ChinaBusiness

Weekly3 September 2019

FCCC/EUCBA ACTIVITIES

Win in China: Business Models & China Entry Strategies – 8 October 2019 – 12:30-16:30 – Kortrijk

China has shown unprecedented economic growth since its market opened four decades ago, rising to become the world’s second-largest economy today. What is happening in China? What are the new business opportunities for European companies? How can you break into the Chinese market and win?

Within the booming Chinese market, there are always changes and challenges, forcing companies to rethink their China strategies. There are many different business models and China entry strategies. Knowing what has worked and failed for other companies can help you succeed in China.

The Flanders-China Chamber of Commerce (FCCC), VOKA West-Flanders and the Cheung Kong Graduate School of Business (CKGSB) have the pleasure to invite you to the seminar focused on: Win in China: Business Models & China Entry Strategies.

ChinaBusiness

Weekly3 September 2019

FCCC/EUCBA ACTIVITIES

Win in China: Business Models & China Entry Strategies – 8 October 2019 – 12:30-16:30 – Kortrijk

China has shown unprecedented economic growth since its market opened four decades ago, rising to become the world’s second-largest economy today. What is happening in China? What are the new business opportunities for European companies? How can you break into the Chinese market and win?

Within the booming Chinese market, there are always changes and challenges, forcing companies to rethink their China strategies. There are many different business models and China entry strategies. Knowing what has worked and failed for other companies can help you succeed in China.

The Flanders-China Chamber of Commerce (FCCC), VOKA West-Flanders and the Cheung Kong Graduate School of Business (CKGSB) have the pleasure to invite you to the seminar focused on: Win in China: Business Models & China Entry Strategies.

NEWSLETTER 3 SEPTEMBER 2019 2

This event provides a comprehensive discussion of the Chinese business environment. There is also a large selection of case studies of Western companies that have failed in China, which will help avoid the same mistakes. Finally, the course aims to help you find the right China entry strategies and business models.

Benefits* Understand the unique business models that work in China to fine-tune your strategy planning, product design, and

market positioning.• Clarify the real reasons behind the failures of some Western companies: let the mistakes of others help you build the

right strategies.• Master your vision of the Chinese market and build new approaches for your company to succeed in China.

Intense Learning with Substantial GainsWin in China is a half-day China immersion program for European senior executives to learn, rethink and develop their Chinastrategies. During the course, you will discuss new business model concepts and frameworks with the CKGSB faculty and your peers. Explore their applications in real-life contexts through interactive group exercises and simulations. You will also learn from the successes and failures of large and small companies operating in China. All these experiences will inspire you to rethink your approach to the Chinese market.

Course Outline• 4 reasons why companies failed in China• Top tips on what to learn based on previous failures • 4 popular business models in China• 8 strategies to enter the Chinese market• 10+ real-life case studies • 2 group exercises and class discussions

Attendees Profile:CEOs, founders and managers from companies interested in doing business with China.

Agenda:12:00 – 12:30 Signup & Networking12:30 – 12:45 Opening Remarks and introduction Gwenn Sonck, Executive Director, Flanders-China Chamber of Commerce and VOKA West-Flanders12:45 – 15:30 Keynote Speech “Win in China: Business Models & China Entry Strategies” Bo Ji, Chief Representative & Assistant Dean of CKGSB Europe15:30 – 16:00 Company testimonial16:00 – 16:30 Q&A Session 16:30 – 17:00 Networking

If you are interested to participate, please send an e-mail to info@flanders-china.be Subscription details will soon be online at: www.flanders-china.be

NEWSLETTER 3 SEPTEMBER 2019 2

This event provides a comprehensive discussion of the Chinese business environment. There is also a large selection of case studies of Western companies that have failed in China, which will help avoid the same mistakes. Finally, the course aims to help you find the right China entry strategies and business models.

Benefits* Understand the unique business models that work in China to fine-tune your strategy planning, product design, and

market positioning.• Clarify the real reasons behind the failures of some Western companies: let the mistakes of others help you build the

right strategies.• Master your vision of the Chinese market and build new approaches for your company to succeed in China.

Intense Learning with Substantial GainsWin in China is a half-day China immersion program for European senior executives to learn, rethink and develop their Chinastrategies. During the course, you will discuss new business model concepts and frameworks with the CKGSB faculty and your peers. Explore their applications in real-life contexts through interactive group exercises and simulations. You will also learn from the successes and failures of large and small companies operating in China. All these experiences will inspire you to rethink your approach to the Chinese market.

Course Outline• 4 reasons why companies failed in China• Top tips on what to learn based on previous failures • 4 popular business models in China• 8 strategies to enter the Chinese market• 10+ real-life case studies • 2 group exercises and class discussions

Attendees Profile:CEOs, founders and managers from companies interested in doing business with China.

Agenda:12:00 – 12:30 Signup & Networking12:30 – 12:45 Opening Remarks and introduction Gwenn Sonck, Executive Director, Flanders-China Chamber of Commerce and VOKA West-Flanders12:45 – 15:30 Keynote Speech “Win in China: Business Models & China Entry Strategies” Bo Ji, Chief Representative & Assistant Dean of CKGSB Europe15:30 – 16:00 Company testimonial16:00 – 16:30 Q&A Session 16:30 – 17:00 Networking

If you are interested to participate, please send an e-mail to info@flanders-china.be Subscription details will soon be online at: www.flanders-china.be

NEWSLETTER 3 SEPTEMBER 2019 3

BioBo Ji is an inspiring TEDx speaker, a Chinapreneur, and game changer for global startupsexpanding into ChinaBo is currently the Assistant Dean & Chief Representative for Europe at Cheung Kong GraduateSchool of Business (CKGSB), a top business school with more than 10,000 chairman/CEO levelalumni in China. Bo had an over-20-year successful corporate career in Global Business Development, Innovation, Strategy, Supply Chain Management, M&A, etc. He served as the senior executive at the headquarters of many fortune 500 companies such as Monsanto, Cargill,Pfizer, Wrigley and Mars. After a long corporate life, Bo became a serial entrepreneur and investor. Bo founded the “China Start” to bring global startups and scale-ups to China. He created a paradigm shift for global startups to expand to China instead of Silicon Valley. Combining his extensive business experiences and in-depth knowledge, Bo has been teaching

EMBA/MBA at some of the world’s most prestigious business schools such as INSEAD, Esade, MIT, New York University, Sydney School of Entrepreneurship, Hong Kong University of Science and Technology, Technology University of Munich (TUM), Tsinghua University, CKGSB, Zhejiang University, Sun Yat-Sen University, Shanghai Jiaotong University and Taiwan’sNational Chengchi University etc. Bo offers more than 10 innovation and entrepreneurship related lectures and seminars worldwide, such as “Customer focused innovation”, “Steve Jobs Mind: Disruptive Innovator’s DNA” ,“Capturing the Audience: How to pitch for investment?” , “Question Storming”, “Win in China” , “Unicorn or Dragon: How to tap into the Chinese Market for Growth”, “The New Trend of the Global Innovation and Entrepreneurship”, etc.

In addition, Bo offers advice to Chairmen and CEOs at large corporations. He also serves as a mentor & advisor to startups and scale-ups at incubators, accelerators and co-working spaces around the world such as Plug & Play, China Accelerator, Sydney School of Entrepreneurship, Techcode, etc.

Bo is a well sought inspiring speaker at renowned international conferences, forums, TV media and annual corporate meetings. He frequently appears at large scale tech/startup conferences around the world as keynote speaker, such as Mobile World Congress (Spain), London Tech Week (UK), Pioneers 18 (Austria), Wolves Summit (Poland), Horasis Global Meeting (Portugal), UN Empretec Global Summit (Turkey), Arctic 15 (Finland), Info Share (Poland), Startup Village (Russia), Lean Startup Europe (Netherlands), Campus Party (Italy), European Startup Days (Poland), OurCrowd Global Investor Summit (Israel), Technology Innovation Summit (China), Startup LaunchPad (Hong Kong), India Blockchain Week (India) etc.Bo is well connected globally and has an extended global political and business network with 30,000+ startup founders, 5000+ investors, and 15,000+ corporate CEOs.

About Cheung Kong Graduate School of BusinessCheung Kong Graduate School of Business (CKGSB) aims to cultivate business leaders with a global vision, a humanistic spirit, a strong sense of social responsibility and an innovative mind-set. Established in Beijing in November 2002 with generous support from the Li Ka Shing Foundation, CKGSB is China’s first faculty-governed, non-profit, independent business school.

Since its founding, CKGSB has developed into a prominent business school with more than 40 full-time professors, who haveearned their PhDs or held tenured faculty positions at leading business schools such as Harvard, Wharton and Stanford. Their research has provided the basis for more than 400 case studies of both China-specific and global issues. CKGSB also stands apart for its unmatched alumni network. More than half of CKGSB’s 10,000+ alumni are at the CEO or Chairman leveland, together, their companies’ revenues account for 1/5 of China’s GDP.

CKGSB strives to understand business in a better-rounded capacity, beyond the traditional boundaries of business schools. For instance, in 2005, CKGSB pioneered the integration of the humanities into its curricula to give students a long-term and holistic view of business and development. The school’s EMBA students—more than 80% of whom are above the Vice President level—are also required to complete six days of community work before receiving their degrees. In 2014, CKGSB was the first Chinese business school to develop a philanthropy program aimed at equipping the school’s alumni with expertise on setting up and managing foundations and engaging in philanthropy.

NEWSLETTER 3 SEPTEMBER 2019 3

BioBo Ji is an inspiring TEDx speaker, a Chinapreneur, and game changer for global startupsexpanding into ChinaBo is currently the Assistant Dean & Chief Representative for Europe at Cheung Kong GraduateSchool of Business (CKGSB), a top business school with more than 10,000 chairman/CEO levelalumni in China. Bo had an over-20-year successful corporate career in Global Business Development, Innovation, Strategy, Supply Chain Management, M&A, etc. He served as the senior executive at the headquarters of many fortune 500 companies such as Monsanto, Cargill,Pfizer, Wrigley and Mars. After a long corporate life, Bo became a serial entrepreneur and investor. Bo founded the “China Start” to bring global startups and scale-ups to China. He created a paradigm shift for global startups to expand to China instead of Silicon Valley. Combining his extensive business experiences and in-depth knowledge, Bo has been teaching

EMBA/MBA at some of the world’s most prestigious business schools such as INSEAD, Esade, MIT, New York University, Sydney School of Entrepreneurship, Hong Kong University of Science and Technology, Technology University of Munich (TUM), Tsinghua University, CKGSB, Zhejiang University, Sun Yat-Sen University, Shanghai Jiaotong University and Taiwan’sNational Chengchi University etc. Bo offers more than 10 innovation and entrepreneurship related lectures and seminars worldwide, such as “Customer focused innovation”, “Steve Jobs Mind: Disruptive Innovator’s DNA” ,“Capturing the Audience: How to pitch for investment?” , “Question Storming”, “Win in China” , “Unicorn or Dragon: How to tap into the Chinese Market for Growth”, “The New Trend of the Global Innovation and Entrepreneurship”, etc.

