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China Bank Regulator Lists Firms It Says Violated Investor Rules

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China’s banking and insurance regulator for the first time published names of companies that it alleges committed shareholder violations in the industry, warning investors against misbehavior as the sector tries to attract private and foreign capital.

The China Banking and Insurance Regulatory Commission’s list of 38 companies, published on its website Saturday, didn’t identify the banks or insurers they invested in but included a few firms that were previously known as shareholders of troubled Anbang Insurance Group Co.. The violations included illegal connected transactions, seeking illicit gains, exceeding shareholding ceilings without approval and fabricating materials.

Shareholder violations have “seriously affected the stable operations of financial institutions,” the regulator said. “The purpose of the disclosure is to send a signal that shareholder supervision will be further tightened.”

China’s financial regulators have been clamping down on shareholder conduct in the past few years to curb irregularities and financial risks, jailing Anbang’s former chairman for illegal fundraising and injecting state capital to take ownership control in the most high-profile case. The government has also removed foreign-ownership ceilings in banks and insurers as the nation opens up its financial market.

The CBIRC will encourage private investors in banks and insurers, especially those with capital strength and management experience in strategic investments, according to the statement.

— With assistance by Sharon Chen, and Dingmin Zhang

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China’s Era of Mega-Dams Is Ending as Solar and Wind Power Rise

It’s the beginning of the end for the era of mega-dam building in China.

China Three Gorges Corp. on Monday turned on the first set of generators at the massive Wudongde hydropower plant, deep in the mountains of Yunnan province. About 170 kilometers (106 miles) downstream on the Jinsha River sits Baihetan, the last of its kind, scheduled to go into operation next year.

50,​820 Million metric tons of greenhouse emissions, most recent annual data 51% Carbon-free net power in Germany, most recent data +0.​95° C May. 2020 increase in global temperature vs. 1900s average

$81.​9B Renewable power investment worldwide in Q4 2019 0 3 2 1 0 9 ,0 8 7 6 5 4 0 4 3 2 1 0 0 5 4 3 2 1 Soccer pitches of forest lost this hour, most recent data

Jiayuguan, ChinaMost polluted air today, in sensor range

At full run, the two sites will produce more electricity than every power plant in The Philippines combined. They’re the final two mega-dams in a Chinese construction boom that goes back more than half a century, one that became increasingly mired in controversy over the trade-off between the benefits of the renewable energy and flood prevention and the social and environmental costs.

Now, China’s hydro industry is down-shifting toward smaller projects and pumped storage. Engineers have run out of the easiest locations to power massive sets of turbines and the falling cost of rival energy sources such as solar mean it isn’t worth moving on to more challenging locations.

“It’s so cheap developing renewables and coal-fired power, why bother injecting huge sums of money to develop hydro 2,000 kilometers deep in the Tibetan plateau,” said Frank Yu, an analyst with Wood Mackenzie Ltd. “The future of hydro is going to be pumped storage and is also going to be smaller and smaller.”

China’s dam-building era began in the 1950s, soon after the Communist Party gained power, but it reached a crescendo in the past two decades. After Baihetan gears up to full capacity in late 2022, China will have completed five of the world’s 10-biggest hydropower plants in just 10 years. China’s dams generated more electricity in 2017 than the total supply of every other country in the world besides the U.S. and India.

Harnessing China’s rivers, which flow from the snowy peaks in the west to the fertile deltas in the east, has always been a prime concern of its leaders. More than 4,000 years ago, the emperor known as Yu the Great gained eternal fame by employing dikes, dams and canals to control flooding that plagued the ancient civilization.

The Communist Party used a disastrous flood in 1931 to argue that the Kuomintang government was a failure, and when Mao Zedong took over in 1949 dam-building was a priority. But construction and engineering were often subpar, resulting in more disasters like the Banqiao and Shimantan dam collapses in 1975 that killed as many as 240,000 people.

As China emerged onto the global scene in the late 1990s, so too did its dam-building industry. “Since the turn of the century, the country has more than quadrupled its installed capacity and accounted for over half of global hydropower growth,” said Samuel Law, an analyst for the International Hydropower Association.

