China policy round-up: Beijing cleared of second wave of Covid-19, US sanctions officials, Trump administration looks into TikTok ban
In this round-up, the latest cluster of Covid-19 in Beijing city comes to an end, the US imposes sanctions on four Chinese officials and Mainland-based social media apps are faced with more pressure.
China’s Consumer Price Index (CPI) inflation edged up to 2.5% year-on-year in June from 2.4% in May, according to data released by the National Bureau of Statistics on Thursday.
Food inflation reached 11.1% in June, a 0.5 percentage point jump from May. Non-food inflation went down slightly from 0.4% in May to 0.3% in June,
Producer Price Index (PPI) deflation eased in June, edging down to 3.0% year-on-year June from 3.7% in May.
“Despite the recent rise, we believe CPI inflation may not represent a policy constraint in coming quarters,” Ting Lu, chief economist at Nomura, said in a Thursday research note. “Instead, the recent stock market rally could be a key hurdle for Beijing’s policy easing agenda.”
The US sanctioned Chen Quanguo, the Communist party secretary, and three other officials in Xinjiang province, according to a Thursday statement by the US Department of the Treasury.
The sanctions are imposed under the Global Magnitsky Human Rights Accountability Act, a law targeting alleged human rights violators. Individuals sanctioned will see their US assets — if they have any — frozen. They will also be banned from travelling to the US and conducting businesses with US entities.
The US also sanctioned the Xinjiang Public Security Bureau.
Wang Yi, China’s foreign minister, warned that the US-China relationship is “facing the most serious challenges since the establishment of diplomatic relations [in 1979]”, according to a speech delivered at a forum on Thursday.
Wang said both sides should not seek to change one another but together explore a peaceful co-existence. He said China has not changed its policies towards the US and still is willing to develop a relationship that is based on sincerity and goodwill.
The Chinese capital city of Beijing had zero new local Covid-19 infections on Monday, the first time zero infection day since June 11, after a coronavirus cluster related to a wholesale food market broke out nearly four weeks ago. There were no new cases for the rest of week.
Wang Chunying, chief economist for the State Administration of Foreign Exchange (Safe), has been appointed as deputy head for the forex regulator.
China’s foreign exchange reserves exceeded $3.11tr ($445bn) in June, after a $10.6bn increase compared to the end of May, according to data from Safe.
Safe’s Wang said on Tuesday that the 0.3% rise was due to changes in exchange rate and asset prices.
The US Secretary of States Mike Pompeo told Fox News on Monday local time that the Trump administration is “certainly looking at” a ban on Chinese social media apps including TikTok.
TikTok, as well as messaging app WeChat, are among the 59 Chinese apps that were recently disallowed in India.
There are renewed talks on a potential ban on Huawei Technologies from the UK’s 5G networks. John Browne, Huawei’s UK chairman, reportedly said in a virtual event in London this week that the company “has become a football” between the United States and China, and that “the UK has had a very long relationship with China and I hope it’s not one that they simply throw away”.