Newsletter11 December 2018

FCCC/EUCBA ACTIVITIES

Information session: “A new 'Single Permit' for work and residence”19 December – 12h00 - Antwerp

The Flanders-China Chamber of Commerce, the Port of Antwerp and Flanders Investment & Trade are organizing the information session: A new 'Single Permit' for work and residence which will take place on 19 December at 12h00 at the Antwerp Port House, Zaha Hadidplein 1, 2030 Antwerp.

On 1 January 2019, the new Single Permit immigration scheme enters into force. In this seminar, we will focus on the changes this Single Permit scheme will bring and how the new process and rules will impact high-skilled immigration towards Belgium.

Your value in participating:• Get an update and overview of the Single Permit legislation;• Become familiar with the impact of the new rules on your mobile employees and your mobility management; • Get tips and tricks on streamlining your immigration processes.

Program:12u00-12u30 Registration and buffet lunch12u30-12u40 Welcome introduction12u40-13u00 Impact of the Single Permit Scheme13u00-13u30 Regional immigration approach13u30-14u00 Practical considerations14u00-14u10 Conclusion

Newsletter11 December 2018

FCCC/EUCBA ACTIVITIES

Information session: “A new 'Single Permit' for work and residence”19 December – 12h00 - Antwerp

The Flanders-China Chamber of Commerce, the Port of Antwerp and Flanders Investment & Trade are organizing the information session: A new 'Single Permit' for work and residence which will take place on 19 December at 12h00 at the Antwerp Port House, Zaha Hadidplein 1, 2030 Antwerp.

On 1 January 2019, the new Single Permit immigration scheme enters into force. In this seminar, we will focus on the changes this Single Permit scheme will bring and how the new process and rules will impact high-skilled immigration towards Belgium.

Your value in participating:• Get an update and overview of the Single Permit legislation;• Become familiar with the impact of the new rules on your mobile employees and your mobility management; • Get tips and tricks on streamlining your immigration processes.

Program:12u00-12u30 Registration and buffet lunch12u30-12u40 Welcome introduction12u40-13u00 Impact of the Single Permit Scheme13u00-13u30 Regional immigration approach13u30-14u00 Practical considerations14u00-14u10 Conclusion

NEWSLETTER 11 DECEMBER 2018 2

Speakers:• Gwenn Sonck, Executive Director, Flanders-China Chamber of Commerce • Matthias Lommers, Senior Director, Deloitte • Joke Braam, Manager, Deloitte

If you are interested to participate in this session, please subscribe before 16 December 2018 via the this link.

Free of charge.

PAST EVENTS

Week International Entrepreneurship: China5 December 2018 – Antwerp

Share useful information and experience!

The Flanders-China Chamber of Commerce (FCCC), VOKA and Flanders Investment and Trade (FIT) organized an event on the occasion of Week International Entrepreneurship: China, on 5 December 2018 at VOKA in Antwerp. In 2017 Flanders exported more than €7.3 billion to China, whereby the country climbed to the 9 th spot on thelist of the Flemish export. The family income of Chinese consumers keeps growing, leading to a higher living standard and rising demand for services in tourism, education, medical care and leisure spending.

Jill Suetens, Manager International, VOKA – KVK Antwerp-Waasland and Gwenn Sonck, Executive Director, Flanders-China Chamber of Commerce / EU-China Business Association, welcomed the participants. Flemish trade with China and actions by FIT was introduced by Michèle Surinx, Area Manager East-Asia, Flanders

Investment and Trade. Filip DeLanghe, Urbanization Architect – Director AWG Architecten, gave a testimony on doing business in China. Sven Agten, Managing Partner, Agio Capital & Business Solutions China, talked about opportunities in new China. A networking reception concluded the event.

ADVERTISEMENT ANDSPONSORSHIP

Interested in advertisement in the FCCC Weekly or on the FCCC website? Send an e-mail to info@flanders-china.be

FOREIGN TRADE

After ceasefire in U.S.-China trade war, hardwork of negotiations begins

China and the United States took a big step forward in relations to reach a truce in the trade war, U.S. President Donald Trump said, as China prepared to send a big delegation to the U.S. for further talks after President Xi Jinping and Donald Trump had dinner together in Buenos Aires on December 1, when they agreed to hold off on imposing new tariffs for 90 days. “Relations with China have taken a BIG leap forward! Very good things will

NEWSLETTER 11 DECEMBER 2018 2

Speakers:• Gwenn Sonck, Executive Director, Flanders-China Chamber of Commerce • Matthias Lommers, Senior Director, Deloitte • Joke Braam, Manager, Deloitte

If you are interested to participate in this session, please subscribe before 16 December 2018 via the this link.

Free of charge.

PAST EVENTS

Week International Entrepreneurship: China5 December 2018 – Antwerp

Share useful information and experience!

The Flanders-China Chamber of Commerce (FCCC), VOKA and Flanders Investment and Trade (FIT) organized an event on the occasion of Week International Entrepreneurship: China, on 5 December 2018 at VOKA in Antwerp. In 2017 Flanders exported more than €7.3 billion to China, whereby the country climbed to the 9 th spot on thelist of the Flemish export. The family income of Chinese consumers keeps growing, leading to a higher living standard and rising demand for services in tourism, education, medical care and leisure spending.

Jill Suetens, Manager International, VOKA – KVK Antwerp-Waasland and Gwenn Sonck, Executive Director, Flanders-China Chamber of Commerce / EU-China Business Association, welcomed the participants. Flemish trade with China and actions by FIT was introduced by Michèle Surinx, Area Manager East-Asia, Flanders

Investment and Trade. Filip DeLanghe, Urbanization Architect – Director AWG Architecten, gave a testimony on doing business in China. Sven Agten, Managing Partner, Agio Capital & Business Solutions China, talked about opportunities in new China. A networking reception concluded the event.

ADVERTISEMENT ANDSPONSORSHIP

Interested in advertisement in the FCCC Weekly or on the FCCC website? Send an e-mail to info@flanders-china.be

FOREIGN TRADE

After ceasefire in U.S.-China trade war, hardwork of negotiations begins

China and the United States took a big step forward in relations to reach a truce in the trade war, U.S. President Donald Trump said, as China prepared to send a big delegation to the U.S. for further talks after President Xi Jinping and Donald Trump had dinner together in Buenos Aires on December 1, when they agreed to hold off on imposing new tariffs for 90 days. “Relations with China have taken a BIG leap forward! Very good things will

NEWSLETTER 11 DECEMBER 2018 3

happen. We are dealing from great strength, but China likewise has much to gain if and when a deal is completed. Level the field!” Trump said in a tweet. Trump also said U.S.farmers would benefit from China’s agreement to buy more American agricultural products, and Beijing had agreed to “reduce and remove” tariffs on U.S. cars. Beijing raised tariffs on American cars to 40% over the summer as the tit-for-tat trade war escalated. A source familiar with the trade talks said China was expected to send about 30 officials to Washington for discussions, but it was not known who would be in the delegation. U.S. Trade Representative Robert Lighthizer would be in charge of negotiations with China over the next 90 days. However, President Trump warned that if the deal does not happen, “remember, I am aTariff Man”. There is still some confusion in the White House when the 90-day period would start, on December 1 or January 1.

“As the next step, both sides will speed up negotiations based on the consensus reached between the two countries’ leaders,” Chinese Foreign Ministry Spokesman Geng Shuang said. The two sides have three months to tackle their differences over forced technology transfer, intellectual property protection, non-tariff barriers and cyber intrusions. If there is no progress, the U.S. will go ahead with increases in duties that it had threatened to apply from January 1. Jake Parker, U.S.-China Business Council Vice President for China Operations, said the ceasefire delayedfurther escalation “but this is where the hard work begins”. “It is unreasonable to assume that all challenges in the relationship can be resolved in 90 days. Both sides should instead aim for substantive, measurable and commercially meaningful outcomes and a long-term engagement framework,” Parker said. U.S. Treasury Secretary Steven Mnuchin also warned that Beijing should avoid “soft commitments” in talks. “There is a 100% unanimous view on our economic team that this needs to be a real agreement,” Mnuchin was quoted as saying. He told CNBC that China had made trade commitments worth around USD1.2 trillion, but stressed that the details still needed to be negotiated.

