While President Xi remains huddled with China’s top leaders in Beidaihe for the Communist Party’s summer retreat, in Beijing senior officials have begun trying to shape the agenda for next month’s G20 summit in China’s eastern city of Hangzhou. On Monday, public comments by two senior government ministers stressed that as this year’s host Xi wants to focus on the subject of global economic growth.
Vice Finance Minister Zhu Gungyao emphasized the need for the G20 to reaffirm the importance of global trade and investment and deplore protectionism: “We really do need to make sure that the people, the public, benefit from economic development and growth,” Zhu said. “If people don’t feel like they are beneficiaries of economic development, if they don’t think their lot in life is improving, that’s when they start getting all kinds of ideas.” (Ideas? Like voting for Donald Trump, perhaps? Or withdrawing from the European Union?)
Meanwhile, China’s Vice Foreign Minister, Li Baodong, said leaders at the Sept 4-5 meeting shouldn’t get sidetracked by issues unrelated to economics–for example, competing sovereignty claims in the South China Sea. “The G-20 summit in Hangzhou is about the economy,” he said. “The consensus is to focus on economic development and not be distracted by other parties.”
Sticking to economics is usually a safe bet at global gatherings. But this year, it might actually court discord. After all, growth isn’t necessarily a subject that plays to China’s strengths these days. China’s GDP is expanding at its slowest pace in 25 years, and a flurry of economic data this past month offers no evidence China will rebound soon. As the Wall Street Journal notes, global investors, though keen on other emerging markets, say they have lost confidence in China’s commitment to tackle its own economic problems.
In the United States, trade with China has emerged as a favorite boogeyman of all the major candidates in this year’s presidential campaign (despite a recent Gallup study casting doubt on the oft-heard assertion that the impact of trade with China explains the rise of Donald Trump). Odds that President Obama will win congressional approval of the Trans Pacific Partnership seem dimmer by the day. And even if Trump continues to self-destruct, Hilary Clinton has staked out a cautious agenda on trade.
Even so, Hangzhou has other charms. For those visiting next month — and even those not — Hong Kong’s South China Morning Post, newly acquired by Hangzhou’s favorite son Jack Ma, has a comprehensive multimedia package to the city.
Here’s what else is happening in China news today.
Global investors steer clear of China, pile into other emerging markets instead. Foreign punters say they’re spoked by the Chinese leaders’ preoccupation on short-term market stability at the expense of solving long-term economic many problems. Mainland shares trading in Hong Kong are down a point for the year, while the Shanghai Composite is down 14%. Wall Street Journal
China stocks rally on rumors of trading link with Shenzhen. A Hong Kong journal reported Monday that details of Shenzhen-Hong Kong Connect arrangement, similar to the one that links the Hong Kong market with the exchange in Shanghai, could be announced as early as this week. Investors were also encouraged by some positive credit data. Wall Street Journal
New lows for high fashion: Global luxury houses including Burberry, Louis Vuitton and Calvin Klein are scaling back their retail operation in China as Beijing’s corruption crackdown enters its fourth year. China’s luxury market fell 2% last year, according to Bain & Company. Deloitte says sales at luxury jewelers from China and Hong Kong dropped 6.8% last year. At luxury boutiques and posh golf courses, sales staff and caddies are going on strike, demanding back wages. But McKinsey sees booming growth in the ‘daigou’ industry, in which consumers pay foreign agents overseas to shop for luxury goods and ship them back to China. The Telegraph
At G20 summit, China wants to talk growth, not politics or South China Seas. At next month’s meeting in Hangzhou, Beijing will push a joint initiative to ward off the mood of rising protectionism. The proposal will stress “inclusive growth.” Reuters, Associated Press, Bloomberg
NYT editorial condemns China’s “risky maneuvers” in the South China Seas. “China’s activities in the South China Sea have increasingly persuaded more and more people that it is determined to put into place the military facilities that will allow Beijing to bully and dominate its coastal neighbors. So far, Mr. Xi has only succeeded in worsening tensions, making other countries fearful and suspicious and pushing them into new security relationships, with the United States and with one another.” NYT
The Hague’s ruling on Philippine claims to islands in the South China Sea complicates China relations for Singapore. SCMP
Abe takes a pass on visit to controversial war shrine The Japanese prime minister and his new defense minister, Tomomi Inada, opted to forgo a visit the controversial Yasukuni Shrine on Monday, the 71st anniversary of Japan’s defeat in World War II. He send an offering of money instead and a group of other members of his cabinet instead. Wall Street Journal
Tokyo says Chinese jet fighters have buzzed disputed islands in the East China Sea repeatedly since May. Between April and June, Japan scrambled fighters against Chinese aircraft approaching its airspace a record 199 times, the Defence Ministry said. Associated Press
In China, Tesla masters some new vocabulary words: Tesla removed the word ‘autopilot’ and a Chinese term for “self-driving car” from China website after a driver in Beijing complained the carmaker oversold the function’s capabilities. The company now used a phrase that translates as “self-assisted driving.” Reuters , Wall Street Journal
Didi CEO Cheng Wei: A nationalist who knows how to “kick ass” and “make history”: Reuters explains how the Cheng rose through the ranks, from assistant to the head of a foot massage company to rising star at Alibaba to boss of the ride-hailing giant that this month faced down Uber in China. Reuters
Chinese lenders are pioneering new techniques for evaluating credit-worthiness by mining borrowers’ social media data. “If you are friends with celebrities from the entertainment or finance industries, we think you must be to some extent trustworthy,” says an executive at Jubao Internet Technology, one of China’s top peer-to-peer lending firms. Lenders think they can make better guesses about credit risk using social media data than banks can by analyzing credit data. China’s peer-to-peer lending sector is almost completely unregulated. Financial Times
The same people who brought us the abacus and paper money are about to seize the lead in the global financial technology industry. So says Joshua Bateman in summarizing the 2016 Fund Forum Asia conference in Hong Kong. TechCrunch
Chinese authorities tackling the technology issues that really matter: China says it is considering lifting the restrictions on the use of mobile phones to connect to the Internet while flying on commercial airlines. Bloomberg
Hollywood’s Panda Pander: From Tony Stark’s Vivo phone to prominent placement for Moon Milk in Independence Day, count the many ways America’s movie industry shows its love for China’s consumers. Vanity Fair