China’s new-found penchant for luxury travel poses the latest threat to a turnaround for the USD80 billion diamond industry. Chinese deluxe spending on travel is the “fastest-growing competitor” standing in the way of diamond sales in China, says De Beers Chief Executive Bruce Cleaver. To win those travel dollars, he says, De Beers could even see itself tying up with the luxury travel market somehow.

“Luxury travel is certainly a competitor to diamonds,” says Cleaver. “If there’s a way to link luxury travel to an African destination where the diamonds came from, we’d certainly look into that too.”

The world’s biggest diamond producer is seeking to kick-start an industry that has seen prices for polished diamonds slump for the past six years. Its major Asian markets, including China and India, reported flat or declining sales in 2016. The company is also facing hurdles as a younger generation of Chinese shoppers spend more on high-end electronics, travel and fine dining.

Sales in China and India showed improvements in the first half of 2017, with single-digit growth from a year earlier, says Cleaver. Diamond sales in China declined 4.8% last year. De Beers is seeking to influence buying trends by spending USD140 million this year to advertise diamonds, the largest amount since 2008. De Beers also is competing against companies including Chow Tai Fook that are offering fashion jewelry at lower prices to lure Chinese shoppers.

China’s economic model represents an “unprecedented” threat to the world trading system that can not be addressed under current global rules, U.S. Trade Representative (USTR) Robert Lighthizer said. “There is one challenge on the current scene that is substantially more difficult than those faced in the past, and that is China,” he said in a speech in Washington. “The sheer scale of their coordinated effort to develop their economy, to subsidize, to create national champions, to force technology transfers and to distort markets in China and throughout the world is a threat to the world trading system that is unprecedented.” The World Trade Organization (WTO) and its rules were not designed to deal with China’s current approach to its economy, he said.

Lighthizer said he doesn’t want to jump to any conclusions from an ongoing USTR investigation into alleged intellectual property violations by China under Section 301 of the Trade Act. The provision allows the President to unilaterally impose tariffs and other restrictions to protect U.S. industries from unfair trade practices by foreign nations. Lighthizer said he gets “an awful lot of complaints,” especially from American Chief Executives from major companies about having to hand over their technology to joint-venture partners in China, and on the issue of Chinese piracy.

It was the first major public speech by Lighthizer, 69, who was confirmed in May as USTR. He served as a Deputy USTR under President Ronald Reagan, earning a reputation as a hard-nosed negotiator.

Lighthizer’s comments on China may damp speculation that the departure of White House Chief Strategist Steve Bannon, a staunch economic nationalist, would lead to a less hawkish tone on trade from the White House.

But Chinese researchers say the talk of Lighthizer is just bluster and there is no real threat of a trade war. Beijing did not directly hit back at Lighthizer over his criticism. Chinese Foreign Ministry Spokesman Lu Kang said that China would go to the World Trade Organization (WTO) to resolve any trade disputes.

Chinese and EU think tanks have urged to speed up negotiations for the conclusion of a bilateral investment treaty (BIT) between China and European Union members. At the First China-EU CEO and Former Senior Officials’ Dialogue, a proposal for China-EU business cooperation was put forward by the China Center for International Economic Exchanges (CCIEE), together with Brussels-based economic think tank Bruegel, the London-based Royal Institute of International Affairs and the Chinese University of Hong Kong. “There is huge potential for bilateral trade and investments,” said Zeng Peiyan, former Vice Premier of the State Council, at the forum. The think tanks said setting up a safer, more open and more transparent platform like a BIT will not only promote bilateral trade and investments but offer a wider range of business opportunities for both sides.

“There is anxiety among investors on both sides, mainly about the access to markets,” said Zhang Xiaoqiang, Executive Vice Chairman of the CCIEE. “Policymakers should ease their anxiety by creating an investment-friendly environment.” Once negotiations for BIT finish, the upgraded bilateral relationship may act as a good foundation for an EU free trade agreement, which is expected to increase the EU’s exports to China by one-third, and China’s exports to the 27 EU member countries by 20%. With each side being the other’s biggest source of imports, the trade volume between China and the EU is estimated to surpass €6.78 trillion in 2025, providing that the economic reforms of both sides are continuing, according to a CCIEE research report.

