Amazon will no longer sell Chinese goods in China – CNN

Amazon will no longer sell Chinese goods in China – CNN

Hong Kong (CNN Business)Amazon is partially retreating from the world’s biggest market for online shopping.

It will close its marketplace in China in the coming months, meaning Amazon customers in the country will no longer be able to buy goods from Chinese merchants.
Amazon (AMZN) did not explain why it was withdrawing its marketplace service, saying only it will instead focus on selling goods shipped from other countries into China.
“We are notifying sellers we will no longer operate a marketplace on Amazon.cn, and we will no longer be providing seller services on Amazon.cn effective July 18,” the company said in a statement.
Amazon’s platform competes for Chinese sellers with Tmall, owned by the country’s e-commerce leader Alibaba (BABA).
Amazon first entered the Chinese market 15 years ago, when it acquired an online book retailer, but it has struggled amid fierce competition. Research suggests that the company’s market share in China was miniscule compared to local rivals.
China’s online retail market is huge, notching up about $2 trillion in sales annually, according to research firmer eMarketer. The US market is worth just over one quarter of that.
The Chinese market is dominated by Alibaba, which accounts for more than half of all transactions, and local rival JD.com (JD), eMarketer data shows.
“There is too much domestic competition and Amazon lacks the kind of brand awareness that Tmall or JD.com have,” said Ben Cavender, an analyst at China Market Research Group. “That leaves Amazon in a position where it has to spend a lot of money to acquire customers while also competing aggressively with multiple strong players on price.”
Singles Day, Alibaba’s annual online spending blitz, regularly racks up bigger sales than Black Friday and Cyber Monday combined.
Users logging onto Amazon’s Chinese site after July 18 will see products sold from its global store, the company said.
“Over the past few years, we have been evolving our China online retail business to increasingly emphasize cross-border sales, and in return we’ve seen very strong response from Chinese customers,” Amazon said.
It will retain its other operations in China, such as cloud computing services. It will also continue to sell its Kindle e-readers and content in the country.
“Amazon’s commitment to China remains strong. We have built a solid foundation here in a number of successful businesses and we will continue to invest and grow in China,” the company added.

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China’s JD.com boss criticises ‘slackers’ as company makes cuts – CNA

China’s JD.com boss criticises ‘slackers’ as company makes cuts – CNA

SHANGHAI: Richard Liu, the founder of Chinese e-commerce giant JD.com Inc, has weighed in on an ongoing debate about the Chinese tech industry’s gruelling overtime work culture, lamenting that years of growth had increased the number of “slackers” in his firm who are not his “brothers.”

Liu’s comments, which Chinese media said were posted on his personal WeChat feed on Friday, are the latest contribution to a growing discussion about work-life balance in the tech industry as the sector slows after years of breakneck growth.

They also come amid reports this week that the company is in the throes of widespread layoffs. Three company sources told Reuters that cuts began earlier this year and had become more extensive in recent weeks.

A JD.com spokesman confirmed the authenticity of Liu’s note. He declined to comment on layoffs but said some adjustments were happening as a normal part of business.

“JD.com is a competitive workplace that rewards initiative and hard work, which is consistent with our entrepreneurial roots,” the spokesman said. “We’re getting back to those roots as we seek, develop and reward staff who share the same hunger and values.”

Liu, who started the company that would become JD.com in 1998, in the note spoke about how in the firm’s earliest days he would set his alarm clock to wake him up every two hours to ensure he could offer his customers 24-hour service – a step he said was crucial to JD’s success.

“JD in the last four, five years has not made any eliminations, so the number of staff has expanded rapidly, the number of people giving orders has grown and grown, while the those who are working have fallen,” Liu wrote. “Instead, the number of slackers has rapidly grown!”

“If this carries on, JD will have no hope! And the company will only be heartlessly kicked out of the market! Slackers are not my brothers!” he added

The term he used, which is commonly translated in China as “slackers” can be directly translated as people who drift along aimlessly or waste time.

