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
- Cartier’s Wake-Up Call for Luxury Dreamers — European luxury brands may be later than investors think to benefit from China’s rapid economic recovery.
- China’s Economy Appears Back on Track, but Challenges Remain — China reported a robust rebound in the second quarter. The question now is whether China has seen the best of the recovery, as Beijing faces a daunting set of challenges through the end of the year.
- A Pandemic and Huawei Woes? No Problem, Says Taiwan’s Chip Champion. — TSMC is confident it can weather the Covid-19 pandemic and the loss of a major customer—Chinese telecom champion Huawei—thanks to its technology edge.
- China Stocks Tumble on Worst Day in Five Months — Chinese shares fell the most in five months, as signs of an uneven economic recovery rattled investors already worried by a rapid run-up in the country’s stock markets.
- IPO Frenzy Grips China’s Nasdaq-Style STAR Market — China’s experiment in easing restrictions on stock offerings has helped funnel tens of billions of dollars into emerging technologies, which Beijing hopes can upgrade the economy. Along the way it has provided frantic trading.
- Western Newsrooms Weigh Alternatives to Hong Kong as Beijing Tightens Grip — For decades, Hong Kong’s press freedoms have made it a hub for Western media organizations covering Asia. Beijing’s new national-security law is causing many newsrooms to rethink the city’s status as a haven for journalists.
- U.S. Sanctions on Hong Kong Security Law Put Banks in a Quandary — As President Trump moves to punish Chinese officials involved in the clampdown on Hong Kong, international banks and other businesses face conflicting rules of both Washington’s coming sanctions regime and the territory’s broad new national-security law.
- Outrage Over China’s Treatment of Hong Kong Galvanizes the West — Complaints about China have long piled up in Western capitals, but it took Beijing’s new curbs on Hong Kong’s autonomy to galvanize them around something approaching a common cause.
The Financial Times
- Chinese GDP grows 3.2% in second quarter — Mainland stocks fall almost 5% in biggest one-day drop since February.
- SMIC scores mainland China’s biggest listing in a decade — Shares in chipmaker pop 246% after Beijing pushes investors to back drive to become self-sufficient.
- White House to impose visa restrictions on Huawei workers — Travel ban represents the latest escalation in Washington’s dispute with Beijing.
- Baccarat: China bull in a French crystal shop — Inability of Fortune Fountain to pay back private loans could lead to some glass getting smashed.
The New York Times
- U.S. Wants to Bar Members of China’s Communist Party. Who Are They? — With more than 90 million members and led by Xi Jinping, the party encompasses people at the heights of Chinese power and the civil servants of everyday life.
- TikTok Enlists Army of Lobbyists as Suspicions Over China Ties Grow — The viral social media app has beefed up its lobbying operation to counter several potential actions in Washington that could threaten the company’s future.
Caixin
- China’s Troubled Bank of Gansu Wins Bailout Approval — Four SOEs will invest through private share placement to recapitalize Hong Kong-listed regional lender.
- China’s Top Court Gives Guidelines on How to Handle Rising Tide of Bond Defaults — Supreme People’s Court issues country’s first legal document on how to systematically tackle disputes involving the security.
- China Scraps Equity Investment Restrictions for Insurance Funds — Decision may unleash trillions of yuan into the economy from an industry with $3.1 trillion of total assets as Beijing moves to fuel pandemic rebound.
- Drugmaker Junshi’s Shares Give Back Some Gains the Day After Meteoric Debut — Money-losing company’s stock closes 16% lower after nearly tripling in its first day trading on Shanghai STAR Market.
- Machinery Maker Sees Strong Rebound Amid Construction Boom — Zoomlion Heavy Industry, China’s largest construction equipment producer, expects to post a first-half profit gain of as much as 63% as demand surges.
- WeChat Steps on E-Commerce Accelerator with New Mini Program — WeChat, an indispensable app for Chinese people’s day-to-day lives, is testing a mini program facilitating online product sales by enterprises and self-employed business owners, in a clear sign of wider e-commerce ambitions for parent Tencent.
