Foreign car makers cannot ignore China's self-driving cars - Mark Schaub

China is leading the market of self-driving cars, because its size and the aggressive way the government is paving the road, literally, says Shanghai-based lawyer Mark Schaub to the China Law Insight. But investing in China offers not only huge opportunities, the challenges are equally gargantuan.

Mark Schaub:

China will be too big for international autonomous car suppliers and service providers to ignore. Biggest automotive market, continued strong growth, right infrastructure, ability for government to implement, early adopter consumers, popularity of car sharing and sharing economy, new and innovative companies on the rise all point to China being pivotal to the development of autonomous cars. 

Also as China’s share of the world economy rises and it becomes the largest economy it may well be that for a company to be “global” in the autonomous car sector then you will also need to “win” in China. 

However, it will not be easy for these international companies though – China will be a major opportunity but also a major challenge. 

Time and time again international companies have underestimated the competitiveness of the Chinese market – it can be crowded – both international and home grown Chinese competitors bitterly fight it out. 

In addition as the Chinese economy is now so big even niches are worth fighting over. In addition to business competition international companies will also have to contend with regulatory controls in China and in particular restrictions on foreign investments in specific sectors. 

As the world’s largest auto market China’s number of cars and strong growth makes it a jurisdiction central to business strategy. It may be that if you are not present in China then you may not be able to succeed globally. 

International companies already with a presence in China are deepening their footprint in China to ready themselves for the new opportunities that autonomous vehicles will provide. For many this will involve setting up their first JVs (even if they have had WFOEs for decades in China) or by cooperating with domestic companies that have expertise or licenses in restricted sectors. There will be opportunities for WFOEs but these are unlikely to be the most important or lucrative businesses. Accordingly for many investors success will necessitate working with Chinese partners – whether they be fellow shareholders or cooperative partners.

More details at the China Law Insight.

Mark Schaub is a speaker at the China Speakers Bureau. Do you need him at your meeting or conference? Do get in touch or fill in our speakers' request form.

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Related articles

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China's presidency: why it matters - Ian Johnson

Ian Johnson

China's presidency - now no longer a two-term function - is highly ceremonial, but still matters, writes journalist Ian Johnson, author of The Souls of China: The Return of Religion After Mao at the NY Review of Books. Xi Jinping was already lifetime leader of the Communist Party and of the Central Military Committee.

Ian Johnson:

This isn’t how China wants to portray itself to the world. Instead, it wants to be seen as a modern country able to offer a new model for governing—the “China formula” (zhongguo fang’an). China’s political system might owe much to the Soviet Union, but it sees itself as much more than just a successor to that failed state. 

This desire for normality extends to how one translates the name of the office that Xi can now hold for the rest of his life. The official translation is “president,” but in Chinese it’s zhuxi, or chairman. It sounds strange to speak of someone being “chairman of China”—it sounds so “Chairman Mao”—hence the official translation, “president.” 

These terms matter domestically, too. For twenty-five years, the three titles—head of party, military, and state—have been united under one person. By dropping the term limits on the presidency, Xi can keep a grip on all three without having a head of state (like a king or queen) who only appears at ceremonial occasions. Such a system wouldn’t work in China. Here, more than in many other countries, ceremony is authority. 

Television footage of the stately Xi and his stylish wife meeting and greeting foreign dignitaries is a major reason for his popularity; losing that would harm him politically.

In hindsight, all this makes perfect sense, but I have to admit I was skeptical last autumn when some political analysts suggested that Xi might try to rule past a second term. One reason was that the Chinese political class has fought hard to institutionalize transfers of power. I wondered if Xi would want to risk alienating so many of his peers by taking such a step. 

Another risk is that this puts Xi in the crosshairs if his policies fail. Should the economy fail to make the transition to a more modern, technology-driven model, for example, it will be difficult for Xi to blame his premier, Li Keqiang, because Xi has so completely eclipsed Li in economic policy. Mao and Deng had proxies who took the fall for failed policies. Now, it’s Xi standing alone.

More in the NY Review of Books.

