Showing posts with label China.. Show all posts
Showing posts with label China.. Show all posts

Apr 13, 2021

News | Business | China: China Forced A restructuring to Ant Group so the Financial Technology Group Acts More like a Bank

China forces Jack Ma's Ant Group to restructure

BBC News

Jack Ma speaking at a conferenceimage copyrightGetty Images

China has forced a sweeping restructure on the Ant Group so the financial technology firm acts more like a bank.

Ant Group's mega $37bn (£27bn) share market launch was derailed by regulators in November over concerns about its finance model.

The latest move is part of a wider crackdown by China to reign in the country's fast-growing tech platforms.

Ant's affiliate company Alibaba was hit with a record fine of $2.8bn on Friday over monopoly concerns.

The overhaul, directed by the People's Bank of China, subjects Ant to tougher regulatory oversight and minimum capital requirements.

Ant Group is China's biggest payments provider, with more than 730 million monthly users on its digital payments service Alipay.

China's central bank said that under a "comprehensive and feasible restructuring plan," Ant would also cut the "improper" linkage between Alipay, and its credit card and consumer loan services.

Its trove of consumer data was widely seen as one of the company's key advantages over its competitors.

Ant has also agreed to set up a personal credit reporting company, which will strengthen the protection of personal information and effectively prevent the abuse of data.

media captionHow a little Ant became a financial giant

Jack Ma under pressure

The move is the latest in a chain of regulatory moves targeting the business empire of Jack Ma, who was a co-founder of both Ant Group and Alibaba.

Regulators began to show increasing interest in Ant Group in October, after Mr Ma criticised regulators, suggesting they were stifling innovation.

Shortly after the speech, Chinese regulators scuppered the share market launch of Ant Group, which is Alibaba's sister company and China's biggest electronic payments provider.

China's State Administration for Market Regulation (SAMR) also began looking into Mr Ma's e-commerce platform Alibaba, which is China's largest.

After Friday's $2.8bn fine was announced, Alibaba's share price rocketed more than 8% as investors believed this signalled the end of the investigations.

However, Chinese regulators appear poised to take a harder line on tech businesses, after taking a laissez-faire attitude towards the country's tech giants as the industry grew.

Last month, China's State Administration for Market Regulation (SAMR) said it had fined 12 companies over 10 deals that violated anti-monopoly rules.

The companies included Tencent, Baidu and Didi Chuxing - which are among China's largest tech companies.

Mar 30, 2021

News | Business | Chinese Club Factory Firm: The Banned Firm 'Club Factory' May Take The Major Force Route

Banned Chinese firm Club Factory may take ‘Force Majeure’ route

Rasul Bailay

Club Factory plans to invoke force majeure to counter Indian companies and vendors that have approached the courts to recover dues from the banned Chinese e-commerce company. Club Factory is citing India’s decision in June to block several Chinese apps as a situation that was beyond its control, according to a former senior company executive.

The Chinese company has hired law firm Khaitan & Co.

BPO companies Cyfuture and Aegis, which had provided customer-care support to Club Factory, have filed separate cases against the company in the Delhi High Court to recover a combined Rs 5 crore.

Other Indian companies and vendors are struggling to find a representative or office contacts for the Chinese company to recover their dues. “For some months, Club Factory just kept saying they are processing our payments,” said Sumit Patel of Surat-based Madeii Ecommerce, which sold watches and masks on the Chinese e-commerce site. “Now even the vendors’ log-in on the site is not working and we have no way to contact them.”

Noida-based Cyfuture sent a legal notice to Club Factory’s office in Indian cos, vendors have moved courts to recover dues from the ecomm player September, invoking an arbitration clause, and it was returned with remarks that the company had “left” India, according to legal documents.

“Most of the officials of the respondent company have left the country and are proactively looking to evade any liability from its service providers,” lawyers for Cyfuture said in court documents, according to a Delhi High Court order on March 17 while issuing notices to Futuretimes Technology India, the company that operated Club Factory in India. Pankaj Bhagat, the lawyer for Cyfuture and Aegis, declined to comment. Khaitan & Co. declined to comment.

Club Factory did not respond to a query seeking comment. Months before the ban, Club Factory reported that it had surpassed 100 million monthly active users in India.

India blocked 59 Chinese apps including TikTok, WeChat and UCBrowser after a clash in the Himalayan heights of Ladakh that left 20 Indian soldiers dead in June.

Mar 25, 2021

News | Business | China: Retail Giants Facing Backlash Over Its Refusal to Use Xinjiang Cotton

Nike, H&M face China fury over Xinjiang cotton 'concerns'

BBC News

Woman walks by H&M store in Shanghaiimage copyrightGetty Images

image captionH&M is facing backlash in China over its refusal to use Xinjiang cotton

Retail giants Nike and H&M are facing a backlash in China after they expressed concern about the alleged use of forced Uighur labour in the production of Xinjiang cotton.

Many Chinese have called for boycotts, celebrities have cut ties, and e-commerce platforms have dropped H&M.

It is accused of committing serious human rights violations against the Uighur Muslim minority in Xinjiang.

The sanctions, including travel bans and asset freezes, target senior officials in the north-west region.

How did Nike and H&M find themselves here?

The statements in question were made by the companies last year, but only resurfaced in recent days following the announcement of Western sanctions.

Both companies had said in separate statements that they were "concerned" about reports that Uighurs were being forced to pick cotton in Xinjiang, and that they did not source products from the region.

But the latest furore appears to have been sparked by a recent social media post by the Communist Youth League, a Chinese Communist Party group.

"Spreading rumours to boycott Xinjiang cotton, while also wanting to make money in China? Wishful thinking!" it said on microblogging platform Weibo on Wednesday morning, as it shared screenshots of H&M's statement.

State media outlets have since launched campaigns defending Xinjiang cotton and criticising the brands.

Chinese state media CGTN shared a video on Weibo claiming to show the reality of cotton-picking in Xinjiang, which involved automation and quotes from a Uighur farmer saying that people "fought" to work there for high earnings.

State broadcaster CCTV said that H&M had "miscalculated" in trying to be a "righteous hero", and that it "must pay a heavy price for its wrong actions".

