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
- China Threatens to Sanction Lockheed Martin Over Taiwan Arms Deal — China said it plans to sanction Lockheed Martin over its role in a $620 million U.S. arms package for Taiwan, Beijing’s latest retaliatory gesture amid mounting pressure from Washington.
- TikTok, Bracing for Scrutiny in Australia, Seeks to Reassure Lawmakers — TikTok, the embattled short-video app run by Chinese technology giant Bytedance, has written to Australian politicians to reassure them about the safety of user data and its independence, as concerns about the app’s Chinese ties grow.
- Former Luckin Chairman Loses Control of Coffee Chain in Court — With Charles Lu losing control of all his shares in a court ruling, according to people familiar with the matter, Chinese private-equity firm Centurium Capital will have the most voting rights.
- China’s Pain Could Be Google’s, Facebook’s Gain in India — With China’s internet giants locked out of the world’s second-most populous country, U.S. tech sees an opportunity.
- GM Faces Battle in China to Regain Lost Ground — Few auto makers are as reliant on China as GM, which typically records nearly half of its global unit sales in the country. To reverse its sales slide in the country, GM has launched fresh models and revamped its brands.
- Virus Turns U.S. Tariffs Into a Sideshow for Luxury Brands — The subdued reactionto Washington’s latest tariff threats reflects the dimming prospects of the U.S. luxury market relative to China’s.
- China’s Imports and Exports Rebound as Coronavirus Fades in World’s Second-Largest Economy — Chinese imports from the U.S. rose for the first time since the new coronavirus emerged earlier this year, showcasing Beijing’s post-pandemic purchasing power even as political tension between the world’s two largest economies continues to rise.
- U.S. Rejects Most Chinese Maritime Claims in South China Sea — The U.S. declared its formal opposition to a swath of Chinese claims in the South China Sea, in an unusually direct challenge to Beijing’s efforts to assert control in the strategic waters.
- Rule of Law in the South China Sea — By The Editorial Board. The State Department finally declares Beijing’s claims unlawful.
- A Way to Curb Chinese Intimidation — Congress kept companies from cooperating with the Arab boycott of Israel. It can follow that model now.
- Disney Closing Hong Kong Property as Government Looks to Halt Virus — The entertainment company said it would again close the Hong Kong Disneyland theme park, less than a month after it reopened, amid an increase of new coronavirus cases in the city.
- Hong Kong Security Law Prompts Departure of China Fund Adviser — The resignation of DeAnne Julius from a China Investment Corp. advisory body comes as a survey shows rising concern about Beijing within business community.
The Financial Times
- Offshore investors dump China stocks after ‘incredible’ rally — Funds outside the mainland sell a record $2.6bn of Chinese stocks in a day.
- India takes a risk by encouraging national interest — A ban on Chinese apps is being closely watched by entrepreneurs and investors.
The New York Times
- U.K. Bans Huawei From 5G Network, Raising Tensions With China — Banning the use of the Chinese tech giant’s equipment in high-speed wireless infrastructure is a major reversal by Prime Minister Boris Johnson — and a big victory for the Trump administration.
- Hong Kong Voters Defy Beijing, Endorsing Protest Leaders in Primary — Voters turned out in high numbers to cast ballots in an unofficial primary for the city’s pro-democracy camp despite government warnings it might be against the new security law.
Caixin
- First Companies Get Nod for Registration-Based IPOs in Shenzhen — Exchange needs to file candidates’ listing registrations with China’s top securities watchdog for final decisions.
- Update: China’s Exports, Imports Return to Growth — Goods exports grew 0.5% in June, while imports rose 2.7%.
- In Depth: How Livestreaming Became a Force in Chinese E-Commerce — Pitching products live online is now a sensation in China, but regulators have been slow to catch up.
- U.S. Preparing to Scrap Securities Information-Sharing Agreement with China — Report cites official saying the action is ‘imminent,’ after U.S. regulators complained for years that China often failed to supply requested information.
- Chinese Aluminum Smelter Completes Backdoor Listing in Shenzhen — After years of trying to list, Tianshan Aluminum succeeds as it seeks to deal with nearly $3.2 billion of debt set to mature this year.
- Two State-Owned Coal Giants Confirm Merger Talks — Combined company would be the second-largest of its kind in China.
