Mr Christian Reinaudo, CEO Agfa, Ms Gwenn Sonck, Executive Director FCCC, Belgian Ambassador Marc Vinck, Mr Herman Raets, Head of ASPACH Region North, Agfa Healthcare

A half-day seminar was held on 10 January 2019 at the Belgian Embassy in Beijing on “The Development of Medical Imaging Technology in the Past 40 Years: How Foreign Investment in Healthcare Can Support Healthy China 2030”.

This seminar brought together stakeholders from a wide range of industries to provide an informative and sharing session to discuss the important role of how foreign investment in Chinese medical imaging healthcare and technology can support and develop the ‘Healthy China 2030’ plans.

HE Marc Vinck, Ambassador of Belgium to China; Christian Reinaudo, AGFA Global CEO; Herman Raets, Head of ASPACH Region North, Agfa Healthcare; Gwenn Sonck, Executive Director of the Flanders-China Chamber of Commerce; Chinese government and hospital representatives and experts in the field of medical device standards, as well as representatives of global healthcare sector organizations attended the seminar. Philippe Snel of Dawo Law Firm moderated the seminar.

Mr Christian Reinaudo gave a presentation on how China became a regional and global center for international medical services, followed by Herman Raets, who talked about “One company’s story: Working to improve Chinese healthcare over 30 years”.

An informal discussion and traditional Belgian-style food buffet concluded the seminar.

China and the U.S. concluded three days of trade talks at vice-ministerial level in Beijing last week, one day longer than originally planned. While the U.S. delegation included no more than 14 people, including translators and Embassy officials, the Chinese team exceeded one hundred officials and even Vice Premier Liu He, the chief trade negotiator for the Chinese side, made an unexpected appearance. While the U.S. government said the talks went very well, few details were made public. Liu He is expected to visit Washington on January 30 and 31.

“We’re making progress” on trade, U.S. Secretary of State Mike Pompeo said in an interview with CNBC. “I hope too that we’ll make progress on all of the other places where China’s not behaving in the way we wish it would. Whether that’s their cyber activity, that has had a real impact.” U.S. President Donald Trump also tweeted that the negotiations were going “very well”. Speaking to CNBC, U.S. Secretary of Commerce Wilbur Ross said that there was a “very good chance” of reaching a settlement that would satisfy both sides, but said that issues like enforcement and compliance would remain challenges. Analysts say the next stage will likely be the creation of a framework to verify China’s commitment to structural industrial reform, a move that could be a stumbling block in ending the trade war between the world’s two largest economies.

Chinese analysts said Liu’s attendance at the talks showed goodwill and Beijing’s commitment to reaching a deal with Washington. Jon Cowley, Senior Lawyer at Baker McKenzie’s international commercial and trade practice group, said he expected that negotiators may have put together a framework for an agreement, but that existing tariffs would not be fully eliminated unless China met the U.S. “all the way”. “It’s possible to reach an agreement that would further extend this truce with respect to the roll-out of new tariffs but it might not necessarily address those that have taken effect,” he said. “We’ve been hearing reports that there’s been a narrowing of a gap between the two sides, but a narrowing of a gap is not a bridging of a gap, and it’s a pretty wide gap.”

United States trade negotiators challenged their Chinese counterparts on a wide-ranging list of grievances during the talks, according to an announcement from the office of the U.S. Trade Representative (USTR) issued as the discussions in Beijing came to a close. In the first official statement from either side, the USTR said the meetings were part of a push to achieve “needed structural changes in China with respect to forced technology transfer, intellectual property protection, non-tariff barriers, cyber intrusions and cyber theft of trade secrets for commercial purposes, services, and agriculture”. The USTR gave no indication as to what, if any, new agreements had been made during the latest round of talks, but its statement said the U.S. side pushed verification and enforcement of previous agreements. The discussions covered China’s commitment to purchasing “a substantial amount of agricultural, energy, manufactured goods, and other products and services from the United States”, the statement added. The U.S. delegation would now “report back to receive guidance on the next steps”.

Myron Brilliant, Vice President of the U.S. Chamber of Commerce, said in a statement that there were encouraging signs resulting from the “constructive dialogue”, but stressed that the business community was not primarily interested in “one-off purchasing commitments by China”. Instead, Brilliant said, U.S. companies wanted “structural reforms that would result in enduring access, a level playing field, and an end to the use of regulations that too often force technology transfer or otherwise disadvantage U.S. firms”. The overall positive tone of the negotiations is encouraging and it suggests there will be follow-up negotiations in the near term, according to Craig Allen, President of the U.S.-China Business Council.

