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China policy round-up: Trade deal review resumes, US asks universities to divest China stocks, Huawei faces more restrictions

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By Addison Gong
21 Aug 2020

In this round-up, China and the US are back on track to review progress of the phase one trade deal, American universities have been told to cut their China investments in their endowments, and Huawei Technologies is hit with another ban.

China and the US will hold trade talks “in the coming days”, the Ministry of Commerce (Mofcom) said on Thursday. The two countries reportedly postponed a video conference call last Saturday to review the phase one trade deal after six months of its implementation. US president Donald Trump has claimed to have called off the talks.

China’s vice premier Liu He, US trade representative Robert Lighthizer, and treasury secretary Steven Mnuchin had been set to speak.

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The US has suspended three bilateral agreements with Hong Kong including the extradition treaty, the State Department announced on Wednesday US time, saying that the new national security law had “crushed the freedoms of the people” of the special administrative region.

The country joins Australia, Canada, France, Germany, New Zealand and the UK in halting extradition agreements with Hong Kong.

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China and the US have decided to double the number of passenger flights between the two countries from eight per week to 16. American and Chinese airlines will each account for eight return flights under the new arrangement.

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Trump said tax credits will be created for companies that bring jobs back to the US from China, when meeting supporters in Minnesota on Monday. At another campaign event on Thursday, he threatened to impose tariffs on firms that refuse to move jobs back from overseas, should he win the November presidential election.

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The US State Department has warned universities and colleges in the country to divest Chinese companies’ stocks from their endowments, Bloomberg reported.

Keith Krach, undersecretary for economic growth, energy and the environment, reportedly wrote in a letter addressing the universities’ board of directors that such divestment would be prudent “in the likely outcome that enhanced listing standards lead to a wholesale de-listing of [Chinese] firms from US exchanges by the end of next year”.

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Huawei Technologies was hit with fresh restrictions from the US this week. On Monday, the US Department of Commerce updated a list of rules that already bans Huawei from obtaining US-made semiconductors. The latest change will also limit Huawei’s access to foreign-made chips based on US software or technology. At the same time, 38 of Huawei’s affiliates from 21 countries were added to the ban.

China’s Ministry of Finance spokesperson Zhao Lijiang called the move “blatant bullying”. The Mofcom said it strongly opposes the US’s decision and will do whatever it takes to protect Chinese companies’ legitimate rights.

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Trump said at an event on Tuesday that Oracle Corp is “a great company” and could take over TikTok’s US operations.

His comments came after Reuters and other media reported that the tech giant will potentially bid for the ByteDance company’s businesses in North America, Australia and New Zealand.

By Addison Gong
21 Aug 2020