S&P Downgrades China, Says Rising Debt Is Stoking Economic, Financial Risks

Elias Glenn
Reuters
S&P’s one-notch downgrade to A+ from AA- comes as Beijing grapples with the challenges of containing financial risks stemming from years of credit-fueled stimulus to meet ambitious government economic growth targets.

Before Wisconsin, Foxconn Vowed Big Spending in Brazil. Few Jobs Have Come.

David Barboza
New York Times
Before the Taiwanese manufacturing giant Foxconn pledged to spend $10 billion and create 13,000 jobs in Wisconsin, the company made a similar promise of 100,000 jobs in Brazil. Six years later, Brazil is still waiting for most of those jobs to...

BYD Predicts Ambitious China Shift to Electric Cars by 2030

David Stanway
Reuters
All vehicles in the country will be “electrified” by 2030, which could range from full electric cars to mild hybrids, Chinese automaker BYD Chairman Wang Chuanfu said on Thursday. BYD, backed by Warren Buffett, has already invested heavily in the...

China's Path out of Poverty Can Never Be Repeated at Scale by a Country Again

Zheping Huang, Tripti Lahiri
Quartz
Since China began its market reforms in the late 1970s, it has lifted more than 800 million people out of poverty, slashing the rate from nearly 90% in 1981 to under 2%, as measured by the World Bank’s latest spending benchmark.

Fame Academy, the Chinese College Offering Classes in How to Become an Internet Celebrity

Liu Zhen
South China Morning Post
Chongqing Institute of Engineering has already enrolled 19 students, mainly female, to be taught about how to present themselves online to attract viewers and translate fame into profit.

Trump's Threats Loom as China Weighs Opening to Wall Street, Tesla

Bloomberg News
Bloomberg
Coincidence or not, China appears set to ease restrictions on foreign automakers and banks amid sustained pressure from U.S. President Donald Trump to open up its economy.

China's Pollution Crackdown Shakes up Iron Ore Traders

Neil Hume
Financial Times
Over the summer, price differentials between high and low grade iron ore have intensified amid a government-led crackdown on pollution and outdated steelmaking capacity. That has caught many traders on the hop and left some nursing nasty losses from...

The Timing May Be Right for Facebook to Enter China next Year, Analyst Predicts

Evelyn Cheng
CNBC
A Mizuho report pointed out that Beijing tends to lessen its media scrutiny during an administration's second term, and Facebook may have “an opening” after Xi Jinping begins his second five-year term in November...

China Considers Lifting Foreign EV Cap in Free Trade Zones

Bloomberg
China is discussing a plan to allow foreign carmakers to set up wholly owned electric-vehicle businesses in its free-trade zones in a major revision of a fundamental principle governing the country’s auto industry policy since the 1990s, according...

Africa Needs Infrastructure, China Wants to Build It. So What’s the Problem?

Eric Olander, Cobus van Staden & more
Every week seemingly brings a new announcement of a Chinese-financed mega project somewhere in Africa. Last week’s announcement of a $5.8 billion power station in Nigeria that will be financed and built by Chinese state-owned companies is typical of...

Conversation

09.15.17

Bannon Says the U.S. Is at ‘Economic War with China.’ Is He Right?

Paul Haenle, Jacqueline N. Deal & more
Steve Bannon, whose controversial views on China remain hugely influential in the White House, is visiting Hong Kong this week to speak at a China investment conference. In August, before he left his White House position as chief strategist, Bannon...

Viewpoint

09.15.17

There Is Only One China, And There Is Only One Taiwan

Richard Bernstein
One of Beijing’s least favorite people is Taiwan’s President Tsai Ing-wen, who won a landslide election victory 18 months ago on a platform calling for more separation from China—a coded way of rejecting one of the mainland’s most sacred principles...

China's WeChat Crackdown Drives Bitcoin Devotees to Telegram

Lulu Yilun Chen
Bloomberg
With administrators personally liable for what is said on groups they run, users of bitcoin exchanges OKCoin, Huobi and BTCChina are migrating to services beyond the Chinese government’s reach.

G.M. Chief, in China, Challenges Planned Bans of Gasoline Cars

Keith Bradsher
New York Times
Speaking in Shanghai on Friday, Mary Barra, the chief executive of General Motors said her company was making a big push to develop electric cars but that consumers, not government dictates, should decide how cars are powered.

China Plans First Dollar-Denominated Bond Sale in a Decade

Gabriel Wildau and Jennifer Hughes
Financial Times
China is planning to sell dollar-denominated bonds for the first time in a decade, as it seeks to take advantage of investor appetite for Chinese credit amid the country’s unexpectedly strong economic growth.