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Related articles

• 'More Opposition in Mao's Time.' Why China's Xi Jinping May Have to Rule for Life
• China makes historic move to allow Xi to rule indefinitely
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• China's Xi Jinping gets expanded mandate, may rule for life

Why the central bank might start printing money again - Victor Shih

Victor Shih

We have seen this before, says financial analyst Victor Shih about the efforts by the financial authorities in China to reduce debts. In 2014 they tried the same, and in 2015, 2016 the PBOC, China's central bank, started to print money again. When economic growth comes under a certain level, that will happen again, he tells Bloomberg.

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Trade tensions will wipe away consumers day fears - Shaun Rein

Shaun Rein

Foreign companies would watch in fear media campaigns at China's consumers day in the past. But this Thursday, consumer day will be a backdrop for upcoming months of upcoming tensions, now a trade war is looming, says business analyst Shaun Rein, author of The War for China's Wallet: Profiting from the New World Order to Bloomberg.

Bloomberg:

This year’s installment comes amid a period that has seen geopolitics impact the Chinese operations of many multinationals. Beijing has retaliated against Korean businesses for Seoul’s support of a U.S. missile-defense system, hurting retailer Lotte Shopping Co. Global companies were also singled out in January for mislabeling China’s territories on their websites. And now, companies are facing the prospect of a trade war between Beijing and Washington.

“I do expect more difficulties for American companies in the Chinese media over the coming months, not just on the CCTV day but other times,” said Shaun Rein, the Shanghai-based founder and managing director of China Market Research Group....

Domestic companies will also likely be on edge. Serial acquirers such as Dalian Wanda Group Co. have come under scrutiny as China clamps down on financial risk. Liquor company Kweichow Moutai Co. has been criticized for having a lofty market valuation.

One possible comfort for both foreign and domestic corporations: while CCTV has had a powerful impact on both consumers and companies in the past, its influence may be weakening. Especially after Japanese retailer Muji was cleared of claims after last year’s program accused it of importing foods from areas contaminated by radiation.

“It seems that the power of the CCTV thing has gone down,” Rein said. “Consumers are kind of bored of it. They realize it’s kind of propaganda and very often targets companies that are doing OK.”

More at Bloomberg.

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Stimulus will remain in China's tool box - Victor Shih

Victor Shih

China's government seems eager to control debts, even when it means a mitigation of economic growth. But the financial stimulus will remain a trusted tool in the country's financial toolbox, in case growth drops too far, says financial analyst Victor Shih at the Deutsche Welle.

The Deutsche Welle:

Experts say the Chinese government needs to slow down the pace of infrastructure investment if it wants to resolve the debt problem. But they doubt that the government is willing to push ahead with such a measure. 

"Because it [infrastructure investment] already is a large contributor to growth, slowing investment will substantially reduce growth rates," said Victor Shih, an associate professor of political economy at the University of California in San Diego. "This is not what the leadership wants."... 

Analyst Shih believes that once China's economic growth drops to a certain level, Beijing would again resort to stimulus to boost expansion. "I still think that if growth falls below a certain level, the top leadership will order a stimulus, which involves acceleration in debt growth," said Shih. "That is the only viable tool in China's arsenal if the economy slows too much."

More at the Deutsche Welle. 


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Reform state-owned companies lagging - Sara Hsu

Sara Hsu

China might have announced drastic reform of its government, state-owned companies are still lagging behind in reforms, argues financial analyst Sara Hsu. Because their access to state funding is unlimited, they keep on creating new debts and have little incentive to improve efficiency, says Sara Hsu at CGTN.

Sara Hsu is a speaker at the China Speakers Bureau. Do you need her at your meeting or conference? Do get in touch or fill in our speakers' request form.

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Why big data are not the new oil - Mark Schaub

Mark Schaub

Shanghai-based lawyer Mark Schaub dives further into the legal consequences of self-driving cars. Big data - generated by cars - are not the same as oil, as some argue, he says. Privacy is a key issue, that did not matter to oil, he writes at the China Law Insight.

Mark Schaub:

Everyone is talking about data and how it is like oil. The above quote has been repeated by the Economist, newspapers, titans of industry and world leaders. 

However, data really is not like oil. 

Oil is ultimately a finite and diminishing resource. Its value is linked to scarcity. Oil has one basic use. Data has none of these attributes. Data and its uses expand exponentially. Indeed it is forecast that in the next two years, 40 zettabytes of data will be created – this is data equivalent to 4 million years of HD video. [1] Most crucially consumers of oil do not generally take matters personally. Data on the other hand, inflames consumers’ passion-how do I maintain privacy? Who has access to my data? How will the data be used? 