Chinese President Xi Jinping “made the pitch himself” during the dinner with Donald Trump that ended with a truce in the trade war with the U.S., according to White House Economic Adviser Larry Kudlow, adding that it was unusual to see government leaders taking such a hands-onrole in this type of negotiation. “We’ve never seen that hands-on participation by President Xi before. In fact, that dinner was quite remarkable,” Kudlow said. “President Xi engaged in a level of detail – you could even say he was selling this, which was, in my opinion, quite unusual for the

head of state. Guys like me are supposed to know the details. He did. He made the pitch himself. I was impressedwith that and I felt that bolstered the Chinese commitment. Imay be wrong, but I believe it did,” Kudlow said. But there remains much skepticism as to what extent Beijing will deliver by the end of the 90-days, as the grace period is nowhere near long enough to allow the two sides to bridge the large differences between their positions on key issues.

Many companies located in the Pearl River Delta who were considering to relocate their operations to Vietnam if the tariffs would be raised from 10% to 25% have put their plans on hold. Xie Jun, a furniture exporterbased in Zhejiang province, said the cost of building a new factory in Vietnam had soared in the past few months and become unaffordable to many. “So the trade war truce is really a relief for us, and we hope the government can really end the trade war next year,” Xie said. While there are no official statistics, this year some 5,000 to 6,000 factories based in mainland China – owned by Hong Kong or Taiwan investors, or by private mainland investors – have sent their people to look into moving production to Vietnam to guard against the rise in tariffs on made-in-China exports, analysts said according to the South China Morning Post. The monthly rent for existing factory buildings in popular industrial parks near Ho Chi Minh City has risen to USD4 per square meter from USD3 last year, according to Vincy Nguyen, Greater China sales manager of BW Industrial Development, which builds and manages industrial parks.

China has begun preparing to restart imports of U.S. soybeans and liquefied natural gas (LNG), as it agreed to buy some U.S. products “immediately”, but it is not known whether the preparations meant China would cut the retaliatory tariffs it imposed on those products, or when the purchases would happen.

NEWSLETTER 11 DECEMBER 2018 3

happen. We are dealing from great strength, but China likewise has much to gain if and when a deal is completed. Level the field!” Trump said in a tweet. Trump also said U.S.farmers would benefit from China’s agreement to buy more American agricultural products, and Beijing had agreed to “reduce and remove” tariffs on U.S. cars. Beijing raised tariffs on American cars to 40% over the summer as the tit-for-tat trade war escalated. A source familiar with the trade talks said China was expected to send about 30 officials to Washington for discussions, but it was not known who would be in the delegation. U.S. Trade Representative Robert Lighthizer would be in charge of negotiations with China over the next 90 days. However, President Trump warned that if the deal does not happen, “remember, I am aTariff Man”. There is still some confusion in the White House when the 90-day period would start, on December 1 or January 1.

“As the next step, both sides will speed up negotiations based on the consensus reached between the two countries’ leaders,” Chinese Foreign Ministry Spokesman Geng Shuang said. The two sides have three months to tackle their differences over forced technology transfer, intellectual property protection, non-tariff barriers and cyber intrusions. If there is no progress, the U.S. will go ahead with increases in duties that it had threatened to apply from January 1. Jake Parker, U.S.-China Business Council Vice President for China Operations, said the ceasefire delayedfurther escalation “but this is where the hard work begins”. “It is unreasonable to assume that all challenges in the relationship can be resolved in 90 days. Both sides should instead aim for substantive, measurable and commercially meaningful outcomes and a long-term engagement framework,” Parker said. U.S. Treasury Secretary Steven Mnuchin also warned that Beijing should avoid “soft commitments” in talks. “There is a 100% unanimous view on our economic team that this needs to be a real agreement,” Mnuchin was quoted as saying. He told CNBC that China had made trade commitments worth around USD1.2 trillion, but stressed that the details still needed to be negotiated.

Chinese President Xi Jinping “made the pitch himself” during the dinner with Donald Trump that ended with a truce in the trade war with the U.S., according to White House Economic Adviser Larry Kudlow, adding that it was unusual to see government leaders taking such a hands-onrole in this type of negotiation. “We’ve never seen that hands-on participation by President Xi before. In fact, that dinner was quite remarkable,” Kudlow said. “President Xi engaged in a level of detail – you could even say he was selling this, which was, in my opinion, quite unusual for the

head of state. Guys like me are supposed to know the details. He did. He made the pitch himself. I was impressedwith that and I felt that bolstered the Chinese commitment. Imay be wrong, but I believe it did,” Kudlow said. But there remains much skepticism as to what extent Beijing will deliver by the end of the 90-days, as the grace period is nowhere near long enough to allow the two sides to bridge the large differences between their positions on key issues.

Many companies located in the Pearl River Delta who were considering to relocate their operations to Vietnam if the tariffs would be raised from 10% to 25% have put their plans on hold. Xie Jun, a furniture exporterbased in Zhejiang province, said the cost of building a new factory in Vietnam had soared in the past few months and become unaffordable to many. “So the trade war truce is really a relief for us, and we hope the government can really end the trade war next year,” Xie said. While there are no official statistics, this year some 5,000 to 6,000 factories based in mainland China – owned by Hong Kong or Taiwan investors, or by private mainland investors – have sent their people to look into moving production to Vietnam to guard against the rise in tariffs on made-in-China exports, analysts said according to the South China Morning Post. The monthly rent for existing factory buildings in popular industrial parks near Ho Chi Minh City has risen to USD4 per square meter from USD3 last year, according to Vincy Nguyen, Greater China sales manager of BW Industrial Development, which builds and manages industrial parks.

China has begun preparing to restart imports of U.S. soybeans and liquefied natural gas (LNG), as it agreed to buy some U.S. products “immediately”, but it is not known whether the preparations meant China would cut the retaliatory tariffs it imposed on those products, or when the purchases would happen.

NEWSLETTER 11 DECEMBER 2018 4

Huawei's CFO arrested in Canada, facingextradition to the U.S. for violating Iran sanctions

The Chief Financial Officer (CFO) of Chinese telecom company Huawei, Sabrina Meng, 41, has been detainedby Canadian authorities on December 1 in Vancouver as she transferred to a flight to Mexico, at the request of the U.S. government. U.S. prosecutors alleged that she violated U.S. sanctions on Iran between 2009 and 2014 and engaged in “conspiracy to defraud multiple financial institutions” in 2013 when she attempted to convince bankers that Huawei and a former Hong Kong subsidiary SkyCom were wholly separate entities when in fact they were not. Meng is the daughter of Huawei’s Founder Ren Zhengfei, but adopted her mother’s surname. She is considered a leading contender to succeed her father at thehead of the company and is Vice Chairperson of the Board of Directors. She is risking up to 30 years imprisonment in an U.S. jail.

The Chinese Embassy in Ottawa protested the move in a statement issued shortly after the Canadian government made the detention public. It said in a statement: “The Chinese side has lodged stern representations with the U.S. and Canadian side, urged them to immediately correctthe wrongdoing and restore the personal liberty of Ms. Meng Wanzhou. Huawei stated: “The company has been provided very little information regarding the charges and isnot aware of any wrongdoing by Ms. Meng. The company believes the Canadian and U.S. legal systems will ultimately reach a just conclusion.” “Huawei complies with all applicable laws and regulations where it operates, including applicable export control and sanction laws and regulations of the UN, U.S. and EU,” the company added.

Following the news of the CFO’s arrest, stocks of Huawei’s suppliers tumbled in mainland China and Hong Kong trading. If Meng fights extradition, her case could go on for years, lawyers said, but if she chooses not to fight, she could be in the United States within weeks. TheChinese government warned Canada that it would face

“grave consequences” if Meng is not freed. China's ForeignMinistry called in the Canadian and U.S. Ambassadors to lodge a protest.

There is also growing anxiety that U.S. executives in China may be targeted in retaliation for the “aggressive” U.S. action. Bill Bishop, China watcher and publisher of the Sinocism newsletter, said Chinese retaliation in tit-for-tat form would be “explosive”. But Chinese foreign ministry spokesman Geng Shuang said China “has always protected the legitimate rights and interests of foreign nationals in China and they should obey Chinese laws when they are in China”. Chinese corporate executives are also concerned. They fear that the arrest of an individual executive at a prominent Chinese firm means the U.S. has become more aggressive in its strategy to erode China’s technological advances and so could take aim at any executive at any Chinese tech firm at any time.

