World Newsletter

CHINA NEWS
2 January 2020

XI'S REMARKS VOICE HK HOPE FOR HARMONY

President Xi Jinping's comments in his New Year's speech about Hong Kong clearly demonstrated the central government's concern for the city and voiced local people's hope for a stable society, the city's opinion and community leaders said.

In his speech on Tuesday, Xi reiterated his concerns for Hong Kong's situation, stressing that the city's prosperity and stability are not only desired by its residents, but also by people on the Chinese mainland.

"Without a harmonious and stable environment, how can there be a home where people can live and work happily?" Xi asked.

Xi's remarks were well-received in the city. Lau Siu-kai, vice-president of the Chinese Association of Hong Kong and Macao Studiesthe nation's leading think tank on Hong Kong affairssaid the New Year's speech made to a global audience showed the central government's concern for Hong Kong, which has been divided by protests for more than half a year.

In past weeks, the scale and intensity of the violence has eased, yet there is no sign of it ceasing, Lau said. Noting such a situation may continue into the beginning of 2020, Lau said ending the violence remains the most urgent task for Hong Kong.

As the worst of the situation has passed, Lau also held that more efforts could be put into reviving the city's hard-hit economy and mending its deep social rifts.

The protracted turmoil landed a blow to the city's economy in 2019. Hong Kong's GDP fell by 2.9 percent in the third quarter from a year earlier, marking the first yearon-year decline since the global financial crisis of 2009.

It also sounded an alarm for the city's education sector because of the high participation rate of youngsters, especially children, in the anti-government activities.

According to the Hong Kong Police Force, more than 6,000 people have been arrested during the six months of protests, originally over an extradition bill, with over one-third of them students. One in six of those arrested have been minors.

Wong Kwan-yu, president of the Hong Kong Federation of Education Workers, said the education sector should not turn a blind eye to teachers and students who were involved in violent protests and indulged in illegal acts. He called for joint efforts by all sectors to get the city back on the right track.

Wong said a "harmonious and stable environment" and "living and working happily", as mentioned by Xi, were exactly what Hong Kong residents were longing for and would be good for the city's youth as well.

After the monthslong social unrest, all the people hoped the city could restore order and return to peace as soon as possible, Wong said.

Tam Yiu-chung, Hong Kong's member of the National People's Congress Standing Committee, highlighted the significance of the Hong Kong community's concerted efforts in maintaining the city's stability.

He emphasized that ending violence and restoring order remain the most urgent task for Hong Kong.

"At the new beginning, I hope every Hong Kong person puts the city's overall benefits first. Otherwise, it will bring no good to any of us," Tam said.

In 2020, Tam said he also hoped the Hong Kong Special Administrative Region government could learn a lesson from the political crisis and be more committed to connecting with the public.

Besides handling the aftermath of the protracted social unrest, he also hoped the government could ramp up efforts to improve people's livelihoods and address deep-seated social problems.

Steven Ho Chun-yin, a Hong Kong lawmaker, said while the city faced unprecedented challenges, he hoped it could solve its problems in the new year under the "one country, two systems" principle and with a high degree of autonomy.

 

GMO CROPS SET TO PASS BIOSAFETY TESTS

A total of 192 genetically modified plant speciesincluding two corn species and a soybean speciesare expected to pass biosafety evaluations by the Ministry of Agriculture and Rural Affairs, opening the way to their commercial use in China.

The ministry released a list of the genetically modified organisms on Monday to solicit public opinion until Jan 20and will award biosafety certificates for them if no objections are raised during the period.

The GMO soybean species, which is resistant to weedkiller, was developed by Shanghai Jiao Tong University and is suitable to grow in South China. The two GMO corn species feature qualities such as being resistant to insects and weedkillers, according to the ministry.

In a similar move in 2009, the ministry awarded biosafety certificates to a genetically modified corn species and two GMO rice species, but none of them has been approved for commercial production.

However, insect-resistant GMO cotton has been grown on more than 31 million hectares across China, helping to reduce the use of pesticides by more than 70 percent, according to the ministry.

