Chinese Economics Thread


Dolcevita

Captain
So scared of competition. China should shut Apple out of China until the US reciprocates with Huawei.

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“Political pressure” reportedly kills Huawei/AT&T smartphone deal
Spying concerns from members of congress means AT&T won't be selling Huawei phones.

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- 1/9/2018, 10:50 AM
Huawei-Mate-S_Colors-640x423.jpg

The Huawei Mate S.
Reports from
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and other outlets say that AT&T was ready to announce a distribution deal with Chinese smartphone maker Huawei, but the deal fell through at the last minute.

The deal would have seen Huawei phones bundled with service deals in AT&T stores, as carrier stores are the primary way US consumers buy phones. The two companies were ready to announce the deal at the currently ongoing CES trade show in Las Vegas.

Huawei is the number three smartphone vendor worldwide, behind only Apple and Samsung, but the company struggles in the US. Huawei currently sells to consumers online, but the lack of carrier deals has made the company basically irrelevant in the US market. Outside of the US, Huawei is a massive company, making not only phones but also its own line of "HiSilicon" SoCs. The company the largest telecommunications equipment manufacturer in the world, but
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about Huawei's relationship to the Chinese government has mostly kept its equipment out of the US.

A report from
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claims that the same "political pressure" situation happened here. Apparently members of the US Senate and House Intelligence Committee sent a letter to the FCC citing a committee report of Huawei's alleged ties to the Chinese government, and the letter said that "additional work by the Intelligence Committees on this topic only reinforces concerns regarding Huawei and Chinese espionage."

Huawei has continually denied allegations that it spies for China.

I already use a Huawei P10 Lite, available on Amazon, on Tmobile network. Love the phone and great value($300). Annoying that I cannot buy directly from the store.

Anyway, Huawei is going ahead to sell the Mate 10 Pro online anyway.

Huawei will sell Mate 10 Pro in the US online after AT&T calls off deal
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Jan 9, 2018, 6:11pm EST
DSC00089.0.jpg

Huawei was widely expected to announce its first flagship smartphone partnership with a major US carrier at CES this week, but AT&T
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— possibly for political reasons — at the eleventh hour. If you live in America and do really want the
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, though, you will at least be able to buy it online this spring through Amazon, Best Buy, and other retailers.

Huawei is pricing the unlocked device at $799, which gets you a 6-inch 18:9 OLED screen, the AI-infused Kirin 970 processor, Android Oreo, 6GB of RAM, 128GB of storage, and a Leica-branded 12-megapixel dual camera setup. It’s a capable phone, to be sure — just not one that’s going to be able to compete on level terms in the US market without any presence in carrier stores.

A Porsche Design version of the Mate 10 will also be available in the US. The non-Pro Mate 10 is a slightly different phone with a 16:9 LCD screen; the Porsche Design version will cost $1,225 for a model with 256GB of storage. Both phones will start shipping on February 18th.
 
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Equation

Lieutenant General
China would win in a trade war with U.S., analyst says

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China-would-win-in-a-trade-war-with-US-analyst-says.jpg



NEW YORK, Jan. 10 (UPI) -- China would win a trade war should the United States choose to exert regulatory pressure on the world's second-largest economy, a U.S. analyst said Tuesday.

Nicholas Lardy, senior fellow at the Peterson Institute for International Economics, said the Chinese are in a better position to withstand the pain that comes with a trade dispute.

Lardy's comments at a panel, hosted by the National Committee on U.S.-China Relations, come at a time when analysts from both countries are bracing themselves for new measures from the Trump administration targeting Chinese competitors.

Speaking at the same panel held at the New York Stock Exchange on Tuesday, Lu Feng, an economist at Peking University, suggested the current U.S. administration might not be able to fulfill its goal of closing the trade deficit.

That's because U.S. demand for Chinese goods is "still strong," which, according to Lu, is the real reason the trade deficit has widened for the United States.

"I'm worried trade issues could be politicized," Lu said, adding the global economic recovery remains "very fragile."

Daniel Rosen, an expert on the Chinese economy at the Rhodium Group, expressed similar concerns.

