The Flanders-China Chamber of Commerce (FCCC), VOKA West-Flanders and the Cheung Kong Graduate School of Business (CKGSB) organized a seminar focused on: Win in China: Business Models & China Entry Strategies. The target audience of the event was CEOs, founders and managers from companies interested in doing business with China. Following registration and a sandwich lunch, Gwenn Sonck, Executive Director of the Flanders-China Chamber of Commerce (FCCC) introduced the event. Bo Ji, Assistant Dean & Chief Representative for Europe at Cheung Kong Graduate School of Business (CKGSB) delivered the keynote speech: “Win in China: Business & China Entry Strategies”. “Experiences of Barco in China” was introduced by Nicolas Vanden Abeele, Executive Committee Member and Senior Vice President- GM Entertainment, Barco. A Q&A and networking session concluded the event.

Apple was denied tariffs relief on five Chinese-made components for the upcoming Mac Pro computer, even after the company announced it was keeping some assembly operations in the U.S. The U.S. Trade Representative’s office refused to grant reprieve from 25% tariffs on optional wheels for Apple’s Mac Pro, a circuit board for managing input and output ports, the power adapter, charging cable and a cooling system for the computer’s processor. The decision came about a week after Apple announced it would make new Mac Pro computers in Austin, Texas, after originally considering shifting production to China.

The move followed an announcement this month that the USTR had agreed to Apple’s request for tariff waivers on 10 of 15 Chinese parts. Apple was denied tariff relief even as President Donald Trump praised the company’s decision to keep some production activities in Texas, thereby supporting U.S. jobs. Apple said it didn’t have any further comment. Exclusion decisions are based on whether a product is available only from China, is strategically important, or related to Chinese industrial programs, and whether duties will “cause severe economic harm” to the company or U.S. interests. Products such as the Apple Watch, AirPods and iMac computers were hit by 15% tariffs earlier this month, while the iPhone, iPad and other major Apple products are set to be impacted later in December.

Meanwhile U.S. President Trump called on Beijing to launch an investigation into the activities of Hunter Biden, the son of his Democratic rival for the presidency Joe Biden. However, China is unlikely to breach its long-standing principle of not interfering in the internal affairs of other countries. Trump also asked Ukraine to investigate Biden and is facing possible impeachment as a result. This may overshadow the upcoming trade talks which are to be held between Chinese and American negotiators in Washington this week. Trump accused Hunter Biden of accepting “billions of dollars in “pay-offs” from Beijing and favorable treatment for his son’s business interests in exchange for softer trade policies. Hunter Biden is Director of BHR Equity Investment Fund Management, which is incorporated in Beijing, but public records do not support Trump’s claims that Beijing invested USD1.5 billion in it. According to the New York Times, Hunter Biden bought a 10% stake in BHR in October 2017 – when his father was no longer Vice President – for about USD420,000.

Christopher McNally, Professor of Political Economy at Chaminade University in Hawaii, said that the negotiations were likely to achieve some breakthroughs given the slowdown of the U.S. economy and the political pressures on Trump. He said possible outcomes included a “ceasefire” in the tariff dispute; “mini deals” on market access, intellectual property rights or the U.S.’ restrictions on Huawei; and China agreeing to buy more American agricultural products.

Indonesia is the “only loser” among ASEAN countries for failing to attract manufacturers seeking to bypass higher tariffs from the U.S.-China trade war, according to two economists from brokerage firm Maybank Kim Eng in Singapore. Vietnam, Malaysia, Singapore and the Philippines had picked up business – mostly in the form of higher foreign direct investment (FDI). Economist Lee Ju Ye said Vietnam had emerged as the biggest beneficiary, with a 73% jump in FDI inflows from China and Hong Kong last year.

As manufacturing data from China, the United States and Europe weakened to record levels in September, economists argued that a downward trend could be expected to continue until at least the first quarter of 2020 amid the trade war between China and the U.S. China’s manufacturing activity has now contracted for five consecutive months, while readings for both Germany and the U.S. dropped to their lowest levels in a decade, the South China Morning Post reports.

As Chinese companies extend their reach abroad after achieving success at home, effective branding is shifting from a “nice to have” to a “business necessity”. To achieve genuine global influence, Chinese enterprises need to translate their tangible strengths – be they manufacturing scale or innovation capabilities – into soft power that is able to impress local consumers and make an impact on business operations, according to marketing experts.

A recent survey by global marketing agency Ogilvy of Chief Marketing Officers of 40 high-profile Chinese companies showed a growing appetite for branching out overseas. The study identified the key drivers for Chinese enterprises’ outbound expansion as “seeking new markets for growth, easing domestic competition and acquiring advanced technologies”. But relatively few were driven to look overseas for branding reasons.

