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
- Aircraft Carrier Size Investment Banks Won’t Solve China’s Financial Woes — A state-owned Chinese JPMorgan equivalent might help stave off foreign competition, but it won’t do much to fix the sector’s structural frailties.
- U.S. Allies Capture China Tech Business Despite Washington’s Curbs — The U.S. is making it tougher for American companies to help Beijing roll out superfast 5G cellular networks, but companies in Japan are fueling China’s leap ahead—and making money doing it.
- U.S. Is Vulnerable to China’s Dominance in Rare Earths, Report Finds — China sees its dominance in strategic rare-earth minerals as leverage that can be used against the West—including in trade disputes with the U.S., according to a new report by U.S.-based researchers.
- U.S. Presses Europe to Uproot Chinese Security-Screening Company — Amid a global anti-Huawei effort that has seen mixed results, the U.S. sets another Chinese tech company in its crosshairs: Nuctech, a state-controlled firm that is quietly dominating Europe’s cargo and airport screening market.
- Luckin Coffee Drops Nasdaq Appeal; Shares to Be Delisted — The embattled Chinese coffee chain said it no longer plans to appeal a decision by the Nasdaq Stock Market to delist its shares, effectively ending its one-year run as a U.S. publicly listed company.
- China Message to U.S.: Crossing ‘Red Lines’ Could Put Trade Deal at Risk — Beijing has begun quietly delivering a message to Washington: U.S. pressure over matters China considers off limits could jeopardize Chinese purchases of farm goods and other U.S. exports under the “Phase One” trade deal.
The Financial Times
- Why Beijing is rushing to push through Hong Kong security law — China keen to introduce legislation before possible pro-democracy protests this week
- China overtakes UK to become world’s fifth-largest fund hub — Shift underscores Asian giant’s status as a rare bright spot for global asset managers
- Luxury groups experiment with China’s livestreaming boom — Brands from Tiffany to Hermès are turning to sales channel but some say it is at odds with desire for exclusivity
- Inside the battle for Arm China — Chief of chip designer’s unit is battling SoftBank and Hopu after they discover his personal investment fund
The New York Times
- In Seizing Control, China Sidelines Its Allies in Hong Kong — Local tycoons and British-trained civil servants helped promote Beijing’s agenda in the territory. Now Beijing seems ready to push them aside.
Caixin
- Former China Construction Bank Veteran Under Corruption Probe — Former president of lender’s Qinghai provincial branch Guo Jizhuang investigated for legal, disciplinary violations
- Cover Story: The Mystery of $2 Billion of Loans Backed by Fake Gold — Nasdaq-listed Wuhan Kingold put up 83 tons of purported gold bars as collateral, but now lenders are finding at least some of it was just gilded copper
- Beijing-Shanghai Rail Operator Zips Into Lesser-Traveled Anhui — National rail operator plans to use IPOs for cash-rich lines to fund some of its newer, less lucrative lines
- Exclusive: China Plans to Grant Securities Licenses to Commercial Banks — Lenders to move into offering securities services as competition from foreign players grows
- Didi Trials ‘Robotaxi’ Service in Shanghai — Following rival Baidu’s Changsha pilot project, ride-hailing giant starts offering free rides in financial hub
- China Industrial Profits Increase for First Time Since November — Earnings rose 6% last month, up from a 4.3% decline in April
- China’s Exporters Find Virtual Trade Fair Is No Match for Real Thing — Exhibitors at the Canton Fair say it was harder to grab visitors’ attention, follow up on leads afterwards
- State Grid Boosts South America Presence with $2.23 Billion Purchase in Chile — China’s largest electricity distributor beats out international bidders for Chilquinta Energia, which was being sold by America’s Sempra Energy
South China Morning Post
- The national security law could turn Hong Kong into Asia’s Monaco — Hongkongers were recently treated to a dazzling double rainbow over the harbour and a solar eclipse a few days later. In many ancient cultures, both are signs of transformation and indicate a period of flux, but some see solar eclipses as signifying a disturbance of the cosmic order and they have been tied historically to disruptive events. At least the colourful rainbow let us know the air was clean and the sunlight was not diluted by low-hanging smog.