“Foreign direct investment (FDI) between China and the EU is still much lower than that between the EU and the U.S. There lies huge potential in the sector,” said Jean-Claude Trichet, former Governor of the EU Central Bank, the China Daily reports.

Home loan rates are going up in Beijing and other big Chinese cities as the government tries to discourage people from buying property with huge loans. The rate increases target new borrowers – those with existing mortgages will not be affected. China’s big four state banks – the Industrial and Commercial Bank of China, China Construction Bank, Agricultural Bank of China and the Bank of China – began earlier this month charging 105% of the benchmark rate to first home buyers in Beijing. Smaller banks have started charging 110% of the benchmark rate to first home buyers in Beijing, while the Beijing branch of Baoshang Bank is charging 130% of the benchmark rate. The only bank still offering mortgages at an interest rate below the benchmark is the Beijing branch of HSBC – with a 1% discount to the benchmark, according to retail banking information website Rong360.com.

Chinese banks can in theory decide how much they charge for mortgages, but in practice the government tries to control the housing market by deciding how much banks can lend homebuyers and how much they can charge in interest on those loans. Home loan rates in Beijing and other big cities such as Shanghai, Shenzhen and Nanjing have been going up in tandem with property prices, which the government is struggling to contain.

Real estate prices in China’s big cities have been climbing at an almost unstoppable pace since the government began allowing private ownership of homes in 1998, and Beijing and Shanghai are now ranked among the top 10 most expensive cities in the world. But there are signs the market is cooling. Meanwhile, downpayments are also going up. In Beijing, the minimum downpayment for a first home was raised to 35% in 2017, and for a second home it went up to 60%. Across the country, total bank loans for property amounted to CNY30 trillion at the end of June – of which CNY20 trillion were mortgages.

Authorities in of Beijing are trying to get people to rent homes as part of their efforts to keep surging property prices in check, but they may be fighting an uphill battle in a society where owning property is highly valued.

New measures were introduced to cool the property market in five cities. Property owners in Chongqing, Nanning (Guangxi), and Nanchang (Jiangxi) must now wait two years before they can resell flats, regardless of whether they are new builds or older homes. In Changsha (Hunan), newly purchased flats cannot be resold for three years, while in Xian (Shaanxi), property owners need approval from the authorities to resell. The four provincial capitals all have populations of more than six million people, while Chongqing municipality – which is directly administered by the central government – is home to more than 30 million. Some of the cities have also restricted the number of properties that can be bought to one per household over a period of two or three years, among other curbs.

The Michelin food guide launched its 2018 Shanghai edition with two restaurants awarded three stars.

The two are the Cantonese restaurant T’ang Court inside Langham Shanghai in Xintiandi, and an innovative Western restaurant Ultraviolet. Michael Ellis, International Director of the Michelin Guides, said Ultraviolet is “an unusual place that immediately plunges the customer into an experiential journey where all the senses are stimulated, and Paul Pairet offers avant-garde cuisine of a very high standard, a real gourmet journey”.

T’ang Court has been awarded three stars for the second year. “Fine Cantonese cuisine has always been my lifelong passion, and I will continue to dedicate my efforts in refining the recipes,” said T’ang Court’s Executive Chef Justin Tan.

The present edition is Michelin’s second Shanghai edition with 30 restaurants awarded one or more Michelin stars. There are five new restaurants awarded one star compared with last year’s guide, including Bo Shanghai, Yong Fu, Wujie (The Bund) and Jean-Georges. Taian Table, which had to close down temporarily last year for operating in unlicensed premises, retains its star after moving to Zhenning Road in Changning district. All awarded restaurants last year retain their stars in the new guide, the Shanghai Daily reports.