China Press Review – September 6, 2019

Press review

US-China trade deal could come as world’s two biggest economies slow, T. Rowe Price says
Tensions between the world’s two biggest economies are likely to linger, T. Rowe Price economist Nikolaj Schmidt says Growth is slowing, but the US is likely to miss a recession, Schmidt says

China, US urged to ease trade war tensions that are ‘weighing on’ global commerce, says IMF chief economist
Gita Gopinath, the International Monetary Fund’s (IMF) chief economist, said in Beijing on Friday that ‘there has been weakness in trade across the board’ The IMF has already revised down China’s 2019 growth projection by 0.1 percentage points to 6.2 per cent and global growth by 0.1 percentage points to 3.2 per cent

China is in no hurry to make ‘monster compromises’ to the US, expert says
Several analysts have predicted that China’s economy — not America’s — will experience a bigger hit from tariffs in the trade war. But the Chinese economy has been “pretty stable,” which means Beijing is not in a hurry to make “monster compromises” to Washington, said Scott Kennedy of the Center for Strategic and International Studies. The U.S. economy is also doing well, so both countries could “hunker down,” said Kennedy.

China, US must both take action to end trade war, make progress, Chinese state media says
Dispute has already affected global economy and ‘must not be allowed to escalate’, Communist Party mouthpiece People’s Daily says in commentary By going to Washington for latest talks, China is showing it is willing to cooperate to find a solution, CCTV says

China cuts banks’ reserve requirements in latest effort to boost economy amid US trade war
People’s Bank of China cuts reserve requirement for all banks by 0.50 percentage point effective from September 16 It also cuts reserve requirements for certain urban banks by another full percentage point, with half effective on October 15 and the rest a month later

China Injects $126 Billion Into Its Slowing Economy
Beijing has called on banks to open the lending spigots as China’s trade war with the United States rages and its economic slowdown shows little sign of abating. The People’s Bank of China on Friday lowered the amount of cash that Chinese banks are required to hold in their coffers, freeing up $126 billion to flow into the financial system at an important time politically and economically.

China: The strategy is working
We believe that China has changed its strategy when it comes to the trade war, and that could lead to further market volatility. In terms of economic growth, it seems the strategy of boosting infrastructure projects is also working.

podcast : China Knows Trump Will Get More Desperate Into 2020 for Any Deal: Zimmerman
James Zimmerman, partner in the Beijing office of law firm of Perkins Coie LLP, talks about the trade war between the U.S. and China. He speaks with Selina Wang and Tom Mackenzie on “Bloomberg Markets: China Open.”

With tariffs eating into profits, some Asian companies are moving home
The trend of companies moving back to their home base — from China — is most prevalent in the electronics and capital machinery sectors in Japan and Taiwan, a Nomura analysis of 56 companies found. They are doing so to avoid higher U.S. tariffs on imports from China. Meanwhile, the largest beneficiaries from the tariff fight are mainly in Asia, with Vietnam, Taiwan and Thailand dominating. Outside Asia, Mexico is a standout.

The Real Losers of the Trade War: Small American Brands
One year and $200 billion worth of tariffs later, the U.S.-China trade war is showing few signs of abating. Last week, President Trump placed a new 15 percent tariff on $300 billion worth of consumer goods, from footwear to TVs to smartphones, starting Sep 1st. Beijing retaliated by increasing tariffs on $75 billion worth of U.S. products. And though the tit-for-tat tariffs have intensified the sense of nationalistic conflict, in today’s interconnected economy of multinational companies, the simplicity of this Washington-Beijing clash rings somewhat false. This holds especially true for the fashion industry, where a product sold in America might have been sourced in China, manufactured Vietnam, and shipped via Panama.

The Real Losers of the Trade War: Small American Brands

Sneakers Are Booming in China — Here’s Why It Matters for Luxury Brands
Although the market for exclusive sneakers and streetwear began as a DIY subculture in the U.S., its designers and brands have become a serious draw for luxury fashion houses seeking to leverage its credibility. Off-White’s Virgil Abloh has ascended to the head of Louis Vuitton Menswear, Shanghai’s Yeti Out collaborated with Coach, and Kim Jones of Dior Men’s has even worked with KAWS to produce a highly sought-after collection. Similarly, GOAT’s fellow resellers Stadium Goods, which was recently purchased by the online luxury fashion marketplace, Farfetch, while the StockX website was valued in the New York Times at more than $1 billion. With Abloh’s Nike Air Max 90 collaboration currently being sold on StockX for almost nine times their initial price, this is a consumer set willing to invest in the right products.

Sneakers Are Booming in China — Here’s Why It Matters for Luxury Brands

China’s economic prospects are less promising than Japan’s or South Korea’s at similar stages, US think tank says
Country needs tough reforms to boost economic growth and avoid ‘middle-income trap’, report says Amid trade war and teetering economy, China’s ‘economic miracle’ stalls

podcast : China Needs to Stabilize Growth by Adding Stimulus: Deutsche Bank
Linan Liu, greater China rates and foreign exchange strategist at Deutsche Bank, talks about China’s economy, policies and bonds.

