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
- American, United Cancel Hong Kong Flights Over Mandatory Crew Testing — The two airlines have temporarily canceled flights to and from Hong Kong after the city said all crew members arriving there would have to undergo Covid-19 tests.
- SoftBank-Backed Chinese Real-Estate Broker Aims to Raise $3 Billion in U.S. IPO — Beike Zhaofang, a Chinese online property brokerage backed by SoftBank Group, is planning to raise up to $3 billion in an initial public offering in the coming months, according to people familiar with the matter, in what would be the largest listing of a Chinese company in the U.S. in more than two years.
- China Tries to Keep Market Exuberance Under Control — Chinese state media urged investors to think long-term, and authorities highlighted hundreds of operations making illegal loans against shares, showing that Beijing is eager to avoid stocks overshooting.
- JPMorgan, Ping An to Fund Financial Technology Startup — A clutch of global investors is throwing its weight behind a financial-technology upstart that facilitates payments between companies and their suppliers, betting that it is well positioned amid the disruption from the coronavirus pandemic.
- FBI Probes Chinese Exile, Including Work With Former Trump Aide Steve Bannon — The FBI is examining exiled Chinese businessman Guo Wengui and the money used to fund his media efforts in the U.S., including his work with Steve Bannon, a former senior adviser to President Trump, according to people familiar with the matter.
- Overnight, a Hong Kong Hotel Is Transformed Into China’s State Security HQ — The rapid arrival in Hong Kong of China’s security agents, handed sweeping powers to police the city under Beijing’s new national security law, underscores how quickly the cosmopolitan financial center is changing.
- TikTok, Once an Oasis of Inoffensive Fun, Ventures Warily Into Politics — The app started allowing U.S. protest videos and pulled out of Hong Kong amid a new national-security law, while facing flak in Washington over its Chinese parent company. With a new American CEO, it is trying to find the right balance between control and free expression.
- As Chinese Trade Surpluses Persist, So Will Risk of Trade Wars — Slack Chinese imports are a symptom of the underlying reason China’s trade surpluses persist: It consumes too little and saves too much. By suppressing consumption, the country imposes a production glut on the world, to the detriment of its trading partners.
The Financial Times
- Australia warns citizens on travel to Hong Kong over security law — Canberra suspends extradition treaty and eases immigration access for city’s residents.
- Google rolls back on Chinese cloud ambitions — ‘Isolated Region’ project abandoned as other data-sensitive options considered.
- Global stocks stable as investors assess economic recovery — Shares in China outperform again as inflation data point to higher demand.
- China says ties with US at lowest point since 1979 — Foreign minister’s remarks hint at desire to halt downward spiral with Washington, analysts say.
- China’s currency hits highest level since March as stocks surge — Renminbi rises past important 7 to the dollar mark against backdrop of soaring shares.
- White House warns railroad pension agency over China investments — Administration officials caution Railroad Retirement Board over ‘unnecessary economic risk’.
The New York Times
- Australia Halts Hong Kong Extradition Agreement and Extends Visas — Prime Minister Scott Morrison said visas for Hong Kongers already in Australia would be lengthened by five years, and suggested businesses should move from the city to his country.
Caixin
- China Blacklists 258 Illegal Securities Margin Lending Platforms — Securities regulatory commission warns investors to avoid illegal funding operations and report fraud as booming stock market revives demand for loans to be used in buying shares.
- Chinese Airlines Push Presales to Boost Post-Virus Revenues — Cash-strapped carriers are enticing travelers with discounts and upgrades to lock in advance bookings.
- In Depth: CATL Loses Electric-Car Battery Crown as Foreign Firms Muscle In — Spark fades for Chinese battery producer as it faces greater overseas participation in its vast home market.
- Chinese Gay Dating App Operator BlueCity Surges on Nasdaq Debut — Stock of LGBTQ community Blued’s owner skyrockets as much as 124% and pushes market cap to near $880 million.
- Tencent President Cashes In $131 Million of Shares as Price Surges — Martin Lau Chi-ping taps into stock’s 45% jump this year amid great expectations for gaming as stock connect programs lure mainland investors.
- Sequoia Capital Opens Its First Tech Incubation Center in Shanghai — Sequoia Capital China, widely viewed as a bellwether of Chinese tech investment, has put into operation its first incubation center in Shanghai in an effort to help the city’s young tech firms grow sustainably.
- Some 266 Foreign-Invested Firms Approved to Offer Telecom Services in China in First Half of 2020 — In the first half of 2020, China approved 266 foreign-invested enterprises to run business in its telecom service market which was once off-limits to foreign investors, according to a think tank.
South China Morning Post
- China’s statistics agency admits mistakenly publishing year-old monthly inflation, producer price data for June — China’s national statistics agency caused mild confusion on Thursday after mistakenly releasing year-old inflation and producer price data for June.
