Posts Tagged ‘Chinese government’

Shanghai Stock Exchange Confusion Over China United Network Communications Sale Involves Tencent and Alibaba

August 17, 2017

AFP

© AFP/File | Unicom Group was among six SOEs chosen by Beijing last year for a pilot programme to funnel private capital into state firms

SHANGHAI (AFP) – A plan under which big Chinese companies led by Tencent and Alibaba would invest $11.7 billion in the country’s second-largest wireless carrier was cast into confusion on Thursday — just a day after it was announced.China United Network Communications Ltd, the Shanghai-listed arm of China Unicom, was to receive the infusion under a deal announced Wednesday, part of the Chinese government’s push to overhaul inefficient state-owned enterprises (SOEs) by luring in private capital.

The investors were to include internet titans like Tencent, Alibaba, and JD.com, taxi-hailing service Didi Chuxing and several other firms.

However, confusion subsequently emerged over exactly which companies would be involved, with China United Network Communications withdrawing a statement to the Shanghai Stock Exchange about the agreement just hours after submitting it on Wednesday.

Meanwhile, plans to lift suspensions on China Unicom-related shares, were subsequently reversed.

China United Network Communications said Thursday in Shanghai that its shares, suspended since April, would remain so for several more days pending further announcements.

“There’s been confusion right to the very last moment — they shouldn?t be rushing ahead to make the announcements,” Francis Lun, Hong Kong-based chief executive officer of Geo Securities Ltd, told Bloomberg News.

“It shows their incompetency. The approval process has to be called into question when they deliver misleading messages like this.”

The fiasco may raise questions over China’s plans to reform SOEs while waging a parallel campaign to crack down on runaway credit in the private sector.

China’s ballooning debt prompted a warning Tuesday by the International Monetary Fund that the country was on a “dangerous trajectory”.

Unicom Group was among six SOEs chosen by Beijing last year for a pilot programme to funnel private capital into state firms, which has seen Unicom-related shares soar this year.

Unicom’s net debt has risen by 20 percent in the last five years to 150 billion yuan ($22 billion), according to Bloomberg, as it spent on mobile network upgrades and plans an expensive 5G rollout expected to benefit the Chinese tech giants.

China’s military faces a computer game threat — Now Chinese army takes aim at ‘King of Glory’

August 14, 2017

AFP

© AFP/File | China’s military faces a computer game threat, top brass fear
SHANGHAI (AFP) – Chinese army officers have a new enemy in their sights — a mobile phone battle game believed so addictive to young soldiers that it may slow them down in real-life combat.

Smartphone smash-hit “King of Glory” is so popular in China that its maker and internet giant Tencent last month began limiting daily playing times to “ensure children’s healthy development”.

Now the Chinese army is taking aim at the multiplayer online battle game.

“There is certainly a security risk that can’t be overlooked,” the People’s Liberation Army Daily newspaper warned gravely.

“The game requires constant attention but a soldier’s job is full of uncertainty. Once a soldier is cut off from the game for an urgent mission, he could be absent-minded during the operation if his mind remains on the game.”

The newspaper said officers had become worried after noticing that almost all the soldiers in one dormitory were playing the game over a weekend.

The state newspaper did concede that up to a point the game offered respite during leisure time and there are no immediate plans to ban it from barracks.

Nevertheless, the rank and file should be given “scientific guidance”, it added.

The game boasts up to 80 million daily users but the Chinese government is increasingly worried about the impact it is having on children and teenagers, who lock themselves away for hours for marathon sessions.

A 17-year-old gamer in the southern province of Guangdong suffered a type of stroke after spending 40 consecutive hours playing “King of Glory”, state media said in April.

Trump Eyes China Sanctions While Seeking Its Help on North Korea

August 13, 2017

BEIJING — In a diplomatic gamble, President Trump is seeking to enlist China as a peacemaker in the bristling nuclear-edged dispute with North Korea at the very moment he plans to ratchet up conflict with Beijing over trade issues that have animated his political rise.

Mr. Trump spoke late Friday with his counterpart, President Xi Jinping of China, to press the Chinese to do more to rein in North Korea as it races toward development of long-range nuclear weapons that could reach the United States. Mr. Xi sought to lower the temperature after Mr. Trump’s vow to rain down “fire and fury” on North Korea, urging restraint and a political solution.

But the conversation came as Mr. Trump’s administration was preparing new trade action against China that could inflame the relationship. Mr. Trump plans to return to Washington on Monday to sign a memo determining whether China should be investigated for intellectual property violations, accusing Beijing of failing to curb the theft of trade secrets and rampant online and physical piracy and counterfeiting. An investigation would be intended to lead to retaliatory measures.