U.S. authorities have been investigating Huawei since at least 2016 for allegedly shipping U.S.-origin products to Iran and other countries in violation of U.S. export and sanctions laws. U.S. security services also suspect that Huawei equipment could be used for espionage purposes and government agencies are prohibited from buying Huawei products. Australia has followed the U.S. in banning Huawei’s equipment from the country’s 5G roll-out.Spark, New Zealand’s biggest telecoms network operator, also said that the country’s intelligence agency blocked its proposal to use Huawei’s equipment for its 5G developmentplans, and BT Group of the UK would remove Huawei’s gear from its core 4G network within two years, and would not use the Chinese company's products in central parts of the next-generation 5G network. Huawei has been in Britainfor more than 17 years, with its equipment checked and monitored by a special company laboratory overseen by government and intelligence operators.

China’s push to lead the global development and roll-out of 5G mobile networks could be at risk, following thearrest of Meng, analysts said, as the company might incur U.S. sanctions. “It is not yet clear whether there has been abreach committed, but for the CFO to be detained we can expect serious accusations to be levied against Huawei in the coming days,” said Paul Haswell, Partner at law firm Pinsent Masons. In Belgium, the Center for Cybersecurity Belgium (CCB) is investigating whether to recommend banning Huawei's equipment from the networks of Proximus and Orange Belgium.

Meanwhile, Huawei Technologies has signed a contract to upgrade Portugal’s No 1 phone network to the 5G

NEWSLETTER 11 DECEMBER 2018 4

Huawei's CFO arrested in Canada, facingextradition to the U.S. for violating Iran sanctions

The Chief Financial Officer (CFO) of Chinese telecom company Huawei, Sabrina Meng, 41, has been detainedby Canadian authorities on December 1 in Vancouver as she transferred to a flight to Mexico, at the request of the U.S. government. U.S. prosecutors alleged that she violated U.S. sanctions on Iran between 2009 and 2014 and engaged in “conspiracy to defraud multiple financial institutions” in 2013 when she attempted to convince bankers that Huawei and a former Hong Kong subsidiary SkyCom were wholly separate entities when in fact they were not. Meng is the daughter of Huawei’s Founder Ren Zhengfei, but adopted her mother’s surname. She is considered a leading contender to succeed her father at thehead of the company and is Vice Chairperson of the Board of Directors. She is risking up to 30 years imprisonment in an U.S. jail.

The Chinese Embassy in Ottawa protested the move in a statement issued shortly after the Canadian government made the detention public. It said in a statement: “The Chinese side has lodged stern representations with the U.S. and Canadian side, urged them to immediately correctthe wrongdoing and restore the personal liberty of Ms. Meng Wanzhou. Huawei stated: “The company has been provided very little information regarding the charges and isnot aware of any wrongdoing by Ms. Meng. The company believes the Canadian and U.S. legal systems will ultimately reach a just conclusion.” “Huawei complies with all applicable laws and regulations where it operates, including applicable export control and sanction laws and regulations of the UN, U.S. and EU,” the company added.

Following the news of the CFO’s arrest, stocks of Huawei’s suppliers tumbled in mainland China and Hong Kong trading. If Meng fights extradition, her case could go on for years, lawyers said, but if she chooses not to fight, she could be in the United States within weeks. TheChinese government warned Canada that it would face

“grave consequences” if Meng is not freed. China's ForeignMinistry called in the Canadian and U.S. Ambassadors to lodge a protest.

There is also growing anxiety that U.S. executives in China may be targeted in retaliation for the “aggressive” U.S. action. Bill Bishop, China watcher and publisher of the Sinocism newsletter, said Chinese retaliation in tit-for-tat form would be “explosive”. But Chinese foreign ministry spokesman Geng Shuang said China “has always protected the legitimate rights and interests of foreign nationals in China and they should obey Chinese laws when they are in China”. Chinese corporate executives are also concerned. They fear that the arrest of an individual executive at a prominent Chinese firm means the U.S. has become more aggressive in its strategy to erode China’s technological advances and so could take aim at any executive at any Chinese tech firm at any time.

U.S. authorities have been investigating Huawei since at least 2016 for allegedly shipping U.S.-origin products to Iran and other countries in violation of U.S. export and sanctions laws. U.S. security services also suspect that Huawei equipment could be used for espionage purposes and government agencies are prohibited from buying Huawei products. Australia has followed the U.S. in banning Huawei’s equipment from the country’s 5G roll-out.Spark, New Zealand’s biggest telecoms network operator, also said that the country’s intelligence agency blocked its proposal to use Huawei’s equipment for its 5G developmentplans, and BT Group of the UK would remove Huawei’s gear from its core 4G network within two years, and would not use the Chinese company's products in central parts of the next-generation 5G network. Huawei has been in Britainfor more than 17 years, with its equipment checked and monitored by a special company laboratory overseen by government and intelligence operators.

China’s push to lead the global development and roll-out of 5G mobile networks could be at risk, following thearrest of Meng, analysts said, as the company might incur U.S. sanctions. “It is not yet clear whether there has been abreach committed, but for the CFO to be detained we can expect serious accusations to be levied against Huawei in the coming days,” said Paul Haswell, Partner at law firm Pinsent Masons. In Belgium, the Center for Cybersecurity Belgium (CCB) is investigating whether to recommend banning Huawei's equipment from the networks of Proximus and Orange Belgium.

Meanwhile, Huawei Technologies has signed a contract to upgrade Portugal’s No 1 phone network to the 5G

NEWSLETTER 11 DECEMBER 2018 5

standard, giving the Chinese company its 23rd global network client – 15 in Europe, five in the Middle East and three in Asia – to extend its lead as the world’s largest maker of telecommunications equipment, ahead of Nokia and Ericsson. The company will supply the equipment and software to Altice Portugal.

Earlier this year, Shenzhen-based ZTE was brought to the brink of collapse after the U.S. activated an export ban that prohibited American companies from doing business with the telecommunications equipment company. The ban was subsequently lifted under a new 10-year probation, a USD1.76 billion fine, and the placement of U.S. complianceofficers at the company. Unlike ZTE, Huawei has not been formally accused of breaching U.S. export sanctions on Iranand North Korea.

FOREIGN INVESTMENT

Alibaba extends its e-trading platform to Liege,where it will build a smart logistics hub

Alibaba's Executive Chairman Jack Ma (left) and BelgianPrime Minister Charles Michel (right) at a previous event

Alibaba Group Holding has signed a memorandum of understanding (MOU) with the Belgian government to extend its electronic world trade platform (eWTP) to Liege. Belgium thereby becomes the third country to welcome Alibaba’s initiative after Malaysia and Rwanda. eWTP seeks to lower barriers to global trade for small and medium-sized enterprises (SMEs). “With over 98% of European companies being small to medium businesses, this partnership signifies our initial and expanded effort to enhance inclusive trade opportunities for these businesses in Belgium and across Europe,” Alibaba Chief Executive Daniel Zhang said in a statement.

Alibaba-owned Cainiao Smart Logistics Network signed a contract with Liege Airport to lease a 220,000-

square meter site where the Chinese company will build a smart logistics hub. Alibaba estimated the project will entail an initial investment of €75 million, with the first phase of operations expected to start in 2021. “The arrival of Cainiaoreinforces the competitiveness of our airport,” Liege Airport Chief Executive Luc Partoune said. “Several Chinese companies are already here.” In September, Alibaba said it plans to invest CNY100 billion to strengthen its global logistics network over the next five years.

The eWTP was conceived by Alibaba Executive Chairman Jack Ma in 2016 as an electronic Silk Road to connect every country and give SMEs the ability to sell anywhere in the world. The benefits of using eWTP hubs include speedy customs clearance, logistics support and minimal tariffs. The first such hub was set up by Alibaba in its home base of Hangzhou, while Malaysia’s capital Kuala Lumpur became the first city outside China to become part of the initiative. The Malaysian hub is expected to be completed by the end of 2019. Rwanda recently became the first African nation to join the eWTP. Alibaba promised to help SMEs in Rwanda sell their products, such as coffee beans, on its online marketplaces. Alibaba sold a record CNY213.5 billion during its Singles’ Day shopping promotion on November 11, with health supplements, milk powder, diapers and skincare products among the most highly sought imported goods, the South China Morning Post – which is owned by Alibaba – reports.

