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
- Facebook Suspending Review of Hong Kong Requests for User Data — Facebook is suspending the review of government requests for user data from Hong Kong following China’s imposition of a national-security law on the city. The company’s move follows an earlier decision by its WhatsApp messaging service.
- Global Stocks Jump, Led by Surge in Chinese Markets — International stocks and U.S. futures rallied on hopes for a strong recovery from the coronavirus pandemic and a signal from Chinese state media suggesting investors should support a local bull market.
- Covid-19 Derails China’s Push to Be Biggest Movie Market — This was supposed to be the year China’s theatrical box office became No. 1 in the world. Instead it is setting a different record: the world’s longest closure of movie theaters.
- Chinese Stocks Surge as Individual Investors Pile Into Market — The flagship Shanghai Composite Index hit its highest since early 2018, as small investors bet that a recovering Chinese economy and easier financial conditions would fuel a boom in corporate profits.
- Chinese Chip Giant Pursues Year’s Biggest Stock Sale — Semiconductor Manufacturing International is preparing a $6.55 billion stock offering on Shanghai’s high-tech STAR market, as China moves to shore up its semiconductor capabilities amid heightened tensions with the U.S.
- China Is Unlikely to Meet Purchase Targets for U.S. Energy — Economic fallout from the coronavirus pandemic has cast doubt on whether China can meet its targets to buy U.S. goods under this year’s trade deal—with energy emerging as the biggest casualty.
- Luckin Coffee Probe Says Chairman Knew or Should Have Known of Fabricated Transactions — An investigation into the accounting misdeeds at Luckin Coffee has concluded that the company’s chairman knew—or should have known—about the fabricated transactions that inflated the Chinese coffee chain’s sales last year, according to a person familiar with the matter.
- India’s Retaliation Against China Carries Economic Costs — New Delhi has banned Chinese apps after 20 Indian soldiers were killed in border clashes, signaling its willingness to roll back economic integration with Beijing. But further such steps would be at least as painful for India as China.
The Financial Times
- China semiconductors/SMIC: chip flip — Chipmaker’s long-term prospects are not as inviting as the speculative fever suggests.
- Why Hong Kong cannot be another Singapore — The rule of law is threatened by Communist party authority.
- China watchdog to purge bank sector of ‘illegal’ shareholders — Regulator names 38 stakeholders that will be forced to divest from lenders and insurers.
- China still needs to curb King Coal — New coal-fired power plant approvals and post-Covid CO2 emissions are surging.
- US-listed China stocks: returned to sender — Wall Street firms that have been raking in big fees from Chinese IPOs will lose out.
- Zomato cut off from Chinese funding by India-China tensions — Indian food delivery start-up unable to access $100m of investment from Ant Financial.
- Daimler to take stake in Chinese battery cell maker Farasis — German luxury carmaker aims to secure supplies as it ramps up electric vehicle production.
- China services index at 10-year high in June — Chinese stocks rise on PMI survey but unemployment still dogs economy.
The New York Times
- Uighur Exiles Push for Court Case Accusing China of Genocide — The complaint at the International Criminal Court is the first of its kind to challenge Beijing on its crackdown on Muslims, but China does not accept the court’s jurisdiction.
- Seized by the Police, an Outspoken Chinese Professor Sees Fears Come True — Xu Zhangrun, who has long taught law at the prestigious Tsinghua University, is one of the few academics in China who have harshly criticized the ruling Communist Party.
- China Dominates Medical Supplies, in This Outbreak and the Next — Government support and protectionism have built a low-cost industry making masks, testing kits and other health gear. Other countries will find it tough to compete.
- New Trump Appointee Puts Global Internet Freedom at Risk, Critics Say — A battle involving Michael Pack and a U.S.-funded tech group revolves around software from Falun Gong, the secretive, anti-Beijing spiritual movement with pro-Trump elements.
- In North Korea, Coronavirus Hurts More Than Any Sanctions Could — Closing the border with China crippled the regime’s few remaining methods, legal and otherwise, for bringing in much-needed foreign currency.
Caixin
- ESR-Manulife Venture Acquires $243 Million Real Estate Portfolio in China — A new venture between logistics real estate major ESR Cayman and global insurer Manulife has completed the acquisition of four logistics properties in China for approximately 1.7 billion yuan ($243 million).
- Tencent Plays in U.S. With California Game Studio Launch — Tech giant Tencent has opened a new studio in California to develop and publish top-notch games as it seeks to move beyond its home China market. The studio, called LightSpeed LA, will be headed by Steve Martin, a former Rockstar Games veteran whose previous credits include “Grand Theft Auto V” and “Red Dead Redemption 2”, Reuters reported Friday.
