Global investors this week seemed to shrug off anxieties about a US – China trade war and focus instead on news that North Korean dictator Kim Jong-un steamed by armored train from Pyongyang to Beijing for a meeting with Chinese president Xi Jinping.
Kim’s trip was extraordinary: his first venture abroad since he came to power in 2011, and his first face-to-face encounter with another head-of-state. The summit was all the more remarkable given the intense acrimony in recent months between North Korea and the world’s two leading powers, the US and China.
It has long been thought that Xi and Kim hold each other in disdain. And yet one would never have guessed that from accounts this week in China’s state-controlled media, which showed Kim and his wife, Ri Sol-ju, receiving a warm welcome in Beijing. Kim, in tortoise-shell spectacles and pin-striped Mao suit, took dutiful notes on Xi’s remarks.
There was a certain logic to Kim’s cordial reception in China. The visit to Beijing came days after Donald Trump declared his willingness to meet with the North Korean leader. Trump’s announcement caught Beijing off guard. From his first meeting with Xi, Trump promised that if China would cooperate in tightening economic sanctions on North Korea, the US would refrain from taking a hard line against what it perceived to be China’s unfair trade practices. Xi was happy to accept that deal. Rightly or wrongly, many Chinese officials feel China has done its share and more in restricting trade with North Korea—only for Trump to push ahead with tough trade sanctions against China anyway.
As Kim cozied up to Xi, Trump seemed to be recalibrating his threats to slap tariffs on Chinese imports. On Sunday, Treasury Secretary Steven Mnuchin said he was optimistic the US would be able to negotiate a solution with China counterparts to avoid tariffs. On Monday, the Wall Street Journal reported that the US and China have begun “behind-the-scenes negotiations” to improve US access to Chinese markets. That news sparked a 3.9% rally on the Dow Jones industrial average, reversing the previous week’s losses. By week’s end, even US trade representative Robert Lighthizer, one of the administration’s fiercest China hawks, seemed to be taking a more dovish line.
More China news below.
Trade and Economy
Counter measures. China will impose counter tariffs on a broad range of U.S. businesses from agriculture to aircraft, autos, semiconductors and services if the trade conflict with the United States continues to escalate, Chinese state-owned media China Daily newspaper said in an editorial on Thursday, a day after US Trade Representative Robert Lighthizer said he would give China a 60-day window before tariffs on Chinese goods take effect. It also quoted Chinese Premier Li Keqiang, who said that China was open to dialogue but “fully prepared with countermeasures”. Reuters
Market debut. iQiyi Inc, a Chinese Netflix-style video streaming service controlled by Chinese tech titan Baidu, raised $2.25 billion in a U.S. initial public offering on Thursday. The stock opened at $18.20 but fell slightly to $17.80 by lunchtime, giving iQiyi a market valuation of about $12.6 billion. Bloomberg
Course change. Wu Xiaohui, the former chairman of China’s Anbang Insurance, has changed course and requested leniency at the end of his high-profile trial in Shanghai for alleged economic crimes such as fraud and a $10 billion embezzlement. Wu had initially contested the charges when the proceedings started Wednesday. Wall Street Journal
Technology and Innovation
Over to you. Airbnb has started disclosing host information to Chinese government agencies from Friday, in order to comply with local operating regulations in China. The San Francisco-based start-up moved to store its Chinese data locally in 2016 but China further introduced a strict cybersecurity law last year that requires foreign and local tech firms to offer technical support to authorities who wish to access it. Bloomberg
Name and shame. Traffic police in Shenzhen have partnered with AI firm Intellifusion to film jaywalkers and project their faces onto large screens near road junctions as a deterrent. But the dystopian policing doesn’t stop there: Intellifusion is now teaming up with social media platforms WeChat and Sina Weibo and local phone carriers to text jaywalkers the moment they offend. South China Morning Post
Is Meituan-Dianping ready for an IPO? Reuters thinks not. The Chinese start-up offering services from food delivery to transport has appointed advisors to prepare for a Hong Kong listing, which will bring its valuation up to $60 billion, but it has not been consistently profitable and a transition to public markets will distract founder Wang Xing and his team, said the commentary. Reuters
Sales frenzy. Tencent president Martin Lau sold 1 million of his shares in the company, reducing his stake to 0.48 percent from 0.49 percent. Tencent lost more than $51 billion in market value in two days last week on news of largest shareholder Nasper Inc’s 2 percent stake reduction for $9.8 billion, and also management’s warning of margin pressure. Reuters
Still hungry. Fosun International, the acquisitive Chinese conglomerate that owns Club Med and a stake in Cirque du Soleil, has plans to invest 20 billion yuan ($3.2 billion) in biotech, fintech and artificial intelligence technology in the next three years. This number will grow to at least 100 billion yuan in the next ten years, its executives added. South China Morning Post
In Case You Missed It
Xi adopts fatherly tone with wayward Kim Financial Times
Kim in Beijing: Why Xi’s still the one he needs to see BBC
Chinese e-commerce giant JD.com to list overseas apartments Financial Times
First licence for drone deliveries in China goes to SF Express TechNode
The world’s first blockchain toothbrush lets you mine coins by brushing your teeth TechNode
After Dominating The Consumer Drone Market, DJI Sets Its Sights On The Business World Fast Company
How clean indoor air is becoming China’s latest luxury must-have The Guardian
China is not impressed with McDonald’s famed Szechuan sauce Quartz
Politics and Policy
And the ‘twain shall meet. North and South Korea this week penciled in April 27 as the date for their first meeting since 2007 – and the first time current North Korean leader Kim Jong-un will hold a summit with South Korea. Kim will meet with South Korean president Moon Jae-in at the border village of Panmunjom. Meanwhile, Chinese internet regulators have been busy scrubbing China’s social media of references to Kim, who has been affectionately referred to by Chinese internet users as “Kim Pig,” “Third fat kid,” and their favorite, “Kim Fatty.” Quartz
This or that. Chinese and North Korean state media are reporting differing accounts of North Korean leader Kim Jong Un’s fence-mending trip to China, which hint at the enduring friction between Beijing and Pyongyang, says the Wall Street Journal. Chinese accounts highlighted the leaders’ discussions of relations and tensions while North Korean accounts played up the pageantry of the visit this week. Wall Street Journal
Bishop’s back. Bishop Chinese police have released Vincent Guo Xijin, an underground bishop operating in China’s Fujian province, after holding him for a day and banning him from attending mass, as Beijing and the Vatican prepare to seal a historic agreement on the appointment of prelates. Guo had been earlier asked by the Vatican to step aside for a prelate approved by China’s Communist government. South China Morning Post