The modern mega-dam building period began in earnest with the long-touted project to block the Yangtze River at the base of the Three Gorges, a series of narrow passageways between mountains that hem in China’s longest river.

The project was unusually controversial in China. Proponents touted the benefits of clean energy, improved navigation and the chance to tame one of the nation’s most flood-prone rivers. Opponents focused on the million-plus people who would be forced to resettle from the narrow strips of fertile orange groves along the river’s edge to harsher environments on higher ground, along with the loss of cultural and archaeological sites.

Work began in 1994 and when the final generator was switched on in 2012 it became the largest hydropower plant in the world, generating 22.5 gigawatts. Two more massive projects, the 6.4-gigawatt Xiangjiaba and the 13.9-gigawatt Xiluodu, were completed in 2014 on the Jinsha River, which feeds into the Yangtze. Along with Wudongde and Baihetan, the 1,200-kilometer stretch of water will have five of the 10 largest hydropower plants on earth.

Pickings are about to get slimmer. Big hydropower plants require large flows of water cascading down a steep change in altitude and China has tapped most of the best prospects that are easy to reach.

After Wudongde and Baihetan, there are no dams bigger than 10 gigawatts are under construction or in planning or permitting stages, according to Pavan Vyakaranam, senior power analyst at GlobalData.

“Although the country has a strong pipeline of mega hydropower projects, it has mostly exhausted its major potential sites and there is reduced scope for new announcements,” he said.

A similar story happened in the U.S., where massive government dam projects helped pull the country out of the Great Depression in the late 1930s, including the Hoover Dam, the world’s largest at the time. By the end of World War II, hydroelectricity supplied more than a third of the nation’s needs.

Construction peaked in the 1960s, then slowly ground to a halt as utilities turned to nuclear power and opposition grew from farmers, environmentalists and Native Americans. Last year, hydroelectricity provided 6.6% of U.S. power supplies, according to the Energy Information Administration.

China hasn’t completely run out of space for hydro. There are plenty of sites for smaller 1-to-3 gigawatt plants that would be signature projects in most other countries. So-called pumped-hydro projects can help store intermittent renewable energy for when it’s most needed. And it does still have potential sites for mega-dams, they just aren’t easy to get to.

The most prominent would be the Motuo dam on the Yarlung Tsangpo River in Tibet, which at one point was being eyed as a potential 38-gigawatt plant, nearly double the size of Three Gorges. The Chinese government is still researching the site’s feasibility, according to a person familiar with the studies, who asked not to be identified because the information isn’t public.

But such a development is seen as unlikely by many analysts. Getting materials and workers to such a remote area would be enormously costly, as would stringing the power lines needed to get the electricity to market. And that doesn’t factor in the geopolitical issues around damming a conduit that feeds some of India’s major rivers, including the Brahmaputra.

As China’s dam builders pack up their tools at home, they are expanding overseas. China’s major development banks have financed nearly $44 billion worth of hydropower projects globally since 2000, according to researchers at Boston University’s Global Development Policy Center.

“Chinese hydro companies are investing heavily in other countries in South Asia, South East Asia, Africa and Latin America,” said GlobalData’s Vyakaranam.

— With assistance by Dan Murtaugh, Feifei Shen, Chris Martin, Jing Li, Hannah Dormido, and Kevin Dharmawan

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Chinese stocks hit their highest level in 5 years, while Europe looks for direction with US markets closed for July 4th

  • Global markets were mixed Friday as investors seek direction with the US markets closed in observance of of the Fourth of July public holiday. 
  • Chinese stocks hit a five-year high as stronger than expected PMI data out of the world's second biggest economy boosted sentiment.
  • In Europe, stocks dropped a little, although there was no immediately apparent key driver to the moves.
  • Liquidity was thin with few US investors online during the day.
  • Visit Business Insider's homepage for more stories.

Global stocks painted a confused picture on Friday as the US holiday for the Fourth of July caused thin liquidity in markets, and upbeat Chinese PMI data pushed Chinese stocks to a five-year high. 

US markets are closed on Friday because of the holiday, leaving markets in Europe and other areas of the western world looking somewhat listless.

In Asia, China's Shanghai Shenzhen CSI 300 (CSI300) closed at its highest level in five years at 4419.60 after stronger than expected data out of the country's service sector.