The contents of his note were reported by major Chinese media outlets such as financial magazine Caijing and the 21st Century Herald newspaper on Saturday as well as widely shared on Twitter-like platform Weibo, where it was read more than 400 million times.

CUTS AND SLOWDOWN

Three JD employees, who declined to be named as they were not permitted to speak to the media, told Reuters that morale at the company was low after several senior executive departures and layoffs across the firm in recent weeks. One said the cuts also affected vice-president level staff.

Tech website The Information reported this week that JD.com could cut up to 8 percent of its workforce. JD, which had more than 178,000 full-time employees at the end of last year, said the figure was incorrect.

“Now is kind of an inflection point, where too many people and too many business leaders or department leaders have been laid off. No one is safe,” one of the sources said.

He added that it had affected productivity in his department and that many workers checked Weibo, the stock markets or played games rather than focus on work.

The layoffs “are pretty much all JD employees can talk about,” he said.

The JD spokesman, when asked about morale, said most of the team was highly committed.

“Change – while uncomfortable for some – can be encouraging for most, who are dedicated to our shared future.”

JD, which is backed by Walmart Inc, Alphabet Inc’s Google and China’s Tencent Holdings, in February posted its lowest quarterly revenue growth rate since its 2015 initial public offering.

Other Chinese tech giants have lowered growth forecasts and cut staff bonuses amid the slowdown, which has driven calls for better work conditions for its workers.

The ‘996’ work schedule, which refers to a 9 a.m. to 9 p.m. workday, six days a week, has in particular become the target of online debate and protests on some coding platforms, where workers have swapped examples of excessive overtime demands at some firms.

Alibaba Group founder and billionaire Jack Ma also weighed in on Friday, telling the company’s employees in a speech that the opportunity to work such hours was a “blessing”.

Liu said JD did not force its staff to work the “996” or even a “995” overtime schedule.

“But every person must have the desire to push oneself to the limit!” he said.

(Additional Reporting by Cate Cadell and Zhang Min in BEIJING; Editing by Gerry Doyle)

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China’s March trade surplus soars past expectations, Beijing data show – CNBC

China’s March trade surplus soars past expectations, Beijing data show – CNBC

Workers manufacture cotton yarn at a factory in Dali county, Shaanxi province, China.

Nelson Ching | Bloomberg | Getty Images

Workers manufacture cotton yarn at a factory in Dali county, Shaanxi province, China.

China’s exports for the month of March came in much higher than expected, while its imports came in much lower than expected, according to customs data released on Friday.

International Monetary Fund this week cutting its forecast for global economic growth for 2019 to 3.3 percent, from 3.5 percent. However, it upgraded its 2019 growth forecast for China in a Tuesday report, citing Beijing’s efforts to support the economy and an improved outlook for the Asian giant’s tariff fight with the U.S.

The IMF said in its latest World Economic Outlook report that China is projected to grow by 6.3 percent this year, higher than the fund’s previous forecast of 6.2 percent.

Meanwhile, hopes are high that the U.S. and China could be close to a trade deal, with Treasury Secretary Steven Mnuchin telling CNBC that Washington and Beijing have “pretty much agreed on an enforcement mechanism” for when a deal is struck.

— Reuters and CNBC’s Yen Nee Lee and Eustance Huang contributed to this report.

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Exclusive: VW eyes buying big stake in China partner JAC, taps Goldman – sources – Reuters

Exclusive: VW eyes buying big stake in China partner JAC, taps Goldman – sources – Reuters

HONG KONG/FRANKFURT (Reuters) – Volkswagen AG is exploring purchasing a big stake in its Chinese electric vehicle joint venture partner JAC Motors and has tapped Goldman Sachs as an adviser on the plan, people with direct knowledge of the matter said.

