Looking at BREXIT in a historical context

The view from a former EU official

See here the text of an informal luncheon address by my friend Michael Graham, former EU official currently living in Beijing, looking at BREXIT in a historical context.
It was addressed in Beijing at a Chinese-American group on 6 March 2017.

The title:
BREXIT AND ITS CONSEQUENCES
PERCEPTIONS AND OUTLOOK IN THE UK AND IN EUROPE
Download here: 170306 Brexitspeechrev3

EU and Brexit

The well researched document gives a unique insight and provides historical data on how the EU was set up and evolved over the years, how the complex interactions between the UK and the rest of the EU changed, how it led to Brexit, and how it could affect the Brexit negotiations. It also explains the underlying causes that lead to the Brexit vote.

No Dunkirk Spirit Can Save Britain From Brexit Defeat
The following article from the New York Times gives a rather sober/somber outlook on what Brexit could mean for the UK: https://www.nytimes.com/2017/07/28/opinion/dunkirk-christopher-nolan-brexit.html

See here two quotes:

A senior ex-diplomat, a man who has spent a professional lifetime building up Britain’s trade and its credibility with investors, is aghast at what the Brexit chaos is doing to our reputation. “The core narrative of the country for the past 40 years has been that we’re stable and politically predictable; the ideal platform for investing into the single market,” he told me. “And now we’re rudderless and in a mess.”

Britain is not an economic powerhouse waiting to be liberated. We are a country of mediocre education and limited skills, whose preening vanity has prevented us from seeing our failings. Our membership in the European Union is not a set of restraints; it is what has been propping us up. If we insist on cutting ourselves off, parts of our economy will start to die.

Does not sound encouraging…

Supporting Daniel Albrecht for vice president EUCCC

Why Daniel?

All candidates up for election in the European Chamber of Commerce in China are capable and merit our vote. I am supporting Daniel Albrecht for vice president EUCCC simply because he stands up to do more for SMEs, an often neglected crowd in the Chamber and in top-level meetings. Mats Harborn is another strong candidate.
See here all candidates:
http://agm.europeanchamber.com.cn/beijing/#candidates

See his video:

Motivation Letter

See: MOTIVATION_LETTER_DANIEL_ALBRECHT

After being an active member in the EUCCC since 2014 I decided to run for the position of Vice President of the European Chamber of Commerce in China (EUCCC).
This is the first time I run for a position on the Board of the EUCCC. I see this as a chance to bring fresh ideas and new energy into the chamber as a board member.
Through my professional experience in Beijing I have become familiar with problems affecting European SMEs such as general legal issues as well as IPR matters. As a small company I have encountered also the difficulties of working in China, being very different from issues faced by multinationals. For SMEs it is more difficult to get support from officials or other institutions due to a lack of a proper lobbying. My clients have been based in several European countries so I am familiar with their different needs and requirements.
I have more than ten years of China experience. In the past I worked for different Chinese and foreign law firms. I have been a member of the EUCCC since 2014, being active in the SME, IPR and CSR Working Groups. Since 2016 I have been helping the China SME IPR Help Desk as an external expert.
In my work for the Chamber, I have devoted myself to write comments and articles for the position papers and other publications and to try to contribute substantial input to change national regulations.
As a Vice president and advocate of the European SMEs I will focus on:

  • Strengthen the voice of European SMEs in China
  • Implement a nationwide network to defend the interests of the SMEs
  • Contribute to the effectiveness of our Chamber
  • Promote a strong European identify of the Chamber
  • Involve more European members

Biography

Daniel Albrecht, German attorney at law, married with a Chinese wife and has a 14-year -old daughter. As an attorney for more than ten years, he is a trusted lawyer of several embassies. Daniel used to be the founder, as well as a lawyer of DA-Legal, after practicing law in Germany, Japan and China, now he is running his own company, Starke, in China since 2014. With more than ten years’ experience in law area, especially in Chinese Law, he also acts as the external expert of EU China IPR SME Help Desk since 2016.  Daniel has not only lots of work experience but also a number of academic experience in Law Field. Having experience as an invited lecturer in universities in Germany, he is now a guest professor of Civil Law of China University of Political Science and Law (CUPL) since 2016. During his career in law, he has published several articles aiming e-commerce, IPR and other law issues in Chinese, Japanese and German magazines.
Daniel also devotes himself to voluntary works. He had been the president of the China-German-Business-Network since 2009 to 2016. From 2015 to 2016, he was the president of the Rotary Club of Beijing. Daniel is also active in different chambers of commerce in China, of which related mostly to SME topics and activities. He always has enthusiasm for organization works and willing to exert efforts.