H&M China has not yet responded to queries from the BBC, but the company posted a statement on Weibo on Wednesday saying that it "respects Chinese consumers as always" and that it "does not represent any political position".

Screenshot of People's Daily Xinjiang cotton campaignimage copyrightPeople's Daily

image captionPeople's Daily shared an image with the hashtag 'I support Xinjiang cotton' in Chinese

white space

By Wednesday night, at least three major Chinese e-commerce platforms - Pinduoduo, and Tmall - have withdrawn H&M products from sale, reports said.

Various celebrities such as Wang Yibo, Huang Xuan and Victoria Song released statements that they were severing ties with the brands, with one noting that "the country's interests are above all".

Social media has seen a huge wave of backlash against both companies, with numerous calls for people to boycott their products. The hashtag "I support Xinjiang cotton" is now the top trending topic on Weibo with more than 1.8bn views.

Analysis box by Robin Brant, Shanghai correspondent

Hennes & Mauritz has a long relationship with China, which is important to both sides. China is one of H&M's main sources of supply and it is a big market too.

But calling out China on what it regards as a core domestic issue is something Beijing doesn't like. Just ask South Korea or the Philippines, whose shop chains and fruit exports both suffered after diplomatic spats.

China likes to use its trading might and retail nationalism to pressure governments and multinationals - both at the same time preferably - to keep them quiet about its abuses.

The timing of this sudden "grassroots" reaction, led by celebrities who've been happy to take H&M money in exchange for endorsement, is down to a wave of coordinated sanctions imposed by the UK, US and EU in the last few days - endorsed by Sweden among others.

Presentational grey line

What is Xinjiang and who are the Uighurs?

  • Xinjiang, China's biggest region, produces about a fifth of the world's cotton. An autonomous region in theory, in reality it faces restrictions which have only increased in recent years
  • Millions of China's Uighurs, a Muslim minority that sees itself as culturally and ethnically close to Central Asian nations, live in Xinjiang
  • In recent decades, mass migration of Han Chinese (China's ethnic majority) to Xinjiang has fuelled tensions with Uighurs which has at points flared into deadly violence
  • This has resulted in a massive security crackdown and an extensive state surveillance programme, which critics say violate Uighur human rights. China says such measures are necessary to combat separatism and terrorism
  • Uighurs have been detained at camps where allegations of torture, forced labour and sexual abuse have emerged. China has denied these claims saying the camps are "re-education" facilities aimed at uplifting Uighurs from poverty.

Mar 4, 2021

News | Economy | China: China sets a Conservative Economic Growth At 6% For the Year

China Sets Conservative Economic Growth Target of Above 6%

Bloomberg News

Beijing Gears Up for the Annual National People's Congress

Photographer: Qilai Shen/Bloomberg

China set a conservative economic growth target of above 6% for the year, well below what economists forecast, and outlined ongoing fiscal support to keep the recovery going.

The government will narrow the budget deficit to 3.2% of gross domestic product this year, Premier Li Keqiang said Friday at the opening of the National People’s Congress. While that’s lower than last year’s 3.6% of GDP, it’s above the 3% expected by many analysts, signaling Beijing still sees a need for expanded fiscal policy to support growth this year.


Xi Jinping, left, and Li Keqiang arrive for the opening session of the National People’s Congress (NPC) at the Great Hall of the People in Beijing on March 5.

Photographer: Leo Ramirez/AFP/Getty Images

“In 2021, China will continue to face many development risks and challenges, but the economic fundamentals that will sustain long-term growth remain unchanged,” said Li. “A target of over 6% will enable all of us to devote full energy to promoting reform, innovation, and high-quality development.”

Rebound in China

One of the few v-shaped recoveries globally

Source: National Bureau of Statistics

China’s economy was the only major one in the world to expand last year, aided by the central bank’s injections of liquidity to support businesses, extra fiscal spending on infrastructure and the quick control of coronavirus outbreaks domestically. Economists predict the economy will expand 8.4% this year, partly due to the low base from 2020.

“The tone is very conservative,” said Raymond Yeung, chief economist for Greater China at Australia and New Zealand Banking Group in Hong Kong. The fiscal targets suggest “2021 is a year of tapering.”

China’s CSI 300 Index of stocks fell as much as 2%, poised to enter a technical correction, before paring. Traders blamed the initial losses on a global rout overnight, rather than any negative headlines out of the NPC. China’s government bonds were little changed, while the onshore yuan weakened less than 0.1%.

NPC Targets20202021
GDP growthNoneover 6%
CPIaround 3.5%around 3%
Fiscal deficit (% of GDP)over 3.6%around 3.2%
Special local government bond quota3.75 trillion yuan3.65 trillion yuan
Anti-virus special sovereign bond quota1 trillion yuannone
New urban job creationover 9 millionover 11 million
Surveyed jobless ratearound 6%around 5.5%

The quota for local government bond sales is higher than the 3.5 trillion yuan forecast by analysts as the government continues to pursue proactive fiscal policy. On monetary policy, the government reiterated that it would be prudent, and would keep the yuan basically stable at a reasonable level.

China’s V-shaped recovery alongside a recession in the U.S. and elsewhere puts it on course to become the world’s largest economy by 2028, two years earlier than expected, according to projections by several banks including Nomura Holdings Inc.

What Bloomberg Economics Says...

This is a low bar for this year. Bloomberg Economics forecasts GDP will expand 8.2% this year, reflecting continued progress in the recovery and a low base of comparison last year, when growth slumped to 2.3%.

-- Chang Shu, chief Asia economist

For the full report, click here

Alongside that recovery has been a build-up in debt and worries about asset bubbles, fueling expectations that policy makers will withdraw the monetary and fiscal stimulus unleashed during the pandemic last year.

This year’s meeting of the NPC, China’s main legislature, has added significance because of the release of a new five-year plan covering 2021-2025. Some of the key goals already outlined include strengthening consumer demand, investing in hi-tech industries, and addressing long-term challenges such as an aging population.

— With assistance by Tom Hancock, Lucille Liu, Lin Zhu, Yujing Liu, and Sofia Horta e Costa

(Updates with comment from economist and market reaction)

    Nov 11, 2020

    News | Business | China: China to clamp down on internet giants


    3-4 minutes - Source: BBC

    Alibaba buildingimage copyrightGetty Images

    China has proposed new regulations aimed at curbing the power of its biggest internet companies.

