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Geo-Strategic Trend

Since the Start of 2017, Chinese Overseas Real Estate Investment Declined 84 Percent

Hong Kong’s Mainland-backed Phoenix New Media recently reported that, based on an analysis that Morgan Stanley Chase completed, the commercial real estate markets in New York, Sydney, and London may face serious challenges in the next two years. The primary cause of this warning is that Chinese investors have started withdrawing from overseas real estate markets. The Chinese government is tightening up capital control and commercial loans very quickly. Statistics showed that, since the beginning of 2017, the total of Chinese overseas real estate investment has declined 84 percent. The expectation is that an additional 18 percent drop will continue into year 2018. The same 2017 number that the Chinese Ministry of Commerce released was an 82 percent decline. According to statistics that the Chinese banking industry published, in the first half of this year, China’s total direct investment overseas showed a decline of 45.8 percent, to US$48 billion. In the second quarter, real estate pricing in Manhattan had already dropped 25 percent.

Source: Phoenix New Media, August 14, 2017
http://finance.ifeng.com/a/20170814/15580536_0.shtml

China Withdraws Industrial Equipment from North Korean Rason Area

The DailyNK, a South Korean news site that focuses on North Korean activities, recently reported, based on its own sources, that hundreds of trucks filled with industrial equipment from the Rason region were lining up outside of Chinese customs, waiting to return to China. This occurred the second day after China banned two thirds of North Korea’s export products based on the UN sanctions resolution. The Chinese government has not yet ordered the evacuation of industrial factories. However, the Chinese factory managers in those factories have been very much concerned about the potential of becoming the target of North Korean retaliation. Locals worried that, if this trend continues, Rason city could quickly become an empty town. At the moment, many Chinese factory owners are still busy looking for trucks. Not long ago, China unexpectedly supported UN Resolution 2371. This move caused quite a few complaints among Chinese investors in North Korea since they were caught unprepared.

Source: DailyNK, August 17, 2017
http://www.dailynk.com/chinese/read.php?cataId=nk00600&num=15705

China Economy: India’s Interest Rate Cut Exposed the Fragile Side of Its Economy

China Economy recently reported that India’s central bank just announced an interest rate cut. This is the first time since the end of last year that an Asian central bank has cut its interest rate. The cut brought India’s interest rate to a seven-year low. Apparently, the Indian economy is facing a serious challenge. Ever since Indian Prime Minister Narendra Modi’s banknote demonetization last year, India’s manufacturing and consumer spending has been suffering major declines. The Modi administration also started its tax reform in July, which caused serious chaos in India’s supply chains as well as distribution channels. It significantly worsened India’s commercial market to its “lowest point” since the global financial crisis. Although the tax reform may have some benefits in the long run, the solution for the immediate chaos should not depend on creating a distraction by triggering military disputes with neighboring countries, which will prove to be “extremely stupid.”

Source: China Economy, August 7, 2017
http://www.ce.cn/xwzx/gnsz/gdxw/201708/07/t20170807_24836070.shtml

The Paper: India Started Charging China Anti-Dumping Duties in 93 Categories

The well-known new Chinese news site The Paper recently reported that the Indian government started charging anti-dumping duties in 93 categories of products imported from China. The decision was made after key players in the Indian tire industry met with government officials. The 93 categories include products in a wide range of industries such as chemical and petrochemical, steel and other metal products, fiber and yarn, mechanical products, rubber or plastic products, power electronics and different types of consumer goods. India also launched an anti-dumping investigation in July on photovoltaic cells and modules from China, Taiwan, and Malaysia. India currently has a US$51 billion trade deficit with China. Indian media have been complaining about cheap Chinese products filling up the Indian market. However, reports from India’s own market study agencies showed that Indian consumers have preferred affordable Chinese products that typically are of better quality that India’s similar ones. According to the Chinese Ministry of Commerce, in the first half of this year, India became the country that had the largest number of anti-dumping investigations against China.

Source: The Paper, August 11, 2017
http://www.thepaper.cn/newsDetail_forward_1760000

BBC Chinese: Sri Lanka Turned Control of Port Hambantota over to China

BBC Chinese recently reported that the government of Sri Lanka reached and signed an agreement with China which will give China full control of the deep-sea port of Hambantota. Sri Lanka explained that, under the US$1.1 billion for 99 years agreement, China will only use the port for commercial purposes. The deal had been shelved for months due to the concern that China might use the port for military purposes. Port Hambantota sits at a critical spot that connects Asia and Europe on the Indian Ocean. According to the Sri Lanka government, the income collected can be used to pay off foreign debts. However, the plan requires moving thousands of villagers out of the region. The government promised new land for these people. Port Hambantota is an important part of China’s “The Belt and Road” grand plan. Multiple China’s trade arch-rivals, such as India and Japan, have been paying close attention to this latest development in the region.

Source: BBC Chinese, July 29, 2017
http://www.bbc.com/zhongwen/simp/world-40762012

China Threatens Military Action at Border Standoff in Doklam

On August 4, Haiwai Net, People’s Daily’s website targeting overseas readers, published a commentary which reiterated China’s position on the border conflict in Doklam. It warned that if India does not withdraw its troops, China will not rule out completely the option of taking military action. It stressed that for India to send troop across the border represents a very serious invasion. It alerted (India) that China will not back off from its position and will resort to all necessary measures to protect its legal rights. It warned that India should not insist on stirring up trouble for China as it will not benefit in any way from doing so.

Also on August 4, Huanqiu published an article in English. According to the Huanqiu article, from Thursday to Friday, two ministries and four institutions, including the Chinese foreign ministry, the defense ministry, the Chinese Embassy in India and People’s Daily, released statements or commentaries on the military standoff between China and India in Doklam, Tibet Autonomous Region. China urged India to pull back the trespassing troops to the Indian side of the boundary immediately and called on them to address the situation in a proper manner to restore peace and tranquility in the border region swiftly.

Ren Guoqiang, a spokesperson for the defense ministry said in a statement posted on its website late Thursday night that, “The series of remarks from the Chinese side within a 24-hour period send a signal to India that there is no way China will tolerate the Indian troops’ incursion into Chinese territory for too long.”

Hu Zhiyong, a research fellow at the Institute of International Relations of the Shanghai Academy of Social Sciences said, “If India refuses to withdraw, then within two weeks, China may conduct a small-scale military operation.”

Source:
1. Huanqiu (Global Times), August 4, 2017
http://www.globaltimes.cn/content/1059727.shtml
2. Haiwai Net, August 4, 2017
http://opinion.haiwainet.cn/n/2017/0804/c353596-31054539.html

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