China Premier Li seeks to bolster his country’s economic outlook at the Shanghai export fair; Australia to 'work constructively' with China
The EU’s plan to regain its competitive edge; IPhone Maker Foxconn’s Sales Decline as China Begins Probe
Welcome to this issue of The China Brief. Today is November 5, 2023. Here at The China Brief, we bring you the latest news on China's politics, economy, and society from global media sources, along with exclusive expert analysis. If you find our content helpful, please subscribe to our newsletter.
China Premier Li seeks to bolster his country’s economic outlook at the Shanghai export fair
Associated Press
Chinese Premier Li Qiang has pledged to continue deepening reforms, expand free trade zones and relax market access for foreign investment while seeking to generate excitement around a largely lackluster economy. Li made the remarks when delivering a keynote speech at the opening of the 6th China International Import Expo in Shanghai. China’s economy expanded at a 4.9% annual pace between July-September, beating analysts’ forecasts of about 4.5%, official data show.
Australia to 'work constructively' with China, PM says
Deutsche Welle
Australian Prime Minister Anthony Albanese has become the first Australian leader to visit China in seven years. In a speech at the China International Import Expo in Shanghai, Albanese stressed the importance of constructive engagement with China and pledged to maintain a cooperative relationship. The visit focuses on trade discussions, including easing barriers that have impacted Australian exports and settling future trade disputes. China is Australia's largest export market, particularly for iron ore, natural gas, and critical minerals. Albanese also plans to raise human rights concerns, including the detention of Australian nationals, in meetings with Chinese leaders.
Japan's 'Buy one, give one' donor scheme takes off in Asia
Nikkei Asia
Japanese company, Landport, has launched a "Buy one, give one" initiative for its solar-powered lanterns. For every lantern purchased, one identical lantern is donated to a location without electricity, including refugee camps in Thailand. Landport's lantern sales have surged from 133 units in 2019 to an expected 16,000 units in 2020, due to an increase in customers looking for environmentally conscious products. The company also plans to expand its donation scheme to other locations and conduct regular study tours.
Hong Kong Leader Criticizes Proposed US Bill to Widen Sanctions
Bloomberg
Hong Kong's Chief Executive, John Lee, has condemned a bill proposed by US lawmakers that seeks to sanction officials, judges, and prosecutors in the city. The bipartisan bill calls on the Biden administration to impose sanctions on 49 individuals who are believed to be responsible for enforcing the Beijing-imposed National Security Law in Hong Kong. Lee and other Hong Kong officials were sanctioned by the US in 2020. The Hong Kong government and judiciary have both condemned the proposed bill, with Lee stating that he condemns it "in the strongest possible terms."
China pledges to expand market access at annual trade fair amid foreign criticism
Reuters
Chinese Premier Li Qiang has said that China will expand market access and increase imports, as the country seeks to open up its economy. Speaking at the annual China International Import Expo in Shanghai, Li stated that China's imports of goods and services are set to reach $17tn within the next five years. Li also promised to protect an international business environment and relax market access restrictions, including lifting restrictions on foreign investment in manufacturing. The statement comes amid criticism from European businesses who have called for more tangible improvements in China's business environment.
The EU’s plan to regain its competitive edge
Financial Times
The EU’s economy is faltering and losing ground to the US and China, prompting calls for a major overhaul of the single market to improve competitiveness. The European Commission has commissioned reports on the problem from former Italian prime ministers Mario Draghi and Enrico Letta. In her annual State of the Union speech, EU Commission President Ursula von der Leyen announced that Draghi would write a report on the state of EU competitiveness and how to improve it. Meanwhile, Letta is preparing a separate report on the state of the internal market. The next European Commission, which will take office in 2025, is expected to take on many of the recommendations made in the reports. The EU economy is 65% the size of the US economy in dollar terms, down from 91% in 2013. US GDP per capita is more than twice the size of the EU's.
The EU's competitiveness has been undermined by the long-term failure of the single market to operate effectively, exacerbated by crises such as the Covid-19 pandemic and Russia's war against Ukraine. Efforts to help Europe weather these crises have created further difficulties by creating medium-term risks. The outpouring of state aid and financial support from Brussels to European companies has changed the “level playing field” between countries and businesses, undermining the single market. The threat of the US's green subsidies has also led to a push for state support for Europe's green transition and low-carbon technologies.
The European Commission has defended its decisions on state aid on the grounds that the US’s green subsidies could prompt an exodus of European companies across the Atlantic if Europe cannot compete with the subsidies on offer from the US. However, critics argue that the state aid boom has frayed the single market, trampling on the safeguards put in place to protect poorer states with less fiscal firepower from the richer states that could otherwise give their national champions an unfair advantage.
‘Malicious, provocative’: China slams Canada over South China Sea mid-air encounter
South China Morning Post
China has accused Canada of "provocative" actions after a Canadian helicopter flew near the Paracel Islands in the South China Sea. China's defence ministry said that the PLA had identified the Canadian helicopter and issued repeated warnings, but that it "refused to respond" and took "provocative actions such as flying at ultra-low altitude". Beijing's response follows accusations by Ottawa that the Chinese air force engaged in "significantly unsafe" behaviour over international waters in the South China Sea on 29 October.