China's services PMI — a closely watched economic survey — hit a 10-year high on Friday in the latest sign that the country's economic recovery as it comes out of the worst of its coronavirus crisis is accelerating.

Read More: A 22-year market vet explains why stocks are headed for a 'massive reset' as the economy struggles to recover from COVID-19 — and outlines why that will put mega-cap tech companies in serious danger

China's Caixin Services Purchasing Managers Index hit 58.4 for in June. The previous reading for May was 55. 

In Europe, the EuroStoxx 600 Index pared earlier gains as France's prime minister resigned.

Here's the market roundup as of 12.08 p.m in London (7.08 a.m. ET):

  • Asian indexes were up with China's Shanghai Composite up 2%, Hong Kong's Hang Seng up 1%, and Japan's Nikkei up 0.7%.
  • European equities were down, with Germany's DAX down 0.3%, Britain's FTSE 100 down 1%, and the Euro Stoxx 50 down 0.5%.
  • US futures are mixed. Futures underlying the Dow Jones Industrial Average is down 0.2% the S&P 500 is down 0.2%  and the Nasdaq is flat. US real-time markets will not open until Monday.
  • Oil prices fell. West Texas Intermediate and Brent crude are both down 1.3%.
  • The benchmark 10-year Treasury yield fell to 0.67%.
  • Gold rose 0.1% to $1,788 per ounce.

Markets were also confused whether to focus on upbeat Non-Farm Payrolls data that came out on Thursday, or rising coronavirus infections worldwide, and particularly in the US. 

American businesses added 4.8 million jobs duringJun e, according to the Bureau of Labor Statistics.

That exceeded the 3 million new jobs expected by economists surveyed by Bloomberg and represents the second straight month of job additions during the coronavirus induced recession. 

Ahead of the May jobs report, economists were predicting job losses of 7.5 million instead of an addition of 2.5 million new jobs that emerged in that month's job report. 

Continued optimism on a vaccination was also in part driving markets for another session. 

Jeffrey Halley, senior market analyst, Asia-Pacific, at OANDA, said: "Pleasingly, some real progress appears to be being made on the Covid-19 vaccine front. By my count this week alone, Pfizer, AstraZeneca and Moderna, along with their partners, are all on the verge of commencing phase III mass trials."

Read More: The most accurate tech analyst on Wall Street says these 6 stocks have potential for huge gains as they transform the sector

"My anti-black swan for 2020 has been, that a vaccine appears in Q4 2020 with immediate deployment thereafter."

On Wednesday Pfizer revealed positive early-stage trial results for its coronavirus vaccine.

Pfizer said patients created between 1.8 and 2.8 times the antibodies seen in those who have recovered from COVID-19. 

Do you have a personal experience with the coronavirus you’d like to share? Or a tip on how your town or community is handling the pandemic? Please email [email protected] and tell us your story.

Get the latest coronavirus business & economic impact analysis from Business Insider Intelligence on how COVID-19 is affecting industries.

Get the latest Pfizer stock price here.

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Business

All mobiles, TVs sold in India have a China connection

It was expected that supplies from China will be back to normal by end-June as their factories are now operating at nearly 90 per cent of normal capacity. But the recent issue with shipments has placed an obstacle that manufacturers can’t bypass.

The ongoing friction between the port and Customs authorities in India and China may derail electronics manufacturers’ plans for recovery before the festive season starts.

With consignments stuck at ports in the two countries, manufacturers now fear a severe impact on their festive season plans if the issue is not resolved by mid-July.

As the authorities hold back consignments from China at Indian ports, leading manufacturers are stuck in limbo.

After disruption in supplies from China between March and May, shipments began to revive only in June.

Most manufactures had been expecting shipments of key electronic components in larger quantities as their inventories were nil.

However, with consignments now stuck they are fearing a further delay in scaling back production levels to pre-Covid times.

“The plan is to scale up production to normal levels by mid-July. Over 60 per cent of our product models are not available any more as pent-up demand after the lockdown consumed whatever little quantitates we were left with.

