The economy is STILL weak, plus the stock market is falling (for now). Will China pile on the debt to try to keep things moving?
Between the recent hacking incident and tensions in the South China Sea, can US-Sino relations stay on an even keel?
June didn’t answer these questions, but it brought them closer to a head.
Below are the key stories for June:
More stimulus amidst sluggish economy and falling stock market
Indicators remain weak. Some sense a bottoming out, but that’s not clear to all. Toward the end of June, the stock market plunged, followed by more stimulus from the government. Tying economic policy and stock market performance not without risk.
Stock Market: Leveling Off (for now)
China stock markets, which have been riding a wave of leverage, showed some signs of retreat toward the end of June. Given China’s economy and the role of leverage in the market’s rise, it’s hard to support the notion that the market will continue to advance. But a collapse isn’t a certainty either.
More E-Commerce Opened to Foreigners
China will allow full foreign ownership of some e-commerce businesses, aiming to encourage foreign investment and the development and competitiveness of the industry. The opening will apply to “online data handling and trade handling services.” It was not immediately clear how this would affect e-commerce companies already operating in China.
LAW & POLITICS
Hong Kong Rejects Beijing’s Democracy Plan
Beijing’s democracy plan, which was the subject of major protests in HK this summer, finally came to a vote in the HK legislature and was voted down. Beijing won’t budge so more confrontation on the way
Law & Politics Round Up: NGO’s under scrutiny and a prisoner talks
A draft law from China would put NGO’s, including industry groups, under close supervision by China’s Public Security Bureau, a position that will likely make it difficult to operate. Upon his release, a Brit who was jailed for illegal data gathering tells of withheld medical treatment and falsified confessions.
South China Sea Tension: Maybe nearing a lull, definitely not resolved
China is (maybe) pausing land reclamation. The country’s opposed to China’s actions are unifying and arming themselves. The G-7 expressed its opposition to China’s actions. Meanwhile, China remains resolute in defense of its strategy. Tensions may drop, but likely only temporarily.
China likely behind huge hack of US government
The US government believes that a hack of the Office of Personnel Management likely originated in China. Background data, and possibly security clearance data, relative to 4-32 million American government workers (past and present) was stolen.
US China Strategic and Economic Dialogue: Few tangible results, as expected
Seventh annual meeting between the US and China. As usual was simply a dialogue, not a meeting meant to lead to major agreements. This time main purpose of the meeting is to prepare for President Xi Jinping’s visit to the US in September of this year.
More than 400 Dead in Shipwreck on the Yangtze
A ship carrying mostly senior citizens on a tour of the Yangtze River sunk on June 1 during a storm over the section of the river that flows through the central province of Hubei. Of more than 450 on the ship, only 14 survivors have been found.