FILE PHOTO: FILE PHOTO: A Volkswagen badge on a production line at the Volkswagen plant in Wolfsburg, Germany, March 1, 2019. REUTERS/Fabian Bimmer/File Photo

The move by VW, the largest foreign automaker in China, to buy into Anhui Jianghuai Automobile Group (JAC Motors) is the latest by foreign automakers to boost ownership in the world’s biggest car market since Beijing relaxed rules last year.

Rival German automaker BMW agreed in October to buy control of its main joint venture in the country for 3.6 billion euros ($4.05 billion). And Daimler AG also plans to increase its stake in local partner BAIC Motor.

The stake purchase move shows that JAC would be a key player in VW’s big global bet on EVs and on strong Chinese demand for such vehicles. VW plans to shift a large part of its planned EV production in China to JAC if it ends up getting control of JAC, said one of the people.

Foreigners were previously prevented from controlling any Chinese automaker or joint venture. Beijing last year removed such caps for firms making fully electric and plug-in hybrid vehicles. Limits on commercial vehicles makers ease in 2020 and by 2022 for the wider car market.

Chinese Premier Li Keqiang promised the European Union on Tuesday that Beijing would no longer force foreign companies to share sensitive know-how when operating in China and was ready to discuss new global trading rules on industrial subsidies.

VW, which has a market capitalization of nearly $85 billion, does not currently own shares in Shanghai-listed JAC, which has a market value of more than $1.7 billion, according to Refinitiv data.

The German car giant’s plans are at an early stage but it is keen to take a big stake, said three of the people. Two of them said it will seek to buy shares from JAC’s major shareholders, which, Refinitiv data showed, are mainly state-backed firms owning over 40 percent.

JAC’s parent, Anhui Jianghuai Automobile Group Holding, holds a 24 percent stake and is fully controlled by the local government.

When contacted by Reuters, VW said: “We are carefully watching what the implications are for our business and for our joint venture partners. In this regard we will explore all possible options together with all stakeholders to secure long-term success in China.”

JAC and its parent didn’t respond to requests for comment. Goldman declined to comment. The people declined to be identified as the matter was confidential.

JAC is trading at a price-to-book ratio of 0.93, which means VW would have to pay a premium for shares since JAC’s state shareholders cannot sell shares for less than their book value.

The Chinese automaker’s shares jumped and hit the daily 10 percent maximum increase limit on Wednesday afternoon. VW shares were slightly lower in early trading.

“The news shows the bargaining power of companies like JAC and BAIC is stronger, and Volkswagen’s and Daimler’s determination to cooperate with Chinese partners in the long-term is also firm,” said Patrick Yuan, a Hong Kong-based analyst at Jefferies.

VW IN CHINA

Wolfsburg-based VW, which delivered 4.21 million cars in mainland China and Hong Kong last year, has operated in China for decades. Besides JAC, it has joint ventures with state-owned FAW Group and SAIC Motor.

FILE PHOTO: Employees work on a production line manufacturing light trucks at a JAC Motors plant in Weifang, Shandong province, China November 30, 2018. REUTERS/Stringer/File Photo

It formed its 50:50 JV with JAC in 2017 to research and develop zero-emission passenger cars as the German automaker has committed almost one-third of the industry’s EV spending, about $91 billion. Separately, South Korea’s SK Innovation Co said it is in talks to set up separate battery-making JVs with VW and Chinese partners, Reuters reported on Wednesday.

JAC, China’s 11th largest local automaker by group sales, makes a range of commercial vehicles including pickup trucks and heavy duty trucks. It also produces vehicles for electric car maker NIO Inc.

JAC warned in January of a 770 million yuan net loss for 2018 mainly due to a drop in car sales, compared to a 432 million yuan profit in 2017. Excluding exceptional items such as government subsidies, losses would reach 1.9 billion yuan, the company said. It will release annual results on April 30.

