World Newsletter

27 December 2019


China and the United States are working on necessary procedures regarding their phase one trade deal and closely communicating on other follow-up matters, the Ministry of Commerce said on Thursday.

Gao Feng, a ministry spokesman, said necessary procedures such as legal review, translation and proofreading the preliminary deal are underway. The two negotiating teams are maintaining close contact on follow-up work including officially signing the agreement, Gao said at a weekly briefing.

About two months have passed since China and the US outlined the much-anticipated phase one agreement to end their protracted trade war.

The two sides agreed on the text of the partial economic and trade agreement based on the principle of equality and mutual respect earlier this month.

In a Dec 20 telephone call, President Xi Jinping and US President Donald Trump both said the phase one economic and trade agreement benefited China, the US and the whole world.

Trade developments continue to be a key focus for markets. Analysts said they hope China and the US will come to a quick resolution, while warning that certain uncertainties persist.

In a prospective investigation into the phase one deal, Zhang Xinyuan, a researcher at Huatai Securities, said increased imports from the US will mainly include crude oil, semiconductors, gas, soybeans, consumer goods, automobiles, ethanol and tourism services.

Ding Shuang, chief economist of Greater China and North Asia at Standard Chartered, said that with the phase one deal reducing downside risks facing the global economy, 2020 should be a year of soft but stabilizing growth for the global economy.

Zhu Jianfang, chief economist at Citic Securities, said in a recent research note that trade disputes may reoccur in the future. So the company's research team is temporarily "cautiously optimistic", and maintained its outlook that China's economic growth will be 6 percent for this year, Zhu said.

In another development, Gao said China strongly opposes the 2020 US National Defense Authorization Act.

China believes that provisions of the act that restrict the purchase of some Chinese products and tighten export controls against Chinese enterprises are "bad examples" of how the government intervenes in the normal business activities of enterprises, Gao said.

He said the US move will endanger the global economic and trade order and affect the security of the global industrial chain.



China is expected to invest about 800 billion yuan ($114.29 billion) in railways, about 1.8 trillion yuan in highways and waterways, and 90 billion yuan in civil aviation, the Ministry of Transport said on Thursday.

China has completed approximately 3.21 trillion yuan in investment in transportation fixed assets in 2019, Minister of Transport Li Xiaopeng said at an annual meeting of the Ministry of Transport on Thursday as reported by Chinese financial news outlet Yicai.

It is estimated that an additional 8,000 kilometers of railways and 330,000 kilometers of roads have been built in the past year, as well as 385 kilometers of high-grade waterways and five civil transport airports, Li said.

Construction of postal express service outlets and intelligent delivery terminals has also been accelerated in 2019, according to Li.

China's business environment has been further optimized. In 2019, it is estimated that it will reduce logistics costs by 80 billion yuan in the transportation sector, and reduce taxes and fees for civil aviation by 9 billion yuan.

As of Dec 18, the total number of electronic toll-collection (ETC) devices for customers in China had reached 192 million, with 111 million new ETC customers, reflecting that 101.25 percent of the release target for ETC had been achieved.

Apart from building the Beijing Daxing International Airport, more than 290,000 kilometers of additional rural roads have been built or upgraded in the past year.

In term of work plans for 2020, China will coordinate major projects, reforms and policies to speed up the development of the country's transportation industry in railways, highways, water transportation, civil aviation, postal services, urban transportation and transportation services, Li said.

To deepen supply-side structural reform in transportation, China will accelerate the construction of railway projects from Chongqing to Kunming and Hetian to Ruoqiang, and promote special railway lines to enter ports, logistics parks and large industrial and mining enterprises next year.

To build an integrated three-dimensional traffic corridor along the Yangtze River Economic Belt, China will strive for delivery and trial operations of the 6 meter-deep waterway regulation project from Wuhan to Anqing next year.

The country will also accelerate the building of key waterway projects from Chaotianmen to Fuling, and coordinate preliminary work of the construction of the new water transportation channel of the Three Gorges hub.

China will deepen reform in investment and financing, stabilize special transport funding policies such as the tax on car purchases, adjust and optimize the structure of expenditures, and improve the special bond system for toll roads next year, Li said.

The country will also encourage general bonds to support the development of ordinary roads and rural roads, guide nongovernmental funds to participate in transportation construction, and promote the continuation, adjustment, and improvement of policies related to port construction fees, according to Li.



