The latest news on US-China business, commerce and industry

By Angela Bao

November 1, 2021

Janet Yellen, Chairman of the Federal Reserve. (Photo credit): Burton

United States, China Continue Talks on Bilateral Ties

US Treasury Secretary Janet Yellen and Chinese Vice Premier Liu He held a video conference on October 26 to discuss bilateral relations and the “macroeconomic situation.” According to a statement from the Chinese Ministry of Commerce, the two sides have said they need to strengthen communication and coordination on macroeconomic policies, but the Chinese side has expressed concerns about US tariffs and the treatment of Chinese companies. Although Yellen did not elaborate, in a separate statement she said she “has frankly raised issues of concern.”

Liu He already had talks with Yellen earlier this year, as well as with US trade representative Katherine Tai. Earlier in October, Tai had a virtual meeting with Liu He to discuss China’s ability to meet trade commitments made under the phase one trade deal. More recently, Tai said her goal is to “turn the heat down” in business talks so the two sides can better discuss what is wrong with the relationship.

China is experiencing an economic slowdown

The Chinese economy grew only 4.9% in the third quarter of this year, compared to 7.9% in the second quarter, due to an energy crisis, shipping disruptions and a real estate crisis.

The massive energy crisis impacted the production of factories and even led to blackouts in some areas. China is heavily dependent on coal, but a combination of strong demand in early 2021 for construction projects and the government’s own goals of reducing carbon emissions have contributed to the crisis. Shipment delays have hit small Chinese manufacturers and resulted in lost orders and cutbacks in production, while the Communist Party’s attempt to reduce debt has had a huge impact on real estate developers like Evergrande.

Restrictions on the real estate sector began in the summer of 2020, when Beijing asked developers to reduce their debt, but the government doubled down on that decision earlier this year in an effort to lower house prices, which are responsible. of the worsening of China. income inequality. Real estate and its related industries account for up to 30% of China’s gross domestic product and could be one of the main obstacles to China’s future economic growth.

US issues $ 100 billion in export licenses to Huawei and minimum wage suppliers

The US Department of Commerce has issued more than $ 100 billion in export licenses to suppliers to Chinese company Huawei and Semiconductor Manufacturing International Corp. (SMIC) from November 2020 to April 2021, although both companies were blacklisted under the Trump administration due to national security concerns. Amid a global chip crisis, the Commerce Department granted 113 export licenses worth around $ 61 billion to Huawei suppliers and 188 export licenses worth around 42 billion dollars. billion dollars to minimum wage providers. Most of the licenses were for semiconductors and related manufacturing equipment.

According to the data, the US government granted licenses for nine out of 10 applications for SMIC providers and 69% of applications for Huawei providers during this period from November to April. The revelation is said to have “enraged” Chinese hawks in Washington, although an unnamed former Commerce Department official said the figures for this period are misleading and the blacklist’s ultimate goal has been successful.

“Dune” opens at Chinese box office

The long-awaited science fiction epic “Dune” opened in China with a solid $ 21.9 million in its first weekend, making it Hollywood’s fourth biggest opening in China for 2021. Maoyan, the best movie ticketing app in China, projects “Dune” to finish his run with around $ 35.2 million. However, the film performed particularly well in Imax theaters, earning $ 5.1 million, which is 23% of the film’s Chinese box office revenue, although Imax only accounts for 1% of the film’s total screens. country.

Despite the hype, “Dune” failed to reverse the Chinese war epic “The Battle of Changjin Lake”, which has now earned over $ 828 million since its release on September 30. The film was commissioned by the Communist Party’s Propaganda Department and depicts the defeat of the US military at the hands of the Chinese.

Tesla’s sales in China nearly half of U.S. sales

Tesla’s vehicle sales in China reached $ 3.11 billion in the third quarter of 2021, nearly half of Tesla’s $ 6.41 billion in sales in the United States. China now accounts for over 22% of Tesla’s total worldwide sales, up from just under 20% in 2020. Despite some PR issues this year, Tesla’s Model 3 and Y are among the top three energy vehicles. top-selling news in the Chinese market for the first three quarters of 2021.

China is the world’s largest automobile market. In particular, the Chinese new energy vehicle industry is expected to account for more than 35% of new vehicle sales on the mainland in 2025, according to the CEO of Chinese electric vehicle company Xpeng. In November 2020, the Chinese government imposed a mandate that 40% of all sales by automakers must be electric vehicles (EVs) by 2030, which is expected to significantly boost electric vehicle manufacturing and related industries.

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