CKGSB Knowledge - China Business and Economy Summer 2020

With the effects of COVID-19 still not yet fully seen and relations between the world’s two largest economies—the United States and China—worsening, many things are hanging in the balance right now. This issue of CKGSB Knowledge addresses several economic and business trends that have been exacerbated by the virus crisis as we look toward the future and what it may bring. With economies around the world still very much challenged by the pandemic and many not able to meet their debt payment responsibilities, where does that leave China’s massive infrastructure project, the Belt and Road Initiative? “Ambitions Disrupted” (page 11) explores the future of the expansive plan. The countries of East Asia, however, appear to have found a way to flatten the curve of pandemic cases and deaths. Our cover story “Facing…

The relationship between China and the US has been deteriorating further in the past months with escalated confrontational rhetoric and actions—some of them military—by both sides. While hopes for the world’s two largest economies to work together amicably are fading for the foreseeable future, the two need to find a way to live together for the good of everyone on the planet. Many, especially the China Hawks in the current US administration, use the analogy of a “Cold War” to describe the anticipated next phase in relations between the US and China. Before it goes too far, we must acknowledge the major differences that exist between today’s China and the former USSR and also recognize how the two sides of the last Cold War were able to manage their differences and…

The EU Chamber of Commerce in China, currently led by President Jörg Wuttke, was founded in 2000 by 51 member companies with a shared goal of establishing a common voice for European businesses operating in the country. It has now expanded to over 1,700 members with chapters active in nine cities across the country. The Advisory Council of the Chamber includes the CEOs and presidents of some of the largest EU companies with investments in China. Wuttke has also been the Chief Representative of German multinational chemical company BASF in Beijing since 1997. In May 2019, he was elected for a third term as the President of the European Union Chamber of Commerce in China. Since 2019, he has been Vice Chairman of the CPCIF International Cooperation Committee, a group representing…

The Belt and Road Initiative is one of the biggest development projects in history, but the pandemic has had a huge impact on the economies of the countries involved in it Pakistan has long been the jewel in the Belt and Road Initiative’s crown with China infrastructure projects under construction spanning some 3,000 kilometers and expected to cost more than $62 billion. Then came the pandemic. Prime Minister Imran Khan vowed to complete the flagship project, known as the China Pakistan Economic Corridor (CPEC), “at all costs” but in April Islamabad appealed to Beijing for debt relief and to relax the terms on loans worth $30 billion. Similar pleas have since echoed across the world, particularly from developing countries. To different extents, these countries have grown dependent on Chinese aid and loans and…

With facemasks flying off the shelves at the beginning of the year, it dawned on the world that China was their only source of the pandemic must-haves. While Japan, Taiwan and the United States produce PPE, they did not have enough to even satisfy domestic demand, giving China an arm lock on production when it came to scale. Production is now being ramped up, but industry insiders say that in terms of the raw materials alone, China is probably irreplaceable as the primary source of masks for at least three years. The diversification of production away from the “Factory of the World” is happening, at least to some extent. But some industries are finding it hard to break free of the China hold Over the past 30 years, the world has shifted…

Throughout the recent China-US trade war, one consumer electronics product has been conspicuously exempt from Washington’s tariffs: the smartphone. In many a tweet, US President Donald Trump threatened to slap 15% levies on Chinese-made handsets, but it never came to pass and was put to rest—at least for a while—with the signing of the phase-one trade deal in January. China has built up a remarkable dominance in the global smartphone market over the last decade, both in manufacturing and brands. But things may be changing Trump never pulled the trigger on smartphone tariffs because it would have had a significant impact on the price of most mobile phones sold in the United States. It would have particularly hit Apple, which has almost half of the US smartphone market and relies on Chinese…