China continues to reel from the last set of tariffs imposed by Trump. Is it prepared for a second round?

As additional tariffs are imminent upon Donald Trump's return to the White House, it's crucial that China prepares its countermeasures – this time with a clear understanding of what lies ahead.

Insole manufacturer, Peter Wang, imagines the potential implications of the proposed tariff system by incoming US President, Donald Trump. Rather than dwell on this, he prefers to think about the comparatively stress-free situation for Chinese exporters who have moved their operations to Southeast Asia.

After already scaling back his activities in the southern production centre of Dongguan due to a wider deceleration in the Chinese economy, a substantial increase in import tariffs from the US – where 80% of his goods are marketed – could spell disaster.

"If the trade taxes are enforced, my employees might become jobless, and I might consider relocating to Southeast Asia to explore new ventures," he expressed. This area has become a favored location for numerous Chinese producers, as deliveries can be directed via nations in that region to avoid US trade taxes.

Concerns similar to Wang's are widespread. If trade conflicts were to intensify again, triggered by Trump's suggested 60 per cent tax on all Chinese-made products, this could significantly hamper the growth of the globe's second most significant economy, which heavily depends on exports.

Experts suggest that China is now more equipped to handle any potential tariffs than it was during the initial wave under Trump's presidency. They propose that China has a wider range of strategies to soften the blow of any future developments, some of which could even significantly alter the international trade landscape.

Huawei aims for worldwide reach with its 'pure blood' operating system, though its current focus remains on China. The tech powerhouse from China has announced that by 2025, all its new devices will come with HarmonyOS Next, its own version of an Android competitor.

The Chinese smartphone manufacturer, which is under US sanctions, announced on Tuesday that starting from 2025, all of its upcoming smartphones and tablets will operate on HarmonyOS Next. This is the most recent version of Huawei's independently developed mobile platform, which no longer accommodates Android applications.

The upcoming launch of HarmonyOS Next on all new Huawei devices next year is expected to be tough due to the current scarcity of compatible applications, says Rich Bishop, the head of AppInChina, a company that publishes global software in China.

Bishop believes that attracting global developers who earn a minimal income from China could be quite challenging. This is because they might consider the expenses associated with creating and sustaining specialized versions of applications for HarmonyOS Next excessively high.

China requires an investment of US$1.4 trillion to enhance local consumption in light of the looming trade war 2.0. An HSBC Asset analyst asserts that this financial influx will be enough to invigorate consumer expenditure and the stock market.

According to HSBC Asset Management's 2025 investment forecast, China may require an extra 10 trillion yuan (equivalent to US$1.4 trillion) to boost local consumption and reestablish investor trust.

As the threat of another trade conflict with the US rises and China's real estate sector continues to stagnate, the country must find ways to stimulate economic growth through enhancing local demand, according to Caroline Yu Maurer, the leader of equities in China and main Asian regions.

She expressed that 10 trillion yuan would be adequate to boost consumer purchases and regain trust in Chinese stocks. She also noted that the financial infusion doesn't need to occur at once or within a single year, but investors would appreciate a clear strategy towards achieving this.

From the end of September, Beijing has initiated a multitude of strategies to stimulate its economy, ranging from reducing interest rates to decreasing the initial payment required for property purchases. These initiatives have propelled Chinese shares into an uncommon surge that hasn't been witnessed in years.

Nonetheless, the surge quickly ran out of momentum, since the eagerly awaited boost for the struggling real estate market and slow consumer expenditure didn't achieve the expected outcome.

The CSI 300 Index, a standard indicator for China, has experienced a drop of 10 per cent since reaching its height in mid-October. Additionally, the Hang Seng Index, known for its inclusion of numerous large Chinese mainland firms, has seen a near 17 per cent decrease.

Two minutes and fifty

Trump warns of implementing fresh anti-narcotic duties on China, Canada, and Mexico from the first day.