The White House had planned to take action on intellectual property earlier but held off as it successfully lobbied China to vote at the United Nations Security Council for additional sanctions on North Korea a week ago. Even now, the extra step of determining whether to start the investigation is less than trade hawks might have wanted, but softens the blow to China and gives Mr. Trump a cudgel to hold over it if he does not get the cooperation he wants.

While past presidents have tried at least ostensibly to keep security and economic issues on separate tracks in their dealings with China, Mr. Trump has explicitly linked the two, suggesting he would back off from a trade war against Beijing if it does more to pressure North Korea. “If China helps us, I feel a lot differently toward trade, a lot differently toward trade,” he told reporters on Thursday.

Mr. Trump has sought to leverage trade and North Korea with China for months, initially expressing optimism after hosting Mr. Xi at his Mar-a-Lago estate in Florida, only to later grow discouraged that Beijing was not following through. The effort has now reached a decisive point with the overt threats of American military action against North Korea — warnings clearly meant for Beijing’s ears.

China is widely seen as critical to any resolution to the nuclear crisis because of its outsize role as North Korea’s main economic benefactor. China accounts for as much as 90 percent of North Korea’s total trade and supplies most of its food and energy while serving as the primary purchaser of its minerals, seafood and garments.

But even though the effectiveness of the new United Nations sanctions depends largely on China’s willingness to enforce them, the Trump administration so far has failed to come up with enough incentives to compel China to do so, analysts said.

In their phone conversation on Friday night, Mr. Xi stressed that it was “very important” for the two leaders to maintain contact to find “an appropriate solution to the nuclear issue on the Korean Peninsula,” according to a statement carried in the Chinese state-run media. The language indicated China wants to push forward with a diplomatic proposal for North Korea that the Trump administration has brushed aside.

The Chinese statement urged the “relevant sides” — a reference to North Korea and the United States — to “avoid words and actions that exacerbate tensions.” It did not explicitly criticize North Korea, which issued its own searing rhetoric all week, including a threat against Guam, and did not draw a clear distinction between Washington and Pyongyang.

In its own account of the call, the White House emphasized points of concurrence. “President Trump and President Xi agreed North Korea must stop its provocative and escalatory behavior,” read a statement from the White House issued early Saturday morning. “The presidents also reiterated their mutual commitment to denuclearization of the Korean Peninsula.”

If Mr. Trump was trying to move Mr. Xi toward bolder action against the North, he did so while the Chinese leader is preoccupied with his own domestic political machinations, attending to a once-every-five-year political shake-up in the top ranks of the Communist Party.

Mr. Xi is believed to be at the beach resort at Beidaihe on the coast east of Beijing, where the leadership conducts a secretive retreat every summer, sometimes emerging casually dressed in open neck shirts and Windbreakers for photographs on the strip of sand along the beachfront.

The final stages of the political process to win Mr. Xi’s favor for a place on the standing committee of the party, now a seven-member body that makes the final decisions on the nation’s affairs, is underway among the resort’s villas and hotels, China’s political analysts said.

The selection will be unveiled at a national congress in Beijing sometime between September and November. Until then, almost all other matters, including foreign policy, are put on hold, the analysts said.

Still, the leadership has been vexed that the Trump administration has paid scant attention to China’s proposal for a “freeze for freeze” solution to North Korea. Described many times by China’s foreign minister, Wang Yi, the notion calls for North Korea to freeze its nuclear weapons and ballistic missile program at current levels in exchange for the United States drawing down military exercises off the Korean Peninsula.

So far, the United States has dismissed the proposal as a nonstarter. Instead, to China’s irritation, the United States is looking to increase missile defenses in South Korea. In some respects, though, Secretary of State Rex W. Tillerson has tried to please Beijing by pledging that Washington does not seek to overthrow the North Korean leader, and does not plan to send American troops north of the 38th parallel that divides North and South Korea.

Mr. Xi is said to be exasperated with Kim Jong-un, a leader much his junior, whom he openly disparaged during his meetings in Florida in April with Mr. Trump, American officials say. But despite the frustration with Mr. Kim, China still prefers to have what it considers a relatively stable North Korea under Mr. Kim rather than a collapsed state that could result in a united Korean Peninsula on its border, with American troops in control.

In rebuffing the “freeze for freeze” proposal, Washington has raised suspicions in Beijing about its true intentions, said Yun Sun, a China expert at the Stimson Center in Washington. Chinese leaders believe the United States sees its true rival as China, a mammoth economy, and not North Korea, one of the poorest countries on earth, Ms. Sun said. In this estimation, Washington is merely using North Korea to mount a military containment strategy around China, she said.