Reporting by Julie Zhu, Arno Schuetze and Yilei Sun; Additional reporting by Edward Taylor in Frankfurt and Kane Wu in Hong Kong; Editing by Jennifer Hughes and Muralikumar Anantharaman

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Asia shares at seven-month peak as China talks stimulus – Investing.com

Asia shares at seven-month peak as China talks stimulus – Investing.com

© Reuters. FILE PHOTO: Pro-Brexit yellow vest protesters demonstrate, in London
© Reuters. FILE PHOTO: Pro-Brexit yellow vest protesters demonstrate, in London

By Helen Reid

World stocks paused on Monday after a strong recent run, as potential flashpoints including a crucial Brexit summit and central bank meetings loomed, and investors began to look ahead to an earnings season that may be disappointing.

Signs of further stimulus from China helped Asian shares touch seven-month highs, but investors’ enthusiasm was fleeting.

MSCI’s world equity index was flat and European stocks slipped 0.2 percent as weak data from Germany and investor caution ahead of a string of political and monetary policy events held the market back.

In a document published on the central government’s website late on Sunday, Beijing said it would step up a policy of targeted cuts to banks’ required reserve ratios to encourage financing for small and medium-sized businesses.

German exports and imports both fell more than expected in February, data showed on Monday, in the latest sign that Europe’s largest economy will likely have meager growth in the first quarter amid increased headwinds from abroad.

Futures for the and Nasdaq eased 0.2 percent, indicating a weaker start on Wall Street.

Globally, stock markets have had a stellar first quarter. The had its best quarter in more than eight years.

“Today’s very minor move down has to be seen in light of recent developments,” said Britta Weidenbach, head of European equities at DWS.

“We’re back at the levels where the correction started last year. So now the question certainly is, what’s next?”

The European Central Bank will update the market on Wednesday, the same day as a crucial European Union Summit on Brexit, while China and the EU will hold a summit on trade on Tuesday.

“European institutions will be under the spotlight in the coming days as they attempt to display proactivity in trade negotiations, on Brexit and in monetary policy,” wrote economists at Swiss private bank Landolt & Cie in a note to clients.

Bond markets were being squeezed by investors’ search for yield after benchmark German Bunds fell into negative territory.

Greece’s 10-year government bond yields were within a shade of their lowest level in over 13 years as a cocktail of positive headlines boosted sentiment towards the country and zero percent Bund yields push investors to riskier investments.

German bund yields traded at 1 basis point, just holding in positive territory.

REALITY CHECK

The upcoming earnings season, which kicks off at the end of this week with U.S. banks reporting, is likely to be a reality check for markets.

Analysts have already slashed their earnings expectations for this year, which are now stabilising around 4.2 percent growth for world stocks.

“Q1 will definitely not be a good quarter for corporates, and it might well be that the market turns back to fundamentals whereas a lot of hope on China/U.S. trade deals and developments on the interest rate front had driven markets up year-to-date,” said DWS’ Weidenbach.

Currency markets were also distinctly risk-averse.

The dollar slipped 0.1 percent to 97.269 against a basket of currencies. The euro inched up 0.1 percent, but hovered near a one-month low at $1.1229 ahead of the ECB meeting later this week.

Sterling inched up 0.2 percent to $1.3057 as a crucial week for Britain’s negotiations to exit the European Union loomed. Prime Minister Theresa May must come up with a new plan to secure a delay from EU leaders at a summit on Wednesday as a deadline of this Friday draws ever closer.

Commodities markets were the exception, rallying strongly.

London prices rose as much as 1 percent on Monday, snapping two days of declines, on expectations of more stimulus measures in top metals consumer China and optimism over Sino-U.S. trade talks. [MET/L]

Oil prices rose to their highest levels since Nov. 2018, driven by OPEC’s ongoing supply cuts, U.S. sanctions against Iran and Venezuela, and fighting in Libya.

was last up 39 cents at $63.45 a barrel, while futures rose 42 cents to $70.76.

