Briefing: Growing European businesses in China in the face of international trade conflicts 26 November 2018 – The Conference Board, Brussels
Nov-28-2018 By : fcccadmin
The Flanders-China Chamber of Commerce and The Conference Board organized the briefing: ‘How leading European companies are growing their China business in the face of international trade conflicts’. This briefing took place at The Conference Board in Brussels on 26 November 2018. Mrs. Gwenn Sonck, Executive Director Flanders-China Chamber of Commerce, introduced the event. During the Briefing, a selected group of senior executives discussed “Global Economic Outlook: On Top of the World, Looking Over the Edge” and “How international conflicts are changing the west’s business model in China – and how to win?” The meeting included presentations of the latest research and analysis by The Conference Board, facilitated by Dr. Bart van Ark, EVP, Chief Economist and Leo Austin, Principal Advisor to The China Center for Economics & Business.
Meeting with Chinese delegation interested in supply to pig farms – 20 November 2018 – Ghent
By : fcccadmin
The Flanders-China Chamber of Commerce (FCCC), the Province of East-Flanders, and the Belgian Feed Association (BFA) organized a China Seminar on 20 November 2018 in the House of the Province.
The increased hog consumption in China provides opportunities for the export of pork meat to China as well as for the supply sector. Hog farming in China is restructuring, which provides opportunities for Flemish and Belgian enterprises in the supply sector which want to export.
The Seminar on 20 November 2018 was organized on the occasion of the visit of a large Chinese delegation from the pig farming sector and focussed on the Flemish and Belgian companies in the supply sector, including companies specialized in feedstuff, infrastructure, construction of pigsties, genetic material, vaccination and vaccines, medical materials, machines and equipment for slaughterhouses, and meat processing. During the Seminar the sector in Flanders and Belgium and research on bio-safety at Ghent University, was presented. A few companies introduced themselves, and the event was concluded with networking with the Chinese companies.
Vice Governor for the Economy and International Cooperation Mrs. Martine Verhoeve welcomed the participants, followed by an overview of the supply sector by BFA. Prof. Dr. Jeroen Dewulf, Ghent University, gave an introduction on bio-safety, followed by a short introduction by four Flemish companies in the supply sector. Mrs. Gwenn Sonck, Executive Director Flanders-China Chamber of Commerce, presented the conclusions of the event.
Will the G20 Buenos Aires talks and dinner lead to a truce in the U.S.-China trade war?
Nov-27-2018 By : fcccadmin
All eyes are now on Buenos Aires, where on November 30 and December 1 the G20 Summit will take place and Presidents Donald Trump and Xi Jinping are expected to hold talks and have dinner. In small signs of goodwill, China has allowed a Hong Kong port call by the U.S. aircraft carrier Ronald Reagan and White House Trade Policy Adviser Peter Navarro – famous for his hawkish points of view on China – has not been invited to the dinner, where each President is expected to be accompanied by six aides. White House Chief Economic Adviser Larry Kudlow told Fox Business News that Trump was trying to “inject a note of optimism” into trade talks with China, adding there were “very detailed communications” between China and the U.S. taking place at all levels of government.
Trump has significantly toned down his rhetoric about China and trade since late September, when the administration imposed 10% tariffs on USD200 billion worth of Chinese imports. From July 6, when Washington slapped the first round of duties on Chinese goods, to the most recent tariff announcement on September 18, Trump tweeted about China 20 times, trade 42 times and tariffs 21 times. Since then, Trump has only mentioned China five times – the latest on November 1, when he said he had “a long and very good conversation” with Xi on many subjects. Meanwhile, his administration is divided between the hardline hawks like Navarro and Lighthizer seeking maximum concessions from China versus pragmatists like Kudlow and Mnuchin who are more willing to seek a compromise – and that will make it more difficult for Trump and Xi to reach any deal.