Death By China: really?

The new Trump team

“Death By China” is again in the news. Sino-US trade frictions loom with Trump’s new pick for policy adviser, as explained in the SCMP:
Appointment of China critic Peter Navarro points to more bilateral tensions ahead, analyst says.
22 December 2016,
http://www.scmp.com/news/china/diplomacy-defence/article/2056678/sino-us-trade-frictions-loom-trumps-new-pick-policy

Peter Navarro

The professor is the author of “Death By China: How America Lost Its Manufacturing Base” (2011)
See the Official Version  of the documentary (in China you need VPN):

I did watch the entire documentary and can only say it is pretty harsh on China and at least a part of his statements are simply dead wrong, e.g. his take on Apple and Foxconn.
However he could find some supporters in the foreign business community for some of his criticism. Anyway Chinese officials better not simply dismiss the whole thing but instead have a close look.

More from Navarro

Peter Navarro is a professor at the Merage School of Business at the University of California-Irvine. With a Masters of Public Administration from the Kennedy School of Government and a Ph.D. in economics from Harvard, this distinguished macroeconomist has written extensively on Asia as well as lived and worked there.

crouchingtiger

His other book: “Crouching Tiger: What China’s Militarism Means for the World” (2015)
See: http://crouchingtiger.net/

It says there:
Will there be war with China? The Crouching Tiger book provides the most complete and accurate assessment of the probability of conflict between the United States and the rising Asian superpower. Equally important, it lays out an in-depth analysis of the possible pathways to peace. Written like a geopolitical detective story, the narrative encourages reader interaction by starting each chapter with an intriguing question that often challenge conventional wisdom. Based on interviews with more than thirty top experts, the author highlights a number of disturbing facts about China’s recent military buildup and the shifting balance of power in Asia: the Chinese are deploying game-changing “carrier killer” ballistic missiles; some of America’s supposed allies in Europe and Asia are selling highly lethal weapons systems to China in a perverse twist on globalization; and, on the U.S. side, debilitating cutbacks in the military budget send a message to the world that America is not serious about its “pivot to Asia.”

And so on.
Oh well, not planning to buy his book(s). Let’s see what he will really do. And good luck to him. He will need it.

What about further devaluation of the RMB?

Rumors of further devaluation of the RMB Yuan

This week in Beijing I was told of rumors (as I call it) of a further devaluation of the RMB (Renminbi) Yuan, some 17% in a few years. I was asked about my opinion. Some American politicians have been attacking China since long, accusing China of currency manipulation (their currency is “undervalued”). I mostly disagreed with that for many reasons. Well, firstly many U.S. companies got rich by importing enormous amount of products for the consumers. If the RMB would go up, that would be bad for them. Just look at how many billions USD Walmart imports every year from China. The reality is, market forces are dragging the currency down, showing its real market value.
They complain China devalues the currency to favor exports. While this might help a bit, this advantage has since a few years mostly disappeared.

The RMB is losing ground recently

The RMB has become weaker indeed. Reasons? Economists will have many explanations but I stick to the sings that capital has been flowing out, by Chinese companies going on a buying spree, by Chinese people feeling uneasy about the state of the economy and politics and taking their money to “safer heavens”. China is now trying to clamp down on all those illicit capital outflows. Yes, the economy is also under stress and that does not help the currency.
With the pressure on the RMB China has now rather started to defend the RMB

Why a further devaluation of the RMB is not so evident

See here a recent comment in the SCMP, recommended to explore as it details the arguments.
07 November 2016 – Macroscope by David Brown
“Why China’s yuan is poised to be the next global super-currency”
With dominant reserve currencies like the dollar and the euro in decline, the yuan has a great opportunity to be a serious contender
http://www.scmp.com/business/markets/article/2043563/why-chinas-yuan-poised-be-be-next-global-super-currency

I quote:

It has only been a short while since the yuan was granted reserve currency status by the International Monetary Fund late last year, so it is still early days. The yuan’s inclusion in the IMF’s basket of reserve currencies, as recently as last month, means it will take some time before China emerges as one of the leading players in the global payments and reserves system.
To reach true reserve currency status, the yuan must meet three key criteria – cementing credibility, convertibility and confidence in the currency. It will be challenging but not impossible. Governments and multinational institutions must be certain China’s currency not only satisfies these conditions, but it is also backed by credible and transparent policies, in order to feel safe about diversifying their foreign exchange reserves in any significant size into yuan.