- China to put visa restrictions on US officials over Hong Kong — China has announced visa restrictions on US officials who “behave egregiously” in relation to Hong Kong affairs.
- US downgraded to ‘medium risk’ for China investment as relations turn sour amid ‘higher uncertainties’ — The United States has been downgraded to a “medium risk” destination for Chinese investment with “higher uncertainties” due to the heightened bilateral disputes in trade, technology, finance, Hong Kong, and Xinjiang, according to a Chinese governmental think tank.
- China loosens rules on fund flows between Greater Bay Area cities, in a partial relaxation of capital controls — China’s government will loosen the rules on two-way fund flows between nine cities in the nation’s southern Guangdong province with Hong Kong and Macau, taking a tentative step toward partial relaxation of its capital controls.
- China county government censured over illicit tax collection in sign of local fiscal woes — A county government in Hebei province has been found to have illicitly collected business fees and taxes following a central government investigation, highlighting the mounting financial pressure facing regional economies because of the coronavirus pandemic.
- US bill aiming to delist Chinese companies could claim American investors, businesses as unintended victims — Sweeping legislation that could remove publicly traded Chinese companies from US stock exchanges has the potential to trip up businesses and investors at home as Chinese firms move to other countries for capital.
- Hong Kong exports continue to slump, falling 7.4 per cent in May, as pandemic and China-US ties hammer demand — The contraction of Hong Kong’s exports worsened in May, falling 7.4 per cent under the weight of weak global demand due to the coronavirus pandemic, with analysts warning of fresh threats from the fallout in ties between China and the United States.
- Coronavirus: Shenzhen manufacturer of Nike, Speedo, Reebok swimsuits partially shuts as clouds gather over China exports — The world’s “largest maker of swimming suits” is partially closing its Shenzhen factory after operating in the boomtown for the past three decades, threatening some of its 2,000 jobs, the factory’s owner and workers said on Monday, in a fresh sign of worsening global conditions for Chinese manufacturers and exporters.
- John Bolton book reveals ‘Xi Jinping’s personal appeals to Donald Trump’ on Huawei and ZTE — Chinese President Xi Jinping made personal appeals in trade talks with his US counterpart to remove sanctions on Chinese technology firms, according to a tell-all memoir by former American national security adviser John Bolton.
- US admiral warns of risk of ‘bogus’ Chinese claims in Arctic — The United States and its Nato allies should maintain close ties to defend their interests in the resource-rich Arctic as China extends its reach around the world, according to a US naval commander.
- Online mutual aid platforms are plugging a health care gap in China for those on lower incomes — Pay less than US$1 and get up to 100,000 yuan (US$14,144) of help if you face a critical illness – this is how an online health care mutual aid platform helped rural resident Hu Youbin pay medical expenses when he was diagnosed with cancer last year.
- Exchanges take shape in Macau, Guangzhou to turbocharge southern China’s Greater Bay into Asia’s largest financial market — Two new financial markets are taking shape on the drawing boards in southern China, with the potential to turbocharge the Greater Bay Area (GBA)’s economic growth engine. This is the making of Asia’s largest and peerless capital market.
- CK Asset’s bet on home demand pays off as Hong Kong buyers shrug aside US law to snap up Tseung Kwan O’s costliest launch — Hong Kong’s homebuyers snapped up the most expensive residential property project that launched in the Tseung Kwan O district on Saturday, persuaded by discounts and flexible payment terms to ignore the risks of a recession and escalating US-China tensions.
Bloomberg
- China Opens Wealth Tap to Hong Kong Amid Political Crackdown — China moved to further deepen its economic ties to Hong Kong, allowing two-way cross border purchases of wealth products at the same time as authorities in Beijing push to quell dissent in the former British colony.
- China Boosts Subsidy-Eligible Solar Projects by 13% in 2020 — China, the world’s biggest solar market, plans to subsidize 434 photovoltaic power projects with a combined capacity of almost 26 gigawatts this year.
- China Oil Titans Plan Joint Crude Buying to Add Market Clout — China’s state-owned oil refining giants are in discussions to form a purchasing group to buy crude together, increasing their bargaining power and avoiding bidding wars.