In addition, Bo offers advice to Chairmen and CEOs at large corporations. He also serves as a mentor & advisor to startups and scale-ups at incubators, accelerators and co-working spaces around the world such as Plug & Play, China Accelerator, Sydney School of Entrepreneurship, Techcode, etc.

Bo is a well sought inspiring speaker at renowned international conferences, forums, TV media and annual corporate meetings. He frequently appears at large scale tech/startup conferences around the world as keynote speaker, such as Mobile World Congress (Spain), London Tech Week (UK), Pioneers 18 (Austria), Wolves Summit (Poland), Horasis Global Meeting (Portugal), UN Empretec Global Summit (Turkey), Arctic 15 (Finland), Info Share (Poland), Startup Village (Russia), Lean Startup Europe (Netherlands), Campus Party (Italy), European Startup Days (Poland), OurCrowd Global Investor Summit (Israel), Technology Innovation Summit (China), Startup LaunchPad (Hong Kong), India Blockchain Week (India) etc.Bo is well connected globally and has an extended global political and business network with 30,000+ startup founders, 5000+ investors, and 15,000+ corporate CEOs.

About Cheung Kong Graduate School of BusinessCheung Kong Graduate School of Business (CKGSB) aims to cultivate business leaders with a global vision, a humanistic spirit, a strong sense of social responsibility and an innovative mind-set. Established in Beijing in November 2002 with generous support from the Li Ka Shing Foundation, CKGSB is China’s first faculty-governed, non-profit, independent business school.

Since its founding, CKGSB has developed into a prominent business school with more than 40 full-time professors, who haveearned their PhDs or held tenured faculty positions at leading business schools such as Harvard, Wharton and Stanford. Their research has provided the basis for more than 400 case studies of both China-specific and global issues. CKGSB also stands apart for its unmatched alumni network. More than half of CKGSB’s 10,000+ alumni are at the CEO or Chairman leveland, together, their companies’ revenues account for 1/5 of China’s GDP.

CKGSB strives to understand business in a better-rounded capacity, beyond the traditional boundaries of business schools. For instance, in 2005, CKGSB pioneered the integration of the humanities into its curricula to give students a long-term and holistic view of business and development. The school’s EMBA students—more than 80% of whom are above the Vice President level—are also required to complete six days of community work before receiving their degrees. In 2014, CKGSB was the first Chinese business school to develop a philanthropy program aimed at equipping the school’s alumni with expertise on setting up and managing foundations and engaging in philanthropy.

NEWSLETTER 3 SEPTEMBER 2019 4

CKGSB is also Mainland China’s most globalized business school. Besides its three campuses in Beijing, Shanghai and Shenzhen, the school has established offices in London, New York and Hong Kong. Moreover, it has formed strategic partnerships for joint programs and research with leading schools worldwide, such as Columbia Engineering in the US, IMD in Switzerland and FDC in Brazil.

The school offers the following innovative courses: MBA, Finance MBA, Executive MBA, Business Scholars Program (DBA); and Executive Education programs.

Seminar: How to export chocolate to China10 October 2019 – 10h00 – 17h00 – Ghent

On 10 October 2019, the Flanders-China Chamber of Commerce, Ghent University and Cacaolab, will organise a seminar on how to export chocolate to China. During this session, experts will give you a better insight into the Chinese market, consumer behaviour, cultural differences, export regulations, legal aspects and stability issues of exported chocolates. This will be done through different case studies. You will also learn how to export through the different Chinese e-commerce platforms. Even more importantly, you will directly meet the right contacts, who can introduce your product on the Chinese market.

This seminar is informative, practical and will help you to get connected with the right people!

Program:10:00 Welcome by FCCC and Ghent

University/Cacaolab

10:10 How to deal with Cultural Differences between East and West by Gwenn Sonck, Executive Director, Flanders-China Chamber of Commerce

10:30 How to export snacks to China? Mr Yu Xiaoning, Founder of EG DistriSelecta (a Beijing-based importing company operating in the F&B Sector for 25 years –mostly beer, chocolate, biscuits, and otherFMCG).

Overview of the marketConsumer behaviour and future outlookCase Studies of EU Companies exportingto China

12:30-13:30 Lunch

13:30-14:10 Exporting via E-commerce: Mr Yu Yingbao, representative Shanghai Overseas Promotion Center for Service Trade (SOPCST)

14:10-14:30 Legal aspects when exporting to China: speaker, John Balzano, Partner Covington and Burling (labeling, IPR)

14:30-15:00 How to guarantee the stability and shelf life of my products by Prof. dr. ir. Koen Dewettinck (Head of the Laboratory of food Technology and Engineering of Ghent University and CEO of cacaolab (bvba) and Mrs Claudia Delbaere (Project Manager at Cacaolab bvba).

15:00-16:00 Testimonials followed by Q&A

Cost:The entry fee for this seminar is €600 (excl. VAT) per person for registrations before September 16 th. For registrations from September 16th onwards, the registration fee is €750 (excl. VAT) per person.Participants of SME's can also apply for a subsidy to reduce the price by 30% (for medium enterprises) or 40% (for small enterprises).

Location: House of the Province of East-Flanders:Gouvernementstraat 1, 9000 Gent

Flanders-China Chamber of Commerce:info@flanders-china.be - www.flanders-china.beCacaolab: Claudia.Delbaere@Cacaolab.be – www.cacaolab.be

Subscribe via this link: http://www.cacaolab.be/?q=content/how-export-chocolates-china

NEWSLETTER 3 SEPTEMBER 2019 4

CKGSB is also Mainland China’s most globalized business school. Besides its three campuses in Beijing, Shanghai and Shenzhen, the school has established offices in London, New York and Hong Kong. Moreover, it has formed strategic partnerships for joint programs and research with leading schools worldwide, such as Columbia Engineering in the US, IMD in Switzerland and FDC in Brazil.

The school offers the following innovative courses: MBA, Finance MBA, Executive MBA, Business Scholars Program (DBA); and Executive Education programs.

Seminar: How to export chocolate to China10 October 2019 – 10h00 – 17h00 – Ghent

On 10 October 2019, the Flanders-China Chamber of Commerce, Ghent University and Cacaolab, will organise a seminar on how to export chocolate to China. During this session, experts will give you a better insight into the Chinese market, consumer behaviour, cultural differences, export regulations, legal aspects and stability issues of exported chocolates. This will be done through different case studies. You will also learn how to export through the different Chinese e-commerce platforms. Even more importantly, you will directly meet the right contacts, who can introduce your product on the Chinese market.

This seminar is informative, practical and will help you to get connected with the right people!

Program:10:00 Welcome by FCCC and Ghent

University/Cacaolab

10:10 How to deal with Cultural Differences between East and West by Gwenn Sonck, Executive Director, Flanders-China Chamber of Commerce

10:30 How to export snacks to China? Mr Yu Xiaoning, Founder of EG DistriSelecta (a Beijing-based importing company operating in the F&B Sector for 25 years –mostly beer, chocolate, biscuits, and otherFMCG).

Overview of the marketConsumer behaviour and future outlookCase Studies of EU Companies exportingto China

12:30-13:30 Lunch

13:30-14:10 Exporting via E-commerce: Mr Yu Yingbao, representative Shanghai Overseas Promotion Center for Service Trade (SOPCST)

14:10-14:30 Legal aspects when exporting to China: speaker, John Balzano, Partner Covington and Burling (labeling, IPR)

14:30-15:00 How to guarantee the stability and shelf life of my products by Prof. dr. ir. Koen Dewettinck (Head of the Laboratory of food Technology and Engineering of Ghent University and CEO of cacaolab (bvba) and Mrs Claudia Delbaere (Project Manager at Cacaolab bvba).

15:00-16:00 Testimonials followed by Q&A

Cost:The entry fee for this seminar is €600 (excl. VAT) per person for registrations before September 16 th. For registrations from September 16th onwards, the registration fee is €750 (excl. VAT) per person.Participants of SME's can also apply for a subsidy to reduce the price by 30% (for medium enterprises) or 40% (for small enterprises).

Location: House of the Province of East-Flanders:Gouvernementstraat 1, 9000 Gent

Flanders-China Chamber of Commerce:info@flanders-china.be - www.flanders-china.beCacaolab: Claudia.Delbaere@Cacaolab.be – www.cacaolab.be

Subscribe via this link: http://www.cacaolab.be/?q=content/how-export-chocolates-china

NEWSLETTER 3 SEPTEMBER 2019 5

MEMBERS' NEWS

Volvo's Polestar brand begins output inChengdu

Polestar, Volvo Car Corp.'s electrified performance-vehicle brand, launched hybrid and electric vehicle output at a new plant in the southwest China city of Chengdu. Polestar, a Tesla challenger, is targeting sales in China and abroad.The first product to be assembled at the factory, known as the Polestar Production Center, is the Polestar 1, a carbon fiber-bodied hybrid coupe with 600 hp and 1,000 Nm of torque.

The Chengdu site, which includes a customer experience center and test track, is jointly owned by Volvo and its corporate parent, Zhejiang Geely Holdings Group. The center will build 500 Polestar 1s each year, with total outputof 1,500 planned over a three-year production cycle, Polestar said. Polestar expects to start delivering the hybridto customers before the end of the year.

Production of the brand’s second product, the Polestar 2 electric midsize sedan, is due to begin in early 2020 at Geely’s Luqiao factory in east China’s Zhejiang province, which now builds the Volvo XC40 and the Lynk & CO 01 crossovers.

All the three vehicles are based on Volvo’s new compact car platform dubbed Compact Modular Architecture. Lynk &CO is a brand jointly owned by Geely and Volvo.