China’s Vice President Wang Qishan said cooperation is the best choice for Beijing and Washington while reiterating his nation will stay committed to its own path. Wang was expected to meet U.S. President Donald Trump at the World Economic Forum meeting in Davos, Switzerland, but the U.S. President has canceled his attendance due to the ongoing U.S. government shutdown. Both countries might still hold talks on the sidelines of the Forum.

China plans to increase spending in the automotive sector as car sales are plummeting. Ning Jizhe, Vice Chairman of the National Development and Reform Commission (NDRC), told China Central Television (CCTV) that spurring auto sales would be part of the efforts to expand domestic demand, and in turn boost the economy. He did not elaborate on the details, but the verbal support was enough to drive up prices of auto stocks, including those of Geely Automobile Holdings, which had plunged 11.3% after reporting a 44% year-on-year sales decline in December alone. The company missed the full-year sales target for 2018. The economic slowdown and the tit-for-tat U.S.-China trade war have largely dampened Chinese consumers’ buying interest in passenger vehicles last year.

Passenger vehicle sales dropped 5.8% to 22.35 million units in 2018, the China Passenger Car Association (CPCA) said. It was the first time since 1992 that China, the world’s largest auto market, reported a contraction in sales. But even with the enforcement of incentives, the auto market is unlikely to see a growth this year, according to Zhou Ling, Fund Manager with Shanghai Shiva Investment. “Most of the car companies will be targeting flat sales,” he added. Expectations are heightening that Beijing would cut the auto purchase tax to stimulate sales. The last time the central government reduced the tax was in 2015 when the rate was slashed from 10% to 5% for cars with engines of up to 1.6 liters.

Chinese automakers are forecasting conservative sales targets for 2019 in a challenging market, investment bank UBS said. “China’s auto industry faces challenges such as high inventory levels and overall car sales may not be so good in the short term,” said Paul Gong, China Auto Analyst at UBS Investment Research. “Total vehicle sales are expected to begin to pick up after the second quarter of this year.” Gong attributed lackluster sales in 2018 to the macro-economic environment, a falling stock market and weak consumer confidence. “Last year, the fall in sales was beyond our earlier expectations,” Gong said, adding that some factories are likely to close this winter and some dealerships in second-tier and third-tier cities may close after the Spring Festival.

The sales slump has hit China’s manufacturing sector, which contracted last month for the first time in more than two years. “The period of rapid growth in production and sales of cars is over and low growth could become the norm in the automotive market,” Xin Guobin, Vice Minister of Industry and Information Technology said recently.

GM, one of the most popular international carmakers in China, delivered 3.64 million vehicles in the country last year, down 9.9% from 2017. SAIC Motor Co, China’s largest carmaker by sales and a partner of GM and Volkswagen, saw its sales last year edge up 1.75% to 7.05 million. In 2017, it registered a growth rate of 6.8%. Geely was the best-selling Chinese brand last year. Its sales grew 20% from 2017 to 1.5 million last year, but it missed its target by 5%. It did not expect the rise to continue, setting a sales goal of 1.51 million for 2019. Geely said its holding in Daimler remained unchanged, refuting a Bloomberg report that said it had cut its 9.7% stake in the German carmaker by more than half. Chairman Li Shifu said in his New Year address that 2019 would be pivotal for Geely as it might face a dismal period because of weak market conditions.

U.S. electric carmaker Tesla broke ground for its Shanghai plant with Chief Executive Elon Musk announcing a plan to start production of its Model 3 by the end of 2019. The USD5 billion project has taken off very quickly as China is eager to attract new investment projects. Construction began just three months after Tesla secured a land parcel at Lingang, Shanghai, for the Gigafactory 3, its first plant outside the United States. The factory in Shanghai will produce “affordable versions of 3/Y for Greater China,” Musk said, adding that the higher-priced S/X models would still be built in the U.S. Wu Qing, Vice Mayor of Shanghai, said the Tesla factory, the largest foreign direct investment project on record in Shanghai, was progressing on a rapid pace with the local government’s support.

Gigafactory 3 was expected to produce around 3,000 Model 3 vehicles a week in the initial phase, ramping up to 500,000 vehicles per year when it became fully operational, Tesla said in a statement. Tesla’s U.S.-made cars are now subject to a 15% tariff on imports to China after Beijing rolled back an extra 25% tariff it slapped on U.S. car imports for three months from January 1. A Model 3 car now sells for CNY499,000 in China. But a locally-produced Tesla car, with reductions in manufacturing and logistics costs on top of the exempted import tariff, is expected to cost as little as CNY300,000, a level that could attract thousands of Chinese customers.