"After passing safety evaluations, GMO researchers and developers must complete some other procedures before the GMO species can be put into commercial use and be available on the market, including gaining different permits for the production of the seeds and production of the species," said Wang Xiping, a professor of life sciences at Beijing Normal University.

Academic opinion generally accepted that GMO products were safe, she said, but safety evaluation standards varied in different countries. GMO crops, such as soybeans, were already grown extensively in countries such as the United States and Brazil, she said.

GMO technology helps improve the quality of crops, such as making them more productive and resistant to insects, and therefore also protects the environment through reduced use of pesticides and fertilizers, Wang said.

Of all agricultural species, only GMO corn and papaya have been approved for commercial planting in China, while some GMO plants, such as soybean and corn, are allowed to be exported to China as material for food processing, according to the ministry.

All GMO products available on the domestic market have passed strict safety evaluations and are safe, the ministry said.

The ministry encourages scientific research and development in GMO technology, but remains cautious in its commercialization. Commercial promotion efforts will first focus on agricultural species that cannot be eaten, such as cotton, and products used as staple food, including rice and soybeans, will come last, it said.

Research into GMO crops in China started in the 1980s, among the earliest in the world, and breakthroughs in the research and development of GMO species, such as insect-resistant rice, drought-resistant wheat and weedkiller-resistant soybeans, have been made in recent years, according to the ministry.

 

BANK RESERVES LOWERED TO BOOST ECONOMY

China's central bank decided on Wednesday to inject more than 800 billion yuan ($115 billion) into the financial sector by reducing the amount of cash financial institutions must keep in reserve. The move is designed to maintain "reasonably ample" liquidity and lower financing costs for the real economy.

The reserve ratio requirement for most financial institutions will be reduced by 0.5 percentage point on Monday, the People's Bank of China, the central bank, said in a statement. After this cut, the reserve ratio will be in a range of 6 percent to 12.5 percent, with the largest banks at the higher end.

The central bank has cut the reserve ratio eight times since early 2018 to spur economic growth. The latest move should not be seen as a change in prudent monetary policy, and it is not a "flood irrigation type of easing", according to the central bank.

The monetary authority is asking commercial banks to use the $115 billion fund to increase financial support for small, micro and private companies.

Small and medium-sized commercial banks, whose main business is lending to small enterprises, may receive more than 120 billion yuan from the reserve cut, according to estimates by economists.

Experts in the financial sector predicted the capital injection several days ago, as the monetary authority usually takes measures to hedge against potential liquidity shortages before Chinese Lunar New Year, which falls on Jan 25this year.

Lou Feipeng, a senior economist at Postal Savings Bank of China, said the first reserve ratio cut in 2020 aims to reduce social financing costs by providing capital for the early issuance of local government bonds that will strengthen infrastructure construction. As the cut was made at the start of the year, commercial banks are able to lend more to companies and receive profits earlier.

"The reserve ratio cut is a countercyclical measure to stabilize growth and a reflection of the flexibility of monetary policy," Lou said.

Before the announcement, central bank advisers achieved a consensus in the most recent central bank monetary policy committee meeting regarding more flexible fine-tuning of monetary policy. The use of various tools is expected to keep liquidity ample and provide cheaper loans for small and private businesses, which are striving for a good start to 2020 with upward economic growth momentum.

Other measures may include lowering the interest rate of medium-term lending facilities — the price of the central bank's lending to financial institutions — so they can lend the cheaper money to small business at a lower cost.

Maintaining reasonably ample liquidity is one of the priorities of Chinese monetary policy, in light of economic downside risks and rapid changes in the global environment, the central bank said on Wednesday in a separate statement about the monetary policy committee meeting.

 

CHINA'S ACHIEVEMENTS HAILED BY WORLD

China's significant achievements last year and its pledge to unswervingly uphold world peace and promote common development have been highly appreciated by global experts.

President Xi Jinping delivered a New Year's speech in Beijing on Tuesday in which he highlighted the steady progress of China's high-quality development in 2019.

Xi said that 2020 will be "a year of milestone significance", pledging that the country will complete its task this year of building a moderately prosperous society in all respects.