South China Morning Post
- Chinese firms seeking Hong Kong listings amid US hostility may help buoy flagging office rental market as space the size of Lippo Centre abandoned — Companies are giving up their office space in Hong Kong at an almost unprecedented rate as the economy tanks in the wake of Covid-19, which piled further misery on top of the city’s year-long political crisis.
- China reopens cinemas for second time in further sign economy is recovering from coronavirus — China announced on Thursday that it will allow most of the cinemas in the country to reopen again from next week, although they must still follow strict guidelines.
- Australia firms in China say bilateral tensions now a bigger risk than weak economy: survey — For Australian businesses with close China ties, tensions between the two countries pose a more worrisome threat than a slowdown in the Chinese economy, a new survey has found.
- US financial sanction threats in response to Hong Kong, Xinjiang are a reality check for China’s global yuan ambitions — Washington’s threats of financial sanctions against Chinese individuals who were involved in formulating the Hong Kong national security law and Chinese banks that do business with them, as well as officials and institutions that took part in alleged crimes in Xinjiang, has rung alarm bells in both Hong Kong and Beijing.
- China President Xi Jinping promises foreign firms reform, opening up amid heightened US tensions — China’s President Xi Jinping has promised that China will stick to its “peaceful development” path, continue reform and deepen the opening of its domestic market in a letter to top international business executives.
- China’s debt-fuelled county admits ‘reckless borrowing’ after video questions 40 billion yuan construction spree — A county-level government in China has vowed to make changes after a viral online video raised questions over its debt-fuelled 40 billion yuan (US$5.7 billion) construction spree that began in 2016.
Bloomberg
- Oil Falls From Four-Month High After OPEC+ Agrees to Taper Cuts — Oil retreated from its highest close in four months after the OPEC+ alliance confirmed it would start tapering output cuts from next month.
- China’s Slowing Oil Purchases Give Bulls Something to Ponder — Is it a pause, or something more profound? Either way, China’s crude purchases are stuttering, helping to put the oil price rally on hold. At least for now.
- Hong Kong Ceases to Be Safe Haven in Gathering U.S.-China Storm — Hong Kong, until recently an oasis of political stability in Asia, is now gripped with unprecedented regulatory and legal uncertainty that threatens its position as one of the world’s top financial hubs.
- Imax Bets on China Cinema Rebound by Adding Screens With Wanda — The Chinese unit of Imax Corp., the world’s largest jumbo-screen cinema platform, is expanding its partnership with the country’s biggest film exhibitor to add 10 more of the systems in a bet that post-pandemic demand will favor premium formats.
- Asia Family Offices Outperformed Peers on Tech, Stocks, UBS Says — The investments of wealthy families in Asia likely outperformed their global peers this year thanks to a bigger exposure to Chinese stocks and tech companies, according to UBS Group AG.
- China’s Attack On Its Biggest Stock Wipes Out Record $25 Billion — Kweichow Moutai Co. fell the most in nearly two years after the influential People’s Daily took aim at the high price of the liquor it makes, saying the alcohol was often used in corruption cases.
- Worst China Stocks Selloff Since February Caps Brutal Reversal — The rally in Chinese shares is unraveling almost as quickly as it began, with losses accelerating Thursday after state media criticized one of the country’s most popular stocks.
- Singapore Downplays Outflows From ‘Formidable’ Hong Kong — Hong Kong remains a “formidable” financial center even though inquiries from businesses looking to come to Singapore are picking up amid the uncertainties in the Chinese territory, said the chief of Singapore’s financial regulator.
- Copper’s Surge Risks Losing Steam as Technicals Signal Caution — Copper’s technical readings are flashing warning signs that it’s storming rally could be coming to an end.
