Must Read
USCBC in the News
10. Forbes: U.S. financial service firms push for bilateral treaty with China
11. Forbes: For tax implications, 'Chindia' worst offender
Chinese News Sources
Notables
17. Reuters: Huang's tale: from Walmart cashier to labor leader in China
18. NYT - DealBook: China’s dominance in cement has little effect on European suppliers
19. Reuters: Weibo IPO could value company at about $3.9 billion
20. WSJ - Eswar Prasad: The coming currency clash in Asia
21. FT - Diana Choyleva: Weaker renminbi could be China’s subprime
22. LAT - Odd Arne Westad: ASEAN's challenge: A swaggering China
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Must Read
1. WSJ: U.S. Treasury looking closely at weaker Chinese yuan
Says it would be concerned if China retreats from easing control of the yuan.
WSJ Back to Top
2. Reuters: U.S. warns China over currency depreciation
The United States warned Beijing on Monday that the recent depreciation of the Chinese currency could raise "serious concerns" if it signaled a policy shift away from allowing market-determined exchange rates. Washington has been pressing China for years to allow its currency to trade at stronger values. A weak yuan makes Chinese exports cheaper for U.S. consumers at the expense of U.S. producers. A weaker yuan also makes Chinese consumers less able to buy foreign goods. Last month, U.S. Treasury Secretary Jack Lew welcomed a decision by China to allow its currency to vary more against the dollar in daily trading. Monday's comments by a senior official from the Treasury Department suggested the United States was not completely sold on China's intention to reduce authorities' interventions in exchange markets.
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3. WP: Ahead of Beijing visit, Defense Secretary Hagel admonishes China
On the eve of his first visit to China as defense secretary, Chuck Hagel paid Beijing a compliment laden with tough love. “China is a great power,” Hagel said Sunday, speaking alongside his counterpart from Japan, the U.S. ally in the region that may have the most at stake in China’s military buildup. “And with this power comes new and wider responsibilities as to how you use that power.” The Obama administration has sought at times to play down the extent to which its strategy to augment military and diplomatic outreach in the Asia-Pacific region is meant to counterbalance China’s military rise. But on Sunday morning, speaking at the Japanese Defense Ministry, Hagel was uncharacteristically sharp when asked what messages he would convey to Chinese officials. “Coercion and intimidation is a deadly thing,” Hagel said, in an apparent reference to Chinese territorial claims that have rankled neighbors, most significantly Japan. “You cannot go around the world and redefine boundaries and violate territorial integrity and sovereignty of nations by force, coercion or intimidation, whether it’s small islands in the Pacific or large nations in Europe.”
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4. NYT: U.S. tries candor to assure China on cyberattacks
In the months before Defense Secretary Chuck Hagel’s arrival in Beijing on Monday, the Obama administration quietly held an extraordinary briefing for the Chinese military leadership on a subject officials have rarely discussed in public: the Pentagon’s emerging doctrine for defending against cyberattacks against the United States — and for using its cybertechnology against adversaries, including the Chinese. The idea was to allay Chinese concerns about plans to more than triple the number of American cyberwarriors to 6,000 by the end of 2016, a force that will include new teams the Pentagon plans to deploy to each military combatant command around the world. But the hope was to prompt the Chinese to give Washington a similar briefing about the many People’s Liberation Army units that are believed to be behind the escalating attacks on American corporations and government networks. So far, the Chinese have not reciprocated — a point Mr. Hagel plans to make in a speech at the P.L.A.’s National Defense University on Tuesday.
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5. NYT: In a test of wills with China, U.S. sticks up for Japan
On his first trip to China as the secretary of defense, Chuck Hagel is finding himself in the middle of a spat that would not be out of place in “Mean Girls,” a movie about social cliques in high school. For the first time, China will host the Western Pacific Naval Symposium, a meeting every two years of countries that border the Pacific Ocean. The W.P.N.S., as it is known in naval circles, counts among its members the United States, Australia, Chile, Canada and a number of Asian countries, including China and Japan. Often at such meetings, the host country organizes an international fleet review, at which the visiting countries can parade their ships and show off some fancy hardware. It can be an eye-popping display of war ships, destroyers and guided-missile cruisers. In 2008, when South Korea hosted the symposium, the United States sent the aircraft carrier George Washington, the guided missile cruiser Cowpens and the destroyer John S. McCain to take part. For this year’s fleet review, China, which is hosting the event in Qingdao, invited all the countries in the symposium to take part — except Japan.
