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
- FedEx Pilots Seek to Halt Hong Kong Operations Over Tighter Covid-19 Rules — Pilots for FedEx have asked the U.S. courier to suspend Hong Kong operations, saying the city’s tightened measures to contain its biggest outbreak of coronavirus infections are unacceptable for the company’s pilots.
- The NBA’s Nightmare Year Started in China. It’s Ending in a Bubble. — The NBA is back nearly five months after basketball stopped. It’s been the most tumultuous season in the league’s history.
- Chinese Hedge Funds Shine in Volatile Year — Chinese hedge-fund managers are having a banner year, outperforming rivals elsewhere.
- Mystery Seeds Postmarked From China to Be Tested by U.S. Officials — The U.S. Department of Agriculture is planning to examine seeds that have shown up unsolicited in mailboxes across the country recently, to determine whether they pose agricultural or environmental risks.
- EU Levels Sanctions Over Hong Kong Security Law, Inching Toward Tough U.S. Stance on China — The European Union imposed sanctions on China over its treatment of Hong Kong, inching the bloc closer to the Trump administration’s more hawkish stance toward Beijing.
- U.S., Australia Bolster Health, Security Cooperation in Face of Coronavirus, China — The U.S. and Australia announced agreements to bolster diplomatic and military cooperation, presenting a united front against an increasingly aggressive China and the coronavirus pandemic.
- Hong Kong University Fires Democracy Advocate as China Clamps Down — Pro-democracy campaigner Benny Tai was fired from his job as an associate law professor at the University of Hong Kong, a decision that cast a pall over wider academic freedoms in the city as China asserts its authority.
The Financial Times
- This surge in Chinese stocks is not like the last one — Recent market rally has a different set of drivers from the 2015 boom and bust.
- Sales at China’s Kweichow Moutai slow to 5-year low — World’s most valuable distiller under pressure following accusations of links to graft.
- Antique Chinese bonds are now in play — Speculators and politicians are eyeing ways to use pre-communist debt to put pressure on Beijing.
- US blacklisting fails to derail ambitions of Chinese AI start-ups — After a brief stumble Megvii and SenseTime are raising money and winning overseas contracts.
The New York Times
- The Vatican Is Said to Be Hacked From China Before Talks With Beijing — In one attack, the hackers weaponized an electronic file with a letter that had a note of condolence from Cardinal Pietro Parolin, the Vatican’s secretary of state.
- What Would a Cold War With China Look Like? — U.S.-China ties haven’t been this strained for decades. What happens if they snap?
Caixin
- Conglomerate Sanpower Has a Plan to Deal With $9.3 Billion in Debt — Ailing company, which has businesses ranging from property to retail to pharmaceuticals, has handed over a restructuring plan to creditors, Caixin has learned.
- MSCI Plans to Launch A-share Thematic Investing Indexes — Move reflects growing interest in Chinese stocks as domestic market outperformed global equity markets over the past 3 years and beat U.S. by 10% in first quarter this year.
- Banks Told to Report Data on Consumer Lending Via Ant’s Platforms — By issuing survey demanding online loan totals back to 2018, central bank appears to be seeking a clear grasp of a $1 trillion lending market that regulators are trying to supervise.
- Regulators Step In as Sichuan Trust Fails to Secure Shareholder Funding — CBIRC freezes repayments of trust products with no resolution in sight for payment crisis ongoing since May on $3.6 billion of investments.
- China ‘Revenge Spending’ Offsets Plunge in Luxury Goods Revenue — LVMH, Kering saw steep declines globally, but a strong second quarter rebound in China.
- Tencent to Pick Up Stake in Shanghai-listed Weaver Network for $110 Million — Tencent has entered into an agreement to pick up a 5 per cent stake in Shanghai-listed office automation solutions provider Weaver Network for over 771 million yuan ($110 million).
South China Morning Post
- AMD gains chip market share at Intel’s expense; shares surge — Advanced Micro Devices (AMD) is gaining share in the lucrative market for server chips, the latest sign it is benefiting from close ties to a major Taiwanese contract manufacturing partner to win orders from larger rival Intel Corp. Shares surged in late trading.
- China’s steel imports top exports for first time since 2009 to aid economic recovery from coronavirus — China became a net steel importer in June for the first time since the last global recession in 2009, with exports from India, Japan, South Korea and Vietnam set for short term gains as demand overshoots supply in the rapidly recovering economy.
- Hong Kong, Huawei and Xinjiang hot topics in frosty China-Britain call — China’s Foreign Minister Wang Yi and his British counterpart Dominic Raab exchanged jabs over Hong Kong, Huawei and human rights in a phone call on Tuesday, as tensions continued to rise between the two countries.