- Trending in China: Jack Ma Sells $8.2 Billion of Alibaba Shares — Good News for Philanthropy or Bad News for Tech Companies? — Alibaba co-founder Jack Ma cut his holdings in the e-commerce company to 4.8% from 6.2% over the past year, according to the firm’s annual report released on Friday. At the current share price, the stake he sold would be worth around $8.2 billion.
- Suning.com Predicts Over $20 Million in Losses in First Half of 2020, Says Carrefour China Remains Profitable — Chinese online retailer Suning.com has anticipated a loss of between 141 million yuan ($20.1 million) and 241 million yuan in the first half of 2020, in a stark contrast to net profit of 2.14 billion yuan during the same period last year, according to a filing to the Shenzhen Stock Exchange Tuesday.
- Online Travel Leader Trip.com to Issue $500 Million in Convertible Bonds — U.S.-listed top Chinese online travel agent Trip.com Group has announced plans to raise up to $500 million through the sale of convertible senior notes outside the U.S., as the Covid-19 pandemic continues to take a toll on the tourism industry.
South China Morning Post
- China urges other nations to oppose US calls for more sanctions on Iran — China has urged other nations not to back recent US calls for more sanctions on Iran, at a time when relations between Beijing and Washington are at their lowest point in decades.
- 5G focus for China’s Guangdong as manufacturing hub pledges to build 20 hi-tech industrial estates by 2022 — China’s manufacturing heartland of Guangdong province has pledged to build 20 industrial estates by 2022 for firms that develop new industrial and business applications using 5G technology.
- China creates Hainan special health care zone to tap growing medical tourism market — “[Chinese] go to the United States and Japan for major operations, Thailand for infertility treatment, Ukraine for beautification injections and South Korea for plastic surgery,” said Liu Zhefeng, a deputy director of the Boao Lecheng International Medical Tourism Pilot Zone. “The demand for overseas medical tourism is huge, but totally unnecessary.”
- Hong Kong third wave: call for fresh subsidies amid tightened Covid-19 measures, as businesses slam nighttime dine-in ban: ‘does virus not exist in afternoon?’ — Hong Kong’s struggling businesses on Tuesday called for fresh subsidies after the government tightened social-distancing restrictions, with some sectors slamming the city’s toughest measures to date for the coronavirus pandemic.
- China’s trade with Europe seen as key amid US frictions after June imports, exports suggest recovery from coronavirus — Chinese exports will continue to face downside pressures due to the impact of the coronavirus pandemic on the global economy, but the stronger-than-expected trade performance in June provides hope for a further improvement in the second half of the year, analysts said on Tuesday.
- Hong Kong government appoints former watchdog head, ex-justice minister as its representatives on Cathay Pacific board, overseeing bailout package — Former securities watchdog chief Carlson Tong Ka-shing and ex-justice minister Rimsky Yuen Kwok-keung have been appointed as the Hong Kong government’s two representatives on Cathay Pacific Group’s board to oversee the airline’s HK$27.3 billion bailout.
- Huizhou’s air link with Hulunbuir opens up Greater Bay Area city to northern China, belt and road neighbours — Huizhou, a fast-growing mainland city, is getting to play a bigger role in Beijing’s Greater Bay Area and Belt and Road Initiative plans.
- Australia exports to China remained strong in May despite rising political tensions — Despite rising tensions between China and Australia, overall trade between the two countries has remained steady, with some sectors even posting increases, the latest export data and sector updates showed.
- Chinese ride-hailing giant Didi Chuxing expands to smaller cities in Australia as part of global push — Chinese ride-hailing giant Didi Chuxing says it plans to expand its operations to smaller cities and towns in Australia, reaching 3 million more people, in the latest move by the company to push its global expansion.
- Apple leaves foreign developers scrambling as unlicensed games removed from China App Store — Apple has left foreign video game developers scrambling to stay afloat in China, according to analysts, after the technology giant started removing thousands of unlicensed games from its local App Store this month to comply with the country’s regulations.
Bloomberg
- Huawei U.K. Chairman Browne to Leave as Members Review Positions — John Browne will step down ahead of schedule as chairman of the U.K. board of directors of Huawei Technologies Co. as Britain prepares to exclude the company from its next-generation telecommunication networks.
- BMW Rolls Out China-Made Electric SUV to Take on Tesla’s Model Y — BMW AG now has its own electric sports utility vehicle to take on the likes of Tesla Inc.’s Model Y and Daimler AG’s Mercedes-Benz EQC.