    The regulations suggest increasing unease in Beijing with the growing influence of digital platforms.

    The new rules could affect homegrown tech giants like Alibaba, Ant Group and Tencent, as well as food delivery platform Meituan.

    The move comes as the EU and the US are also seeking to curb the power of internet giants.

    Chinese tech shares were sharply lower after the proposed regulations were released on Tuesday.

    The news came as and Alibaba were gearing up for Singles Day, the annual online sale which is their biggest day of the year.

    The sell-off continued on Wednesday, with Alibaba,, Tencent, Xiaomi and Meituan all heading lower, shedding more than $200bn (£150bn) from their combined value.

    What do the rules do?

    The 22-page draft by the State Administration for Market Regulation (SAMR) will for the first attempt to define anti-competitive behaviour for the tech sector.

    The new rules will attempt to stop companies from sharing sensitive consumer data, teaming up to squeeze out smaller rivals and selling at a loss to eliminate competitors.

    They would also clamp down on platforms forcing businesses into exclusive arrangements, something which Alibaba has been accused of by merchants and competitors.

    The regulations will also take aim at companies that treat customers differently based on their data and spending habits.

    The SAMR is seeking reviews and feedback from the public on the antitrust guidelines until the end of the month.

    How dominant are these companies?

    Alibaba and dominate the online retail market in China, together accounting for roughly three-quarters of Chinese ecommerce.

    As of September, Alibaba boasted 881m mobile monthly active users - more than half of China's population.

    Beijing has separately raised concerns about Alibaba's affiliate company Ant Group, which pulled its stock market launch last week after regulators raised concerns over the increasing power of online lenders and how they might affect the broader financial system.

    The share market offering was supposed to be the world's largest.

    Ant has around 1.3bn users, mostly in China, where it runs Alipay, the country's dominant digital payment system.

    Tencent, which has a competing payment system and is also the world's largest gaming company, could also come in for scrutiny.

    A global trend?

    If the Chinese authorities have concerns about the explosive growth of some internet platforms, they aren't alone.

    The European Union has announced antitrust charges against Amazon, which it accuses of abusing its market power in Germany and France.

    Warehouse worker in China.image copyrightGetty Images

    Meanwhile, US authorities are taking action against Google's dominance as an internet search engine.

    The US Department of Justice has described the tech giant as a "monopoly gatekeeper of the internet".

    It's the biggest antitrust suit in the US since a case against Microsoft in the late 1990s.  

    Nov 10, 2020

    News | Business | China: China's pork prices drop for the first time in more than a year as shortage eases


    Evelyn Cheng

    Breeders feed piglets at a pig farm on May 12, 2020 in Bijie, Guizhou Province of China.

    Breeders feed piglets at a pig farm on May 12, 2020 in Bijie, Guizhou Province of China.

    Deng Gang | Visual China Group | Getty Images

    BEIJING — Prices of pork in China fell for the first time in more than a year, after months of surging prices for the country’s most popular meat.

    Pork prices fell 2.8% in October from a year ago, China’s National Bureau of Statistics said Tuesday. The drop was the first since February 2019, or more than a year-and-a-half ago.

    Prices doubled last fall and continued their rapid rise into this spring as African swine fever killed swaths of pig herds in China. The pace of increase began to slow in the last few months.

    Bruce Pang, head of macro and strategy research at China Renaissance, said Tuesday that the decline in prices was due to an increase in the supply of live pigs, and that he expects further year-on-year declines in pork prices in the current quarter.

    Overall inflation in China as measured by the consumer price index is likely to decline, Pang said.

    The consumer price index rose 0.5% in October from a year ago, the statistics bureau said. Overall food prices climbed 2.2%, with fresh vegetable prices rising 16.7%. Beef and lamb prices also rose, up 7% and 3.6%, respectively.

    Looking ahead, China’s pork supply is set to recover further from the recent shortage.

    Zhao Guangyu, agriculture goods analyst at Nanhua Futures, said the stock of reproductive sows has entered a period of “accelerated recovery,” according to CNBC’s translation of a Chinese-language statement.

    Zhao expects imports of pork and central government auctions of meat from its frozen reserves to continue their increase through the end of this year, adding to supply while consumption demand remains steady.

    For the first three quarters of the year, China’s imports of pork more than doubled from a year ago, the national customs agency said last month.

    However, that growth is set to fade.

    In China’s plans for the next five years, the central Chinese government has specifically stated that ensuring national food security will be a priority. That would reduce China’s reliance on agriculture imports from countries such as the U.S. and Australia, with whom Beijing’s relations have become tense

    “After a torrid pace in 2020, China pork imports are forecast down 6 percent (in 2021) due to the rebound in domestic production,” the U.S. Department of Agriculture Foreign Agricultural Service said in a quarterly report dated Oct. 9. The agency predicts a 9% increase in Chinese pork production, but notes it will still be nearly 25% lower than prior to the disease outbreak.

    Imports will account for only about 11% of Chinese pork consumption this year, according to data from the USDA Foreign Agricultural Service.

    The report said U.S. pork exports next year will likely remain about the same, at 3.3 million tons as growth in Mexico, Japan and other markets offset weaker demand from China.

    Oct 26, 2020

    News | Business | China: China's top leaders meet this week to plan for the next five years. Here's what to expect


    Evelyn Cheng

    People wearing masks pass by portraits of Chinese President Xi Jinping and late Chinese chairman Mao Zedong as the country is hit by an outbreak of the novel coronavirus, on a street in Shanghai, China February 10, 2020.

    People wearing masks pass by portraits of Chinese President Xi Jinping and late Chinese chairman Mao Zedong as the country is hit by an outbreak of the novel coronavirus, on a street in Shanghai, China February 10, 2020.

    Aly Song | Reuters

    BEIJING — Chinese President Xi Jinping is about to deepen his mark on what could soon be the world’s largest economy.

    The central committee of China’s ruling Communist Party, led by Xi, is set to meet in Beijing from Oct. 26 to 29 to discuss a proposal for national development for the next five years — from 2021 to 2025.

    The government sets these economic and social priorities every five years — this year’s discussion is the 14th such plan.