Earlier this year, Polestar started taking orders for its first two models in China: The Polestar 1 carries a price tag of 1.45 million yuan ($202,514) while the Polestar 2 has a starting price of 298,000 yuan. The brand aims to open 20 stores in China by the end of next year.

It expects to open the first store in the Chinese capital city of Beijing in the third quarter, with plans for stores in ten other major Chinese cities -- including Shanghai, Shenzhen, Hangzhou, Chengdu, Chongqing, Wuhan, Xi’an,Nanjing and Xiamen -- before the end of 2020.

Polestar also expects to export the two China-built vehicles to Western Europe and North America, though it has yet to set timetables for the shipment.

FOREIGN TRADE

Latest U.S. and Chinese tariffs enter into force

A new round of punitive tariffs imposed by the United States and China took effect on September 1 in the latest escalation of their 14-month trade war. The measures came into effect at 12.01pm Beijing time, 12.01am in Washington. The U.S. levied a new 15% tariff on about USD110 billion worth of Chinese products, including clothing, food, household goods, Bluetooth ear buds and televisions. It is the first tranche of a two-part dutyon USD300 billion worth of imports – or virtually all of the Chinese goods that have yet to be hit – with the second round postponed to December 15 to prevent American shoppers being hit with price rises during the Christmas season.

In response to the U.S. tariffs, Beijing raised existing tariffs on USD75 billion worth of U.S. goods – including soybeans – by between 5% and 10%, also in two steps, on September 1 and on December 15. The Chinese measuresalso included the introduction of a new 5% tariff on crude oilimports from the U.S. and the reinstatement of a 25% duty on U.S.-made cars. A 5% tariff on American car parts will take effect on December 15. Meanwhile, Washington is seeking public feedback on Trump’s proposal to raise the

NEWSLETTER 3 SEPTEMBER 2019 5

MEMBERS' NEWS

Volvo's Polestar brand begins output inChengdu

Polestar, Volvo Car Corp.'s electrified performance-vehicle brand, launched hybrid and electric vehicle output at a new plant in the southwest China city of Chengdu. Polestar, a Tesla challenger, is targeting sales in China and abroad.The first product to be assembled at the factory, known as the Polestar Production Center, is the Polestar 1, a carbon fiber-bodied hybrid coupe with 600 hp and 1,000 Nm of torque.

The Chengdu site, which includes a customer experience center and test track, is jointly owned by Volvo and its corporate parent, Zhejiang Geely Holdings Group. The center will build 500 Polestar 1s each year, with total outputof 1,500 planned over a three-year production cycle, Polestar said. Polestar expects to start delivering the hybridto customers before the end of the year.

Production of the brand’s second product, the Polestar 2 electric midsize sedan, is due to begin in early 2020 at Geely’s Luqiao factory in east China’s Zhejiang province, which now builds the Volvo XC40 and the Lynk & CO 01 crossovers.

All the three vehicles are based on Volvo’s new compact car platform dubbed Compact Modular Architecture. Lynk &CO is a brand jointly owned by Geely and Volvo.

Earlier this year, Polestar started taking orders for its first two models in China: The Polestar 1 carries a price tag of 1.45 million yuan ($202,514) while the Polestar 2 has a starting price of 298,000 yuan. The brand aims to open 20 stores in China by the end of next year.

It expects to open the first store in the Chinese capital city of Beijing in the third quarter, with plans for stores in ten other major Chinese cities -- including Shanghai, Shenzhen, Hangzhou, Chengdu, Chongqing, Wuhan, Xi’an,Nanjing and Xiamen -- before the end of 2020.

Polestar also expects to export the two China-built vehicles to Western Europe and North America, though it has yet to set timetables for the shipment.

FOREIGN TRADE

Latest U.S. and Chinese tariffs enter into force

A new round of punitive tariffs imposed by the United States and China took effect on September 1 in the latest escalation of their 14-month trade war. The measures came into effect at 12.01pm Beijing time, 12.01am in Washington. The U.S. levied a new 15% tariff on about USD110 billion worth of Chinese products, including clothing, food, household goods, Bluetooth ear buds and televisions. It is the first tranche of a two-part dutyon USD300 billion worth of imports – or virtually all of the Chinese goods that have yet to be hit – with the second round postponed to December 15 to prevent American shoppers being hit with price rises during the Christmas season.

In response to the U.S. tariffs, Beijing raised existing tariffs on USD75 billion worth of U.S. goods – including soybeans – by between 5% and 10%, also in two steps, on September 1 and on December 15. The Chinese measuresalso included the introduction of a new 5% tariff on crude oilimports from the U.S. and the reinstatement of a 25% duty on U.S.-made cars. A 5% tariff on American car parts will take effect on December 15. Meanwhile, Washington is seeking public feedback on Trump’s proposal to raise the

NEWSLETTER 3 SEPTEMBER 2019 6

tariff rate on USD250 billion of Chinese imports already subject to the penalties to 30% from 25% from October 1.

U.S. President Donald Trump told reporters on August 31 that “as of now” the face-to-face talks scheduled to take place in Washington later this month were still on. China, however, has yet to confirm the negotiations will resume, with the Chinese Ministry of Commerce (MOFCOM) saying that the U.S. would need to create the proper conditions forthe talks to resume and “make substantive concessions on some issues that are unacceptable to China”.

American businesses have strongly opposed the increased tariffs on USD300 billion of Chinese imports, which mainly targets consumer goods including smartphones. Some 150 business groups under the “America for Free Trade” organization sent an open letter toU.S. President Donald Trump urging him to delay the increase. The moves clearly indicate that the Trump administration does not plan to step back from escalating its trade war with China. The proposed increase will target some 6,830 types of imports from China, including goods related to technology transfer, intellectual property and innovative industries.

Industry leaders say the uncertainty and unpredictability in the trade war has made it difficult for U.S. businesses to operate in China, especially for companies with their supplychains sourced from within the country. “The President is right to fight against China’s forced technology transfers and intellectual property theft,” said Gary Shapiro, President and CEO of the Consumer Technology Association. “But tariffs are taxes on Americans, putting us on the wrong economic path and compromising our global leadership.” Based in Virginia, the Consumer Technology Association consists of trade representatives from 2,200 technology firms in the U.S. “Instead of making America great again, the President is using tariffs to make a great economic mistake – again,” Shapiro added. “We are writingwith an urgent request that you postpone all tariff rate increases on Chinese goods that are scheduled to take effect this year,” Americans for Free Trade said. “These tariff rate increases come at the worst possible time, right inthe middle of the busy holiday shipping period,” it added. Americans for Free Trade was formed nearly a year ago in response to the bilateral trade war that Trump started in July 2018.

The U.S. first imposed a 25% tariff on USD50 billion of Chinese imports in July and August last year, followed by a 10% tariff on USD200 billion in September. The tariff rate on the USD200 billion of goods was raised to 25% in May.

Trump announced the plan for the two tariff increases on August 23 in retaliation for China imposing additional dutiesof 5% to 10% on USD75 billion of U.S. imports earlier that day. The Chinese move itself was in retaliation to Trump’s announcement at the start of August that he planned to impose an original 10% tariff on USD300 billion of Chinese goods not yet subject to punitive import tariffs, the South China Morning Post reports.

“We are willing to resolve the trade dispute with the U.S. through calm negotiations,” Vice Premier Liu He said in a speech at the Smart China Expo in Chongqing. “We resolutely oppose the escalation of the trade war, which is not beneficial for the U.S. or China. It is also not beneficial to the world.” He reaffirmed China’s commitment to welcoming companies from around the world, including the U.S., to invest and conduct business in its domestic market. China will also continue to improve its investment environment and strengthen its protection of intellectual property, Liu said. “We strongly oppose technology blockades and protectionism. We will work hard to keep ourindustrial chains intact,” he added.

Analysts said that China would have to ease economic policy further to cushion the worsening impact from the escalating trade war and weakening domestic demand. Macquarie analysts suggested that China may increase infrastructure spending to shore up growth, although regulators may have to loosen the current controls on shadow banking.

Chinese state media has called U.S. President Donald Trump’s decision to escalate the tariff war a “strategic mistake” and vowed not to give in to America’s “unreasonable demands”. Media also called Beijing’s retaliation a “restrained response, different in nature from the American provocation”. An editorial in the People’s Daily warned that the latest move would make it impossible for Washington to “win” the trade war.

Beijing has cast doubt on whether trade talks will resume this month. China denied that it had called the U.S. negotiators to ask to resume the talks. The People’s Daily warned in a commentary: “China will do what it has said. Any attempts to force China to make concessions through extreme pressure will be in vain.” According to the Chinese Ministry of Commerce (MOFCOM), the last high-level phone calls between Chinese and U.S. trade negotiators took place on August 13 between Liu He, Lighthizer and Mnuchin. U.S. Treasury Secretary Steven Mnuchin also refused to confirm whether the scheduled trade talks would take place next month.

NEWSLETTER 3 SEPTEMBER 2019 6

tariff rate on USD250 billion of Chinese imports already subject to the penalties to 30% from 25% from October 1.

U.S. President Donald Trump told reporters on August 31 that “as of now” the face-to-face talks scheduled to take place in Washington later this month were still on. China, however, has yet to confirm the negotiations will resume, with the Chinese Ministry of Commerce (MOFCOM) saying that the U.S. would need to create the proper conditions forthe talks to resume and “make substantive concessions on some issues that are unacceptable to China”.

American businesses have strongly opposed the increased tariffs on USD300 billion of Chinese imports, which mainly targets consumer goods including smartphones. Some 150 business groups under the “America for Free Trade” organization sent an open letter toU.S. President Donald Trump urging him to delay the increase. The moves clearly indicate that the Trump administration does not plan to step back from escalating its trade war with China. The proposed increase will target some 6,830 types of imports from China, including goods related to technology transfer, intellectual property and innovative industries.

Industry leaders say the uncertainty and unpredictability in the trade war has made it difficult for U.S. businesses to operate in China, especially for companies with their supplychains sourced from within the country. “The President is right to fight against China’s forced technology transfers and intellectual property theft,” said Gary Shapiro, President and CEO of the Consumer Technology Association. “But tariffs are taxes on Americans, putting us on the wrong economic path and compromising our global leadership.” Based in Virginia, the Consumer Technology Association consists of trade representatives from 2,200 technology firms in the U.S. “Instead of making America great again, the President is using tariffs to make a great economic mistake – again,” Shapiro added. “We are writingwith an urgent request that you postpone all tariff rate increases on Chinese goods that are scheduled to take effect this year,” Americans for Free Trade said. “These tariff rate increases come at the worst possible time, right inthe middle of the busy holiday shipping period,” it added. Americans for Free Trade was formed nearly a year ago in response to the bilateral trade war that Trump started in July 2018.

