The Shanghai Financial Court, which specializes in finance-related lawsuits and is the first of its kind in China, began operating last week. The new institution is meant to provide a better business environment for investors from home and abroad. The intermediate-level court focuses on civil and administrative disputes over financial issues, including loans, insurance, securities and cases against financial authorities. For the court to handle cases, the minimum amounts at issue are CNY100 million if both parties are in Shanghai and CNY50 million if one party is not based in the city. Cases that do not meet the minimum are handled by district courts. Criminal cases are not accepted by the Financial Court.

“If we take online lending as an example, lawsuits against online lending platforms will be accepted and heard at the court, but criminal cases in which such platforms are suspected of committing illegal activities won’t be accepted,” said Zhao Hong, President of the Court. Twenty-eight judges will oversee case hearings and trials at the court, which has 66 staff members. Most of the judges are veterans of the lower-level financial tribunals of the city’s courts. Individuals and businesses can register cases, check progress, apply to read legal documents and view court decisions on the bilingual Chinese-English website of the Court. Sheng Yongqiang, Vice President of the Shanghai High People’s Court, said that globally financial centers have almost all set up legal system mechanisms aligned with their financial systems.

From 2013 to 2017, courts in Shanghai heard nearly 480,000 finance-related cases as courts of first instance and the number of such lawsuits in Shanghai grew by an average 51% year-on-year. The financial court was another innovation in China’s judicial system after the intellectual property courts and an internet court were set up, the China Daily reports.

One of China’s largest property developers, China Vanke Co, refuted media reports that the entrance of institutional landlords has led to current soaring rental prices. “It is not until the past two years that large companies started to emerge in the traditional leasing market, but the penetration rate is less than 5% in China, which is too small to have a significant influence,” Vanke President Zhu Jiusheng said. Large real estate brands are acquiring rental homes on a large scale, substantially pushing up leasing prices. According to a report by china.com.cn, rents in 13 major cities have increased by over 20% in the past year, especially in first-tier cities such as Beijing, Shanghai, Guangzhou and Shenzhen.

Many leading property developers recently have regarded the rental sector as a core business and a key driver in the future. Taking Vanke as an example, it has acquired more than 160,000 rooms for rent in 30 cities and a quarter of them were on the market by the end of June. Zhu said the company included rental housing as one of its core businesses in 2018, saying the source of its apartments was mostly from building projects on land which is restricted to rental-only properties by the government, other firms’ idle resources, and personal properties.

Meanwhile, Country Garden Holdings announced that it has 24,000 long-term rental apartments in total, 21,000 of which are still under construction, and the aim is to launch 1 million units in three years. It is reported that some apartment rental platform operators offer 20% to 40% higher than normal market prices to house owners in order to acquire more apartments to increase rental prices. However, Pan Shiyi, Chairman of SOHO China, noted it would still be a loss to invest in the longterm leasing sector even if the current rental price doubles. The rate of return in China’s rental market has been low in the long term. In the second quarter of 2018, it was just 2.6% in China’s 50 biggest cities, a year-on-year decrease of 6% according to the E-House China R&D Institute. Liu Weimin, Researcher at the Development Research Center of the State Council, said there were multiple factors behind the soaring rents. “The critical reason is a supply shortage, especially a lack of high-quality resources,” the China Daily reports.

Rents in Beijing have risen 25.8% compared to last year, with July rent alone 4.3% higher on a monthly basis. Rent for a 50-square-meter one-bedroom apartment built in 1980 in Xuanwumen, 2 kilometers from Tiananmen Square, is over 8,000 a month, while earlier this year, the rent was CNY6,000 per month. The average monthly income in Beijing is CNY8,467.

China’s labor market must be well-prepared to adapt to challenges brought by the rapid development of artificial intelligence, which is expected to replace 40 million to 50 million full-time jobs in the country within the next 15 years, according to a report by the China Development Research Foundation (CDRF) and Sequoia Capital China. By 2030, automation will replace one-fifth of the country’s jobs in the manufacturing industry, and if the process of automation accelerates, nearly 100 million workers will need to change their field of work, the report said. “AI will greatly free humans from repetitive jobs and cultivate creative minds,” said Neil Shen, Founding and Managing Partner of Sequoia Capital China.

“This means work will shift from being labor-centric to innovation-driven. More talents will devote their time to scientific discovery and technological innovation, and dedicate their efforts to the enrichment of the world.” This is a blessing for jobs featuring creativity, but a curse for employees with repetitive work. The report noted that by 2027 there will be 9.93 million employees in the Chinese financial industry, but 22% of the jobs in banks, 25% in the insurance market, and 16% in the capital market will be eliminated because of repetitive work. For the remaining employees, working time will be reduced by 27% due to AI. Lu Mai, Vice Chairman and Secretary General of the CDRF, said the country must be prepared to adapt to the changes and meet the challenges. “If we decide to follow the path toward a future with AI, we must emphasize human capital investment,” Lu said.