    With the global turbulence caused by the coronavirus pandemic and rising U.S.-China tensions, the meeting will be launched at a particularly critical time for the Asian nation. Economists predict the country will firmly become the world’s largest economy in the next few years.

    For Xi, the next half decade and beyond builds on eight years in which he abolished term limits and consolidated political power.

    One of the key milestones ahead is the 100th anniversary of the Chinese Communist Party in 2021 — authorities have pledged to build a “moderately prosperous society” by next year. Then in 2022, the 20th Congress of the Chinese Communist Party will shed light on Xi’s future leadership plans.

    There are many more dates ahead that the authoritarian government has named for development goals. They include the “Made in China 2025” plan to dominate in high-tech and key manufacturing areas, and “China Standards 2035” for global specifications on leading technology.

    The final text of the upcoming five-year plan is due for release next year at the National People’s Congress typically held in March.

    “One thing I think will stand out is the supply chain security,” Dan Wang, Shanghai-based chief economist at Hang Seng China, told CNBC in a phone interview.

    “I think there will be some major adjustments because this 14th five-year plan is a long-term plan. It’s not an emergency plan,” Wang said. “It will drive some of the long term issues. Now with some of the U.S. competition, there will be a lot of stress on strengthening those sectors related to national security and basic livelihood of (the) people.”

    Self-reliance and security

    Following years of criticism that state-dominated China has unfairly taken advantage of global markets, U.S. President Donald Trump’s administration has taken a tougher stance on Beijing that many expect will continue in some form — even if Democratic nominee Joe Biden becomes president next year. Trump has pressured China to buy more American goods, while hampering Beijing’s technological advancement with restrictions on companies such as Chinese telecommunications giant Huawei.

    The uncertainty of whether Chinese tech firms can continue to collaborate with U.S. companies is accelerating Beijing’s efforts to ensure future technological prowess.

    In a speech earlier this month, Xi talked up support for quantum mechanics, which can drive the development of supercomputers which have processing abilities that far exceed current systems.

    With national security in mind, Yue Su, principal economist at The Economist Intelligence Unit (EIU), expects the five-year plan to stress support for technology such as semiconductors. She also anticipates the plan will discuss building resilience in energy security rather than relying on petroleum imports, and ensuring food security in the face of trade tensions with agriculture-producing countries and a shortage in pork, a staple in Chinese households.

    From a social perspective, Su expects China to find more ways to boost consumption, including abolishing limits on the number of children families can have.

    “I would put it at the top (of) the topics to be watched,” she said, noting such a move would help China’s medium- to long-term growth.

    Turning to the domestic opportunity

    China’s economic growth has slowed in the last few years, amid concerns about fast-paced growth fueled by debt. Under the 13th five-year plan, which outlined the government priorities from 2016 to 2020, China moved incrementally to relying more on consumption for growth rather than exports.

    In the last several months, public officials have talked up a new phrase that is expected to underpin the plan for the next five years, a concept they refer to as “dual circulation.” It is broadly split into two parts: “internal circulation” focused on growing China’s domestic market, and “external circulation” — or trade with other countries.

    “The 14th five-year plan isn’t just about the next five years, but the next 30 years,” said Qin Gang, founder of YaSong (Ode & Song) City Strategy and a consultant for many real estate development projects. That’s according to a CNBC translation of his Mandarin-language remarks.

    In the next five years, China will really emphasize high-quality growth, so the speed might not be as great as before.

    Zong Liang

    chief researcher at the Bank of China

    Given its recent economic success, “China has greater confidence on what it thinks is important,” Qin said, noting that the country does still have a long way in allowing market forces to play a greater role in the business environment. “The 14th five-year plan is primarily overall to satisfy China’s domestic demand.”

    With the greater focus on China’s home market, analysts generally anticipate the forthcoming development plan will provide greater support for public health, education, sports and culture and tourism.

    “In the next five years, China will really emphasize high-quality growth, so the speed might not be as great as before,” Zong Liang, chief researcher at the Bank of China, said in a Mandarin-language interview.

    He said the next five years will be critical for China to boost its economy to a new level and escape the so-called middle-income trap. The term refers to an economic theory in which a country is able to grow quickly for a time based on cheap labor costs, but fails to innovate quickly enough to sustain higher wages and greater growth opportunities.

    Foreign businesses are already moving to capture China’s hundreds of millions of middle-class consumers.

    Xi has also stated that opening the Chinese market further to foreigners and improving the local operating environment remain national goals, even if critics say the pace is too slow.

    Analysts anticipate the latest five-year plan will cover topics such as expanding the growth of existing urban centers and other goals aimed at keeping a population of 1.4 billion largely content with their quality of life under the current government.

    “Another way of interpreting the living standards is trying to let the people to enjoy or have (a) better environment,” said Cui Jingbo, associate professor of applied economics at Duke Kunshan University. He expects authorities to encourage the use of more renewable energy rather than rely on fossil fuel.

    Last month, Xi said in a speech at the United Nations that China plans to be carbon neutral by 2060.

    Oct 13, 2020

    News | Business | Digital Currency | China: Shenzhen residents embrace digital currency


    3 minutes - Source: BBC

    Hands holding Yuan Image copyright Getty Images

    China's central bank has issued 10 million yuan ($1.5m; £1.1m) worth of digital currency to 50,000 people in the Shenzhen area via a lottery.

    The move is the latest in a series of trials testing out China's new Digital Currency Electronic Payment (DCEP).

    Those who were successful received digital "red packets" worth about 200 yuan, which they could download and spend at more than 3,000 stores.

    Nearly two million people signed up to take part in the lottery.

    The People's Bank of China (PBOC) says it plans to launch DCEP later this year, although it is yet to set a date.

    In April, it was conducting tests in four cities across China, and intends to pilot the system at future Winter Olympics venues.

    Cashless society

    The DCEP is not a crypto-currency. Instead it is a digital version of China's official currency the yuan, which is issued and backed by the central bank.

    It is part of China's push for a cashless society, a process which is already well advanced.

    Surveys show roughly four out of every five payments in China are made through Tencent's WeChat Pay or Alibaba's Alipay.

    Data from the People's Bank of China showed that in 2019, banks handled non-cash mobile payments of $49.27 trillion, an increase of more than 25% over the previous year.