Chinese electric vehicles are ready to expand into international markets, with Hong Kong serving as a launch pad. Hong Kong has the potential to operate as a double-edged gateway, allowing Chinese electric vehicle manufacturers to reach out to foreign markets while also importing advanced technologies.

The first automotive industry supply chain summit, organized by the China Association of Automobile Manufacturers (CAAM), took place in Hong Kong on Wednesday. The event saw the participation of numerous electric vehicle manufacturers and government representatives, who came together to explore ways in which Hong Kong can assist mainland car producers in their international expansion efforts.

According to Fu Bingfeng, the secretary general of CAAM, Chinese automobile manufacturers encounter various obstacles when expanding their operations abroad. These include managing trade agreements, adhering to global regulations, enhancing brand visibility, offering post-purchase customer support, and navigating financial services.

"He emphasized that Hong Kong, with its inherent strengths as a global financial, trading and innovation hub, can significantly aid Chinese businesses in their pursuit of worldwide expansion."

"It can serve as a dual-channel portal for Chinese EV manufacturers to expand internationally and import innovative technologies."

Electric vehicle (EV) manufacturers in China are looking to expand globally due to intense local competition, robust sales, production growth, and foreign trade restrictions. In August, the Biden administration increased the import tax on Chinese EVs from 25% to a whopping 100%. Similarly, last month, the European Union hiked up tariffs on Chinese EVs to a maximum of 45.3%.

Unicorns from China are propelling Asia's growth narrative

TOJOY's chief executive advocates for enhanced international collaborations at the Smart Nation Expo

TOJOY's chief executive advocates for enhanced international collaborations at the Smart Nation Expo

[The information in this piece has been generated by our promotional collaborator.]

During the Smart Nation Expo 2024 held in Kuala Lumpur starting November 21, Ge Jun, the Co-Chairman of TOJOY Holding and the CEO of TOJOY Enterprise Services, gave an inspiring speech about the influence of China's unicorns on the future of productivity and innovation throughout Asia.

The executive's address, which was just a fraction of the company's overall participation at the fair, illuminated the transformative capacity of these rapidly expanding enterprises and emphasized the importance of enhanced international cooperation within the area. Chinese unicorn companies, those with a valuation exceeding US$1 billion, are not merely symbols of economic prosperity but are progressively regarded as catalysts for technological change.

Addressing a varied group of policy makers, corporate heads and creative thinkers, Ge outlined the idea of "new quality productive forces" backed by the Chinese government. This phrase refers to advanced productivity approaches that surpass conventional growth strategies.

"Unicorns are not solely focused on developing new business approaches," said Ge. "They are now making technological advancements that have the potential to revolutionize whole sectors."

A newly released White Paper discussing the development trajectory of China's Unicorn Enterprises, co-written by TOJOY and the GuoYan Institute of Economic Research, supports this perspective.

Hong Kong shares plummet following the largest increase in five weeks. The shares are finding it hard to recover from a drop that has pulled the standard down by over 15 per cent from the peak of this year in October.

The Hang Seng Index dropped by 1.2 per cent, closing at 19,366.96, and the Hang Seng Tech Index fell by 1.5 per cent. In the mainland, the CSI 300 Index declined by 0.9 per cent, while the Shanghai Composite Index pulled back by 0.4 per cent.

Shares in Hong Kong have been battling to recover from a downturn that has seen the key index fall by 16% since its peak in October, due to China's lackluster efforts to stimulate its economy and potential tariff actions by Donald Trump. The index saw a surge of over 2% on Wednesday, driven by the anticipation of more aggressive measures from Beijing to bolster the economy. A yearly economic conference is scheduled for the coming month, where President Xi Jinping along with other senior officials will convene to outline the primary policies for the upcoming year.

"The market is influenced by regulations. If there are gradually beneficial policies being introduced, like stabilizing the real estate market and promoting consumer spending, it will restore market confidence," stated Melody Lai, a researcher at SPDB International based in Hong Kong. "Prior to these policies being implemented, stocks will vary within a certain limit and chances will solely originate from specific sectors and stocks."

