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To: Arran Yuan who wrote (148395)	5/13/2019 9:06:11 PM
From: TobagoJack	1 Recommendation Recommended By Arran Yuan Respond to of 217948

damage report china-briefing.com China Trade War: No Need for PanicOp/Ed by Chris Devonshire-Ellis The ongoing trade spat between China and the United States has generated a great deal of alarmist publicity. This has come from both economists worried about a slowdown’s impact on global growth, and from consultants concerned about their American clients’ ability to survive in China. Lurid headlines such as “ Will The Last Manufacturing Company in China Please Turn Out The Lights” and more recently allusions to, of all things, the Cold War have helped fuel an unnecessary grim view of FDI and the ability of US companies in particular to sustain their business in China. With such negative stories dominating the media landscape, what is the real deal with the US-China trade war? I did address the issue a couple of weeks ago in this article: Are American Manufacturers Really Exiting China?, while Dezan Shira & Associates are currently meeting in Malta to discuss Asian operations and tweak a few issues. For those of you unfamiliar with our practice, our firm is now in its 26th year of on-the-ground, operational China experience, and with partners also well into their second and even third decade in China. Why Malta? Because I have a very nice house there and it gets us all away from the office for a few days while we take a long hard look at our Asian operations. *Dezan Shira & Associates Partners at dinner in Malta last night. L-R: Sabrina Zhang, Adam Livermore, Chris Devonshire-Ellis, Alberto Vettoretti.* Obviously, the current state of the market in China came up, given that our firm has invested over US$5 billion of American clients’ money in China over the past 25 years. We have a sizeable portfolio of US manufacturers based in China and have had for decades. It’s a portfolio that continues to grow in China. So how are they getting on? Firstly, this is not the first time China and the US have had tariff issues. Neither is it the first time that large swathes of foreign-invested manufacturers in China have felt economic pressures. In terms of our clients, many have been forewarned about these economic pressures for over a decade now. It’s why we declared, in our very first issue of Vietnam Briefing magazine in 2018, that “Global Manufacturing Is Moving to Vietnam”. That initial move to Vietnam and Southeast Asia was partly kicked into play at the time by the Chinese themselves, who through a series of tax and “disincentives” managed to force low margin manufacturers out of South China – where at the time much of the light manufacturing industry was based – and elsewhere. These policies were put into place because China needed to move upstream and attract better quality and more high-tech businesses into the country. Plastic bucket manufacturers and Christmas decoration producers found themselves unwelcome. (At one stage Dongguan had proudly proclaimed itself the “Christmas Tree Capital” of the world). All those low-end, low margin, export-driven manufacturers relocated, either wholly or partially, to countries such as Vietnam. The low-end US, export-driven manufacturers left China to other climes years ago. Vietnam has been a popular destination and is now chock-a-block with foreign manufacturers. Now, it is coastal cities such as Da Nang, rather than Ho Chi Minh, that represent better production value and is where foreign manufacturers are heading. And if they’re not going there, they’re mainly heading for Indonesia or the Philippines. Of the US manufacturers that stayed in China, there are two camps. There are businesses that shifted parts of their production overseas, but kept parts in China to service other, non-US markets, including China itself. They will not be affected by any US-China trade battle because they have already adapted. Then, there are a handful of remaining, outdated, and frankly miserable US export-driven manufacturers that stayed put in China and they will suffer. A quick poll of hands among our Partners demonstrated that none of these are clients of ours, and anyway we