(GRAPHIC: Earnings growth April 8 – https://tmsnrt.rs/2I5yaRq)

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Pompeo suggests woman arrested at Trump’s Mar-A-Lago resort may have been spying for China – Business Insider

Pompeo suggests woman arrested at Trump’s Mar-A-Lago resort may have been spying for China – Business Insider

  • Secretary of State Mike Pompeo suggested a woman who breached security at President Donald Trump’s Mar-a-Lago, Florida club may have been a Chinese spy.
  • Yujing Zhang passed Secret Service checks and made it onto the Mar-a-Lago property after showing staff Taiwanese passports and being mistaken for the daughter of a member who shared her last name.
  • The incident has set off concerns about security across multiple agencies as a federal investigation is probing Zhang’s possible ties to Chinese intelligence.
  • Visit Business Insider’s homepage for more stories.

Secretary of State Mike Pompeo suggested Friday that Yujing Zhang, the woman who breached security at President Donald Trump’s Mar-a-Lago, Florida club, may have been a Chinese spy.

Pompeo said on “CBS This Morning” that there was an active investigation into the incident where 32-year-old Zhang was arrested.

“I think this tells the American people the threat that China poses, the efforts they’re making inside the United States, not only against government officials but more broadly,” Pompeo said.

Zhang’s arrest has surfaced broader security concerns across several law enforcement agencies, as she has reportedly been charged by federal prosecutors and is under investigation by the FBI’s Counterintelligence Division in South Florida for possible ties to Chinese intelligence services, according to the Miami Herald.

Read more: The arrest of a woman carrying a USB stick with malware into Mar-a-Lago exposes glaring flaws in the resort’s security, as FBI reportedly investigates whether she is a Chinese spy

Zhang was on resort property after showing two Taiwanese passports to Secret Service agents and telling them she was a club member trying to use the pool, Secret Service Agent Samuel Ivanovich said in a Saturday court filing.

Upon her arrest, agents discovered she was carrying a laptop, a hard drive, and a thumb drive containing “malicious malware” and spoke better English than she had initially presented to security.

The private property presents a unique security challenge to federal agents, as Trump has previously hosted official visits on the property, in close proximity to resort guests.

The Secret Service said in a statement after Zhang’s arrest that it “does not determine who is invited or welcome at Mar-a-Lago; this is the responsibility of the host entity. The Mar-a-Lago club management determines which members and guests are granted access to the property.”

Zhang is due to appear in court next week

Watch Pompeo’s full interview below »

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Duterte threatens ‘suicide mission’ if Beijing oversteps in South China Sea – CNN

Duterte threatens ‘suicide mission’ if Beijing oversteps in South China Sea – CNN

Hong Kong (CNN)Philippine President Rodrigo Duterte has threatened to send his troops on a “suicide mission” if Beijing doesn’t “lay off” a Manila-occupied island in the South China Sea.

Duterte’s speech at a rally in the city of Puerto Princesa in Palawan came days after the Philippine government claimed as many as 275 Chinese boats and ships had been spotted in recent months around Manila’s Thitu Island in the Spratly Island chain.
“Let us be friends, but do not touch Pagasa Island and the rest,” Duterte said, according to CNN Philippines, using the Philippine word Pagasa for Thitu.
“If you make moves there, that’s a different story. I will tell my soldiers, ‘Prepare for suicide mission’.”
Duterte said his words were not a warning, but rather “advice to my friends.”
“I will not plead or beg, but I’m just telling you that lay off the Pag-asa because I have soldiers there,” he said, according to CNN Philippines.
CNN has reached out to the Philippines government for further comment.
A small Philippine military garrison as well as about 100 civilians are based on Thitu, which lies about 500 kilometers (310 miles) from Palawan, one of the islands that make up the Philippines.
Tensions have risen since the start of 2019 in the South China Sea, one of the world’s most disputed regions and an important shipping lane.
The Philippines and China each claim overlapping areas of the vast sea, along with multiple other countries including Vietnam, Malaysia and Brunei. The area where Thitu is located is also claimed by China as part of its territory.
The latest arrival of Chinese vessels around Thitu Island has provoked a stern response from Manila.
The Philippines Department of Foreign Affairs in a statement Thursday said their presence was “illegal” and a “clear violation of Philippine sovereignty.”
“It has been observed that Chinese vessels have been present in large numbers and for sustained and recurring periods — what is commonly referred to as ‘swarming’ tactics — raising questions about their intent as well as concerns over their role in support of coercive objectives,” the Philippine statement said.
Independent analysis by the Asia Maritime Transparency Initiative (AMTI) of the hundreds of vessels which have appeared around Thitu Island since January has determined they are composed of dozens of fishing vessels, as well as China Coast Guard ships and People’s Liberation Army Navy ships.
When asked about the disputed island on Wednesday, Chinese Foreign Ministry spokesman Geng Shuang pointed to a meeting between Philippine and Chinese representatives to discuss a bilateral consultation mechanism to avoid South China Sea conflicts.
“I believe that the consensus reached by the two sides through discussion in this meeting is the best answer to your question,” he said.

