US-China Market Watch: US-China Business Optimism, China Crypto Ban, Universal Beijing Resort

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Original Source: East West Bank

U.S. business optimism in China rebounds

According to a survey conducted by the American Chamber of Commerce in Shanghai and PwC China, U.S. businesses are the most optimistic in three years about business prospects in China, despite some concerns over Beijing’s pandemic-related travel restrictions and tense bilateral relations.

Seventy-eight percent of respondents said that they were “optimistic or slightly optimistic” about their business outlook in China in the next five years, which is nearly back to 2018 levels. Almost 60% of those surveyed said they had increased their investments in China over the past year, and over 82% expected to achieve revenue growth for the full year.

However, U.S. firms still face hurdles in China. Companies are having difficulty bringing in more employees due to border closures, and China’s crackdown on industries ranging from education to real estate has increased the uncertainty in China’s business environment.

Beijing bans crypto trading and mining

In their most detailed and expansive cryptocurrency crackdown yet, Chinese regulators have issued a ban on all crypto-related trading and mining. Ten agencies that include the People’s Bank of China, financial regulators, and securities regulators have joined together for the first time to “root out” any “illegal” crypto activities.

Other countries in Asia and the United States are also clamping down more tightly on digital currencies, due to concerns over the impact such currencies could have to their financial markets. Beijing has also expressed worries over the amount of energy usage required to mine digital currencies. Some analysts posit that the Chinese government saw cryptocurrencies as a threat to its own sovereign digital yuan, which China began developing in 2017.

Universal Beijing Resort finally opens

Universal opened its first theme park in China, the Universal Beijing Resort, to a sold-out crowd just in time for the Mid-Autumn Festival holiday. Tickets for the following National Day holiday weekend also quickly sold out. This is the first U.S.-branded theme park in Beijing on par with the Disneyland parks in Shanghai and Hong Kong, and is Universal’s fifth theme park worldwide. The resort features seven themed “lands” based around Universal properties, such as Harry Potter and Kung Fu Panda.

More Hollywood films get China release dates

Two major Hollywood blockbusters, science fiction epic “Dune” and the upcoming James Bond flick “No Time to Die,” have secured China release dates in October. “Dune” will open in China on the same day as its North America release date (October 22), and “No Time to Die” will debut in China on October 29, three weeks after its North American release.

The news comes as welcome relief, after other big Hollywood titles like “Black Widow” and “Shang-Chi and the Legend of the Ten Rings” never received release dates over the summer. Part of the summertime blackout was due to the Communist Party celebrating its 100th anniversary and releasing a slew of patriotic films. However, China’s box office has been slow overall this summer, due to delta variant outbreaks and concerns over government crackdowns on Chinese celebrities, with September having one of the lowest box office weekends in 2021.

GM invests in autonomous cars and chips in China

General Motors announced it was investing $300 million in Chinese autonomous driving startup Momenta, less than six months after Momenta raised nearly $500 million in funding from firms including Mercedes-Benz AG, SAIC, and Toyota. The investment is intended to accelerate the development of autonomous vehicle technology for GM vehicles in China, where GM has formed strong partnerships, and is part of the $35 billion GM had earmarked specifically for electric and autonomous vehicle ventures through 2025. China’s best-selling EV, the Wuling Mini EV, is a joint venture between China’s SAIC Motor Corp., GM, and Wuling Motors, produced under the brand SGMW.

SGMW also announced that it was developing its own auto chips and wanted to increase its use of locally sourced chips. However, SGMW did not say whether it was just designing the chips or would also be manufacturing them.