And here my comments I posted:

Some good points made. The Yuan has a long way to go but the outlook is rather favorable as other currencies have lost their luster, as explained here. In Beijing some Chinese “economists” predict the yuan will devalue by 17% within a few years. That is better than what some pessimists predict (free fall due to debt and other) but I am more hesitant. China is actually trying to defend the currency as to improve its image as a world currency. Devaluation to help exports is also questionable today. A fact is the yuan is under pressure so the government will have to do something and not let “market forces” act too much. So what will happen? Difficult to say but I would rather opt for under 10% rather than 17%.

What are the main risks in China?

Opinions differ.
Some see the debt burden as a doomsday scenario, the economy will totally collapse.Z
I am not so sure about that, yes debt is a problem but the government has more control than any other country.
More alarming is the real estate bubble. The government is trying to contain it but it is not sure they can succeed. The reason for the bubble are diverse and merits a separate analysis.

China-Belgium Economic Forum in Anbang

Program of the Forum

On the occasion of the official visit to the People’s Republic of China by Prime Minister Charles Michel and to celebrate the 45th anniversary of diplomatic relations between China and Belgium, Michel Malherbe, Ambassador of Belgium and Wu Xiaohui, Chairman of Anbang Insurance Group jointly organized the China-Belgium Economic Forum on Monday 31 October at the Anbang Group Head Office in Beijing.
The Anbang buildings are state of the art and impressive. It was a great setting for a Forum that we can say was very successful.
There was a VIP line-up of speakers:

  • Wu Xiaohui, Chairman of Anbang Insurance Group
  • Zhong Shan, Vice Minister of Commerce and International Trade
  • Lawrence Summers, Former US Secretary of Treasury, Former President of Harvard University and Economist
  • H.E. Charles Michel, PM
  • Michela Ritondo, Fiscal Department for Foreign Investments, Federal Public Service Finance (Belgium)
  • Mattias Debroyer, Consulate General of Belgium in Shanghai

The speeches were followed by a panel discussion, with among others representatives of Huawei and Anbang.
To conclude there was a lively Q&A with PM Michel.
Pictured are, among others, our ambassador Michel Malherbe, Paul Lambert (Consul General Shanghai), Eddy De Cuyper (Counsellor, Customs Attaché at the embassy), and others.

Content of the Forum

We saw some pretty cool videos about Belgium, I checked and all are available on this Belgian website, an excellent overview of our country with well-done short videos:
http://focusonbelgium.be/en
See for example the video of Gent (Ghent), my hometown:
(you need VPN for the direct link, Https://vimeo.com/151404508)

The presentations by the Belgian side were very informative, giving a clear introduction to our country as well as indicating all the advantages of investing and operating there, such as also tax incentives.

As mentioned by China Daily, see:
http://europe.chinadaily.com.cn/business/2016-11/01/content_27235357.htm

Chinese insurer Anbang Insurance Group Co Ltd unveiled a three-year loan program that will offer a total of 10 billion euros ($10.97 billion) to help Chinese startups and smaller companies to do business in Europe. The plan was announced by Anbang chairman Wu Xiaohui at the China-Belgium Economic Forum in Beijing. The loan will be extended through Anbang’s banking subsidiary Bank Nagelmackers in Belgium.
The loan program is part of Anbang’s response to a Chinese government call for greater support for local small business, which have faced growing difficulties in gaining access to capital amid the economic slowdown.

Interview VRT with Gilbert and the media

The previous day I was interviewed by VRT (Stefan Blommaert), near the Belgian Embassy along the Liangma River. See the pics of the interview in the previous post.
Pictured are several screenshots of the VRT TV News, the last group of pictures.
Overall the visit of our Belgian PM received wide media coverage in the Chinese media.