Zhou Qiang, President of the Supreme People’s Court, said Chinese courts handled more intellectual property rights cases last year – a key area of tension in trade relations between Washington and Beijing. In his report to the National People’s Congress (NPC) session, he said that 288,000 first instance IP-related cases had been concluded in 2018 – up 41.8% from a year ago. It was the second consecutive year the number of IPR cases processed by the courts went up by more than 40%. In 2017, Chinese courts handled 213,480 such cases – a rise of 40.4% from the previous year.

In a separate report, Zhang Jun, Procurator General of the Supreme People’s Procuratorate, highlighted the number of IPR-related prosecutions. He said that 8,325 people had been prosecuted in 2018 for acts including infringement of patent and trademark rights and trade secrets – a rise of 16.3% from the previous year. The jump in the number of cases indicated a greater awareness of protecting intellectual property rights, according to Fang Jianwei, Partner with Zhong Lun Law Firm in Beijing. China first established specialized IP courts in Beijing, Guangzhou and Shanghai in 2014. Last year, a new IP tribunal was set up at the Supreme Court to handle appeals relating to civil and administrative IP issues such as trademarks, patents, trade secrets and unfair competition.

SPC President Zhou Qiang added that there were plans to open 19 more IP courts, adding that 15,000 civil and commercial IP first instance cases involving foreign parties had been handled last year. Shen Changyu, Director of the National Intellectual Property Administration, said a number of IPR protection centers would be opened to provide the public with a more convenient, efficient and lower-cost channel to protect their rights. Asked if intellectual property had to be included in a trade deal, Trump said: “Yes, it does”, the South China Morning Post reports.

Record numbers of Chinese firms are defaulting on their bonds, while also taking longer than ever to pay their suppliers, says trade credit insurer Coface. A majority of companies expect lower growth this year, up from a third last year, as the private sector bears the weight of China’s economic slowdown. One example is Chuying Agro-Pastoral Group, a pig breeder in Henan province, which defaulted on a bond of CNY1.5 billion last year. It then made headlines in China in November when it offered to repay holders of debt it had defaulted on with ham or pork products. To compound matters, large numbers of its livestock starved to death, with the company not having the money to feed them. The company’s situation is emblematic of an awful year all round for China’s private sector, which felt the brunt of a government drive towards deleveraging. External factors, such as the U.S.-China trade war, are also causing trouble.

As China’s economic growth slowed to 6.6% last year, its corporate bond defaults quadrupled in value to USD16 billion, with the total number of bond defaults tripling to 119. Meanwhile, fewer companies are being paid on time, with 40% reporting that they have recorded an increase in payment delays, up from 29% in 2018, Coface’s study showed. In total, 62% of Chinese companies experienced payment delays in 2018. Over the course of a year, the average time it took for Chinese companies to receive payment rose by 10 days to 86 days. More worryingly, according to Coface, is that just over half of companies are now waiting longer than six months for payments worth over 2% of their total turnover. “According to Coface’s experience, 80% of ultra-long payment delays are never paid. When these constitute more than 2% of annual turnover, a company’s cash flow may be at risk,” the report said.

Aside from construction, the car industry is the sector which has one of the worst payment cycles, according to Coface. Companies in these industries take the longest to be paid (106 days and 105 days, respectively) and are also heavily exposed to the downturns in investment and consumption in China. These are also the two sectors with the most “ultra-long” payment delays – with 28% of payments in the construction sector and 27% of car industry payments outstanding for longer than 180 days and unlikely to ever be paid. The bond defaults and delayed payment periods do not exist in isolation, said Carlos Casanova, Asia-Pacific Economist at Coface. “A combination of tighter liquidity and elevated bond maturities led to a large number of respondents stating that they were experiencing payment delays due to their customers’ lack of financial resources,” he said. “Tighter liquidity was further exacerbated by the government deleveraging campaign and curbs on the shadow banking sector in the first half of 2018.” For the first time in the 16-year history of the Coface survey, a majority of Chinese companies (59%) expect lower growth this year, up from a third last year, the South China Morning Post reports.

But in the past few years, court rulings ordering borrowers to repay loans, have been better enforced. Since March 2016, CNY4.4 trillion owed by defaulters has been repaid. Defaulters’ names – including those of companies’ legal representatives – have been added to a publicly accessible online blacklist which restricts their consumption of goods and services, according to the China Daily. In the past three years, defaulters on the list have been blocked from taking 19.41 million flights and 5.61 million rail trips.

The market share of new-energy cars in China could go into “free fall” after 2020 if the government cancels all subsidies, Chen Hong, SAIC Motor’s Chairman said. In 2018, the number of new-energy cars sold in China surpassed 1.2 million. However, Chen said, the sales are still largely policy-driven. The Chinese government has been reducing its subsidies to consumers of new-energy cars, and plans to cancel all subsidies after 2020. “The cost of batteries and the manufacturing of new-energy cars will go down with technical progress, but we estimate that by 2020 the cost of those cars will still be higher than traditional cars,” Chen said. “The cancellation of subsidies could reduce the market share of new-energy cars in China by about 40%.” Chen suggested that the government keep incentives for both manufacturers and consumers, especially tax cuts for consumers.