- India-China tensions will not influence AIIB as newly re-elected president vows to keep lender an ‘apolitical institution’ — The China-backed Asian Infrastructure Investment Bank will remain an “apolitical institution” and will continue to back projects in India despite recent tensions in the disputed Himalayan border region, according to newly re-elected president Jin Liqun.
- Apple’s China iPhone sales surge amid price cuts and gradual consumer recovery — Demand for Apple’s iPhone in China surged in the second quarter, recording a 225 per cent quarterly growth in sales volume, amid price cuts as the world’s biggest smartphone market slowly recovers from the disruptions caused by the coronavirus pandemic.
- Hong Kong’s coronavirus-ravaged economy shrinks 9 per cent in second quarter — Hong Kong’s economy contracted 9 per cent in the second quarter, a worse-than-expected slump during the coronavirus crisis which falls just short of the record year-on-year decline set earlier in 2020.
- China’s tech hub, Shenzhen, barely avoids economic contraction in first half of 2020 — The city of Shenzhen, China’s tech capital that sits on the border with Hong Kong, barely avoided an economic contraction in the first half of this year, as a strong rise in investment offset weaker consumer spending and exports.
Bloomberg
- Brooks Brothers, Lacoste Supplier Sees 40% Drop in 2021 Sales — TAL Apparel Ltd., the biggest supplier to Brooks Brothers Group Inc., projects a plunge in sales will carry through to next year, signaling that retail pain will continue and likely trigger more bankruptcies in the sector.
- China’s Iron Ore Appetite Takes India Imports to 8-Year High — China’s purchases of iron ore from India rocketed to an eight-year high in the first half of 2020, fueled by supply shocks at major producers and record steel output at the world’s largest steelmaker.
- Fund Scandal Was ‘Wake-Up Call’ for Noah’s Shadow-Bank Shift — Only a year ago Noah Holdings Ltd. was a poster child for the dangers lurking in China’s $8 trillion shadow banking system. Now it’s at the fore of a historic shift in Chinese asset management, one that policy makers say is reducing financial risks in the world’s second-largest economy.
- Ant IPO Bonanza Looms for Silver Lake, Carlyle, Warburg — A raft of U.S. private equity firms backed by the country’s largest endowment and pension funds stands to reap big gains from Ant Group’s highly anticipated initial public offering, even as U.S. lawmakers push funds to halt investments in China.
- Fuel-Cell Firm Stages Comeback 20 Years Later With Help of China — Two decades ago, a burst in the dot-com bubble meant that shares of Ballard Power Systems Inc. may have been dead in the water. Now, it’s rebounding with a vengeance.
- Arm Accuses China Venture Ex-CEO of Blocking its Business — Arm Ltd., the chip designer owned by SoftBank Group Corp., accused the ousted head of its China joint venture of hurting its business there, escalating a dispute that’s becoming a test of Beijing’s willingness to protect foreign investment in the world’s second-largest economy.
- Hong Kong Traders Love Chinese Firms Raising Funds at Home — For Hong Kong’s Chinese companies, selling shares back home is a sure-fire way to boost their stock’s valuation.
- India Tech Moguls Urge Tougher Protectionism to Battle China — Leaders in India’s technology industry are urging the country to go even further to protect the interests of local companies against foreign rivals, or risk ceding the world’s fastest growing internet arena to Chinese and American monopolies.
- Three Gorges Said to Mull $4 Billion Foreign Unit Stake Sale — China Three Gorges Corp. is exploring selling a stake worth as much as $4 billion in the state-owned power company’s overseas asset portfolio, according to people familiar with the matter.
- Huawei Supplier MediaTek Hires Ex-U.S. Official Amid Tensions — MediaTek Inc. has hired a former U.S. Department of Commerce official to help the Taiwanese chipmaker navigate worsening U.S.-China tensions that have already ensnared its customer Huawei Technologies Co.
- China’s Poor Getting Poorer as Virus Hits Consumption: CICC — China’s economic recovery will continue to be held back by weak consumption, as the lower-income part of the population are still seeing falling wages and persistent virus outbreaks keep consumers at home, according to China International Capital Corp.
- Moutai Profit Rises 13% as China Liquor Market Remains Solid — Liquor giant Kweichow Moutai Co. said its net income rose 13% in the first half of 2020 as the recovering local economy boosted demand for its ultra-premium line of baijiu, China’s national drink, although growth has not yet returned to pre-pandemic levels.