- Exodus of US firms from Hong Kong to avoid sanctions imposed in wake of security law would hit office market already hurt by unrest, coronavirus — A potential exodus of American companies from Hong Kong to avoid sanctions from US legislation that seeks to punish those who undermine the city’s freedom is likely to put pressure on landlords to reduce rents of prime office space, analysts said.
- Price pressure on China’s manufacturing sector fell in June as coronavirus impact eased — Pressure on China’s manufacturing sector eased in June following the impact of the coronavirus pandemic, data released on Thursday showed.
- China extends tax dragnet to worldwide income, with state employees in Hong Kong first to feel the pinch — China’s tax authorities are tightening personal income tax law by extending the dragnet to income earned globally, with employees of state-owned enterprises based in Hong Kong first to feel the pinch, according to people involved in the matter.
- China calls for joint development in AI to reduce risk of technology gap between rich and poor countries — Chinese government officials and some of the country’s top business leaders have called for stronger global collaboration in artificial intelligence at a prominent AI summit that opened in Shanghai on Thursday, despite a pushback from the Trump administration that sees Beijing’s tech ambitions as a threat to US economic and national security.
- How China’s Greater Bay Area wealth management connect could help millionaires move their money across borders — After China unveiled its latest plan to promote the Greater Bay Area as a wealth management hub on June 29, confusion reigned in financial circles.
Bloomberg
- BT, Vodafone Need 5 Years to Replace Huawei Without ‘Blackouts’ — BT Group Plc and Vodafone Group Plc told U.K. lawmakers they would need at least five years to swap out China’s Huawei Technologies Co. if the government decides on strict rules that would ban the company’s products from being used in 5G networks.
- Hong Kong Dollar Peg Defense Tops $13 Billion as Demand Surges — Demand for Hong Kong dollars is intensifying in the face of an increasingly politicized environment, with mainland buying helping to buoy both the pegged currency and local stock market.
- Chinese Refiners Post-Lockdown Boom Crushed by Oil Above $40 — China’s independent oil refiners — who ramped up fuel production rapidly last quarter as the economy recovered from the coronavirus — are now set to wind down activity amid weakening margins.
- China Auto Sales Recovery Picking Up Pace, Trade Group Predicts — Automakers may recover from China’s slump faster than initially expected, with an industry group revising its 2020 vehicle-sales forecast to a less severe drop of potentially just 10% as the coronavirus pandemic eases in the country.
- China Stock Euphoria Lifts IPO to Record 924% First-Day Gain — A Chinese initial public offering soared tenfold on its Thursday trading debut, the latest sign of euphoria in the nation’s $9.3 trillion stock market.
- Chinese Economy Is Showing Signs of Remarkable Turnaround — The Asian giant, felled by Covid just months ago, appears to have pulled off a remarkable turnaround and may be set to drive another economic cycle.
- Vanguard, NYSE Set to Weigh In on U.S. Crackdown on China Firms — Vanguard Group Inc., the New York Stock Exchange and Nasdaq Inc. are about to get the chance push back on an escalating risk to their bottom lines: threats from Capitol Hill and the Trump administration to dramatically curtail U.S. investments in Chinese companies.
- Tesla Gaining Ground Pushes China EV Bubble Toward Bursting — Tesla Inc.’s new Shanghai plant has churned out popular Model 3 sedans for the past six months, catapulting the company atop the electric-car sales chart and piling the pressure on cash-strapped local rivals. There was another casualty last week.
Reuters
- In echo of Mao era, China’s schools in book-cleansing drive — As schools reopened in China after the COVID-19 outbreak, they have thrown themselves into a nationwide exercise to remove books deemed politically incorrect, deepening Chinese President Xi Jinping’s push to instil patriotism and ideological purity in the education system.
- China to boost investments, financing for water conservancy projects — China will deepen investment and boost financing mechanisms to expedite construction of water conservancy projects and improve its ability to guard against floods, state television reported on Thursday citing a meeting of the country’s state council.
- China’s slower meat imports seen worsening protein shortage — China’s dwindling pace of meat imports, thanks to its tough measures against coronavirus contamination, will provide further support for prices already buoyed by a severe shortage of pork, analysts said.
- Dollar gives ground to higher-risk currencies as Chinese shares soar — The U.S. dollar fell against most currencies on Thursday as a rally in riskier assets such as global equities and commodities put a dent in safe-haven demand for the U.S. currency.
- Exclusive: Chinese banks prepare contingency plans over threat of U.S. sanctions, sources say — Chinese state lenders are revamping contingency plans in anticipation of U.S. legislation that could penalise banks for serving officials who implement the new national security law for Hong Kong, sources at five state financial institutions said.
- Singapore fuel oil stocks at over three-year high, records first net import from China — Singapore’s residual fuel oil inventories jumped 6% in the week to July 8 to a more than three-year high, official data showed on Thursday, as limited bunker demand and steady imports pushed supplies higher.
- China charges on, gold reaches nine-year high — European shares were rising again after a two-day wobble on Thursday as China’s markets continued their charge, and something between fear and greed propelled gold to a nine-year high.