Hong Kong residents who traveled to neighboring Guangdong province for the Christmas holiday over two days, planned to see friends and dine out before visiting some scenic spots.

Previously, the trend was reversed, with crowds of mainlanders crossing the border to witness the Christmas celebrations in Hong Kong.

Guangdong's wealth of tourist sites has made the area a desirable destination for people from the Hong Kong Special Administrative Region in recent years. Crowds were heavy as more than 50,000 people had passed both ways before noon on Wednesday. More than 42,000 of those were arriving from Hong Kong — an increase of 45 percent over the same day last year — while only 8,000 were heading to Hong Kong.

Authorities said the crush of people entering Shenzhen via the checkpoint, one of the busiest entry gates from Hong Kong, didn't let up on Thursday, and similar throngs were expected through Saturday.

Among the other things that attract visitors from Hong Kong are Shenzhen's Cantonese cuisine, the availability of goods at low prices, convenient transportation and holiday promotions.

With major infrastructure projects linking Hong Kong and Guangdong opening in recent years, it only takes about an hour to travel between many cities in the Guangdong-Hong Kong-Macao Greater Bay Area. It now takes Hong Kong residents less than 20 minutes to reach Shenzhen via high-speed train and about 40 minutes to drive to Zhuhai via the Hong Kong-Zhuhai-Macao Bridge, which opened a year ago.

In addition to shopping centers, department stores and restaurants that offer holiday promotions, many banks have introduced special Greater Bay Area dual-currency credit cards to attract Hong Kong residents.

Many banks promise discounts and cash back for those who use their credit cards in Guangdong, which is widely viewed as a showcase for China's reform and opening-up process.



Any attempts by the United States to stifle China's development will be in vain, and will only backfire and harm the US, Senior Colonel Wu Qian, a spokesman at the Ministry of National Defense, said at a news briefing in Beijing on Thursday.

"If someone insists on forcing China into being a competitor, then China will certainly be a formidable one," Wu said when commenting on the recent hawkish rhetoric and actions by the US, which he said have "blatantly interfered with China's domestic affairs" and seriously damaged military-to-military relations and bilateral ties.

In early December, US Defense Secretary Mark Esper said China is now the United States' top military priority, and he accused Beijing of seeking "veto power" over the economic and security decisions of smaller nations.

John Rood, under secretary of defense for policy, said earlier this month that China has a massive military budget that it will use to "militarize" the South China Sea, improve its cyberattack capabilities and space potential and undermine the current world order.

On Dec 20, the US signed the 2020 National Defense Authorization Act into law. The $738 billion military spending bill includes clauses that support the protests in Hong Kong, improve Taiwan's defense capabilities through military exchanges and arms sales and require the compilation of regular reports on the condition of Muslim minorities in the Xinjiang Uygur autonomous region.

"It is blatant interference in China's domestic affairs, and seriously violates the one-China principle and three joint communiques between China and the US," he said.

"It has damaged the growth of China-US military-to-military relations and bilateral ties, undermined mutual trust and cooperation, and the Chinese military resolutely opposes these acts," he said.

"The recent baseless accusations against China lodged by US officials sound like a criticism of the US itself," Wu said. "The NDAA authorizes a $738 billion military budget for the US, accounting for over 40 percent of global military spending. I don't know how the US has the conscience to criticize other countries for having a big military budget," he said.

Moreover, the NDAA greenlighted the launch of the US Space Force. Wu said US efforts to greatly expand its space combat capability will lead to an arms race and the militarization of outer space.

"The US is citing so-called military threats from other nations as an excuse to build its Space Force. Its intention is to pursue an absolute military advantage in space. This can easily lead to arms races and seriously threatens peace and security in space, as well as global strategic stability."

For the South China Sea, Wu said the so-called freedom of navigation operations in the region are "extremely irresponsible and dangerous" and should be renamed "hegemonic navigation".

"The US actions have seriously undermined the sovereignty and security interests of countries in the region, damaged regional peace and stability and threatened the life and safety of frontline military personnel," he said.

As for cybersecurity, Wu said the US is notorious for cyberespionage and cyberattacks against other countries. "The world is still waiting for a verdict on the Snowden incident. The US is the least qualified country to point fingers at others," he said.

Edward Snowden is a former employee of a company that worked for the US National Security Agency. In 2013, he left his job in the US and released top secret information about Washington's global surveillance programs to international media sources.

