Good Morning. Welcome to The Wire’s daily news roundup. Each day, our staff gathers the top China business, finance, and economics headlines from a selection of the world’s leading news organizations.
The Wall Street Journal
- A Rising China’s Underclass Is Suddenly Thrust Into the Light — Jobs, instead of growth, will be the focus of China’s post-Covid-19 economy. The plight of the country’s millions of low-income workers is highlighting the gaps in China’s social safety net—and creating political fissures as well.
- China’s Companies Find Ways to Avoid Bond Blowups — Chinese companies are avoiding or minimizing bond defaults, even as the economy shrinks for the first time in decades. Some methods include asking creditors to wait longer for repayment or forgo the right to redeem bonds early.
- China’s Factory-Gate Deflation Accelerates — Industrial prices fell at their fastest pace in more than four years as the coronavirus pandemic crushed global demand for commodities.
- Huawei and the U.S.-China Tech War — By The Editorial Board. Computer chips are the first battlefield of the great power rivalry.
- 1MDB’s Suspected Mastermind Found New Ways to Move Money in Kuwait — The Kuwaiti royal family provided Jho Low means to fend off U.S. and Malaysian investigators who accuse him of masterminding the plunder of Malaysian state investment fund 1MDB.
The Financial Times
- TikTok rival Zynn removed from Google Play Store — Chinese video app owner admits problem with plagiarism shortly after shooting to top of US charts.
- UK looks to wean itself off Chinese imports — Brexit and Covid-19 behind move to diversify supply chains and ensure access to critical goods.
The New York Times
- A Watch Is More Than Its Parts. But if You Can’t Get Them? — Swiss watch companies returning to production after coronavirus shutdowns are grappling with supply chain disruptions.
- A U.S. Secret Weapon in A.I.: Chinese Talent — New research shows scientists educated in China help American firms and schools dominate the cutting-edge field. Now industry leaders worry that worsening political tensions will blunt that edge.
Caixin
- CBIRC Tells Lenders to Reduce Structured Deposits — Window guidance from top banking regulator meant to reduce regulatory arbitrage amid flood of cheap money
- Chinese Companies Abandon Bond Sales Amid Market Volatility — Rising interest rates in China’s debt markets are curbing everyone’s enthusiasm, analysts say
- Exclusive: Chinese Banks Told to Shrink Loan-Loss Provisions and Lend More — Small and midsize institutions can slash the amounts needed to cover losses from bad loans so they can increase credit to virus-stricken businesses, sources say
- In Depth: China Eases Off Rules That Have Strangled Mainland’s Offshore Trade — Loosening the rules would make it easier for companies in Shanghai’s pilot free trade zone to get a bigger piece of the multibillion-dollar business
- Easing Pork Prices Drag China’s CPI Down to 14-Month Low — Consumer inflation moderated to 2.4% in May, while decline in PPI deepened to 3.7%
- Other Customers Could Fill Gap Left By Huawei, TSMC Chief Says — Mark Liu, who heads Taiwan contract chip giant, tells shareholders his company will manage after U.S. extends sanctions
- Mega Refinery Wins Approval in China’s Eastern Oil Hub — NDRC gives the green light for planning to begin on the construction of the $18 billion facility’s first phase
- Electric Carmaker Xpeng Shows Off New Factory — Chinese electric vehicle startup Xpeng has given the world a peek at the inside of its new wholly owned factory as it tries to highlight the quality of its manufacturing process. The glimpse comes as the company tries to distinguish itself from most of its Chinese peers whose cars are made under contract by bigger automakers.
- Tencent Targets Japan Anime, Manga to Jump-Start Global Growth — Tencent Holdings Ltd., spurned in years past by Japan’s guarded entertainment industry, is rekindling its courtship of the country’s fabled anime and manga houses.
South China Morning Post
- NetEase gets a lot of love from investors, as shares are oversold by 360 times in Hong Kong secondary listing — Hong Kong’s retail investors seem to love NetEase. Shares of the world’s second-largest publisher of mobile games were oversold by a massive 360.5 times ahead of the Guangzhou-based company’s HK$20.9 billion (US$2.7 billion) secondary listing in Hong Kong on June 11.
- Dread over impending anti-Huawei law grows at US companies — A quiet panic is spreading in Washington and corporate boardrooms that a law taking effect in two months, which bans Huawei Technologies gear, will threaten the business of government contractors.
- TikTok chief executive Kevin Mayer pledges fake news fight in call with EU digital chief Thierry Breton — Chinese-owned video app TikTok’s new chief executive Kevin Mayer has told EU digital chief Thierry Breton he intends to play an active role fighting disinformation, an EU official said on Tuesday, as Breton pushes tech giants to step up their efforts against fake news.
- Hong Kong’s Executive Council gave Cathay Pacific bailout unanimous support, and airline will have ‘space to restructure’, member says — The government-led HK$39 billion (US$5 billion) bailout of Cathay Pacific had the unanimous support of Chief Executive Carrie Lam Cheng Yuet-ngor’s de facto cabinet, one of its members revealed on Wednesday.