Chen said OECD statistics from 2014 showed that taxes for buying and keeping cars in China accounted for 40.5% of all taxes related to vehicles in China, while the percentage in the U.S., Japan, the UK and Germany was 35.3%, 33.9%, 25.2% and 16.7%, respectively. “The high tax burden in buying and keeping cars suppresses consumption, and in most developed countries, fuel consumption takes up a greater portion of taxes,” Chen said. Also, in China, excise, vehicle and vessel taxes are classified solely on engine displacement and do not take emissions into account. Chen suggested that those taxes should be counted on the basis of emissions so as to encourage the use of more environment-friendly cars. The government could also consider cutting income taxes for people who purchase new-energy cars as such a measure has yielded positive results in the U.S., he said. For manufacturers, Chen suggested that the government cut value-added tax (VAT) on the new-energy car industry from 16% to under 10%, following the leads of Norway, Iceland and Austria, the Shanghai Daily reports.

Shanghai has been ranked as one of the top five financial centers in the world after it overtook Tokyo to move into fifth place, according to the latest edition of the Global Financial Centers Index, co-published by the China Development Institute in Shenzhen and Z/Yen Partners, a London-based market research company. Not for the first time, New York took first place in the index, 7 points ahead of London. Hong Kong was only 4 points behind London in third, and Singapore remained in fourth place. Toronto rose 27 points and gained four places to seventh. Zurich, Beijing and Frankfurt remained in the top 10, the findings showed. Among the top five centers, gaps are now being narrowed between runners-up and leaders. For example, Shanghai was 193 points behind the leader when the index was published for the first time in 2007, but now it is just 17 points behind.

A total of nine Chinese cities were on the list this time, as a number of second-tier cities such as Chengdu in Sichuan province and Dalian in Liaoning province are rising in importance. The financial center list has grown from 100 to 102 this year and the latest result showed a continued shift to the Asia-Pacific, as the top eight places in the region are now in the top 15 in the whole index.

Local government officials said Shanghai has made great headway in serving the country’s financial reforms, and the city has further consolidated its position as a financial center. Nine of the world’s 10 biggest asset managers opened offices in the city’s Lujiazui financial area, and 51 internationally renowned asset management companies set up 69 wholly foreign-owned firms in Shanghai in 2018. Next, the city will strive to enhance the degree of its financial internationalization and its global influence, attract more overseas investors to participate in its financial market, further optimize its business climate for the financial sector, and improve its capabilities for financial supervision and risk prevention, the Shanghai Daily reports.

China’s economy remained stable in the first two months of the year, with economic data showing resilience and progress, the National Bureau of Statistics (NBS) announced, as it unveiled economic indicators for the January-February period, showing a pickup in investment, stable consumer spending and optimized industrial structure. Industrial output grew 5.3% year-on-year in the first two months, with fast growth in emerging industries and new products. The growth narrowed from a 5.7% expansion in December, the Bureau said, citing the Spring Festival as a major factor for the slowdown. It is estimated that industrial production would have grown 6.1% year-on-year in the first two months if distortions from the Spring Festival were excluded.

Fixed-asset investment (FAI) grew 6.1% year-on-year in the first two months of 2019, 0.2 percentage points higher than in 2018. Domestic demand maintained steady growth, said NBS Spokesman Mao Shengyong. Retail sales of consumer goods rose 8.2%, flat with the December figure. Consumption in rural areas climbed 9.1%, outpacing a rise of 8% in urban regions. Mao said data showed some bright spots in the Chinese economy, including rising domestic demand, optimized industrial structure, stable employment and consumer prices, and positive market expectation. Online retail sales maintained robust growth, up 13.6%. China’s consumer confidence index rose 2.3 points to 126 in February from January, pointing to a positive outlook.

Production in strategic emerging industries maintained fast expansion, with its output increasing by 10.1%. The output of new-energy vehicles (NEVs) saw a surge of 53.3% year-on-year during the period, while solar cell production rose by 13.5%. Investment in high-tech industries and industrial technology improvement jumped 8.6% and 19.5% year-on-year, both faster than the overall growth of fixed-asset investment. The service output index rose 7.3% year-on-year, flat from December. Property investment jumped 11.6% in the first two months, faster than the 9.5% expansion recorded in 2018. Total property investment amounted to CNY1.2 trillion, with 72.1% used in residential buildings, the Shanghai Daily reports.

Exports in February dropped by 16.6% to CNY922.76 billion, while imports showed a slight decrease of 0.3% to CNY888.3 billion. “Slower growth was mainly caused by business disruptions during the Spring Festival holiday and the lack of clear signals in the trade dispute with the United States,” said Wang Xiaosong, Researcher with the National Academy of Development and Strategy at Renmin University of China. If the Spring Festival is excluded, trade volume in February climbed 10.2% year-on-year, according to customs data. With a total value of CNY1.42 trillion, mechanical and electrical products including machine tools, cranes and construction machinery expanded to 58.3% of China’s total exports in the first two months, while the nation’s exports of labor-intensive products such as furniture, garments and plastic goods dropped 3.9% year-on-year to CNY467.14 billion. The EU and ASEAN accounted for 16.2% and 12.8% of China’s total foreign trade volume in the first two months, both higher than the 11.6% with the U.S., the China Daily adds.