U.S. President Donald Trump has delayed the raising of tariffs from 25% to 30% on USD250 billion worth of imports from China from October 1 to October 15, to avoid China’s 70th anniversary celebrations. Trump’s announcement followed Beijing’s unveiling of a list of 16 types of products that will be exempt from the first round of China’s additional tariffs on U.S. imports as the two sides prepare for another round of high-level trade negotiations in October. The exemption announced by China will go into force on September 17 and remain in place until September 16, 2020. A number of medicines and insecticides are included on the list of temporarily exempted U.S. products, while some others will be eligible for refunds on tariffs already paid. China also exempted U.S. agricultural products such as soybean and pork from additional tariffs. China welcomed Trump’s decision to postpone the planned tariff increase, calling it an act of “goodwill”.

U.S. President Donald Trump’s top advisers are trying to find an escape route for a series of tariff increases in the coming months, worried about the potential for further economic damage. Chinese Vice Premier Liu He said the top items on the agenda for trade talks in Washington in October are the “U.S.-China trade balance, market entry and investor protection”. The comments suggest that China will steer talks clear of more challenging issues such as structural reform and security issues, focusing instead on less deep-rooted issues such as purchases of American agricultural goods. Liu made the comments in Beijing during a meeting with Evan Greenberg, President of the U.S.-China Business Council. “The whole world is expecting to see progress in China-U.S. negotiations,” Liu added.

“I’d rather get the whole deal done,” Trump told reporters at the White House. “I see a lot of analysts are saying an interim deal, meaning we’ll do pieces of it, the easy ones first. But there’s no easy or hard. There’s a deal or there’s not a deal,” but Trump added that an interim deal is “something we would consider, I guess”. Bloomberg reported earlier that the Trump administration is considering offering a “limited” trade deal to China that involves delaying and even rolling back some U.S. tariffs in exchange for Chinese purchases of U.S. goods and a commitment on intellectual property rights.

Meanwhile, U.S. Chief Technology Officer Michael Kratsios called on the government and private sector to collaborate to keep the U.S. on top in the competition for dominance in artificial intelligence (AI). He said that the U.S. remains in front in the worldwide AI competition, but China is narrowing the gap quickly. Kratsios’ call for greater collaboration between Washington and the private sector comes as annual federal spending on non-defense-related AI research is set to jump to nearly USD1 billion. China has made one of the biggest pushes towards AI dominance after announcing a plan two years ago to become the world leader in the emerging technology by 2030. In mid-August, a report published by the Center for Data Innovation showed the U.S. as the leading AI nation, with China rapidly catching up, and the European Union in third place. The U.S. led in four of the six categories the report examined: talent, research, development and hardware. China led in two categories: adoption and data. The European Union led in no category, although it ranked closely behind the U.S. in talent, the South China Morning Post reports.

The General Administration of Customs announced that the total value of Chinese imports and exports of goods rose 3.6% year-on-year to CNY20.13 trillion in the first eight months of the year. The country’s trade surplus stood at CNY239.6 billion last month, expanding 41.8% from a year earlier. China’s trade with the EU increased by 9.7% from a year earlier to CNY3.15 trillion, while trade with the United States was down 9% to CNY2.42 trillion. Imports and exports of private companies soared 11.2% year-on-year to CNY8.49 trillion between January and August, accounting for 42.2% of the total value of China’s foreign trade.

Huawei Founder and CEO Ren Zhengfei has offered to license the company’s 5G technology to foreign companies, including patents, licenses, code, technical blueprints and production know-how for a one-time fee, according to a two-hour interview with The Economist. The acquirer would be allowed to modify the source code, meaning that neither Huawei nor the Chinese government would even have hypothetical control of any telecom infrastructure built using equipment produced by the new company. Huawei would likewise be free to develop its technology in whatever direction it pleases.