    China aspires to be a leader on digital currencies.

    A commentary published by PBOC last month said China needs to become the first nation to issue a digital currency in its push to internationalise the yuan and reduce its dependence on the global dollar payment system.

    The digital currency race

    This latest test comes as central banks worldwide grapple with the potential rise of digital currencies and how they should be managed.

    Earlier this month, a group of seven central banks, including the Federal Reserve and the Bank for International Settlements (BIS), published a report laying out guiding principles for central bank-issued digital currencies.

    At least 17 governments are considering or testing out some form of digital currency, according to an BIS report issued in March.

    In addition to national governments, private companies are also looking at the concept.

    Facebook was forced to rethink its plans for a digital currency, named Libra, after a number of regulators and governments expressed concern over the projec

    Aug 27, 2020

    News | Business | Air Travel | China: Flights in China to 'fully recover' next month

    3-4 minutes - Source: BBC

    Flights within China are predicted to fully recover by the start of next month. Image copyright Getty Images
    Flights within China should fully recover by the start of next month according to a global travel data firm.
    Air travel has been picking up gradually since the coronavirus grounded the majority of planes in February.
    This month domestic arrivals at Chinese airports reached 86% of 2019 levels according to figures from ForwardKeys.
    Its prediction is a glimmer of hope for the airline industry which is suffering mass layoffs and losses.
    By mid-February the majority of flights within China were cancelled as it took measures to control the spread of the virus.
    As virus cases reduced, more flights were re-instated and bookings are now back to 98%, with most being for travel in mid to late August.
    "This is a highly significant moment because it is the first time, since the start of the Covid-19 outbreak, that a major segment of the aviation market anywhere in the world has returned to pre-pandemic levels," said Olivier Ponti at ForwardKeys.
    Its forecast that domestic flights will fully recover by early September is based on a number of factors, such as keeping the pandemic under control and the continued use of "aggressive price promotions".
    Many Chinese airlines have launched discounts to entice passengers back, with some promotions targeted at university students.
    Travel to Sanya, the holiday hotspot in the South China Sea, has seen strong recovery helped by a new duty-free policy.
    "The crunch question is whether heavy discounting will still be needed to maintain the recovery," added Mr Ponti.
    "China's advantage is that they have a huge domestic hinterland, and they have a strong domestic tourism market, which can help the Chinese carriers mitigate any impact," added Alfred Chua at FlightGlobal magazine.
    However, Chinese travel to Beijing is still 24.8% behind the same period in 2019, held back by the city's second coronavirus outbreak in early June.

    International flights

    The recovery in domestic air travel in China is one positive development in an otherwise bleak outlook for the aviation industry. But international flights are not expected to fully recover for many years.
    The International Air Transport Association, a global industry group, has warned global passenger numbers will not return to pre-virus levels until 2024, a year later than previously projected.
    The recovery in short haul travel is still expected to happen faster than for long haul travel it said, as travel bubbles are established between countries.
    Earlier this week, American Airlines said it will cut 19,000 jobs in October when a government wage support scheme extended to airlines during the pandemic comes to an end.
    The world's biggest airline said the cuts would leave its workforce 30% smaller than it was in March.
    Other carriers have also warned of similarly large cuts amid a severe slump in air travel which is expected to see losses of more than $84bn (£66bn) this year.
    "At least for the rest of the year, I think we will see two very distinct patterns: domestic will be recovering very quickly, with international networks still very weak," added Mr Chua.

    Aug 26, 2020

    News | Politics | China: Hong Kong pro-democracy lawmakers arrested

    3-4 minutes - Source: BBC

    Lam Cheuk-ting and Ted Hui Chi-fung (file photo) Image copyright Getty Images
    Image caption Lam Cheuk-ting (left) and Ted Hui Chi-fung were arrested at home in the early hours
    Two Hong Kong opposition lawmakers are among 16 people arrested over anti-government protests, as a crackdown on democracy supporters widens.
    Lam Cheuk-ting and Ted Hui Chi-fung from the Democratic Party were arrested at their homes on Wednesday morning.
    Mr Lam is accused of rioting over a July 2019 incident when masked men attacked protesters after a rally.
    He was one of dozens injured in the attack, where police were accused of failing to protect democracy activists.
    A police source told the BBC that a total of 16 people, including the two lawmakers, had been arrested in the operation on Wednesday.
    These latest arrests come two weeks after police arrested media tycoon and vocal Beijing critic Jimmy Lai under a controversial national security law that China recently imposed on Hong Kong.
    Mr Lai was paraded through his Apple Daily newsroom in handcuffs as some 200 police raided the office as part of an operation that also saw nine other activists arrested, including Agnes Chow, a prominent youth activist.

    Accusations over earlier protests

    The verified Facebook pages of the two opposition politicians - both critics of Beijing - confirmed their arrests on Wednesday.
    A tweet from Mr Lam's team said he was accused of rioting at Yuen Long train station on 21 July last year.
    It added that police also accused him of conspiring to damage property and obstruction of justice on 6 July last year.
    Mr Hui's office released video footage of his arrest, reported AFP, where officers said they were charging him with attempted obstruction of justice, access to a computer with criminal or dishonest intent and criminal damage over the 6 July protest.
    The violent attack on pro-democracy protesters returning home from the 21 July rally, at a train station in Yuen Long in north-west Hong Kong, was captured by victims and bystanders on mobile phones.

    Media captionA large group of masked men in white T-shirts stormed Yuen Long station
    The footage, which went viral on social media, showed groups of men dressed in white shirts and suspected to be triad gangsters beating passengers with rods.
    Police were late to arrive on the scene and the incident contributed to growing mistrust of the force at a time Hong Kong was faced with widespread protests.
    Police have so far arrested 44 people on suspicion of involvement in the Yuen Long mob attack, seven of whom have been charged with rioting, according to Reuters.
    On Wednesday, Twitter users reacted with outrage at Mr Lam's arrest.
    "We know you were protecting citizens on the train on that day," wrote one. Another posted that the move kept "the actual instigators at large".