believe them to be few in number. So, in practical China terms, very few American, export-driven manufacturers are going to be damaged by any trade war as they have long since adapted their businesses to deal with bumps along the way. And what bumps there have been! *Real China trade problemsAsian Financial Crisis – 1997* Asian currencies devalued across the board. FDI into China dried up as everyone expected Beijing to devalue the RMB. They didn’t. SARS – 2003 A highly contagious and often fatal disease that spread from China. It took a year to bring it under control. Global Financial Crisis – 2007 Stocks tanked and businesses went bust after toxic US loans went bad and impacted their global investors. Three years of lower growth. Simply put, in terms of China, the US-China trade war is a storm in a tea cup. Will it slow growth in China? Yes, and the IMF reckons it will shave 1.5 percent off China’s GDP growth for 2019. My apologies, but those figures don’t get me excited much, and certainly not in terms of pushing the panic button. China will be fine; there are a great deal of other markets it can sell to, and is. For example, China-Russia bilateral trade is set to grow from US$100 billion to US$200 billion over the next five years, averaging 20 percent growth returns per annum. GDP growth is high in other regions across Asia, including India and the ASEAN region. And to hoover up the US-China trade war shortfall, what has China done? Tripled its investments into emerging Asia. So, the message is, don’t worry. As for some practical advice about alternatives in Asia, here are some pointers. As a firm, we have our own offices in each of these locations and have had for several years: Vietnam It is getting hard to find good quality manufacturing locations now in Ho Chi Minh City, as the city’s industrial and export processing zones are almost full. There is capacity around Hanoi, while Da Nang half-way down the east coast is the next spot, with industrial parks being build, and capacity put in place. (Da Nang also has an excellent golf course). Details? Contact: vietnam@dezshira.com. Indonesia There is plenty of manufacturing capacity around Java (not Jakarta). Surabaya, for example, is an excellent manufacturing location with plenty of existing infrastructure. Improved road and rail links are transforming the ability to get things done. Contact: indonesia@dezshira.com. Philippines Can be chaotic but there are other advantages, good US ties, and English is widely spoken. Infrastructure is improving. Contact: philippines@dezshira.com. India India should be considered both as an export manufacturing driven market, as well, like China, a market in its own right. It is also currently having issues with President Trump. However, its position as global manufacturer is now fast taking shape. If you’re not there now, you will need to be in the coming decade. Contact: india@dezshira.com. Final words of advice? Don’t panic. The US-China trade war is a blip, and anyway China is already reacting to it. Emerging Asia is the place to be and the good news is there are plenty of options. All you have to do is choose and develop a business plan to suit. And if you need advice, just ask info@dezshira.com. About Us** Dezan Shira & Associates assist foreign investors into Asia and provide a range of professional services in doing so. We maintain offices throughout China, Hong Kong, India, the ASEAN nations, and Russia. Please contact us at info@dezshira.com or visit us at www.dezshira.com.

To: Arran Yuan who wrote (148395)	5/13/2019 9:07:36 PM
From: TobagoJack	Respond to of 217948

