WA and China in Headlines

(A round-up from January 2018)

Apr. 16: Weekly in China calls homeless in Seattle “strange phenomenon”

CEWeeklyChina Economic Weekly carried an article with this headline, “Strange Phenomenon of Seattle: Growing Homeless Population Behind Prosperity.” It quoted statistics from U.S. Bureau of Economic Analysis that of the 15 major cities in the U.S., Seattle’s GDP growth in 2016 ranked third, behind only Silicon Valley and Austin. However, the report said, under this prosperity there was a place called Licton Springs Village where more and more poor and destitute people gather. Homeless population in Seattle, it continued, soared rapidly by 44% from 2015 to 2017, reflecting the similar growth all over America. The article also included the image of the cover story “Homeless in Seattle” of The Weekly Standard. –WA China Watch Digest 04/17/18

Apr. 12: Greater China a central market for Boeing Business Jets

AINonlineAINonline reported that, Greg Laxton, the new head of Boeing Business Jets, called Greater China a central market for both new and pre-owned BBJs. Laxton spoke ahead ABACE, the Asian Business Aviation Conference & Exhibition in Shanghai, Apr. 17-19. The BBJ fleet has jumped from 10 aircraft in 2012 to 29 this year in Greater China, which accounted for 42 percent of all pre-owned BBJ sales since 2012. The fleet is slated to continue to expand in the region this year with two BBJs, one BBJ 2 and a BBJ 787. AINonline quoted Laxton as saying, “Greater China, is coming on,” and “Boeing really believes this is the region of tremendous growth.” --WA China Watch Digest 04/17/18

Apr. 4: China tariff not hitting Boeing hard in short term

King 5Glenn Farley of King 5 reported that “China's proposed tariff could hit Boeing, but not hard.” He explained that China’s proposed 25% tariffs on U.S.-made aircraft included those with an empty weight of between 15,000 to 45,000 kilograms, little less than 50 tons, leaving out the new Boeing 737 MAX 8 and MAX 9 jetliners. Most of the current unfilled jet orders from Chinese airlines were for Renton-built MAX 8 and 9 models. Farley quoted Michel Merluzeau, an industry analyst with Bellevue-based Air Insights Research, that the proposed tariff was China warning and saying we are looking at your commercial aircraft production. Farley also reported Boeing’s statement that they were confident that dialogue would continue, and they would also continue to proactively engage both governments. --WA China Watch Digest 04/06/18

Apr. 2: Washington state growers worry new China tariffs to hurt apple, cherry exports

APAP reported, as carried in the Seattle Times, that cherry and apple growers in Washington state are worried their exports to China will be hurt by a growing trade war, as China raised import duties on a $3 billion list of products, including apples, cherries and pears. According to AP, China is the top export market for Washington cherries, buying 2.9 million cases worth $127 million a year, and it also bought about $50 million worth of apples and $1.5 million worth of pears last year. The report quoted Kate Woods, a vice president of the Northwest Horticultural Council in Yakima, Washington: “Our hope is that the U.S. and China will reach a solution before cherry season starts in June." –WA China Watch Digest 04/03/18

Mar. 22: Washington state leaders worry about China’s retaliation tariffs

King5Natalie Brand at King 5 had this post, “China retaliation to tariffs worries Washington state leaders," with statements from a number of local leaders on the impact of China’s retaliation against President Trump’s tariffs. They were Governor Inslee, Lt. Governor Habib, former Governor and American Ambassador to China Gary Locke, former Port of Seattle Commissioner Bill Bryant, Rep. Dave Reichert, Sen. Maria Cantwell, Dr. Richard Ellings of the National Bureau of Asian Research, and Economics Professor Brian Kelly at Seattle University. Gary Locke said China could give a lot of orders to Airbus. Lt. Governor Habib worried about the 15% tariffs proposed by China on Washington’s fruit and wine. Most shared the view that tariffs were not an effective way to deal with Chinese piracy and forced technology transfer. --WA China Watch Digest 03/24/18

Mar. 21: China’s C919 wins near 1,000 orders, potentially undermining Boeing 737

PSBJAndrew McIntosh at the Puget Sound Business Journal reported that C919 passenger jet, China’s answer to Boeing's popular 737 single aisle aircraft, was approaching 1,000 orders. The C919, made by Commercial Aircraft Corp. of China Ltd. (COMAC), had gained 815 orders from 28 customers in China and abroad, as COMA announced. The value of the deals was not, however, disclosed. McIntosh said, as COMAC wins more C919 orders, it could undermine Boeing's own sales in China, where Boeing now sells one in three new 737s made in Renton, and where it's also launched a completion center for 737s in a joint venture with COMAC. Any decline in 737 sales could also hurt Puget Sound region aerospace companies that build and supply parts for 737s. --WA China Watch Digest 03/23/18

