Must Read
USCBC in the News
12. Politico - Pro: Investment treaty could help drive China reform
13. CD: Trust and confidence are key for US-China businesses
14. LTN: China’s FDI laws to be changed
Chinese News Sources
Notables
20. Bloomberg: Nike shoemaker Yue Yuen says over 1,000 China workers on strike
21. FT: Tech groups transform how finance is done in China
22. Bloomberg Businessweek: Smartphones and social media power China's e-shopping revolution
23. Bloomberg: Grads remake China workforce as high-end threat to U.S.
24. FT: A game change in public service
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Must Read
1. AP: China's growth slows to 24-year low of 7.4 percent
China's economic growth slowed to a 24-year low of 7.4 percent in the first quarter, raising the risk of job losses and a potential impact on its trading partners. The figure reported Wednesday by the government was down from the previous quarter's 7.7 percent. It came in below the full-year official growth target of 7.5 percent announced last month. Beijing is trying to guide China to slower, more sustainable growth based on domestic consumption rather than trade and investment following a decade of explosive expansion.
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2. WSJ: China's economic growth slows to 7.4%
Data from world's No. 2
economy still beat forecasts.
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3. Reuters: China statistics bureau: Q1 GDP growth still within targeted range
China's economic growth in the first quarter was within range, and the employment situation remained stable and inflation under control, the statistics bureau said on Wednesday. "Although economic growth slowed in the first quarter, in general, it stayed in a reasonable range," said bureau spokesman Sheng Laiyun. The comments came at a media briefing following the release of data showing the economy grew 7.4 percent in January-March, slightly above expectations
for 7.3 percent growth.
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4. FT: Slowing growth adds to China stimulus pressure
Chinese growth slowed sharply in the first quarter of the year, raising pressure on Beijing to provide a fresh round of government stimulus to prop up faltering growth in the world’s second-largest economy. In the three months to the end of March, China’s gross domestic product expanded 7.4
per cent from the same period a year earlier, a slowdown from 7.7 per cent growth in the fourth quarter but faster than the 7.2
per cent pace that some analysts had predicted.
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5. NYT: World’s growth engines falter
Hunan Xinwei Bags Company, a manufacturer of knapsacks and handbags, is struggling to survive. The Chinese economy is slowing. Wages are rising amid a shortage of blue-collar workers. And competition from countries like Vietnam is growing. But what has really hurt Hunan Xinwei in recent months has been a credit squeeze facing small and medium companies all over China. Exorbitant interest rates and a scarcity of loans at any rate have turned the financing of everything from raw materials to equipment into a crippling challenge for businesses and individuals without political connections to borrow at regulated rates from the state-controlled banking system. “The current monthly interest rate that people like me are paying is around 3 percent,” compared with just 0.5 a month for regulated loans, said Yin Haibian, president of Hunan Xinwei.
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6. WSJ: Housing trouble grows in China
Overbuilding by real-estate developers leaves smaller cities with
glut of apartments.
Unfurnished or largely empty housing projects ring Chinese cities, such as this development in the northern city of Yingkou. Wall Street Journal photo.
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7. Bloomberg: China urged by U.S. to allow bigger market role in valuing yuan
The U.S.
urged China to reduce currency interventions and let markets play a bigger role in setting the value of the yuan, in a report that declined to name any major trading partner a foreign-exchange manipulator. “There are a number of continuing signs that the exchange-rate adjustment process remains incomplete and the currency has further to appreciate,” the Treasury Department said yesterday in a semiannual report to Congress. Pressured by its international counterparts to loosen currency controls, China last month doubled the limit within which the yuan, also known as the
renminbi or RMB, can move against the U.S.
dollar every day.
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8. Reuters: U.S. warns China its currency is still undervalued
The Obama administration on Tuesday warned Beijing that its currency was too weak and expressed doubt over the Asian giant's resolve to let market forces guide the value of the yuan. In a semiannual report to Congress, the U.S. Treasury stopped short of declaring China a currency manipulator, but singled it out among large U.S.
trading partners for its currency practices. "Recent developments in the
... exchange rate raise particularly serious concerns if they presage a retreat from China's announced policy of allowing the exchange rate to reflect market forces," the Treasury said.
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9. FT: US Treasury slams China on currency
The US Treasury slammed China for resuming large-scale efforts to hold down the
renminbi just hours after official data showed the country has amassed nearly $4trn in foreign exchange reserves, with a ramp-up in the first quarter pointing to central bank intervention to weaken the
renminbi. Renewed focus on China was the main feature of the Treasury’s
semi-annual currency report after this year’s spurt of
renminbi weakness following several years of steady appreciation. While it also upped its pressure on Germany, the Treasury stopped short of naming any country a “manipulator” in its
semi-annual currency report.