The agreement on the eWTP initiative in Belgium is the firstsuch deal with a European country to promote inclusive global trade. “This will be a huge opportunity to boost exports and bring wide-ranging economic benefits to society, including employment opportunities to Liege,” said Belgium Prime Minister Charles Michel. Alibaba said the new smart logistics hub will be the cornerstone of the eWTP infrastructure collaboration and facilitate access to the Chinese market. In addition to the logistics hub, Alibabaand the Belgian government will work to digitize and streamline customs procedures to allow for a more efficient clearance of goods. Alibaba and Belgian trade and investment agencies will also work on promotions, marketing and direct imports of Belgian products to increase their sales on Alibaba’s e-commerce platforms. Alibaba will also promote Belgium as an attractive destination for Chinese tourists.

NEWSLETTER 11 DECEMBER 2018 5

standard, giving the Chinese company its 23rd global network client – 15 in Europe, five in the Middle East and three in Asia – to extend its lead as the world’s largest maker of telecommunications equipment, ahead of Nokia and Ericsson. The company will supply the equipment and software to Altice Portugal.

Earlier this year, Shenzhen-based ZTE was brought to the brink of collapse after the U.S. activated an export ban that prohibited American companies from doing business with the telecommunications equipment company. The ban was subsequently lifted under a new 10-year probation, a USD1.76 billion fine, and the placement of U.S. complianceofficers at the company. Unlike ZTE, Huawei has not been formally accused of breaching U.S. export sanctions on Iranand North Korea.

FOREIGN INVESTMENT

Alibaba extends its e-trading platform to Liege,where it will build a smart logistics hub

Alibaba's Executive Chairman Jack Ma (left) and BelgianPrime Minister Charles Michel (right) at a previous event

Alibaba Group Holding has signed a memorandum of understanding (MOU) with the Belgian government to extend its electronic world trade platform (eWTP) to Liege. Belgium thereby becomes the third country to welcome Alibaba’s initiative after Malaysia and Rwanda. eWTP seeks to lower barriers to global trade for small and medium-sized enterprises (SMEs). “With over 98% of European companies being small to medium businesses, this partnership signifies our initial and expanded effort to enhance inclusive trade opportunities for these businesses in Belgium and across Europe,” Alibaba Chief Executive Daniel Zhang said in a statement.

Alibaba-owned Cainiao Smart Logistics Network signed a contract with Liege Airport to lease a 220,000-

square meter site where the Chinese company will build a smart logistics hub. Alibaba estimated the project will entail an initial investment of €75 million, with the first phase of operations expected to start in 2021. “The arrival of Cainiaoreinforces the competitiveness of our airport,” Liege Airport Chief Executive Luc Partoune said. “Several Chinese companies are already here.” In September, Alibaba said it plans to invest CNY100 billion to strengthen its global logistics network over the next five years.

The eWTP was conceived by Alibaba Executive Chairman Jack Ma in 2016 as an electronic Silk Road to connect every country and give SMEs the ability to sell anywhere in the world. The benefits of using eWTP hubs include speedy customs clearance, logistics support and minimal tariffs. The first such hub was set up by Alibaba in its home base of Hangzhou, while Malaysia’s capital Kuala Lumpur became the first city outside China to become part of the initiative. The Malaysian hub is expected to be completed by the end of 2019. Rwanda recently became the first African nation to join the eWTP. Alibaba promised to help SMEs in Rwanda sell their products, such as coffee beans, on its online marketplaces. Alibaba sold a record CNY213.5 billion during its Singles’ Day shopping promotion on November 11, with health supplements, milk powder, diapers and skincare products among the most highly sought imported goods, the South China Morning Post – which is owned by Alibaba – reports.

The agreement on the eWTP initiative in Belgium is the firstsuch deal with a European country to promote inclusive global trade. “This will be a huge opportunity to boost exports and bring wide-ranging economic benefits to society, including employment opportunities to Liege,” said Belgium Prime Minister Charles Michel. Alibaba said the new smart logistics hub will be the cornerstone of the eWTP infrastructure collaboration and facilitate access to the Chinese market. In addition to the logistics hub, Alibabaand the Belgian government will work to digitize and streamline customs procedures to allow for a more efficient clearance of goods. Alibaba and Belgian trade and investment agencies will also work on promotions, marketing and direct imports of Belgian products to increase their sales on Alibaba’s e-commerce platforms. Alibaba will also promote Belgium as an attractive destination for Chinese tourists.

NEWSLETTER 11 DECEMBER 2018 6

CHINA NEWS ROUND-UP

Volvo betting on China as a manufacturing hubfor the global market

Swedish automaker Volvo Cars is revving up its strategy to develop China as a manufacturing hub for the global market. About 40% of the vehicles made in its Daqing plant in Heilongjiang province are now sold around the world. The plant is the first of Volvo’s production facilities in China to adopt its state-of-the-art Scalable Product Architecture, and has become the sole producer globally of the carmaker’s flagship S90 sedans since November 2016. Last week, the 100,000 th S90 made at the plant rolled off the assembly line; the bright silver right-hand-drive car will be shipped to the United Kingdom, one of nearly 70 countries and regions where the model is sold. “This is a truly significant event and the S90 is a milestone product for Volvo Cars. The importance lies in the fact that the S90 not only serves Chinese consumers, but is also exported to the global market with the same premium quality,” said Yuan Xiaolin, President and CEO of Volvo Asia-Pacific, in a celebratory speech at the plant.

David Stenstrom, the Daqing plant’s General Manager, saidVolvo executives used to have concerns about whether China-built vehicles would meet the company’s high global standards, but those worries have been tossed aside, “because we have long proved that Volvo cars made in China have won global recognition,” Stenstrom said.

From January to October this year, sales of the S90 worldwide totaled 47,811 units, with a year-on-year growth of 40.8%. The first batch of China-made S90s was exported to Europe in April 2017, and one month later, another batch was sent to the United States. In 2015, Volvobecame the first premium carmaker to export China-built cars to developed markets, when S60 sedans made at its Chengdu plant were shipped to the United States. Currently, Volvo’s exports to Europe and the United States amount to about half of all China-made vehicles sold there. Globally, Volvo sold 526,062 cars in the first 10 months this year, up 14% year-on year. Sales in China totaled 107,275 units from January to October, growing 15.2% from the same period last year. It took one month less this year than in 2017 for Volvo to sell 100,000 units in China, according to Zhao Qin, Vice President of Corporate Communications of Volvo Cars Asia-Pacific, as reported by the China Daily.

China expected to surpass U.S. in venturecapital fundraising for start-ups

2018 is likely to go down as the “Year of the Red Unicorns,” when for the first time China beats the U.S. in attracting the most global venture capital for early-stage start-ups, private equity data provider Preqin said. Already in the first half of the year, China outpaced the U.S. in venture capital for promising privately held companies worth at least USD1 billion, raising USD56 billion versus USD42 billion, according to “The Year of the Red Unicorns” study by Preqin and graduate business schoolINSEAD. China is home to some of the hottest unicorns in the world, sparking multibillion-dollar funding rounds this year for companies such as Ant Financial, bike-sharing start-up Mobike and Ping An Healthcare.

The Preqin-INSEAD study tracks 321 unicorns, of which one third – or 98 – were Chinese and half – or 162– were from the U.S. This means that, despite fewer in number, China’s unicorns tend to be highly valued by their investors. “The success of the red unicorns has spurred a culture of entrepreneurship in China, inspiring millions of young Chinese to follow suit as they are encouraged by government efforts to support innovation and entrepreneurship,” the report said. China is drawing huge global attention with its “Made in China 2025” program that aims to transform the country into a hi-tech powerhouse, taking on the U.S. and other Western tech giants in everything from robotics to aerospace to new material and new energy vehicles.

