Presidents Donald Trump and Xi Jinping both reported more positive outlooks on U.S.-China trade cooperation after a phone call between the two. According to Reuters, Xi was quoted saying that they hoped to “expand bilateral trade cooperation.” Both presidents were reported saying that they were willing to meet at the upcoming G20 summit in Argentina to talk further. However, in sharp contrast to the phone call, the U.S. Justice Department has indicted Chinese state-owned company Fujian Jinhua Integrated Circuit Co. and its Taiwanese partner for allegedly stealing trade secrets from the United States’ largest memory chip-maker, Micron Technology Inc. Former United States Attorney General Jeff Sessions also announced a new “China initiative” to combat theft of critical U.S. technology.
Analysts say that the Politburo’s most recent statement indicated that China was recognizing the negative impact of the trade war and will shift its policies to protect its economy. The statement included lines about protecting the private economy and boosting the stock markets. Xi wrote an open letter pledging support to China’s private business owners and their development. Already, China implemented income tax cuts to help boost consumption and has lowered tariffs on textiles, machinery, construction material, and paper to lower costs for consumers and companies.
The trade war hasn’t seemed to have affected the U.S. economy as much; the economy grew by 3.5 percent in the third quarter—buoyed mainly by tax cuts—but there are signs that the growth could slow in the coming months.
Chinese tech company Bytedance secured $3 billion in funding from SoftBank and other investors. That puts the company’s valuation at $75 billion, which effectively makes the 6-year-old company the world’s most valuable startup.
Bytedance, which owns news aggregator Toutiao, one of China’s most-used apps with 120 million users, and short-video social platform TikTok (known as Douyin in China), will use the funding to speed up its overseas expansion. Bytedance also acquired Musical.ly, another short video platform popular in the U.S., for $1 billion in 2017, and subsequently merged it with TikTok, which recently exceeded Facebook, Instagram, YouTube and Snapchat in new U.S. downloads for the month of October.
Although Bytedance has achieved rapid success, the company has run afoul of Chinese censors in the past. They had to shut down their joke-sharing app Neihan Duanzi and temporarily remove Toutiao from app stores.
Dalian Wanda Group, the Chinese real estate developer turned multinational conglomerate, has agreed to sell two of its tourism units to Chinese property developer Sunac China Holdings. In a deal worth over $900 million, Sunac bought a 75 percent stake of Chengdu Wanda Theme Cultural and Tourism Management, and 99 percent of Wanda Culture Travel Innovation Group. In 2017, Wanda had also agreed to sell a 91 percent stake in 13 of its culture and tourism assets, along with 76 hotels, to Sunac.
There were also reports that Wanda was considering selling a portion of its stake in Hollywood studio Legendary Entertainment, which it acquired in 2016 for $3.3 billion, as well as its sports assets. However, the company denied all talk of the sale.
Chinese tech giants Baidu and Tencent are delving further into smart transportation. Tencent is expanding its QR code payments, bus hailing, and travel assistance, and has ramped up efforts to promote digitalization of China’s transportation sector. Instead of swiping cards, Tencent hopes to get users to use QR codes via their smartphones to pay for public transit. As part of its plans, Tencent has signed an agreement with Shenzhen Airlines to allow passengers to use QR codes for security checks and to board planes.
Baidu, China’s largest search engine, has focused on autonomous vehicles via its open development platform called Apollo. Baidu recently inked a deal with Swedish carmaker Volvo to develop self-driving electric vehicles in China. Baidu also launched a two-year project with Ford to test self-driving vehicles on Chinese roads, which will start in Beijing this year. By the end of the test period, the vehicles should be capable of operating autonomously in certain road conditions.
E-commerce giant Alibaba has entered into a joint venture with e-commerce fashion company Yoox Net-a-Porter (owned by Swiss luxury goods group Compagnie Financiere Richemont). The partnership will launch two apps for Chinese consumers: one for Net-a-Porter and one for Mr. Porter, Net-a-Porter’s male-focused offshoot. Both Net-a-Porter and Mr. Porter will also launch online stores on Alibaba’s Tmall Luxury Pavilion.
The deal comes on the heels of Alibaba rival JD.com’s $400 million investment in Farfetch, a fast-growing international luxury marketplace, as these e-commerce giants try to cater to Chinese consumers’ appetite for luxury goods. In 2017, Chinese shoppers made up 32 percent of the world’s spending on luxury goods, and this demographic is expected to account for 44 percent by 2025.