Incoherence

Dear Access member,

Our word of the day is incoherent: 不连贯 bù liánguàn.

—Jeremy Goldkorn, Editor-in-Chief 

1. A great deal that probably won’t happen

The South China Morning Post reports: 

U.S. President Donald Trump lambasted Beijing’s trade practices in a speech in New York on Tuesday while also saying “a significant phase one trade deal with China could happen soon, but we will only accept the deal if it’s good for the United States and our workers at our great companies”.

His remarks, at an event hosted by the Economic Club of New York, came as the world looks to see if the two largest economies are able to agree on a “phase one” deal that would begin to wind down the 17-month-long trade war.

China “is having the worst year in more than half a century, their supply chains are cracking very badly and they are dying to make a deal,” Trump said.

“But we are the ones that are deciding whether or not we want to make a deal.”

The deal that Trump is referring to is merely a cessation of hostilities, a return to a situation not even as good for the U.S. as the status quo on July 6, 2018, before the first Trump tariffs went into place. 

Other reports:

• Trump says China cheated America on trade, but he blames US leaders for letting it happen / CNBC

• Trump says U.S. to substantially raise tariffs if no China deal / Bloomberg (porous paywall)

—Jeremy Goldkorn

BUSINESS AND TECHNOLOGY:

• Germany companies balk at rising labor costs
  Survey finds 23% of German firms plan to exit China / AFP via Taipei Times

The German Chamber of Commerce’s annual survey of 526 member firms in China found that 23 percent have either already decided to withdraw production capacity in the country or are considering it… 

Of the 104 companies that have decided to leave or are considering to, 71 percent cited the rise in production costs — particularly for labor. One-third blamed an unfavorable public policy environment and one in four said the China-US trade dispute is having an impact.

• Tencent and the NBA
  Tencent falls $90b behind e-commerce giant Alibaba after NBA China clash / Bloomberg via DealStreetAsia

The WeChat operator has lost $86 billion of market value since its April peak… 

The NBA brouhaha “places further pressure on Tencent’s advertising revenue. More broadly, Tencent’s advertising business faces structural declines in video advertising revenue and increased competition from ByteDance,” said Michael Norris, research and strategy manager at Shanghai-based consultancy AgencyChina.

• Huawei rewards its employees for response to U.S. blacklist
  Huawei hands out billions in bonuses for staff response to sanctions / Caixin

Huawei Technologies is handing out bonuses to hundreds of thousands of staff for their response to U.S. sanctions, multiple company employees told Caixin.

The Chinese telecom giant said in an internal memo Monday that it would issue two monetary rewards that are unrelated to regular bonuses, the people said.

First, Huawei will award an additional month’s salary to its staff, whose numbers totaled 194,000 worldwide as of June, according to the transcript of a Globe and Mail interview with Huawei founder and CEO Ren Zhengfei. The total rewards could amount to billions of yuan.

In addition, the company is earmarking 2 billion yuan ($285 million) for employees who helped with “business continuity,” according to the people.

• CBD from hemp made for export
  China lets its cannabis industry bloom but says no to marijuana / WSJ (paywall)

China has grown hemp, a strain of cannabis, for thousands of years to use in clothing and traditional medicine and is one of the world’s largest hemp producers. The country is using that foothold to churn out cannabidiol, or CBD, a loosely regulated chemical related to marijuana that is finding its way into products as diverse as bath bombs and pet food…
According to the Hemp Business Journal, China accounted for about 11% of the $800 million global CBD market in 2018, trailing Europe and the U.S… 

As the industry matures, CBD hopefuls are buying up more land and increasing production. Despite the longstanding farming of hemp, local governments only recently developed more formal regulations.

• Chinese smartphone brands compete for Indian market
  Xiaomi maintains lead in India handset market, but Chinese rivals pose growing threat / Caixin

In the three months through September, Xiaomi grew its shipments in India by 8.5% year-on-year to a record 12.6 million units, giving the firm a 27.1% market share, according to the report.