- Deutsche Bank Asia CEO Picks Singapore in Snub to Hong Kong — Deutsche Bank AG’s new Asia chief executive officer will be based in Singapore, picking the city over Hong Kong at a volatile time for the Chinese territory.
- China’s Coal Consolidation Continues With Planned Shanxi Merger — China is taking another step to consolidate its coal industry with plans to merge three firms that could form the country’s third-biggest miner.
- India’s Ambani Challenges Huawei, Tencent in U.S.-China Tech War — India’s richest man audaciously positions himself to profit from the tech cold war, with some Silicon Valley help.
- China Churned Out a Record 3 Million Tons of Steel a Day in June — China’s steelmakers pushed daily output to a record in June, putting the world’s top producer on track for a billion tons of output this year amid booming demand from construction and infrastructure.
- China GDP: Growth Drivers Challenge Rebalancing Toward Consumers — Old drivers such as exports and infrastructure helped the recovery. But that challenges a long-sought shift toward consumers.
- China’s Stock Run-Up Throws New Challenge at Credit Market — Given the option between tapping a recently soaring stock market for fresh funds or selling debt at a higher cost, China’s cash-hungry firms are making the obvious choice.
- China Home Prices Rise Most in 10 Months, More Curbs Imposed — China home prices rose at the fastest pace in 10 months in June, prompting some local authorities to roll out fresh housing curbs.
- China Is Forcing the World to Find New Ways to Deal With It — Western policies have largely failed to shape, slow, or stop an emboldened Beijing that knows it’s no longer simply a “rising” power.
- TikTok’s Huge 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.
- Belt and Road Re-Emerges in Pakistan With Flurry of China Deals — China’s Belt and Road program has found new life in Pakistan with $11 billion worth of projects signed in the last month, driven by a former lieutenant general who has reinvigorated the infrastructure plan that’s been languishing since Prime Minister Imran Khan took office two years ago.
- Oil Jumps After Trump Leans Against Further Chinese Sanctions — Oil jumped to a four-month high after U.S. President Donald Trump indicated that he doesn’t want to add more sanctions against Chinese officials for now in a move to defuse tensions with Beijing.
Reuters
- Air France-KLM adds China flights after France intervenes — Air France-KLM will add more flights to China, the airline group said on Thursday, after France moved to reduce Chinese airlines’ services in protest of flight restrictions imposed by Beijing.
- Explainer: What’s behind rising tensions in the South China Sea? — The United States this week hardened its position on the South China Sea, where it has accused China of attempting to build a “maritime empire” in the potentially energy-rich waters, despite regional concerns.
- Chinese regulator says will prevent majority shareholders manipulating firms — China will regulate shareholders of its banks and insurers and prevent the controlling shareholders from manipulating companies, said Liang Tao, Vice Chairman of China Banking and Insurance Regulatory Commission on Thursday.
- China raises annual rare earth mining quota to record high in 2020 — China raised its mining quota for rare earth minerals by 6.1% in 2020 to a record annual high, the natural resources ministry said, in the effort to ramp up production of the prized minerals.
- China’s regulator urges banks and insurers to strengthen emergencies management — China’s banking and insurance regulator on Thursday issued guidelines to banks and insurers on management of emergency events, asking them to update or make new contingency plans and conduct drills at least once every three years.
- Danone beefs up Specialized Nutrition business in China — French food group Danone said on Thursday it would spend 100 million euros ($114.08 million) to strengthen its Specialized Nutrition business in China, as it bets on the Chinese market as a source of growth.
- China’s economy will continue recovery in second half: stats bureau — China’s economy will continue its recovery in the second half of the year, although the impact from the coronavirus pandemic on the world economy would create some challenges for its growth, the statistics bureau said on Thursday.
- China industrial output rises 4.8% year-on-year in June; retail sales, investment fall — China’s industrial output rose 4.8% in June from a year earlier, data showed Thursday, expanding for the third straight month and offering some relief to an economy trying to regain its footing from the shock of the coronavirus outbreak earlier in the year.