US consumer confidence shines amid the gathering economic gloom. But for how long?
With the latest manufacturing data apparently supporting growing market pessimism as the US-China trade war rages on, American consumer sentiment has become the single most important factor shaping the global economic outlook

China risks falling further behind the US in AI if it does not step up basic research, academic says
Advances in AI have slowed in past two years, meaning real progress can only be made by breakthroughs, Peking University professor says

Nio raises $200 million from Tencent, CEO in convertible notes
Troubled electric vehicle maker Nio is raising new cash via convertible notes from Tencent to help with finances during an acute cash-flow crunch.

Nio raises $200 million from Tencent, CEO in convertible notes

Xpeng P7 electric limosine gets an earlier start
At the Chengdu Motor Show, the Chinese electric car startup Xpeng Motors has just revealed the 2020 model year of its first model G3 with an increased range to 520 NEDC kilometres, as well as its second production model, the P7.

Xpeng reveals the P7 electric limosine in Chengdu

Cramer: US economic strength empowers Trump to continue to play hardball on China trade
“Trump is set in his ways because he doesn’t see any weakening” in growth compared to the drag that China’s economy has been experiencing, argues CNBC’s Jim Cramer. “The Chinese still need it more than we do,” said Cramer, pointing to the strong U.S. labor market and the strong American consumer. Cramer was reacting to China announcing Thursday that top U.S. and Chinese trade negotiators agreed to meet early next month for another round of talks.

Stocks Blog: Shanghai, Hang Seng post best weekly performances in two months
Fitch downgrades Hong Kong’s credit worthiness amid protests ZTE rallies most in four months on expectations about 5G bid business in Europe

Hong Kong Stock Exchange says its website was hacked while it halted derivatives trading to fix unrelated software bug
The open-access website of the HKEX was hacked yesterday, the second such cyberattack since August 2011 An unrelated software bug in the vendor-supplied trading platform, which forced the exchange to suspend derivatives trading yesterday, has been isolated and fixed

China’s new tech board is a rising STAR
On 13 June 2019, as part of its capital market reform, China officially launched the Science and Technology Innovation Board (STAR). Trading in the STAR market has been quite active since its debut on 22 July 2019. The first batch of 25 stocks listed on the board — mostly from the telecommunication, media and technology sector and equipment manufacturing industries — saw their prices on average more than double with a price-to-earnings (PE) ratio of around 136, compared with the industry average level of just 33. The daily average stock turnover also reached 40 per cent, much higher than that for the Chinese A-share market.

China’s new tech board is a rising STAR

Fitch Downgrades Hong Kong Over China’s Stronger Hand
The ratings firm cited Beijing’s growing influence over the city, suggesting the barriers separating their legal and financial systems are blurring.

What’s at stake for China’s economy as Hong Kong protests drag on?
Last year, Chinese companies raised $64.2 billion globally – almost a third of the worldwide total – via initial public offerings (IPOs), but just $19.7 billion of that came from listings in Shanghai or Shenzhen, according to data from Refinitiv, compared with $35 billion in Hong Kong. “Connect” schemes linking the Hong Kong bourse with those in Shanghai and Shenzhen also provide the main gateway for foreigners to buy mainland stocks.
What’s at stake for China’s economy as Hong Kong protests drag on?

Alibaba acquires NetEase”s import e-commerce platform Kaola 
Alibaba Group is buying Kaola, the import e-commerce platform owned by online gaming and entertainment company NetEase, for about $2 billion and taking a minority stake in NetEase Cloud Music, the two Hangzhou-based companies said Friday.

Novartis selling manufacturing site to Chinese drugmaker
China’s Zhejiang Jiuzhou is buying most of Suzhou Novartis in Changshu, China, for 790 million yuan ($110.5 million), according to a Dow Jones report in China’s Morningstar. The operation has about 340 employees.

Tmall China cool’ hits the runway at NYFW: The shows 
Alibaba Group’s B2C online marketplace, Tmall, returned to New York Fashion Week on Wednesday, bringing with it some of the most-creative, forward-looking designers in China.

China hackers reverse engineered NSA spy tools, researchers say
Chinese state-backed hackers reverse engineered tools used by a US-government affiliated hacking group, enabling them to expand their arsenal of espionage tactics without the need for a direct attack on US intelligence agencies, new research suggests.

China hackers reverse engineered NSA spy tools, researchers say

Hong Kong needs a risk-taking culture to foster innovation, tech leaders urge
Efforts to establish that culture have taken on more significance amid competition for talent, capital and start-ups with other hi-tech hubs

Merkel in Beijing says Hong Kong freedoms must be ‘guaranteed’
German Chancellor Angela Merkel has said the rights and freedoms of people in Hong Kong “must be guaranteed” after meeting with Chinese Premier Li Keqiang in Beijing, her spokesman said.

Chinese biotech firm Sinogene creates country’s first cloned cat
Beijing-based pet cloning company Sinogene has successfully created the first cloned cat in China, reported. After a year-long effort, the clone of a British Shorthair named Garlic was born on July 21.

Chinese biotech firm Sinogene creates country’s first cloned cat

Is Southeast Asia Winning the US-China Trade War? Not So Fast
If the U.S.-China trade war continues or worsens ASEAN countries will also experience a bumpy ride.

Alain Gillard
Information Officer
Service Asie Pacifique
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