Realme and Oppo respectively claimed the fourth- and fifth-largest market shares, but posted jaw-dropping quarterly sales growth. Realme, which launched last year as a budget sub-brand of Oppo, shipped 6.7 million units, representing a whopping growth of 401.3% from a year earlier… Oppo, meanwhile, posted strong year-on-year growth of 92.3%, the report showed.

• Pork price inflation
  China’s pork prices rose 101% year-on-year in October / Caixin

Pork prices in China hit an eight-year high last month according to the latest Consumer Price Index (CPI) released by the country’s National Bureau of Statistics.

The data shows pork prices rose 101% year-on-year and 20.1% from September. The CPI itself rose 3.8% year-on-year, a 0.8% rise from September, with pork prices accountable for about 2.43% of that increase.

POLITICS AND CURRENT AFFAIRS:

• Brazil and China
  BRICS summit marks recovery of China-Brazil relations / Reuters
  “Jair Bolsonaro’s repeated bashing of China on the campaign trail last year left diplomats on both sides worried he might take a wrecking ball to one of the world’s biggest trading partnerships.”

• Hong Kong
  Hong Kong protests: Rule of law on ‘brink of collapse’, police say / BBC
  “The protests started in June against a now-withdrawn plan to allow extradition to mainland China, but have since morphed into wider demonstrations, with activists demanding greater democracy and police accountability in Hong Kong.”

• Anti-China protests in Nepal
  Nepal protestors burn Xi Jinping’s effigy in protest against Chinese encroachment / Hindustan Times

The protestors held play-cards, banners and chanted slogans such as “Go back China and Return Nepali land” during the protests.

The protest comes after a survey report recently released by the Survey Department stated that China has encroached upon 36 hectare land of Nepal.

• Fears of Beijing’s influence at Australian universities
  Australia: the campus fight over Beijing’s influence / FT (paywall)

Drew Pavlou is an unlikely threat to the Chinese Communist party. The 20-year-old arts student at Australia’s University of Queensland has never even been to the country. But his decision to organize a campus demonstration in support of Hong Kong pro-democracy protesters has sparked a diplomatic incident between Canberra and Beijing and put him on a collision course with the Chinese authorities.

The July 24 protest turned violent, with clashes between pro- and anti-Beijing students. The organisers were subsequently accused by China’s consul-general in Brisbane, Xu Jie, of being “separatists” and “anti-China activists”… 

The spillover of tensions generated by the Hong Kong protests at colleges in Australia, New Zealand, Canada, the US and elsewhere has intensified a global debate about Beijing’s influence at western universities where annual enrolment of Chinese students doubled to 869,000 in the decade to 2017, according to the Centre for Independent Studies, a Sydney-based think-tank. It is a concern that extends beyond Beijing’s monitoring of its own citizens on overseas campuses: bleeding into areas such as research and development and cyber security.

SOCIETY AND CULTURE:

• Migrant workers and their lives
  The world’s factory, on film / Sixth Tone
  “Zhan Youbin worked for years as a migrant laborer in the heart of China’s export machine. Then, one day, he picked up a camera.” Click through to the article for examples of Zhan’s award-winning photography. 

• The rise of “Chi-fi”
  The wonderful world of Chinese hi-fi / The Verge

Increasingly, [this] subset of audiophile culture [is] obsessed with a wide variety of no-name Chinese brands selling earbuds that often cost less than $25… 

Online, the phenomenon is known as “Chi-fi” — a mashup of “Chinese” and “high-fidelity.” It’s usually used to refer to portable audio gear — they’re almost always earbuds, which sit outside the ear canal like AirPods, or in-ear monitors (IEMs), which have squishy tips and actually go inside the ear canal — that come from essentially anonymous Chinese companies. 

• Nationalism in hip-hop
  Why Chinese rappers don’t fight the power / BBC
  Yi-Ling Liu writes that “in stark contrast to the longstanding tradition of counter-culturalism and racial protest that has defined American hip-hop, the politics these rappers are asserting has a distinctly, one-noted nationalist tone.” While once, there was “a cacophony of rap voices cutting across different ideologies, geographies and socioeconomic classes — creatively competing for the hearts and minds of young Chinese,” now there are largely “binary themes — love and hate, anti-China vs. pro-China, fervent nationalism vs. treason to the nation.”