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10. Bloomberg: Hackers from China waste little time in exploiting Heartbleed
For those who don't feel the urgency to install the latest security fixes for their computers, take note: Just a day after Heartbleed was revealed, attacks from a computer in China were launched. The software bug, which affects a widely used form of encryption called OpenSSL, was announced to the world April 7 at 1:27 p.m. New York time, according to the Sydney Morning Herald. That sent companies scrambling to fix their computer systems -- and for good reason.
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11. Bloomberg Businessweek: FBI movie warns American students overseas are 'tempting and vulnerable targets' of Chinese spies
“There is an old Chinese proverb—‘Life is like a game of chess, changing with each move. And to win the game you must often sacrifice your pawns.’”It sounds like the beginning of a clichéd kung fu flick. Instead, it’s the opening lines of an almost 30-minute movie, released yesterday by the Federal Bureau of Investigation on YouTube, aimed at educating young Americans studying abroad about the dangers of being recruited by foreign spy agencies. “We’d like American students traveling overseas to view this video before leaving the U.S.
so they’re able to recognize when they’re being targeted and/or recruited,” says a statement on the FBI’s website.
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USCBC in the News
12. Politico - Pro: Investment treaty could help drive China reform
A proposed investment treaty could be the United States’ best chance of influencing Chinese economic reforms as the manufacturing giant shifts away from its dependence on exports and big domestic spending projects to generate growth, former U.S.
government officials said today. “We’re not going to fundamentally affect the trajectory of this internal reform program, but I’d argue the bilateral investment treaty may give us our best shot to at least angle the direction of that program,” said Christopher Johnson, a former CIA and State Department official now at the Center for Strategic and International Studies. Former U.S. Treasury Secretary Henry Paulson agreed, saying he believes Chinese President Xi Jinping wants to use the BIT talks and potentially other trade initiatives, like the proposed Trans-Pacific Partnership agreement led by the United States, to lock in a new generation of reform. “Just like [former Chinese Premier] Zhu Rongji used WTO admission, you know, to drive economic reforms internally, this is what the current Xi government would like to do,” Paulson said at a CSIS event
on Beijing’s current reform plans.
The U.S.
business community hopes the proposed pact, which would have to be approved by the Senate to go into force, will open up more of the Chinese economy to U.S.
investment. “China maintains ownership restrictions on American and other foreign companies in about 100 sectors, including manufacturing, services, energy, and agriculture,” John Frisbie, president of the U
.S
.-China Business Council, wrote recently in the China Business Review. “To put it simply, investment barriers in China are market access barriers. A BIT would significantly open markets for American companies.” However, striking a deal is expected to be difficult because the United States
is already open to most Chinese investment except for a few cases that have been stopped on national security grounds. “The U.S.
doesn’t have much to give up in the negotiations,” David Dollar, a former Treasury and World Bank official now at the Brookings Institution, said at the CSIS event. But for China, opening up sectors like financial services, telecommunications,
logistic and media to U.S.
investment will be “hugely controversial,” particularly in light of the current “cold” environment in China toward foreign firms, Dollar said.
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13. CD: Trust and confidence are key for US-China businesses
Sometimes it's not enough for money to talk. It has to cut through a
cacophonic, complicated din. Take the recent
rebalancing of world growth, for instance. "Just as economists have begun lowering their forecasts for China and other developing economies, the American economy is bouncing back." So went the promotional blurb for an economic forum co-presented last week by the Americas Society/Council of the Americas and China Business News. The value to both China and the US of sorting out the complexity can't be overstated. China is at least a $300 billion market for US companies and US workers, according to the US-China Business Council. What's more, US exports to China, including manufactured goods, chemicals, electronics, and agriculture products, consistently top $110 billion annually. With so much money on the table in a shifting economic landscape, what will be the key US-China business issue in the months, or even years, ahead?
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14. LTN: China’s FDI laws to be changed
Chinese officials are soliciting ideas to build a level playing ground for all businesses, domestic and overseas. “China should combine foreign investment law with company law, which will give national treatment to overseas companies on the Chinese mainland and pave the way for the country’s progress in corporate governance,” said Wang Zhile, a senior researcher on foreign investment at the Chinese Academy of International Trade and Economic Cooperation, a think tank of the Ministry of Commerce. The National People’s Congress Standing Committee has said it will “speed up” research on a new corporate legal framework and will propose a draft when “conditions are ripe”. In a recent statement, the US-China Business Council called for China’s policymakers to consider eliminating terminology such as “foreign-invested enterprises”. “Continued use of this term invites differential treatment for various types of domestic enterprises versus others, based solely on ownership. Government regulators should act independently and transparently and ensure that all domestic enterprises-including foreign invested enterprises-are treated equally and allowed to compete fairly. Efforts to build ‘national champions’ in certain sectors should not include measures that discriminate against other domestic legal persons,” the statement said.“Continued use of this term invites differential treatment for various types of domestic enterprises versus others, based solely on ownership. Government regulators should act independently and transparently and ensure that all domestic enterprises-including foreign invested enterprises-are treated equally and allowed to compete fairly."
