China Reform Monitor - No. 1298

Chinese interests a casualty of Venezuelan crisis;
Report: China would be the loser in any trade war

September 7, 2017

August 14:

Venezuela's crisis has hurt China's economic and diplomatic interests. A $7.5 billion high-speed railway project in the country has been abandoned, and Caracas been unable to repay its loans, nor has it supplied as much oil as it agreed to, reports
The South China Morning Post. There used to be 400,000 Chinese living in Venezuela, but many have returned to China as the economy has imploded and violent protests spread. The growth of Chinese migration coincided with massive financial backing for the regime of the late Hugo Chavez and his successor, Nicolas Maduro. The China Development Bank poured at least $37 billion into Venezuela, making it the bank's top recipient country. China-led projects were once ubiquitous, with several thousand Chinese workers living in Caracas. Today, however, Venezuela's collapse has become the latest reminder of the perils of "going out." Dozens of Chinese shops have been looted. "We are trying our best to deposit US dollars and send money back to China and relatives overseas," said one Chinese resident. The Chinese Academy of Social Sciences has twice named Venezuela the most dangerous place for Chinese businesses to invest.

August 17:

China and Pakistan are setting up the "China-Pakistan Information Corridor" as the first step in the creation of an information corridor that traverses the 60-70 countries along the Belt and Road Initiative. The initiative will have four basic platforms: a service platform for projects and investment financing; a platform for think-tank specialists, culture, education, and training; a platform of ross-border e-business; and a platform of security certification. Meetings to discuss the corridor's construction were recently held between the Chinese and Pakistanis in Haikuo, Hainan,
Pakistan's The Nation reports.

August 19:

The State Council has released a document that limits overseas investments in sectors including hotels, cinemas, the entertainment industry, real estate and sports clubs, and bans investments in gambling and the sex industry,
reports the Los Angeles Times. The goal is to promote the "rational, orderly and healthy development of foreign investment while effectively guarding against risks," the document outlines. "There are great opportunities for our nation's companies to embark on foreign investment, but they also face numerous risks and challenges." The move is the latest effort by regulators to slow foreign acquisitions, citing concerns that some companies may be taking on too much debt. By contrast, the document encourages companies to invest in projects connected to President Xi's signature Belt and Road initiative, which seeks to link China with Asia through multibillion-dollar investments in ports, highways, railways, power plants and other infrastructure.

August 20:

The immediate impact of any trade war between the U.S. and China would be worse for Beijing, and the American, European, and Japanese export sectors would not be significantly affected by an economic slowdown in China, according to a new report by The Conference Board regarding the exposure of multinational companies to the Chinese market. The U.S., European, and Japanese value-added exports to China are equivalent to only 0.7 percent, 1.6 percent, and 2.1 percent, of national economic outputs, respectively. China's value-added exports to the U.S., by contrast, were roughly 3 percent of its GDP, suggesting that Beijing has more to lose in a trade showdown,
the Financial Times reports.

August 21:

Cambridge University Press (CUP) has reversed course and unblocked readers in China from accessing hundreds of academic articles following a request by Chinese authorities. The about-face took place after
what the Washington Post described as "a major backlash from academics." CUP had confirmed that hundreds of articles in China Quarterly, a scholarly journal, would be inaccessible within China, after a letter from the journal's editor protesting against the move was published. "We can confirm that we received an instruction from a Chinese import agency to block individual articles from China Quarterly from within China," the letter said. "We complied with this initial request to remove individual articles, to ensure that other academic and educational material we publish remains available to researchers and educators in this market." The request to censor an academic journal marks a more aggressive turn by Chinese authorities, who usually do not target small-circulation publications, the Guardian reports

Related Categories: China; China and East Asia Program

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