Five of the top 10 “mega-unicorns”, defined by Preqin asprivately held, venture-backed companies with a valuation of at least USD10 billion and over, originate from China. At the head of the list is Ant Financial, which has a valuation of USD150 billion. The fintech and third-party payment network affiliate of the Alibaba Group has this yearraised a record-breaking series-C round at USD14 billion, from such leading investors as Temasek, CPP Investment Board, Carlyle Group and GIC. Holding second place is Didi Chuxing, a ride-hailing mobile app in China that has since expanded into autonomous driving. Valued at USD56 billion, its backers include Softbank, Tencent, Singapore sovereign wealth fund Temasek, GGV Capital and others. In terms of investors with stakes in the largest number of Chinese unicorns, the three Chinese so-called BAT tech giants – Baidu, Alibaba and Tencent – are among the top five. Internet titan Tencent tops the list with equity stakes in 27 of the 98 Chinese unicorns that Preqin tracks. Alibaba and Baidu have 15 and 13 red unicorns, respectively.

NEWSLETTER 11 DECEMBER 2018 6

CHINA NEWS ROUND-UP

Volvo betting on China as a manufacturing hubfor the global market

Swedish automaker Volvo Cars is revving up its strategy to develop China as a manufacturing hub for the global market. About 40% of the vehicles made in its Daqing plant in Heilongjiang province are now sold around the world. The plant is the first of Volvo’s production facilities in China to adopt its state-of-the-art Scalable Product Architecture, and has become the sole producer globally of the carmaker’s flagship S90 sedans since November 2016. Last week, the 100,000 th S90 made at the plant rolled off the assembly line; the bright silver right-hand-drive car will be shipped to the United Kingdom, one of nearly 70 countries and regions where the model is sold. “This is a truly significant event and the S90 is a milestone product for Volvo Cars. The importance lies in the fact that the S90 not only serves Chinese consumers, but is also exported to the global market with the same premium quality,” said Yuan Xiaolin, President and CEO of Volvo Asia-Pacific, in a celebratory speech at the plant.

David Stenstrom, the Daqing plant’s General Manager, saidVolvo executives used to have concerns about whether China-built vehicles would meet the company’s high global standards, but those worries have been tossed aside, “because we have long proved that Volvo cars made in China have won global recognition,” Stenstrom said.

From January to October this year, sales of the S90 worldwide totaled 47,811 units, with a year-on-year growth of 40.8%. The first batch of China-made S90s was exported to Europe in April 2017, and one month later, another batch was sent to the United States. In 2015, Volvobecame the first premium carmaker to export China-built cars to developed markets, when S60 sedans made at its Chengdu plant were shipped to the United States. Currently, Volvo’s exports to Europe and the United States amount to about half of all China-made vehicles sold there. Globally, Volvo sold 526,062 cars in the first 10 months this year, up 14% year-on year. Sales in China totaled 107,275 units from January to October, growing 15.2% from the same period last year. It took one month less this year than in 2017 for Volvo to sell 100,000 units in China, according to Zhao Qin, Vice President of Corporate Communications of Volvo Cars Asia-Pacific, as reported by the China Daily.

China expected to surpass U.S. in venturecapital fundraising for start-ups

2018 is likely to go down as the “Year of the Red Unicorns,” when for the first time China beats the U.S. in attracting the most global venture capital for early-stage start-ups, private equity data provider Preqin said. Already in the first half of the year, China outpaced the U.S. in venture capital for promising privately held companies worth at least USD1 billion, raising USD56 billion versus USD42 billion, according to “The Year of the Red Unicorns” study by Preqin and graduate business schoolINSEAD. China is home to some of the hottest unicorns in the world, sparking multibillion-dollar funding rounds this year for companies such as Ant Financial, bike-sharing start-up Mobike and Ping An Healthcare.

The Preqin-INSEAD study tracks 321 unicorns, of which one third – or 98 – were Chinese and half – or 162– were from the U.S. This means that, despite fewer in number, China’s unicorns tend to be highly valued by their investors. “The success of the red unicorns has spurred a culture of entrepreneurship in China, inspiring millions of young Chinese to follow suit as they are encouraged by government efforts to support innovation and entrepreneurship,” the report said. China is drawing huge global attention with its “Made in China 2025” program that aims to transform the country into a hi-tech powerhouse, taking on the U.S. and other Western tech giants in everything from robotics to aerospace to new material and new energy vehicles.

Five of the top 10 “mega-unicorns”, defined by Preqin asprivately held, venture-backed companies with a valuation of at least USD10 billion and over, originate from China. At the head of the list is Ant Financial, which has a valuation of USD150 billion. The fintech and third-party payment network affiliate of the Alibaba Group has this yearraised a record-breaking series-C round at USD14 billion, from such leading investors as Temasek, CPP Investment Board, Carlyle Group and GIC. Holding second place is Didi Chuxing, a ride-hailing mobile app in China that has since expanded into autonomous driving. Valued at USD56 billion, its backers include Softbank, Tencent, Singapore sovereign wealth fund Temasek, GGV Capital and others. In terms of investors with stakes in the largest number of Chinese unicorns, the three Chinese so-called BAT tech giants – Baidu, Alibaba and Tencent – are among the top five. Internet titan Tencent tops the list with equity stakes in 27 of the 98 Chinese unicorns that Preqin tracks. Alibaba and Baidu have 15 and 13 red unicorns, respectively.

NEWSLETTER 11 DECEMBER 2018 7

Second in ranking is Sequoia Capital, a U.S.-headquartered venture capital firm, which has 25.

Underlining China’s increasing dominance in producing unicorns, Raymond Chan, Allianz Global Investors’ equity Chief Investment Officer for Asia-Pacific, said China is also expected to surpass the U.S. this year in research and development (R&D) spending in 2018. The five-year compound annual growth rate for China R&D spending up to 2016 was 9.88%, compared to the U.S. growth rate up to2015 of 2.01%, the South China Morning Post reports.

China has deficit in e-commerce foreign trade

China’s goods trade via cross-border e-commerce platforms rose to CNY111.04 billion in the first 10 months of 2018, as the country continues to lift individuals’annual transaction volume cap. Through this fast-growing sector, the country’s imports surged 86% year-on-year to reach CNY67.18 billion between January and October, while exports jumped by 173.9% year-on-year to CNY43.86billion, according to the General Administration of Customs.“China will continue to adjust the product list and tax policies for cross-border e-commerce retail imports,” said LiChenggang, Assistant Commerce Minister.

He made the remarks after the country released a policy onNovember 28 increasing the total number products to 1,321 under 63 tariff categories. The products include textiles and clothing, footwear, jewelry, certain food products, small household appliances, stationery, fitness equipment, wine, beer, telescopes, video game consoles and ski boots. As for transaction volume caps, the limit per transaction has been lifted from CNY2,000 to CNY5,000, while the annual cap has been raised from CNY20,000 to CNY26,000 per person. These caps will be further raised as people’s income increases in the future, officials said. Assistant Minister Li said that under the new rules, China will extend the policies currently implemented in the existing15 pilot cities to another 22 comprehensive cross-border e-commerce pilot zones, including Beijing.

“Unlike general trade, cross-border e-commerce retail imports mainly serve to provide diversified and quality products to domestic consumers. The products must be sold to consumers directly and confined to personal use,” said Wang Wei, Director of the Department of Port Administration at the GAC. Cross-border e-commerce retailimports are for personal use and not subject to certain requirements such as first-time import licenses, registration or filing for record. “Cross-border e-commerce companies

take the main responsibility for the quality and safety of goods. Cross-border e-commerce platforms must register with the authorities to conduct business activities in China, and bear the responsibility for up-front compensation,” Feng Jinping, Director of the Tariff Department of the Ministry of Finance, said, as reported by the China Daily.

In the past four years, Tmall Global has introduced nearly 19,000 overseas brands from 75 countries to Chinese consumers. More than 80% were new to the Chinese market. Chinese consumers have become increasingly drawn to foreign brands via e-commerce platforms.

Italy ready to embrace Belt & Road Initiative(BRI)

Italy stands ready to embrace the Belt and Road Initiative as the next key growth driver for the country’seconomy, Italian Finance Minister Giovanni Tria said. He added that China’s further reform and opening-up will unleash vast opportunities for cooperation, and emphasized the two countries’ shared vision to uphold globalization and underpin their ever-closer relations. “Italy must be actively involved in the process” of integrating the initiative, Tria said, “not only to realize all the advantages ofparticipating in major infrastructure projects, but also, in the longer term, maintaining a strategic position in the trade routes.”