"We are underestimating the trade war potential that others have talked about," Rosen said. "I think we have a really fraught situation in terms of global trade activity that could just as easily be negative for China in 2018, than it's likely to be a big windfall of growth for China on the export side."

Other analysts at the forum expressed skepticism about a U.S.-China trade war.

Huang Yiping, a professor at Peking University, said he was "surprised" that a trade war had not taken place, adding he previously thought the dispute would start on day one of
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's presidency, a reference to Trump's strong campaign rhetoric that blamed China for the widening U.S. deficit.

But Huang's view, possibly shared by his Chinese colleagues, might be an example of Chinese underestimations of prevailing U.S. misperceptions about China, Rosen said.

"Neither side fully appreciates the perceptions of the other side," Rosen said, adding the Chinese side engages in clear rational analysis, that leads Chinese officials to conclude that it's "simply not in the interest of the United States to trigger a trade war."

For better or for worse, the Chinese believe "powerful U.S. institutions will lean in and prevent policy from going off the tracks," Rosen said.

"On the U.S. side there are misperceptions about what's going on in China," the analyst said. "It took the current administration the better part of the first year of the presidency to realize that currency manipulation really was not the issue."

China recently relinquished control over the yuan, and the move signals
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in the steady appreciation of its currency against the dollar.

While China moves forward with globalization, it is still "more than likely" a trade war will take place by the end of 2018, Rosen said.

Lardy said trade deficits arise for more complicated reasons, and the Trump administration is simplifying the issue in blaming foreign governments, including China's.

"The only way to deal with a trade deficit is raise savings and investment rates," Lardy said, referring to the reason deficits occur -- Americans consuming spending more than they produce.

Recent U.S. tax reform is harmful, the analyst said.

"Repeal tax reform," he said. "Because the tax reform is going to make the U.S. global trade and current account deficit go up."

Tax reform is also designed to raise interest rates.

"There'll be capital inflow, and the trade deficit will be going up," Lardy said. "I think it's almost inevitable."

"It reflects a fundamental flaw in understanding how the political economy works."
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now noticed
Airbus-China contract for 184 A320 jets to be finalized soon: France's Macron

Updated 5 hours ago
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French President Emmanuel Macron said a contract with China for 184 Airbus (
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) A320 narrow-body jets would be finalized soon and that his country also had ambitions to sell A350 and A380 planes to China in coming weeks or months.

The potential A320 order, which had not been previously announced, would be worth more than $18 billion at list prices.

“On the order for 184 A320s, it’s something that will be finalised shortly,” Macron said during his state visit to China, adding it was confirmed to him by Chinese President Xi Jinping.

“And we also have ambitions on A350 and A380 mid-range and large carriers in the weeks or months to come,” Macron said.

The A320s would be delivered in 2019 and 2020, a French presidency official said on condition of anonymity.

Ahead of Macron’s trip, sources had told Reuters that Airbus was in talks about an order for 100 or more jets. New jet orders have historically featured during such tours by French leaders.

While no deal has been finalised over the current official visit, Macron said China had assured him it would respect market-share parity between Airbus and Boeing (
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).

China regularly splits large orders between Europe and the United States to cope with its fast-expanding airline traffic, but the momentum has recently been with rival Boeing (
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), which sold 300 jets during a visit by U.S. President Donald Trump last year.

China, however, placed a large order for 140 Airbus jets during a visit to Germany by Xi last July.

Airbus signed a provisional deal on Tuesday to boost the number of A320 family jets assembled in Tianjin to six a month by 2020 from four at present.

Airbus declined to comment on Wednesday.
 

Dolcevita

Captain
So scared of competition. China should shut Apple out of China until the US reciprocates with Huawei.

Please, Log in or Register to view URLs content!


“Political pressure” reportedly kills Huawei/AT&T smartphone deal
Spying concerns from members of congress means AT&T won't be selling Huawei phones.

Please, Log in or Register to view URLs content!
- 1/9/2018, 10:50 AM
Huawei-Mate-S_Colors-640x423.jpg

The Huawei Mate S.
Reports from
Please, Log in or Register to view URLs content!
and other outlets say that AT&T was ready to announce a distribution deal with Chinese smartphone maker Huawei, but the deal fell through at the last minute.

