Archive for September, 2019

01/09/2019

Shanghai builds memorial hall for first CPC congress

SHANGHAI, Aug. 31 (Xinhua) — Construction started Saturday on a memorial hall for the first National Congress of the Communist Party of China (CPC) in Shanghai.

It is located close to the historic building where the first CPC national congress was convened in 1921.

The memorial hall is scheduled to open to the public in 2021 and will exhibit historical materials about the founding of the CPC.

In July 1921, thirteen delegates representing about 50 CPC members nationwide attended the first CPC national congress in the two-story brick-and-wood building in downtown Shanghai.

The building was turned into a memorial site in 1952. In 2018, it received a record number of more than 1.47 million visitors, according to its administration office.

Source: Xinhua

01/09/2019

Escalating trade war continues to hit China’s manufacturing, with slump continuing into August

  • The manufacturing purchasing managers’ index, released by the National Bureau of Statistics on Saturday, was 49.5 in August
  • Figure adds to a month of woe for policymakers in Beijing, even ahead of planned US tariff increases on September 1, October 1, and December 15
China’s manufacturing purchasing managers’ index fell by 0.2 points in August as the trade war continued to bite. Photo: Xinhua
China’s manufacturing purchasing managers’ index fell by 0.2 points in August as the trade war continued to bite. Photo: Xinhua

As the trade war with the United States continues to gather pace, manufacturers in China remain gloomy about their prospects, with the sector activity contracting for the fourth successive month in August.

The manufacturing purchasing managers’ index (PMI), released by the National Bureau of Statistics (NBS) on Saturday, stood at 49.5 in August, down from a reading of 

49.7 in July

, and below analysts’ expectations. The median result of a survey of analysts by Bloomberg expected a reading of 49.6.

The PMI is a gauge of sentiment among factory operators, with 50 being the demarcation line between expansion and contraction in sector activity. In the survey, manufacturers are asked to give a view on business issues such as export orders, purchasing, production and logistics.
That the index has remained in contractionary territory for six of eight months this year shows that the effects of US tariffs are resonating through the Chinese economy. The manufacturing PMI only showed expansion in March and April of this year.
New and higher US tariffs scheduled to enter force on September 1, October 1 and December 15 could provide some very temporary boost to Chinese exports and therefore manufacturers, should they inspire American buyers to make early purchases to pay lower tariff rates. However the long term trajectory is negative, with many manufacturers scoping out or already relocating to production sites outside the world’s second largest economy.

Also released on Saturday was the official non-manufacturing PMI, a survey of the construction and services sectors. This stood at 53.8, up from 53.7 in July, showing that these sectors have remained more robust in the face of a general slowdown in China’s economy. The Bloomberg survey of analysts had expected non-manufacturing PMI in August to remain unchanged.

Composite PMI, a combined reading of both manufacturing and non-manufacturing, was 53, down from 53.1 in July.

The August PMI decline “indicates downward pressure on the economy,” said Zhang Liqun, an analyst with the China Federation of Logistics and Purchasing, which produces the index with the NBS.

“Corporations’ forecasts of the market outlook were quite poor while being cautious on their production operations,” Zhang said. The PMI indicated a drop in new orders, which also reflected a lack of domestic demand. Given that the US is escalating tensions with China, downward pressure on external demand is also apparent, Zhang said.

August was a month to forget for policymakers in Beijing, with a series of negative data highlighting the serious economic challenges facing the nation. With the trade war threatening to tip the global economy into a recession, China remains heavily exposed.

The trade war is having a significant impact on Chinese manufacturing. Photo: Xinhua
The trade war is having a significant impact on Chinese manufacturing. Photo: Xinhua

While exports grew by 3.3 per cent in July, a sign of front-loading, imports fell by 5.6 per cent, emphasising the issues with consumption in China. This problem was also clear in retail sales figure, which came in at a disappointing 7.6 per cent for July, down from 9.8 per cent growth in June.

Industrial production

, a measure of output in China’s manufacturing and mining sectors, grew by just 4.8 per cent in July, the lowest reading since February 2002.

Gross domestic product in China for the second quarter of 2019 grew at 6.2 per cent, the lowest rate since NBS quarterly records began in 1992.
Source: SCMP
01/09/2019

Did China’s growing presence in Arctic prompt Donald Trump’s offer to buy Greenland?

  • US president likely had Beijing ‘on his mind’ when he made his audacious offer, diplomat says
  • Proposal ‘could be interpreted as a very clear signal’ to China and Denmark that the US sees Greenland as part of an exclusive strategic zone, academic says
China has been building closer ties with Greenland in recent years. Photo: Reuters
China has been building closer ties with Greenland in recent years. Photo: Reuters

US President Donald Trump’s eyebrow-raising idea to buy Greenland from Denmark last month epitomised what analysts say is Washington’s fear of the growing interplay of Chinese money, Russian aggression and Arctic political division.

Of all the countries involved in the region, Denmark is feeling the most heat, and not just because Trump recently cancelled a trip and called its Prime Minister Mette Frederikse “nasty” for describing his plan to buy the world’s largest island “absurd”.

Over the past few years, both of Denmark’s self-ruled governments – Greenland and the Faroe Islands – have increasingly turned to China for commercial deals, adding weight to Beijing’s growing strategic influence in the vast area that forms the common backyard of Europe, North America and Russia.