    Aug 17, 2020

    News | Business | Asia | China: China and trade: Breaking up is hard to do

    By Karishma Vaswani 

    Woman works at medal-maker Royal Insignia Image copyright Royal Insignia
    There's an old adage in Asian business circles: when China sneezes, Asia catches a cold. So imagine what happens during a pandemic.
    When China locked down, supply chains around the region were hit and companies couldn't get access to raw materials and products.
    Nothing escaped the reach of the coronavirus crisis, not even the tiniest artefact, as speciality crafts studio Royal Insignia found out.
    For decades, the fine craft studio has made medals and jewellery for the who's who in South East Asian royalty.
    But coronavirus closed down borders and that meant the company couldn't meet customer orders.
    Royal Insignia sources its precious metals from Italy and its gift boxes from China.
    General manager Lin Yiqun says it was a double whammy - lockdowns in both countries meant the company couldn't get any of its supplies.
    "The important lesson for us to learn here was you need to have an alternate source for supply chains," he said.

    "If this thing is going to hit us again, how do we respond to that? For packaging materials, we definitely are looking at other suppliers."
    Although Royal Insignia has invested in automation, most of its precious products are made painstakingly by hand.
    It only keeps just the right amount of raw materials for production, meaning it didn't have extra stock lying around.

    Wake-up call

    For Royal Insignia and other companies around the world, the pandemic caused a massive disruption in global trade. It was a huge wake-up call.
    It taught them a valuable lesson that depending on one country all the time for everything is bad for business.
    That lesson is starting to have a real-world impact.
    A recent survey by supply chain management firm QIMA showed that 95% of US companies questioned said they would diversify suppliers both in and out of China.
    But even with the pandemic and the continuing trade war between the US and China, a complete break is tough.
    Some 87% of the companies surveyed still said the mainland is one of their top three sourcing destinations.
    It is not just US firms having that realisation, and neither is it just because of how deep the supply chains are in China.
    "China responded to the virus in a different manner to how other countries responded," said Steven Lynch, chief executive of the British Chamber of Commerce in China."The one thing they did was reassure and gave businesses confidence to reopen."

    He said: "Companies who have supply chains and manufacturing operations here, [China] very quickly gave tax incentives and support to businesses to reassure them of their investments."
    Meanwhile, China's appetite for high-tech goods is growing when other countries are cutting back.
    For Taiwanese firm Advantech, which makes industrial computers, China makes up almost a quarter of its business.
    Advantech founder Chaney Ho said China was its second-biggest market: "From a business point of view, we cannot just give up this market."
    He said: "China is still doing a lot of infrastructural expansion for 5G and high-speed train subway infrastructure. It requires a lot of industrial computers.
    "This is not just good for Advantech, but also for a lot of other European companies too."
    China has gone from being the world's supplier to also becoming one of the world's most important customers.
    It's the only economy that's likely to grow this year.
    Global trade has been defined by China in the last few decades - and that's not going to change any time soon.

    Jul 28, 2020

    News | Business | China: Hong Kong's new tech index up 3.5% on the second day of trade

    Saheli Roy Choudhury

    From left, the flags of the Hong Kong Stock Exchange, China and Hong Kong are seen flapping in the wind on May 6, 2019.
    From left, the flags of the Hong Kong Stock Exchange, China and Hong Kong are seen flapping in the wind on May 6, 2019.
    Anthony Wallace | AFP | Getty Images

    Hong Kong’s new tech index rose on its second day of trading as experts said its diverse list of constituents will be attractive for traders looking to invest across the sector.
    The Hang Seng Tech Index rose 3.51%, beating the broader Hang Seng index which traded up 0.69%.
    “It’s a really good, I think, list of constituents across multiple slices of the tech sector,” said Sam Le Cornu, CEO and co-founder of Stonehorn Global Partners.
    The tech index was launched on Monday and tracks the 30 largest technology companies listed in Hong Kong that pass the screening criteria.
    Tech shares are some of the top traded stocks in Hong Kong. The new index trades at about 45 times earnings, versus the Hang Seng Composite Index’s price-to-earnings ratio of 12, according to data published by Hang Seng Indexes Company before the new index’s first day of trading.
    The top five firms listed on the index are Alibaba, Tencent, Meituan Dianping, Xiaomi and Sunny Optical, which had a combined weight of more than 40% as of July 17. Others include Ali Health,, Lenovo, Ping An Good Doctor and ZTE.
    “So, it’s not just hardware, you’ve also got some insurance in there, you’ve got some cloud computing, you’ve got fintech, e-commerce, you have got a really nice slice. The only thing it doesn’t have, I think, is renewable tech. So, it doesn’t have batteries in there,” Le Cornu said on CNBC’s “Squawk Box Asia” on Tuesday. 
    “Apart from that, it’s a really interesting tech index and I think it will be one which would be followed very closely,” he added. 
    Analysts at Citi said interest in the new index may draw some attention away from the tech-heavy Nasdaq in the U.S. and could lead to more turnover at the stock market operator, Hong Kong Exchanges and Clearing, with “more related index linked products” that could be issued.
    The index’s constituents will be reviewed quarterly and a fast-entry rule could allow significant tech companies that go public in Hong Kong to be included if they meet certain requirements. That implies when fintech giant and Alibaba affiliate Ant Group goes public, it could potentially be added to the index.
    Ant Group is preparing a dual listing in Hong Kong as well as on the Shanghai Stock Exchange’s tech-focused STAR board. Though details on the pricing of shares are not yet available, some analysts are predicting a mammoth valuation that could top that of some of Wall Street’s biggest banks. 
    Le Cornu pointed out that alongside Ant Group, other U.S.-listed Chinese tech companies that may either return to Hong Kong or do secondary listings there could also potentially be added to the index under the fast-entry rule.
    Rising U.S.-China tensions have prompted some Chinese companies listed on Wall Street to return to Hong Kong. For example, the likes of Alibaba, and NetEase have carried out secondary listings there. More could follow if a U.S. bill that may force Chinese companies to delist from U.S. stock exchanges is passed.
    Jonathan Garner, managing director and chief Asia and emerging market equity strategist at Morgan Stanley, said the new tech index is important.
    “When we actually look at the development of the markets here, those intra-regional flows, particularly the north and south bound channels in and out of China are very important for the future evolution of the markets here,” he said on CNBC’s “Squawk Box Asia” on Tuesday.
    Garner added that while the American depositary receipt (ADR) market, which is used by Chinese companies to list and trade in the U.S., is likely to diminish in relevance, these new indices are “clearly offering a product suite that is going to be part of the market’s development out here in Asia.”