- Cover Story: Anxin Trust’s $7 Billion Investment Black Hole — Shanghai-listed Anxin Trust Co. Ltd. was once lauded as China’s most profitable trust company. That was before a 50 billion yuan ($7 billion) financial black hole appeared in its books, along with mounting defaults and opaque operations that have regulators seeing it as a troublemaker.
South China Morning Post
- China province orders new checks on big cash transactions after bank runs — China has launched a pilot programme in the northern province of Hebei requiring the public to apply for approval if they plan to make large cash deposits or withdrawals at commercial banks.
- China’s copyright law amendment criticised as an ‘abusive use of power’ that weakens IP protection — A controversial proposed amendment to China’s copyright law that claims to offer copyright owners increased protection has been criticised as an “abusive use of power” and “rule-of-law with Chinese characteristics”.
- China manufacturers struggling to keep up with surge in global bike demand amid coronavirus fears — Fears of taking public transport amid the coronavirus pandemic have led to increased demand for bicycles, and while other products are struggling due to a lack of consumption, the boom has outstripped production capacity in China.
- China’s shadow banking system under spotlight as Sichuan Trust misses payments amid economic slowdown — Cracks are appearing in China’s 21.3 trillion yuan (US$31 trillion) trust industry, a key component of the country’s shadow banking system, as fresh trouble at Sichuan Trust highlights growing risks in alternative funding for companies unable to access regular bank loans.
- Display maker Royole said to mull China IPO as US listing plans stall — Chinese flexible display maker Royole Corp is weighing an initial public offering in China, while its planned US listing is put on hold, according to people familiar with the matter.
- Severe backlog in Europe-bound trains at Chinese border, as coronavirus increases rail freight volume — A Chinese rail freight operator has cut cargo services to central Europe amid a backlog of trains waiting at the Chinese border to leave the country, the 21st Century Business Herald reported on Saturday.
- Time for China to decouple the yuan from US dollar, former diplomat urges — China must brace for a full-blown escalation of the struggle with the United States and prepare to gradually decouple the Chinese yuan from the US dollar, a former senior Chinese diplomat warned amid the continued downward spiral in relations between the world’s two largest economies.
- Live-streaming service providers Huya, DouYu to drive cloud-based gaming expansion in China — Chinese live-streaming service providers Huya and DouYu are poised to help drive the expansion of cloud-based gaming in China, according to analysts, as the two companies entice more players to access sophisticated desktop computer and console video games straight from a browser.
- Australia sees ‘partial economic decoupling’ from China as Canberra weighs risks of over reliance after coronavirus disruptions — Australia is edging towards a “partial economic decoupling” with China as a result of the coronavirus pandemic, a new Australian parliamentary inquiry has heard.
- Hong Kong’s home buyers are back in droves at CK Asset’s Sea To Sky project as they shrug aside political concerns — Hong Kong’s homebuyers turned out in droves for the second consecutive weekend to snap up the most expensive flats to launch in Lohas Park in two years, shrugging aside concerns about large financial commitments even after the enactment of a security law in the city.
- Hong Kong security law: China doubles down on support for city as finance hub as concerns mount over its future — Beijing is expanding existing financial schemes and voicing continued support for Hong Kong’s role as a gateway for international investors into China, amid concerns about the impact of a new national security law on the city.
- As Hong Kong autonomy bill moves to Donald Trump’s desk, analysts focus on his previous reluctance to use sanctions — As US President Donald Trump faces pressure from rare bipartisan US congressional support for a bill authorising sanctions against officials deemed to have eroded Hong Kong’s autonomy, legal analysts are attempting to predict what exactly the American leader – who has shown a reluctance to dole out hard-hitting sanctions on China and Russia – will do next.
- US lighting company Alpan joins an exodus of manufacturers leaving China to get around higher tariffs from trade war — Alpan Lighting Products, a US manufacturer of solar lamps, is shifting production from China to Indonesia, joining droves of companies looking to escape higher tariffs triggered by the trade war with the US.
Bloomberg
- China Rally Is Fueled by Funds Short Covering, Nomura Says — Macro hedge funds and quantitative investors are fueling the Chinese stock market rally as they unwind bearish wagers, according to Nomura.
- U.K. Set to Start Huawei 5G Phase-Out as Soon as This Year — Prime Minister Boris Johnson is preparing to begin phasing out the use of Huawei Technologies Co. equipment in the U.K.’s 5G telecommunications networks as soon as this year, a person familiar with the matter said.
- What to Watch in Commodities: Virus, Oil, Copper, Iron Ore, IEA — Commodity investors get vital insights into energy, metals and crop markets this week against a backdrop of better-than-expected economic data and countervailing concern over the jump in coronavirus infections. Global confirmed cases are now rising by well over 1 million per week, casting doubt over expectations raw materials demand will rebound.
