EU Ambassadors in Beijing criticize Belt & Road Initiative
Apr-24-2018 By : fcccadmin
(EU Ambassadors on a visit to the headquarters of the Shanghai Cooperation Organization (SCO) in Beijing in September 2017)
The European Union has criticized China’s Belt and Road Initiative as 27 out of the 28 EU ambassadors to China signed a document denouncing the project for hampering free trade and giving an advantage to Chinese companies. Only the Hungarian Ambassador refused to sign the document. The Europeans’ concerns may overshadow an upcoming summit between China and the EU, scheduled for July. The document said China was attempting to shape globalization to suit its own interests, and the Belt and Road Initiative is “pursuing domestic political goals like the reduction of surplus capacity, the creation of new export markets and safeguarding access to raw materials.”
“Whether originally intended by China or emerging as a, no doubt, welcome side-effect, China has been putting a wedge between some EU states, or between member states and the union,” said Jyrki Kallio, Senior Researcher at the Finnish Institute of International Affairs. Cui Hongjian, European Affairs Expert at the China Institute of International Studies (CIIS), said the document was meant to show the EU has a common stance on China. “There has been a lot of discussion that the EU does not have a common policy towards China, and in particular the Belt and Road,” he said. “It is clear that EU countries are divided on Belt and Road, but I don’t think that this division is something we need to worry about. It’s a question of who wants to participate, and how deeply.”
Jan Weidenfeld, head of the European China Policy Unit at the Mercator Institute for China Studies, said the document reflected “a set of concerns that people have been expressing in various parts of Europe” after heavy Chinese investment had increased Beijing’s influence over some of the smaller and poorer countries. Much of China’s investment in southern and eastern parts of Europe has been in utilities and energy, or involves existing infrastructure projects, such as the Port of Piraeus in Greece, where Chinese state-owned firm COSCO Shipping had acquired a 51% stake, the South China Morning Post reports.
European Union and Italian authorities are investigating suspected wide-scale tax fraud by Chinese criminal gangs importing goods via Greece’s largest port, a trade gateway between China and Europe, officials said. The investigation at Piraeus port came as its majority stakeholder, COSCO Shipping, faced mounting concerns over a multibillion takeover bid that could see it acquire a container terminal in the U.S. The European Anti-Fraud Office (OLAF) confirmed it was working with Italy on the investigation into the suspected tax scams, but declined to give details. COSCO said it has “in its global operations consistently and strictly followed local and international laws, and persevered to operate legally and compliantly”
China pledges to remove investment caps on foreign car companies by 2022
By : fcccadmin
The Chinese government announced it will scrap foreign ownership limits on local auto firms by 2022, boosting companies such as Tesla which may wish to have a wholly-owned subsidiary in the world’s largest auto market. The timetable of wider market access for foreign auto markers was published after President Xi Jinping told the Boao Forum that China would cut import tariffs and relax foreign ownership restrictions. Currently, foreign carmakers are required to set up a joint venture with a local firm in which there is a 50% investment cap. The cap will be scrapped for new energy vehicle manufacturers this year, for commercial car producers in 2020, and for passenger car producers starting from 2022. Foreign carmakers will be allowed to have more than two Chinese joint ventures as well in 2022. Passenger cars are the largest automotive segment, accounting for around 85% of the 28.9 million new vehicles sold in China last year.
The first to benefit from the relaxation are expected to be new energy carmakers that wish to expand in China. “The growth of traditional carmakers has been pretty stable under the mixed ownership model,” said Toliver Ma, Auto Analyst at Guotai Junan Securities in Hong Kong, adding that the fast growing electric vehicle market will become more competitive as a result of the relaxation. But it will still be some time before a wholly-owned foreign auto manufacturer is set up in China regardless of the implementation time frame by the government, according to Peter Chen, Shanghai-based Engineer with U.S. component maker TRW.
“Nearly all the major global brands have set up their joint-ventures with Chinese partners and it will be unreasonable for them to add many new production lines in the market,” Chen said. General Motors said it would continue to work with existing Chinese partners, suggesting it is in no hurry to set up fully-owned plants in the near future. In November, Tesla’s Chief Executive Elon Musk said the company was three years away from making cars in China. But the ownership structure has proven to be a stumbling block, with Chinese authorities insisting that the plant be set up through a joint venture with local partners, while Musk wanted it to be fully owned by Tesla. China imported 17,000 Tesla vehicles in 2017, up 51.6% from a year earlier, according to the China Automobile Dealers Association (CADA). Passenger cars from Chinese brands accounted for around 44% of the total sold in the country in 2017. China is now the world’s biggest electric vehicles (EV) market, outselling both the U.S. and Europe.
China will also lift shareholding limits in the shipbuilding and aircraft manufacturing industries for foreign investors this year.