The U.S. first imposed a 25% tariff on USD50 billion of Chinese imports in July and August last year, followed by a 10% tariff on USD200 billion in September. The tariff rate on the USD200 billion of goods was raised to 25% in May.

Trump announced the plan for the two tariff increases on August 23 in retaliation for China imposing additional dutiesof 5% to 10% on USD75 billion of U.S. imports earlier that day. The Chinese move itself was in retaliation to Trump’s announcement at the start of August that he planned to impose an original 10% tariff on USD300 billion of Chinese goods not yet subject to punitive import tariffs, the South China Morning Post reports.

“We are willing to resolve the trade dispute with the U.S. through calm negotiations,” Vice Premier Liu He said in a speech at the Smart China Expo in Chongqing. “We resolutely oppose the escalation of the trade war, which is not beneficial for the U.S. or China. It is also not beneficial to the world.” He reaffirmed China’s commitment to welcoming companies from around the world, including the U.S., to invest and conduct business in its domestic market. China will also continue to improve its investment environment and strengthen its protection of intellectual property, Liu said. “We strongly oppose technology blockades and protectionism. We will work hard to keep ourindustrial chains intact,” he added.

Analysts said that China would have to ease economic policy further to cushion the worsening impact from the escalating trade war and weakening domestic demand. Macquarie analysts suggested that China may increase infrastructure spending to shore up growth, although regulators may have to loosen the current controls on shadow banking.

Chinese state media has called U.S. President Donald Trump’s decision to escalate the tariff war a “strategic mistake” and vowed not to give in to America’s “unreasonable demands”. Media also called Beijing’s retaliation a “restrained response, different in nature from the American provocation”. An editorial in the People’s Daily warned that the latest move would make it impossible for Washington to “win” the trade war.

Beijing has cast doubt on whether trade talks will resume this month. China denied that it had called the U.S. negotiators to ask to resume the talks. The People’s Daily warned in a commentary: “China will do what it has said. Any attempts to force China to make concessions through extreme pressure will be in vain.” According to the Chinese Ministry of Commerce (MOFCOM), the last high-level phone calls between Chinese and U.S. trade negotiators took place on August 13 between Liu He, Lighthizer and Mnuchin. U.S. Treasury Secretary Steven Mnuchin also refused to confirm whether the scheduled trade talks would take place next month.

NEWSLETTER 3 SEPTEMBER 2019 7

U.S.-China trade friction is dampening the outlook for American companies operating in China, hurting their ability to compete, according to the annual U.S.-China Business Council member survey. About 26% of respondents said they expected revenue from China to decline in the current year, a record high in the 19-year history of the survey. More than 80% of the surveyed companies – 8% more than a year ago – said trade tensions had affected their China business operations this year. On the other hand, half the 220 companies who took part in the annual survey said they expected China revenueto increase and their margins of profit in the country to be better than the global average. While China continues to bea priority market for most of the American companies surveyed, optimism is moderating with 22% – a record low – saying they were optimistic about the five-year outlook forbusiness in China.

The survey results come as American business groups increasingly voice their opposition to the Trump administration’s trade policies. In an opinion piece in The Washington Post, U.S. Chamber of Commerce Chief Executive Thomas Donohue wrote: “The biggest mistake our leaders could make right now – putting our economy at greater risk of a downturn – is to stoke further uncertainty. Lift the tariffs, and restart trade talks with China now”.

ARTIFICIAL INTELLIGENCE

Alibaba’s Jack Ma and Tesla’s Elon Musk debateimpact of AI

Billionaire techpreneurs Jack Ma and Elon Musk faced off over artificial intelligence (AI) at a much-anticipated morning session at the Shanghai World Artificial Intelligence Conference, showing they have a different vision of the future. The conference attracted executives from nearly 300 companies including U.S. firms Intel, IBM, Microsoft and Qualcomm as well as scientists and scholars from across the world. Both men had to condense their

visions of the future into a compact 45-minute session, which also included answering a series of pre-prepared questions from Chinese netizens.

“AI will open a new chapter so that humans will know themselves better,” said Jack Ma, Alibaba Group Holding Founder. “Most of the projections about AI are wrong, people who are street-smart about AI are not scared by it. Due to AI, people will have more time to enjoy themselves as human beings. Forget long days, we could end up with 12-hour work weeks,” said Ma. “I don’t worry too much about the impact of AI on jobs, in the future we will not need a lot of jobs.”

Elon Musk, who has founded a string of tech ventures including SpaceX, Boring Co and Neuralink, aside from his role as Co-founder and CEO of Tesla, said he had heard that “AI sounds like love in Chinese”, but in a more cautioustone described AI as “much more than just a smart human”.“Humans may become too slow. A millisecond is an eternityto a computer today,” said Musk. “Computers are already smarter than human beings in many aspects,” he said, adding that while humans write AI software today, in the end the machine will do this itself.

Ma is mainly an optimist, seeing AI as an inevitable agent of change in a digital world, whereas Musk has sounded several warnings. In 2017, Musk urged the United Nations to take action against the dangers of autonomous weapons, known as “killer robots”. He has alsodescribed AI as humanity’s “biggest existential threat”, comparing it to “summoning the demon”. Amid the escalating trade and technology war between the U.S. and China, Jack Ma said both countries needed to make a concerted effort to work together on technology for the world to benefit from the digital era, the South China Morning Post reports.

During his China-trip, Elon Musk visited Tesla's USD5 billion production facility in Lingang, part of Shanghai’s free-trade zone (FTZ), and launched the China unit of his infrastructure start-up Boring. Musk said that the Shanghai factory was progressing at a fast speed and that he was satisfied with the work done by Tesla’s China team. He added that “it’s a good story for the world to see how much progress you can make in China. I really think China’s future looks very impressive.”

The second edition of the Smart China Expo was also held in Chongqing, attracting over 1,800 participants and 843 companies from 28 countries and regions, including 13Nobel Prize laureates, four Turing Award winners, Fortune

NEWSLETTER 3 SEPTEMBER 2019 7

U.S.-China trade friction is dampening the outlook for American companies operating in China, hurting their ability to compete, according to the annual U.S.-China Business Council member survey. About 26% of respondents said they expected revenue from China to decline in the current year, a record high in the 19-year history of the survey. More than 80% of the surveyed companies – 8% more than a year ago – said trade tensions had affected their China business operations this year. On the other hand, half the 220 companies who took part in the annual survey said they expected China revenueto increase and their margins of profit in the country to be better than the global average. While China continues to bea priority market for most of the American companies surveyed, optimism is moderating with 22% – a record low – saying they were optimistic about the five-year outlook forbusiness in China.

The survey results come as American business groups increasingly voice their opposition to the Trump administration’s trade policies. In an opinion piece in The Washington Post, U.S. Chamber of Commerce Chief Executive Thomas Donohue wrote: “The biggest mistake our leaders could make right now – putting our economy at greater risk of a downturn – is to stoke further uncertainty. Lift the tariffs, and restart trade talks with China now”.

ARTIFICIAL INTELLIGENCE

Alibaba’s Jack Ma and Tesla’s Elon Musk debateimpact of AI

Billionaire techpreneurs Jack Ma and Elon Musk faced off over artificial intelligence (AI) at a much-anticipated morning session at the Shanghai World Artificial Intelligence Conference, showing they have a different vision of the future. The conference attracted executives from nearly 300 companies including U.S. firms Intel, IBM, Microsoft and Qualcomm as well as scientists and scholars from across the world. Both men had to condense their

visions of the future into a compact 45-minute session, which also included answering a series of pre-prepared questions from Chinese netizens.

“AI will open a new chapter so that humans will know themselves better,” said Jack Ma, Alibaba Group Holding Founder. “Most of the projections about AI are wrong, people who are street-smart about AI are not scared by it. Due to AI, people will have more time to enjoy themselves as human beings. Forget long days, we could end up with 12-hour work weeks,” said Ma. “I don’t worry too much about the impact of AI on jobs, in the future we will not need a lot of jobs.”

Elon Musk, who has founded a string of tech ventures including SpaceX, Boring Co and Neuralink, aside from his role as Co-founder and CEO of Tesla, said he had heard that “AI sounds like love in Chinese”, but in a more cautioustone described AI as “much more than just a smart human”.“Humans may become too slow. A millisecond is an eternityto a computer today,” said Musk. “Computers are already smarter than human beings in many aspects,” he said, adding that while humans write AI software today, in the end the machine will do this itself.

Ma is mainly an optimist, seeing AI as an inevitable agent of change in a digital world, whereas Musk has sounded several warnings. In 2017, Musk urged the United Nations to take action against the dangers of autonomous weapons, known as “killer robots”. He has alsodescribed AI as humanity’s “biggest existential threat”, comparing it to “summoning the demon”. Amid the escalating trade and technology war between the U.S. and China, Jack Ma said both countries needed to make a concerted effort to work together on technology for the world to benefit from the digital era, the South China Morning Post reports.

During his China-trip, Elon Musk visited Tesla's USD5 billion production facility in Lingang, part of Shanghai’s free-trade zone (FTZ), and launched the China unit of his infrastructure start-up Boring. Musk said that the Shanghai factory was progressing at a fast speed and that he was satisfied with the work done by Tesla’s China team. He added that “it’s a good story for the world to see how much progress you can make in China. I really think China’s future looks very impressive.”

The second edition of the Smart China Expo was also held in Chongqing, attracting over 1,800 participants and 843 companies from 28 countries and regions, including 13Nobel Prize laureates, four Turing Award winners, Fortune

NEWSLETTER 3 SEPTEMBER 2019 8

500 business leaders and tech companies including Intel, Tencent, Baidu, Alibaba and Xiaomi. “Smart technology is developing very fast in China,” Vice Premier Liu He said at the opening ceremony. “It has become a new, important economic growth point, with preliminary statistics showing that the total industrial scale of AI-related industries in China surpassed CNY500 billion in 2018.” Chongqing, on the upper reaches of the Yangtze river, has established oneof the world’s largest IT industrial clusters and one of China’s biggest auto manufacturing bases. In 2018, the citypoured over CNY7 billion into smart manufacturing upgrades.