- Argentina suspends exports from eight meat plants to China after COVID-19 found — Argentina has suspended exports to China from eight meatpacking plants after cases of the novel coronavirus were found among their employees, Argentina’s food quality and safety body, Senasa, said on Wednesday.
- China asks Brazil to stop exports from two meat plants over coronavirus worries, source says — The Chinese government has asked Brazil to suspend exports from two meat plants over concerns about novel coronavirus outbreaks in food-processing facilities in the South American country, a person with direct knowledge of the matter told Reuters.
- China buys more soybeans as its U.S. crop buying spree continues — China’s U.S. farm product buying spree continued on Wednesday, traders said, with private importers in the Asian nation booking more U.S. soybeans as the end of Brazil’s export season approached.
- U.S. corn to challenge export record to China in 2020-21: Braun — The new marketing year is still a month-and-a-half away, but the amount of new-crop U.S. corn that has already been sold to China would make those 2020-21 exports the second-largest on record if the full volume is shipped.
Xinhua
- China’s property investment up 1.9 pct in H1 — China’s investment in property development edged up 1.9 percent year on year in the first half of 2020 (H1), compared with the 7.7-percent decline during the January-March period, the National Bureau of Statistics said Thursday.
- China’s fixed-asset investment down 3.1 pct in H1 — China’s fixed-asset investment went down 3.1 percent year on year in the first half of 2020, narrowing from the 6.3-percent decline in the first five months, the National Bureau of Statistics (NBS) said Thursday.
- China’s central bank injects liquidity into market — China’s central bank continued to pump cash into the banking system via reverse repos Thursday.
- China’s rare earth industry witnesses recovery in Q2 — The China Rare Earth Industry Prosperity Index, a gauge of the industry’s overall performance, rose to 103.70 points in the second quarter this year, up 4.26 percent from last quarter, an industrial report said on Thursday.
- China’s industrial capacity utilization rate rose in Q2 — China’s industrial capacity utilization rate stood at 74.4 percent in the second quarter of 2020, rising 7.1 percentage points from the first quarter as the country has been resuming work and production, official data showed Thursday.
- Foreign trade of China’s Henan up 7.7 pct in H1 — Foreign trade of central China’s Henan Province rose 7.7 percent to reach 228.04 billion yuan (about 32.6 billion U.S. dollars) in the first half of this year, local authorities said.
- China’s retail sales down 3.9 pct in Q2 — China’s retail sales of consumer goods declined 3.9 percent year on year in the second quarter of this year, the National Bureau of Statistics (NBS) said Thursday.
- Japan’s Nikkei drops on overheating, virus concerns — Tokyo stocks closed lower Thursday as investors took profits amid concerns the market may be overheating and due to rising domestic and overseas COVID-19 cases, but solid Chinese growth data helped trim losses.
Other Publications
- TechCrunch: VPN providers rethink Hong Kong servers after China’s security law — In response to the new security rules, TunnelBear, a Toronto-based VPN service acquired by McAfee in 2018, announced it will remove all of its Hong Kong servers “to ensure the safety” of its users.
- The Standard: HK, China Fulbright scholarships end under Trump executive order — The Fulbright exchange program for China and Hong Kong will be terminated under the executive order signed by US President Donald Trump overnight. The executive order would involve future exchanges for participants traveling from and to China or Hong Kong, according to the White House statement.
- The Diplomat: North Korean Citizens Desperately Need the China Border to Reopen — Largely hidden from the rest of the world, North Korea is facing one of its most difficult financial years yet, with Sino-North Korea trade having plummeted by 90 percent in March and April compared to the same time last year.
- Nikkei Asian Review: US threatens to cut off Chinese banks’ access to dollars — Chinese banks seen as complicit in Beijing’s clampdown on Hong Kong face being cut off from much of the global financial system under wide-ranging sanctions that are a part of newly enacted U.S. legislation.