- China Stokes a Stock-Market Mania, Risking Repeat of 2015 Bubble — The dramatic moves in Chinese stocks over the past week are inviting comparisons with a bubble that burst spectacularly five years ago.
- Greater China First-Half Offshore Loans Drop 25% Amid Pandemic — Offshore loan volumes in the Greater China region tumbled by a quarter in the first half of the year to the lowest level since late 2016 as companies borrowed less in the wake of the coronavirus pandemic.
- BlackRock Favors Asia Markets Closely Tied to China’s Recovery — The world’s biggest asset manager is betting that some of the Asian markets that are closely tied to China’s recovery and have policy headroom will outperform peers over the next year.
- Lost in Oil’s Rally: $2 Trillion-a-Year Refining Industry Crisis — Crude oil is the world’s most important commodity, but it’s worthless without a refinery turning it into the products that people actually use: gasoline, diesel, jet-fuel and petrochemicals for plastics. And the world’s refining industry today is in pain like never before.
- China Coal Group Halts Demand Index Used as Economic Indicator — A Chinese coal industry group halted publication of a daily consumption index that was widely used as a real-time indicator of the nation’s economic health.
- Goldman Says U.S. Tensions Won’t Hurt China Stocks Too Much, Yet — The relationship between the U.S. and China would have to get a lot worse to hurt Chinese stocks in a significant way, according to Goldman Sachs Group Inc.
- China Property Price Surge Is Rooted in Safety, not a Covid Spree — There’s a post-Covid splurge factor, but in reality, investors are seeking safety. Beijing should make REITs an option.
- Luckin Coffee Shareholders Vote to Oust Chairman Lu: Reports — Luckin Coffee Inc.’s chairman, Charles Zhengyao Lu, was ousted by shareholders from the scandal-plagued Chinese company, just days after surviving an effort by some directors to strip him of control, local media reports said, citing unidentified sources.
- Hong Kong’s Business Outlook Stabilized in June as Virus Eases — Business conditions in Hong Kong showed further signs of stabilization in June, as the government further eased social-distancing restrictions with coronavirus infection rates largely under control.
- China’s Era of Mega-Dams Is Ending as Solar and Wind Power Rise — It’s the beginning of the end for the era of mega-dam building in China.
- Gold Funds Underpin Pandemic Price Rally as Jewelers Vanish — Western investors piling into gold in the pandemic are more than making up for a collapse in demand for physical metal from traditional retail buyers in China and India, helping push prices to an eight-year high.
- Quant Fund Gains 108% by Dumping China Stocks a Day After Buying — A Chinese quant-trading firm made 108% this year by selling every stock bought the previous day.
- China’s Thirst for Beer Provides a Win for Canada in Barley Feud — As a barley battle brews in the Pacific Rim, Canadian producers are swooping in just in time to take advantage of China’s peak beer-drinking season.
- Trudeau Suspends Hong Kong Extradition Treaty on China Law — Prime Minister Justin Trudeau is suspending Canada’s extradition treaty with Hong Kong, making it the first country to break law enforcement links with the former British colony since China tightened its control over the territory.
- China Bank Regulator Lists Firms It Says Violated Investor Rules — China’s banking and insurance regulator for the first time published names of companies that it alleges committed shareholder violations in the industry, warning investors against misbehavior as the sector tries to attract private and foreign capital.
Reuters
- Trump weighs executive orders on China, manufacturing, immigration, aide says — U.S. President Donald Trump is considering several executive orders targeting China, manufacturing and immigration, his chief of staff Mark Meadows told reporters at the White House on Monday, though he offered few details.
- India reviewing around 50 investment proposals from Chinese firms: sources — The Indian government is reviewing around 50 investment proposals involving Chinese companies under a new screening policy, three sources familiar with the matter told Reuters.
- Stocks rally to four-week highs as investors bet on China revival — Global stock markets rallied to four-week highs and China’s yuan headed for its best day against the dollar since December on Monday as investors counted on a revival in China to boost global growth, even as surging coronavirus cases delayed business re-openings across the United States.
- Ford’s China ventures extend auto sales recovery in June — Ford Motor’s China ventures reported year-on-year sales growth for June as the world’s biggest auto market continues to recover from coronavirus-induced lows.
- Factbox: Recent flurry of M&A by China’s big miners — China’s big miners are snapping up gold mines and strategic minerals in a deal binge that comes as governments in mineral-rich Canada and Australia tighten restrictions on foreign investment.
- China halts imports from two more Brazil meat plants amid COVID-19 concerns — China has suspended imports from two Brazilian pork plants owned by meatpackers JBS SA and BRF SA , according to the Chinese customs authority, as it cracks down on meat shipments amid concerns about the new coronavirus.
