Tuesday, May 18, 2021
Welcome to this week’s issue of China Briefing’s Belt & Road Initiative Weekly Investor Intelligence round up.
US businesses in China are facing pressures under the current political and trade climate between Washington and Beijing, leading Tesla to suspend development of its Shanghai facilities and look elsewhere for servicing the Asian market for its EV vehicles – the first time anti-China investment sentiment has affected such a large corporate investor and a sign of increasing politicization of US business interests.
China though has been aware for several years that at some point the US could place such pressures on their economy by manipulating investors away from the country. That has become apparent with the trade figures over the past seven years between China and Belt & Road Initiative countries reaching US$9.2 trillion.
We also examine how China is further developing trade and investment from Central Asia and how tiny Hainan Island is deliberately creating policies to woo Russian and other foreign investors.
Elsewhere we examine Russia’s continuing investment trends to the East and look at how the Digital Yuan is shaping up to affect business.
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Tesla has postponed plans to expand its Shanghai facilities due to rising US-China tensions. It indicates that the US-China decoupling rhetoric from the US political class may be spreading into the corporate sector. We examine Tesla’s options.
Statistics released by Chinese official sources at the Fifth Annual Silk Road Expo in Xi’an this weekend have revealed that the total trade volume between China and the Belt and Road countries amounted to U$9.2 trillion from 2013 to 2020.
Central Asia comprises of five states with a combined population of 77.2 million. Their economies have considerable potential to develop, with target GDP, based on PPP, at an aggregate US$900 billion.
Hainan provides for the exemption from import duties for foreign products exported to mainland China, if at least 30 percent of added value was created due to processing in Hainan.
The Eurasian Economic Union – comprising Armenia, Belarus, Kazakhstan, Kyrgyzstan, and Russia – achieved US$622.8 billion foreign trade in 2020. Upcoming FTA will significantly boost its Central and South Asian effectiveness.
Alibaba’s online grocery service and food delivery units, including ele.me food delivery system, Tmall supermarket, and Hema grocery stores, are included in China’s digital yuan pilot program. Users of these platforms may find a “digital yuan” option in their payment options.
We discuss the recent changes to China’s export tax rebates regime and provide suggestions on how to prevent non-compliance, maintain access to benefits, and manage corporate risks in a practical way.
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