watch to see if deep-state sanctions Malaysia unless and until Malaysia says "no" to free stuff thestar.com.my Malaysia set to see new wave of China FDI We can expect a fresh stream of investments from China following the revival of ECRL and Bandar Malaysia, as well as Dr Mahathir’s recent productive trip to Beijing. AFTER Prime Minister Tun Dr Mahathir Mohamad and President Xi Jinping held a Malaysia-China bilateral meeting on April 25, a journalist who had worked in Beijing for four years Whatsapped me a photograph of both leaders greeting each other happily. “So happy, both of them. Xi rarely smiles like that,” the journalist remarked in her message. Both had strong reasons to be happy to meet each other. For Xi, who is seldom seen smiling, happiness was in winning over the heart of Malaysia ahead of the second international Belt and Road summit and forum in Beijing – the world’s biggest diplomatic event of the year. For the past 12 months, Malay sia-China relations had been frosty and choppy due to the suspension of several key China-linked projects by the government of Dr Mahathir, who overthrew the previous administration in the May 2018 general election. After becoming premier for the second time, Dr Mahathir mercilessly attacked China-linked mega projects launched by former premier Datuk Seri Najib Razak, alleging corruption, collusion and overpricing in the contracts. But just before visiting China for the second time during his current premiership, the 94-old leader made a U-turn on two major projects and the prospects for normalised bilateral ties suddenly brightened up. On April 12, Malaysia revived the East Coast Rail Link (ECRL) project after renegotiating its cost down to RM44bil from RM65.5bil. It subsequently reinstated the Bandar Malaysia project, with a revised total gross development value of RM140bil. Restoring these two China-linked projects was important for Beijing ahead of the April 25-27 summit, as they are vital projects under Xi’s signature Belt and Road Initiative (BRI). For Dr Mahathir, this visit to Beijing also meant luring more foreign direct investment (FDI) and getting China to commit to buying more palm oil. Before the trip, there were indications that the outspoken Malaysian leader would be accorded the highest honour. He was scheduled to share his views on two occasions: at the BRI top leaders’ roundtable on April 26 and the high-level forum on April 27. In fact, the Malaysian leader was the only Asean leader invited to speak at the opening of the high-level BRI forum. “This was the honour felt by all Malaysians at the forum. I attended the opening of the forum and I felt proud for our Prime Minister,” says Tan Sri Ter Leong Yap, president of the National Chamber of Commerce and Industry of Malaysia.A total of 36 heads of government and about 5,000 delegates from all over the world were at the BRI extravaganza. Launched in 2013, the BRI aims to create an economic land belt through Central Asia and West Asia to the Middle East and Europe, as well as a maritime road linking China’s ports with those in South-East Asia, Africa and the Mediterra nean. However, this multi-trillion prog ramme has come under attack by the United States as a “debt trap” for developing countries and a plan for China to spread its influence. Loan contract terms signed with China were said to be oppressive and not transparent. In this second official BRI summit in Beijing, Xi had taken pains to address key concerns on BRI and emphasised shared prosperity. Dr Mahathir’s views helped refute Western allegations against China when he aired support for BRI: “The BRI is not a ‘domination plan’ by China, one of the world’s superpowers, to gain control of participating countries.” Before returning to Kuala Lumpur, Dr Mahathir told Malaysian media that to lure in more FDI, he planned to set up a one-stop centre to expedite the process of giving foreign investment approvals. FDI has been a strong force in Malaysia’s economic development. But based on the Unctad World Investment Report, FDI into Malaysia over the past decade grew only 3% annually, achieving US$9.5bil (RM39.2bil) per year. Last year, Malaysia netted only US$8bil (RM33bil). But this year, Malaysia is likely to see a rebound in FDI growth, led by the inflow of IT firms and industries from China that will meet the economic needs of the country. Ter, who is also president of the Associated Chinese Chamber of Commerce and Industry of Malay sia, tells Sunday Star: “Chinese investors are very positive about Malaysia after the visit of our Prime Minister, who has voiced his support for BRI and sent out a friendly signal to Chinese businessmen.