“The BRI is a train that Italy must not miss. Italian companies’ participation in projects, including those in collaboration with Chinese companies in third-country markets, are particularly important,” Tria said on the sidelines of the Boao Forum for Asia’s Rome conference, which was attended by 300 political, business and academic leaders from 15 countries. The BRI was a hot topic, with many speakers hailing it as an important stabilizer of globalization. Italy’s keen desire for engagement with the initiative was demonstrated by Italian Deputy Prime Minister Luigi Di Maio’s announcement in Beijing in September that Italy wants to be the first of the G7 industrialized countries to sign a memorandum of understanding with China about BRI collaboration. In August, the Italian government established a China task force to help Italian companies realize BRI opportunities.

For Finance Minister Tria, Italy’s vision for engagement is clear and built at three levels: direct infrastructure engagement, geographical connection and growing exportsto emerging markets along the BRI trade routes. First, he encouraged Italian companies in a wide range of sectors,

NEWSLETTER 11 DECEMBER 2018 7

Second in ranking is Sequoia Capital, a U.S.-headquartered venture capital firm, which has 25.

Underlining China’s increasing dominance in producing unicorns, Raymond Chan, Allianz Global Investors’ equity Chief Investment Officer for Asia-Pacific, said China is also expected to surpass the U.S. this year in research and development (R&D) spending in 2018. The five-year compound annual growth rate for China R&D spending up to 2016 was 9.88%, compared to the U.S. growth rate up to2015 of 2.01%, the South China Morning Post reports.

China has deficit in e-commerce foreign trade

China’s goods trade via cross-border e-commerce platforms rose to CNY111.04 billion in the first 10 months of 2018, as the country continues to lift individuals’annual transaction volume cap. Through this fast-growing sector, the country’s imports surged 86% year-on-year to reach CNY67.18 billion between January and October, while exports jumped by 173.9% year-on-year to CNY43.86billion, according to the General Administration of Customs.“China will continue to adjust the product list and tax policies for cross-border e-commerce retail imports,” said LiChenggang, Assistant Commerce Minister.

He made the remarks after the country released a policy onNovember 28 increasing the total number products to 1,321 under 63 tariff categories. The products include textiles and clothing, footwear, jewelry, certain food products, small household appliances, stationery, fitness equipment, wine, beer, telescopes, video game consoles and ski boots. As for transaction volume caps, the limit per transaction has been lifted from CNY2,000 to CNY5,000, while the annual cap has been raised from CNY20,000 to CNY26,000 per person. These caps will be further raised as people’s income increases in the future, officials said. Assistant Minister Li said that under the new rules, China will extend the policies currently implemented in the existing15 pilot cities to another 22 comprehensive cross-border e-commerce pilot zones, including Beijing.

“Unlike general trade, cross-border e-commerce retail imports mainly serve to provide diversified and quality products to domestic consumers. The products must be sold to consumers directly and confined to personal use,” said Wang Wei, Director of the Department of Port Administration at the GAC. Cross-border e-commerce retailimports are for personal use and not subject to certain requirements such as first-time import licenses, registration or filing for record. “Cross-border e-commerce companies

take the main responsibility for the quality and safety of goods. Cross-border e-commerce platforms must register with the authorities to conduct business activities in China, and bear the responsibility for up-front compensation,” Feng Jinping, Director of the Tariff Department of the Ministry of Finance, said, as reported by the China Daily.

In the past four years, Tmall Global has introduced nearly 19,000 overseas brands from 75 countries to Chinese consumers. More than 80% were new to the Chinese market. Chinese consumers have become increasingly drawn to foreign brands via e-commerce platforms.

Italy ready to embrace Belt & Road Initiative(BRI)

Italy stands ready to embrace the Belt and Road Initiative as the next key growth driver for the country’seconomy, Italian Finance Minister Giovanni Tria said. He added that China’s further reform and opening-up will unleash vast opportunities for cooperation, and emphasized the two countries’ shared vision to uphold globalization and underpin their ever-closer relations. “Italy must be actively involved in the process” of integrating the initiative, Tria said, “not only to realize all the advantages ofparticipating in major infrastructure projects, but also, in the longer term, maintaining a strategic position in the trade routes.”

“The BRI is a train that Italy must not miss. Italian companies’ participation in projects, including those in collaboration with Chinese companies in third-country markets, are particularly important,” Tria said on the sidelines of the Boao Forum for Asia’s Rome conference, which was attended by 300 political, business and academic leaders from 15 countries. The BRI was a hot topic, with many speakers hailing it as an important stabilizer of globalization. Italy’s keen desire for engagement with the initiative was demonstrated by Italian Deputy Prime Minister Luigi Di Maio’s announcement in Beijing in September that Italy wants to be the first of the G7 industrialized countries to sign a memorandum of understanding with China about BRI collaboration. In August, the Italian government established a China task force to help Italian companies realize BRI opportunities.

For Finance Minister Tria, Italy’s vision for engagement is clear and built at three levels: direct infrastructure engagement, geographical connection and growing exportsto emerging markets along the BRI trade routes. First, he encouraged Italian companies in a wide range of sectors,

NEWSLETTER 11 DECEMBER 2018 8

from consulting, design and engineering to logistics, machinery, IT, security, and others, to actively seek deals on BRI infrastructure projects. Second, he said Italy should strengthen its ports and efficiency so it can leverage its geographical location between Asia, Europe and Africa to handle more trade flowing between these regions. Third, Italian companies, particularly in the sectors of agriculture and food, sustainable technology, pharmaceuticals, tourismand design, should consider the growing consumption power of new BRI markets’ and the opportunity to boost exports, the China Daily reports.

OnePlus to release first commercial 5G handsetin Europe next year

Chinese smartphone company OnePlus plans to release the first commercial 5G handset in Europe next year, supporting the roll-out of next-generation mobile services in the United Kingdom. Pete Lau, Founder and Chief Executive of OnePlus, made the announcement at a technology summit in Hawaii, where semiconductor supplier Qualcomm Technologies launched its Snapdragon 855 mobile chip set for 5G smartphones. “Our users are always eager to try new things and they are now ready to experience the next generation of connectivity and speed,” Lau said. “In response, OnePlus has poured efforts into 5G research since 2016. Today, we stand poised to embrace the dawn of 5G.”

The upcoming OnePlus 5G smartphone will be initially available on EE, the UK’s largest mobile network operator and part of BT Group, according to Lau, who did not provide a specific launch date. The British carrier will switchon its 5G network services in 16 UK cities next year, including London, Cardiff, Edinburgh, Belfast, Birmingham and Manchester. OnePlus and EE have already partnered on a research and development program to ensure their customers get the “best possible 5G connected experience”, according to a statement from the Shenzhen-based smartphone supplier. “We’re working together on cutting edge technology to deliver that, and we’re leading the world on the journey to 5G,” Marc Allera, Chief Executive of BT’s Consumer Division, said in the statement.

Introducing the first 5G handset in Europe – ahead of largersuppliers Samsung Electronics, Huawei Technologies and Apple – would not only burnish the reputation of OnePlus inthe premium segment of the global smartphone market, butalso help smash people’s general perception that China’s domestic brands are only good for inexpensive, low-quality handsets. Both Huawei and Samsung have also

announced plans to launch 5G smartphone models next year, but Apple is holding off until at least 2020 before offering a 5G iPhone, according the South China Morning Post.

Founded in 2013, OnePlus is a rarity among Chinese smartphone brands because it derives almost 70% of its sales from outside China, with the U.S., Europe and India among its biggest markets. OnePlus is now among the top five supplier of high-end Android smartphone models across the world.

Meanwhile, another Chinese smartphone maker – Xiaomi – beat Apple and Fitbit to claim the No 1 spot again in the global wearables market this third quarter, according to research firm IDC. The company sold 6.9 million wearable devices up to September, accounting for over 20% of global market share.

Dishonest behavior in IPR field to be sanctioned

Organizations and individuals in China engaging in severely dishonest behavior in the field of intellectual property rights (IPR) will face restrictions or bans on a wide range of economic activities, according to a document released by the National Development and Reform Commission (NDRC). Thirty-eight Chinese government authorities, including the NDRC, will share information and impose multiple punishments. The kinds of dishonest behavior include declining to execute punishments on patent violations and submitting fake documents when applying for patents. The punishments are taking effect by the end of December. Targeted individuals and companies will face difficulties obtaining external financing. For instance, financial institutions will take dishonest behavior into account when granting credit, and the securities regulator will refer to the records when reviewing enterprises’ applications for initial public offerings (IPOs) and the issuance of convertible bonds.