“The Chinese operate from the conviction that China remains and will always be the No. 1 strategic threat to the U.S., so the issue of North Korea will be used against China — through sanctions, provocations and everything else,” she said. China was also annoyed, Ms. Sun said, that the United States refuses to discuss a “grand bargain” or “end game” on the future of the Korean Peninsula. Of most interest to China, she said, is the future disposition of American forces in South Korea, now standing at 28,500 troops.

The phone conversation between Mr. Trump and Mr. Xi will be followed by a visit from the chairman of the Joint Chiefs of Staff, Gen. Joseph F. Dunford Jr., who is expected in Beijing on Monday. General Dunford will also visit South Korea and Japan.

The general’s visit, planned earlier this summer, is the first by a senior American official to Beijing since Mr. Tillerson met with Mr. Xi in March.

Much of the diplomacy between China and the United States has been conducted between Mr. Trump’s son-in-law, Jared Kushner, and the Chinese ambassador in Washington, Cui Tiankai. Those talks have concentrated on Mr. Cui’s efforts to stave off punishing trade tariffs against China that are gathering momentum in White House discussions.

During his two-day visit, General Dunford is likely to use the opportunity to drive home arguments for the Chinese to put more pressure on the Kim government, said Brian McKeon, who was a senior Pentagon official in the Obama administration.

A major point of dispute will likely be American plans to deploy more missile defenses in South Korea, he said. China vehemently opposes the Terminal High Altitude Area Defense system, or Thaad, that has already been deployed in South Korea, calling it a threat to its own security.

“I would expect that Dunford will make the usual request that they put more pressure on the regime to behave, and to recognize that Kim’s actions threatens our core interests, which means we will have to continue to take measures that Beijing doesn’t like, for example the deployment of Thaad,” Mr. McKeon said.

Trump Administration to Begin Probe of Alleged Chinese Technology Theft

August 13, 2017

Investigation of China’s government agencies is unrelated to North Korea nuclear crisis, officials say

.

Updated Aug. 12, 2017 2:33 p.m. ET

WASHINGTON—The Trump administration announced plans Saturday to pressure China over alleged intellectual property theft, adding the threat of trade retaliation to an ongoing campaign seeking greater cooperation from Beijing in the North Korean nuclear crisis.

Aides said President Donald Trump will sign a directive Monday ordering his trade representative to start a formal probe into whether Chinese government agencies and companies were unfairly acquiring valuable patents and licenses from U.S. firms, either through outright theft, or by pressuring Americans to turn over their inventions as the price of entry into China’s market.

“Such theft not only damages American companies, but can threaten our national security,” a senior administration official said in a Saturday morning briefing for reporters.

Officials at the briefing stressed that while they were casting a spotlight on what they consider a major irritant in bilateral commercial relations, they weren’t rushing into action. They said Monday’s directive would launch a study into whether a formal trade investigation was warranted, and that probe would take a year or more. They declined to discuss what sorts of penalties the U.S. might impose against China, saying that question was “premature.”

The administration made the announcement a day after Mr. Trump held a phone call with Chinese President Xi Jinping to discuss escalating tensions over North Korea’s rapidly advancing nuclear weapons program. Mr. Trump has repeatedly said he would cut Beijing slack over trade issues if he felt the Chinese were being helpful in reining in Pyongyang.

The Wall Street Journal reported earlier in the month that a new trade investigation over China’s alleged forced technology transfers was in the works and had been planned for an early August announcement. But that was delayed until after an Aug. 5 U.N. Security Council vote imposing new financial penalties on North Korea, which China supported.

Asked if Mr. Trump discussed the pending trade investigation with Mr. Xi on Friday, an official pointed to the official White House summary of the call, which didn’t mention trade issues.

The White House aides said the new trade probe wasn’t tied to the administration’s North Korea strategy, despite the president’s earlier linkage of the subjects. “These are totally unrelated events,” one official said. “Trade is trade. National security is national security.”

Write to Jacob Schlesinger at jacob.schlesinger@wsj.com

WASHINGTON — The Trump administration announced plans Saturday to pressure China over alleged intellectual property theft, adding the threat of trade retaliation to an ongoing campaign seeking greater cooperation from Beijing in the North Korean nuclear crisis.

Aides said President Donald Trump will sign a directive Monday ordering his trade representative to start a formal probe into whether Chinese government agencies and companies were unfairly acquiring valuable patents and licenses from U.S. firms, either through outright theft, or by pressuring Americans to turn over their inventions as the price of entry into China’s market.

“Such theft not only damages American companies, but can threaten our national security,” a senior administration official said in a Saturday morning briefing for reporters.

Officials at the briefing stressed that while they were casting a spotlight on what they consider a major irritant in bilateral commercial relations, they weren’t rushing into action. They said Monday’s directive would launch a study into whether a formal trade investigation was warranted, and that probe would take a year or more. They declined to discuss what sorts of penalties the U.S. might impose against China, saying that question was “premature.”