Big data is a focus area for many industries and the auto industry is no exception. However, with the advent of self-driving cars the auto industry will not only be a consumer of data but also a major generator of data. A single self-driving car could generate as much as 100GB of data every second. [2] 

Given that China has 217 million cars and the number increases by nearly 11% each year [3] this means the potential amount of data produced yearly would be far greater than the data held by Google.[4] 

Self-driving cars may not need oil to function (as most will be electric) but they will need data to be on the roads. Self-driving cars will rely on a massive amount of data to flow via various sensors integrated into the vehicles. The vehicle will need to know its precise location, its destination and also be able to keep track of everything while it is on the road.[5] Self-driving cars will also need to learn about their environment and the consumers who use them. The “smarter” self-driving cars can become, the greater the convenience for the users. However, the cars will need increasing amounts of personal data to become smarter and also to incorporate data results into the services.[6] 

Unlike oil the data generated by self-driving cars will not be a simple commodity that will be used for one purpose and consumed. The data generated will have great value to carmakers, mobile operators, insurance companies, restaurants, hotels and any other innumerable numbers of service or product providers that hope to interact with a self-driving car or its user. Google has built a $400 billion business on its knowledge of over one billion[7] users’ internet habits using their search engine for 1.2 trillion searches per year. [8] Imagine how valuable similar insights that are generated by observing billions of consumers’ behavior in cars for extending periods of time every day.  The potential for monetization will be almost limitless.[9] 

Data – great for companies, great for convenience, great for consumer experiences – but not so great for privacy.  Privacy concerns on the part of consumer have greatly increased in recent years with the growth of social media, internet and data hacks. Self-driving cars will amplify concerns and consumers and regulators realize how much data and personal information these vehicles will generate, use and record about users and the surrounding environment. Self-driving cars will be a veritable fleet of data factories. Such mobile surveillance will mean that privacy will be compromised … everywhere. 

As millions of self-driving cars are expected to be on the road within the next few years the issue of balancing the modern concern of privacy and the pressure to not hinder the next great industrial revolution will be increasingly pressing. A balanced regulatory scheme will need to be established to protect privacy on the one hand while still allowing the technology to develop unheeded by excessive government intervention.

Much more at the China Law Insight.

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The madness of Trump's Tariff Scheme - Harry Broadman

Harry Broadman

The US announcement of tariffs on steel and aluminum was supposed to be a fit shot in the US-China trade war but left many US allies behind in disarray. Former US official Harry Broadman tries to make sense out of the mess Donald Trump has created, for Forbes.

Harry Broadman:

When President Trump signed an Executive Order on March 11, 2018 that set forth a plan to impose prospectively import tariffs on steel of 25% and on aluminum of 10% for countries exporting those products to the U.S., most of us trade negotiation veterans were startled. Literally. You should be too. 

We were taken aback for two reasons. First, the legal basis on which the Executive Order appealed is arcane and rarely invoked. Second, the mechanics of how the tariffs would be applied—under a dangled threat, where countries would have to belly up to the table one-by-one and seek exclusions from Mr. Trump until the Executive Order becomes effective on March 23, 2018—are unprecedented, set in motion a dynamic that threatens to unravel the multilaterally agreed rules-based world trading system for which the U.S. has been the primary champion for more than 70 years, and plunges an extraordinarily wide swath of industries lying at the core of world economic growth into uncertainty. 

Only Canada and Mexico were provisionally excluded in Trump’s Executive Order—since they are in the midst of a U.S.-forced re-negotiation of the North America Free Trade Agreement (NAFTA). But if the NAFTA renegotiations do not go Mr. Trump’s way, the only two neighboring countries of the U.S. and our 2nd and 3rd largest trading partners, respectively, would also fall under the Trumpian Sword of Damocles. 

Some of the smartest trade policy observers in Washington, Brussels, Tokyo, Beijing, New Delhi, Mexico City, Ottawa and Canberra, among others, are scratching their heads as to why Trump proceeded in this fashion. Actually, the answer can be found in the way the President has conducted his business dealings in the private sector for years. Regrettably, these practices are fundamentally at odds with the rules governing global trade negotiations, which, after all are among sovereign not commercial entities.