- Zhejiang wins China’s first private fuel export license: sources — China has granted Zhejiang Petroleum & Chemical Co (ZPC) a license to export refined oil products, making it the first private oil refiner to win such permission, two sources with knowledge of the matter said on Thursday.
- Chinese video site Bilibili considers secondary Hong Kong listing: sources — Chinese video site Bilibili is considering a secondary listing in Hong Kong, said two people with direct knowledge of the matter, joining other U.S.-listed Chinese companies eyeing a return to the exchange closer to home amid China-U.S. tensions.
- Breakingviews – Ant will surf wave of Chinese cash into Hong Kong — The Ant Group can hitch a ride to Hong Kong on the back of Chinese bulls. Jack Ma’s fintech outfit is eyeing a listing in the city valuing it at over $200 billion, Reuters reported on Wednesday, citing people familiar with the matter. As Beijing moves to crush political unrest, mainland money has flooded the exchange, juicing a rally despite U.S. sanction threats. That’s a relief for Ant, its Chinese peers, and the local financial industry.
- Ford’s quarterly China sales rise for the first time in 3 years — Ford Motor Co said its China vehicle sales increased 3% in April-June from a year earlier, its first quarterly sales rise in the world’s biggest auto market in almost three years.
- China cracks down on poor taste in renewed bid to clean the internet — China has punished video platforms including Alibaba-backed Youku and Baidu-backed iQiyi for carrying “low taste” content in a renewed effort to clean up the internet, a pornography watchdog said.
- China’s producer prices extend declines but recovery signs emerge — China’s factory gate prices fell for a fifth straight month in June as the coronavirus pandemic weighed heavily on industrial demand, although signs of a pickup in some parts of the sector suggest a slow economic recovery remains intact.
Xinhua
- China’s consumer inflation rises slightly to 2.5 pct in June — China’s consumer inflation remained generally stable in June under the country’s continued efforts toward economic recovery, official data showed Thursday.
- China to issue 4th batch of special bonds for COVID-19 control — China will issue the fourth batch of special government bonds for COVID-19 control amid efforts to balance epidemic control with economic and social development, the Ministry of Finance said Thursday.
- China Pacific Insurance sees rising premium income in H1 — China Pacific Insurance (Group) Co., Ltd., one of the country’s leading insurers, on Thursday reported premium income of 215.28 billion yuan (about 30.72 billion U.S. dollars) in the first half of the year.
- China sees stable intellectual property development in H1 — China on Thursday reported a stable trend in intellectual property development in the first half of this year.
- China’s courier sector sees robust H1 growth despite epidemic — China’s courier sector registered robust growth in the first half of 2020 after a quick recovery from a COVID-19 downturn, the State Post Bureau said Thursday.
- Exports of Chinese “stinky” noodles soar in H1 — Exports of Luosifen, an iconic dish known for its pungent smell in the southern Chinese city of Liuzhou, registered remarkable growth in the first half of this year, data from Liuzhou Customs showed Thursday.
- Sinopec creates record by drilling 8,725 meters deep oil, gas field — China Petrochemical Corporation (Sinopec) announced that its Shunbei oil and gas field created a record for the deepest onshore directional well drilling in Asia, with a depth of 8,725 meters, Science and Technology Daily reported recently.
- China’s largest SUV maker posts robust sales growth — Great Wall Motors (GWM), China’s largest sport utility vehicle (SUV) and pickup manufacturer, saw vehicle sales rise 29.6 percent year on year to 82,036 units in June.
- Daimler records “best second quarter” in China despite COVID-19 impact — Daimler’s Mercedes-Benz brand achieved its “best second quarter ever in terms of unit sales” in China, where car sales increased by 21.6 percent year-on-year, the German carmaker announced on Wednesday.
- China’s comprehensive LNG import price up — China’s comprehensive import price index for liquefied natural gas (LNG) rose last week, according to the Shanghai Petroleum and Natural Gas Exchange (SHPGX).
Other Publications
- CNBC: A ‘financial war’ with China could be brewing on top of the trade war — You’ve heard about the trade war with China. There may be a separate, potential “financial war” brewing. The Securities and Exchange Commission wants you to know more about what is happening with Chinese companies that list in the United States. The regulators also want you to know that they are having a really hard time finding out exactly what is going on.
- Forbes: Tesla Downside If China Arrests Musk — As Tesla expands quickly in China, how exposed is Tesla to Elon Musk’s possible entanglement with Chinese authorities? Is this silly to ask? Perhaps as ridiculous as the possibility of a pandemic before it all started. There have, in fact, been hiccups with high profile foreign executives detained in China, as we detail below. With trade tensions between the U.S. and China remaining high, investors should not discount such possibilities.
- WIRED: Linkin Park T-Shirts Are All the Rage in China — The band hasn’t been cool for years. But its Minutes to Midnight logo is everywhere in the most populous country in the world.