    Jul 1, 2020

    News | Politics | China: HK arrests dozens as 'anti-protest' law kicks in.

    8-10 minutes - Source: BBC

    Small protests took place on Wednesday morning Image copyright EPA
    Image caption Small protests took place on Wednesday morning
    Dozens of people have been arrested in Hong Kong, including a man carrying a pro-independence flag, after a new "anti-protest" law imposed by Beijing came into effect, officials say.
    Police have used pepper spray to disperse some protesters gathered to mark 23 years since British rule ended.
    The national security law targets secession, subversion and terrorism with punishments up to life in prison.
    Critics say it stops some freedoms meant to be guaranteed by China.
    Hong Kong's sovereignty was handed back to China by Britain in 1997, under an agreement designed to protect certain freedoms for at least 50 years.
    The annual pro-democracy march to mark the anniversary had been banned for the first time by authorities, who cited a bar on gatherings of more than 50 people because of Covid-19.
    Police confronted a small group of demonstrators gathered in the city centre and at least 30 people were arrested for "unlawful assembly, violating the security law, obstructing police and possession of weapons".
    Those arrested included a man carrying a "Hong Kong Independence" flag - protesters have been warned certain slogans and banners might constitute serious crimes under the new law.
    Earlier, Chief Executive Carrie Lam, the city's pro-Beijing leader, said the law would "restore stability" after widespread protests in 2019, saying: "The [new law] is considered the most important development in relations between the central government and Hong Kong since the handover."
    The legislation has been widely condemned by countries including the US and UK as well as human rights activists and groups. US Secretary of State Mike Pompeo said: "[China] promised 50 years of freedom to the Hong Kong people, and gave them only 23."
    But one Chinese official bristled at foreign critics, asking them: "What's this got to do with you?"
    "We Chinese will not be scared by anyone," said Zhang Xiaming of the Hong Kong and Macau Affairs office of the State Council. "Gone are the days when we had to take cues from others."

    Hong Kong's new security law

    What is happening on the anniversary?

    Some pro-democracy activists have pledged to defy the ban and march later in the afternoon. "We march every year... and we will keep on marching," veteran Leung Kwok-hung told Reuters.
    Photos on social media - confirmed by police as genuine - showed a flag being used to warn protesters about the new law.
    Image copyright Twitter
    One pro-democracy activist warned there was a "large chance of our being arrested".
    "The charges will not be light, please judge for yourself," said Tsang Kin-shing of the League of Social Democrats.
    Police officers in the city are on standby, insiders told the South China Morning Post. They said around 4,000 officers were poised to handle any unrest.

    What does the new law say?

    Under the new law, crimes of secession, subversion, terrorism and collusion with foreign forces are punishable by a minimum sentence of three years, with the maximum being life.
    Protesters often targeted city infrastructure during the 2019 protests, and under the new law, damaging public transport facilities can be considered terrorism.
    Beijing will also establish a new security office in Hong Kong, with its own law enforcement personnel - neither of which would come under the local authority's jurisdiction.
    Inciting hatred of China's central government and Hong Kong's regional government are now offences under Article 29.
    The law can also be broken from abroad by non-residents, under Article 38. This could mean that foreigners could be arrested if they step into Hong Kong, if they are suspected of breaking the new law.
    Some critics feared the law would apply retroactively - that is, to offences committed before the law was passed - but Mr Zhang said that would not be the case.
    He added that suspects arrested in Hong Kong on charges of violating the law may be tried on the mainland.

    Activists go quiet

    Under the national security law, many of the acts of protest that have rocked Hong Kong over the past year could now be classed as subversion or secession… and punished with up to life in prison.
    Carrie Lam said the law was long overdue. Political activists have resigned and one pro-democracy protester, who asked to remain anonymous, told me that ordinary people were now deleting posts on social media.
    Many people are just stopping talking about politics, and stopping talking about freedom and democracy, because they want to save their own lives. They want to save their freedom and avoid being arrested.
    One contact of mine, a lawyer and human rights activist, sent me a message shortly after the law was passed. Please delete everything on this chat, he wrote

    What reaction has the new law drawn?

    Mr Pompeo said the "draconian" law "destroyed Hong Kong's autonomy".
    "Hong Kong demonstrated to the world what a free Chinese people could achieve - one of the most successful economies and vibrant societies in the world," he said.
    "But Beijing's paranoia and fear of its own people's aspirations have led it to eviscerate the very foundation of the territory's success."
    Meanwhile, Canada has updated its Hong Kong travel advice, saying: "You may be at increased risk of arbitrary detention on national security grounds and possible extradition to mainland China."

    Media playback is unsupported on your device
    Media captionAi Weiwei: "Today is the darkest day for Hong Kong"
    Minutes after the law was passed on Tuesday, pro-democracy activists began to quit, fearful of the punishment the new law allows.
    "With sweeping powers and ill-defined law, the city will turn into a secret police state," said Joshua Wong, a key pro-democracy leader.
    The political party he co-founded - Demosisto - was also disbanded.
    One opposition legislator told the BBC the move had taken away the city's rights.
    "Our freedom is gone, our rule of law, our judicial independence is gone," said Ted Hui.

    Media playback is unsupported on your device
    Media captionJimmy Lai: China's security law 'spells the death knell for Hong Kong'
    In the US, lawmakers from both parties have launched a bill to give refugee status to Hong Kong residents at risk of persecution, reported local media outlets.
    Taiwan's government has said it will set up a special office to help those in Hong Kong facing immediate political risks.