Diplomacy and intimidation

To reinforce its claims to the South China Sea, China has built and militarized artificial islands and has attempted to undermine other countries’ positions through a combination of diplomacy and intimidation.
Its aggressive moves in the region had antagonized previous Philippine administrations, which took Beijing to court to prove its claims over the sea.
But relations between China and the Philippines have warmed considerably since the 2016 inauguration of Duterte, who has pushed for a closer economic relationship with Beijing.
“I need China. More than anybody else at this point, I need China,” Duterte said before flying to China in April 2018.
Compared with his predecessors, Duterte has viewed the dispute in the South China Sea as more negotiable than a matter of principle.
But China has been strengthening its hold over the region. In May 2018, Beijing announced it had successfully landed bombers on islands under its control for the first time, a big step in the militarization of the region.
The United States has also ramped up its freedom of navigation exercises in the region under US President Donald Trump, in an apparent attempt to hold back Chinese influence.
In a defiant statement to then-US Secretary of Defense James Mattis during a Beijing meeting in June 2018, President Xi Jinping said China wouldn’t give up “any inch of territory.”

Fishing vessels and naval ships

Philippines armed forces spokesperson Edgard Arevalo cautioned on Monday that it was difficult to quantify how many ships are around the island at any one time, as Chinese vessels “come and go” from the area.
In an article published in February, the Asia Maritime Transparency Initiative said the sudden increase in the number of ships between December and January appeared to be a response to reclamation and construction by the Philippines government.
“The fishing boats have mostly been anchored between 2 and 5.5 nautical miles west of Thitu, while the naval and coast guard ships operate slightly farther away to the south and west,” the AMTI said in an article.
“The fishing vessels display all the hallmarks of belonging to China’s maritime militia, including having no gear in the water that would indicate fishing activity and disabling their Automatic Identification System (AIS) transceivers to hide their activities.”
AMTI noted that Thitu is only about 12 nautical miles (22 kilometers) from Subi Reef, one of the main places China has fortified in its recent buildup in the South China Sea.
The Philippines Foreign Ministry said on Thursday if the Chinese government didn’t repudiate the actions of the fishing vessels in the vicinity of Thitu, it would be assumed to have directed them.
“The presence of Chinese vessels within the (island group), whether military, fishing or other vessels, will thus continue to be the subject of appropriate action by the Philippines,” the statement said.
Duterte’s administration has made threats of military action against Chinese troops in the South China Sea before which have come to nothing. In May 2018, his foreign minister threatened “war” if Beijing attempted to access the oil and gas reportedly buried beneath the sea.

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US and China are reportedly drawing closer to a final trade agreement – CNBC

US and China are reportedly drawing closer to a final trade agreement – CNBC

(L-R) US Treasury Secretary Steven Mnuchin, US Trade Representative Robert Lighthizer and Chinese Vice Premier Liu He pose for a group photo at the Diaoyutai State Guesthouse in Beijing on February 15, 2019.