Hong Kong’s role as gateway for mainland firms to become more vital: John Lee
South China Morning Post
Hong Kong's Chief Executive, John Lee Ka-chiu, has highlighted the city's role as a gateway for mainland Chinese firms to expand globally. Speaking at the China International Import Expo in Shanghai, Lee urged mainland Chinese firms to take advantage of Hong Kong's "fast and convenient gateway" that offers unhindered access to the rest of the world. He pledged that Hong Kong would continue to provide world-class professional services, financing, and corporate solutions to firms. The number of mainland companies based in Hong Kong has increased by a third over the past four years.
China’s Sinopec signs second 27-year natural gas supply deal with Qatar
South China Morning Post
Qatar has signed a 27-year natural gas supply deal with Sinopec, the Chinese oil giant, as China looks to increase its energy security. Under the agreement, Qatar will supply Sinopec with 3 million tonnes of gas per year. This is the second deal between the two companies, with the first being signed in April. Qatar has been increasing its gas exports to Asian countries, including China, Japan and South Korea, since Russia's invasion of Ukraine last year.
Hong Kong’s Paul Chan says economic growth for 2023 to fall short of estimates
South China Morning Post
Hong Kong's finance chief, Paul Chan Mo-po, has said that the city's economic growth this year will be lower than previously expected, as its performance in the first three quarters of 2021 fell slightly short of official estimates. Chan cited external factors such as high interest rates and the performance of financial markets as constraints on the strength of the rebound in local consumption. In August, local authorities revised Hong Kong's GDP forecast for this year from between 3.5% and 5.5% to between 4% and 5%.
Ukraine Recap: Kyiv Strikes Russian Missile Carrier in Crimea
Bloomberg
Ukraine has struck the Zaliv shipyard in Crimea, hitting a Russian ship capable of carrying Kalibr missiles, according to Ukrainian air defense commander Mykola Oleshchuk. Russia's defense ministry confirmed damage to a vessel, stating that it had been attacked by 15 cruise missiles, 13 of which were shot down. Separately, Ukrainian air defense intercepted three Russian Iskander-cruise missiles directed towards the Dnipropetrovsk and Poltava regions. In response, Russia's defense ministry announced that its new nuclear-powered submarine, Emperor Alexander III, successfully test-launched a Bulava ballistic missile. Ukrainian President Volodymyr Zelenskiy denied claims that US and European officials were pressuring Kyiv towards peace negotiations with Moscow, stating that the conflict with Russia has entered a new phase of static and attritional fighting.
Toyota plans to trial new EV pickup in Thailand to counter Chinese rivals
South China Morning Post
Toyota will test a new electric pickup truck in Thailand as it aims to boost sales of electric vehicles (EVs) in the country. Chinese EV makers are increasing their market share in Thailand and have pledged $1.5bn to build new manufacturing facilities there. Pras Ganesh, executive vice-president of Toyota Daihatsu Engineering & Manufacturing, said engineers were working on adapting the company’s electric pickups to local conditions. Toyota is the market leader in Thailand with a 34% share of new vehicle sales.
China to accelerate issuance of government bonds, finance minister says
Reuters
China's new finance minister, Lan Foan, has stated that the country will accelerate the issuance and use of government bonds as part of efforts to boost the economy. The finance ministry will focus on resolving local government debt risks and leveraging the role of special bonds. Lan also emphasized the need to implement a proactive fiscal policy and improve efficiency. Some new local government debt quotas for 2024 have been issued in advance to meet local financing needs. The appointment of Lan comes as the Chinese government increases fiscal stimulus to revive the economy.
Japan turns to Southeast Asia to boost security network
Japan Times
Japanese Prime Minister Fumio Kishida has concluded a three-day trip to Southeast Asia, where he aimed to strengthen Japan's security and defense ties with Malaysia and the Philippines. Kishida's visits are part of Tokyo's efforts to expand and bolster its network of security partners amid concerns over China's growing military power. During a joint news conference with Malaysian Prime Minister Anwar Ibrahim, Kishida stated that they had discussed accelerating coordination to implement Tokyo's new Official Security Assistance program, but it is unclear how much progress was made.
IPhone Maker Foxconn’s Sales Decline as China Begins Probe
Bloomberg
October sales for Hon Hai Precision Industry Co., also known as Foxconn, dropped 4.6% as a result of uncertainty caused by an investigation launched by Beijing into the world's largest iPhone assembler. The investigation is complicating Apple's position in its largest international market and production base. China accounts for about a fifth of Apple's sales, and investors have grown wary of the iPhone's prospects in the country due to a struggling consumer economy and increasing hostility towards US businesses in the ongoing technology conflict. Foxconn has said it will cooperate with authorities, but its shares have tumbled as a result of the investigation.
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