    Jun 22, 2020

    News | Business | Tech | China: China has a 15-year plan to shape the future of tech. But some call it hype

    Arjun Kharpal

    4-5 minutes - Source: CNBC

    Chinese President Xi Jinping
    Chinese President Xi Jinping
    Aris Messinis | Pool | Reuters

    A major plan that will form part of China’s global technology push has been dubbed as hype and will face a number of challenges, a technology industry body told CNBC.
    China Standards 2035 is an ambitious 15-year blueprint that Beijing is expected to release this year. It will lay out China’s plans to set the global standards for the next-generation of technologies.
    Standards have been crucial for the development of technologies we use today such as 4G mobile networks or Wi-Fi. They are technical specifications that not only outline how technologies work but also interoperability. Standards are part of the reason why you can go abroad and still use mobile networks.
    Typically, the development of standards have been dominated by U.S. and European companies and experts. But with China Standards 2035, Beijing is pushing domestic firms and experts to be part of the global effort to set standards for next-generation technologies.
    “This is an ambition to set the rules for the future world, especially the technological rules as we enter into a new technological era. China Standards 2035 is the industrial plan that operationalizes this strategy,” Emily de La Bruyere, co-founder of consultancy Horizon Advisory, told CNBC’s “Beyond The Valley” podcast.
    And what would be the significance of that?
    “The short answer is we have a world operating according to Chinese rules and those rules hold in both the virtual and real domains,” Bruyere explained. “What that means is China has this inherent industrial competitive advantage. It also has an inherent information advantage, which both mean Beijing is able to collect better information on the world with security and with commercial implications, but also that it’s able to shape that information.”
    China’s State Council did not respond to a request for comment when contacted by CNBC. 

    ‘Game day pep talk’

    But China’s attempts will face challenges and the big plan may not be all that it is being hyped up to be, according to Naomi Wilson, senior director of policy for Asia at the Information Technology Industry Council (ITI). The U.S.-based industry body counts major technology firms among its members.
    Wilson said that China has released a number of strategic plans over the years and this is the latest one targeted at domestic companies and experts.
    “The intended audience is the Chinese populus, in this case Chinese companies and Chinese technical experts. So it’s really meant to be a little bit more effusive and kind of have the tone of almost like a game day pep talk,” Wilson told CNBC’s “Beyond The Valley” podcast.
    “China will likely play an increasingly important role as their companies develop. The standards process and standards development doesn’t operate in a vacuum and it’s not the be all end all of technological competitiveness either. It’s one stage in the process. It’s an important stage, but it’s not an opportunity to sort of carte blanche rewrite the rules for technology’s future.”
    Standards are set by industry bodies. Usually, many companies and experts in a field come together to come up with what those look like. They offer suggestions and then over the years those are refined to formulate a final set of rules around a particular technology. Wilson argued that this process means that it would be tough for China to come in and dominate the process.
    “These fora are rules-based, consensus-based, industry-driven fora, that really have these ... long-established procedures in place to prevent that type of undue influence,” she said.
    “And they (Chinese firms and experts) can propose any number of contributions that they like as other companies do, and the process really is intended to weed out the bad or the insufficient contributions in favor of the contributions that are the most appropriate for the current technology and for the consumer needs.”

    Jun 18, 2020

    News | Coronavirus | China:Why China's virus spike caused a salmon panic

    5-6 minutes - Source: BBC

    Salmon Image copyright Getty Images
    Beijing has in the past week seen a spike of Covid-19 cases - almost all of which have been linked to a huge wholesale food market.
    State media said the virus was discovered on chopping boards used for imported salmon at the Xinfadi market - sparking fears across the country.
    Supermarkets and restaurants across Beijing hurried to pull salmon from their shelves, and imports from Europe were halted.
    On Wednesday it was announced that a 22-year-old man - known to have occasionally cleaned frozen seafood - had tested positive for the virus in Tianjin, near Beijing.
    But China's Centre for Disease Control (CDC) said that it was unlikely that salmon carried the virus. So how and why did the panic emerge?

    What happened in the market?

    Last Thursday, Beijing reported its first virus case after 57 days without a locally-transmitted infection.
    Since then, almost 150 cases have been confirmed - almost all of which have been linked to the city's largest wholesale market.
    Xinfadi supplies 80% of Beijing's vegetables and meat and is used by tens of thousands of people a day.
    But unlike the market in Wuhan, there is no evidence of a wildlife trade in the Xinfadi market.
    Traces of the virus were found on a chopping board used by a seller of imported salmon, said reports.
    But some 40 samples from the market tested positive for the virus - some of which were not from chopping boards used to cut salmon, said a spokesman for Beijing's Municipal Health Commission.

    Could salmon be a host for the virus?

    It's very unlikely.
    An official at the Chinese Centre for Disease Control said there was no evidence that salmon was the host - or even an intermediate host - for the virus.
    Shi Guoqing, deputy director of the CDC's emergency response centre, said there was no trace of the virus on the salmon before it reached the market - suggesting the virus was present in the market, rather than in the salmon itself.
    And experts agree.
    "Viruses must rely on the viral receptor on the host cell surfaces to infect cells. Without the certain receptor they cannot enter into cells successfully," Cheng Gong, a virologist at Tsinghua University told CGTN.
    "All known evidence so far suggests this kind of receptors exist only in mammals, not fish."
    However, the CDC's chief epidemiologist, Wu Zunyou, said the fish could not catch the virus in their natural habitat - but added that it was possible they were contaminated by workers during their capture or transportation.
    Overall, it is still unclear what the original source of the virus is - or where it might have come from, though the WHO has said it cannot be transmitted through food and drink to humans.
    "Coronaviruses cannot multiply in food; they need an animal or human host to multiply," the global health body said in a document published on its website.
    It also said it was "highly unlikely" that it could spread through food packaging.

    Will this affect salmon imports worldwide?

    Media playback is unsupported on your device
    Media captionPaul Adams asks whether China is being bolder in the wake of the pandemic
    China imports about 80,000 tons of chilled and frozen salmon each year from countries like Chile, Norway, the Faroe Islands, Australia and China, according to the Global Times.
    The virus is not rampant in most of these countries - and Norway has said its salmon was not the source, after Norwegian salmon producers saw orders from China cancelled over the weekend.
    Other countries around the globe however, seem largely unfazed by the salmon speculation.
    Hong Kong's Centre for Food Safety confirmed that 16 samples of imported salmon from countries including Chile, Iceland and Denmark all tested negative for the virus.
    Long queues were also seen outside sushi restaurants in the city.
    Singapore's Food Agency has also said there was no evidence that the virus would be transmitted via food or even food packaging - though it said it would monitor "developments in this area". 

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