China has named Huawei Technologies and Hikvision Digital Technology as new national champions in artificial intelligence (AI). Huawei will take the lead in the research on AI infrastructure and software. Surveillance systems firm Hikvision will cover initiatives related to video perception. The other new national AI champions introduced at the Shanghai World Artificial Intelligence Conference include Hong Kong-listed smartphone vendor Xiaomi Corp, which will focus on smart home ware; e-commerce company JD.com, on smart supply chain; and internet security company Qihoo 360 Technology, handling online safety. Facial recognition start-ups Megvii and Yitu were tasked to cover the areas of image perception and image computing, respectively. China now has a total of 15 national AI champions since it started this initiative in 2017.These include Baidu for autonomous driving, Alibaba Group Holding for smart city initiatives, Tencent Holdings for computer vision in medical diagnosis and iFlyTek for speech recognition. SenseTime was added last year, with its focus on intelligent vision.

FOREIGN INVESTMENT

U.S. documentary “American Factory” stirs updebate in China

The Netflix documentary “American Factory” tells the story of American workers on a production line owned by China's Fuyao Glass in Dayton, Ohio. It vividly portrays the experiences and culture clash of American workers and Chinese management. It not only shows U.S. viewers how work in a Chinese-owned factory in the U.S. unfolds, but has also stirred up discussion in China.

The film, backed by Barack and Michelle Obama’s new production company Higher Ground, documents how Chinese auto-glass company Fuyao built a factory near Dayton, Ohio, where thousands of workers were laid off when General Motors closed its plant in the rust belt a decade ago. Fuyao brought not only new jobs to Ohio, but also high expectations and a harsh management style, customary in factories across China. It most notably spent more than USD1 million to put down a unionizing campaign. Although Netflix is not available in mainland China, pirated and Chinese-subtitled copies of the film havebeen circulated online, and it has been widely discussed onsocial media. On popular social network WeChat, a post offering a summary of the documentary along with discussion of whether Fuyao could be considered representative of a Chinese-run factory has been viewed more than 100,000 times.

Fuyao’s investment in Ohio was welcomed at first, but the cultural gap soon emerged. The American workers complained about long hours and insufficient safety measures. The Chinese management staff on the production lines were unhappy about the pace of the American workers and the quality of the products they weremaking. Fuyao’s billionaire Chairman, Cao Dewang – nicknamed “the king of glass” in China – visited the factory, replacing the top American Manager with a Chinese who had years of experience in the U.S. Some viewers expressed their fascination with the sharp contrast betweenFuyao’s factories in America and China.

The Ohio employees worked eight hours a day, five days a week. Some made enough to rent their own apartments. They complained about the low wages and safety hazards despite the difficulty of finding other factory jobs. In the southeastern Chinese city of Fuqing in Fujian province, where Fuyao Glass was founded, however, migrant workers lived in dormitories, worked 12-hour shifts and went home once or twice a year. They chanted slogans every morning pledging to work hard. They picked up shattered glass with minimal protection. The contrast has led to a wave of reflections on the life of blue-collar workersin China as well as a heated debate over whether the country’s economic success has justified their ordeal or not.

NEWSLETTER 3 SEPTEMBER 2019 8

500 business leaders and tech companies including Intel, Tencent, Baidu, Alibaba and Xiaomi. “Smart technology is developing very fast in China,” Vice Premier Liu He said at the opening ceremony. “It has become a new, important economic growth point, with preliminary statistics showing that the total industrial scale of AI-related industries in China surpassed CNY500 billion in 2018.” Chongqing, on the upper reaches of the Yangtze river, has established oneof the world’s largest IT industrial clusters and one of China’s biggest auto manufacturing bases. In 2018, the citypoured over CNY7 billion into smart manufacturing upgrades.

China has named Huawei Technologies and Hikvision Digital Technology as new national champions in artificial intelligence (AI). Huawei will take the lead in the research on AI infrastructure and software. Surveillance systems firm Hikvision will cover initiatives related to video perception. The other new national AI champions introduced at the Shanghai World Artificial Intelligence Conference include Hong Kong-listed smartphone vendor Xiaomi Corp, which will focus on smart home ware; e-commerce company JD.com, on smart supply chain; and internet security company Qihoo 360 Technology, handling online safety. Facial recognition start-ups Megvii and Yitu were tasked to cover the areas of image perception and image computing, respectively. China now has a total of 15 national AI champions since it started this initiative in 2017.These include Baidu for autonomous driving, Alibaba Group Holding for smart city initiatives, Tencent Holdings for computer vision in medical diagnosis and iFlyTek for speech recognition. SenseTime was added last year, with its focus on intelligent vision.

FOREIGN INVESTMENT

U.S. documentary “American Factory” stirs updebate in China

The Netflix documentary “American Factory” tells the story of American workers on a production line owned by China's Fuyao Glass in Dayton, Ohio. It vividly portrays the experiences and culture clash of American workers and Chinese management. It not only shows U.S. viewers how work in a Chinese-owned factory in the U.S. unfolds, but has also stirred up discussion in China.

The film, backed by Barack and Michelle Obama’s new production company Higher Ground, documents how Chinese auto-glass company Fuyao built a factory near Dayton, Ohio, where thousands of workers were laid off when General Motors closed its plant in the rust belt a decade ago. Fuyao brought not only new jobs to Ohio, but also high expectations and a harsh management style, customary in factories across China. It most notably spent more than USD1 million to put down a unionizing campaign. Although Netflix is not available in mainland China, pirated and Chinese-subtitled copies of the film havebeen circulated online, and it has been widely discussed onsocial media. On popular social network WeChat, a post offering a summary of the documentary along with discussion of whether Fuyao could be considered representative of a Chinese-run factory has been viewed more than 100,000 times.

Fuyao’s investment in Ohio was welcomed at first, but the cultural gap soon emerged. The American workers complained about long hours and insufficient safety measures. The Chinese management staff on the production lines were unhappy about the pace of the American workers and the quality of the products they weremaking. Fuyao’s billionaire Chairman, Cao Dewang – nicknamed “the king of glass” in China – visited the factory, replacing the top American Manager with a Chinese who had years of experience in the U.S. Some viewers expressed their fascination with the sharp contrast betweenFuyao’s factories in America and China.

The Ohio employees worked eight hours a day, five days a week. Some made enough to rent their own apartments. They complained about the low wages and safety hazards despite the difficulty of finding other factory jobs. In the southeastern Chinese city of Fuqing in Fujian province, where Fuyao Glass was founded, however, migrant workers lived in dormitories, worked 12-hour shifts and went home once or twice a year. They chanted slogans every morning pledging to work hard. They picked up shattered glass with minimal protection. The contrast has led to a wave of reflections on the life of blue-collar workersin China as well as a heated debate over whether the country’s economic success has justified their ordeal or not.

NEWSLETTER 3 SEPTEMBER 2019 9

Some regard the film as a poignant criticism of China’s labor abuse, which includes harsh working conditions, a workplace culture that encourages self-sacrifice, and state crackdowns on independent unions. But others said the filmdemonstrated the superiority of China’s culture and politicalsystem – without the harsh factory work, the country would not have achieved rapid development as a whole. They also defended entrepreneurs like Cao for creating jobs and lifting people out of poverty. Directors Steven Bognar and Julia Reichert said they wanted to spark a conversation about how the working class, both in China and America, were being affected by the forces of globalization and automation, the South China Morning Post reports.

ADVERTISEMENT ANDSPONSORSHIP

Interested in advertisement in the FCCC Weekly or on the FCCC website? Send an e-mail to info@flanders-china.be

CHINA NEWS ROUND-UP

China to establish six pilot free trade zones

China will establish new pilot free trade zones (FTZs) insix provinces – including in border regions – to help improve trade ties with neighboring countries and expand the reach of the Belt and Road Initiative (BRI). The move will make underdeveloped provinces more attractive to highquality manufacturing. The six new FTZs are located in landlocked Yunnan province; Heilongjiang, the northeastern-most province of China’s rust belt; the southern autonomous region of Guangxi and the coastal provinces of Shandong, Jiangsu and Hebei. In the south, Yunnan province borders Vietnam, Laos and Myanmar; while Guangxi also borders Vietnam. In the north of the country, Heilongjiang borders Russia. In addition, Shandong to the east is one of China’s major gateways for trade and investment flows with South Korea and Japan.

“The FTZs will tap into respective geographical advantages to deepen trade and economic cooperation with neighboring countries and regions,” Chinese Vice Minister of Commerce Wang Shouwen said at a press conference. “The arrangement will not only help to optimize the strategicdistribution of pilot FTZs, but also serve major national strategies such as the Belt and Road Initiative,” he said.

The Heilongjiang FTZ would boost trade cooperation with Russia by easing the movement of goods and people across the border and encouraging companies to look for opportunities abroad, while the Guangxi FTZ is intended to further Beijing’s goal to build a new international land-sea trade corridor with the 10 ASEAN countries, as well as to promote cross-border trade, logistics and labor cooperation through the maritime Silk Road to Africa and Europe. The Yunnan pilot FTZ will promote the expansion of a major international corridor connecting South Asia with Southeast Asia, while the Shandong FTZ will push forward economic cooperation among China, Japan and South Korea. The addition of Shandong, Jiangsu and Hebei means China will have FTZs in all its coastal provinces.

Jiangsu and Shandong had the second and third largest provincial economies in China in the first half of the year. In contrast, the gross domestic products of Guangxi, Yunnan and Heilongjiang were among the lowest of China’s 31 provincial-level regions, the South China Morning Post reports. China launched its first pilot FTZs in Shanghai in 2013, which recently doubled in size by including the Lingang area. As of today, the country has 18 free trade zones. In the first half of the year, foreign direct investment (FDI) in the 12 established free trade zones across China reached nearly CNY70 billion, accounting for roughly 14% of the overall FDI in the country and an increase of 20% from the same period last year.

China to relax restrictions on car purchases

The Chinese government is calling on local authorities to relax restrictions on car purchases, which would help unleash the potential of the world’s largest auto market. Local governments that have placed curbs on vehicle sales should explore gradually relaxing or removing them if conditions permit, the central government said. It also asked them to offer support to new energy vehicle (NEV) purchases and facilitate trade in used vehicles among different regions. Stock prices of carmakers listed on China’s A-share and H-share markets including Brilliance Auto and Great Wall Motors rose on the news as the Chinese auto market saw sales fall for a 13 th consecutive month in July.