“This visit has boosted investor confidence. Those adopting a wait-and-see attitude are now convinced that Malaysia is the right place for them. I feel confident in saying that a lot of Chinese FDI will come to Malaysia.” Ter’s positive view is largely shared by the president of China Entrepreneurs Association in Malaysia, Datuk Keith Li. “Chinese confidence in Malaysia has been restored after Dr Mahathir’s visit. In addition to other factors, the appointment of Datuk Abdul Majid (Ahmad Khan)as the new chairman of Malaysia Industrial Development Authority (Mida) shows Malaysia’s determination to woo more Chinese FDI,” Li tells Sunday Star. Abdul Majib is a former ambassador of Malaysia to China. After retiring, he became the president of the Malaysia-China Friendship Association to promote Malaysia-China relations. Li adds: “More Chinese FDI, particularly in the infrastructure and IT fields, are expected to rush in. The Prime Minister’s visit to Huawei and SenseTime is seen as an endorsement of Chinese technology.” Many observers believe that Malaysia-China ties will soar from now on. “The reset button has begun. A recent turn of events has signalled that both Malaysia and China remain committed to further enhance their long-term relationship as it enables each of us to achieve economic goals together,” says economist Lee Heng Guie, director of the Socio-Economic Research Centre (SERC). On a wider scale, Malaysia is expected to become a major beneficiary of BRI after being put off the radar for more than a year. In his closing remarks at the BRI forum on April 27, Xi hailed deals worth over US$64bil (RM268.8bil) signed during the week the summit/forum was held. He reassured the BRI nations that the initiative would deliver sustainable growth and green and high-quality developments. Though Malaysia’s economy and sources of FDI are diversified, some believe that at this juncture, it is important for Malaysia to look to China for investment as new FDI flow from traditional sources has been slow. “Malaysia cannot escape from China, the second largest economy in the world. The Middle Kingdom is Malaysia’s biggest trading partner. It is a major buyer of our palm oil and natural gas, and a very reliable investment partner,” says a China watcher. China has been Malaysia’s top trading partner for the past 10 years. Total bilateral trade last year stood at US$108.6bil (RM445bil), according to Chinese data that captured trade via Singapore and Hong Kong. In recent years, Chinese investments in infrastructure, construction, property, banking and manufacturing have created 73,500 jobs for Malaysians, Chinese Embassy data shows. China’s accumulated FDI in Malaysia stood at RM170.4bil or 2.7% of total FDI outstanding at end-2018, according to SERC. Approved Chinese FDI in the manufacturing sector totalled RM20bil last year. In the past 10 years, local property market saw inflow of Chinese capital of US$43.8bil (RM181bil), according to Knight Frank. With the revival of some local and Chinese mega projects, as well as a clearer direction on Chinese FDI policy, Malaysia’s stagnating economy is expected to look up. Currently, the country is facing outflow of funds, a slide in the ringgit and stock market, and low ratings for the one-year-old government of Dr Mahathir. But optimism seems to be in the air now. RHB Investment Bank last week projected that Malaysia’s GDP growth for the second half of this year will be boosted to 4.8% from 4.5% in the first half, after recent policy actions. Some research firms are projecting a higher economic growth, rebound of the ringgit and return of portfolio funds. But Dr Khoo Boo Teik, a professor at Tokyo’s National Graduate Institute for Policy Studies, looks at the success of Dr Mahathir’s Beijing trip beyond economic arena. He says: “Malaysia’s successful ECRL renegotiation and Dr Mahathir’s productive visit to China have exorcised the spectre of Najib Razak that hung over Malaysia-China relations after the 14th General Election). “If other (China) projects once criticised by Mahathir before GE14 are reviewed in detail, at least a mutually acceptable framework for resolving disputes is in place.” Najib is facing countless corruption charges linked to 1MDB. He is being tried in court for one multi-billion case. Prof Khoo states: “Now whatever happens to Najib internally will bear no impact on the economic, security and other relations between Malaysia and China.”

