Coal and steel still large and in charge – China’s latest business and technology news

“Rebalancing with Chinese characteristics,” Christopher Balding, a professor at Peking University’s HSBC Business School in Shenzhen, declared upon hearing the news that China’s steel output had hit a record high in June. In doing so, he referred to two things: current president Xi Jinping’s years-long policy goal of “rebalancing” the economy away from heavy industry and toward services, and former leader Deng Xiaoping’s famous maxim about “socialism with Chinese characteristics,” a phrase that is often used derisively but refers to the government’s vision of China as a country with a balance of public sector control and private sector competitiveness.

Xi’s rebalancing act has not reduced the role of government-subsidized heavy industry and manufacturing: Quartz reports that record coal and steel output — a side of China’s economy that is both polluting and disproportionately state-owned — is largely responsible for recent economic growth trends. According to Bloomberg, a “factory rebound” led to these numbers, all of which slimly surpassed survey expectations by less than 0.5 percent, except for industrial output, which rose 1.1 percent above expectations:

• GDP up 6.9 percent in the second quarter from a year earlier
• Industrial output up 7.6 percent in June from a year earlier
• Fixed-asset investment up 8.6 percent in the first half of this year
• Retail sales up 11 percent from a year earlier in June

• Foreign acquisitions
  China blocks Dalian Wanda from completing overseas deals / WSJ (paywall)
  This isn’t the first recent report of Wanda in trouble. As The China Project reported last week, Chinese citizens noticed the company’s unusual behavior and suspected its chairman, Wang Jianlin 王健林, knew something they did not. Now we know: Six of Wanda’s recent foreign transactions — four completed and two pending — were found by regulators to have violated capital outflow restrictions.
• Mobile payments
  In urban China, cash is rapidly becoming obsolete / NYT (paywall)
• U.S.-China relations
  U.S.-China trade talks sputtering at 100-day deadline / Reuters
  Trump’s team is ready for a trade war over steel / Washington Post
• Artificial intelligence
  This is why China hasn’t jumped on the smart speaker bandwagon / Bloomberg
• Financial markets
  A sense of calm has descended on China’s markets. Don’t fall for it / Bloomberg
  Here’s why China is flooded with AAA-rated bonds: Confusion and rivalry among regulators / SCMP