- Jack Ma’s New Chieftain Lays Out Plan to Fend Off Tencent — Billionaire Jack Ma’s newest chieftain is accelerating Alipay’s evolution into an online mall for everything from loans and travel services to food delivery, in a bid to claw back shoppers lost to Tencent Holdings Ltd.
- Two Chinese-Centric Casinos Exit Philippines on Virus, Taxes — Two online casino operators that cater mostly to Chinese clients are exiting the Philippines, and more will likely follow suit due to virus curbs and taxes, the Philippine gaming agency said. Casino and property stocks fell.
- China Brokers Sink on Report Banks May Get Securities’ Licenses — Chinese brokerages slid after a media report that regulators may allow some of the nation’s largest banks into the securities industry, raising concerns over intensified competition in an already fragmented market.
- Amateur Traders Pile Into Asian Stocks, Making Pros Nervous — When the coronavirus pandemic sent shares plunging, you didn’t have to be a professional investor to spot a buying opportunity. In fact, it might be better if you weren’t.
- China’s Cleanup of Wealth Management Runs Into Fed-up Investors — Beijing must resist watering down rules to clean up wealth management as angry mom-and-pop investors want their money back.
- World’s Top Iron Ore Shipper Says Robust Prices Are Here to Stay — Top iron ore shipper Australia predicts elevated prices will stay for the rest of 2020 as Chinese demand strengthens and supply is slow to increase.
- Supply Lines: Peak Season Strains Arrive Early for U.S. Importers — Usually the ocean freight market tightens in the fall as retailers stock up before the holidays. This year a crunch is happening four months early because the pandemic has torn up the most basic law of economics. First Covid-19 hit supply chains during Chinese lockdowns. Now it’s making demand hard to predict, forcing shipping companies to throttle back capacity next quarter and sending freight rates soaring.
- China’s U.S. Oil Binge Seen Slowing With Virus Revival — A second wave of Covid-19 infections in China’s capital is threatening to depress the nation’s appetite for American oil just after a pick-up in purchases.
- Luckin Seeks Chairman’s Resignation Amid Accounting Scandal — Luckin Coffee Inc.’s board will require Chairman Charles Zhengyao Lu to resign, adding to the fallout from an accounting scandal that has battered the onetime market darling.
- Chinese Professor Found Guilty in U.S. of Economic Espionage — A Chinese professor was found guilty by a judge of trade-secret theft and and an even more serious and rarer charge of economic espionage, marking the latest conviction in the Trump administration’s pursuit of Chinese scientists and engineers.
Reuters
- S&P affirms China; flags risk to growth from coronavirus, tensions with U.S. — Credit rating agency S&P Global Ratings on Monday affirmed China’s sovereign credit ratings at ‘A+/A-1’ with a stable outlook, amid the ongoing coronavirus outbreak.
- CanSino’s COVID-19 vaccine candidate approved for military use in China — China’s military has received the greenlight to use a COVID-19 vaccine candidate developed by its research unit and CanSino Biologics after clinical trials proved it was safe and showed some efficacy, the company said on Monday.
- China’s factory activity likely slowed in June on subdued global demand, Reuters poll shows — China’s factory activity likely grew for the fourth month June but the pace may be waning, as global demand stayed subdued while a fresh coronavirus outbreak in the Chinese capital and rising worldwide cases threaten to undermine a gradual domestic recovery.
- Chinese online tutor Zuoyebang raises $750 million in fresh round — Online tutoring startup Zuoyebang said on Monday it raised $750 million in a fresh funding round, led by investment firms FountainVest Partners and Tiger Global Management, as the COVID-19 crisis spurs investor interest in education technology.
- China state firms’ profits fall 52.7% year-on-year in Jan-May: finance ministry — Profits at China’s state-owned firms fell 52.7% y/y in Jan-May, according to a statement from the country’s Finance Ministry on Monday, to 663.1 billion yuan ($93.67 billion).
- All tangled up: China confusion leaves scrap metal stranded overseas — China is dragging its feet in releasing new codes governing high-grade copper and aluminium scrap imports, leaving scrap metal firms abroad confused and without a clear way into their key market.
- Some U.S. food suppliers forego China contracts over coronavirus curbs, trade group says — Chinese demands that overseas suppliers guarantee their food shipments are free of the novel coronavirus are causing some shippers to forego the China trade, an industry group representing U.S. produce growers said on Friday.