More at Forbes and this pdf file.

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Related articles

• GOP Lawmakers Voice Little Support For Trump's Tariffs
• Juncker responds to Trump's trade tariffs: 'We can also do stupid'
• Trump Says U.S. to Be Very Flexible on Tariffs He Plans to Sign Today
• Donald Trump threatens EU with tariffs on cars in trade war warning

The real story behind the US trade war against China - Arthur Kroeber

Arthur Kroeber

The world was once again flabbergasted by the US trade measures since it did hurt designated trade enemy China less than potential US allies again China, says leading economist Arthur Kroeber, author of China's Economy: What Everyone Needs to Know®. Behind those measures are efforts to design a whole new playbook, to change global economy, he tells both Livemint and Bloomberg.

Livement:

Transparent Trump is doing exactly what he promised supporters on the campaign trail. He pledged to take on a Chinese government he claimed was “raping” and “killing” American workers. Trump makes no secret he’s miffed that Xi hasn’t curbed North Korea’s exploits. He’s desperate to change the narrative away from the Russia and corruption scandals swirling around his White House. How better than launching a trade war? 

Trouble is, Trump hasn’t considered the consequences. “The real problems,” says Arthur Kroeber of Gavekal Dragonomics, “are second-order effects, relating to the systemic impact of the US thumbing its nose at the global trading system it worked so hard to build. The basic question, impossible to answer at the moment, is whether this move is a one-off, driven by Trump’s visceral desire to impose big tariffs on someone?” 

While Xi’s China is the target, Washington’s tariffs will hit Brazil, Canada, European Union, Japan, Mexico, South Korea and Taiwan—all, in theory, US allies. And for what? China exports just a small fraction of steel and aluminium output to Trumpland. As such, Kroeber says, Trump’s tariffs “make it far harder to organize resistance to Chinese bad behaviour”.

More in Livemint. (Since the article has been published, Australia, Canada and Mexico have been exempted from trade levies.)

Bloomberg:

"The trade and security hardliners want to write a new playbook -- they believe China has prospered thanks to a cynical manipulation of global trade rules, and is now using the profits to subsidize huge investments in crucial technologies," Arthur Kroeber, head of research at economic consultancy Gavekal Dragonomics in Beijing, wrote in a recent note. 

While some in China press the U.S. for a list of demands for a deal, ultimately the Trump administration may not be seeking specific trade or market-access measures. For example, Trump didn’t press for U.S. banks to get greater access to China when he visited Beijing in November, China announced the measure after he left. 

Hard-liners instead are seeking "to either get China to dismantle its industrial-policy edifice and conduct its economy more along Western lines, or failing that, ensure the U.S. defeats China in the race for technological supremacy," Kroeber said. The context is that among Xi’s priorities is reducing reliance on foreign technology -- including a push for China to achieve a leadership position in semiconductor design and manufacturing.

More in Bloomberg.

Arthur Kroeber is a speaker at the China Speakers Bureau. Do you need him at your meeting or conference? Do get in touch or fill in our speakers' request form.

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Also at universities: women stay in the shadow of men - Zhang Lijia

Zhang Lijia

Female students have been accusing their teachers and supervisors of sexual harassment at Chinese colleges and universities. Author Zhang Lijia of Lotus: A Novel on prostitution in China, tells NewsChina she is not really amazed.

NewsChina:

Zhang Lijia, a feminist writer and social commentator based in Beijing, told NewsChina that sexual harassment on campus shows that despite improvements, women – including the highly-educated – remain largely in the shadow of men in traditionally maledominated China. Zhang said sexual harassment was prevalent in many places and was rooted in “the Confucian ideology that has dominated China for centuries.” 

“It places women in an inferior position. The issue of campus harassment attracts more attention partly because educated women are less willing to put up with it, and more willing to speak out,” she said. “But sadly, male chauvinism still dominates in today’s China.”... 

“The authorities should establish a mechanism that includes specific measures to prevent, investigate and punish. And more importantly, we need an atmosphere that doesn’t place pressure on victims,” Zhang Lijia told our reporter. “The perfect relationship between an academic adviser and a graduate student is respect for each other.”

More at NewsChina.