Noting that China continued to be an active participant in the global community last year, Xi reiterated China's commitment to peaceful development.

Jon R. Taylor, a professor and chair of the Department of Political Science and Geography at the University of Texas at San Antonio, said Xi's speech sends an optimistic message to the world, with its particular emphasis on issues such as poverty eradication and common development.

"What most impressed me about China in 2019 was its ability to handle a series of adverse economic, trade and social stability issues — 'winds and rains', in the words of President Xi," he said, adding that he was impressed when Xi mentioned ordinary citizens whose work has had a positive impact on China during the past year.

Andrei Ostrovsky, deputy director of the Institute of the Far East at the Russian Academy of Sciences, said China has made tremendous achievements in improving its economy and people's living conditions in the past decade. He has witnessed the huge differences between China's current economic situation and that of 1978 when the country had just embarked on reform and opening-up.

"At that time, I was not able to imagine that China could make such breakthroughs in its economy," Ostrovsky said.

Yan An, president of the Association of Chinese Education in Japan, said that Xi's words reflect "the dazzling and extraordinary achievements the motherland has made".

"I am very proud of that," Yan said. "We sincerely wish China to be more prosperous in the future."

Christopher Bovis, a professor of international business law at the University of Hull, hailed China's quest to balance its economic progress with social development.

He said that China's structural reforms and the continued opening up of its economy have coincided with the need to adopt a governance model with responsive and responsible political and economic leadership, and the need to promote people-centered sustainable development to eradicate poverty and promote stability, peace and harmonious relations.

Rana Mitter, director of the University of Oxford China Center, said Xi's speech stressed economic development in particular, and that it's vital for global economic development to become increasingly cooperative rather than competitive in the 2020s. He was impressed with Xi's pledges on consistent strategies for international growth and cooperation through this year.

"China will have to play a major role in shaping that new economy," he said. "This is an area where the United Kingdom, the European Union and China can all cooperate, helping to shape a new economic model."

What impressed Alan Barrell, director of studies at Cambridge Innovation Academy, was when Xi said that China is willing to join hands with people of all countries to build the Belt and Road Initiative and push ahead to build a community with a shared future for mankind.

Barrell said it will be "very important" for his country, the United Kingdom, to continue to forge close links with China and expand cross-border cooperation and investment in the post-Brexit era.

"Perhaps it is more important than the eventual outcome of the deals done now between the UK and the EU," he said.

 

BETTER EV CHARGING SERVICES ON THE WAY AS DEMAND BOOMS IN NATION

It's easy to plug your electric vehicle into a charger, but it's hard to first find a nearby charging pile available, cheap and efficient. It is even harder to do that for someone venturing far from home.

Not having enough access to efficient charging piles remained problematic for EV drivers in China, according to a McKinsey survey.

With the total number of EV chargers climbing dramatically by 61.2 percent year-on-year to 1.17 million units by November, services bridging between charging stations and drivers have emerged as a top concern.

Buoyed by increasing demand for charging services, a rising number of EV charging infrastructure operators in China are exploring new business potential through information sharing, mapping, battery maintenance, and many other sectors, an expert said.

"As the total number of EV charging piles increase, EV drivers' demand for charging services like information and battery maintenance will soar," said Lin Boqiang, head of the China Institute for Studies in Energy Policy at Xiamen University.

China's EV charging service market is estimated to create an industry value worth 2.2 billion yuan ($315.9 million) by 2020, a report by industry association China EV100 and the Natural Resources Defense Council said.

The boom in China's EV charging service sector came as the government is extending its financial support to the operation of charging stations.

As a result, subsidies will be offered to EV charging operators that are commercially viable and able to guarantee a minimum usage and will no longer be easily available for electric vehicle charging infrastructure makers, Lin said.

"It is natural that an increasing number of companies are rushing into the sector and trying to take a share in the promising business. For them, it (developing EV charging services) is also a good opportunity to have businesses with added value and generate new growth points. Currently many of them fail to make ends meet," said Lin.

 

 

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