They will also face restrictions in participating in government purchasing as suppliers, setting up or becoming senior managers of financial institutions, and obtaining land supplied by the government. In addition, market supervision authorities will forbid such individuals and entities from producing or selling imported and exported goods related to the dishonest records for a certain period. Liu Chunsheng, Associate Professor at the Central University of Finance and Economics, said the move is an innovative approach in the protection of intellectual property, as it correlates dishonesty in the field

NEWSLETTER 11 DECEMBER 2018 8

from consulting, design and engineering to logistics, machinery, IT, security, and others, to actively seek deals on BRI infrastructure projects. Second, he said Italy should strengthen its ports and efficiency so it can leverage its geographical location between Asia, Europe and Africa to handle more trade flowing between these regions. Third, Italian companies, particularly in the sectors of agriculture and food, sustainable technology, pharmaceuticals, tourismand design, should consider the growing consumption power of new BRI markets’ and the opportunity to boost exports, the China Daily reports.

OnePlus to release first commercial 5G handsetin Europe next year

Chinese smartphone company OnePlus plans to release the first commercial 5G handset in Europe next year, supporting the roll-out of next-generation mobile services in the United Kingdom. Pete Lau, Founder and Chief Executive of OnePlus, made the announcement at a technology summit in Hawaii, where semiconductor supplier Qualcomm Technologies launched its Snapdragon 855 mobile chip set for 5G smartphones. “Our users are always eager to try new things and they are now ready to experience the next generation of connectivity and speed,” Lau said. “In response, OnePlus has poured efforts into 5G research since 2016. Today, we stand poised to embrace the dawn of 5G.”

The upcoming OnePlus 5G smartphone will be initially available on EE, the UK’s largest mobile network operator and part of BT Group, according to Lau, who did not provide a specific launch date. The British carrier will switchon its 5G network services in 16 UK cities next year, including London, Cardiff, Edinburgh, Belfast, Birmingham and Manchester. OnePlus and EE have already partnered on a research and development program to ensure their customers get the “best possible 5G connected experience”, according to a statement from the Shenzhen-based smartphone supplier. “We’re working together on cutting edge technology to deliver that, and we’re leading the world on the journey to 5G,” Marc Allera, Chief Executive of BT’s Consumer Division, said in the statement.

Introducing the first 5G handset in Europe – ahead of largersuppliers Samsung Electronics, Huawei Technologies and Apple – would not only burnish the reputation of OnePlus inthe premium segment of the global smartphone market, butalso help smash people’s general perception that China’s domestic brands are only good for inexpensive, low-quality handsets. Both Huawei and Samsung have also

announced plans to launch 5G smartphone models next year, but Apple is holding off until at least 2020 before offering a 5G iPhone, according the South China Morning Post.

Founded in 2013, OnePlus is a rarity among Chinese smartphone brands because it derives almost 70% of its sales from outside China, with the U.S., Europe and India among its biggest markets. OnePlus is now among the top five supplier of high-end Android smartphone models across the world.

Meanwhile, another Chinese smartphone maker – Xiaomi – beat Apple and Fitbit to claim the No 1 spot again in the global wearables market this third quarter, according to research firm IDC. The company sold 6.9 million wearable devices up to September, accounting for over 20% of global market share.

Dishonest behavior in IPR field to be sanctioned

Organizations and individuals in China engaging in severely dishonest behavior in the field of intellectual property rights (IPR) will face restrictions or bans on a wide range of economic activities, according to a document released by the National Development and Reform Commission (NDRC). Thirty-eight Chinese government authorities, including the NDRC, will share information and impose multiple punishments. The kinds of dishonest behavior include declining to execute punishments on patent violations and submitting fake documents when applying for patents. The punishments are taking effect by the end of December. Targeted individuals and companies will face difficulties obtaining external financing. For instance, financial institutions will take dishonest behavior into account when granting credit, and the securities regulator will refer to the records when reviewing enterprises’ applications for initial public offerings (IPOs) and the issuance of convertible bonds.

They will also face restrictions in participating in government purchasing as suppliers, setting up or becoming senior managers of financial institutions, and obtaining land supplied by the government. In addition, market supervision authorities will forbid such individuals and entities from producing or selling imported and exported goods related to the dishonest records for a certain period. Liu Chunsheng, Associate Professor at the Central University of Finance and Economics, said the move is an innovative approach in the protection of intellectual property, as it correlates dishonesty in the field

NEWSLETTER 11 DECEMBER 2018 9

of intellectual property rights with business credit that influences enterprises and individuals’ access to all kinds ofeconomic activities. “Compared with traditional punishments which had limited influence and were hard to execute completely, the new approach is a more powerful deterrent,” Liu said. The system, which is expected to be fully operational by the end of 2020, will rank individuals and enterprises and punish violators engaging in unethical behavior, the China Daily reports.

Canada to export more barley to feed China’sbeer market

As China is producing more premium beers, its demand for malt is rising, according to Peter Watts, Managing Director of the Canadian Malting Barley Technical Center, a non-profit research facility funded by maltsters, exporters, brewers and farmers. The center is helping to fuel research of new malt barley varieties that produce a richer color and flavor than lower-quality grain. Canada, the second largest malt barley exporter to China, is trying to gain a bigger slice of the burgeoningmarket from Australia, the leading supplier. China is the world’s largest beer market, and consumers are increasingly shifting to premium and foreign brews from mass-market brands as incomes rise. The market share of premium lager in the five years to the end of 2017 more than doubled.

Acreage for barley in Canada rose 13% in 2018, and outputis poised to climb to 8.2 million tons, government data showed. Planting had fallen by 30% in the past decade as farmers opted for more profitable crops such as lentils and peas. Adverse weather that delayed barley harvests in parts of the Prairies – which comprise Alberta, Saskatchewan and Manitoba provinces – reduced the supply of crops suitable to be turned into malt. Exports to China were still expected to top a million tons, the second-highest yet, Watts said. Malt barley shipments to China reached a record 1.4 million tons in 2017, surpassing the amount used in the domestic market for the first time, he said.

Global barley stockpiles are poised to tumble to a 35-year-low after dry conditions cut production from Europe to Australia, boosting costs for brewers and distillers. The shortfall has pushed up the cost of feed barley in places including Germany by more than 30% since April and spot prices in Saskatchewan gained as much as 10% this year. Firm prices might spur farmers to plant additional acres in 2019, said Jerry Klassen, Manager of Canadian operations

and trading at Gap Grains & Produits in Winnipeg, Manitoba. Canada might grab the opportunity to increase exports at the expense of Australia as China is starting an anti-dumping investigation on imports of Australian barley, the South China Morning Post reports.

Chinese trademark applications increase by30% in 2017

China was the driving force with a 30% leap in global trademark applications in 2017 as innovation turns into the main battleground among world economies, the World Intellectual Property Organization (WIPO) said. Trademark applications hit 9.11 million last year while patent applications rose 5.8% to 3.2 million, with 2018 data showing the trend was continuing, WIPO Director General Francis Gurry told a news conference. Asia now accounted for 65.1% of patent applications, 66.6% of trademark applications, and 67.9% of design applications.“This is of course, driven mainly, but not exclusively by China,” Gurry said. “Innovation is increasingly the battleground for economic advantage amongst the leading economies. This is an extraordinary transformation that has occurred in a relatively short period of time,” he added.

WIPO Chief Economist Carsten Fink said trademarks were usually filed when a new company was created or a new product was launched on the market, and were sometimes seen as a leading indicator of changes in the business cycle. “When we received the data from intellectual property offices around the world, we were quitestunned by the high growth rate,” he said. Gurry said China’s growth was “prodigious” at 54.4% in a year but other countries also reported big rises in trademark filings. Applications grew by 12.6% in the United States, by 24.2% in Japan and by 24.1% in Britain, but the European Union’s intellectual property office saw only 0.5% growth, as Italy and France’s filings slipped by 1% and 1.4% respectively, the Shanghai Daily reports.

NEWSLETTER 11 DECEMBER 2018 9

of intellectual property rights with business credit that influences enterprises and individuals’ access to all kinds ofeconomic activities. “Compared with traditional punishments which had limited influence and were hard to execute completely, the new approach is a more powerful deterrent,” Liu said. The system, which is expected to be fully operational by the end of 2020, will rank individuals and enterprises and punish violators engaging in unethical behavior, the China Daily reports.