Mar. 19: Microsoft milestone: machine translating Chinese as well as humans

Tech Wire AsiaTech Wire Asia reported Microsoft’s announcement last week that three teams of Microsoft researchers from the company’s Beijing and Redmond, Washington labs worked together and reached a “historic milestone: the development of the first machine translation system that apparently had the same quality and accuracy as a person when translating Chinese news articles to English. Microsoft hired external bilingual human evaluators to verify the machines translation accuracy. Xuedong Huang, a US-based technical fellow in charge of Microsoft’s speech, natural language and machine translation efforts said, “Hitting human parity in a machine translation task is a dream that all of us have had. We just didn’t realize we’d be able to hit it so soon.” --WA China Watch Digest 03/19/18

Mar. 7: Fortune lists Boeing, Starbucks top U.S. businesses at risk from trade war with China

FortuneFortune magazine carried an article titled “These U.S. Businesses Are Most at Risk From a Trade War With China.” Of the ten businesses on its list, Boeing was number one, followed by Starbucks. About Boeing, Fortune said, with Boeing expecting China to need 7,240 new planes valued at almost $1.1 trillion in the two decades through 2036, it would be an easy target if China’s leaders decided to punish American companies. About Starbucks, Fortune said that as the most visible U.S. brands, and especially with its newly opened first international Roastery and Tasting Room in Shanghai, Starbucks could be an easy target of Chinese consumers angered by Trump. Other businesses at risk included Westinghouse, Tesla, Apple, and Ford. --WA China Watch Digest 03/09/18

Mar. 2: Don Bonker called steel, aluminum tariffs first shot of trade war with China

Seattle TimesFormer U.S. House of Representative Don Bonker wrote in the Seattle Times an oped titled “A trade war will hurt Washington” and called President Trump’s decision to impose more tariffs on steel and aluminum the first shot in the coming trade war with China. Bonker said Washington state would feel the brunt of China’s retaliation, in agricultural export, port facilities, not to say Boeing would have to pay more for aluminum products from China. He also mentioned how the Trump administration had pressured AT&T to quash its plans to roll out a smartphone by Chinese company Huawei, and asked what if Beijing reciprocated and banned Apple products entering the China market. Huawei, Bonker said, had planned to locate its America consumer headquarters in Bellevue. --WA China Watch Digest 03/03/18

Feb. 16: Chongqing-led group blocked in buying Chicago Stock Exchange

Chicago TribuneChicago Tribune reported that the decision of the Securities and Exchange Commission to reject a bid by a Chinese-led investor group to buy the Chicago Stock Exchange was a major blow to its international aspirations. The lead investor was from Chongqing, Seattle’s sister city: Casin Enterprise Group Co., which wanted to serve as a conduit to bring Chinese companies to the U.S. to raise capital. The SEC said it couldn't resolve concerns about the proposed ownership structure, which would have given 29% of the company to a China-based shareholder. CEO and president of the Exchange John Kerin expressed disappointment. An analyst at Greenwich Associates was quoted as saying, however, the Exchange's plan to help Chinese companies go public in the U.S. didn't require owning an exchange and that the motivation was a little unclear. --WA China Watch Digest 02/16/18

Feb. 5: Boeing transferring technologies to China Southern Airlines

China DailyChina Daily Guangdong reported that on Feb. 2 in Guangzhou, Boeing and China Southern Airlines (CSAIR) signed an agreement to convert passenger planes into cargo planes. Boeing will transfer technologies in a series of joint programs, including undercarriage overhaul for Boeing 777 and 787 planes, establishing a production line for converting Boeing 737 NG passenger planes into cargo planes, a support center for Boeing 787 planes, and support programs for Guangzhou Aircraft Maintenance Engineering Co (GAMECO). Boeing VP Stanley Deal was quoted as saying Boeing looked forward to the collaborating to meet demands for Boeing 787 operators, support regional airlines, promote the Boeing Converted Freighter program, etc. This was the first time Boeing made such technologies in aircraft MRO (maintenance, repair, and operation) available to China. --WA China Watch Digest 02/05/18