China Is Stumbling Hard at Acquiring the High-Tech Chip Companies It Wants So Badly

Josh Horwitz
Quartz
US president Donald Trump on Wednesday vetoed a Chinese private-equity firm’s proposed $1.3 billion purchase of Lattice Semiconductor, an Oregon-based chip manufacturer.

VW, China Partners to Recall 4.86 Million Vehicles over Takata Airbags

Reuters Staff
Reuters
Official Chinese estimates show over 20 million cars in China had air bags made by Takata, which have been linked to at least 16 deaths and 180 injuries globally. The air bags have the potential to explode with too much force and spray shrapnel.

China's Two Largest Tech Companies Sign a Deal over the West's Biggest Music

Andrew Flanagan
NPR
Among the deals being signed that shape the way the world experiences culture, a new partnership will exert a great influence on the flow of content from the world's three remaining major record labels to an enormous and growing marketplace —...

The Rise and Rise of China's Xiaomi in India

Abhishek Baxi
Forbes
A couple of years ago in 2015, MIT Technology Review ranked Xiaomi number 2 on their list of 50 Smartest Companies -- a list that also had companies like Apple, Google, and Microsoft who were rated far below the Chinese smartphone and smart home...

What the World's Emptiest International Airport Says about China's Influence

Brook Larmer
New York Times
The four-lane highway leading out of the Sri Lankan town of Hambantota gets so little traffic that it sometimes attracts more wild elephants than automobiles. The pachyderms are intelligent — they seem to use the road as a jungle shortcut — but not...

China Just Reversed Two Policies Designed to Keep the Yuan from Sliding

Elena Holodny
Business Insider
China is reversing course and loosening some financial restrictions after the yuan's appreciation in 2017...

Smuggling Operations at Sea Targeted in Latest UN Sanctions against North Korea

Liu Zhen
South China Morning Post
The UN has called on member states to use “new tools” to clamp down on smuggling activities at sea under the latest sanctions against North Korea following its nuclear test last week.

China and Russia Warn the U.S. Not to Seek North Korean Regime Change

Ting Shi and David Tweed
Bloomberg
In supporting a watered-down version of North Korea sanctions, China and Russia had a stern warning for the U.S.: Don’t try to overthrow Kim Jong Un’s regime.

Sinica Podcast

09.11.17

China’s Tightening Grip on Cyberspace

Kaiser Kuo, Jeremy Goldkorn & more from Sinica Podcast
Adam Segal returns to Sinica to comment on China’s recent cybersecurity law—where it came from, how it changed as it was being drafted, and how it may shape the flow of information in China in the future. Other issues discussed include the...

Next Stop for the Steve Bannon Insurgency: China

Mark Landler
New York Times
Stephen K. Bannon plans to travel to Hong Kong to deliver a keynote address at an investor conference, where he will articulate his call for a much tougher American policy toward China.

Renminbi Slides after China Relaxes Currency Controls

Gabriel Wildau, Tom Mitchell, Jennifer...
Financial Times
The renminbi suffered its worst day in three months after China’s central bank scrapped two rules intended to bolster the currency in a sign that official nervousness about currency depreciation and capital flight has eased.

China to Shut Bitcoin Exchanges

Chao Deng
Wall Street Journal
Chinese authorities are ordering domestic bitcoin exchanges to shut down, delivering a heavy blow to once-thriving trading hubs that helped popularize the virtual currency pushing it to recent record highs.

China Steps up Curbs on Virtual Currency Trading

Peng Qinqin, Wu Yujian and Han Wei
Chinese regulators ordered a halt to all virtual currency trading platforms in the country, acting to further rein in risks related to cryptocurrencies, Caixin learned from a source close to regulators.

China's Export Engine Slows as Imports Maintain Steady Gains

Bloomberg News
Bloomberg
China’s export growth slowed as global demand for the country’s products moderated, while imports remained robust as investment at home aided demand.

High Cost of China's Push for Unesco Heritage Sites

Ben Bland
Financial Times
China is ranked second only to Italy in terms of number of world heritage sites. But it's come at a cost...

China Will Back Fresh U.N. Measures on North Korea over Nuclear Tests

Emily Rauhala
Washington Post
China’s foreign minister said Thursday that Beijing would support further U.N.-imposed “measures” against North Korea following its largest nuclear test, but stopped short of saying whether China would back crippling economic sanctions such as halts...

Blocked in China, Facebook Is Said to Seek a Shanghai Office

Paul Mozur
New York Times
The social media giant in recent months has quietly scouted for office space in Shanghai, according to two people with knowledge of its efforts there. Those offices would house employees working on Facebook’s effort to make hardware but could also...