Technology Battle: New US restrictions on chips to further hinder China's drive towards self-sufficiency

The Chinese chip sector could see substantial effects if key local suppliers are banned, according to insiders.

The decision by Washington is anticipated to impact not only venture capital firms closely linked to the Chinese semiconductor industry, but also businesses higher up the supply chain like special gas suppliers. This information comes from an individual briefed about the situation, who chose to remain anonymous due to the delicate nature of the issue.

On Wednesday, the Bureau of Industry and Security, a branch of the US Commerce Department, chose not to provide any comments. Mao Ning, the spokesperson for China's foreign ministry, criticized the proposed US trade restrictions. She asserted that Beijing would take firm actions to protect the business interests of the mainland.

The forthcoming penalties are expected to significantly intensify the technological competition between the US and China, which has been on the rise since October 2023. This was when the Biden administration increased its export restrictions, initially implemented in 2022, aimed at China's semiconductor industry. These actions were taken due to fears that cutting-edge technology could potentially strengthen Beijing's military power.

What's causing the global excitement about LNG? As the planet grapples with an environmental emergency, liquefied natural gas presents a greener, more viable energy alternative. But what makes LNG crucial to the shift in energy use, and how does it impact everyday living?

From the desk of the Morning Studio editors, November 28

Continue reading to delve into the narrative

With the global climate emergency on the rise, liquid natural gas presents a greener, more viable energy alternative. However, why is LNG crucial to the shift towards sustainable energy, and in what ways does it impact our everyday lives?

From the Morning Studio Editors, November 28, 202

Continue reading to delve into the narrative

The top experts in climate science forecast a significant increase in worldwide temperatures, surpassing the globally set limits in the future years. Preventing this impending climate disaster makes the shift to greener energy sources even more essential.

In order to meet the temperature goals outlined in the Paris Agreement, natural gas is viewed as an appropriate interim energy source as we move towards more environmentally friendly options. Specifically, liquefied natural gas (LNG), which emits less carbon than other conventional fossil fuels like coal, is a key player in initiatives to control global warming, as per the scholarly research resource, ScienceDirect.

LNG towards a more sustainable future

However, first, what exactly is LNG?

Why do certain energy specialists champion LNG as a key energy resource that might fuel our future?

Petronas' initiatives towards carbon neutrality

Top figures in the industry are taking action to make sure that LNG fulfills its potential for a future with less carbon emissions. Petronas has been a leader in this field for over four decades, providing and moving LNG.

LNG plays a vital role in Petronas' plans for a future with reduced carbon emissions. However, the Malaysian energy company is also dedicated to decarbonisation and lowering operational emissions through a number of significant measures set out in its "Net Zero Carbon Emissions by 2050" roadmap.

In order to fulfill its goal of net-zero emissions, Petronas has pledged to meet the subsequent decarbonisation objectives:

Immediate Objectives

By the conclusion of 2024, Petronas aims to limit their Malaysian operations' greenhouse gas emissions to 49.5 million metric tonnes of carbon dioxide equivalent (MtCO₂e). Also, the goal is to cut their global natural gas value chain's methane emissions in half by 2025, as compared to the levels recorded in 2019.

In line with its goal to reach net-zero emissions, Petronas has pledged to meet the subsequent targets for carbon reduction:

Goals for the Intermediate Term

Petronas aims to cut its overall emissions by 25 per cent by the year 2030. This target includes a 70 per cent decrease in methane emissions from its global natural gas value chain, alongside a 50 per cent decrease in methane emissions from Malaysia's natural gas value chain, all measured from the baseline levels of 2019.