To: Arran Yuan who wrote (148395)	5/13/2019 9:10:50 PM
From: TobagoJack	1 Recommendation Recommended By Arran Yuan Respond to of 217948

ah ha ... Vietnam being counselled to say "no" good news for the Jetson :0) scmp.com Vietnam has become awash with Chinese investment in the last decade as businesses from its northern neighbour spread their wings abroad in a push for new markets. Capital inflows from mainland China, Hong Kong and Macau stood at US$700 million in 2011, but by last year had topped US$2.4 billion. Proponents say the money has been invaluable in providing jobs and pulling up industrial, labour and regulatory standards. But critics argue Chinese projects exploit cheap labour and minerals, while polluting the environment and landing the locals in debt. Either way, China looks there to stay. The Asian giant is now the fifth biggest investor in Vietnam behind Japan, South Korea and Singapore, and the sectors attracting cash are increasingly varied. Workers clean a footpath around the Hoan Kiem Lake in Hanoi. Photo: Bloomberg Share: However, experts say Vietnam will need further regulatory reforms, better education and a push to move up the value chain to make future investments pay off and limit the environmental impact of low-cost manufacturing. Cheap labour has traditionally been the pull at a time when labour costs in China rise. A Vietnamese worker costs on average between US$300 and US$350, about half the figure to the north. Foreign firms have brought more advanced technologies and management models, and have helped promote Vietnamese exports, 70 per cent of which are produced by overseas enterprises. They have also helped pull up standards at government ministries and agencies. SUBSCRIBE TO THIS WEEK IN ASIA Get updates direct to your inbox SUBMIT By registering for these newsletters you agree to our T&C and Privacy Policy Trade war pushing companies from China to Vietnam, but experts warn they may have missed the boat Foreign direct investment (FDI) has made a huge contribution to job creation and training. Direct employment in the sector stood at 330,000 workers in 1995 but had hit 3.6 million by 2017, and another five to six million people are indirectly employed. Chinese investments have also encouraged other countries to follow with projects of their own. A man walks by the Mekong River in Vietnam’s An Giang province. Photo: Reuters Share: A chief target has been e-commerce, seen as a major source of growth owing to Vietnam’s relatively young population. Between 2016 and 2018, the two most developed e-commerce sites, Lazada and Tiki, both received large investments from China. Alibaba Group, which owns the South China Morning Post, injected US$2 billion into Lazada, and was planning more. In January 2018, China’s JD.com confirmed an investment of US$44 million in Tiki. Vietnam races to launch 5G network, but Chinese tech giant Huawei notably left out of plan For China, investing in Vietnam is an opportunity to integrate economically with the world. Whereas in the past the country was mainly a beneficiary of inward investment, the direction is shifting as China seeks new sources of growth abroad through programmes such as its ambitious Belt and Road Initiative, a global trade strategy based on the ancient Silk Road trading route. Projects in Vietnam under the belt and road plan include a highway linking the southern provinces of China with Hanoi and northern ports, as well as upgrades or construction of new ports. Some of these infrastructure projects have targeted Vietnam’s border provinces left behind in the rush to modernise, such as Lao Cai, Lang Son, Cao Bang and Lai Chau. Ho Chi Minh City has been a major beneficiary of Chinese investment. Photo: Shutterstock Share: But the benefits for Vietnam have also had a more intangible side. The export-oriented nature of Chinese FDI has boosted the country by providing a convenient route for Made-in-Vietnam products to reach the world, boosting the country’s industrial image. The exports have also helped promote the growth of related sectors such as hotels, tourism services, currency exchanges, and consultancies. But relying on foreign cash to grow the economy is a double-edged sword, with the emphasis on exports exposing the country to unnecessary risks. Minister of Industry and Trade Tran Tuan Anh has said overreliance is “an unstable element because the production and export of FDI enterprises depends a lot on regional and global supply chains”. Are Facebook and YouTube ‘online gangsters’ corrupting the youth of Vietnam? And then there is the pollution. Like China before it, Vietnam has imported a whole host of dirty industries such as textiles, footwear, thermal power and mining. In 2016 Hung Nghiep Formosa Ha Tinh Pte Limited accepted responsibility for widespread damage to marine life brought by the discharge of industrial waste into the seas around four provinces in central parts of the country, a disaster which raised concerns about the environmental toll of Chinese FDI projects. Many