Canada to export more barley to feed China’sbeer market

As China is producing more premium beers, its demand for malt is rising, according to Peter Watts, Managing Director of the Canadian Malting Barley Technical Center, a non-profit research facility funded by maltsters, exporters, brewers and farmers. The center is helping to fuel research of new malt barley varieties that produce a richer color and flavor than lower-quality grain. Canada, the second largest malt barley exporter to China, is trying to gain a bigger slice of the burgeoningmarket from Australia, the leading supplier. China is the world’s largest beer market, and consumers are increasingly shifting to premium and foreign brews from mass-market brands as incomes rise. The market share of premium lager in the five years to the end of 2017 more than doubled.

Acreage for barley in Canada rose 13% in 2018, and outputis poised to climb to 8.2 million tons, government data showed. Planting had fallen by 30% in the past decade as farmers opted for more profitable crops such as lentils and peas. Adverse weather that delayed barley harvests in parts of the Prairies – which comprise Alberta, Saskatchewan and Manitoba provinces – reduced the supply of crops suitable to be turned into malt. Exports to China were still expected to top a million tons, the second-highest yet, Watts said. Malt barley shipments to China reached a record 1.4 million tons in 2017, surpassing the amount used in the domestic market for the first time, he said.

Global barley stockpiles are poised to tumble to a 35-year-low after dry conditions cut production from Europe to Australia, boosting costs for brewers and distillers. The shortfall has pushed up the cost of feed barley in places including Germany by more than 30% since April and spot prices in Saskatchewan gained as much as 10% this year. Firm prices might spur farmers to plant additional acres in 2019, said Jerry Klassen, Manager of Canadian operations

and trading at Gap Grains & Produits in Winnipeg, Manitoba. Canada might grab the opportunity to increase exports at the expense of Australia as China is starting an anti-dumping investigation on imports of Australian barley, the South China Morning Post reports.

Chinese trademark applications increase by30% in 2017

China was the driving force with a 30% leap in global trademark applications in 2017 as innovation turns into the main battleground among world economies, the World Intellectual Property Organization (WIPO) said. Trademark applications hit 9.11 million last year while patent applications rose 5.8% to 3.2 million, with 2018 data showing the trend was continuing, WIPO Director General Francis Gurry told a news conference. Asia now accounted for 65.1% of patent applications, 66.6% of trademark applications, and 67.9% of design applications.“This is of course, driven mainly, but not exclusively by China,” Gurry said. “Innovation is increasingly the battleground for economic advantage amongst the leading economies. This is an extraordinary transformation that has occurred in a relatively short period of time,” he added.

WIPO Chief Economist Carsten Fink said trademarks were usually filed when a new company was created or a new product was launched on the market, and were sometimes seen as a leading indicator of changes in the business cycle. “When we received the data from intellectual property offices around the world, we were quitestunned by the high growth rate,” he said. Gurry said China’s growth was “prodigious” at 54.4% in a year but other countries also reported big rises in trademark filings. Applications grew by 12.6% in the United States, by 24.2% in Japan and by 24.1% in Britain, but the European Union’s intellectual property office saw only 0.5% growth, as Italy and France’s filings slipped by 1% and 1.4% respectively, the Shanghai Daily reports.

NEWSLETTER 11 DECEMBER 2018 10

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Companies interested in posting a banner/an advertisement on the FCCC website, FCCC weekly newsletter or bi-weekly sectoral newsletters are kindly invited to contact the FCCC at: info@flanders-china.be

Organisation and founding members of the Flanders-China Chamber of Commerce

Chairman: Mr. Stefaan Vanhooren, President Agfa Graphics, Member of the Executive Committee of the Agfa Gevaert Group, NV THE AGFA-GEVAERT GROUP SAVice-Chairmen: Mr. Bart De Smet, Chief Executive Officer, NV AGEAS SAMr. Philippe Van der Donckt, Director Government Affairs Asia, NV UMICORE SASecretary and Treasurer: Wim Eraly, Senior General Manager, NV KBC Bank SAExecutive Director: Ms. Gwenn Sonck

Members of the Board of Directors and Founding Members:Mr. Stefaan Vanhooren, President Agfa Graphics, Member of the Executive Committee of the Agfa Gevaert Group, NV THE AGFA-GEVAERT GROUP SAMr. Christian Leysen, Executive Chairman, NV AHLERS SAMr. Filip Pintelon, Senior Vice President, GM Healthcare, NV BARCO SAMr. Philip Eyskens, Senior Vice President Legal, IT and M&A, NV BEKAERT SAMr. Philip Hermans, General Manager, NV DEME SAMr. Bart De Smet, Chief Executive Officer, NV AGEAS SAMr. Wim Eraly, Senior General Manager, KBC Bank SAMr. Johan Verstraete, Vice-President Marketing, Sales & Services Weaving Solutions, NV PICANOL SAMr. Philippe Van der Donckt, Director Government Affairs Asia, NV UMICORE SA

Membership rates for 2019 (excl. VAT)

● SMEs: €405 (€490.05 incl. VAT)● Large enterprises: €1,025 (€1,240.25 incl. VAT)

Contact

Flanders-China Chamber of CommerceOffice: Ajuinlei 1, B-9000 Gent – Belgium New telephone and fax numbers: Tel.: +32/9/269.52.46 – Fax: ++32/9/269.52.99E-mail: info@flanders-china.be Website: www.flanders-china.be

Share your story

To send your input for publication in a future newsletter mailto: info@flanders-china.be

The FCCC Newsletters are edited by Michel Lens, who is based in Beijing and can be contacted by e-mail michel.jc.lens@gmail.com . Disclaimer: the views expressed in this newsletter are not necessarily those of the FCCC or its Board of Directors.

NEWSLETTER 11 DECEMBER 2018 10

Your banner at the FCCC website or newsletter

Companies interested in posting a banner/an advertisement on the FCCC website, FCCC weekly newsletter or bi-weekly sectoral newsletters are kindly invited to contact the FCCC at: info@flanders-china.be

Organisation and founding members of the Flanders-China Chamber of Commerce

Chairman: Mr. Stefaan Vanhooren, President Agfa Graphics, Member of the Executive Committee of the Agfa Gevaert Group, NV THE AGFA-GEVAERT GROUP SAVice-Chairmen: Mr. Bart De Smet, Chief Executive Officer, NV AGEAS SAMr. Philippe Van der Donckt, Director Government Affairs Asia, NV UMICORE SASecretary and Treasurer: Wim Eraly, Senior General Manager, NV KBC Bank SAExecutive Director: Ms. Gwenn Sonck

Members of the Board of Directors and Founding Members:Mr. Stefaan Vanhooren, President Agfa Graphics, Member of the Executive Committee of the Agfa Gevaert Group, NV THE AGFA-GEVAERT GROUP SAMr. Christian Leysen, Executive Chairman, NV AHLERS SAMr. Filip Pintelon, Senior Vice President, GM Healthcare, NV BARCO SAMr. Philip Eyskens, Senior Vice President Legal, IT and M&A, NV BEKAERT SAMr. Philip Hermans, General Manager, NV DEME SAMr. Bart De Smet, Chief Executive Officer, NV AGEAS SAMr. Wim Eraly, Senior General Manager, KBC Bank SAMr. Johan Verstraete, Vice-President Marketing, Sales & Services Weaving Solutions, NV PICANOL SAMr. Philippe Van der Donckt, Director Government Affairs Asia, NV UMICORE SA

Membership rates for 2019 (excl. VAT)

● SMEs: €405 (€490.05 incl. VAT)● Large enterprises: €1,025 (€1,240.25 incl. VAT)

Contact

Flanders-China Chamber of CommerceOffice: Ajuinlei 1, B-9000 Gent – Belgium New telephone and fax numbers: Tel.: +32/9/269.52.46 – Fax: ++32/9/269.52.99E-mail: info@flanders-china.be Website: www.flanders-china.be

Share your story

To send your input for publication in a future newsletter mailto: info@flanders-china.be

The FCCC Newsletters are edited by Michel Lens, who is based in Beijing and can be contacted by e-mail michel.jc.lens@gmail.com . Disclaimer: the views expressed in this newsletter are not necessarily those of the FCCC or its Board of Directors.