Moody’s advised staff to work from home ahead of China outlook cut; Xi Jinping to visit Vietnam with rail project talks expected
Xi seeks to defuse China-EU tensions over trade imbalance; CATL says Ford project on track despite new U.S. battery rules
Welcome to this issue of The China Brief. Today is December 7, 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.
Moody’s advised staff to work from home ahead of China outlook cut
Moody's Investors Service advised its staff in China to work from home before downgrading the country's sovereign credit rating outlook, indicating concerns over possible reactions from Beijing. This move underscores the apprehension of foreign companies operating in China amid tensions with the US and its allies. Moody's instructed non-administrative staff in Beijing and Shanghai to stay home, citing potential government inspections. Analysts in Hong Kong were also advised to avoid travel to the mainland. Moody's subsequently lowered China's credit rating outlook, drawing criticism from Chinese officials and social media. The agency's action has raised concerns about regulatory risks and potential repercussions in the Chinese business environment. Despite these concerns, Moody's also downgraded the outlook for Hong Kong, Macau, and several Chinese state-owned and private companies.
Xi Jinping to visit Vietnam with rail project talks expected
Nikkei Asia
Chinese President Xi Jinping will visit Vietnam next week, according to Beijing, in a trip that is expected to focus on a rail project and rare earths. Vietnam must manage its relationship with both China and the US, balancing their rivalry, and sources say the cargo rail project the two countries will discuss will fall under China's Belt and Road Initiative. Both China and the US are keen to secure supply chains for rare earths, which are used in electric car batteries, solar panels and other technology. Vietnam, which has the world's second-largest deposits of rare earths, is open to working with both sides, according to sources.
Xi seeks to defuse China-EU tensions over trade imbalance
Nikkei Asia
Chinese President Xi Jinping has met with the leaders of the European Commission and European Council in Beijing to help smooth over relations after Brussels warned China about its chronic trade imbalance. The EU leaders, Ursula von der Leyen and Charles Michel, called for dialogue to strengthen trust and protect the EU market. China's trade surplus with the EU remains a point of contention, reaching $201bn in the first 11 months of 2021, although it has narrowed from the previous year. Xi struck a conciliatory tone at the meeting, similar to his recent meeting with US President Joe Biden.
CATL says Ford project on track despite new U.S. battery rules
Nikkei Asia
The partnership between Chinese battery giant CATL and Ford Motor on an electric vehicle battery plant in the US will not be affected by new rules regarding Chinese involvement in such projects, according to CATL founder Zeng Yuqun. The rules, proposed by the Biden administration, aim to address the US's overreliance on EV batteries manufactured in China. Under the new guidelines, a joint venture will be classified as a foreign entity of concern if a company from China, Iran, North Korea, or Russia holds a stake of 25% or more, or if a company enters into a licensing agreement with another entity that exercises "effective control" over battery production. CATL is also expanding its R&D efforts and plans to establish an R&D center in Hong Kong.
X to set up an app development team in Japan: CEO Yaccarino
Nikkei Asia
Twitter, now known as X, plans to establish an app development team in Japan and hire engineers in 2024. The team will develop new app functions and advertising products to cater to the Japanese market. X hopes to generate demand for ads from small and midsize companies in Japan to improve its business. The move comes as X aims to become more responsive to the needs of Japanese users and advertisers. The company has faced challenges, including the loss of ad revenue, following a tweet by former CEO Elon Musk that was seen as antisemitic. X plans to reinforce its team in Japan to deal with inappropriate content and is open to welcoming back advertisers who left the platform. The new development team will focus on low-cost ads and better serving existing customers.
China Scores a Big Win in Race with US for Influence on the Moon
Bloomberg
China has gained support from Egypt for its proposed International Lunar Research Station (ILRS), a Chinese-backed lunar base set to launch in 2030. The China National Space Administration signed a memorandum of understanding with the Egyptian Space Agency, following their recent collaboration in which a Chinese rocket sent an Egyptian satellite into orbit. The agreement marks a diplomatic victory for China in its race against the US for influence in space. The competition between the two countries has intensified in recent years as they vie for allies in their plans to send astronauts to the moon.
Democracy activist Agnes Chow says she still feels under the Hong Kong police’s watch in Canada
Associated Press
Hong Kong activist Agnes Chow, who left the city for Canada, has said that she feels under surveillance by Hong Kong police even after moving to Toronto. Chow was arrested in 2020 under the national security law but was released on bail. She claims that the authorities have been attempting to intimidate her and that the restrictions imposed on her have severely impacted her mental health. Chow's decision not to return to Hong Kong has been criticised by the government, but she maintains that she made the decision herself and that the security law is being used to intimidate dissidents.
Tesla executives looked at industrial estates in Thailand - PM
Reuters
Thailand's Prime Minister, Srettha Thavisin, has said he showed Tesla executives around industrial estates in the country last week for potential investment. Thavisin said he went "out of his way" to show Tesla the country and expects the automaker to invest in Thailand. The country is aiming to convert about one-third of its annual production of 2.5 million vehicles into EVs by 2030 and is preparing incentives to encourage investment and EV manufacturing. Thailand is already the largest car producer and exporter in Southeast Asia.
Up to 600 North Korean defectors deported by China 'vanish' - rights group
Reuters
Up to 600 North Koreans who were forcibly deported by China in October have disappeared and may face imprisonment, torture, sexual violence, and execution in North Korea, according to a report by the Transitional Justice Working Group (TJWG), a Seoul-based human rights group. The report comes after South Korea protested against the suspected repatriation of a large number of North Koreans attempting to flee to South Korea. The TJWG stated that the defectors were transported in guarded buses and vans from Chinese detention centres across the border into North Korea on 9 October, making it the largest mass repatriation in years. The identity of the defectors remains unknown, but most are believed to be women. North Korean state media has not commented on the case.
China posts surprise November export growth after six-month decline
Nikkei Asia
China's exports unexpectedly rose in November for the first time in six months, driven by demand for cars and mobile phones. However, analysts warned the string of monthly declines may not last, and imports posted a surprise decline on falling purchases of oil and agricultural products. While the figures hinted at a pickup in manufacturing, they follow subdued factory activity data released this month. The International Monetary Fund in November upgraded its forecast for the world's second-largest economy. But on Wednesday, Moody's downgraded China's sovereign credit rating to negative from stable.
Stay informed about the latest news, analysis, and policy briefs from across the globe related to China with the China brief. Our team aggregates, synthesizes, and summarizes the most important information from various sources, including media outlets, think tanks, government agencies, and industry experts.
Our mission is to provide you with easily accessible and critically valuable information tailored to your specific field of interest. We understand the significance of staying up-to-date on developments related to China and aim to make this information comprehensible for our readers.
Join the conversation and stay informed about the latest news and developments related to China by visiting our website at www.6dobrief.com