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Can Facebook overtake WeChat? - Matthew Brennan

Tencent's WeChat has been a winner in China in terms of users but might even beat its Western competitors in terms of functionality, writes WeChat analyst Matthew Brennan at the China Channel. The bigger question is will the tech giants outside China ever be able to catch up?

Matthew Brennan:

Chinese users spend approximately one-third of all their time on mobile in WeChat. That presented a huge opportunity to build extra features and functionality on top of the basic messaging experience. And it was many of these features that hit the China market at exactly the right time, met the needs of local users perfectly, and helped propel WeChat to becoming the juggernaut that it is today. 

Classic examples include Shake-shake, Friends Nearby, Walkie-Talkie, QR Codes, Official Accounts, Mini-Programs, and of course WeChat Pay. 

It’s no coincidence that Tencent was the company to grasp this best, given their previous experience with flagship desktop messaging product QQ. Tencent CXO David Wallerstein had this to say: “When it came time to building value-added services around WeChat, it just came to us very naturally because we had just learned so much over a decade, probably like 12 years of learning by the time we got to WeChat… we also started thinking more about the economy, more about financial services, more about e-commerce, about how do you really transform a business or a hospital or a government using WeChat and I think we had so much experience with platform services and tying services together in a seamless way that when it came time to WeChat, it was like okay, good fresh platform, let’s get everything right this time.” 

The growth rate of new active WeChat users has been steadily declining for many quarters and many — myself included — believe it has pretty much reached a ceiling. The future and focus of WeChat will not be about gaining more new users, it will be about embracing it’s stated vision to “Connect people to people, people to services, people to businesses, and people to objects.” 

The digitalization of daily life continues at rapid pace in China through trends such as mobile payments, online-to-offline services, the sharing economy, smart retail and digital ID cards. WeChat acting as China’s great universal connector is at the very center of all of this and showing little sign of relinquishing its place at the forefront of Chinese innovation. The bigger question is will the tech giants outside China ever be able to catch up?

More at the China Channel.

Matthew Brennan is a speaker at the China Speakers Bureau. Do you need him at your meeting or conference? Do get in touch or fill in our speakers' request form.

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China dominates the woman self-made billionaires - Rupert Hoogewerf

Rupert Hoogewerf

Chinese women dominate the Hurun global self-made woman rich list, says Hurun founder Rupert Hoogewerf. The list is released on today's Women's Day, and has Zhou Qunfei of the Lens Technology firm as the topper, says the BBC.

The BBC:

China has once again dominated a list of global self-made woman billionaires. 

The top four women in the report by publisher Hurun - and five of the top 10 - come from the Asian superpower. 

Zhou Qunfei, who founded a firm that makes glass used to cover laptops and smartphones, was the world's richest self-made woman, with $9.8bn (£7.1bn). 

Her company Lens Technology has contracts with some of the biggest technology firms, and counts Apple and Samsung as its main customers... 

In total, 28 of the top 50 on the Hurun self-made list are from China. 

Ms Zhou took the top spot from Beijing-based real estate developer Chen Lihua ($8.1bn). 

Ms Chen, who runs Fu Wah International, slipped to third after her wealth barely changed since 2017. 

Another property developer, Wu Yajun from the western city of Chongqing, moved into second place. She is worth $9.3bn after a staggering 83% leap in her fortune in just 12 months. 

The richest self-made woman from outside China is American Diane Hendricks, the co-founder of Wisconsin-based ABC Supply, one of the US's largest distributors of roofing and windows.

More at the BBC.

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A booming "she economy" - Ben Cavender

Ben Cavender

Milleniums, especially women, are key for consumer spendings, says retail analyst Ben Cavender at Reuters on Women's Day. Companies went all out to attract the female buyers, he says.

Reuters:

The women-targeted market, or the so-called “she economy”, a term coined by China’s education ministry in 2007, is expected to account for $700 billion by 2019, according to the Chinese securities firm Guotai Junan. 

“If you look at how companies are thinking about their ad spending, how they think about product selection, probably they are thinking, 70 to 75 percent of our spending really needs to be targeted directly at women,” said Ben Cavender, Shanghai-based principal at China Market Research Group. 