- Smartphone giant Xiaomi enters China’s online mutual aid industry with new health care platform — Smartphone giant Xiaomi Corp has joined China’s fast-growing online mutual aid industry, with the launch on Monday of a crowdfunding health care platform to rival those from other major technology companies.
- As China’s ‘vendor economy’ goes from state approval to reject, analysts see synergies with commercial real estate market — China’s street vendor economy is getting some mixed signals from municipal governments after an apparent endorsement from the State Council, causing confusion about the role of small businesses in the midst of a slump.
- Vodafone says UK’s desire to lead in 5G will suffer a blow if Huawei gear is ripped out — Vodafone Group, the world’s second biggest mobile network operator, has warned that Britain’s desire to lead the world in 5G technology will face a big blow if it decides to remove China’s Huawei Technologies from the country’s telecommunications infrastructure.
Bloomberg
- SoftBank’s Arm Says China CEO Fired for Major Irregularities — SoftBank Group Corp.’s Arm Ltd. and its Chinese venture clashed publicly over whether the venture’s CEO had been fired, a dispute that threatens to disrupt a Western company central to the global semiconductor industry.
- Car Inc. Chairman Resigns as Luckin Scandal Escalates — The head of Luckin Coffee Inc. resigned as chairman of Car Inc., as scrutiny over the high-flying Chinese coffee chain and its accounting scandal continues to mount. Shares of the car-rental company surged.
- Tesla Loses China Executive Ren Just as Competition Heats Up — Tesla Inc. lost an executive who helped spearhead its expansion in China over the past few years, the latest in a string of management changes at the U.S. electric-car maker.
- China’s Carbon Market Exchange Completes Trading Platform Test — The electronic platform that will be used for China’s national carbon trading program has completed testing, according to people with knowledge of the situation, a significant step for efforts by the world’s top polluter to rein in emissions.
- A Quiet Panic Is Growing in U.S. Boardrooms Over Huawei Ban — A quiet panic is spreading in Washington and corporate boardrooms that a law taking effect in two months, which bans Huawei Technologies Co. gear, will threaten the business of government contractors.
Reuters
- China Express Air to buy 100 of COMAC’s Chinese made planes — China Express Airlines said on Wednesday it had signed a strategic partnership agreement with the Commercial Aircraft Corporation of China (COMAC) to buy a total of 100 ARJ21 and C919 passenger aircraft for delivery from 2020.
- Inditex says in-store sales have normalised in China, Korea — Zara owner Inditex said on Wednesday that in-store sales and customer activity had returned to levels seen before the coronavirus outbreak in its stores in Asian countries like China and Korea.
- Breakingviews – Citi uncomfortably straddles Hong Kong-China fence — Citigroup has a busy time ahead staying out of Chinese politics. Chief Executive Mike Corbat has so far avoided taking sides on Beijing’s controversial security law targeting sedition, terrorism, and “foreign interference” in Hong Kong. But if the White House follows through on threats to sanction Chinese banks over the issue, the $124 billion lender might make a convenient target for retaliation.
- Chinese companies put U.S. listing plans on ice as tensions mount — Chinese companies are putting off plans for U.S. listings as tensions between the world’s top two economies rise, lawyers, bankers, accountants and regulators involved in what has been a major capital-raising route told Reuters.
Xinhua
- China’s airline industry shows signs of recovery — China’s airline industry showed signs of recovery in May with the decline in key indicators significantly narrowing from a month ago, the country’s top aviation authority said Wednesday.
- China’s newly-added social financing grows in May — China’s newly-added social financing, a measurement of funds the real economy receives from the financial system, came in at 3.19 trillion yuan (about 451 billion U.S. dollars) in May, up 1.48 trillion yuan year on year, central bank data showed Wednesday.
- Tianjin leads China in aircraft, ship leasing — Aircraft and ship leasing has become a booming industry in north China’s Tianjin Municipality, local authorities said.
- South China’s Hainan to create int’l aviation hub to boost free trade port construction — South China’s island province Hainan is accelerating the construction work of the expansion project of Haikou Meilan International Airport to serve the development of its free trade port.
- Economic decoupling from China to deepen crisis, delay recovery: economist — Economic distancing from China or self-isolation will worsen the economic conditions and prolong the path toward recovery, Shiro Armstrong, director of the Asian Bureau of Economic Research at the Australian National University, has said.
- China’s top liquor brand targets 10 pct growth for 2020 — China’s leading liquor producer, Kweichow Moutai, set its revenue growth target for 2020 at around 10 percent compared with last year, the chairman of the company said on Wednesday.
- China greenlights two IPOs on sci-tech innovation board — China’s securities regulator has approved the registration of the initial public offerings (IPOs) of two companies on the science and technology innovation board.
Other Publications
- Pan Daily: WeChat Adds Delivery Services to Its All Built-In Functions — WeChat added delivery services to its mini programs last week, another feature to make WeChat a super app that is almost equivalent to an operating system.
- Harvard Business Review: 5 Questions About China That Boards Should Be Asking Right Now — To understand their China risks, U.S. executives and boards need to start a discussion. As we see it, the agenda should include the following five questions.