Wanda Sues over 'False' Reports on Chairman Wang Jianlin

Wayne Ma
Wall Street Journal
Dalian Wanda Group, the property and entertainment giant controlled by billionaire Wang Jianlin, has filed defamation suits against at least 10 Chinese social media accounts that published reports the company says sent its shares and bonds tumbling.

Trump May Have Pushed Mexico into the Arms of China's Alibaba

Sophia Yan
CNBC
Mexico's Ministry of Economy and Alibaba will partner to get more Mexican products onto the tech firm's popular e-commerce platforms...

Conversation

09.06.17

China’s Communist Party Is About to Meet. Here’s What You Should Know.

Matthias Stepan, Victor Shih & more
The Chinese Communist Party will hold its 19th Party Congress on October 18, marking the end of the first term of General Secretary Xi Jinping. In a leadership reshuffle, Xi is expected to promote allies to the Party’s key decision-making body, the...

Chinese Premier to Discuss Economy with Int'l Institution Chiefs

Xinhua
Xinhua
Chinese Premier Li Keqiang will hold a roundtable meeting with leaders of six major international economic and financial institutions in Beijing next Tuesday, Foreign Ministry spokesperson Geng Shuang said on Wednesday.

China Brushes off Vietnam Protests over South China Sea Drills

Reuters
Reuters
China on Wednesday dismissed Vietnamese condemnation of its military live-fire exercises in the disputed South China Sea, saying it was acting within its sovereign rights.

North Korea Nuclear Test Puts Pressure on China and Undercuts Xi

Jane Perlez
New York Times
It was supposed to be Xi Jinping’s moment to bask in global prestige, as the Chinese president hosted the leaders of some of the world’s most dynamic economies at a summit meeting just weeks before a Communist Party leadership conference.

China's HNA Group Sues Exiled Chinese Businessman

Julie Steinberg and Carolyn Cui
Wall Street Journal
One of China’s most acquisitive companies is suing an exiled Chinese businessman for allegedly spreading what it says are falsehoods that have hurt the conglomerate’s reputation and financial interests.

China Realizes It Needs Foreign Companies

Christopher Balding
Bloomberg
China is increasingly desperate for foreign investment. Yet foreign companies are less and less interested in what it has to offer. How this problem gets resolved may be one of the most important questions facing China's economy...

What’s Yours Is Mine in China but Is Sharing at a Peak?

John Sudworth
BBC
Ok, so car sharing makes perfect sense. And we get bike sharing, too. But ball sharing?

China Can Squeeze Its Neighbors When It Wants. Ask South Korea

Jethro Mullen
CNN
South Korean businesses have been suffering since early this year after the country angered the Chinese government with the deployment of a U.S. missile defense system. The victims include companies in tourism and retail, but also Hyundai (HYMTF),...

China’s War on Smog Shakes up Ports; Tianjin Loses, Rivals Benefit

Meng Meng and Josephine Mason
Reuters
China’s war on smog is shaking up the country’s busiest ports, which handle billions of tonnes of cargo a year, forcing Tianjin to overhaul its business as northern rivals snare a greater share of vast coal and iron ore shipments, results show.

Alibaba and Tencent Are Showing How Companies Can Get around Beijing's Crackdown on Foreign Deals

Sophia Yan
CNBC
The firms, among China’s most important tech giants, are overseeing the merger of two companies they back. Chinese delivery firm 58 Suyun is combining with Hong Kong logistics company GoGoVan — both have raised funds from Alibaba, and Tencent backs...

Trump on China: ‘I Want Tariffs. And I Want Someone to Bring Me Some Tariffs’

MarketWatch
President Donald Trump demanded tariffs against China at a recent White House meeting, according to a new report, dismissing concerns from his “globalist” advisers.

More Turmoil for China’s Wanda as Rumors Fly

Variety
China’s Dalian Wanda issued a stern denial Monday following rumors that company chairman Wang Jianlin had been detained by authorities as he attempted to fly abroad. The unsubstantiated reports caused stocks in Wanda’s hotel group to swoon. “Rumors...

China Is Investing $57 Billion into Pakistan

Fortune
Chinese entrepreneurs are looking to explore opportunities in Pakistan, where Beijing has pledged to spend $57 billion on infrastructure projects as part of its “Belt and Road” initiative.

China State Media Says US Will ‘Pay’ for ‘Unjust’ Sanctions

CNBC
China has come out strongly against new U.S. moves to pressure North Korea with its foreign ministry opposing the “long-arm jurisdiction” of President Donald Trump’s administration, arguing that Beijing has always met international obligations in...