President Xi calls to build a digital China at Fuzhou Summit
By : fcccadmin
Chinese President Xi Jinping called for the promotion of informatization and the building of a digital China in a congratulatory letter sent to the first Digital China Summit, which ran from April 21 till 24 in Fuzhou, capital of Fujian province. Digitalization, networking and the application of intelligent technologies are playing more important roles in promoting social and economic development, modernizing China’s governance system and capacity, and meeting the people’s ever-growing needs for a better life, Xi Jinping said in the letter.
The summit showcased China’s latest achievements in developing e-governance and the digital economy. Huang Kunming, Director of the Publicity Department of the Communist Party of China (CPC), addressed the opening ceremony, urging implementing Xi’s strategic thought and instructions on building China into an internet power. He also urged achieving breakthroughs in core technologies. Tencent Chairman Pony Ma and Alibaba Group Founder Jack Ma also spoke at the Summit. Jack Ma said a law on the digital economy is urgently needed to guide the development of internet companies in China. The country is the world’s largest e-commerce market, accounting for over 40% of the value of worldwide transactions, according to the McKinsey Global Institute.
Xi’s words were also seen as encouraging companies to incorporate advanced technologies including big data, artificial intelligence (AI), virtual reality (VR) and augmented reality into their products, according to Xiong Li, CEO of NetDragon Websoft, China’s leading online gaming and education developer.
Comprehensive master plan for the Xiongan New Area published
By : fcccadmin
A master plan for the development of the Xiongan New Area in Hebei province was published last week. Xiongan is another new area of “national significance” following the Shenzhen Special Economic Zone and Shanghai Pudong New Area, which has the highest backing of the Communist Party and of the Chinese government. The plan charts the development of the Xiongan New Area, mapping out the area’s future by 2035 and looking ahead into the mid-21st century, according to the document.
It has 10 chapters covering general requirements, developing a scientific and reasonable layout, shaping the city landscape for a new era, building a beautiful natural ecology and environment, developing high-end and high-tech industries, offering quality shared public services, constructing a fast and highly-efficient transport network, building a green and smart new city, fostering a modernized city security system, and ensuring orderly and effective implementation of the plan. The document sets 38 key targets for the building of Xiongan. The key targets include the ratio of research and development (R&D) expenditure in the local GDP, the number of patents registered by every 10,000 people, big data’s contribution to urban and emergency management, and air quality improvement. Bidding on transport projects, including railways and highways, will start soon. The new plan will spur huge amounts of investment, up to at least CNY10 trillion. This year, 13 projects will be started in Xiongan, with investment of more than CNY60 billion.
In April 2017, China announced the establishment of Xiongan New Area, spanning three counties in Hebei province about 100 kilometers southwest of Beijing. Xiongan will be the location for Beijing’s non-capital functions. The area will become a new home for Beijing’s colleges, hospitals, business headquarters, and financial and public institutions that meet the requirement of Xiongan’s status and development. This means that polluting industires will not be allowed to be set up in the area. By 2035, Xiongan will basically develop into a modern city that is green, intelligent, and livable, with relatively strong competitiveness and harmonious human-environment interaction. By the middle of the century, it will become a significant part of the Beijing-Tianjin-Hebei city cluster, the Shanghai Daily reports.
PBOC Governor pledges opening up of financial sector
By : fcccadmin
Recently appointed Governor of the People’s Bank of China (PBOC) Yi Gang attended the three-day spring meetings of the International Monetary Fund (IMF) and the World Bank in Washington. In a statement to the International Monetary and Financial Committee, Yi said China would “vigorously” push forward the reform and opening of its financial sector, significantly relax market access restrictions, create a more attractive investment environment, strengthen the protection of intellectual property, and actively expand imports. Yi told a seminar in Washington that the U.S. should also look at bilateral trade in the service industry, reiterating the pledge that China would continue to open its financial sector. “China will continue its fundamental strategy of opening up its financial markets – and that will not be affected by the current trade friction with the U.S.,” Yi said. He added that as the sector opened further, the U.S. would see growth in its services trade with China.
China’s economic fundamentals are strong and it has sufficient policy tools to guard against systemic risks, Governor Yi Gang said. The Chinese government has prioritized containing financial risks, after years of debt-fueled growth put China’s economy on what the IMF previously called a “dangerous and unsustainable” trend.
U.S. Treasury Secretary Steven Mnuchin announced that a trip to China was under consideration to discuss the trade dispute between the two countries, but no date has yet been announced. Moreover, experts do not expect a breakthrough if such a trip materializes. “The larger threat is posed by increasing trade tensions and the possibility that we enter a sequence of unilateral, tit-for-tat measures, all of which generate uncertainties for global trade and GDP growth,” Roberto Azevedo, Director General of the World Trade Organization (WTO), told the IMF’s Policy Committee.
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