“It was expected that supplies from China will be back to normal by end-June as their factories are now operating at nearly 90 per cent of normal capacity. But the recent issue with shipments has placed an obstacle ahead of us that manufacturers like us can’t bypass,” said a top executive of a leading smartphone company.

According to Navkendar Singh, research director at IDC, it may further delay the recovery for the electronics manufacturers in India.

“Physical checking of all consignments, especially for electronics goods, is unfeasible.

“We are totally dependent on China for several key components like printed circuit boards and display panels.

“Given the delicate nature of these components, unboxing them for a physical check may totally damage the items”, he said.

Display panel that forms over 60 percent of the cost of a flat panel television and over 15 percent for smartphones, are manufactured in a highly controlled environment and bringing them out in a normal environment may make it unusable.

Further, if the issue is not resolved by mid-July manufacturers plans for the festive season to get hampered.

While the season begins from mid-September, all major players including Xiaomi, Samsung, Vivo, Oppo and Apple, begin stocking up finished handsets from end-June, to meet the surge in demand during Durga Puja and Diwali.

With no inventory left to meet the current demand, their festive season supply plans have already got delayed this year.

S K Saraf, president, Federation of Indian Export Organisations, in a letter to the commerce ministry said, the physical examination of all consignments from China is not only delaying the process but also adding import cost.

Urging the ministry to clear any air of confusion among customs officials about additional checking of Chinese consignments, he informed the government that Chinese authorities are retaliating by holding several shipments at their end.

According to the data from the Ministry of Commerce, manufacturers in India imported Rs 10.7 trillion worth of telecom and handset equipment in 2018-19, while for TVs, it was Rs 95,500 crore.

Between April 2019 and February 2020, imports on these two accounts stood at Rs 8.54 trillion.

According to sources, Chinese companies like Xiaomi, Vivo, Realme, Oppo, OnePlus, TCL, Techno, Lenovo and Motorola, are considering all options, including a representation to the government.

While all of them are assembling in India, they are heavily dependent on imported TV and handset parts from China.

Estimates suggest, over 50 per cent (of cost of material) of the components are imported from the neighbouring country by the prominent brands.

Industry analysts said, while Chinese firms are more dependent on Chinese consignments, no electronics firm can survive without them.

“There are no handsets or TV sets that are sold today that do not have China’s contribution in it”, said Singh.

Photograph: Reuters

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China v U.S., India’s Bright Spot, Job Growth Optimism: Eco Day

Happy Friday, Asia. Here’s the latest news and analysis from Bloomberg Economics to help get you through to the weekend:

  • The U.S. Senate gave final approval to legislation that would impose sanctions on Chinese officials cracking down on dissent in Hong Kong. The bill heads to President Donald Trump for his signature or veto
  • India has accumulated the world’s fifth-largest foreign exchange reserves at more than $500 billion, making it a bright spot in an otherwise dismal economy
  • The U.S. labor market made great progress last month digging out of a deep hole, yet optimism was tempered by stubbornly high layoffs and a resurgent outbreak across the country
  • The past two weeks saw some improvement in Hong Kong’s economy, even as the number of new cases of Covid-19 rose, writes Chang Shu
  • Boris Johnson’s government refused to back down after China warned of “consequences” if it presses ahead with the offer a home in the U.K. for millions of Hong Kong residents
  • Here’s why it’s hard for Europe to break China’s supply chains, Stephanie Flanders and Lucy Meakin discuss in Stephanie’s weekly podcast
  • Japanese Prime Minister Shinzo Abe will fall short of his pledge for women to hold 30% of the nation’s leadership positions this year as the pandemic highlights the fragility of women’s employment gains
  • Thailand’s plan to target high-spending foreigners to kick-start its travel sector has a green light after winning Cabinet approval and additional support from the nation’s aviation regulator
  • An average of 178,000 workers have been exiting Spain’s furlough program every week to return to their jobs in a sign that the recovery is slowly gathering pace, where the recession is expected to be one of Europe’s deepest
  • The gulf between generations in the U.K. is yawning as the pandemic exposes inequalities and damages younger people’s work prospects
  • The Indian military has been discussing a two-front war with Pakistan and China for decades to keep politicians focused on defense spending. Now that scenario is looking ever more realistic
  • Nathan Tankus, 28, hasn’t yet finished his bachelor’s degree. He has, however, mastered enough knowledge of economics and finance to become a widely followed commentator on the Fed

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‘It is difficult for us to get rid of China overnight’

‘China feels India will be hard-pressed not to go after China because we are so badly dependent on them — and that is the reality.’

