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China policy round-up: Trump threatens to raise tariffs again, China to set up manufacturing fund, US Senate passes HK bill

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By Rebecca Feng
22 Nov 2019

In this round-up, US president Donald Trump threatened to raise tariffs again if a phase one deal is not reached, China is planning to set up a fund to promote its manufacturing industry and the US Senate passed the Hong Kong Human Rights and Democracy Act.

On Wednesday, Trump told reporters when he was touring a manufacturing facility in Texas that China is not doing enough to strike a deal.

“I can tell you this,” he said. “China would much rather make a trade deal than I would. I don’t think they’re stepping up to the level that I want.”

In separate news, the US Department of Commerce granted US companies another 90-day extension to have “specific, limited engagements” with Huawei, the blacklisted Chinese telecoms giant, according to an announcement by the Department of Commerce on Monday.

“The Temporary General License extension will allow carriers to continue to service customers in some of the most remote areas of the United States who would otherwise be left in the dark,” secretary Wilbur Ross said. “The Department will continue to rigorously monitor sensitive technology exports to ensure that our innovations are not harnessed by those who would threaten our national security.”

Huawei was first put on the US blacklist in May. At that time, the Trump administration cited concerns that the Chinese company posed a national security risk.

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China is setting up a massive fund to promote the nation’s manufacturing industry, Shanghai Securities News, a state-owned media, reported on Wednesday.

The fund has a registered capital of Rmb147bn ($20.9bn). It will invest in early-stage and matured companies in new materials, new information technologies and electrical equipment sectors.

The fund has 20 shareholders, including its largest shareholder the Ministry of Finance, as well as China Development Bank’s investment arm CDB Capital Co.

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The US Senate unanimously passed the Hong Kong Human Rights and Democracy Act on Tuesday. The bill requires the US secretary of state to certify at least once a year whether the SAR still warrants special treatment under US law. The decision will be made based on a number of factors including the autonomy of its government’s decision-making on human rights, extradition requests and law enforcement.

The bill will now be sent to Trump to be signed into law. Trump is expected to sign the bill despite warnings from China, Bloomberg reported, citing a person familiar with the matter.

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The China Securities Regulatory Commission (CSRC) issued an action plan regarding improving the quality of Chinese listed companies in the next three to five years, state-owned media Securities Times reported on Monday.

The detailed plan laid out 46 tasks for the listed companies, including improving information disclosures efficiency, corporate governance, delisting rules, regulatory supervisions and market environment.

From the CSRC’s perspective, it said it will gradually pilot a registration-based IPO system on the ChiNext Board, hoping to extend the success of the Star Market on the Shanghai Stock Exchange.

By Rebecca Feng
22 Nov 2019