The administration made the announcement a day after Mr. Trump held a phone call with Chinese President Xi Jinping to discuss escalating tensions over North Korea’s rapidly advancing nuclear weapons program. Mr. Trump has repeatedly said he would cut Beijing slack over trade issues if he felt the Chinese were being helpful in reining in Pyongyang.

The Wall Street Journal reported earlier in the month that a new trade investigation over China’s alleged forced technology transfers was in the works and had been planned for an early August announcement. But that was delayed until after an Aug. 5 U.N. Security Council vote imposing new financial penalties on North Korea, which China supported.

Asked if Mr. Trump discussed the pending trade investigation with Mr. Xi on Friday, an official pointed to the official White House summary of the call, which didn’t mention trade issues.

The White House aides said the new trade probe wasn’t tied to the administration’s North Korea strategy, despite the president’s earlier linkage of the subjects. “These are totally unrelated events,” one official said. “Trade is trade. National security is national security.”

The new probe does signal a bit of a hardening shift in Trump administration’s China trade policy, as it is the first White House trade directive aimed directly at Beijing. During the 2016 presidential campaign, Mr. Trump regularly blasted the U.S.’s $347 billion trade deficit with China, and vowed to take swift, drastic retaliation if he were elected, from across-the-board tariffs to branding Beijing a “currency manipulator.”

But the early months of Mr. Trump’s presidency have seen a considerably softer tone toward China over trade. He quickly dropped the campaign-trail threats, and during a genial April summit with Mr. Xi at his Mar-a-Lago Florida resort, the two countries launched a new “comprehensive economic dialogue” aimed at resolving bilateral commercial disputes amicably. A month later, China announced some modest market-opening moves, like ending a 14-year ban on U.S. beef imports, and Commerce Secretary Wilbur Ross declared economic ties between the world’s two largest economies were “hitting a new high.”

But the first round of economic dialogue talks in mid-July were tense and ended up with no agreements. Officials said Saturday that impasse was one factor behind the decision to launch the new trade review.

In focusing on China’s voracious appetite for American intellectual property, the Trump administration responding to a longstanding complaint by Western trade groups, who say the country’s industrial policies effectively force foreign companies in sectors such as autos to transfer technology to stay in the market.

Beijing has been emboldened by the growing strength of its own companies to make more demands of foreign firms, industry executives say, and the government is careful to keep regulations vague. U.S. high-tech companies have struck a string of investments and technology-sharing agreements in software, semiconductors and other areas in the past couple of years, often under pressure from officials in closed-door meetings.

China’s government rejects assertions that it forces foreign companies to transfer technology or permits infringement of intellectual property. Premier Li Keqiang denied it was using industrial policies to strong-arm foreign companies into turning over technology, telling a World Economic Forum meeting in Dalian in June that “such cooperation is voluntary and helps companies expand in the Chinese market and even in third countries.”

While many U.S. companies and policy makers agree Chinese forced technology transfer is a problem, they also say it is difficult to figure out a solution.

One challenge is that many U.S. firms are reluctant to lodge formal complaints, making it difficult for trade officials to make their case.

“An important question going forward will be whether U.S. companies and trade associations who have highlighted the problem will actually come forward and assist our government in the investigation,” said Michael Wessel, a member of the congressional U.S.-China Economic and Security Review Commission. Or, he added, “whether they will hide the facts fearful that our government won’t follow through, that the Chinese will retaliate against their interests or that they’ll have to admit what’s happened to their critical assets.”

Another question is just what remedy the U.S. government might pursue if it felt it had a case. Options might include imposing new limits on technologies that U.S. firms could license to China, or imposing new limits on Chinese investment in the U.S. But those would likely draw complaints from U.S. firms, and may contradict other policy goals. Mr. Trump personally touted China’s Foxconn Technology Group’s announcement in July to build a new display panel factory in Wisconsin.

The new China probe also marks a noticeable change in the process for how the Trump administration is processing trade policies, and suggests that a newly more organized and measured way to proceed with those complaints may be emerging.

Earlier Trump trade threats were made seeking swift action, and were done without broad consultation from stakeholders, drew widespread concern from business groups and lawmakers. Among them, an April promise to impose new steel and aluminum tariffs by June — a plan that remains stalled amid resistance. Mr. Trump also in April threatened to pull out of the North American Free Trade Agreement, but backed down after intense lobbying from allies, business groups, lawmakers and his own aides. He instead agreed to renegotiate the pact with Canada and Mexico, a process that begins Wednesday.