Amidst the tension on the Ladakh front with China, another looming concern is the enormous trade deficit India has vis a vis China which makes it impossible for the country to break out of the Chinese economic stranglehold.

Going on the offensive over the issue, the Congress party sharply attacked the Narendra Damodardas Modi government for allowing the trade deficit with China to balloon to $53 billion — from $36 billion when the Manmohan Singh government left office in 2014.

So how did India reach this level of trade deficit with its neighbour? How and why did Chinese goods so capture Indian markets?

Syed Firdaus Ashraf/Rediff.com spoke to Biswajit Dhar, economics professor at the Centre for Economics Study and Planning, School of Social Sciences, Jawaharlal Nehru University, to understand what bedevils India-China trade.

“India as a country cannot run without electronics and pharma products from China. If we do not get these products, who will provide us? Professor Dhar asks in the first of a two-part interview.

Whenever border tensions rise, voices across India get louder about banning Chinese imports. But can we do without them?

I don’t think it is possible in the short run. The amount of inter-climbing between the two economies — and especially given our dependence on China — it is not possible for us to decouple from china in the short run.

It can happen in the medium term if the Indian government takes serious steps to rejuvenate domestic production so some amounts of imports can be replaced by domestic production.

Can India raise duty on Chinese goods?
If it does so, will it lead to a violation of WTO terms which says that every member must offer every other member the same import duty rate and not discriminate?

There are ways of doing it. The WTO would never say no to countries trying to develop their industrial or manufacturing sector.

What the WTO would object to is if you give direct subsidy or raise tariffs beyond the permissible limit.

As long as government does this, finds ways of supporting the industry without violating the WTO, it should be fine.

Every country gives certain amount of support to its industries. There are red lines of what kind of support you can give so you should be careful that you do not transgress those red lines and violate WTO rules.

India’s trade deficit with China has ballooned in the last six years. Why did it happen and what are the companies that benefit from this?

It is not six years, it has happened in the last 15 years.

If you see, imports from China in 2003-2004 were $4 billion. In the last financial year it was $65 billion.

Now, two things happened. At that time China had just joined the WTO and was given the Most Favoured Nation status and treated at par with other members.

At the same time India started liberalising more and tariffs started coming down rapidly in 2003.

After the 1991 liberalisation, the sharpest decrease in tariffs happened in 2002 and 2003.

The third thing that happened was that India’s manufacturing sector was very weak then. There were government reports that talked about improving the share of manufacturing in GDP. But all those reports were ignored by successive governments.

As a result, China got advantage of the open Indian economy.

Without any competition from India’s manufacturing sector who could not compete with China, that resulted in the ballooning of the trade deficit.

But what was the compulsion to reduce the tariffs on Chinese goods? Was it because of the WTO?

No. Even I have not been able to understand what was the necessity of unilaterally bring down the tariffs when your industries cannot compete.

Why are you exposing our industries to unfair competition?

And once China comes in then they indulge in all kind of unfair competition. They dumped their products.

This answer has not been given by the successive Vajpayee, Manmohan Singh and Modi governments.

The Vajpayee government got into this agreement with ASEAN (Association of South East Asian Nations) to do a Free Trade Agreement which was concluded by the Manmohan Singh government. And then there were FTAs with Japan and South Korea.

The Modi government decided to join the RCEP (Regional Comprehensive Economic Partnership) which we vehemently opposed as China was a part of that grouping and they have already done so much damage to us and this decision would be like a kulhadi (axe) on your leg.

Fortunately, Prime Minister Modi went to sign the RCEP in Bangkok in November 2019, but pulled out at the last moment.

If the government had signed the RCEP, the situation would have been more terrible.

What was the reason for Modi not to sign the RCEP?

A lot of us wrote against it and a large number of domestic industries spoke up against it. They said there will be unfair competition from China and we will cease to exist.