However, branding is increasingly becoming a game-changer in shaping consumer perceptions, especially as a growing protectionist sentiment looms over the global economy, said Chris Reitermann, Asia and China CEO of Ogilvy. “I do think a lot of companies have underestimated the value of a clearly defined brand in getting people to understand what a company is, what a company does and what its values are,” Reitermann said. The transformed macro-economic environment is pushing companies to shift from traditional merger and acquisition-based growth to more organic, green-field investment, and that makes a “clearly-defined brand” a necessity, he added.

Deng Delong, President of Trout & Partners, which specializes in brand positioning, said he believes global distribution of assets will be conducive to the world economy at large. Deng also supports Chinese companies’ goals of seeking new growth opportunities abroad. But instead of recklessly expanding overseas, brands should first identify local needs, position themselves and prove their relevance, he noted. “Especially against economic uncertainties, a strong and unique brand proposition will give companies unparalleled pricing power. This would put them in an advantageous position even amid trade disputes,” Deng said. Due to the costs of branding, many Chinese companies are taking a gradual approach by working with overseas partners to make an impact. “We don’t want to just rush into the global scene before we are fully prepared, especially on the branding front. Branding isn’t simply about helping sell products to a global audience. It’s about conveying the brand DNA, concepts and our unique characteristics,” said Han Boming, CEO of K-Boxing, a Chinese manufacturer of menswear.

Chinese businesses have increased their understanding of branding, Reitermann said, but there is still a discrepancy between the grand vision held by senior executives and various entities within the organization handling day-to-day business, he added. “That’s why it is so important to get the right management model in place and provide the right resources.” Reitermann believed learning the value of brand building takes time: “It will probably take Chinese companies another 10 years to get there,” the China Daily reports.

Hong Kong Exchanges and Clearing (HKEX) has dropped its bid for the London Stock Exchange (LSE). It faced a deadline of October 9 to raise its original bid, which had been rejected by LSE and will now not be able to make new bid for the coming six months.”The Board of HKEX continues to believe that a combination of LSE and HKEX is strategically compelling and would create a world-leading market infrastructure group,” HKEX said in a regulatory statement. “The Board of HKEX is disappointed that it has been unable to engage with the management of LSEG in realizing this vision,” it added.

Calls for HKEX to raise its bid had faced opposition. “I will definitely oppose HKEX from raising its offer for the LSE as it will become too expensive,” said Christopher Cheung, a Hong Kong lawmaker for the financial services sector, and an HKEX shareholder. Cheung and about 500 local brokerages received shares of HKEX when it was listed in 2000. But HKEX failed to convince these shareholders about the merits of a higher takeover offer. Three shareholders of the London bourse had said they could be drawn into further discussions if HKEX raised its offer price by 20% and increased the cash component. “The deal is full of uncertainties as we do not know if the regulators in the UK, U.S. and Europe will approve it, and we do not know if the combination of the two exchanges will work out smoothly,” said Cheung, who is also the Founder and Chief Executive of Christfund Securities.

HKEX on September 11 surprised the market by proposing to pay GBP83.61 per LSE share in cash and stock for the London bourse operator, valuing it at GBP29.6 billion. It was the most expensive exchange takeover offer and could have created a giant exchange that would span Asia, Europe and America. The LSE immediately rejected the unsolicited approach, saying it faced regulatory hurdles and did not make strategic sense. But HKEX had not given up and hired HSBC and UBS to lobby the shareholders of LSE directly.

“Like many shareholders, I do not feel the current offer on the table from HKEX for the LSE fully reflects the value and future potential earnings the combined entity would likely achieve. That said, were we to see a revised headline price and an improvement in the cash component from HKEX, that would likely catch the attention of LSE shareholders,” Guy de Blonay, Manager of the Jupiter Financial Opportunities Fund and a major LSE shareholder said, before HKEX decided not to raise its offer, the South China Morning Post reports.

U.S. digital money transfer platform PayPal Holdings has obtained Beijing’s approval to buy a controlling stake in a domestic payments firm, which would make PayPal the first foreign firm to enter China’s payment services market. Gopay Information Technology, PayPal’s acquisition target, has received approval from the People’s Bank of China (PBOC) to sell a 70% stake to PayPal. Gopay has licenses for mobile, online and cross-border yuan payment services. PayPal will make the acquisition through a subsidiary in Shanghai. No financial terms were disclosed. The transaction is expected to close in the fourth quarter of 2019.

Early last year, China’s central bank announced that it was opening the country’s domestic market to foreign third-party electronic payment firms, a move intended to promote competition in the retail payments industry.