In order to fulfill its goal of net-zero emissions, Petronas has pledged to meet the subsequent carbon reduction objectives:

Ultimate Objective

Achieve a balance of zero carbon emissions through

LNG observed in real-world settings

Globally, the dependence on LNG is increasing at an impressive rate, signaling a worldwide progression towards more eco-friendly energy. This form of energy is already being utilized in numerous countries globally, with Asia – specifically Japan, South Korea, and China – being notable examples. Petronas, as one of the world's leading LNG producers, has supplied LNG to over 55 terminals in more than 25 countries around the globe. LNG is instrumental in people's daily routines, enabling everyday tasks to proceed without hitches.

For instance, Japan heavily depends on LNG, accounting for approximately 24 per cent of its overall energy consumption. The rise in reliance on LNG largely stems from the country's learnings from the 2011 earthquake and tsunami, which resulted in a Fukushima power plant being put out of action.

The main use for Japan's supply of LNG is in power generation, but it also serves as a source of heat and fuel for cooking in the majority of homes.

In Singapore, nearly 95% of the power comes from natural gas, viewed by the nation as the most eco-friendly type of fossil fuel. The nation is constantly on the lookout for cleaner energy imports from foreign countries, such as Malaysia and Indonesia.

The city state is also expanding its natural gas sources through an LNG terminal functioning on Jurong Island, with intentions to construct a second terminal soon to assist new industrial areas and power stations.

The usage of LNG is becoming more popular due to its adaptability and effectiveness.

In 2023, the worldwide trade in liquefied natural gas (LNG) saw a rise to 401.4 metric tonnes, marking an increase of 8.4 metric tonnes. The United States held the top spot as the largest exporter of LNG in the same year, distributing a total of 84.5 metric tonnes, which signifies an 8.9 metric tonnes increase from the previous year.

China reclaimed its position as the globe's foremost LNG importer in 2023, with a total import of 71.2 metric tonnes, showing an increase of 7.6 metric tonnes from 2022.

As global efforts towards decarbonisation gain momentum, LNG is expected to play a pivotal role in leading the shift towards sustainable energy. The gas industry itself is evolving through a decarbonisation phase, which involves speeding up the use of carbon capture, low-carbon solutions, and renewable energy, as well as the eradication of methane emissions. These measures solidify the role of LNG and the wider energy sector in achieving global climate objectives. Through concerted efforts, the world can anticipate a greener and more sustainable future.

Narrative crafted by Morning Studio

Creative Supervisors

Venice Ng, Wing Chan

Editors

Fairoza Mansor, Reggie Ho

Assistant Editor

Megan McCoid

Observation Scope | China's tariff issues are minor compared to Germany's economic difficulties

An escalating trade conflict could cause more chaos to Europe's biggest economy, which is already grappling with economic slowdown, decreased exports, and geopolitical stress.

Trump, known for his unpredictable nature, has once again sparked debate regarding the depth, extent, and tactics of his tariff policies. Nevertheless, a quick look at the trade surpluses of the countries targeted by these policies – these three economies along with the euro zone have the biggest bilateral surpluses with the US – indicates Trump is acting consistently with his usual behavior.

Trump has a strong distrust towards trade, seeing it only from the shallow perspective of two-party balances. He is targeting countries that have significant trade surpluses with the US. According to the incoming president and his team, any country that has a large surplus with the US is likely taking high-paying manufacturing jobs away from the US, thus undermining the middle class.

With a significant downturn in China's economy, European exporters have turned to the US market to compensate for the shortfall. This is particularly evident in Germany, where trade surplus solely with the US makes up 40 per cent of the EU's total, as stated by GlobalData TS Lombard.

Standard Chartered's CEO suggests that while US import duties may cause disturbances, 'markets will find balance'. He asserts that 'Global trade is pushing ahead. It continues to provide vast benefits globally, a fact that is widely acknowledged,' says Winters.

"Although there may be disturbances, markets will eventually balance out. If a nation imposes a trade tax on another, commerce will simply redirect itself," Winters stated on his recent trip to Hong Kong.