Who benefits from these Chinese imports? Is there a lobby?

There must be some lobby, but I don’t know. It is a matter for journalists to investigate. There are obvious pitfalls, we as researchers can point out by looking at the broad numbers.

Who are the people who pushed us into this situation from where there is no escape?

Two big areas where our dependence is huge on China are electronic goods — that includes telecom — and pharmaceuticals products.

We cannot do without China in these two sectors.

India as a country cannot run without electronics and pharma products from China.

If we do not get these products, who will provide us?

Eighty percent of the 17 rare earth minerals used in computers to lighting to renewable energy is controlled by China, so how can you as a country do without them?

I am not saying you can cut off from China completely. I believe Indian entrepreneurs have the capability of producing smartphones and computers, so why can’t we produce it?

If you have large industries here, these industries need raw materials and when Chinese companies are selling 17 rare earth minerals, they will come here to sell their products.

Today what is happening is that they have the raw materials, they are processing it and they are giving their people jobs.

Here we are only importing and there is widespread unemployment in India because there are no jobs.

Did Make in India fail because of China?

That never took off. If it had taken off, we would have not been in this mess.

It did not take off not because of China, but because of us.

Every country where production happens, the government creates the right kind of infrastructure, ecosystem and does handholding for entrepreneurs to come and invest. It creates the environment for them.

Look at the infrastructure, red tape etc here.

Your cost of capital is higher. Take the MSME sector, they get loans at very high rates. Your cost of capital is higher.

So where is the incentive for entrepreneurs to come up and start manufacturing in India?

Look at China, the government is giving incentives to their industries, they are giving subsidies directly or indirectly. Therefore, we cannot compete with them unless the Indian government plays an active role.

Does China not fear losing its business from India when border tensions rise?

China feels that it is in a win-win situation because the Indian economy is so terribly dependent on them.

It is difficult for us to get rid of China overnight.

Suppose China stops exporting pharmaceutical products to us, then our pharmaceutical industry will suffer badly. The same is the case with electronic products and telecom sector.

China is doing all this as they are confident of the fact that India is on the back foot economically. They think they can extract some additional concessions from India.

They feel that India will be hard-pressed not to go after China because we are so badly dependent on them — and that is the reality.

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Guess who’s benefited from India-China conflict? Hong Kong

In the last five years, imports from HK have more than tripled — from $5.6 billion in FY15 to $17.1 billion in FY20. In the same period, exports declined by 20 per cent ­– from $13.6 billion in FY15 to $10.8 billion (annualised) in FY20. 

Hong Kong has emerged a beneficiary of the India-China conflict, with Indian importers increasingly sourcing their requirements from the Special Administrative Region (SAR), which has a separate jurisdiction under the World Trade Organisation (WTO). 

India’s trade deficit with China is on a downward trajectory, and hit a 5-year low in FY20 due to lower imports and higher exports, but trade deficit with Hong Kong continues to rise. 

In FY20, the same increased to a record high of $6.3 billion (annualised basis), from $5 billion a year ago. This was driven by a sharp rise in imports and a steady decline in exports to the SAR. 

The FY20 data is based on the commerce ministry’s trade statistics for the April 2019-February 2020 period. 

In the last five years, imports from HK have more than tripled — from $5.6 billion in FY15 to $17.1 billion in FY20. In the same period, exports declined by 20 per cent ­– from $13.6 billion in FY15 to $10.8 billion (annualised) in FY20. 

India had a trade surplus with Hong Kong till two years ago. Exports to Hong Kong in FY18 exceeded imports by $4 billion, which turned into a trade deficit of $5 billion the following next year. 

In contrast, trade deficit with China declined to a 5-year low of $47 billion in FY19, from a record high of $63 billion in FY18. In FY20, imports from China were down 3.6 per cent to $68 billion (annualised) from $70.3 billion a year ago, while our exports were up 1.2 per cent year-on-year to around $17 billion. 

Analysts, however, say that mainland China and Hong Kong should be seen together as the latter is a Special Administrative Region (SAR) of China and an economic gateway to the mainland. A significant portion of China international trade passes through Hong Kong port. 

