Belgian-Chinese Chamber of Commerce (BCECC)

China Press Review – September 8, 2021

pdf Belgian foreign trade under the microscope
Every year, the Agency for Foreign Trade publishes a summary study on Belgium’s foreign trade. The main figures of the Belgian trade are highlighted. Imports, exports and the various geographical trade balances are scrutinized.

pdf Belgium’s place in world trade
The studies are based on the figures of the World Trade Organization. In addition to the evolution of world trade, they also show Belgium’s position as a world importer and exporter of goods and services.

What is behind China’s Dual Circulation Strategy?
China’s dual circulation strategy should not be dismissed as a buzzword: its implementation will entail major consequences.

Alibaba’s hometown named China’s city with most economic potential, but who else tops the list?
Hangzhou tops the emerging city rankings produced by The Economist Intelligence Unit (The EIU) ahead of Shenzhen, Guangzhou and Shanghai     Ningbo, Hefei and Suzhou also make the top 10 alongside Zhuhai, Beijing and Nanjing

Coronavirus shipping delays force China’s small manufacturers to cancel orders as inventories pile up
Disruptions to sea and air freight caused by the coronavirus pandemic are delaying payment terms for Chinese factories     With cash tied up in inventory that cannot be shipped, smaller exporters are rejecting orders to avoid cash flow problems

podcast : Making Sense of China’s Economy
Hui Shan, chief China economist at Goldman Sachs Group Inc., discusses China’s growth forecast for the year, the economy and her outlook for monetary policy. She speaks on “Bloomberg Markets: China Open.” (Source: Bloomberg)

As the COP26 summit nears, all eyes are on China
With less than two months before the start of the COP26 climate conference in Glasgow, China is increasingly the centre of global climate policy attention. The country has missed the 31 July deadline set by the United Nations to submit new emissions reduction pledges – known as Nationally Determined Contributions (NDCs) – ahead of COP26, sparkling doubts about its contribution under the Paris Agreement.

Guangdong-Macao Intensive Cooperation Zone to Enjoy Free Trade Port Treatment
China has unveiled a masterplan for constructing the Guangdong-Macao Intensive Cooperation Zone at Zhuhai’s Hengqin island. The masterplan sets out a series of policies, many of which are similar to those implemented at the Hainan Free Trade Port (FTP). The policies include setting up a special customs supervision system as well as rolling out financial and tax incentives for corporates and individuals.

US security reviews now extend to Chinese acquisitions never filed with government
Given new funding and expanded authority, watchdog Committee on Foreign Investments in the United States is pursuing ‘non-notified transactions’    While CFIUS was strengthened during the Trump administration, the tough scrutiny on Chinese deals is seen as continuing under President Joe Biden

Fitch says ‘some kind of default appears probable’ at China Evergrande, cuts debt rating along with Moody’s
Fitch cuts ratings for Shenzhen-based firm and its subsidiaries to “CC”, four levels below investment-grade debt     Credit ratings downgrades briefly send Evergrande shares in Hong Kong below their 2009 IPO price

Exclusive | Suning founder Zhang Jindong faces hostile creditors in attempt to delay US$600 million bond repayment
Creditors including Chinese lenders said to be preparing to demand for repayment, although a compromise may still be reached     Other lenders have earlier sued in mainland and Hong Kong courts to recover their debts

Chinese state media signal Beijing’s attempt to ease panic about its tech crackdown in unusual front-page editorial
People’s Daily editorial says regulation of private education, data security and platform economy is ‘not targeted at specific industries or businesses’    Communist Party mouthpiece stresses Beijing’s support of the private sector after stock market rout  Analysts said that China’s scrutiny of its tech firms will continue.     Wednesday’s People’s Daily editorial said that China will strive for both “regulation” and “growth”.  China will “make the rules clear and draw a line in the sand”, pressing tech firms to “obey the leadership of the Party and to serve the big picture of economic and social development”, it said.   Repeating President Xi’s message from last week, the article said that Beijing’s campaign to “prevent the disorderly expansion of capital” and address the “barbaric growth” of China’s tech sector had achieved early results.  Meanwhile, state-run news agency Xinhua reported that a two-month campaign to “clean up the cyberspace” that launched in June has achieved initial results, with 4,800 offending websites closed, 20 million messages censored, and 8 million accounts punished.      “China’s regulatory offensive is driven by [its] political imperative to align the private sector and capital behind the party’s political, social and economic objectives,” said Bo Zhuang, China economist and strategist at US investment firm Loomis Sayles. “These objectives are not just crucial issues for the Communist Party’s political legitimacy but are necessary to support China’s growth over the next 10 years. Hence we do not expect a policy reversal.”  Bruce Pang, head of macro and strategy research at China Renaissance Securities, said China will maintain regulations to support national goals, such as “common prosperity”.  The editorial on People’s Daily said China will enhance “transparency and predictability” in future policymaking.   “Market communication will certainly improve because the initial stage of the campaign was marked by poor market communication and seemingly uncoordinated policy moves across different government agencies,” said Zhuang at Loomis Sayles.