China’s ‘Belt and Road’ Initiative Could Be the next Risk to the Global Financial System

CNBC
China has pitched its mammoth, pan-Eurasian “Belt and Road” infrastructure initiative as a means of promoting economic prosperity and fostering diplomatic ties on a global scale.

Balance of Power: China Extends Its Reach

Bloomberg
President Xi Jinping is spending more than $50 billion in an economic corridor in Pakistan, Afghanistan’s neighbor. The highways and gas pipelines, designed to provide China an alternative land route to the high seas, also give it an interest in...

Breaking Down the U.S. Trade Deficit with China

Paul Haenle & Yukon Huang from Carnegie-Tsinghua Center for Global Policy
A positive relationship between the United States and China, the world’s two largest economies, is crucial for promoting global growth and development. The bilateral relationship, however, has become increasingly fraught by disagreements over what a...

Germany Is Trying to Stop China from Gobbling up Its Companies — but There May Be a Downside

Karen Gilchrist
CNBC
Think of Germany and it isn’t long before visions of bustling business districts and thriving manufacturing plants spring to mind. It isn’t surprising: it’s these industries that have elevated the country to rank among the world’s leading economies...

China Demands U.S. Immediately Withdraw N. Korea Sanctions, Warns Will Hit Ties

Simon Denyer
Washington Post
China demanded the United States immediately withdraw a package of sanctions on companies and individuals trading with North Korea on Wednesday, and said the decision by the Trump administration will damage Sino–U.S. ties.

New Balance Wins $1.5 Million in Landmark China Trademark Case

Sui-Lee Wee
New York Times
A Chinese court has ruled that three domestic shoemakers must pay New Balance $1.5 million in damages and legal costs for infringing the American sportswear company’s signature slanting ”N” logo, in what lawyers said was the largest trademark...

China, Like U.S., Struggles to Revive Industrial Heartland

Michael Schuman
New York Times
The hulking, brown–brick industrial plants lining the roads were once the backbone of this gritty city. Today, they are outdated and unwanted, and the region is one of the Chinese economy’s most troubled. 

China to Rev up Bullet Train Revolution with World's Fastest Service on Shanghai-Beijing Line

Sarah Zheng
South China Morning Post
China will soon start official operation of the world’s fastest train service, knocking an hour off the 1,318km journey between Beijing and Shanghai.

China Says Economy Unaffected by Environmental Inspections

South China Morning Post
China’s Ministry of Environmental Protection said that recent environmental inspections did not hurt the country’s economy and blamed some ”inappropriate methods” conducted by local authorities for causing short–term market dislocation.

Books

08.21.17

China’s Banking Transformation

James Stent
In this timely and provocative book, James Stent, a banker with decades of experience in Asian banking and fluency in Chinese language, explains how Chinese banks work, analyzes their strengths and weaknesses, and sets forth the challenges they face in a slowing economy. Without minimizing the real issues Chinese banks face, China’s Banking Transformation challenges negative media accounts and reports of “China bears.” Based on his 13 years of service on the boards of China Minsheng Bank, a privately owned listed bank, and China Everbright Bank, a state-controlled listed bank, the author brings the informed view of an insider to the reality of Chinese banking.China’s Banking Transformation demonstrates that Chinese banks have transformed into modern, well-run commercial banks, playing a vital role supporting the country’s extraordinary economic growth. Acknowledging that China’s banks are different from Western banks, the author explains that they are hybrid banks, borrowing extensively from Western models, but at the same time operating within a traditional Chinese cultural framework and in line with China’s governance model.From his personal experience working at board level, Stent describes the governance and management of China’s banks, including the role of the Communist Party. He sees China’s banks as embedded in ancient concepts of how government and society work in China, and also as actors within a market socialist political economy. The Chinese banking system today bears similarities with banking in Northeast Asian “developmental states” of recent past, and also pre-1949 Chinese banking.As the first account of Chinese banking by a Westerner who has worked in China’s banks, China’s Banking Transformation should be read by anyone interested in the political economy of contemporary China, in Asian development issues, and in banking issues generally. The book dispels misconceptions and provides insight into the financial aspects of China’s economic growth story. —Oxford University Press{chop}

Steve Bannon Says U.S. In Economic War with China

NBC News
The United States is in an economic war with China, U.S President Donald Trump's chief political strategist has said, warning Washington is losing the fight but is about to hit China hard over unfair trade practices...

Conversation

08.16.17

Trump Says He Wants Fairer Trade with China. Will His Latest Move Work?

Wendy Cutler, Susan Shirk & more
On Monday, Donald Trump returned to Washington from his summer vacation for the public signing of an executive order requesting that the United States Trade Representative begin a review to determine wether the U.S. should investigate China over...