Ren’s stated aim is to create a rival that could compete in 5G with Huawei to help level the playing field at a time when many in the West are worried that Huawei equipment could be used for spying by the Chinese government. “A balanced distribution of interests is conducive to Huawei’s survival,” Ren said. The U.S. has put Huawei on its Entity List, prohibiting U.S. companies from selling goods and services to Huawei, but has also granted a 90-day reprieve twice. Google has been lobbying the Trump administration to allow it to resume supplying Huawei, and the U.S. Commerce Department has received more than 130 applications from companies for licenses to sell U.S. goods to Huawei. The Trump administration, however, has not yet granted any such license since the latest Huawei reprieve was announced. Despite these challenges, the Shenzhen-based company saw its global share of the telecom equipment market expand to 28.1% in the first half of this year, and it also remains ahead in the 5G equipment market with 50 announced commercial 5G mobile network deals.

UK Defense Secretary Ben Wallace has said China needs to modify its cyber-behavior and adopt a code of “fair play” if Beijing wants the British government to allow Huawei technology to be used in future 5G mobile networks. He added that a long-awaited decision on allowing Huawei to supply equipment to Great Britain’s 5G network is coming soon, without giving a firm date. The U.S. is demanding that Huawei equipment is not used by its allies, while China has warned that not using Huawei as a supplier would delay the rollout of 5G in the UK. Liu Xiaoming, Chinese Ambassador to the UK, said Britain would “lag a year and a half behind”, and that dropping Huawei would “send a bad message to Chinese business”, the South China Morning Post reports.

In Shanghai, the world’s first 5G application exhibition and innovation center was launched at the North Bund waterfront. The 5G International Innovation Harbor has an exhibition hall displaying the most updated applications based on 5G, along with innovation platforms for global enterprises to join the development. Leading Chinese technology companies, including Huawei, ZiFiSense and Lora, display their technologies, facilities, products and scenarios based on 5G. A futuristic outlook at 6G technology, or 5G plus low earth orbit mobile-satellite communications, is also showcased. Shanghai has become one of the leading Chinese cities on 5G development after major carriers China Mobile, China Unicom and China Telecom debuted their 5G networks in the city in June. The city had over 8,800 large 5G outdoor base stations and nearly 6,000 small indoor stations to cover 598 buildings citywide by the end of August.

China Unicom and China Telecom, the second and the third largest Chinese telecom operators, announced that they plan to cooperate in building and sharing 5G network infrastructure in 15 cities, including Beijing, Tianjin, Shanghai and Nanjing. If they now build one instead of two networks, this could have a negative impact on telecom suppliers such as Huawei and ZTE. But China Unicom and China Telecom will also build 5G networks independently in other provinces. China International Capital Corp said that the partnership between the two telecom companies will significantly relieve the financial pressure on both companies. Currently, China Mobile, the country’s largest telecom operator, has as many 4G base stations as China Unicom and China Telecom combined. Last year, the China Academy of Information and Communications Technology forecast that the country’s telecom carriers are expected to spend CNY900 billion to CNY1.5 trillion on 5G network construction from 2020 to 2025.

Smartphone shipments in China fell 6% to 97.9 million units in the second quarter, down from 104.2 million units a year earlier, according to research firm IDC. The appearance of 5G handsets on the market may give a new impulse. Huawei will started selling its Mate 20 X 5G smartphone in the country on August 16, priced at CNY6,199. Pre-orders of the handset exceeded 1 million. The Axon 10 Pro 5G smartphone from ZTE Corp and Samsung’s Galaxy S10 have also been released in China. Vivo is expected to launch its own 5G handset in Shanghai this week, while Beijing-based Xiaomi will follow soon.

Apple’s newly released iPhone 11 series does still not support 5G and could therefore lose out in the competition. Globally, iPhone sales fell 12% to USD25.99 billion in the quarter to June 30, after dropping 17% in the previous quarter. In July, Apple reported total sales of USD9.61 billion in the same period from Greater China – covering mainland China, Hong Kong and Taiwan – 4% down from a year earlier.