- Russia says China would be needed in expanded G7 summit: TASS — Russia is not in talks with Washington about its potential role at an expanded Group of Seven summit later this year, Deputy Foreign Minister Sergei Ryabkov said on Saturday, insisting that China should also be included in the event.
- Fearful of China’s new security law, Hong Kongers scramble for safe havens — Many Hong Kong residents are scouring for new jobs and homes overseas, fearful that a new national security law imposed by Beijing will crush coveted rights not enjoyed on the mainland and herald a new authoritarian era for China’s freeest city.
- Indian video-sharing apps surge in popularity on TikTok ban — Indian tech and entertainment firms are looking to capitalise on sudden opportunities arising from a government ban on Chinese owned apps, including the wildly popular TikTok, with one rival video app saying it had added 22 million users in 48 hours.
- India seeks to curb Chinese power equipment imports amid tensions — Indian companies will need government permission to import power supply equipment and components from China, an order by the power ministry said, amid rising military tensions between the two countries.
Xinhua
- China’s warehouse storage sector continues to recover in June — China’s warehouse storage sector continues to recover in June amid the gradual recovery of market demand, industrial data showed.
- China’s Bond Connect program reports robust operation in June — The trading volume under China’s Bond Connect program in June reached 422.1 billion yuan (about 59.76 billion U.S. dollars), according to a monthly report released by Bond Connect Company Limited.
- Factbox: China’s progress on economic resumption — China is steadily reviving its economy as the country strives to contain COVID-19. The following facts and figures indicate how the country is forging ahead in resumption of work and production.
- China invests 200 mln yuan to improve China-Europe rail network — China’s top economic planner has allocated 200 million yuan (about 28.3 million U.S. dollars) from the central budget to support the construction of transportation hubs in five cities to improve China-Europe rail freight services.
- China’s Guizhou targets 10-pct growth of digital economy in 2020 — Southwest China’s Guizhou Province, the country’s first comprehensive big data pilot area, has set an annual growth target of about 10 percent for its digital economy this year, according to a recently released action plan.
- China’s top property developers see stable sales in H1 — China’s top real estate developers saw stable sales in the first half of this year, an industrial report showed.
- China’s electronic information manufacturing reports higher revenue, profits — China’s electronic information manufacturing sector saw revenue and profit expansion in the first five months of the year as work and production resumption presses ahead, data from the Ministry of Industry and Information Technology (MIIT) showed.
- China goods, services trade surplus tops 420 bln yuan — China’s international goods and services trade surplus stood at 424 billion yuan (about 60 billion U.S. dollars) in May, official data showed.
- Hong Kong stocks surge for 3 trading days on improved business environment — Hong Kong stocks have gained for three trading days in a row as buying and selling remained robust, pointing to improving investor confidence in Hong Kong business environment.
- China launches three chemical options on Dalian Commodity Exchange — The trading of options for three major chemicals, namely polypropylene (PP), polyvinyl chloride (PVC) and linear low-density polyethylene (LLDPE), were launched on the Dalian Commodity Exchange in northeast China’s Liaoning Province on Monday.
- Chinese shares close higher Monday, set multiple records — Chinese stocks soared Monday, with the benchmark Shanghai Composite Index up 5.71 percent to close at 3,332.88 points, the highest in two and a half years.
- China’s agricultural product wholesale prices edge up — The wholesale prices of China’s agricultural products registered a slight uptick Monday, according to a report from the Ministry of Agriculture and Rural Affairs.
Other Publications
- Forbes: Europe’s Auto Makers, Weakened By Coronavirus, Vulnerable To Chinese Incursions — “However, vehicle markets are on the turn as we get into the second half of the year. China was first in to the crisis and was first out. China’s light vehicle (cars and SUVs) market was up 8% in May and South Korea’s was up nearly 10%. In Europe we’re seeing some improvement to vehicle markets now, too, helped by government subsidies for new vehicle purchases,” MacRae said.
- PIIE: Despite the rhetoric, US-China financial decoupling is not happening — But for all the fireworks over tariffs and investment restrictions, China’s integration into global financial markets continues apace. Indeed, that integration appears on most metrics to have accelerated over the past year. And US-based financial institutions are actively participating in this process, making financial decoupling between the United States and China increasingly unlikely. An examination of the data shows the danger of generalizing based on misleading anecdotal evidence.
- Foreign Policy: China’s Superpower Dreams Are Running Out of Money — Hard figures for China are hard to come by, but it seems that the Chinese government was scaling back spending commitments even before the coronavirus hit. You would hardly know it from the glowing project announcements, but China’s BRI funding commitments have actually been falling since 2017. And even these falling numbers are just promises—the reality of China’s BRI spending is even more meager.