In choosing the China trade probe, Mr. Trump is targeting an area that business groups and Republican and Democratic lawmakers have identified as a concern. His aides Saturday also stressed that in contrast with the rushed earlier attempts at handling trade matters, they were setting no deadline and that any investigation would closely follow intricate procedures, including discussions with Beijing.

Before making any decisions on an investigation, the trade representative “would consult with the appropriate advisory committees,” one official said, and “if the investigation is instituted, we would consult with China. We would give interested parties the opportunity to comment. There would likely be a hearing. And these investigations can take as much as a year before we reach a conclusion.”

Eva Dou in Beijing contributed to this article.

Write to Jacob Schlesinger at jacob.schlesinger@wsj.com

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Diplomacy to defuse India, China border crisis slams into a wall — China media warns of “unavoidable countermeasures”

August 8, 2017

Reuters

AUGUST 8, 2017 / 8:18 AM

NEW DELHI (Reuters) – India’s diplomatic efforts to end a seven-week military standoff with China have hit a roadblock, people briefed on the talks said, prompting Chinese state-run media to trumpet rhetoric of “unavoidable countermeasures” on the unmarked border.

China has insisted that India unilaterally withdraw its troops from the remote Doklam plateau claimed by both Beijing and Indian ally Bhutan.

But China did not respond to India’s suggestion in the talks that it move its troops back 250 meters (820 ft) in return, said one source with close ties to Prime Minister Narendra Modi’s government.

In the low-key diplomatic maneuvers that took place outside the public eye, the Chinese countered with an offer to move back 100 meters (328 ft), so long as they received clearance from top government officials.

But there has been no comeback since, except for China’s mounting warnings of an escalation in the region, which it calls Donglang.

Image result for china, india, border dispute, photos

“It is a logjam, there is no movement at all now,” said a second source with knowledge of the talks.

In Beijing, China’s Foreign Ministry, which has repeatedly urged India to withdraw, did not immediately respond to a request for comment on the state of talks.

Indian troops went into Doklam in mid-June to stop a Chinese construction crew from extending a road India’s military says will bring China’s army too close for comfort in the northeast.

Their faceoff since, military experts say, is the most serious since going toe-to-toe in the 1980s, with thousands of soldiers each, elsewhere along the 3,500-km (2,175-mile) border.

China has held off going to war in the hope New Delhi would see reason, the state-run Global Times, which has kept up a barrage of hostile commentary, said on Tuesday.

“If the Narendra Modi government continues ignoring the warning coming from a situation spiraling out of control, countermeasures from China will be unavoidable,” it said.

Indian activists shout anti-Chinese slogans during a protest near the Chinese embassy in New Delhi.
Indian activists shout anti-Chinese slogans during a protest near the Chinese embassy in New Delhi.(AFP)

The border crisis caps a year of souring diplomatic ties between the Asian giants, even though trade between the fast growing economies is rising rapidly.

India has grown concerned at China’s ties to its arch rival Pakistan, viewing their trade corridor across Kashmir as an infringement of its claim to the whole of the region.

Modi refused to join President Xi Jinping’s signature Belt and Road initiative to knit together Asia and beyond, making India the lone country to boycott a summit in May.

China has warned New Delhi not to be drawn into a Western military alliance led by the United States and including Japan. Modi has sought closer ties with both.

“There will be no happy ending for this confrontation,” Indian foreign policy expert C. Raja Mohan wrote in the Indian Express newspaper, adding that India was unlikely to give in.

The second source said the worry was the standoff could drag on into a summit of BRICs nations China is hosting next month.

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Indian military officials say there is no troop buildup on either side, nearly two months into a standoff that involved about 300 soldiers just 100 meters (328 ft) apart on a plateau 3,000 m (10,000 ft) above sea level.

China has accused India of massing troops, however, and state media have warned against a fate worse than its defeat in a brief border war in 1962.

“We will keep engaging with China to resolve the dispute. War cannot solve problems,” Indian Foreign Minister Sushma Swaraj told parliament, sticking to a conciliatory stance.

Still, both have flexed their muscles.

Last month, China held live-fire drills on the Qinghai-Tibet Plateau near the site of the standoff, state media said.

India’s army ran low-key exercises in the Ladakh sector of the western Himalayas, where previous disputes have flared, though it is thousands of miles distant from Doklam.

“The chance of a conflict is low, nobody is expecting Xi Jinping to go to war before the Communist Party’s congress,” said Srikanth Kondapalli, a China specialist at Jawaharlal Nehru University in New Delhi, referring to an Oct-Nov meeting expected to confirm a second five-year term as party general secretary for the Chinese leader.