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6. Bloomberg: Hagel gets aircraft carrier tour on first visit to China
U.S. Defense Secretary Chuck Hagel toured China’s first aircraft carrier a day after warning the Communist Party-led nation not to use coercion to settle territorial disputes with its neighbors. Hagel was the first foreign visitor to get such access to China’s aircraft carrier, according to a senior U.S. defense official. The ship, Liaoning, is based at Qingdao naval base. A day before leaving for China, Hagel met in Tokyo with his Japanese counterpart Itsunori Onodera to assure him that the U.S. would stand by Japan if China forcefully grabbed Japanese-controlled islands in the East China Sea. He compared the island dispute with Russia’s annexation of Crimea. “You cannot go around the world and redefine boundaries and violate territorial integrity and sovereignty of nations by force, coercion and intimidation, whether it’s in small islands in the Pacific, or large nations in Europe,” Hagel said while in Japan.
Bloomberg Back to Top
7. NYT: Hagel tours Chinese aircraft carrier
Defense Secretary Chuck Hagel finally got a long-awaited look at China’s only aircraft carrier on Monday, taking a two-hour tour of the vessel at a naval base near this port city that Pentagon officials said was the first such visit by a foreign defense official. Accompanied by a handful of aides, Mr. Hagel toured the medical facilities, living quarters and flight control station of the Liaoning aircraft carrier in Qingdao, and took a walking tour of the flight deck to see launch stations and other apparatus devoted to getting China’s fighter jets into the air. Mr. Hagel and other Obama administration officials have repeatedly called on the Chinese government to demonstrate more transparency, particularly in its military, whose budget has increased significantly even as the United States has cut back on military spending. After Qingdao, Mr. Hagel flew to Beijing, where he was scheduled to hold talks on Tuesday with his Chinese counterpart and to deliver a speech at China’s National Defense University.
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8. Bloomberg: China's smog splits expatriate families as companies pay for fresh air
As a thick smog hung over Beijing last year, Stephanie Giambruno and her husband decided it was time for her and their two girls to return to the U.S. Giambruno’s husband stayed back in China for his job as general manager of a global technology company. He now skypes with the family twice a day and lives with “constant jet lag” as he travels to Florida once a month to see them, she says. While it’s hard to be apart, Giambruno says Beijing’s record air pollution left them no choice. She saw friends’ children develop asthma. Their own daughters, at age 6 and 21 months, were often forced to remain indoors.
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9. WSJ: China restricts U.S. pig imports
Tougher restrictions are due to concerns about a swine virus; News adds to jitters in lean-hog futures market.
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USCBC in the News
10. Forbes: U.S. financial service firms push for bilateral treaty with China
It used to be that U.S. corporations clamored over China’s cheap labor. You made shoes and exported them to home. But nowadays, U.S. multinationals want to be in China for China’s sake. What do they want now? A bilateral investment treaty is high on the list. Such a treaty with China would change the rules for U.S. companies operating there, said John Frisbie, President of the U.S. China Business Council, a Washington lobby group working on behalf of multinational American companies conducting business in China. Frisbie met with U.S. businesses in Beijing in late March. “China maintains ownership restrictions on American and other foreign companies in about 100 sectors, including manufacturing, services, energy, and agriculture,” Frisbie said. For example, American ownership in auto plants is limited to 50%. Life insurance is also 50%. Cloud computing is another 50% and soybean oil — used in kitchens in every Chinese home — is 49%. What if they could have outright ownership? Or even just a little bit more? It would be a windfall for a number of companies that face tough growth restrictions in one of the world’s most important consumer markets. The ownership barriers keep American companies from reaching more customers in China, Frisbie attests, adding that a bilateral investment treaty (BIT) with China should be high on President Obama’s Chinese to-do list.
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11. Forbes: For tax implications, 'Chindia' worst offender
China and India are home to the most complicated tax regimes in the Asia Pacific, making it harder to set up shop for new business, or keep profit margins as attractive as regional rivals like Australia and Japan. According to a 36 page survey by Deloitte, published on Monday, the region’s most populous economies are also heavily populated with cumbersome taxes. Out of 458 respondents, more than half of the Chinese business leaders said taxes had a strong influence or some influence on their decision-making process. The number was very similar in India, only more of those respondents said taxes had a strong influence rather than only some influence on decision making. When Hong Kong is added to the mix, China and its autonomous region to the south is crawling with taxes. One of the reasons why business keep pouring money into China is because of growth prospects there. A growing middle class, coupled with rising incomes and fairly steady growth — albeit at a slower pace — have the vast majority of businesses overlooking the tax load. In a 2013 U.S. survey by the U.S. China Business Council, taxes was one of the biggest pitfalls for multinationals doing business in mainland China.
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Chinese News Sources
12. SCMP: Cooling China expected to put drag on East Asia's economic growth
World Bank says recovery in advanced markets and structural reforms key to region's growth.
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13. SCMP: Monetary easing seen as Beijing's next move to spur slowing growth
Slowing growth may force central government to follow its mini stimulus with a cut in bank reserves, the first such move in two years.
