With its recent promises of better market access for foreign companies, China tries to placate international criticism. But the steps are half-hearted at best, especially since the relaxations in some areas go hand in hand with new restrictions in others.
Interview with Shazeda Ahmed
In setting up the so called Social Credit System, China plans to monitor, rate and regulate the behavior of citizens and companies with the help of big data. What motivates the government? What are the major challenges? And what do people in China think about this system?
China’s outbound M&A volume has contracted significantly since the beginning of the year. The Chinese government’s attempt to curtail acquisitions outside the core business areas of Chinese companies and the resulting breathing spell could have a favourable effect on M&A success probabilities.
North Korea’s triumph in the standoff with the United States may be short-lived. The strategic value of its nuclear deterrent is questionable, as it has profoundly alienated China, North Korea’s long-time ally. At the same time, the regime in Pyongyang continues to dig its own grave with its failed economic policies.
(via The Diplomat)
The increasing digitalization of life in China has increased the need for the security of personal data. To ensure effective data protection, the party-state would have to create a unified legal framework and to subject itself to supervision.
China’s GDP growth rate target wastes resources and prevents necessary structural adjustments. The target encourages the build-up of overcapacities and forces the government to stimulate demand even if this demand is not sustainable. China should replace growth targets with economic forecasting and assessments of China’s capacity growth potential.
Interview with Carsten Holz
The Chinese government spends millions to develop the Tibetan areas of China. But what can investment achieve in these remote regions? Can it create sustainable jobs and change people’s lives? In this MERICS Experts Podcast, the economist Carsten Holz of Hongkong University of Science and Technology accounts his research trip on the Tibetan plateau in Western Sichuan.
After turbulences in the stock and real estate markets, China’s next speculative asset bubble might be building in the Fintech sector. Stricter regulation won’t solve the underlying problem: the lack of attractive investment options caused by low interest rates and capital controls will keep producing new bubbles.
The global fight against climate change will continue after the US withdrawal from the Paris Agreement. Participants at a MERICS conference agree that Germany and China can play a decisive role in keeping the topic on the G20 agenda.
The evasion of VAT for the import of digital services from China is a growing problem for the EU. Rather than waiting for the completion of a European single digital market, loopholes for non-EU suppliers should be closed now.
China aims to fight growing risks in its financial sector with restrictions on shadow banking assets and interbank lending. But a sudden reduction of liquidity could increase rather than reduce the risk of a financial panic and dampen growth.
Air pollution is a severe problem across China, but the levels of pollution vary greatly between regions. Though still a major challenge, air quality in urban centers like Beijing and Guangzhou is improving. Cities in the industrial heartland on the other hand have seen little to no Progress.
Charlotte Roehren (via The Diplomat)
With its growing international integration, China is becoming a major actor in global health issues. Beijing has valuable experience in fighting pandemics and in providing health and medical support to Africa. The G20 Summit in Hamburg will be an opportunity for China to step up its multilateral health engagement.
Punitive levies on Chinese imports would hurt American consumers and U.S. companies that are part of the global supply chain. At the same time, they would strengthen Beijing's resolve to speed up its quest for independence from foreign technology.
(via The Diplomat)
International businesses in China struggle to comply with new regulations, which force them to store critical data within China's borders, limit the application of foreign encryption services, and require handing over customer data of terror suspects.
China sets its hopes on e-mobility. Smart and forceful industrial policies are geared toward grooming domestic brands and keeping foreign competition at bay. Governments and manufacturers in industrial countries will have to act fast to counter this trend.
China’s industrial policies aim to build national champions via acquiring technological knowledge abroad. This goal may be in line with the current worldwide wave of economic nationalism, but it is likely to collide with the strategic aims of increasingly globalized Chinese companies.
In the French election campaign, trade with China and Chinese investment raise similar controversies as in the U.S. last fall. Even if a moderate candidate wins, France is likely to adopt a tougher stance vis-à-vis China.
The U.S. withdrawal from TPP and TTIP leaves the EU as the main advocate of high regulatory standards in international trade agreements. The Trump administration’s anti-trade rhetoric may have created an opening for Brussels to get concessions from Beijing and to bolster its position through agreements with other Asian countries.
In the absence of U.S. and European leadership, China is emerging as the world’s best hope in the fight for climate change. Despite tremendous near-term challenges, Beijing’s political commitment and forward-looking policies could turn China into a model for building an alternative energy economy.
As China imposes tighter controls on capital outflows, China’s global M&A activities may decelerate. However, German companies are likely to remain attractive targets for Chinese buyers for strategic, geopolitical, and business reasons.
Interview with Philippe Le Corre (via Young China Watchers)
As the recent surge of investment from China has fueled heated debate in Europe, Chinese investors struggle with the challenge of becoming a part of the European corporate landscape. Young China Watchers spoke about this dilemma with Philippe Le Corre, visiting fellow in the Center of the United States and Europe at Brookings Institution, and author of a new book on "China's Offensive in Europe."
(via The Diplomat)
Berlin wants to manage the geopolitical implications and to ensure the economic sustainability of China’s pet Project.
US President-elect Donald Trump has continued branding China as a currency manipulator – accusing the country of keeping the yuan low to help Chinese exports and harming jobs in the US. But in fact China’s currently intervenes in the opposite direction to prevent a weakening of the yuan – supporting American Jobs.