(For a graphic on China-India border dispute, click tmsnrt.rs/2hlUh9H)

Additional reporting by Ben; Blanchard in BEIJING and Fayaz Bukhari in SRINAGAR; Editing by Clarence Fernandez

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Modi government is naive — War unavoidable if India ignores warnings, China says

August 8, 2017

Image result for China-India border, photos

Days after Modi government showed olive branch to China in the current border row, China has said that India has learnt nothing from the 1962 war.

In an editorial, China’s state run Global Times ridiculed a Times of India report where the newspaper said that experts believe minimal chance of a war between the two countries.

“Fifty-five years have passed, but the Indian government is as naive as it ever was. The lessons of the 1962 war didn’t last for half a century,” Global Times said.

Just few days back External Affairs Minister Sushma Swaraj said that war is not a solution and that India wants to resolve disputes through talks. The same was reiterated by Prime Minister Narendra Modi.

Drawing a parallel with the situation of 1962 to present, it said, “India made constant provocations at the China-India border in 1962. The government of Jawaharlal Nehru at that time firmly believed China would not strike back…However, the Nehru government underestimated the determination of the Chinese government to safeguard China’s territorial integrity even as the country was mired in both domestic and diplomatic woes.”

“Now the Indians place their hopes on China being unwilling to risk a war due to strategic concerns. They believe the US will likely side with India, which will exert huge psychological pressure on China. It seems that New Delhi does not comprehend the nature of the Sino-US rivalry and the meaning of strategic containment. It thinks Washington can influence the situation along the China-India border simply by issuing a pro-India statement or sending warships to the Indian Ocean.”

It said that Beijing has not yet started a war “because it hopes New Delhi can make a rational choice rather than China daring not to take action”.

“If the Narendra Modi government continues ignoring the warning coming from a situation spiraling out of control, countermeasures from China will be unavoidable,” the Global Times warned.
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http://economictimes.indiatimes.com/news/defence/modi-government-is-naive-as-nehrus-war-unavoidable-if-india-ignores-warnings-china/articleshow/59965957.cms

Trump close to decision on addressing Chinese trade practices

August 2, 2017

Steve Holland

Reuters

WASHINGTON (Reuters) – U.S. President Donald Trump is close to a decision on how to respond to what he considers China’s unfair trade practices, a senior Trump administration official said on Tuesday.

Trump is considering encouraging U.S. Trade Representative Robert Lighthizer to initiate an investigation of Chinese trade practices under the 1974 Trade Act’s section 301, the official said. An announcement could come as early as this week, the official said, speaking on condition of anonymity.

Section 301 of the Trade Act of 1974 allows the president to unilaterally impose tariffs or other trade restrictions to protect U.S. industries from “unfair trade practices” of foreign countries, such as trade agreement violations, or “discriminatory” actions that burden U.S. commerce.

The United States has a long list of grievances about China on trade, including accusations of steel dumping and theft of U.S. intellectual property.

China has said that trade between China and the United States benefits both sides and that Beijing is willing to work with Washington to improve their trade relationship.

Trump has long been a critic of Chinese trade practices but his interest in penalizing Beijing has risen because of his concern at what he perceives to be Chinese inaction on reining in increasingly belligerent North Korea.

The United States has pressed China to exert more economic and diplomatic pressure on North Korea to help rein in its nuclear and missile programs. Beijing has repeatedly said its influence on North Korea is limited and that it is doing all it can.

A senior Chinese official said on Monday there was no link between North Korea’s nuclear program and China-U.S. trade.

Susan Thornton, acting assistant secretary of state for East Asia, told a congressional hearing on Tuesday that new U.S. sanctions aimed at curbing North Korean’s weapons programs, including measures aimed at Chinese financial institutions, could be expected “fairly soon.”

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China Shipping containers sit on a ship in the Port of Los Angeles after being imported to the U.S., California, Oct. 7, 2010. Reuters photo

Section 301 was used extensively in the 1980s to combat Japanese imports of motorcycles, steel and other products – an era during which Lighthizer served as deputy U.S. trade representative.

The statute has been little used since the World Trade Organization was launched in 1995.

The WTO provides a forum for resolving trade disputes, but Lighthizer and Commerce Secretary Wilbur Ross have complained that it is extremely slow, often taking years to reach a conclusion, and that the Geneva-based organization has an inherent anti-U.S. bias.

Both China’s Foreign Ministry and Commerce Ministry did not respond immediately to requests for comment.

FILE PHOTO: Chinese national flags are flying near a steel factory in Wu’an, Hebei province, China, February 23, 2017. REUTERS/Thomas Peter/File Photo

Chinese Premier Li Keqiang met Michigan’s governor Rick Snyder in Beijing on Tuesday, where he said the common interests of China and the United States were bigger than any disputes.