Jack Ma, the Founder of online retailer Alibaba Group, is stepping down as the company’s Executive Chairman. Ma retired on the 20th anniversary of the establishment of the country’s top e-commerce conglomerate as well as his 55th birthday, and handed over his position to Alibaba’s 47-year old CEO Zhang Yong. In a speech Ma made in August, he said that stepping down from the position did not mean full retirement or that he will stop entrepreneurship. Born in Hangzhou, capital of Zhejiang province, the business tycoon started up Alibaba in September 1999 and gradually molded it into China’s largest and most valuable internet company specializing in a variety of areas including e-commerce, online finance, retail and entertainment.

Jack Ma’s position as Alibaba’s “spiritual leader” would not change, Liu Xingliang, Director of the Beijing-based Data Center of China Internet, told the Global Times. “His influence will remain, and he will still steer Alibaba’s general strategy and business direction.” Alibaba’s success is attributed to Ma’s business acumen and to China’s opening-up policy. “Companies like Alibaba can pop up only under the condition of opening-up,” said Ye Hang, Economics Professor at the College of Economics of Zhejiang University, adding: “How can such private businesses start and grow, even beyond the border, in a planned economy?”.

Zhang Yi, CEO of Shenzhen-based iiMedia Research, said that the year 1999 saw the start of a strong, irreversible internet trend in China, with many talented Chinese people returning from the West to start internet entrepreneurship on the Chinese mainland. This societal change gave birth to e-commerce giants like Alibaba and Tencent. “The trend of the internet around 1999 is just like the trend of 5G today,” Zhang told the Global Times.

Along with the changing of the guard at the USD460 billion internet company, some doubt whether Alibaba can withstand competition from social e-commerce platforms such as JD.com and pinduoduo.com, because Alibaba lacks social networking tools. But according to iiMedia’s Zhang Yi, competitors might distract some users from Alibaba’s e-commerce sector, “but won’t threaten its predominance”. The U.S.-China trade war will benefit Alibaba by accelerating China’s technological development and opening-up, according to Zhang.

“The green mountain won’t change, the flowing water is endless. See you around!,” Jack Ma told the gala marking the company’s 20th anniversary and his own birthday, held at the Hangzhou Olympics Sports Expo Center with 60,000 people attending. Alibaba said its core mission was “to make it easy to do business anywhere”. The company aims to serve 2 billion consumers, create 100 million jobs and help 10 million small- and medium-enterprises become profitable by 2036. “Today marks not my retirement, but the beginning of a new corporate governance scheme for Alibaba and the next stage of the company’s development,” he said. He called on businesses to truly embrace sustainable development, inclusiveness and altruism, the three biggest factors for a successful business. Ma also said that the greatest chance for China to develop its economy was to boost domestic consumption and further embrace the market economy, as reported by the Global Times and the Shanghai Daily.

Alibaba also adjusted its six core values, including focusing on “customers first, employees second, shareholders third”; knowing that “trust makes everything simple”; remembering that “change is the only constant”; and that “today’s best performance is tomorrow’s baseline”.

Recently, Alibaba acquired NetEase Kaola, the cross-border e-commerce arm of NetEase, for USD2 billion. It will create an online marketplace for consumers seeking high-quality foreign products, and holding a more than 50% cross-border e-commerce market share in the country. Kaola will continue to operate independently under its current brand, while Alvin Liu, Tmall’s Import and Export General Manager, will serve as Kaola’s new CEO. Alibaba’s Tmall Global and NetEase’s Kaola are China’s largest and second-largest cross-border e-commerce platforms, holding 31.7% and 24.5% of the market respectively in 2018, according to the Beijing-based consultancy Analysys. Alibaba, together with Yunfeng Capital, a private equity firm backed by Jack Ma, will also invest approximately USD700 million in streaming music service NetEase Cloud Music.