According to a report on AI in 2017, China’s core AI industry scale reached USD5.6 billion in 2017, representing more than 15% of the global total. By 2020, that scale will surpass USD22 billion, with a 65% annual growth rate, higher than the global average, which is 60%, the China Daily reports.

On 28 September, the Embassy of the People’s Republic of China in Belgium is organizing a seminar in cooperation with the Flanders-China Chamber of Commerce. The seminar is focused on China and the recently published White Paper on the WTO. It will take place at the Tangla Hotel Avenue E. Mounier 5, 1200 Brussels. An invitation will be sent to the FCCC members.

A Chinese delegation, led by Vice Minister of Commerce Wang Shouwen, plans to visit the United States this week for talks on bilateral economic and trade issues, China’s Ministry of Commerce (MOFCOM) announced. Wang is also the Deputy China International Trade Representative. The American delegation will be led by David Malpass, Under Secretary for Inter national Affairs at the U.S. Department of the Treasury. China has reaffirmed its stance of opposing unilateralism and trade protectionism, and not accepting any form of unilateral restrictive trade measures. China welcomes dialogue and communication on the basis of reciprocity, equality and integrity, according to a MOFCOM statement.

While the engagement, at the invitation of the U..S side, was seen by analysts and business officials as positive, they cautioned that the talks were unlikely to lead to a breakthrough given they are among lower-level officials and led on the U.S. side by the Treasury Department, not the U.S. Trade Representative (USTR). The world’s two largest economies have slapped tariffs on tens of billions of dollars worth of each other’s goods since they held their last high-level meeting in June, and have threatened further duties on exports worth hundreds of billions of dollars.

“The lower rank of the delegation suggests that both sides remain far apart, and an agreement during this visit is very unlikely,” Jonas Short, head of the Beijing office of investment bank Everbright Sun Hung Kai, wrote in a note. The meeting would end what had been a lull in talks between the two sides. The last round was held in early June when Chinese Vice Premier Liu He met U.S. Commerce Secretary Wilbur Ross in Beijing. The U.S. Treasury Department, led by Mnuchin, has been viewed as most opposed to tariffs among key Trump administration agencies, espousing a more moderate approach to China than trade hardliners such as the USTR’s Robert Lighthizer, the Shanghai Daily reports.

The China Daily added that Douglas H. Paal, Vice President of the Asia Program at the Carnegie Endowment for International Peace, said the new talks will be difficult, as the two sides have many disparities to resolve. “Having working-level talks on these specific issues is not a bad idea, however, if only to start identifying points of agreement that might be reached considerably later,” Paal said, adding that a breakthrough seemed unlikely before the midterms in November. Gary Hufbauer, a trade expert at the Peterson Institute for International Economics in Washington, said that “for the next few months, I think we will see a defusing of the trade dispute”.

China has banned banks in its free trade zones (FTZs) from certain lending activities to ease pressure on the yuan in offshore markets. The move comes after the yuan weakened against the dollar for nine straight weeks. The move prevents commercial banks from using some interbank accounts to deposit or lend yuan offshore through FTZ schemes. It was aimed at tightening offshore yuan liquidity and making it more expensive to short the Chinese currency, traders said.

U.S. President Donald Trump has signed into law the USD716 billion John S. McCain National Defense Authorization Act that authorizes tougher regulations on foreign investments in the U.S. and broadens the authority of the Committee on Foreign Investment in the U.S. (CFIUS) that reviews foreign investments in the U.S. for national security concerns. The law “significantly expands CFIUS’s jurisdictional ambit, and reflects the most comprehensive reform to CFIUS in its history”, Mario Mancuso, author of “A Dealmaker’s Guide to CFIUS” said. He added that the new law “will capture many investments that have not been historically subject to CFIUS’s review”, including venture capital and private equity deals, as in many cases it shifts the reviewer’s focus “from whether a foreign investor could ‘control’ a U.S. business to whether the foreign investor is ‘non-passive’”. It is the first reform that the review process has undergone in more than a decade. Although the bill did not single out any countries in particular, lawmakers have not shied away from spelling out that China’s acquisitions of U.S. key technologies are their main concern. Analysts have expressed concern over the lack of clarity regarding what kinds of technology will raise red flags for the Committee. The new law also bars U.S. government agencies from buying ZTE products, but allows the company to buy U.S. parts and sell to American consumers.