Mark Schiefelbein | AFP | Getty Images

(L-R) US Treasury Secretary Steven Mnuchin, US Trade Representative Robert Lighthizer and Chinese Vice Premier Liu He pose for a group photo at the Diaoyutai State Guesthouse in Beijing on February 15, 2019.

American and Chinese officials negotiating a trade deal have resolved most of the outstanding issues but are still haggling over how to implement and enforce such an agreement, the Financial Times reported late Tuesday.

Both countries have yet to agree on a number of important issues.

Beijing wants Washington to remove existing U.S. tariffs on Chinese goods, while the United States wants China to agree to terms of an enforcement mechanism ensuring it abides by the deal, the FT said.

Myron Brilliant, executive vice president for international affairs at the U.S. Chamber of Commerce told reporters that 90 percent of the deal is done, but the final 10 percent remains the trickiest part of the negotiations and would require trade-offs on both sides, according to the FT.

The U.S. and China have levied tariffs on billions of dollars worth of each other’s goods since last year, which disrupted supply chains and raised costs for companies.

U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin are set to resume talks with Chinese Vice Premier Liu He on Wednesday, days after both sides reported progress in talks that took place in Beijing.

If the discussions prove fruitful, the FT said it’s possible that U.S. President Donald Trump will meet with Chinese president Xi Jinping to formally sign an agreement. In the event the world’s two largest economies are unable to reach a trade deal soon, some analysts have warned that a global recession could follow.

Read more about the FT’s report on US-China trade negotiations here.

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Philippines protests hundreds of Chinese ships around disputed island – CNN

Philippines protests hundreds of Chinese ships around disputed island – CNN

Hong Kong (CNN)The Philippines government has filed a diplomatic protest with China over the presence of hundreds of Chinese vessels near a Philippines-administered island in the South China Sea.

As many as 275 Chinese ships and boats have been spotted this year around Thitu island, also known as Pag-asa island in the Philippines, said Jason Ramon, chief of public affairs for the Philippine military’s western command, to CNN Philippines.
Armed forces spokesperson Edgard Arevalo cautioned that it was difficult to quantify how many ships are around the island at any one time, as Chinese vessels “come and go” from the area. “The information that we got is the more likely intention is to establish their presence in the area,” he told CNN Philippines on Monday.
Philippines presidential spokesperson Salvador Panelo said Manila had several questions for Beijing about the presence of so many vessels.
“We will ask them first why. First, if they acknowledge such fact as determined by us. Number 2, ask them why they are doing it. Number 3, we will politely ask them not to … not to do what they are doing,” Panelo said, according to CNN Philippines.
China’s ambassador to the Philippines, Zhao Jianhua, said Beijing was trying to verify how many vessels were around Thitu. They might be “unarmed” fishing vessels, he said, according to CNN Philippines.
Thitu island is in the disputed Spratlys chain, which includes Chinese-controlled atolls and reefs that Beijing has built up and developed with buildings, ports and runways over the past several years.
Philippines opposition lawmaker Gary Alejano said Saturday that the Duterte administration should not let China establish any long-term presence around Thitu.
“China is establishing a norm there which we cannot alter later on. Every day is a wasted opportunity to assert our sovereignty if we do not act now,” he said, according to CNN Philippines.
Besides the Philippines, China, Taiwan and Vietnam have also laid claim to Thitu. It has a civilian population of more than 100, as well as some military personnel, according to the Asian Maritime Transparency Initiative.
The island is about 500 kilometers (310 miles) from Palawan, one of the main Philippine islands, which will be hosting exercises between the US and Philippine militaries in the next two weeks.
Manila has been in an awkward dance between Beijing and Washington for years over the South China Sea.
Under the previous government of Benigno Aquino, Manila won a landmark case against China at an international tribunal, which ruled that many of Beijing’s territorial claims in the South China Sea were unlawful.
However, the administration under current President Rodrigo Duterte has moved closer to Beijing, even as the president voiced concerns about China’s territorial ambitions.

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