Economy

The Hengqin Plan and Qianhai Plan released by the Chinese central government aim to deepen economic cooperation and promote cross-border integration within the Guangdong-Hong Kong-Macau Greater Bay Area (GBA). The Plans will involve greater integration of Hong Kong and Macau with the mainland. While Macau has always embraced this trajectory and the Hengqin Plan could bring greater dynamism to the SAR, Hong Kong’s fears of “mainlandisation” and the territorial instincts of mainland cities may present some obstacles to the Qianhai Plan. EAI academic Yu Hong tells us more.

Local governments in China are facing a problem of not having enough in their coffers, leading to various measures such as a hiring freeze in Hegang city. Corruption also remains a problem, with some officials using their authority and influence to line their own pockets. Zaobao correspondent Yang Danxu notes that there is a danger of such debt issues becoming a risk to social stability.

Even as the pandemic created greater demand for internet companies like Kuaishou, Alibaba and Meituan, these companies are finding their large staff numbers unsustainable, leading to a wave of major retrenchments over the past year or so. This is not just due to overexpansion, but also operational pressures that come with new regulations to protect employment rights. Zaobao journalist Meng Dandan reports.

The US’s recently enacted Uyghur Forced Labor Prevention Act prohibits the import of Xinjiang-produced goods, leaving US companies in a bind. In response, Walmart and Tesla have taken different approaches. While Sam’s Club under Walmart removed Xinjiang products, drawing the ire of Chinese consumers, Tesla gained cheers for opening a new showroom in Urumqi. Will US companies be forced to choose sides? Zaobao correspondent Chen Jing looks into the matter.

China has managed Trump era hostilities by implementing a “dual circulation strategy” with a focus on its domestic market, but it risks turning inward to the detriment of its economy, says analyst Zheng Weibin. In particular, it should guard against being shut off from the technological progress of other major economies.

In 2022, as global supply chains normalise and inflation gradually decreases, there is room for cautious optimism in the global economic outlook, but much will depend on countries’ fiscal policies and the extent to which the US Federal Reserve adjusts its interest rates. Economics professor Zhang Rui predicts that if investments of economic giants such as the US, the EU, Japan and China continue to rise, the global economy will expand, but emerging countries will need to be wary of increasing their debt burdens.

The China-Laos railway linking China’s Yunnan province to Vientiane, the capital of Laos, was officially opened in December 2021. This mega project under China’s Belt and Road Initiative is expected to improve connectivity and stimulate the economy but Laos has incurred hefty external debt to achieve this, says EAI academic Yu Hong. The railway alone is also just the hardware; the Laotians will have to do more to make the best of its investment.

Claims that financial decoupling will occur between China and the US are not yet evident from the trade data, says NUS academic Christopher J. Voisey. In 2020, FDI inflows in China increased by 6% and the ease of doing business improved. And while there have been greater hurdles for Chinese companies seeking US listings, their stocks are often still available to foreign investors through alternative channels. Might some turbulence be par for the course as China seeks stronger autonomy and economic power?

Amid regulatory concerns and news of Didi Chuxing delisting from the New York Stock Exchange, it seems that the writing is on the wall for Chinese companies seeking overseas listings. Will the Hong Kong Stock Exchange be their natural refuge? The Hong Kong government has implemented reforms to woo new-economy innovative companies and investors, but will these measures be enough? NUS academic Xu Le has the details.