businesses use little or outdated technology. Vietnam thus runs the risk of becoming China’s “technology landfill” if it does not select projects wisely. A crane moves sand from a ship on the Mekong River in Hau Giang province. Photo: Reuters Share: The machinery and equipment brought in can often be produced domestically, but the massive imports of cheap consumer goods have made it difficult for some domestic industries to survive. FDI projects using Chinese technology often cost double or three times similar ones relying on Japanese or European tech. This gap leads to misleading assessments of their effectiveness. China’s belt and road may accelerate exit of manufacturing to Vietnam and India, researchers warn Transfer pricing is another drawback. It involves foreign enterprises overstating the value of their investments, which negatively impacts the host country as a result of tax losses, reduced profits, and unfair competition. A Vietnamese partner is often unable to assess the price of the modern technology and equipment used by a foreign firm, which tends to place a high value on its contribution and inflate the amount of capital it has injected into a joint venture. Foreign enterprises often find ways to increase advertising and promotional costs to reduce or eliminate profits, leaving little for the locals. The Vietnam Chamber of Commerce and Industry and the United States Agency for International Development conducted a survey in 2014 which revealed 20 per cent of foreign enterprises had admitted to transfer pricing. Most cases have not been brought to court due to the weakness of Vietnam’s legal framework and the sophistication of overseas firms in hiding the practice. Vietnam’s capital, Hanoi. Photo: Shutterstock Share: Many domestic partners are also forced into debt by interest payments on delayed projects. The Cat Linh-Ha Dong elevated urban railway in Hanoi saw its cost balloon to US$868 million – US$315 million more than estimated after almost eight years under construction. It was originally to open in November 2013, but is still yet to begin services. According to experts’ calculations, each day of delay costs around 1.2 billion Vietnamese dong (US$52,000) in interest payments. Vietnam 600kg meth bust the latest in a string of big hauls as lawless ‘Golden Triangle’ and home-grown labs churn out narcotics Navigating these pitfalls will require reform. Vietnam will need to continue improving its regulations and procedures. Useful lessons can be gleaned from Ho Chi Minh City – the most favoured destination for FDI in the nation. In 2016 and 2017, the city’s total incoming investment was a staggering US$10 billion. Part of its success was due to its location, a positive record as the country’s most economically vibrant city, and a stable socio-economic environment. The city has the infrastructure to facilitate foreign investment with its ports and airports. It also has favourable policies and procedures for investors. Decisions usually made by national authorities have been delegated to local departments, and administration for investment promotion activities streamlined. China’s FDI inflows have largely been concentrated in high-risk industries such as thermal power, steel, chemicals, and cement. Photo: Alamy Share: But legal reforms will also be key. Vietnam needs to draw up a law against transfer pricing and narrow the gap in tax incentives between foreign and domestic firms to level the playing field. Local tax authorities should be empowered to better monitor overseas companies and their compliance with the law. A database on taxes should be set up to monitor any changes in their income and revenue flows. For those that flout the law, appropriate sanctions should be meted out, such as reducing the duration of their preferential rates or even raising levies. How greedy brokers force thousands of Vietnamese workers to seek illegal work in Taiwan And Vietnam will need to move up the value chain. It must find ways of attracting hi-tech industries, environmentally friendly firms, clean energy, as well as advanced medical equipment and health care services. China’s FDI inflows have largely been concentrated in high-risk industries such as thermal power, steel, chemicals, and cement. These investments need to be screened because they require huge investment, large amounts of energy, and run the risk of polluting the nation. Chinese FDI has tended to take advantage of cheap labour and minerals while jacking up Vietnam’s trade deficit and polluting the environment. Although its nature is now shifting from light industry and consumer sectors to a focus on processing and manufacturing, as well as the distribution of electricity, gas, water, and real estate, the two countries can do more to improve the quality of China’s investments – for everyone’s benefit. Lam Thanh Ha is a senior lecturer at the Diplomatic Academy of Vietnam under the country’s Ministry of Foreign Affairs. This article is based on ISEAS Perspective 2019/34 “Chinese FDI in Vietnam: Trends, Status and Challenges”, published by the ISEAS-Yusof Ishak Institute in Singapore This article appeared in the South China Morning Post print edition as: china money carries big risks for Vietnam Vietnam