Women spent 64 percent more in 2017 than in 2015, with a majority of purchases made in major cities such as Beijing, Shanghai and Guangzhou, according to a report by Alibaba, which controls the largest share of retail e-commerce sales in China.

Purchases were more than cosmetics and shoes. 

The number of women who bought running outfits rose over 13 times in the last 12 months, while spending on boxing gloves by women soared 75 percent, according to a separate Alibaba report.

More at Reuters.

Ben Cavender is a speaker at the China Speakers Bureau. Do you need him at your meeting or conference? Do get in touch or fill in our speakers' request form.

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Related articles

• After supermarkets, Alibaba moves into furniture
• China fires back at Trump in a warning shot at sorghum imports ahead of a possible trade war
• JD.com's logistics business raises $2.5B from Hillhouse, Sequoia China and others

WeChat goes for more services, as growth stalls - Matthew Brennan

Matthew Brennan

Tencent's WeChat announced a record number of monthly users over Springfestival passing one million. But WeChat expert Matthew Brennan expects that growth in numbers reached its top, and WeChat will be adding more functionality to expand its business, he tells CNNMoney.

CNNMoney:

WeChat’s number of monthly active users popped above the milestone during the Lunar New Year holiday in February, its parent company, Tencent, said this week. It’s an impressive number, but it’s still well short of Facebook’s 2.1 billion monthly users or WhatsApp, which has more than 1.5 billion. Catching up with those totals will be tough. WeChat is the dominant messaging platform in China but has struggled to win over large numbers of users outside its home market. 

“The growth on WeChat has been slowing down consistently for the last two years,” said Matthew Brennan, founder of ChinaChannel, a WeChat-focused research firm. 

“It’s really topped out, I feel,” he said. “It’s not going to go much further.”... 

But user growth hasn’t been a priority for WeChat for some time, according to Brennan. Instead, Tencent is focused on pushing users to turn to the app for more and more activities, such as gaming, entertainment and payments. 

By getting people to spend more time and money on those services, WeChat has a lot of “untapped potential” for bringing in greater revenue, according to Brennan. “It’s not about new users anymore,” he said.

More in CNNMoney.

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Getting a launching platform for your startup - William Bao Bean

William Bao Bean

Most internet startups are at the mercy of Facebook, Google, and in China Tencent or Alibaba to get a launching platform. William Bao Bean, managing director of Shanghai-based SOsV, co-founded the Mobile Only Accelerator MOX, an independent platform offering not only capital but also an audience to launch, he explains in the News Lens.

The News Lens:

MOX member companies can tap support that includes financing from SOSV, the US$300 million VC fund that oversees MOX, and access to audience that sidesteps the life-sapping expenses involved in acquiring users through Facebook and Google. Founding teams can also tap the advice and knowhow of 270 global mentors. 

MOX founder William Bao Bean summed it up: “It doesn’t matter how good your app is – no one will ever see your app or platform unless you pay Google, Facebook or a bunch of Chinese guys [Alibaba, Tencent, etc.]. They charge 20 to 30 cents per app launch, and it’s impossible to make that back in emerging markets.” 

SOSV is regularly ranked among the most active seed investors in the world by Crunchbase, the data-driven company analytics service, and 60 percent of the companies in MOX’s previous three batches have either raised money or broken even (or both), with 30 percent closing or about to close US$1-3 million in the last year, according to Bao Bean. 

In return for offering up a share of their revenue and equity, MOX companies are provided with up to 150,000 users to help localization and optimization as they enter each of the markets in MOX’s coverage, which spans Southeast Asia, India, Eastern Europe and South America.

More in the News Lens. William Bao Bean is a speaker at the China Speakers Bureau. Do you need him at your meeting or conference? Do get in touch or fill in our speakers' request form.

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US does not want more market, but contain China - Arthur Kroeber

Arthur Kroeber

The disruption caused by trade tensions is not going to give the US more market share for American companies, says leading economist Arthur Kroeber, author of China's Economy: What Everyone Needs to Know® to Bloomberg. And that is not what the US wants: "The USTR is not trying to bargain with Beijing: it is trying to force a deep change in behavior."

Bloomberg:

The U.S. Trade Representative’s office, along with national security officials labeling China a "strategic competitor" ultimately aren’t interested in things such as greater market access for American companies, says Arthur Kroeber, head of research at economic consultancy Gavekal Dragonomics in Beijing. Instead, these Trump administration elements are engaging in an effort to contain the growing sway of a state-driven Chinese economic model on the global stage, he argues. 