“China welcomes U.S. states, including Michigan, to … enhance bilateral trade and investment, … and consolidate and expand cooperative consensus to create better development opportunities and jobs for both countries’ peoples,” Li told Snyder, according to a Chinese government statement

“The Trump administration believes in free and fair trade and will use every available tool to counter the protectionism of those who pledge allegiance to free trade while violating its core principles,” Ross said in a Wall Street Journal opinion piece on Tuesday.

He tried to refute arguments that the Trump administration was taking a protectionist stance, saying that both China and Europe were more protectionist because they subsidized export industries and had “formidable tariff and non-tariff trade barriers against imports.”

“China is not a market economy. The Chinese government creates national champions and takes other actions that significantly distort markets,” Ross wrote. “Responding to such actions with trade remedies is not protectionist.”

Additional reporting by David Lawder in Washington and Michael Martina in Beijing; Editing by Andrew Hay, Peter Cooney & Shri Navaratnam

Apple Removes Apps From China Store That Help Internet Users Evade Censorship

July 29, 2017

HONG KONG — China appears to have received help on Saturday from an unlikely source in its fight against tools that help users evade its Great Firewall of internet censorship: Apple.

Software made by foreign companies to help users skirt the country’s system of internet filters has vanished from Apple’s app store on the mainland.

One company, ExpressVPN, posted a letter it had received from Apple saying that its app had been taken down “because it includes content that is illegal in China.”

Another tweeted from its official account that its app had been removed.

A search on Saturday showed that a number of the most popular foreign virtual-private networks, also known as VPNs, which give users access to the unfiltered internet in China, were no longer accessible on the company’s app store there.

ExpressVPN wrote in its blog that the removal was “surprising and unfortunate.”

It added, “We’re disappointed in this development, as it represents the most drastic measure the Chinese government has taken to block the use of VPNs to date, and we are troubled to see Apple aiding China’s censorship efforts.”

Read the rest:https://www.nytimes.com/2017/07/29/technology/china-apple-censorhip.html

China to Punish Wanda for Breaching Investment Rules

July 17, 2017

Bloomberg

July 17, 2017, 2:11 AM EDT July 17, 2017, 2:48 AM EDT
  • Government is scrutinizing six Wanda deals, people say
  • Move is unprecedented setback for one of China’s richest men

China plans to punish billionaire Wang Jianlin’s Dalian Wanda Group Co. for breaching the nation’s restrictions on overseas investments by cutting off funding and denying the conglomerate with necessary regulatory approvals, according to people familiar with the matter.

The government has found violations of China’s restrictions in six investments, four of which have been completed and two are still pending, according to the people, who asked not to be identified because the matter is private. The deals being scrutinized include a Wanda unit’s purchase of Nordic Cinema Group Holding AB and Carmike Cinemas Inc., the people said, without identifying the remaining transactions.

Wang Jianlin

Photographer: Jason Alden/Bloomberg

A Wanda representative declined to comment. China’s banking regulator didn’t immediately respond to requests for comment.

The move represents an unprecedented setback for China’s second-richest man, who was among the country’s most prominent dealmakers up until last year by gobbling up Hollywood assets such as “Kong: Skull Island” producer Legendary Entertainment. For the government, targeting one of the country’s top businessmen represents an escalation of its broader efforts to crack down on capital outflows.

Wanda Properties International Co.’s 2024 notes declined as much as 4.8 cents on the dollar to 100.2 cents in afternoon trading in Hong Kong on Monday, according to Bloomberg-compiled data. Wanda Hotel Development Co. shares fell as much as 7.3 percent.

According to the people, the four completed deals will be subject to punitive measures including:

  • No financing from domestic banks
  • Assets will be barred from being injected into any listed entity in China
  • Wanda will be barred from injecting capital into those assets from within China or involve them in any restructuring with any of Wanda’s domestic units
  • No government approval will be given if Wanda attempts to sell those assets to any Chinese companies

On the two pending deals, related authorities won’t provide support with financing or foreign-exchange-related approvals needed to move money out of China, according to the people.

Wanda is among conglomerates including Fosun International Ltd.HNA Group Co.and Anbang Insurance Group Co. whose loans are under government scrutiny after China’s banking regulator asked some lenders to provide information on overseas loans to the companies, people familiar with the matter said in June.

Though cutting off funding may pressure Wanda, the group is poised to get some relief after it agreed to sell hotels, land and projects to Chinese developer Sunac China Holdings Ltd. in a 63.2 billion yuan ($9.3 billion) deal announced last week. For Wang, the sale of the bulk of his “Wanda City” projects — massive multi-billion-dollar complexes with theme parks and lodgings — represented a departure from the billionaire’s past predictions that he would build a tourism empire bigger than that of Walt Disney Co.

The Wall Street Journal earlier reported that China is restricting the completion of six overseas deals by Wanda Group following the government’s broader crackdown on offshore investments, citing documents.