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14. CD: Chinese minister cautions the United States
Maintaining peace and stability in the Asia-Pacific region serves the common interests of China, the US and other regional countries, Minister Wu Xi of the Chinese Embassy in the US said in a speech on Friday. Issues such as the East China Sea and South China Sea concern China's sovereignty and maritime rights and interests. Speaking at George Mason University in Fairfax, Virginia, Wu focused on building a new model of major country relations between China and the US. Last June, President Xi Jinping and President Obama had a historic meeting in Sunnylands in California, Wu noted. "They agreed that China and the US should work together to build a new model of major country relations. It provides strategic direction and guidance to the development of the bilateral relations," Wu said. Over the past year, great achievements have been made in China-US relations. "It takes the concerted efforts by both sides to translate the new model of major country relations into reality, a relationship that is free from conflict, or confrontation, based on mutual respect, and aimed at win-win cooperation," Wu said.
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15. CD: Seven regions raise minimum wage standards
Seven regions across China have raised their minimum wage standards so far this year, with Shanghai's standard leading the nation, according to statistics from local governments. The regions are Chongqing, Shaanxi, Shandong, Beijing, Tianjin, Shenzhen and Shanghai. With a minimum monthly payment requirement of 1,820 yuan ($290) and a minimum hourly rate of 17 yuan, Shanghai topped the nation. Shenzhen followed closely, with a minimum monthly payment requirement of 1,808 yuan and minimum hourly pay of 16.5 yuan. According to the Ministry of Human Resources and Social Security, in 2013, 27 regions across China raised their minimum wage standards, with an average increase of 17 percent.
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16. SD: Eaton opens local auto technical center
Eaton Chairman and Chief Executive Sandy Cutler speaks in Shanghai yesterday during the unveiling of a new technical center for the company’s vehicle unit. The US$3.3-million center will strengthen the local testing and development resources of the power management company’s vehicle unit, and significantly upgrade its ability to work with customers in the development of new engine platforms and efficient solutions. China is the world’s largest passenger and commercial vehicle market and Cutler said the US company will continue to invest in China.
Shanghai Daily photo.
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Notables
17. Reuters: Huang's tale: from Walmart cashier to labor leader in China
Huang Xingguo took a job as a cashier at a new Walmart store in his hometown in southern China for a steady paycheck and the prospect of upward mobility after a string of sales jobs and a run as a day trader. Five years later, he has landed on the frontlines of China's labor rights movement, an unlikely leader of several dozen workers seeking better severance pay after the store in the Hunan province city of Changde announced last month it was closing. It's not the biggest labor dispute China has seen in a recent surge of activism that has included factory strikes involving thousands of workers, but experts say it's among the more significant. In China, as in other countries, Wal-Mart Stores Inc has figured prominently in the debate over worker rights. Unions first opened at its stores in 2006 during a major government-led drive to unionize private companies. The Chinese government used Wal-Mart as a fillip for greater unionization at foreign firms.
Huang Xingguo (back L) talks to workers outside a closed Walmart store in Changde, Hunan province in this handout photo taken on March 26, 2014 provided by Huang to Reuters on April 6, 2014.
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18. NYT - DealBook: China’s dominance in cement has little effect on European suppliers
In the cement industry, as with so much else in global commerce, China is a dominant force. Yet unlike many global commodities, cement is a product in which China’s leading role has little bearing on exports or on European suppliers. Cement is so heavy and relatively inexpensive that it is not worth shipping far from the source of production. That means China, in this field, has little impact on global supplies or prices, even though the nation accounts for about 60 percent of world production of this most basic of building materials. ‘‘Cement is usually a short-haul sea trade, because the cost of production is not high,’’ said Vikrant S. Bhatia, the chief executive of KC Maritime, a bulk-carrier shipping line based in Hong Kong that specializes in cement. Very little cement moves between Asia and Europe, he said.
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19. Reuters: Weibo IPO could value company at about $3.9 billion
China's Weibo Corp said it expected its initial public offering of 20 million American Depository Shares to be priced at $17-$19 each, valuing the Twitter-like messaging service at about $3.9 billion. The IPO is expected to raise about $380 million at the top end of the expected price range. Weibo, owned by Sina Corp, is the latest Chinese internet giant to tap U.S. markets, following on the heels of search service Baidu and its own corporate parent.
A man holds an iPhone as he visits Sina's Weibo microblogging site in Shanghai May 29, 2012. Reuters photo.
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20. WSJ - Eswar Prasad: The coming currency clash in Asia
Recent events have set the stage for uphill capital flows and rising currency tensions.
WSJ Back to Top
21. FT - Diana Choyleva: Weaker renminbi could be China’s subprime
Further fall would hit strategies based on view of ever-rising currency.
FT Back to Top
22. LAT - Odd Arne Westad: ASEAN's challenge: A swaggering China
Beijing's relationship with its neighbors is moving in the wrong direction.
LAT Back to Top