The deal would have seen Huawei phones bundled with service deals in AT&T stores, as carrier stores are the primary way US consumers buy phones. The two companies were ready to announce the deal at the currently ongoing CES trade show in Las Vegas.

Huawei is the number three smartphone vendor worldwide, behind only Apple and Samsung, but the company struggles in the US. Huawei currently sells to consumers online, but the lack of carrier deals has made the company basically irrelevant in the US market. Outside of the US, Huawei is a massive company, making not only phones but also its own line of "HiSilicon" SoCs. The company the largest telecommunications equipment manufacturer in the world, but
Please, Log in or Register to view URLs content!
about Huawei's relationship to the Chinese government has mostly kept its equipment out of the US.

A report from
Please, Log in or Register to view URLs content!
claims that the same "political pressure" situation happened here. Apparently members of the US Senate and House Intelligence Committee sent a letter to the FCC citing a committee report of Huawei's alleged ties to the Chinese government, and the letter said that "additional work by the Intelligence Committees on this topic only reinforces concerns regarding Huawei and Chinese espionage."

Huawei has continually denied allegations that it spies for China.

All major UK mobile carriers such as O2, EE, Vodafone, and Three all sell Huawei Phones including the Huawei Mate 10 Pro. Yet they are not banned as security threats. Another example of Brazen Protectionism from US Government.

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Equation

Lieutenant General
Wall Street falls on China, NAFTA concerns


NEW YORK (Reuters) - The three major U.S. stock indexes ended lower on Wednesday after a choppy trading session as investors worried that China would slow U.S. government bond purchases and that U.S. President Donald Trump would end a key trade agreement.

The S&P and the Nasdaq snapped a six-day rally after Bloomberg reported that China, the world's biggest holder of U.S. Treasuries, could slow or stop buying the government bonds. The report sent Treasury yields to a 10-month high.

The S&P 500 pared some losses as yields backed away from their intraday peaks and investors digested the China report. But the index lost ground again in mid-afternoon trading after Reuters reported that Canada is increasingly convinced Trump will soon announce a U.S. exit from the North American Free Trade Agreement. It cited two unnamed government sources.

"It's a fairly light week for economic and financial data. In a week like this, political headlines can have a bigger impact than they normally would," said Jon Mackay, investment strategist at Schroders Investment Management in New York.

While Mackay said the selloff was overblown, he noted that a change to NAFTA could hurt corporate earnings.

"If that news is true, you'd expect a higher dollar price and a negative impact to earnings," said Mackay.

The Dow Jones Industrial Average (.DJI) fell 16.67 points, or 0.07 percent, to 25,369.13, the S&P 500 (.SPX) lost 3.06 points, or 0.11 percent, to 2,748.23 and the Nasdaq Composite (.IXIC) dropped 10.01 points, or 0.14 percent, to 7,153.57.

Investors were particularly skittish about the China report as they worried that the market was overdue for a correction.

"It's a reflection of investor weariness and awareness that the market has risen for four straight months without seeing a major pullback," said Robert Pavlik, chief investment strategist, SlateStone Wealth in New York.

"As the day wore on, Treasury yields started to move lower on the realization the story doesn't have any legs," he said. "There's no way on earth the Chinese stop buying U.S. Treasuries."

The S&P financial index (.SPSY) was the best performer among the S&P 500's 11 major sectors with a 0.9 percent rise, helped by gains in Berkshire Hathaway (BRKa.N), JPMorgan (JPM.N) and Wells Fargo (WFC.N).

Banks and insurance companies often rise with bond yields as investors expect a profit boost from higher interest rates.

Rate-sensitive sectors such as utilities (.SPLRCU) and real estate (.SPLRCREC) were the biggest losers with declines of 1.1 percent and 1.5 percent.

Investors started 2018 with high hopes for strong U.S. earnings growth. Banks will kick off earnings season on Friday.

Earnings for S&P 500 companies are expected to increase by 11.8 percent, with the biggest contribution from the energy sector, according to Thomson Reuters I/B/E/S.

Berkshire Hathaway (BRKb.N) rose 1.3 percent after the conglomerate promoted two top executives, cementing their status as the most likely successors to Warren Buffett.