- Hillhouse Is Said to Invest $1 Billion In Beigene’s Share Sale — Hillhouse Capital plans to invest $1 billion in Chinese biotechnology company Beigene Ltd., said people with knowledge of the matter, in the largest equity financing ever by a biotech company.
- TikTok’s Massive Data Harvesting Prompts U.S. Security Concerns — TikTok has become one of the world’s most popular apps by serving up a steady beat of lip-syncing videos and viral memes. But behind the scenes the company, owned by one of China’s biggest tech firms, is also scooping up massive amounts of data on Americans and tracking users’ every move.
- Oil Drops as the World’s Emergence From Virus Lockdown Slows — Oil slipped for a second day on signs of a slower emergence from lockdown in some corners of the globe.
- Korea Looking Into H.K. Hedge Fund That Halted Some Withdrawals — South Korea’s financial regulators are looking into a Hong Kong-based hedge fund that has halted withdrawals from some of its funds by Korean investors, according to people familiar with the matter.
- China’s Hottest Stocks Sink as Beijing Cools Speculative Fervor — Volatility is picking up in China’s most overheated stocks, a sign that this month’s $1.5 trillion rally is looking vulnerable.
- How China’s Great Firewall Could Encircle Hong Kong: QuickTake — Hong Kong’s internet users worry that the new national security law imposed on the city by the Chinese government will end up cutting off the free flow of information, landing them on the dark side of China’s Great Firewall. One social media company has pulled out, others are considering how far they can push back against the law’s provisions and keep doing business.
- China Snaps Up Steel as Pandemic Creates Two-Speed Global Market — China’s steel buyers have pounced on cheap offers from around the world to feed buoyant demand at home, with flows to the biggest market reaching levels unseen since the global financial crisis.
- Fidelity Bets Against China Bond Rout With Record Holdings — A savage rout in China’s $2.6 trillion sovereign debt market is offering Fidelity International opportunities to snap up bonds from the world’s second-largest economy.
- Casino Shares Surge After Easing of Macau Travel Restrictions — Casino stocks rallied as the easing of some Chinese travel restrictions for Macau sparked optimism of a revival in the world’s largest gambling hub.
- The Virus Is Still Sapping China’s $6 Trillion Power to Consume — Three months after China started to emerge from its coronavirus restrictions, its army of shoppers that help power the global economy are still nervous of travel, reticent to spend and forming habits that may change the face of consumption permanently.
- Copper’s Rally, Driven by China, Gets Latin American Support — After demand provided the spark, output constraints in coronavirus-hit Latin America may supply the next leg up.
- Luckin Names Jinyi Guo Chairman and CEO After Founder’s Ouster — Luckin Coffee Inc. named Jinyi Guo chairman and chief executive officer as the Chinese chain tries to move past an accounting scandal that nearly brought it down.
- Huawei Sales Rebound Despite U.S. Efforts to Halt Gear Deals — Huawei Technologies Co. said sales grew even as the company faces restrictions from a number of countries on the use of its telecommunications equipment.
Reuters
- China says U.S. warnings over Xinjiang hurt global supply chain — China’s commerce ministry said on Tuesday that the United States’ “warning” to U.S. companies working in the western Xinjiang region had destabilised the global supply chain.
- China’s Wanda Film warn a loss — China’s largest cinema chain operator Wanda Film said on Tuesday it expects to report a net loss of 1.5 to 1.6 billion yuan (214 to 228 million dollars) in the first half of this year, after the coronavirus kept its cinemas shut for almost the entire period.
- Chinese university sacks professor who criticised President Xi, friends say — A Beijing law professor who has been an outspoken critic of China’s President Xi Jinping and the ruling Communist Party was fired by his university after being released from a nearly week-long detention, his friends said.
- BP, Mercuria first global firms delivering oil into Shanghai contract: sources — BP delivered 3 million barrels of Iraqi oil to the Shanghai International Energy Exchange (INE) this month, becoming the first major global trader to make a physical delivery since China launched the futures market in 2018, industry sources said on Tuesday.
- China’s economy seen growing 2.5% in second quarter as lockdowns end, stimulus kicks in: Reuters poll — China’s economy likely returned to modest growth in the second quarter after a record contraction, as lockdown measures ended and policymakers announced more stimulus to combat the shock from the coronavirus crisis, according to a Reuters poll.