Numerous promises were given throughout the [US presidential] campaign, and, in terms of their general intent, I'm certain they'll be respected.

The bank headquartered in London, that earns a significant portion of its revenue from Asia, is relying on its expertise in international transactions and investments for future expansion. In addition, it plans to focus on wealth management to serve the increasing number of wealthy clients in Asia.

In Vietnam, China emerged as the leading direct investor, accounting for 29.7% of all fresh initiatives in the initial seven months of the current year.

The 'Emperor's Home' penthouse in Hong Kong was purchased at a discount of 68% as financially struggling magnates sell off their assets. Analysts predict that this trend of asset disposal by owners under economic stress will persist until there is a significant reduction in interest rates.

Tycoons from Hong Kong and mainland China, under financial strain, persist in selling their real estate properties in the city at a loss. This is happening as the market experiences a resurgence in deals, drawing in more individuals looking for good deals.

A tri-level penthouse apartment located in The Arch complex on top of Kowloon station in Hong Kong was sold on Tuesday. This apartment was part of a collection of six properties in receivership that were sold for a total of HK$410 million (US$52.7 million). This is a significant 68% reduction from the original asking price of HK$1.3 billion in 2021. The property collection, which included six parking spaces, was previously owned by Hui Chi-ming, the ex-chairman of Sino Union Petroleum & Chemical International, as per the Land Registry.

Unprecedented interest rates, along with a decline in the real estate market in Hong Kong and mainland China, have compelled some heavily indebted borrowers to resort to desperate sales. In the meantime, the prolonged slump in the property market has dwindled the personal wealth of regional and mainland business proprietors and real estate magnates.

"Owners under financial strain will persist in selling off their properties until there is a significant decrease in interest rates," stated Tom Ko, the executive director and leader of capital markets for Cushman & Wakefield in Hong Kong.

In the meantime, the relatives of the deceased 'Shop King' of Hong Kong, Tang Shing-bor, are attempting to offload their Hotel Ease Access located in Tsuen Wan, as stated by Cushman & Wakefield, the exclusive broker. The 21-floor hotel, which comprises 170 rooms, is now priced at HK$300 million, experiencing a 40 per cent depreciation from its initial selling price last year.

Naomi Osaka shares personal experiences at Women Aces in Leadership gathering

The renowned tennis player teamed up with other female sportspersons and worldwide executives at the discussion event, which took place alongside the Prudential Hong Kong Tennis Open.

One hour and seventeen

Naomi Osaka is set to be one of the speakers at the Women Aces in Leadership event.

In both the sporting and corporate world, women have tirelessly battled for upper echelon positions. This made the Prudential Hong Kong Tennis Open an appropriate occasion to gather a renowned group of international tennis athletes and high-ranking executives from across the globe for a special event celebrating the achievements of women leaders.

Last month, Prudential hosted the Women Aces in Leadership event in Hong Kong. This event was linked with the women's tennis tournament that Prudential has been sponsoring since 2014, as a part of their initiative to emphasize the significance of resilience to the younger generations. Additionally, Prudential aims to promote diversity, equality, and inclusivity in both the sports and business sectors.

At the commencement of the event, Angel Ng, the Regional Chief Executive Officer for Greater China's customer and wealth division at Prudential Group, stated: "Promoting a healthy and active lifestyle among individuals is one of Prudential's key objectives. This is why we are intensely dedicated to backing women in the field of sports."

Over 120 attendees convened to listen to two panel debates where seven women achievers from the spheres of sports and business, featuring four-time Grand Slam tennis winner Naomi Osaka, recounted their individual paths to triumph in their respective industries.

The initial conversation, named "Emerging Talents: Guidance and Psychological Strength for Future Leaders", showcased Osaka as well as Lilian Ng, the director in charge of the Strategic Business Group at Prudential Group, and Mary Huen, the Chief Executive Officer for Hong Kong, Greater China, and North Asia at Standard Chartered Bank.