Jan. 25: Amazon has a potential competitor: Alibaba and Kroger

ReutersReuters reported that Chinese e-commerce and technology company Alibaba and U.S. grocer Kroger Co have had early discussions on working together. The discussions come, the report said, as U.S. e-commerce company Amazon has expanded aggressively into groceries with its acquisition of Whole Foods Market. While Amazon last week opened to the public its Amazon Go checkout-free grocery store, which relies on cameras and sensors to track what shoppers remove from the shelves, Alibaba runs its Hema supermarket chain as a test bed for the e-commerce firm’s move into traditional retail, where mobile phones are used to order, pay and get information about items. Reuters also said Alibaba’s talks with Kroger were not CEO-level yet. --WA China Watch Digest 01/27/18

Jan. 25: Boeing China breaking record in delivery of aircraft in 2017

NetEaseNetEase reported that Boeing China president John Bruns gave a press conference on Jan. 24 on Boeing’s achievement in 2017. He pointed out that, for the first time, Boeing broke the record by delivering 202 aircraft to China, after six years of delivering over 140 aircraft a year. By the end of 2017, China’s fleet of Boeing planes reached 1,500. In addition, Boeing also began construction of its 737 completion and delivery center in Zhejiang, expecting first delivery of 737 Max by the end of 2018. Boeing’s composite materials company in Tianjin also assembled its millionth product in 2017, and with its number of employees growing bigger than that of its competitors. With the competition of high speed trains, Boeing estimated that China would still need 7,000 new aircraft in the next twenty years. --WA China Watch Digest 01/27/18

Jan. 25: Starbucks Shanghai Roastery one day sale doubles one week sale of U.S. store

CNBCCNBC reported that the eight-week old Starbucks Shanghai Roastery is raking in insane sales: its one day sales more than doubles what a traditional U.S. store makes in an average week. It quoted Howard Schultz, Starbucks' chairman, "Our U.S. Starbucks stories, on average, do about $32,000 a week… The Roastery in Shanghai, after eight weeks of operations is doing, on average, twice that not each week, but each day." Shultz then continued to say that in the history of Starbucks, he had never, ever, seen anything remotely like what happened when they opened the Shanghai Roastery, as it shattered every sales record in the history of the company. --WA China Watch Digest 01/27/18

Jan. 5: Chinese homebuyers file lawsuit against Realogics Sotheby broker for inflating prices

Seattle TimesMike Rosenberg at the Seattle Times reported that a lawsuit had been filed by two plaintiffs from China who bought homes in Kirkland, alleging that their broker at Realogics Sotheby’s International Realty was actually working on behalf of the builder selling the homes. They were told there were multiple offers on the table and that they needed to bid more than $2 million each to buy the homes. But when they arrived in the area after the deals closed, they discovered the homes weren’t as promised, and that there had been no evidence that other buyers were interested in the homes. The plaintiffs are Jie “Gabby” Jiao, and the married couple Maoqi Zhang and Wei Fan; the defendant is Realogics Sotheby’s broker Connie Blumenthal. –WA China Watch Digest 01/06/18

Jan. 4: Starbucks spends $1.4 billion and buys 1,400 stores in East China

PSBJThe Puget Sound Business Journal reported that Starbucks closed a deal on Wednesday, spending $1.4 billion and buying 1,400 stores in East China. The Journal said Starbucks announced back in July that it would spend $1.3 billion to buy out the remaining 50% of a partnership with two other companies, or 1,300 stores, in Shanghai, Jiangsu and Zhejiang provinces. The acquisition on Wednesday, the Journal said, meant that Starbucks had added 100 stores in the past six months. Back then, Starbucks CEO Kevin Johnson said, “Unifying the Starbucks business under a full company-operated structure in China reinforces our commitment the market.” The report said Starbucks now operates 3,000 stores in 136 Chinese cities, opens a new store every 15 hours. --WA China Watch Digest 01/04/18

Jan. 2: Chongqing showcased in Times Square New Year’s Eve celebration

East Day NetSeattle’s sister city Chonqing took part in the Times Square New Year's Eve Countdown celebration on Dec. 31, 2017 in New York City, according to East Day news. As the official partner city of this year’s celebration, Chongqing sent its representatives to Times Square, the crossroads of the world, promoted its famed landscape and cultural heritage, and presented the revelers with its Tongliang Dragon Dance. Along with those from Chongqing Tourism Bureau, also appearing at the ceremony were officials of the New York City, the Chinese Consulate in New York, Times Square Committee, and U.S.-China Friendship Association. A banner held up by the Chongqing group in Times Square read, “Happy New Year 2018. Chongqing, China Welcomes You!” --WA China Watch Digest 01/02/18