Eight major cities – including Beijing – and Hainan provincehave placed curbs on car purchases in an effort to ease traffic congestion and cut emissions. Cui Dongshu, Secretary General of the China Passenger Car Association (CPCA), said lifting restrictions will be of great help to the auto market, which is a pillar of China’s economy, if it is well

NEWSLETTER 3 SEPTEMBER 2019 9

Some regard the film as a poignant criticism of China’s labor abuse, which includes harsh working conditions, a workplace culture that encourages self-sacrifice, and state crackdowns on independent unions. But others said the filmdemonstrated the superiority of China’s culture and politicalsystem – without the harsh factory work, the country would not have achieved rapid development as a whole. They also defended entrepreneurs like Cao for creating jobs and lifting people out of poverty. Directors Steven Bognar and Julia Reichert said they wanted to spark a conversation about how the working class, both in China and America, were being affected by the forces of globalization and automation, the South China Morning Post reports.

ADVERTISEMENT ANDSPONSORSHIP

Interested in advertisement in the FCCC Weekly or on the FCCC website? Send an e-mail to info@flanders-china.be

CHINA NEWS ROUND-UP

China to establish six pilot free trade zones

China will establish new pilot free trade zones (FTZs) insix provinces – including in border regions – to help improve trade ties with neighboring countries and expand the reach of the Belt and Road Initiative (BRI). The move will make underdeveloped provinces more attractive to highquality manufacturing. The six new FTZs are located in landlocked Yunnan province; Heilongjiang, the northeastern-most province of China’s rust belt; the southern autonomous region of Guangxi and the coastal provinces of Shandong, Jiangsu and Hebei. In the south, Yunnan province borders Vietnam, Laos and Myanmar; while Guangxi also borders Vietnam. In the north of the country, Heilongjiang borders Russia. In addition, Shandong to the east is one of China’s major gateways for trade and investment flows with South Korea and Japan.

“The FTZs will tap into respective geographical advantages to deepen trade and economic cooperation with neighboring countries and regions,” Chinese Vice Minister of Commerce Wang Shouwen said at a press conference. “The arrangement will not only help to optimize the strategicdistribution of pilot FTZs, but also serve major national strategies such as the Belt and Road Initiative,” he said.

The Heilongjiang FTZ would boost trade cooperation with Russia by easing the movement of goods and people across the border and encouraging companies to look for opportunities abroad, while the Guangxi FTZ is intended to further Beijing’s goal to build a new international land-sea trade corridor with the 10 ASEAN countries, as well as to promote cross-border trade, logistics and labor cooperation through the maritime Silk Road to Africa and Europe. The Yunnan pilot FTZ will promote the expansion of a major international corridor connecting South Asia with Southeast Asia, while the Shandong FTZ will push forward economic cooperation among China, Japan and South Korea. The addition of Shandong, Jiangsu and Hebei means China will have FTZs in all its coastal provinces.

Jiangsu and Shandong had the second and third largest provincial economies in China in the first half of the year. In contrast, the gross domestic products of Guangxi, Yunnan and Heilongjiang were among the lowest of China’s 31 provincial-level regions, the South China Morning Post reports. China launched its first pilot FTZs in Shanghai in 2013, which recently doubled in size by including the Lingang area. As of today, the country has 18 free trade zones. In the first half of the year, foreign direct investment (FDI) in the 12 established free trade zones across China reached nearly CNY70 billion, accounting for roughly 14% of the overall FDI in the country and an increase of 20% from the same period last year.

China to relax restrictions on car purchases

The Chinese government is calling on local authorities to relax restrictions on car purchases, which would help unleash the potential of the world’s largest auto market. Local governments that have placed curbs on vehicle sales should explore gradually relaxing or removing them if conditions permit, the central government said. It also asked them to offer support to new energy vehicle (NEV) purchases and facilitate trade in used vehicles among different regions. Stock prices of carmakers listed on China’s A-share and H-share markets including Brilliance Auto and Great Wall Motors rose on the news as the Chinese auto market saw sales fall for a 13 th consecutive month in July.

Eight major cities – including Beijing – and Hainan provincehave placed curbs on car purchases in an effort to ease traffic congestion and cut emissions. Cui Dongshu, Secretary General of the China Passenger Car Association (CPCA), said lifting restrictions will be of great help to the auto market, which is a pillar of China’s economy, if it is well

NEWSLETTER 3 SEPTEMBER 2019 10

implemented. Authorities in Guangzhou and Shenzhen have increased their license plate quotas, but other cities like Beijing or Shanghai have not followed suit so far. In Beijing, more than 3.3 million people are counting on luck to get one of the 38,000 gasoline car license plates allocated annually.

Xu Haidong, Deputy Secretary General of the China Association of Automobile Manufacturers (CAAM), urged local governments to come up with new measures. “If you make a close examination of the potential customers, you will find that those who want to buy cars and can afford them are residents living in cities where license plates are rationed,” said Xu. The CAAM estimates that overall sales in China this year could fall by 5% to 26.68 million units from 2018, which saw the first fall since 1990 in the country.Patrick Yuan, Analyst at investment firm Jefferies Hong Kong expected the market to rebound in 2020, saying that residents’ desire to purchase will gradually recover and some of China’s measures including tax cuts have increased people’s disposable incomes. Yuan said most cardealers’ inventories had also returned to a reasonable level after the de-stocking efforts started earlier this year.

The China Automobile Dealers Association (CADA) said the government’s call for efforts to facilitate trade in used vehicles across the country will help stimulate new car sales, because if people sell used cars they will buy new vehicles. In the first half of the year, used vehicle sales totaled 6.86 million, up 3.93% year-on-year, the China Dailyreports.

Private rocket enterprises thriving in China

As China’s private rocket enterprises strive to expand their presence in the Chinese space sector, they have also started tapping the international market. LandSpace, aBeijing-based space startup and one of the leading private rocket makers in China, announced at the International Aviation and Space Salon 2019 in Russia that it has begun inviting payload partners from around the globe to consider using its ZQ 2 liquid-propellant, medium-lift carrier rocket. Zhang Long, President of LandSpace, toldChina Daily that foreign companies, research institutes and educational organizations are welcome to use the scheduled maiden flight of the ZQ 2 in 2021 to send their satellites or experimental payloads into space. He said ZQ 2’s debut mission will ferry several small satellites or payloads into a sun-synchronous orbit at an altitude of about 500 kilometers.

LandSpace has inked launch service agreements with several European satellite manufacturers and operators such as Denmark’s GomSpace and Britain’s Open Cosmos, Zhang said. A rising star in the Chinese space industry, LandSpace brought scale models of several types of carrier rockets to the Russian air show, also known as MAKS 2019. This is the first time the Chinese firm has taken part in an overseas air show. OneSpace, another rocket startup headquartered in Beijing, has attended two international expos since 2018 to promote its commercial launch services.

According to LandSpace, the 49.5-meter ZQ 2 will have a diameter of 3.35 meters — the same as that of most of China’s Long March-series rockets — and a liftoff weight of 216 metric tons. It will be propelled by LandSpace’s TQ-12oxygen-methane rocket engines, the first of their kind in China. Compared with traditional types of rocket engines, oxygen-methane engines are reusable. Before LandSpace,only the United States’ SpaceX and Blue Origin had begun development and testing of such engines. The privately built ZQ 2 will be capable of placing two-ton payloads into asun-synchronous orbit of 500 km or fout-ton satellites into alow-earth orbit at altitudes of 200 km. LandSpace launched its first carrier rocket – the 19-meter, solid-fueled ZQ 1 – in late October at the Jiuquan Satellite Launch Center in Northwest China. The mission failed due to in-flight technical malfunctions.

Zhang Changwu, Founder and CEO of LandSpace, told China Daily in May that his company “is focused on the development of the ZQ 2”, calling it “the largest and most powerful carrier rocket designed and built by a Chinese private rocket company”. Mass production of the TQ-12 engine and the ZQ 2 rocket “will begin later this year at our Huzhou plant” in Zhejiang province, the first privately owned carrier rocket factory in China, and the largest of its kind in Asia. The Huzhou facility in Zhejiang province will beable to produce about 15 ZQ 2 rockets and 200 TQ-12 engines annually starting in 2022, the China Daily reports.

Costco store receives warm welcome inShanghai

The world’s second-largest retailer, Costco Wholesale Corp, received a warm welcome from consumers when its first brick-and-mortar store on the Chinese mainland opened in suburban Shanghai. The store had to suspend sales in the afternoon on its opening day due to the large crowds pushing to get inside.

NEWSLETTER 3 SEPTEMBER 2019 10

implemented. Authorities in Guangzhou and Shenzhen have increased their license plate quotas, but other cities like Beijing or Shanghai have not followed suit so far. In Beijing, more than 3.3 million people are counting on luck to get one of the 38,000 gasoline car license plates allocated annually.

Xu Haidong, Deputy Secretary General of the China Association of Automobile Manufacturers (CAAM), urged local governments to come up with new measures. “If you make a close examination of the potential customers, you will find that those who want to buy cars and can afford them are residents living in cities where license plates are rationed,” said Xu. The CAAM estimates that overall sales in China this year could fall by 5% to 26.68 million units from 2018, which saw the first fall since 1990 in the country.Patrick Yuan, Analyst at investment firm Jefferies Hong Kong expected the market to rebound in 2020, saying that residents’ desire to purchase will gradually recover and some of China’s measures including tax cuts have increased people’s disposable incomes. Yuan said most cardealers’ inventories had also returned to a reasonable level after the de-stocking efforts started earlier this year.

The China Automobile Dealers Association (CADA) said the government’s call for efforts to facilitate trade in used vehicles across the country will help stimulate new car sales, because if people sell used cars they will buy new vehicles. In the first half of the year, used vehicle sales totaled 6.86 million, up 3.93% year-on-year, the China Dailyreports.

Private rocket enterprises thriving in China

As China’s private rocket enterprises strive to expand their presence in the Chinese space sector, they have also started tapping the international market. LandSpace, aBeijing-based space startup and one of the leading private rocket makers in China, announced at the International Aviation and Space Salon 2019 in Russia that it has begun inviting payload partners from around the globe to consider using its ZQ 2 liquid-propellant, medium-lift carrier rocket. Zhang Long, President of LandSpace, toldChina Daily that foreign companies, research institutes and educational organizations are welcome to use the scheduled maiden flight of the ZQ 2 in 2021 to send their satellites or experimental payloads into space. He said ZQ 2’s debut mission will ferry several small satellites or payloads into a sun-synchronous orbit at an altitude of about 500 kilometers.