— With assistance by Steven Yang, and Prudence Ho

https://www.bloomberg.com/news/articles/2017-07-17/china-is-said-to-punish-wanda-for-breaching-investment-rules-j57r4vzy

China Hammers Wanda — “Touched a red line concerning foreign investments”

July 17, 2017

China places Wanda under unprecedented scrutiny, closes off most loan options

By Xie Yu
South China Morning Post

Monday, 17 July, 2017, 2:58pm

China’s bank regulator has instructed the country’s largest state-owned lenders to put six of magnate Wang Jianlin’s overseas acquisition projects under an unprecedented level of scrutiny, because they have touched a red line concerning foreign investments, according to several sources familiar with the matter.

Four of the six purchases have closed. Of the two uncompleted acquisitions, Chinese government departments have been ordered to not approve any loan applications or foreign currency exchanges, for completing the deals, based on verbal instructions delivered at a June 20 meeting summoned by the China Banking Regulatory Commission in Beijing, according to sources familiar with the briefing.

Chinese banks are instructed to not lend any money to the four acquisitions that have closed, according to the briefing, made available to the South China Morning Post.

 Wang Jianlin at the opening ceremony of Harbin Wanda Cultural Tourism City on June 30. Photo: SCMP/Simon Song

Those projects are forbidden from injection into any of Wanda’s China-listed companies, and Wanda is barred from injecting any funds, or conducting any form of financial restructuring involving these assets, if they encounter operational difficulties, according to sources present at the June 20 meeting.

The unprecedented instructions would close off any available avenue of financing for the highly leveraged Wanda, which may have contributed to Wang’s decision last week to sell the majority of his hotel and theme park holdings — including a Harbin park that he’d opened barely two weeks earlier — to Shanxi magnate Sun Hongbin for US$9.3 billion, in what would turn out to be the largest single real estate sale in China’s corporate history.

Wang could not be reached to comment. A Wanda Group spokesman in Beijing declined to comment.

Wanda, founded in 1988 by Wang as a provincial developer in the coastal city of Dalian, has evolved into one of China’s biggest asset buyers around the world, in the process turning the 62-year-old former soldier into the country’s wealthiest businessman.

Through a string of offshore acquisitions that began in 2012, Wanda is now the world’s largest cinema operator, owning 8,200 screens all over the globe. It owns a yacht builder, a Spanish football club, a Hollywood movie studio, a string of shopping malls, hotels and theme parks across China, and the global rights to the Iron Man triathlon races.

The world took notice of Wang’s worldwide shopping spree. Harvard invited Wang to speak, twice. At a November 2015 speech to the Harvard Business School, Wang admitted that one of the shareholders in at least one of his unlisted units included Deng Jiagui, the brother in law of Chinese president Xi Jinping. Deng invested in a 2009 rights issue by Dalian Wanda Commercial Properties Co., and sold it before the company’s December 2014 listing in Hong Kong, Wang said at Harvard.

 The logo of the Wanda Group is pictured during a media event in Beijing, China March 2, 2017. Photo: Reuters

That may have raised the ire of the Chinese government, which was then half way through a campaign to crack down on corruption, influence peddling and any form of financial misconduct.

Wanda wasn’t the sole Chinese company to be put under the spotlight. The Anbang Group, Fosun Group, HNA Group and a Zhejiang-based company called Rossoneri Sport Investment have also been singled out for scrutiny.

Of the six projects singled out by the bank regulator, at least two are for cinemas abroad, which would dent Wang’s ambition to control one in every five of the world’s cinema screens by 2020. They include the US$930 million acquisition announced in January for the Nordic Cinema Group, which owns 664 screens in 118 cinemas in Sweden, Finland, Norway, Estonia, Latvia and Lithuania. Also under scrutiny is the US$1.1 billion purchase of Carmike Cinemas, the fourth-largest American cinema operator, with 2,954 screens in 41 US states.

Wanda Commercial was delisted in Hong Kong on September 20 last year. Wang promised investors he’d list the developer’s assets on an exchange in mainland China, where the Shanghai bourse trades at a price-earnings ratio that’s four times higher on average than its stock in Hong Kong.

S&P Global Ratings on Monday placed the company’s BBB- long term corporate credit rating on watch, with negative implications.

“We placed the ratings on CreditWatch to reflect the risks that Wanda Commercial’s unexpected sale of its tourism projects and hotels could weaken its business position and have an uncertain impact on leverage,” according to the agency.

With reporting by Summer Zhen in Hong Kong, Zheng Yangpeng in Beijing.

http://www.scmp.com/business/companies/article/2102933/china-places-wanda-under-unprecedented-scrutiny-closes-most-loan