Bad reactions to Beijing crackdown make Chinese corporate bonds attractive for investors, Baring says
Past episodes suggest negative market reactions are buying opportunities, according to Baring Asset Management     Fund owned Chinese bonds including those issued by developers Kaisa Group and Xiamen Yuzhou Grand Future Retail in August  Among those who were slapped fines included Tencent Holdings, and Alibaba Group Holding, the owner of this newspaper. Since then, many companies have started to pledge billions in donations in response to President Xi Jinping’s “common prosperity” call.
Baring, which manages about US$382 billion of bonds, real estate and alternative assets globally, said the move stems from the Chinese government’s desire to strengthen economic and social stability, and will not stifle innovation.  Certain sectors, like education, might see weak investor potential as firms are forced to remodel as non-profit businesses. There will be winners too.   “In the real estate sector, for instance, companies that can endure the changes could emerge with stronger balance sheets,” Lawal added. “And for the tech sector, increased competition and the break-up of monopolies could bring fairer prices for consumers and better protections for workers.”

Is China at its ‘Volcker Moment’ as real estate curbs spiral out of control? More economists are joining the chorus in saying yes
China’s property developers defaulted on US$6.2 billion worth of high-yield debt through mid-August, according to Morgan Stanley

What if China’s property crackdown goes overboard too?
The escalating crackdown in tech draws attention, but the bigger risk is that the new regulatory enthusiasm tips over a more familiar target     China’s regulatory crackdown has wiped billions off technology companies’ market value. But the continuing squeeze on real estate—if allowed to run much further—could have even bigger repercussions.

Stock rally halted as Chinese tech giants surrender gains after steep rebound
Hang Seng Index took a breather after a three-week rally as Chinese tech stocks surrendered gains    Some fund managers see value among Chinese tech stocks after months of regulatory crackdowns

What Is The Goal Of Beijing’s New Stock Exchange?
China says the new bourse will invigorate Small and Medium-Sized Enterprises (SMEs). Some observers argue it forms part of a plan to bring firms listed abroad back to China.  “If big companies are delisted in the United States and relisted in China, on the Shanghai or Shenzhen exchanges, the volatility caused to those existing exchanges will be too great. But on a new stock exchange that is not an issue,” Zhang said.    “Beyond spreading the risks of financing SMEs … the exchange in Beijing will help with repatriating tech companies with minimal disruption

Chinese AI firm seeks to stop Apple’s iPhone production, sales ahead of new device launch next week
Shanghai Zhizhen Intelligent Network Technology, also known as Xiao-i Robot, continues to push its nearly decade-long patent dispute with Apple over Siri  A Chinese artificial intelligence firm has asked a Shanghai court to stop the production and sale of Apple’s iPhone in the country over a long-standing patent dispute involving virtual assistant Siri, around a week before the world’s most valuable company launches the latest update of its flagship smartphone. Shanghai Zhizhen Intelligent Network Technology, also known as Xiao-i Robot, last Friday applied to the Shanghai Higher People’s Court for a preliminary injunction to ban the manufacture, sale and export of iPhones containing Siri that infringe on its patent, according to the Chinese company’s statement that was posted on its official WeChat account on Tuesday.  Apple is expected to launch the new iPhone 13 line and other devices in the US at an event on September 14    The injunction, if granted, would not bode well for Apple’s ambitious new launch, which has prompted main supplier Foxconn Technology Group to ramp up recruitment of assembly line workers at the world’s biggest iPhone factory in the central Chinese city of Zhengzhou.  Apple’s Asian supply chain is expected to initially produce an estimated 90 million units of the iPhone 13, up from the initial batch of 80 million units for the iPhone 12 launch last year, according to Dan Ives, managing director at investment firm Wedbush Securities, in a research note on Tuesday.   Ives said Apple is targeting to ship from 130 million to 150 million new iPhones in the second half of this year.

Tencent draws a line between WeChat and Weixin, telling users to choose as China’s strict new data laws come into effect
Tencent is sending notifications to Chinese Weixin users, asking them to switch to overseas WeChat accounts if they use an international phone number     The move comes as China cracks down on the collection and use of domestic user data with a new personal information law

Expectations for near-term easing cool after China central bank comments
-Expectations for near-term easing cooled and the yuan strengthened Wednesday after comments by central bank officials the day before that China will maintain prudent monetary policy and that there is no shortfall in base money. China will not resort to flood-like stimulus, Pan Gongsheng, vice governor at the People’s Bank of China (PBOC) told a news conference on Tuesday.