When asked about Taiwan, Wu said the island is an inseparable part of China, and the US attempt to use Taiwan to pressure China is merely a pipe dream. "We will not allow anyone, at any time, using any methods to separate Taiwan from China," he said.



Despite downward economic pressure, China will not relax its efforts to strengthen environmental governance, a senior official said on Thursday.

Xu Bijiu, director of the general office at the Ministry of Ecology and Environment, dismissed concerns that intensified efforts would hinder the country's economic development.

Xu said at a news conference in Beijing that there had been suggestions that environmental protection had exerted a negative impact on the economy in recent years, with those concerns heightened as downward economic pressure continues.

But Xu said that despite such pressure, the ministry will stick to the path of pollution control and spare no efforts in the campaign, as required by President Xi Jinping at the annual Central Economic Work Conference that ran from Dec 10 to 12.

Xu said 90 percent of the work had been done but the remainder would be the most challenging, adding that with the campaign in its final phase, the ministry has no choice but to keep moving forward.

He also said economic data showed enhanced environmental governance efforts could actually boost development. "Most of the industrial sectors confronting marked economic downturns are not those listed as key targets in environmental governance," Xu said.

In addition, industries with high-energy consumption-such as steel, construction materials and power generation-which were key targets in the pollution control campaign, saw higher increases in their value-added production than the average for the entire industrial sector in the first 11 months of this year, Xu said.

For example, the steel sector saw year-on-year growth of 10.7 percent, over 5 percentage points higher than the average for the entire industrial sector, he said.

The nation has seen a harmonious, win-win relationship between economic development and environmental protection, Xu said.

Environmental protection and economic protection are not in conflict with each other, Xu said.

"As the country enters a high-quality development stage, enhanced efforts on environmental protection could play a role in boosting economic growth while exerting no negative impact on the economy," he added.



Chinese fast-food chain Real Kungfu, or Zhen Gong Fu in Chinese, said on Thursday that it will fight the accusations that it has used the image of late martial arts film star Bruce Lee as its logo without permission.

The chain is being sued by Bruce Lee Enterprises LLC, a California-based company run by Lee's daughter, Shannon Lee. The case was accepted by Shanghai No 2 Intermediate People's Court on Dec 5.

Ye Fang, the lawyer representing Bruce Lee Enterprise, told Chinese news website The Paper that her client is demanding that the fast-food chain immediately ceases usage of her father's image, makes a public clarification and pays 210 million yuan ($30 million) in compensation, plus 88,000 yuan generated by other legal procedures.

Real Kungfu, which is run by Guangzhou Real Kungfu Catering Management Co., Ltd, on Thursday issued a notice on Chinese social platform Sina Weibo saying that it will not be commenting on the pending case. The notice also pointed out that the company's series of trademarks were registered and approved by the China Trademark Office and have been in use for 15 years.

"There were disputes years ago over whether our trademarks infringe the rights of others, but no verdict was given by the authorities or courts. We feel confused by this lawsuit and are preparing to take this to court," it said.



Travelers will benefit from new services during this year's Spring Festival travel rush.

A waitlist function added to 12306, the country's official train ticket purchasing platform, allocates returned tickets to buyers on a waiting list when the tickets are cancelled or changed by other buyers.

With the waitlist function, a passenger can join the waiting line for a desired train ticket which is not available at the moment.

"We will expand the waitlist function service to all trains and optimize the operation process so that the ticketing experience can be enhanced," Li Wenxin, deputy general manager of China Railway Corporation, said.

In addition, the operation of some new transport facilities is expected to ease the traffic burden during the travel rush.

This year, Daxing International Airport was put into operation, the Beijing-Tianjin-Hebei comprehensive transportation system was further improved, and Chengdu-Guiyang Railway opened.

And by the end of the year, the toll stations at provincial boundaries of national expressways will be basically abolished and use of electronic toll-collection devices will improve traffic efficiency at toll gates.

Moreover, e-tickets will be widely used in major high-speed railways and most intercity railways to increase efficiency.

In addition to these new changes, more than 220,000 volunteers are expected to provide guidance, emergency rescue and other services to passengers in the travel rush.

About 3 billion trips are expected to be made during the 2020 Spring Festival travel rush - the world's biggest annual human migration. 

The 40-day travel rush, known as chunyun, will begin on Jan 10 and last until Feb 18.


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