China’s food and drinks sector is booming and will become a trillion-dollar industry in the next few years if it continues on its current trajectory. It could soon displace the U.S. as the world’s biggest catering market. The growth engine is the increasing numbers of young professionals heading out for a late dinner or ordering home delivery after a long day at the office, according to analysts. Jacky Wong, hospitality and services sector lead partner at Deloitte China, said people born in the 1990s contributed just over half of catering sales in 2018.

“They usually work overtime, stay up late and thus require instant gratification, leisure, and a trending lifestyle. Restaurants, F&B outlets or online to offline (O2O) F&B delivery services are becoming their first choice,” said Wong. Data from the National Bureau of Statistics (NBS) in July showed that catering revenue for the first half of 2019 rose 9.4%, having climbed by a similar amount to USD628 billion in the whole of last year. Food and beverage accounted for 11.2% of China’s total retail sales of consumer goods. It is expected to grow into a USD927 billion a year industry by 2023, according to Dr Neil Wang, Greater China President for Frost and Sullivan.

The growth of restaurant chains in China is creating new investment opportunities. “It is likely that an increasing number of China-based restaurant chains will seek listings,” said Wang. “Though the market for catering in China has reached CNY4 trillion in 2018, there are not too many listed companies in the market yet.” Since Haidilao’s HKD7.6 billion initial public offering (IPO) last September, the stock has doubled, giving the Beijing-based hotpot chain HKD182 billion in market capitalization. Founder Zhang Yong’s wealth is now estimated by Forbes at USD13.8 billion.

Hong Kong-listed Xiabuxiabu Catering Management is on a growth path that resembles Haidilao’s. Taiwanese Founder Ho Kuang-chi brought the chain to mainland China in 1998 and had an estimated net worth of USD670 million last year. In 2012, private equity firm General Atlantic took a 19% stake in Xiabuxiabu, which has seen its revenue grow 30% in the past year and more than double from 2014 to 2018, while profit margins have stayed around 10% or more, the South China Morning Post reports.

Suzhou Industrial Park (SIP) in Suzhou, Jiangsu province, struggles to keep its foreign companies amid the economic slowdown and the U.S.-China trade war, the South China Morning Post reports. Built on an area five times the size of Manhattan that was once farmland and fields, the park’s Singaporean-inspired design has an emphasis on tidy urban planning and green landscapes in the city of Suzhou, known as the Venice of the East for its many canals. In the 25 years since its establishment, Suzhou Industrial Park (SIP) has been very successful in attracting foreign companies with offers of cheap labor and top notch infrastructure, including Microsoft, Siemens, Honeywell and Panasonic. For the first half of this year, the park’s output was 14% of the entire Suzhou economy. But recently, local officials have turned to offering subsidies and other forms of support to convince foreign companies to stay. Home to 5,000 foreign enterprises – many of them exporters – SIP saw its exports decline 10% over the first six months of 2019 compared to a year earlier. Imports, meanwhile, have fallen 15%. These are significant drops, even as the occupants of the park are now increasingly catering to China’s domestic market.

In August, officials from Jiangsu’s Department of Commerce visited some of the park’s foreign firms, asking what problems they were having and how the provincial government could help, keen to stop more companies relocating to Southeast Asia. Among the companies officials called on was Swiss packaging maker SIG Combibloc, suffering from the 10% tariff China placed on many American imports, including manufacturing machines. Now the Suzhou government has agreed to exempt the company from the 10% duties. The company has decided to invest CNY3 billion in a new facility, according to Sha Haitao, Director at SIG Combibloc. Foreign firms have accounted for 60% to 70% of imports and exports in Suzhou.

Consistent with the import and export declines in SIP, Suzhou’s gross domestic product (GDP) growth slowed to 6% in the first half of this year, below the 6.5% rate in Jiangsu as a whole, though SIP still made the biggest contribution among all industrial estates to provincial GDP. But the trade war is not only to blame. Cheap labor and low-cost land have been disappearing in SIP, the South China Morning Post reports. Since its launch in 1994, SIP has attracted USD31.27 billion in foreign direct investment (FDI) and contributed over CNY800 billion in tax revenue as of the end of 2018.