China’s arbitration reforms will align it with international rules
China’s move to align arbitration rules with those in other large international arbitration centres could fundamentally change the way arbitration works in China

Coronavirus: China vaccinates two-thirds of population in Covid-19 herd immunity race
With more than 2 billion doses administered, 67 per cent of the country’s people are fully vaccinated, according to disease control bureau     Precautions being taken to update shots to cover potential threats from new variants, senior public health official says

China proposes global code of conduct on biosecurity, amid coronavirus ‘lab leak’ row with US
‘Tianjin Biosecurity Guidelines’ aim to prevent misuse of bioscience research and promote the responsible development of biotechnology     Introducing the initiative in Geneva, China’s disarmament affairs envoy highlighted the potential risks and threats of biotechnology development

China develops Mars drone for future red planet missions
Helicopter drone will help a rover to navigate the planet’s surface, allowing future missions to be more efficient     It has similarities to Nasa’s Ingenuity helicopter, which is already operating on Mars, expert says

China: Germany’s difficult balancing act
Profitable economic relations clash with competing systems. Germany is caught between the fronts. Berlin’s most powerful ally and its most important trading partner are on a collision course – the US and China.

EU and US working together on trusted connectivity to counter China
The European Union and the US are pushing for a trusted connectivity approach to ensure that the exponentially rising global demand for digital and physical infrastructure is shaped by democratic values, in the midst of a trade and ideological clash with China.

China accuses Australia of ‘bullying’ and ‘grossly interfering’ in its internal affairs
Beijing’s latest broad swipe at Australia has included accusations of “bullying” and claims that Canberra uses China’s economic coercion for “selfish political gain”.

China to keep contact with Taliban’s interim regime, but asks it to listen
Foreign ministry calls naming of interim government a necessary step but urges it to ‘listen to the opinions of all ethnic groups and factions’     Beijing yet to formally recognise Taliban-led regime despite speculation that it could take on greater involvement in Afghanistan

Time for the US to rethink its defence stand on Taiwan, former US Pacific Command chief says
United States should be clearer on its responsibilities to the island as Beijing seeks to dominate it, Harry Harris says      Strategic ambiguity should not be maintained just because it has been the policy since the 1970s, he says

David Shambaugh on China’s Political Personalities, From Mao to Xi
“Although their respective periods of rule are four decades apart, and China has changed so much in the interim, it is really quite striking just how much Mao and Xi have in common.”   In brief, one argues for “managed opening and liberalization” of the system, while the other argues for holistic controls to prevent any dissent, liberalization, or emergence of genuine civil society. The first believes that the best – indeed the only – way to stay in power is to open the system, the society, the economy – but in an incremental and managed way. The other faction argues that any opening is a slippery slope that cannot be managed and will inexorably cascade out of control – hence comprehensive control is the only practical answer to sustaining CCP rule. This is a somewhat oversimplified description, which is described in much greater detail and depth in the book, but it helps to explain some of the discontinuities we have witnessed in Chinese politics over the past four decades. Scholars refer to this as the repetitive “fang-shou cycle” (opening and closing cycle).   Xi Jinping is the representative par excellence of the second faction. That is why we have seen a sweeping return to pervasive controls throughout China under his rule. Xi is a control freak. His actions may have successfully dealt with the many aspects of “atrophy” that were apparent when he took over, and this has indeed brought about short-term stability and a strengthening of the party in the short-term. Yet, and this is relevant to your original question, I would argue that his repressive actions to reassert comprehensive controls over society and the party-state will, in fact, weaken the CCP in the long-term.    Through implementing excessive controls, combined with his own dictatorial style, Xi is actually increasing the rigidity and hence sclerosis in the system. The party is now being run like a military organization – a top-down institution where orders are given and to be followed. There is little, if any, genuine bottom-up or horizontal feedback and participation, much less autonomy, in the political system. The party has become robotic and responsive only to the supreme leader. In this sense, Xi has failed to grasp one of the key elements that contributed to the atrophy of the Soviet system and its downfall: ruling parties need to have “life” with them. Deng, Jiang, and Hu all understood this – and they all undertook “managed liberalization” of the system. Not Xi. The irony may be that his efforts to strengthen party control may have worked in the short term, but may well make it more vulnerable in the medium-to-long term

China Doesn’t Like How Gen Z Is Spending Its Time
A crackdown on boy-band celebrities signals a wider dissatisfaction with the next generation of would-be revolutionaries.

China’s New Gaming Restrictions Have Already Been Circumvented
E-commerce sites started renting out gaming accounts to avoid restrictions

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