- First companies obtain regulatory approval for IPOs under new ChiNext system — Three Chinese companies have become the first to obtain regulatory approval to publicly list on Shenzhen’s start-up board ChiNext, after a recent reform aimed at fast-tracking initial public offerings (IPOs).
- China’s first-half exports to U.S. down 8.1% year-on-year, imports fall 1.5% — China’s exports to the United States fell by 8.1% in the first half from the same period a year earlier while imports from the U.S. declined 1.5%, customs spokesman Li Kuiwen told reporters on Tuesday.
- China’s state chip fund to cut stakes in two more tech companies — China’s largest state-backed semiconductor fund plans to reduce its holdings in two listed technology companies, a decision that comes following a torrid bull run in China’s stock market.
- France reduces Chinese flights to Paris in tit-for-tat row — France on Monday started restricting Chinese airlines to one passenger flight per week, saying it was acting in response to curbs imposed by Beijing on French carriers.
- Exclusive: Trump administration to soon end audit deal underpinning Chinese listings in U.S. – official — The Trump administration plans to soon scrap a 2013 agreement between U.S. and Chinese auditing authorities, a senior State Department official said, a move that could foreshadow a broader crackdown on U.S.-listed Chinese firms under fire for sidestepping American disclosure rules.
- Russia’s Gazprom Neft sends its first oil cargo to China via Arctic route — Russia’s Gazprom Neft, the oil arm of gas giant Gazprom, has shipped its first cargo with Arctic oil to China via the Northern Sea Route (NSR), it said on Monday.
Xinhua
- China’s outstanding yuan funds for forex decline in June — China’s outstanding yuan funds for foreign exchange declined in June, central bank data showed on Tuesday.
- China’s central bank injects 30 bln yuan into market — China’s central bank continued to pump cash into the banking system via reverse repos Tuesday to maintain liquidity.
- IPTV sees steady growth of user base in China — IPTV, or Internet Protocol TV, registered a steady growth of its user base in China last year, according to an annual report on the country’s radio and TV sectors.
- Chinese firm develops AI-powered ultrasound tech for breast screening — Chinese sci-tech company Medical AI has developed an AI-powered ultrasonic tool for breast screening that can accurately detect lesions.
- Means of production prices edge up in China — Market prices of the means of production rose 0.5 percent last week from the previous week, data from the Ministry of Commerce showed Tuesday.
- China’s overnight Shibor interbank rate decreases Tuesday — The overnight Shanghai Interbank Offered Rate (Shibor), which measures the borrowing cost of China’s interbank market, decreased 45.8 basis points to 1.67 percent Tuesday.
Other Publications
- POLITICO: ‘Here’s your check’: Trump’s massive payouts to farmers will be hard to pull back — The spending surge began in mid-2018 when USDA started writing checks to farmers and ranchers to pay for the damage from Trump’s trade war, which brought about higher tariffs that crushed agricultural exports and commodity prices. Farm sales to China plummeted from $19.5 billion in 2017 to just $9 billion the next year; as producers continued to hemorrhage profits in 2019, farm bankruptcies jumped nearly 20 percent last year.
- Foreign Policy: U.S. Preparing to Suspend Extradition Treaty With Hong Kong — The Trump administration is preparing to suspend its extradition treaty with Hong Kong, another diplomatic blow to China as it tightens its grip over Hong Kong.
- Business Insider: 3 missions to Mars launch this month, from NASA, China, and the United Arab Emirates — here’s what they’ll do on the red planet — NASA has sent five rovers to the red planet in the past, but this will be China’s and the UAE’s first attempts.
- Forbes: Anime Distributor Turns To Merchandise And E-Commerce Amid Pandemic For Growth — As the name implies, Chiu’s Hong Kong-based Medialink Group connects anime producers in Japan with consumers in mainland China. Medialink gets 80% of its revenue acquiring anime from Japan’s myriad studios and distributing them to big buyers such as China’s Nasdaq-listed sites Bilibili and iQiyi.
- The Hill: Hawley fires back at ESPN, NBA over China — Sen. Josh Hawley (R-Mo.) in an interview on Monday called ESPN’s suspension of reporter Adrian Wojnarowski a distraction from the NBA’s relationship with China and said he would support a Senate subpoena of NBA Commissioner Adam Silver.