The barbarians aren’t Chinese’: Australia’s foreign relations bill faces local backlash
The Australian Foreign Relations Bill is widely seen as Canberra’s attempt to clamp down on state level governments doing trade deals with Beijing. But state leaders have labelled the plans ‘complete overkill’ and ‘patronising’ and warn the economy is being put at risk.
Australia’s export surge to China tails off amid rising trade tensions and lower iron ore production
Iron ore exports to China in July were 10.5 per cent higher compared to a year earlier, but dropped significantly compared to June. Trade tensions between the two countries have been on the rise this year with barley, beef and wine exports from Australia to China in the spotlight.
China-Japan ties in steady hands if Yoshihide Suga takes over from Shinzo Abe, analysts say
Suga is the front runner in the race for his party’s leadership and would have to balance security and economic interests with China and the United States. Tokyo’s relations with Beijing expected to continue to warm under a Suga administration, observer says.
World Bank probing whether ‘Doing Business’ report was manipulated to benefit China, other nations
The World Bank is investigating allegations its global ease of doing business rankings may have been manipulated to benefit China, Saudi Arabia and two other countries. The probe follows a review that found a member of the development economics department had made changes to data used for ‘Doing Business 2020’, sources say.
COVID-19 exposes the fragility of Central Asia
Russia is also distracted as it struggles to deal with the pandemic. The Russian economy has taken a hit from the sharp decrease in global energy prices. With migrant labour opportunities drying up there, Moscow risks losing an important lever of influence over its Central Asian neighbours.
China appears well-poised to take advantage of Russia and the West’s troubles. Beijing has whitewashed its COVID-19 history, is marketing its digital tools of monitoring populations and disease to local governments and is deploying flashy humanitarian missions.
Chinese diplomats must get approval to visit US universities or meet local government officials
The new requirements are a ‘direct response to the excessive restraints already placed on our diplomats’ by China, says the US secretary of state. New rules require China’s embassy and consulates to seek permission before hosting events outside their properties with an audience larger than 50 people.
U.K.’s Premier League Ends China Soccer Coverage
The U.K.’s Premier League terminated a 650 million-pound ($861.6 million) agreement for the broadcast of English soccer matches in China amid growing political tension between the two countries.
China’s Population To Drop By Half, Immigration Helps U.S. Labor Force
China’s population is projected to drop by half by 2100, calling into question the country’s future economic growth in the face of a sharp decline in its labor force. In contrast, America’s population and labor force is likely to be sustained if the Trump administration’s policy of reducing U.S. immigration level is reversed. The population of China is projected to decline from 1.4 billion in 2017 to 732 million by 2100, a drop of 48%, according to a new report published in the medical journal The Lancet and authored by University of Washington School of Medicine Professor Stein Emil Vollset and 23 coauthors. The number of people of working age in China is expected to plummet. The report forecasts a decline of 64% for China’s population aged 20–24 years. That is the prime age for a country’s military, the authors note.
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