- United Airlines to resume China flights in July — United Airlines said on Friday it would resume service to China, with two flights a week between San Francisco and Shanghai beginning July 8.
Xinhua
- China’s investment in highways, waterways grows in Jan.-May — China’s fixed-asset investment (FAI) in highways and waterways reported growth in the first five months, recovering from a year-on-year decline of 7.8 percent in the January-April period, official data showed.
- Foreign capital keeps flowing into China amid COVID-19, U.S.-China trade tensions — As COVID-19 continues to sweep across the world and wreck economic havoc globally, foreign capital continues to flow into China, according to a report compiled by research firm Rhodium Group published Thursday.
- China’s central bank skips reverse repos — The People’s Bank of China (PBOC), the country’s central bank, skipped open market operations via reverse repos Monday.
- Tianjin port tops LNG imports in China — North China’s Tianjin port ranked first in liquefied natural gas (LNG) imports among China’s LNG import ports in the first five months of this year, accounting for about 19.5 percent of the country’s total LNG imports, according to the Tianjin Customs.
- Chinese shares close lower Monday — Chinese stocks closed lower on Monday, with the benchmark Shanghai Composite Index down 0.61 percent to end at 2,961.52 points.
- Hong Kong stocks close 1.01 pct lower — Hong Kong stocks closed down 248.71 points, or 1.01 percent, to 24,301.28 points on Monday.
- China’s Changqing Oilfield to produce 63 mln tonnes oil equivalent in 2025 — PetroChina Changqing Oilfield Company, a subsidiary of China’s top oil and gas producer PetroChina, is expected to produce 63 million tonnes of oil equivalent of crude oil and natural gas in 2025.
- China’s industrial profits down 19.3 pct in first five months — Profits of China’s major industrial firms dropped 19.3 percent year on year in the first five months of 2020 due to the COVID-19 impact, official data showed Sunday.
- Tencent releases new simulation platform for autonomous driving — China’s tech giant Tencent has released TAD Sim 2.0, the new generation of its autonomous-driving simulation platform, to improve the development and testing efficiency of autonomous driving.
- China’s STAR drives IPO momentum on A-share market: EY report — Shanghai Stock Exchange’s sci-tech innovation board, commonly known as the STAR market, has continued to drive the momentum of initial public offerings (IPOs) on the A-share market, according to the consulting firm Ernst & Young.
- China’s Ebang International Holdings makes Nasdaq debut — Ebang International Holdings, which makes equipment for cryptocurrency mining in China, started trading on Nasdaq Friday.
- China greenlights two IPOs on sci-tech innovation board — China’s securities regulator has approved the registration for the initial public offerings (IPOs) of two companies on the science and technology innovation board.
- China’s privately offered funds expand slightly — China’s privately offered funds managed 14.35 trillion yuan (about 2 trillion U.S. dollars) at the end of May, industry association data showed.
Other Publications
- Harvard Business Review: Prepare for the U.S. and China to decouple — Sources at political risk consultancies have indicated to me that U.S. businesses have pinned their hopes on a possible end of the Trump presidency following the November 2020 elections. They will be disappointed. First, it is far from a foregone conclusion that Trump will lose. Second, and more importantly, if there is one thing Democrats and Republicans agree on these days, it is that the rise of China needs to be checked.
- Forbes: Forget Trump And Google—Huawei Now Has A Critical New Problem In China — Huawei has always admitted that its technology has been deployed by third parties in Xinjiang, but has denied direct involvement. ASPI claimed that this is not true. “Huawei’s work in Xinjiang is extensive,” it said, “and includes working directly with the Chinese Government’s public security bureaus in the region.”
- Forbes: China’s Major Ride-Hailing And Food Delivery Players See A Resurgence In The Shadow Of Covid-19 — Chinese ride-hailing giant Didi Chuxing and delivery firm Meituan Dianping have started to see a rebound in business after the initial shocks of the Covid-19 pandemic but the future still looks rocky.
- Nikkei Asian Review: China’s state-backed shipbuilders overcome coronavirus slump — China’s government-backed shipbuilders are busy despite the hammering the global shipping market has taken from the novel coronavirus pandemic.