To: Arran Yuan who wrote (148395)	5/14/2019 5:48:51 AM
From: TobagoJack	Read Replies (2) \| Respond to of 217948

it would seem the trade-war-monger Jetson Elroy is getting what he wished for folks are getting riled up, indignant, ala May Fourth Movement, episode II am guessing nothing is priced-in as yet edition.cnn.com Chinese media calls for 'people's war' as US trade war heats up Hong Kong (CNN) — China will survive its trade war with the United States, state media insists, as it mounts a fierce new propaganda campaign against US "greed." In a series of opinion pieces and on-air editorials, the country's government-controlled media used strong and nationalistic language to reassure a shaky domestic audience that China's economy can weather the higher tariffs imposed last Friday by US President Donald Trump. One strongly worded editorial published by both the Xinhua News Agency and the People's Daily, the Communist Party mouthpiece, said that while the US was fighting for "greed and arrogance," China fought to defend "its legitimate rights and interests." "The trade war in the United States is the creation of one person and his administration who have swept along the entire population of the country. Whereas the entire country and all the people of China are being threatened. For us, this is a real 'people's war,'" the editorial said. A statement read during the primetime 7 p.m. news on state broadcaster CCTV by anchor Kang Hui said China would "fight for a new world," adding that in its long history "there's nothing we haven't seen before." "As President Xi Jinping pointed out, the Chinese economy is a sea, not a small pond. A rainstorm can destroy a small pond, but it cannot harm the sea. After numerous storms, the sea is still there," Kang said. The clip went viral on China's social media sites, where it has been viewed millions of times. CCTV's own post of the clip has has been reposted by most state media accounts. The commentaries marked a dramatic escalation in the propaganda battle after a week in which state media played down news of the trade war -- barely mentioning the pair of tweets from Trump on May 3 which reignited tensions after months of negotiations. Farmer says there is a rise in suicides after tariffs 01:22 China announces new tariffs In just a couple of weeks the prospect of a wide-ranging agreement to end the year-long trade war has almost completely collapsed. On Friday, the Trump administration raised tariffs on $200 billion of Chinese exports from 10% to 25%, after the US leader accused China of trying to back out of the deal by renegotiating key aspects of it. Washington also said it would start the process of adding duties to almost everything else which China sends to the US, valued about $300 billion. In response, China announced on Monday it would be raising tariffs on roughly $60 billion of US exports. The mood was a stark contrast to late April, when there was speculation a deal could be signed within weeks. But on the face of it, neither side is showing much concern about the rapid escalation. Trump told reporters in the Oval Office on Monday that he was happy to impose more tariffs. "I love the position we're in," he said. In Beijing, Foreign Ministry spokesman Geng Shuang told a daily press briefing that China would "never yield to external pressure." "China hopes the US can make joint efforts and work with China to solve mutual concerns based on mutual respect, and to reach a mutually beneficial deal," he said. US markets clearly did not relish the trade tensions, with the Dow closing down 617 points and the S&P 500 falling by 2.4%. For both, it was their worst day since January 3. Trump and Xi are expected to meet at the G20 summit in Japan in June. Hot and cold Up until Wednesday last week, Chinese state media had barely mentioned renewed tensions between Washington and Beijing over trade. Instead TV, newspapers and online media sites were suddenly full of good news about the Chinese economy and its resilience in the face of global headwinds. On May 7, the People's Daily published a front-page article titled "China's Economy: Full of Resilience," citing strong economic data. Xinhua ran a similar story. CCTV aired a five-minute report in its flagship evening newscast under a similar banner, complete with a video montage of crisscrossing high-speed trains, automated factory assembly lines and busy container ports. But there were hints of what was to come. State-run social media account Taoran Notes, under the Economic Daily newspaper, declared ominously that if a deal is "unfavorable, (China) won't budge no matter how you ask." On Wednesday last week it went even further. "We are no stranger to the scenario of fighting while negotiating." CNN's Steven Jiang, Serenitie Wang and Lily Lee contributed to this article.