Higher imports from China has blunted reduction in India’s trade deficit with China. India combined trade deficit with China and Hong Kong is expected to $57.4 billion in FY20 marginally down record high of $59 billion in FY18 and $58.5 billion in FY18. 

There are also a lot of similarities between India trade with China and that with Hong Kong. For example, electronics and electrical equipment are India’s biggest import from both mainland China and Hong Kong followed by power generation equipment such as boilers and reactors. 

In the first 11 months of FY20, India imported $18 billion worth of electronics and electrical equipment from China, accounting for nearly a quarter of imports. In case of Hong Kong the figure was around $8.2 billion, accounting for half of all imports from the city-state.

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China orders some American media outlets to give details on staff after US move

China’s Hong Kong national security law concerning for businesses’ future: Curtis Chin

Former Asian Development Bank U.S. Ambassador Curtis Chin on China’s new Hong Kong national security law and its threat to economic development.

BEIJING (Reuters) – China has asked four U.S. media organizations to submit details about their operations in the country, the foreign ministry said on Wednesday in what it described as retaliation for U.S. measures against Chinese media outlets.

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The Associated Press, UPI, CBS, and National Public Radio are required to provide information about their staff, financial operations and real estate in China within seven days, foreign ministry spokesman Zhao Lijian told a daily news briefing.

“We urge the U.S. to immediately change course, correct its error, and desist in the political suppression and unreasonable restriction of Chinese media,” Zhao said.

HONG KONG POLICE ARREST PRO-DEMOCRACY PROTESTERS AS CONTROVERSIAL LAW TAKES EFFECT

The United States and China have been engaged in a series of retaliatory actions involving journalists in recent months, amid increasing tensions over a range of issues, from the coronavirus pandemic to Hong Kong.

China has asked four U.S. media organizations to submit details about their operations in the country, the foreign ministry said on Wednesday. (iStock)

Last month, the United States said it would start treating another four major Chinese state media outlets as foreign embassies, following similar measures taken by Washington earlier in the year. That designation similarly required the outlets to report their personnel and real estate holdings.

US ENDING SPECIAL TREATMENT OF HONG KONG AMID TENSIONS WITH BEIJING

In March, China expelled about a dozen U.S. journalists from the New York Times, the News Corp-owned Wall Street Journal, and the Washington Post. At the time, it also asked those outlets, as well as broadcaster Voice of America and Time magazine, to provide details on their China operations.

That had followed Washington’s move to slash the number of journalists permitted to work in the United States at four major Chinese state-owned media outlets.

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The AP, NPR, CBS and UPI did not immediately respond to requests for comment.

In May, Washington limited visas for Chinese reporters to a 90-day period, with the option for extension. Previously, such visas were typically open-ended.

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World News

U.K. to Give Hong Kong Nationals Way Out After China Crackdown

Prime Minister Boris Johnson’s government will allow almost three million Hong Kong citizens to move to the U.K., risking further escalating tensions with China after it enforced a sweeping security law on the former British colony.

Speaking in the House of Commons on Wednesday, Johnson said the new legislation contravenes the 1984 agreement between London and Beijing, which set out the “one country, two systems” approach to protect Hong Kong’s autonomy when it returned to Chinese control in 1997.

Under the U.K. plan, the status of British National (Overseas) passport holders will be upgraded to grant immigration rights beyond the current six-month limit. The passports are held by 350,000 people in Hong Kong, with a further 2.5 million eligible for them. China accused the U.K. of meddling in its internal affairs after the proposal was first put forward in May.

“The enactment and the imposition of this national security law consitutes a clear and serious breach of the Sino-British joint declaration,” Johnson said. “It violates Hong Kong’s high degree of autonomy and is in conflict with Hong Kong’s Basic Law.”

Johnson said that he’d made clear “that if China continued down this path we would introduce a new route for those with British National Overseas status to enter the U.K., granting them limited leave to remain, with the ability to live and work in the U.K. and thereafter to apply for citizenship — and that is is precisely what we will do now.”

The British Passport Stoking Controversy in Hong Kong: QuickTake

The spat over passports is one of a series of flash-points in U.K.-China relations, which have deteriorated on issues ranging from the British response to pro-democracy protests in Hong Kong to the ongoing debate over whether Huawei Technologies Co. can retain a role in building the U.K.’s next-generation 5G telecommunications networks.