Russia seeks Chinese support in developing Arctic shipping routes

Greenland is of particular concern to the White House and the Pentagon as it is home to the US Thule Air Force Base, located far above the polar circle and which served as the first line of defence during the cold war.
Nowadays, the island is also strategically important for the US ballistic missile early warning system, as the shortest route from Europe to North America goes via the ice-cloaked, resource-rich territory.

“Though it’s difficult to tell the motivations of President Trump, he likely had China on his mind with his Greenland offer,” said a Beijing-based diplomat, who asked not to be named.

The US was likely to step up its presence in Greenland in the future, the person said.

In May, US Secretary of State Mike Pompeo accused China and Russia of introducing a strategic power struggle into the Arctic region and described Beijing’s behaviour there as aggressive.

When Greenland signalled an interest in engaging a Chinese state-owned company to build two airports in 2017 – the island’s prime minister flew to Beijing to appeal for financial backing – Copenhagen stepped in amid US pressure, reluctantly agreeing to finance the projects from the public coffers.

Denmark’s reluctance stems from a long-standing mistrust between Copenhagen and Greenland, as the island’s quest for economic development is viewed by the Danes as an attempt to shore up capital to push for a future independence movement.

“There is no doubt that the US foreign and security policy community is becoming far more interested in Greenland as a strategic asset,” said Andreas Bøje Forsby, a researcher at the University of Copenhagen’s Nordic Institute of Asian Studies.

“Proposing to buy Greenland could be interpreted as a very clear signal to both China and Denmark that Greenland is part of an exclusive American strategic zone,” he said.

Danish Prime Minister Mette Frederikse described Donald Trump’s plan to buy Greenland as “absurd”. Photo: Reuters
Danish Prime Minister Mette Frederikse described Donald Trump’s plan to buy Greenland as “absurd”. Photo: Reuters

The government of the Faroe Islands – an archipelago located between Scotland, Norway and Iceland – has a similar readiness to engage with China but for a different purpose.

Unlike Greenland, there are no immediate political movements calling for independence from Denmark, making its overall relationship with Copenhagen more amiable.

This month, the Faroese government will open a liaison office in Beijing, located within the Danish embassy.

“Our top priority is to have a free-trade agreement with China,” Sigmundur Isfeld, the first head of the Faroe Islands’ representation to Beijing, said.

US defence report flags China’s expanding military reach in the Arctic

With Norway – a key competitor of the Faroes in the fishing and export industries – eyeing a similar arrangement with China, the time was ripe to clinch a deal, he said.

“It is a challenge for us … we need to get in the game.”

Although part of Denmark, the Faroe Islands are not part of the European Union and therefore have to form separate trade agreements with other countries.

“For example, there is an EU-Japan economic partnership agreement. It covers all EU nations, but it does not cover the Faroe Islands,” Isfeld said.

Trade between Greenland and China totalled US$126 million in 2108. Photo: AFP
Trade between Greenland and China totalled US$126 million in 2108. Photo: AFP

China, for its part, has sought to exert its economic and cultural influence on the Faroes, which has a population of about 52,000 people.

Huawei

, the embattled Chinese telecoms giant, has been working with the islands’ main telecoms provider for four years and is said to be finalising a plan for 5G upgrades across the archipelago.

Beijing also helped fund a project for a Chinese-Faroese dictionary.
With a population of about 56,000 people, Greenland is one of China’s smallest trading partners. In the first seven months of 2019, trade between the two was US$126 million, with Chinese imports of fish accounting for the bulk of the total.
The Greenland government’s annual political and economic report for 2019 said that strong demand for metals from China had contributed to mineral and mining projects in the country, though China’s transition to a less mineral-intensive economy could spell trouble for the future of the sector.
The island’s gross domestic product is expected to grow by 3 per cent this year, according to the report, with seafood – principally cod, halibut and prawns – set to continue to be its chief export.
The end of the Arctic as we know it
China’s attempts in recent years to expand its involvement in Greenland have run into roadblocks.
In 2016, a Chinese mining company expressed interest in taking over an abandoned marine station in Grønnedal, an offer that the Danish government turned down the following year. A Chinese state-owned construction company had also offered to build airports in Greenland, but withdrew its offer this year.
Also this year, China expanded its involvement in exporting from Kvanefjeld, one of the world’s largest deposits of rare earths and uranium, by creating a joint venture to process and export the resources.
Beijing has made clear its strategic ambitions in the region. Early last year, it unveiled its Polar Silk Road strategy, plotting the course for its future development goals in the region – including scientific, commercial, environmental preservation and resource extraction efforts.
It also aligned its Arctic interests with its Belt and Road Initiative. Chinese companies are encouraged to invest in building infrastructure along the routes and conduct commercial trial voyages to gauge feasibility.
Putin boasts of nuclear icebreaker fleet as he outlines Arctic expansion plans

Anders Rasmussen, a former Danish prime minister and erstwhile Nato secretary general, said in an article published in Atlantic magazine last month that with melting ice caps opening the Arctic Sea to shipping, Arctic sea lanes “will likely become another flashpoint of renewed competition among the great powers as climate change alters our world”.

It was a situation he said he found “regrettable, but inevitable”.

“Both China and Russia are interested in getting a foothold in Greenland, to expand their influence in the Arctic region,” Rasmussen said. “Instead of being a source of contention,

Greenland should serve to highlight how many interests the United States and Denmark have in common.”

Source: SCMP

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