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Chinese News Sources
15. SD: More FTZ advantage for foreign companies
China yesterday unveiled rules that will allow foreign companies based in the Shanghai pilot free trade zone to invest in value-added telecom services, the latest move in opening up the country’s telecom sector. Foreign enterprises in the zone with a registered capital of no less than 1 million yuan (US$161
,000) can apply for investment in the value-added telecom business sector, according to a regulation released by the Ministry of Industry and Information Technology yesterday. Enterprises that apply for the services are required to base their service facilities in the FTZ, the
regulation said. The ministry also simplified approval procedures and has designated the Shanghai Communications Administration, the city’s telecom regulator, to handle the vetting procedures, cutting the processing time to two months from the previous five months.
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16. SD: National security tops Xi’s agenda
National security is “a matter of prime importance” as China presses ahead with its modernization drive, President Xi Jinping stressed yesterday. Chairing the first meeting of the national security commission, Xi told members to adhere to an overall national security outlook and explore a “national security path with Chinese characteristics.” Xi, who heads the commission, said China is facing the most complicated internal and external factors in history. To implement the overall national security outlook, China must attach importance to both external and internal security. Domestically, China will pursue development, reform, stability and foster a safe environment, Xi said. Externally, the country will seek peace, cooperation, a win-win situation and a harmonious world, he said.
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17. Caixin: Closer look: Blunt talk between U.S., Chinese military officials a good sign
Pentagon chief Chuck Hagel sparred with his hosts during a recent visit, an indication both
countries see the value in clearly stating their positions.
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18. Caixin: Hebei hopes to turn cities into satellites by pushing them into Beijing's orbit
Province sees capital's traffic, air pollution and overcrowding woes as
opportunity for its towns. Now it needs to convince central government.
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19. SD: China Film to invest in Hollywood productions
China's state-owned film distributor is making its first investment in Hollywood movies by taking a stake in two Legendary Entertainment productions. China Film Co will make an “eight-figure equity investment” in two upcoming films, “Seventh Son” and “Warcraft,” the Chinese unit of Legendary Entertainment said yesterday. The exact amount of the US dollar investment was not specified. “Seventh Son” is a fantasy adventure starring Jeff Bridges and Julianne Moore that’s slated for release on February 6, 2015. “Warcraft,” based on a popular video game series, is scheduled for release on March 11, 2016. If approved for release in China, China Film would distribute the movies under current rules and regulations for foreign films, which are limited to 34 a year. The deal calls for China Film to be credited on the movies.
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Notables
20. Bloomberg: Nike shoemaker Yue Yuen says over 1,000 China workers on strike
Yue Yuen Industrial Holdings Ltd. (551), a shoe supplier for Nike Inc.
and Adidas AG, said more than 1,000 factory workers in a southern Chinese city went on strike today, demanding better social security payments. The employees took to the streets of Dongguan before being stopped by local police, according to a statement from the Hong Kong-listed company. Yue Yuen said 600 workers staged a demonstration yesterday, though Hong Kong-based China Labor Bulletin put the number at more than 10,000 and New York-based China Labor Watch at “tens of thousands.”
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21. FT: Tech groups transform how finance is done in China
The internet is making the country a much fairer place.
FT Back to Top
22. Bloomberg Businessweek: Smartphones and social media power China's e-shopping revolution
When
twenty-something marketing assistant Li Hui needed to find a dress to wear to her sister’s wedding in Jiangjiakou last summer, she looked online. Although shopping malls and bridal boutiques are plentiful in Beijing, where she lives, Li says that shopping online is “faster and more convenient” and offers a wider selection. And it’s easier to compare prices online. Li’s affinity for e-tailing is hardly unique in China, where three-quarters of online shoppers make purchases at least weekly, according to a new survey by PricewaterhouseCoopers. And mobile is king.
Of those online shoppers, 77 percent made at least some of their purchases online using
smartphones.
Bloomberg photo.
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23. Bloomberg: Grads remake China workforce as high-end threat to U.S.
Barely 26 years old, Zhang Xi has studied at an elite American university, worked for an investment bank in Hong Kong and an oil company in Beijing and now may launch an Internet startup with two friends. Zhang, a foreign movie buff who quotes lines from “Forrest Gump” in fluent English, symbolizes a transformation of China’s labor force that is minting college graduates in a country better known for its factory workers. “We just don’t want to sit on the side while all the big things are happening,” she says. “There are tons of choices in front of young people right now.”
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24. FT: A game change in public service
Demand for once coveted civil servant jobs in China is declining.
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