In an interview with Sky News in June, Foreign Secretary Dominic Raab said the U.K. would be prepared to sacrifice a post-Brexit free trade deal with China to protect Hong Kong citizens.

The U.K. is not alone in criticizing China’s new national security law, which came into force just ahead of the July 1 anniversary of Hong Kong’s return to Chinese rule, a symbolic occasion usually marked by mass protests against Beijing. U.S. Secretary of State Michael Pompeo said Hong Kong could no longer be considered sufficiently autonomous, and President Donald Trump is considering revoking some or all of its special trade privileges.

Meanwhile the G-7 group of nations has said the law would jeopardize a system “which has allowed Hong Kong to become one of the world’s most prosperous regions.”

The national security law is aimed at punishing acts of secession, subversion of state power, terrorism and “collusion” with foreign and external forces. Separately, Hong Kong lawmakers passed legislation on June 4 that would punish anyone who shows disrespect for China’s national anthem — something that is already a crime in the mainland.

Hong Kong Chief Executive Carrie Lam, who is supported by Beijing, has defended the plan, insisting it has wide public support and the city’s freedoms would be preserved.

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Customs to clear pharma raw materials from China

Apart from them, consignments of 11 top importers, including LG, Samsung, Toyota, Honda, and Siemens, will also be allowed entry, relieving them of the 100 per cent inspection rule. 

Easing restrictions on imports from China, the customs department has decided to clear pharma raw material shipments from that country. 

Consignments of 11 top importers, including LG, Samsung, Toyota, Honda, and Siemens, will also be allowed entry, relieving them of the 100 per cent inspection rule. 

This comes after a week of economic disruption caused by introducing stringent scrutiny, resulting in shipments originating in China getting held up at Indian ports. 

After representations from industry bodies, the government on Tuesday cleared imports of active pharma ingredients (APIs) from China. Besides, the top importers falling within the Tier 3 category of the Authorised Economic Operator (AEO) programme were given exemption from stringent scrutiny. 

“Imports of APIs and shipments from AEO T3 importers have been exempt from the 100 per cent check. The Indian pharma industry is heavily dependent on API imports from China and they were facing a huge shortage of raw material. Besides, the tier 3 AEOs are the top importers who meet the highest level of compliance, so they have been given the relaxation,” said a government official. 

He said these shipments would get moving from Wednesday. Over 60 per cent of APIs used in India come from China. On June 22, Customs officials in Chennai and Vizag were asked to put all shipments from China on hold until further orders. This was done on the basis of intelligence inputs about “illegal imports of narcotics”. 

Informal instructions were given to all ports and airports to do 100 per cent physical checks of shipments originating in China. Bilateral trade between China and India was worth $88 billion in FY19, with a deficit of $53.5 billion in China’s favour. 

India is also heavily dependent on China for intermediates and key starting material (KSM) for making drugs. This dependence has grown over the years as local manufacturers have moved to high-margin products (after they could not expand freely due to pollution norms) and Chinese APIs are 30 per cent cheaper than domestic stuff. 

The country mostly imports APIs and intermediates for vitamins (like Vitamin C), common antibiotics, and metformin (diabetes) from China. The government has now drawn up a plan to reduce dependence on the country by incentivising the local production of APIs through production-linked incentives (PLI) of up to Rs 10 crore. 

The government has identified 41 products (molecules), covering 53 crucial APIs, for which India is dependent on China. Almost 80 per cent of the 41 are intermediates. In 2016, the customs department had launched the Authorised Economic Operator, or AEO, scheme. 

It is a voluntary programme, under which an importer gets preferential treatment from customs for being compliant with supply-chain security standards. AEOs get benefits like fast-tracking shipments, deferred payments, exemption from issuing guarantees, and preferential treatment from customs. 

They are classified into three categories — T1, T2, and T3 — with T3 representing the highest level of compliance. Of the more than 3,000 AEOs, only 11 are in the T3 category. 

Meanwhile, the government is planning to curtail imports of at least 300 non-essential items from China, either through duty hikes and imposing non-tariff barriers.

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