As the Chinese government gradually removes ownership restrictions on automotive joint ventures, Tesla became the first foreign carmaker to set up a wholly-owned new-energy vehicle (NEV) factory in China. China is the world’s largest auto and NEV market, with Beijing aspiring to become the global NEV leader with technologies that meet the highest international standards by 2025. NEV sales in China jumped 75.6% in the first 10 months of 2018 from a year earlier, hitting 860,000 units.

But Tesla will face competition from local electric car start-ups such as Byton, Nio and Xpeng Motors, the South China Morning Post reports. As Elon Musk was breaking ground on its factory in Shanghai, Byton, headquartered in Nanjing, presented its electric sport utility vehicle (SUV) M-Byte at the CES fair in Las Vegas. The M-Byte has five screens: a 49-inch, edge-to-edge dashboard display, a tablet embedded in the steering wheel and a new 8-inch touch screen in the center console, combined with two more on the headrests for rear-seat passengers. The company is working with “deep integration” apps including navigation and music that will provide individualized recommendations based on one’s calendar schedule and interest preferences stored in the cloud. The model will feature Amazon’s Alexa for overseas markets and Baidu’s voice control for China. Byton is also working with U.S. self-driving start-up Aurora and Baidu on self-driving technology for foreign and local markets, respectively. Deliveries are slated for the end of this year in China.

Meanwhile, Baidu, operator of China’s largest search engine, has entered a partnership deal with California-based autonomous delivery start-up Udelv that will see self-driving vans powered by its software to offer delivery services to American retailers such as Walmart from February. The delivery services will operate alongside robo-taxis from Alphabet’s Waymo, putting China’s champion up against one of its biggest autonomous driving rivals in the U.S. market. Nasdaq-listed Baidu announced the deal with Udelv at a launch event for its latest open self-driving platform – Apollo 3.5 – on the sidelines of the 2019 CES tech fair in Las Vegas.

Southern China’s Hainan province has unveiled plans aimed at building the tropical island into a world-class medical tourism hub, combining high-end medical tourism with characteristic Chinese healthcare. The move follows a plan released by the National Development and Reform Commission (NDRC) to encourage tourism-related activities in Hainan, such as medical tourism, horse racing, sports betting and an instant lottery. Focusing on four key areas — medical treatment, cosmetic procedures, rehabilitation and health promotion — Hainan will introduce internationally renowned institutions, insurance providers and intermediary service agencies to build a high-end foundation for the international medical tourism market, the plan said. In 10 years, Hainan is projected to become a major medical tourism destination with total annual business revenue reaching CNY40 billion.

Eight major medical tourism projects will be developed, covering fields such as cancer treatment and rehabilitation, fertility therapy, cardiovascular and cerebrovascular disease treatment and rehabilitation, environmental healing and sports recuperation, traditional Chinese medicine and spiritual retreat. Medical tourism has become one of the world’s fastest-growing emerging industries, and Hainan has unique conditions for developing it, Governor Shen Xiaoming said on the sidelines of the Boao Forum for Asia Annual Conference 2018 in April. Under the plan, Hainan will tap its characteristic resources of vast coastal areas, tropical rain forests and hot springs to cultivate innovative healthcare and leisure products.

To stimulate the industries, Hainan will explore flexible policies, regulatory models and management systems for investment, financing, fiscal policies and taxation, financial innovation, and entry and exit, to create the proper conditions for the medical tourism industry, which is growing by about 20% annually around the globe. In China, more than 600,000 people went overseas as medical tourists in 2016. In 2013, the Boao Lecheng International Medical Tourism Pilot Zone was launched to pioneer medical tourism in Hainan, including cutting-edge technological research on stem cells. Twenty-seven medical projects have been completed or are under construction in the pilot zone, and another 38 projects have passed medical technology appraisals. All projects in the pilot zone are targeted to be completed within five years, the China Daily reports.

Meanwhile, a Business Leaders’ Advisory Council for the Hainan provincial government was inaugurated in Sanya with the aim of soliciting advice and suggestions that will further advance the opening-up of the tropical island and the development of the China (Hainan) Pilot Free Trade Zone established by the central government in April. Seated on the first advisory council are five well-known Chinese entrepreneurs and economists: Jack Ma, Founder and Chairman of Alibaba, Pony Ma, Chairman and CEO of Tencent, Ning Gaoning, Chairman of Sinochem, Zhou Qiren, Professor at Peking University’s National School of Development, and Liang Jianzhang, Chairman of online travel agency Ctrip. Jack Ma was elected council Chairman and Pony Ma Vice Chairman. The Advisory Council will grow and include more Chinese and foreign entrepreneurs, said Ni Qiang, Secretary General of the provincial government. They will meet in Hainan every December.