"The USTR is not trying to bargain with Beijing: it is trying to force a deep change in behavior," Kroeber wrote in a March 2 note. The policy "is to either get China to dismantle its industrial-policy edifice and conduct its economy more along Western lines, or failing that, ensure the U.S. defeats China in the race for technological supremacy." 

Kroeber added that "the odds are that the trade and security hawks will have the better of the battle in 2018" in the administration, unless supporters of globalization such as White House economic adviser Gary Cohn can organize greater support from U.S. companies with major China operations that could be under threat.

More in Bloomberg.

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What is behind the Xi Jinping policies - Victor Shih

Victor Shih

As China prepares for the second term of president Xi Jinping, the world wonders what is behind his acts. Political analyst Victor Shih, author Factions and Finance in China: Elite Conflict and Inflation takes at the Guardian a helicopter view on Xi's anti-corruption drive, his global aspirations and plans for the future.

The Guardian:

Soon after coming to power in 2012, Xi began a sweeping anti-graft campaign that has seen about 1.3 million officials punished in some form. But Xi’s work to weaken rival factions at the pinnacle of Chinese politics has left him the last man standing. Zhou Yongkang, the former security czar, became the highest ranking official since the founding of the People’s Republic to be jailed on corruption charges. 

“Xi has a very particular vision of where China is going: for China to enter the centre stage of world affairs and reshape the global order,” said Victor Shih, a politics professor at the University of California, San Diego. “He feels he needs control every little detail to achieve those goals, and will silence officials he thinks stand in his way.” 

Xi has also targeted high-ranking military officials, with some committing suicide rather than suffer the consequences of a public shaming, and is pushing to establish an anti-corruption watchdog with more extensive powers, ensuring the purges will continue... 

Now he is poised to have his name inscribed in the country’s constitution as well. But ordinary Chinese people are already accustomed to seeing Xi’s name everywhere. While China’s state-controlled media has always focused heavily on the achievements of national leaders, Xi was second only to Mao in frequency and intensity of state media coverage, according to a 2014 study. 

“The airwaves are saturated with his thoughts, his image and his work, they go out of their way to cover him,” said Shih. “It shows he’s firmly in control, but also that he is personally responsible for China’s direction, instead of the state or the party.”... 

Xi has centralised power in his own hands to a greater extent than even Deng Xiaoping, and for junior officials to critique Xi’s policies would amount to career suicide. 

“If he makes a policy mistake, no one is going to be there to correct him,” said Shih. “What used to be healthy policy debates will turn into sycophancy.” 

Shih pointed to the creation of a new city called Xiong’an, meant to be a satellite capital to Beijing where non-essential departments are based, as a “massive waste” helmed by Xi. In theory absolute power comes with absolute responsibility, but so far Xi has been able to deflect the blame for crises, like a stock market meltdown in 2015.

More at the Guardian.

Victor Shih is a speaker at the China Speakers Bureau. Do you need him at your meeting or conference? Do get in touch or fill in our speakers' request form.

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Why China can afford to stay cool under Trump's trade war threats - Arthur Kroeber

Arthur Kroeber

China has reacted pretty cool on the increased signals US president Donal Trump is heading for a trade war, says leading economist Arthur Kroeber, author of China's Economy: What Everyone Needs to Know® to the Washington Post. While the traditional conflict-solving procedures at the WTO might not fit the tit-for-tat approach of a trade war, China can afford to keep its composure.

The Washington Post:

Many will now wonder whether the United States is not a greater threat to the world trading system, said Arthur Kroeber, managing director of the Beijing-based research firm Gavekal Dragonomics. 

“China can afford to play it pretty cool and measured, as they have been doing ever since Trump took office,” Kroeber said. “They take a small, really negligible, hit to their steel and aluminum exports, but strategically they come out way ahead by just letting Trump be Trump.”

More at the Washington Post.

Arthur Kroeber is a speaker at the China Speakers Bureau. Do you need him at your meeting or conference? Do get in touch or fill in our speakers' request form.

Are you looking for more political analysts at the China Speakers Bureau? Do check out this list.