Meanwhile, the Office of the U.S. Trade Representative published a 53-page report with updated information about the Section 301 investigation of China’s technology and innovation-related policies and practices. It mentions the USD2 billion acquisition of a 45% stake in California-based electric car maker Faraday Future by Evergrande Health, the Hong Kong-listed subsidiary of China’s largest property company the Evergrande Real Estate Group, as an example of how Beijing makes use of outbound investments to obtain advanced technologies favored by state industrial plans. The report also accused China of “conducting and supporting cyber-enabled theft” for gaining access to intellectual property and said the Chinese government has created and supports a web of entities with presence in Silicon Valley and other U.S. technology centers to invest in hi-tech American start-ups and other investment activities to further the industrial policy goals of the Chinese government. “This update shows that China has not fundamentally altered its unfair, unreasonable, and market-distorting practices that were the subject of the March 2018 report on our Section 301 investigation,” U.S. Trade Representative Robert Lighthizer said.
“China is deeply concerned with the new accusations, and urges the U.S. side to stop making statements or moves that are destructive to bilateral economic and trade ties,” Ministry of Commerce Spokesman Gao Feng said. “By putting domestic laws above international laws, the United States has broken its commitment to all members of the World Trade Organization and has disregarded and damaged multilateral rules of the World Trade Organization,” he added.
A threat by Kevin Hassett, Chairman of Donald Trump’s Council of Economic Advisers to evict China from the World Trade Organization was dismissed as “talking nonsense’’. “The WTO is a multilateral organization and is not owned by the United States,” Foreign Ministry Spokesman Geng Shuang said, noting that the comment “fully exposed Washington’s bullying and the mentality of self-conceit”.
Some analysts expect the Chinese government to announce more reform and opening up policies at a gathering in December to celebrate the 40th anniversary of the country’s reform and opening up. Those policies could move China close to a reciprocal trading environment and help end the trade war. While Beijing has agreed to buy more U.S. goods to reduce its trade surplus, it has refrained from dramatically overhauling its industrial policies as Washington has requested. In a bid to reach a ceasefire in the trade war, China has offered to buy more natural gas from the U.S. and improve protection of intellectual property rights.
The U.S. is trying to “decouple” from China and retract its companies from the Chinese supply chain. But China is becoming less reliant on the U.S. for its economic health, and more intertwined with Asia. Today, bilateral trade with the U.S. accounts for 14% of China’s trade flows. The U.S. share of Chinese exports in trade in value-added terms actually declined from about 30% in 2002, just after China joined the World Trade Organization (WTO), to 20% in 2011. Since the global financial crisis, China has both overtaken the U.S. as the world’s largest trading nation and seen its gross domestic product growth become less dependent on exports. China’s trade-to-GDP ratio is 38%. By comparison, Vietnam’s trade as a percentage of GDP is over 200%. This suggests China is less susceptible to the downsides of a bilateral trade war, the South China Morning Post reports.
Shanghai free trade zone (FTZ) announces several “firsts”
By : fcccadmin
Twelve companies signed agreements on November 19 to start business in the Shanghai free trade zone (FTZ). The deals include many firsts: the first foreign performance brokerage firm, the first joint-venture aircraft manufacturer, the first foreign vocational psychological training institute, and the first foreign financial education institute. “We are glad to become the first foreign financial education institute on the Chinese mainland, thanks to the FTZ’s opening-up policy,” said Zhong Ke, General Manager of IfFP Shanghai, set up by the Zurich-based Institute for Financial Planning. IfFP Shanghai, which will be based in Jinqiao, will conduct training sessions for financial professionals and students.
Travelex, the world’s largest currency exchange network that is based in London, also signed an agreement to set up its Asia headquarters in the FTZ. “As the world’s leading international financial center, Pudong has favorable financial environment as well as full supporting facilities and policies,” said Cameron Hume, Managing Director of Travelex Asia. Shanghai will be the center for its Asian operation, he said. Other companies to sign deals included China-Russia Commercial Aircraft International Corp — a joint venture between the Commercial Aircraft Corp of China and United Aircraft Corp of Russia, which is jointly developing the CR929 long-haul jet — as well as the Sweden-based Elekta, which will launch a new radiation therapy system featuring field magnetic resonance technology in China.