LandSpace has inked launch service agreements with several European satellite manufacturers and operators such as Denmark’s GomSpace and Britain’s Open Cosmos, Zhang said. A rising star in the Chinese space industry, LandSpace brought scale models of several types of carrier rockets to the Russian air show, also known as MAKS 2019. This is the first time the Chinese firm has taken part in an overseas air show. OneSpace, another rocket startup headquartered in Beijing, has attended two international expos since 2018 to promote its commercial launch services.

According to LandSpace, the 49.5-meter ZQ 2 will have a diameter of 3.35 meters — the same as that of most of China’s Long March-series rockets — and a liftoff weight of 216 metric tons. It will be propelled by LandSpace’s TQ-12oxygen-methane rocket engines, the first of their kind in China. Compared with traditional types of rocket engines, oxygen-methane engines are reusable. Before LandSpace,only the United States’ SpaceX and Blue Origin had begun development and testing of such engines. The privately built ZQ 2 will be capable of placing two-ton payloads into asun-synchronous orbit of 500 km or fout-ton satellites into alow-earth orbit at altitudes of 200 km. LandSpace launched its first carrier rocket – the 19-meter, solid-fueled ZQ 1 – in late October at the Jiuquan Satellite Launch Center in Northwest China. The mission failed due to in-flight technical malfunctions.

Zhang Changwu, Founder and CEO of LandSpace, told China Daily in May that his company “is focused on the development of the ZQ 2”, calling it “the largest and most powerful carrier rocket designed and built by a Chinese private rocket company”. Mass production of the TQ-12 engine and the ZQ 2 rocket “will begin later this year at our Huzhou plant” in Zhejiang province, the first privately owned carrier rocket factory in China, and the largest of its kind in Asia. The Huzhou facility in Zhejiang province will beable to produce about 15 ZQ 2 rockets and 200 TQ-12 engines annually starting in 2022, the China Daily reports.

Costco store receives warm welcome inShanghai

The world’s second-largest retailer, Costco Wholesale Corp, received a warm welcome from consumers when its first brick-and-mortar store on the Chinese mainland opened in suburban Shanghai. The store had to suspend sales in the afternoon on its opening day due to the large crowds pushing to get inside.

NEWSLETTER 3 SEPTEMBER 2019 11

Jason Yu, General Manager of market consultancy Kantar Worldpanel China, said the quality and good prices of Costco’s food products are a major attraction to Chinese consumers, as the demand for such products has grown. “As Chinese consumers put more stress on healthy products and higher living standards, the retail industry’s growth has remained robust in China and the momentum will continue,” he said.

Membership at Costco Shanghai has been available since July 1, with an annual membership card priced at CNY299. The company put its Chinese membership at over 120,000.The store, with a shopping area of 14,000 square meters, islocated in suburban Minhang district, nearly 30 km from thecity’s center. Richard Zhang, Costco’s Senior Vice President for Asia, said that the location was chosen due tothe presence of seven international schools in the area andthe large group of middle class consumers who are Costco’s targets. He also said that the market has matured sufficiently for Chinese consumers to be “ready to pay for a membership card”. Costco is the world’s largest membership-only retailer. Walmart, the world’s largest retailer, has opened 26 membership-based Sam’s Club stores in China. The latest opened in June in northern Shanghai, only 10 km from the Costco outlet.

In related retail news, the State Administration for Market Regulation gave the green light to Suning.com to acquire an 80% stake in French supermarket Carrefour’s China business. In March, German retailer Metro was reported tobe selling its Chinese business, with Tencent and Alibaba appearing on the potential buyers' list, the China Daily reports.

According to eMarketer’s worldwide retail and e-commerce forecast, China is poised to surpass the United States to become the world’s top retail market in 2019. The report said China’s overall retail sales will rise 7.5% this year to USD5.64 trillion, compared to USD5.53 trillion in retail salesin the U.S.

Huawei may delay 5G Mate 30 smartphonesales overseas

Huawei Technologies, the world’s second largest smartphone vendor, may delay overseas sales of its upcoming 5G Mate 30 series smartphones for lack of access to Google services under the U.S. trade ban, according to analysts. While the new handsets will continueto run on the Android operating system, the U.S. trade ban on Huawei will prevent the company from selling these

high-end devices with popular Google mobile services, such as Gmail and Google Maps. The Shenzhen-based company is expected to send out invitations to internationalmedia for the launch of the Mate 30 in Munich, Germany, inmid-September. But without access to Google mobile services, Huawei will need to focus on selling the new Mate30 smartphone to consumers in its home market, where a range of domestic apps and services are more widely used.

Huawei declined to comment on speculation. “The open Android operating system and the ecosystem around it are still our first choice. Please stay tuned for our new products,” the company said. Huawei recently received another 90-day extension from the trade ban, allowing it to buy major components from American hi-tech companies, but this does not apply to new products such as the Mate 30, so it cannot be sold with licensed Google apps and services, according to a Reuters report. The new Mate 30 series represents Huawei’s most important device launch inthe second half of this year because it will compete against similar high-end handsets to be introduced by rivals Samsung Electronics and Apple in the same period.

Huawei, whose high-end P and Mate series smartphones sell for up to USD1,000 in overseas markets, has regularly launched the latest models in September in Europe, its most important market outside China. The company, however, saw its smartphone shipments in Europe decline by 16% in the second quarter of this year, according to research firm Canalys. Richard Yu, Chief Executive of Huawei’s Mobile Business Group, recently said the U.S. trade ban could have wiped out shipments of about 10 million smartphones from Huawei in the past quarter. Still, the U.S. trade ban has prompted Huawei to accelerate the roll-out of its self-developed mobile operating system calledHarmony, although for now it would prefer to stick to Android, if allowed by the trade ban.

Chinese rechargeable lithium-ion batteriesimported in the U.S. hit by tariffs

American manufacturers of rechargeable electronic deviceswill be scrambling with a dilemma on September 2: pass a 15% import duty on China-made rechargeable lithium-ion batteries to customers, or find alternative sources outside China to power smartphones, drones, or electric vehicles. These batteries are mostly made in China, the largest exporter of lithium-ion cells to the U.S. for the past seven years. Chinese producers made up USD872.8 million, or more than half of all lithium-ion batteries importedby the U.S. in the first six months of this year.

NEWSLETTER 3 SEPTEMBER 2019 11

Jason Yu, General Manager of market consultancy Kantar Worldpanel China, said the quality and good prices of Costco’s food products are a major attraction to Chinese consumers, as the demand for such products has grown. “As Chinese consumers put more stress on healthy products and higher living standards, the retail industry’s growth has remained robust in China and the momentum will continue,” he said.

Membership at Costco Shanghai has been available since July 1, with an annual membership card priced at CNY299. The company put its Chinese membership at over 120,000.The store, with a shopping area of 14,000 square meters, islocated in suburban Minhang district, nearly 30 km from thecity’s center. Richard Zhang, Costco’s Senior Vice President for Asia, said that the location was chosen due tothe presence of seven international schools in the area andthe large group of middle class consumers who are Costco’s targets. He also said that the market has matured sufficiently for Chinese consumers to be “ready to pay for a membership card”. Costco is the world’s largest membership-only retailer. Walmart, the world’s largest retailer, has opened 26 membership-based Sam’s Club stores in China. The latest opened in June in northern Shanghai, only 10 km from the Costco outlet.

In related retail news, the State Administration for Market Regulation gave the green light to Suning.com to acquire an 80% stake in French supermarket Carrefour’s China business. In March, German retailer Metro was reported tobe selling its Chinese business, with Tencent and Alibaba appearing on the potential buyers' list, the China Daily reports.

According to eMarketer’s worldwide retail and e-commerce forecast, China is poised to surpass the United States to become the world’s top retail market in 2019. The report said China’s overall retail sales will rise 7.5% this year to USD5.64 trillion, compared to USD5.53 trillion in retail salesin the U.S.

Huawei may delay 5G Mate 30 smartphonesales overseas

Huawei Technologies, the world’s second largest smartphone vendor, may delay overseas sales of its upcoming 5G Mate 30 series smartphones for lack of access to Google services under the U.S. trade ban, according to analysts. While the new handsets will continueto run on the Android operating system, the U.S. trade ban on Huawei will prevent the company from selling these

high-end devices with popular Google mobile services, such as Gmail and Google Maps. The Shenzhen-based company is expected to send out invitations to internationalmedia for the launch of the Mate 30 in Munich, Germany, inmid-September. But without access to Google mobile services, Huawei will need to focus on selling the new Mate30 smartphone to consumers in its home market, where a range of domestic apps and services are more widely used.

Huawei declined to comment on speculation. “The open Android operating system and the ecosystem around it are still our first choice. Please stay tuned for our new products,” the company said. Huawei recently received another 90-day extension from the trade ban, allowing it to buy major components from American hi-tech companies, but this does not apply to new products such as the Mate 30, so it cannot be sold with licensed Google apps and services, according to a Reuters report. The new Mate 30 series represents Huawei’s most important device launch inthe second half of this year because it will compete against similar high-end handsets to be introduced by rivals Samsung Electronics and Apple in the same period.

Huawei, whose high-end P and Mate series smartphones sell for up to USD1,000 in overseas markets, has regularly launched the latest models in September in Europe, its most important market outside China. The company, however, saw its smartphone shipments in Europe decline by 16% in the second quarter of this year, according to research firm Canalys. Richard Yu, Chief Executive of Huawei’s Mobile Business Group, recently said the U.S. trade ban could have wiped out shipments of about 10 million smartphones from Huawei in the past quarter. Still, the U.S. trade ban has prompted Huawei to accelerate the roll-out of its self-developed mobile operating system calledHarmony, although for now it would prefer to stick to Android, if allowed by the trade ban.

Chinese rechargeable lithium-ion batteriesimported in the U.S. hit by tariffs

American manufacturers of rechargeable electronic deviceswill be scrambling with a dilemma on September 2: pass a 15% import duty on China-made rechargeable lithium-ion batteries to customers, or find alternative sources outside China to power smartphones, drones, or electric vehicles. These batteries are mostly made in China, the largest exporter of lithium-ion cells to the U.S. for the past seven years. Chinese producers made up USD872.8 million, or more than half of all lithium-ion batteries importedby the U.S. in the first six months of this year.