- Permira Said to Invest in EF Kids Unit at $1.5 Billion Value — Private equity firm Permira has agreed to acquire a majority stake in EF Education First Inc.’s kids and teens business, valuing the unit at about $1.5 billion, according to people familiar with the matter.
- Top Consumer Fund Places Big Bets on China’s Tourism Revival — As the coronavirus forces countries to keep their international borders largely sealed, Joohee An is counting on the enthusiasm of local Chinese travelers and betting on stocks linked to a potential revival in domestic tourism.
- Founder Hits Jackpot Thanks to China’s Love of Stock Trading — When the coronavirus put a halt on people’s lives in China in February, Justin Jin’s old university classmates thought about selling face masks to make money. The 21-year-old suggested they instead try their luck with two stocks: Tesla Inc. and Tencent Holdings Ltd.
- China’s $941 Billion Wealth Fund Loses Talent at the Worst Time — China’s sovereign wealth fund is losing senior-level talent at one of the worst possible times.
Reuters
- U.S. Republicans worry China might use TikTok to meddle in election — A group of top Republican U.S. Senators on Tuesday ramped up pressure on TikTok, asking the Trump administration to assess the threat that the popular Chinese-owned video sharing app might meddle in U.S. elections.
- China’s Hengli makes bold $20 billion bet to spin coal into fabric — What to do with China’s abundant stock of coal? Chemical giant Hengli plans to make clothes out of it.
- Rio Tinto touts ‘V-shaped’ China recovery as it beats profit expectations — Rio Tinto said on Wednesday it saw a sharp V-shaped recovery in China as stimulus spurred industrial activity, helping its first-half profit handily beat market expectations.
- China banks, regulators move to cool gold rush — Chinese regulators and major banks are rushing to curb precious metal trading by domestic investors to temper speculation that some fear could cause a repeat of this year’s oil trading mishaps.
- China’s factories may lose momentum in July amid floods, soft global demand: Reuters poll — China’s factory activity probably grew for the fifth month in July, but at a slower pace, as floods disrupted manufacturing and a resurgence in coronavirus cases around the world threatens to undermine the gradual domestic recovery.
- Harvard professor accused of lying about China ties faces U.S. tax charges — U.S. prosecutors brought tax charges on Tuesday against a Harvard University professor accused of lying to authorities about his ties to a China-run recruitment program and funding he allegedly received from the Chinese government for research.
- Column: U.S.-China cold war would redirect energy flows – Kemp — Worsening diplomatic relations between the United States and China are putting a spotlight on their economic interdependence in the context of global supply chains for both technology and energy.
Xinhua
- China to boost local-government special bond issuance — China will accelerate the issuance of local-government special bonds, the Ministry of Finance announced in a circular on Wednesday.
- CITIC Securities posts surge in first-half profits — CITIC Securities, one of China’s leading brokerage companies, on Wednesday reported soaring profits for the first half of the year amid a vibrant domestic stock market.
- Hong Kong can fend off financial volatility: former monetary authority head — Hong Kong has the capability of fending off financial volatility with its stable financial system and cautious regulation, Joseph Yam Chi-kwong, former chief executive of the Hong Kong Monetary Authority, said Wednesday.
Other Publications
- CNBC: Chinese companies look to ride a new cross-border e-commerce wave driven by the coronavirus — Some Chinese companies are tapping a new growth opportunity in online shopping amid trade tensions and the coronavirus pandemic. While e-commerce has become a part of modern life around the world through giants such as Amazon and Alibaba, online shopping remains a fraction of overall retail sales.
- Newsweek: Russia, China Investing in Submarines to Threaten U.S. Homeland: Pentagon — The officer nominated to lead the U.S. Northern Command and North American Aerospace Defense Command has warned that both Russia and China are investing in submarines and other strategic capabilities to threaten the U.S. homeland.
- The Guardian: Five Eyes alliance could expand in scope to counteract China — The Five Eyes intelligence alliance could be expanded to include Japan and broadened into a strategic economic relationship that pools key strategic reserves such as critical minerals and medical supplies, according to centre-right MPs working internationally to decouple the west from China.
- CSIS: Decoupling Kabuki: Japan’s Effort to Reset, Not End Its Relationship with China — Japan has long been skeptical of China. China is viewed unfavorably by a whopping 85 percent of the Japanese public, far outstripping even skeptical Americans (66 percent as of April 2020). Tokyo is particularly worried about Chinese mercantilism and its extremely aggressive high-tech drive. At the same time, Japan also has an enormous economic relationship with China, with two-way trade in goods in 2019 totaling over $300 billion.