Declining issues outnumbered advancing ones on the NYSE by a 1.59-to-1 ratio; on Nasdaq, a 1.09-to-1 ratio favored decliners.

The S&P 500 posted 74 new 52-week highs and 7 new lows; the Nasdaq Composite recorded 98 new highs and 24 new lows.

Volume on U.S. exchanges was 6.93 billion shares, above the 6.38 billion average for the full session over the last 20 trading days.
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related to:
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is
China denies reports it's slowing or halting US bond purchases
2018-01-11 12:10 GMT+8
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A report that China is considering slowing or halting US Treasury purchases could be based on wrong information or simply “a piece of fake news.” according to a statement by China’s State Administration of Foreign Exchange on Thursday.

Bloomberg, citing “people familiar with the matter,” reported on Wednesday that officials reviewing China’s foreign-exchange holdings have recommended slowing or halting US bond purchases.
 

Hendrik_2000

Brigadier
From New york times. I guess the western press will miss the polluted air in Beijing to joke about

Pollution Appears to Ease in Beijing Amid China’s Drive to Clear the Air


By
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JAN. 11, 2018
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Even so, pollution levels fell less precipitously or rose elsewhere, suggesting that a concerted effort last fall to shift heating to natural gas from coal may have simply shifted the harmful effects to regions far from the capital.

In the northern province of Heilongjiang, on the border with Russia, pollution levels rose 10 percent. In a statement with its analysis, Greenpeace argued that the results demonstrated the need for more government action, noting that nationwide the drop in pollutants was only 4 percent.

“China’s national air pollution action plan has brought massive reductions in pollution levels and associated health risks, but policies favoring coal and heavy industry are holding back progress,” Huang Wei, one of the organization’s campaigners, said in the statement.


But in Beijing, where pollution levels are tracked as closely as property prices are in Hong Kong, London or New York, the respite from eye-watering, throat-scratching smog has nonetheless been welcomed. Only a year ago
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on some days that schools were closed and flights were canceled.

Air quality is measured by
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, or particulate matter of a size deemed especially harmful; such pollutants contribute to a variety of health conditions. Anything under 50 is considered good.

For a couple of days at the end of December, levels nearly reached 300, which is considered hazardous, but those were, for this winter so far at least, the exceptions. (On Thursday evening, as this article was being written, the level was 29, according to the China Environmental Monitoring Station index.)

But beyond the health risks, pollution also poses a political risk for the government of President Xi Jinping as he moves to promote the country’s rise on the world stage.

The government does not seem to be resting on its laurels in the fight against pollution. The Ministry of Environmental Protection warned in a statement on Wednesday that clearer skies were caused in part by favorable weather conditions, and that conditions could worsen in late January and early February.

“Local governments need to strengthen pollution controls to further cut emissions and make sure they reach their goals on air quality improvement,” the ministry was quoted as saying in
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.
 

Hendrik_2000

Brigadier
This part is missing
BEIJING — Winters in Beijing have long been choked by thick, dusty, toxic smog. But this winter, the sky has taken on a once seemingly unthinkable hue: blue.

Now, an analysis of government data by Greenpeace has confirmed what many people could see but that nonetheless seemed too good to be true.

Pollution in Beijing and in 27 other cities in northeastern China has fallen precipitously, dropping 33 percent on average compared with the last three months of 2016.

In Beijing, pollution fell 53 percent. Greenpeace estimated that lower pollution levels resulted in 160,000 fewer premature deaths across China in 2017.

The drop indicated that the government’s antipollution campaign — first announced in 2013 but accelerated last year for regions around the capital — has begun to show results.
 

Hendrik_2000

Brigadier
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The Chinese are now buying as much stuff as Americans, a game-changer for the world economy


By Heather Long

January 11 at 11:10 AM 
The mighty force of consumerism has taken hold in China. In 2018, retail sales in China are expected to equal or surpass sales in the United States for the first time, another definitive marker in China's rise to economic superpower status. The growth of China's domestic retail market is luring everyone from automakers to make up companies that want to cash in on the country's growing middle class, but it also serves as another complication in President Trump's quest to transform U.S.-China trade.