The Pudong New Area also launched a “service specialist” scheme that offers efficient and tailored services. A service specialist will be dispatched to serve a single company and help in resolving all kinds of difficulties, said Wang Hua, Deputy Director of Pudong. Four supportive teams made up of officials from various government bodies will assist the specialists in dealing with business development, planning and construction, policy consultation, and talent services, Wang said. The FTZ’s opening-up measures helped to attract 340 service companies from January to October. The FTZ has attracted a total of 2,744 companies to set up offices. Wholly foreign-owned hospitals, certification bodies and vocational training institutes have been allowed in the FTZ along with the 38 newly opened business sectors to foreign investments. Nearly 300 regional headquarters of multinational corporations are based in Pudong, accounting for 45% of the city’s total, the Shanghai Daily reports.
Tianjin in northern China is also stepping up its efforts to build a high-standard pilot free trade zone and apply for the establishment of a free port to further drive the joint development of the Beijing-Tianjin-Hebei region. The Chinese government also announced new policies to lower the threshold for foreign investors in FTZs in sectors that include construction, healthcare and financial services. They constitute 39 general policies for all 12 zones and 14 specific measures for certain zones, such as those in Zhejiang and Fujian provinces. Foreign carriers will be allowed to offer passenger and cargo services from Zhengzhou, Henan province, and Xian, Shaanxi province, both capitals of provinces with pilot FTZs, to other countries.
China has set up 12 FTZs over the past five years. The Chongqing Pilot Free Trade Zone will set up a special port for drugs and biological products imported for the first time. The total volume for imports and exports in China’s pilot FTZs reached CNY2.6 trillion in 2017, or 9.35% of the country’s total.
Boycott of Dolce & Gabbana by Chinese consumers following ad fiasco
By : fcccadmin
Stefano Gabbana (left) and Domenico Dolce (right)
Products of Italian fashion house Dolce & Gabbana were taken out of shop shelves and e-commerce sites in China as consumers started boycotting the firm after it posted a short video deemed racially offensive. The controversy started as the Italian fashion brand published a video on the Chinese social media site Weibo showing a Chinese model using chopsticks to try to eat pizza, cannoli and spaghetti. Weibo users accused the label of trivializing China’s culture and depicting Chinese women in a racist way. The video was taken down within 24 hours but it had already been shared widely on social media, where the hashtag #BoycottDolce began to circulate.
A search of D&G on Taobao.com and Tmall.com, China’s largest online retailer, failed to come up with any results from the brand. The world’s biggest online luxury goods retailer Yoox Net-a-Porter, and Hong Kong-based luxury department store operator Lane Crawford, have joined Chinese retailers in dropping Dolce & Gabbana products.
The accusations of racism and racial stereotyping intensified after a conversation on Instagram between Stefano Gabbana and the fashion writer Michaela Phuong in which Gabbana appeared to defend the campaign and make derogatory comments about China and Chinese commenters. Next, D&G claimed its internet accounts had been hacked and asserted: “We have nothing but respect for China and the people of China.”
A planned catwalk show in Shanghai was canceled as one participant after another withdrew, including TFBoys singer Wang Junkai. The Communist Youth League posted on its Weibo account: “foreign companies operating in China should respect China and respect Chinese people”. But the mere cancelation of the fashion show did not satisfy Chinese consumers. The controversy could result in a financial blow to the company, which has shops in 25 cities in China. In 2007, the label was openly criticized for adverts which appeared to depict violence against women and romanticizing slavery.
“This incident is not a diplomatic issue essentially and the Chinese side does not wish to escalate it into one,” Foreign Ministry Spokesman Geng Shuang said. “Instead of asking the Foreign Ministry Spokesperson, it is better to ask the ordinary people in China to see how they view this issue.” The founders of the Italian fashion label Dolce & Gabbana have issued an apology to the Chinese people in a video released on November 23. “We offer our sincerest apologies to Chinese people worldwide,” said Gabbana. Dolce continued: “We hope our misunderstanding of Chinese culture can be forgiven. We’ve always been very crazy about China, we’ve visited it a lot. We’ve been to many cities. We love your culture.” The video ended with the pair saying the single word “sorry” in Mandarin. “It’s the kiss of death for Dolce & Gabbana,” said Shaun Rein, Founder and Managing Director of the China Market Research Group in Shanghai. Rein added it is a big mistake when Westerners come up with creative content but don’t understand how it will be received by Chinese consumers.
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