• Benedict Pham

Short news on China - 31 December 2020

Updated: Jan 6

Coal Shortages and Rising Prices

At least three of China's 34 first-level administrative divisions ordered limited energy use due to a potential coal shortage. Many cities might stay dark this winter.


Complaints about energy shortages and blackouts from factory owners appear as they have been chosen for "electricity rationing and staggered supply", as reported in the Asia Times.


Still highly relying on coal as a source of energy - China is nearly 70% powered by fossil fuels - a shortage on coal could hit hard. Enterprises are also affected by energy-saving measures such as: no power during weekends for office buildings or mandatory switch off for lighting during designated hours.


China's officials denied that coal shortages are self-inflicted by banning Australian coal but admitted the predicament.

Chen, F. (2020, December 18). Power crunch turning the lights out in China. Asia Times.

https://asiatimes.com/2020/12/power-crunch-turning-the-lights-out-in-china/

Wang, V. (2020, December 21). ‘The Whole City Was Dark’: China Rations Electricity for Millions. The New York Times.

https://www.nytimes.com/2020/12/21/world/asia/china-electricity-coal-shortage.html

Zhou, C. & Wang, Z. (2020 December 23). China suffers worst power blackouts in a decade, on post-coronavirus export boom, coal supply shortage. South China Morning Post.

https://www.scmp.com/economy/china-economy/article/3115119/china-suffers-worst-power-blackouts-decade-post-coronavirus


German Car Manufacturer Recalls 936 Vehicles Due to Software Malfunctions in China

Yet again a German car manufacturer, BMW, recalled vehicles due to malfunctioning on-board diagnostics (OBD) systems, this time in China.


According to the State Administration for Market Regulation, the BMW models X5M, X6M, M5, and M8 produced between 22 November 2017 and 7 September 2020 exceeded the standard level for emission due to OBD software malfunctions.


BMW was not convicted intentionally using emission control software during Dieselgate but was still fined EUR 8.5 million by the Munich public prosecutor due to negligent supervision.

Hua, X. (2020, December 20). BMW recalls 936 defective vehicles in China. Xinhua. http://www.xinhuanet.com/english/2020-12/20/c_139604896.htm

BMW-Fahrzeuge von Softwaremanipulation betroffen. (2020, August 12). ADAC Fahrzeugtechnik, Juristische Zentrale.

https://www.adac.de/verkehr/abgas-diesel-fahrverbote/abgasskandal-rechte/rechte-verbraucher/bmw/


Jack Ma's Alibaba and Ant Financials are Facing Antitrust Investigations

Similar to Jeff Bezos' Amazon, Jack Ma's platforms are now facing antitrust investigations from official sides in China.


After the sudden suspension of Ant Financial's planned US-dollar 37 billion IPO last month, the State Administration for Market Regulation has launched further investigation into Alibaba and Ant Financials.


The authorities are acting on disclosures that Alibaba is pushing merchants to solely selling on Alibaba's e-commerce platform and a perceived potential risk of Ant's lending model.


According to Chinese regulators, merchants that want to sell on Alibaba's Taobao are forced to sign exclusive deals, effectively preventing them from selling goods on rival competitor platforms. They also called Ant Financial's online-lending model with its high-interest lending a potential risk for China's financial system.

Lin, L.; Wei, L. & Ping, C. K. (2020, December 24). Alibaba, Ant Face Crackdowns From Chinese Regulators. The Wallstreet Journal.

https://www.wsj.com/articles/chinese-regulators-launch-antitrust-investigation-into-alibaba-11608772797

Zhu, J.; Wu, K. & Leng, C. (2020, December 24). China launches antitrust probe into tech giant Alibaba. Reuters.

https://www.reuters.com/article/us-china-antgroup/china-launches-antitrust-probe-into-tech-giant-alibaba-idUSKBN28Y05T

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