Retail sales in China are on track to hit just over $5.8 trillion this year, according to Mizuho, a Japanese bank. It's a stunning rise from a decade ago, when retail sales in China were a quarter of those in the United States. China's rapidly growing middle class has been eager to buy brand-name clothes, cars and cellphones, among other products. Shanghai is now referred to in fashion circles as “Paris of the East.” Their spending habits have been supported by fatter paychecks, with China's income per capita jumping from about $2,000 a year a decade ago to over $8,000 a year now.

“China's best bargaining chip is its massive and fast-growing domestic market,” says Jianguang Shen, chief China economist for Mizuho, who pointed out the retail trend in a recent presentation in Washington, D.C. “This will change the balance (of power) tremendously, as it is first time when the U.S. is dealing with a market of equal size in a potential trade war.”

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On the campaign trail, Trump railed against China as the “economic enemy” of the American people. He harped on the fact that the United States buys far more than it sells to China. The United States ran a $310 billion trade deficit with China in 2016. But Trump has softened his tone on China lately, especially after he visited China in November, and the countries have jointly faced escalating nuclear tensions with North Korea.

Stephen K. Bannon, Trump's former chief strategist, was one of the harshest critics of China in the White House. “To me, the economic war with China is everything," Bannon said over the summer. His excommunication from the Trump fold might also reduce the urgency in the White House to go after China.

Still, the two nations continue to dance around each other in a quest for global and economic dominance. Both sides continue to look for leverage over the other. On Wednesday morning, a Bloomberg story suggesting the Chinese government might halt its purchases of U.S. Treasurys was enough to temporarily spook U.S. markets, sending stocks sliding in early trading. China is the largest foreign holder of U.S. Treasurys. There are also more playful jabs between the countries. A mall in northern China put up a giant dog balloon that bears a striking resemblance to Trump.

If Trump really wants to go after China on trade, “we will need leverage and we will need allies,” says Olin Wethington, who served as a special envoy to China in 2005 and as an economic adviser to President George H.W. Bush. Wethington's name has surfaced for a possible role in Trump's State Department.

Wethington says he personally prefers bringing trade cases against China over the blanket tariffs Trump talked about on the campaign trail, which many warn would spark a trade war that could harm the U.S. economy and the stock market's rapid climb.

While Trump wants to show his blue-collar base he is being tough on trade, big businesses don't want to see any dramatic actions. Over 20 percent of sales at companies like General Motors, Boeing and Apple now come from China, says Shen, the Mizuho economist. Any restrictions on Chinese access to the United States would likely be met with barriers to American companies selling in China.

“China is one of the most important markets for many U.S. multinational companies,” Shen says. “This should lend China immense bargaining power.”

A record 17.6 million vehicles were sold in the United States in 2016, for example, but that was far below the 24 million passenger cars sold in China. U.S. automakers account for about 1 out of every 5 cars sold in China, even though the communist government placed a 10 percent tax on luxury cars and trucks imported from the United States.

But MIT economist David Autor, an authority on trade and automation, thinks the United States still has substantial leverage in any debate with President Xi Jinping of China.

“China exports a substantial piece of its GDP to the United States. They are very dependent on our markets,” Autor says. The United States currently buys 19 percent of China's total exports.

One area where there's a lot of agreement across the political spectrum is to go after China's theft of U.S. intellectual property. It's an increasingly important area as the race for global dominance in robotics, biotech and new energy takes off. Trump has been mulling whether to take action, although he's largely been focused on Chinese steel and aluminum. Trump has pointed to the tariffs President Ronald Reagan put on Japanese semiconductors in the 1980s as a model he wants to emulate, but the difference is the U.S. economy was far larger than Japan's at the time. Now the United States faces an economic equal.

As Trump deliberates what to do, Autor says the president has already handed China a great victory on trade.

“Trump did China the biggest favor of the last 10 years by tearing up TPP (the Trans-Pacific Partnership)," Autor says, calling it the best gift to China since the communist country joined the World Trade Organization in 2001. “If you want to look for an inflection point in rate of U.S. global decline, we’ll probably be able to point to tearing up TPP.”
 

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