NEWSLETTER 3 SEPTEMBER 2019 12

For America’s USD950 million energy storage industry, more than 70,000 jobs are at stake. “Imposition of duties onkey components required for the U.S. energy storage industry would constitute a major – and a completely unnecessary – step backwards in achieving the U.S. energy policy goal of a more secure grid for all Americans,” Kelly Speakes-Backman, Chief Executive of the Energy Storage Association (ESA) said in a June 17 letter to the office of the U.S. Trade Representative (USTR) objecting tothe tariffs. Tariffs on Chinese-made lithium-ion batteries “willraise costs to utilities and electric customers using battery storage for electric system modernization and resilience” asthe batteries are not available from U.S. suppliers to a “meaningful degree,” said the ESA, a trade group of companies working to modernize the American electric grid.

Tariffs on lithium-ion batteries were among the U.S. duties that took effect on September 1. The tariff could put Impossible Aerospace, a California maker of drones for police and first responders, at a severe disadvantage to its Chinese counterparts. Unlike batteries, completed drones are not subject to additional duties under the proposed tariffs. “This puts American manufacturers at a competitive disadvantage; to build the exact same product using American workers, we must pay more in tariffs than our competitors do to import a completed aircraft from China,” Stephen Gore, Impossible Aerospace’s Chief Executive, said in a June 11 letter. Finding an alternative battery supplier has been difficult for many companies given China’s dominance over much of the global supply chain, the South China Morning Post reports.

Beijing Daxing International Airport to startoperations at the end of September

Beijing Daxing International Airport completed its largest official comprehensive test, marking steady progress toward the start of commercial operations by the end of September. The Civil Aviation Administration of China (CAAC) is expected to issue an operating license soon, signaling that the facility will be qualified to handle flights.

In the latest test, 9,000 volunteers carried 5,600 pieces of luggage through the security and boarding processes on the third and fourth floors of the airport’s departure hall. Other passengers dropped off their checked baggage at Caoqiao subway station for transfer to flights for the first time. Four check-in counters opened at the station, including one to test international flights and three for domestic ones. Automated trains, running from Caoqiao

station in downtown Beijing to the new airport, were also put into operation. The trains, each with seven passenger cars and one for luggage, are scheduled to run every 8.5 minutes. Li Jianhua, Project Manager of the Beijing Daxing Airport Terminal Construction Office, said the test “helps theairport assess its operational readiness and fix possible problems”.

Daxing Airport has the world’s largest seamless steel structure terminal building. The tests also included security system failures and the operations of several restaurants, cafes and retail venues. Blue Frog Bar and Grill, a Western chain in China, opened its first airport dining area in the new facility. China Eastern Airlines used 5G technology during the test run. Facial recognition technology at check-in was also tested, the China Daily reports.

Your banner at the FCCC website or newsletter

Companies interested in posting a banner/an advertisement on the FCCC website or FCCC weekly newsletter are kindly invited to contact the FCCC at: info@flanders-china.be

Organisation and founding members of the Flanders-China Chamber of Commerce

Chairman: Mr. Stefaan Vanhooren, President Agfa Graphics, Member of the Executive Committee of the Agfa Gevaert Group, NV THE AGFA-GEVAERT GROUP SAVice-Chairmen: Mr. Bart De Smet, Chief Executive Officer, NV AGEAS SAMr. Philippe Van der Donckt, Director Government Affairs Asia, NV UMICORE SA

NEWSLETTER 3 SEPTEMBER 2019 12

For America’s USD950 million energy storage industry, more than 70,000 jobs are at stake. “Imposition of duties onkey components required for the U.S. energy storage industry would constitute a major – and a completely unnecessary – step backwards in achieving the U.S. energy policy goal of a more secure grid for all Americans,” Kelly Speakes-Backman, Chief Executive of the Energy Storage Association (ESA) said in a June 17 letter to the office of the U.S. Trade Representative (USTR) objecting tothe tariffs. Tariffs on Chinese-made lithium-ion batteries “willraise costs to utilities and electric customers using battery storage for electric system modernization and resilience” asthe batteries are not available from U.S. suppliers to a “meaningful degree,” said the ESA, a trade group of companies working to modernize the American electric grid.

Tariffs on lithium-ion batteries were among the U.S. duties that took effect on September 1. The tariff could put Impossible Aerospace, a California maker of drones for police and first responders, at a severe disadvantage to its Chinese counterparts. Unlike batteries, completed drones are not subject to additional duties under the proposed tariffs. “This puts American manufacturers at a competitive disadvantage; to build the exact same product using American workers, we must pay more in tariffs than our competitors do to import a completed aircraft from China,” Stephen Gore, Impossible Aerospace’s Chief Executive, said in a June 11 letter. Finding an alternative battery supplier has been difficult for many companies given China’s dominance over much of the global supply chain, the South China Morning Post reports.

Beijing Daxing International Airport to startoperations at the end of September

Beijing Daxing International Airport completed its largest official comprehensive test, marking steady progress toward the start of commercial operations by the end of September. The Civil Aviation Administration of China (CAAC) is expected to issue an operating license soon, signaling that the facility will be qualified to handle flights.

In the latest test, 9,000 volunteers carried 5,600 pieces of luggage through the security and boarding processes on the third and fourth floors of the airport’s departure hall. Other passengers dropped off their checked baggage at Caoqiao subway station for transfer to flights for the first time. Four check-in counters opened at the station, including one to test international flights and three for domestic ones. Automated trains, running from Caoqiao

station in downtown Beijing to the new airport, were also put into operation. The trains, each with seven passenger cars and one for luggage, are scheduled to run every 8.5 minutes. Li Jianhua, Project Manager of the Beijing Daxing Airport Terminal Construction Office, said the test “helps theairport assess its operational readiness and fix possible problems”.

Daxing Airport has the world’s largest seamless steel structure terminal building. The tests also included security system failures and the operations of several restaurants, cafes and retail venues. Blue Frog Bar and Grill, a Western chain in China, opened its first airport dining area in the new facility. China Eastern Airlines used 5G technology during the test run. Facial recognition technology at check-in was also tested, the China Daily reports.

Your banner at the FCCC website or newsletter

Companies interested in posting a banner/an advertisement on the FCCC website or FCCC weekly newsletter are kindly invited to contact the FCCC at: info@flanders-china.be

Organisation and founding members of the Flanders-China Chamber of Commerce

Chairman: Mr. Stefaan Vanhooren, President Agfa Graphics, Member of the Executive Committee of the Agfa Gevaert Group, NV THE AGFA-GEVAERT GROUP SAVice-Chairmen: Mr. Bart De Smet, Chief Executive Officer, NV AGEAS SAMr. Philippe Van der Donckt, Director Government Affairs Asia, NV UMICORE SA

NEWSLETTER 3 SEPTEMBER 2019 13

Secretary and Treasurer: Wim Eraly, Senior General Manager, NV KBC Bank SAExecutive Director: Ms. Gwenn SonckMembers of the Board of Directors and Founding Members:Mr. Stefaan Vanhooren, President Agfa Graphics, Member of the Executive Committee of the Agfa Gevaert Group, NV THE AGFA-GEVAERT GROUP SAMr. Christian Leysen, Executive Chairman, NV AHLERS SAMr. Filip Pintelon, Senior Vice President, GM Healthcare, NV BARCO SAMr. Philip Eyskens, Senior Vice President Legal, IT and M&A, NV BEKAERT SAMr. Philip Hermans, General Manager, NV DEME SAMr. Bart De Smet, Chief Executive Officer, NV AGEAS SAMr. Wim Eraly, Senior General Manager, KBC Bank SAMr. Johan Verstraete, Vice-President Marketing, Sales & Services Weaving Solutions, NV PICANOL SAMr. Philippe Van der Donckt, Director Government Affairs Asia, NV UMICORE SA

Membership rates for 2019 (excl. VAT)

● SMEs: €405 (€490.05 incl. VAT)● Large enterprises: €1,025 (€1,240.25 incl. VAT)

Contact

Flanders-China Chamber of CommerceOffice: Ajuinlei 1, B-9000 Gent – Belgium New telephone and fax numbers: Tel.: +32/9/269.52.46 – Fax: ++32/9/269.52.99E-mail: info@flanders-china.be Website: www.flanders-china.be

Share your story

To send your input for publication in a future newsletter mailto: info@flanders-china.be

The FCCC Newsletters are edited by Michel Lens, who is based in Beijing and can be contacted by e-mail michel.jc.lens@gmail.com . Disclaimer: the views expressed in this newsletter are not necessarily those of the FCCC or its Board of Directors.

NEWSLETTER 3 SEPTEMBER 2019 13

Secretary and Treasurer: Wim Eraly, Senior General Manager, NV KBC Bank SAExecutive Director: Ms. Gwenn SonckMembers of the Board of Directors and Founding Members:Mr. Stefaan Vanhooren, President Agfa Graphics, Member of the Executive Committee of the Agfa Gevaert Group, NV THE AGFA-GEVAERT GROUP SAMr. Christian Leysen, Executive Chairman, NV AHLERS SAMr. Filip Pintelon, Senior Vice President, GM Healthcare, NV BARCO SAMr. Philip Eyskens, Senior Vice President Legal, IT and M&A, NV BEKAERT SAMr. Philip Hermans, General Manager, NV DEME SAMr. Bart De Smet, Chief Executive Officer, NV AGEAS SAMr. Wim Eraly, Senior General Manager, KBC Bank SAMr. Johan Verstraete, Vice-President Marketing, Sales & Services Weaving Solutions, NV PICANOL SAMr. Philippe Van der Donckt, Director Government Affairs Asia, NV UMICORE SA

Membership rates for 2019 (excl. VAT)

● SMEs: €405 (€490.05 incl. VAT)● Large enterprises: €1,025 (€1,240.25 incl. VAT)

Contact

Flanders-China Chamber of CommerceOffice: Ajuinlei 1, B-9000 Gent – Belgium New telephone and fax numbers: Tel.: +32/9/269.52.46 – Fax: ++32/9/269.52.99E-mail: info@flanders-china.be Website: www.flanders-china.be

Share your story

To send your input for publication in a future newsletter mailto: info@flanders-china.be

The FCCC Newsletters are edited by Michel Lens, who is based in Beijing and can be contacted by e-mail michel.jc.lens@gmail.com . Disclaimer: the views expressed in this newsletter are not necessarily those of the FCCC or its Board of Directors.