China News - 21 August
International
China urges BRICS to become geopolitical rival to G7. Leaders from the bloc of developing economies will gather in Johannesburg this week to discuss their expansion. China is pushing for the group to become a full-scale rival to the G7, as they debate its largest expansion in more than a decade. Joseph Cotterill, James Kynge, Arjun Neil Alim and Michael Pooler. Financial Times, 20 August
German minister proposes tougher rules on Chinese foreign direct investment. Germany’s deputy chancellor has set out proposals increasing the scrutiny of Chinese investments. These measures would toughen restrictions in critical sectors such as semiconductors and AI. Laura Pitel. Financial Times, 20 August
Biden, Kishida, Yoon at historic Camp David summit. US President Biden, Japanese Prime Minister Kishida and South Korean President Yoon met at the Camp David summit which marked a “new era of partnership” between the three countries. Biden announced that “together we’re going to stand up for international law”. Trevor Hunnicutt, Hyonhee Shin and Eric Beech. Reuters, 19 August
China helping to arm Russia with helicopters, drones and metals. Russia-China trade is set to surpass $200 billion this year, creating a new record high. According to the Observatory of Economic Complexity, exports of Chinese goods with potential military uses rose by more than three times this year. Sophia Yan. Telegraph, 19 August
China launches military drills around Taiwan after vice-president’s US stopover. China’s military drills followed Lai’s return from a low-profile stop in America. The People’s Liberation Army called it a “serious warning against the provocation of ‘Taiwan independence’ forces colluding with external forces”. Kathrin Hille. Financial Times, 19 August
Why is China so angry about the Taiwan vice president’s US trip? The CCP has repeatedly called on US officials not to engage with, or allow Taiwanese political leaders into their country. They see these actions as support for Taiwan’s desire to be viewed as separate from China. Reuters, 19 August
Economy & Tech
China’s confidence deficit. The Chinese government has tried multiple new strategies to help their economy. However, the one thing they are yet to try is giving fiscal stimulus. Ethan Wu. Financial Times, 21 August
China set to cut lending rates as economic recovery drags. The People’s Bank of China is set to announce reductions to loan rates for businesses and households. This large cut is expected to help revive flagging economic demand in China. Thomas Hale, Hudson Lockett and Cheng Leng. Financial Times, 20 August
China unveils capital market reforms to boost investor confidence. The China Securities Regulatory Commission said the measures were designed to “boost capital market investor confidence” and activity amid concerns over the country’s economic situation. The measures include lower fees and longer trading hours. Hudson Lockett and Cheng Leng. Financial Times, 18 August
Abandoned EVs start to pile up in cities across China. As a result of China’s economic slowdown, the once electric car giant is now facing an excess of unwanted vehicles as hundreds of companies go bust. Linda Lew. Bloomberg, 18 August
Evergrande: restructuring amid worsening crisis is Neverland fantasy. Evergrande applied for Chapter 15 bankruptcy protection in New York on Thursday, and restructuring proceedings are taking place in Hong Kong and the Cayman Islands. Policy easing by the PBC has failed to slow the slide. Financial Times, 18 August
China eyes robot manufacturing as way to fuel economic growth. The country has said it will increase the use of robots in manufacturing and industry to help growth and move China up the industrial chain. Last year, China was the world’s largest market for robots. Yuanyue Dang. South China Morning Post, 20 August
Opinion & long-reads
China is too big for a Soviet Union-style collapse, but it’s on shaky ground. China’s economic growth is slowing, its property bubble has burst and unemployment is rising. However, forecasts of China’s downfall may be hugely premature as Beijing could instead be aiming for slower and more sustainable growth. Larry Elliott. The Guardian, 20 August
Germany must pull away from China before it’s too late, warns Berlin’s top economic adviser. Monika Schnitzer, leader of the Council of Economic Experts, said that Germany must reduce economic ties with China to avoid a “real moment of conflict”. She adds that Germany should also wean itself off its current over-reliance on car making as many consumers shun expensive EVs. Szu Ping Chan. Telegraph, 19 August
China’s quest for self-reliance risks choking innovation. China’s scientific and technological successes are a result of frequent exchanges and connectivity with the global scientific community. Beijing is now facing the challenge of how far the drive for “indigenous innovation” can go without tapping into western scientific powerhouses. Yu Jie. Financial Times, 18 August