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
- HSBC Profit Slumps on Coronavirus, Trade Tensions — HSBC’s net profit plummeted in the second quarter as the impact of the coronavirus pandemic complicated the bank’s efforts to refocus on Asia while dealing with rising U.S.-China political tensions.
- Apple Faces $1.4 Billion Lawsuit by Chinese AI Firm in Siri Patent Fight — An artificial-intelligence company recently awarded a Chinese patent for a voice assistant similar to Apple’s Siri has filed a patent infringement lawsuit against Apple that, if successful, could prevent the American tech giant from selling many of its products in the world’s second-largest economy.
- Microsoft Says It Remains Committed to Reaching TikTok Deal — Microsoft said it is committed to trying to acquire the U.S. operations of the Chinese video-sharing app TikTok on terms required by the White House, after CEO Satya Nadella spoke by phone with President Trump about the possible deal.
- The China Vise Tightens on Hong Kong — Elections are cancelled, protesters are arrested, and a professor is fired.
- How Chinese Officials Hijacked My Company — A joint venture applied to Beijing for patents on 510 of my designs, without notifying or crediting me.
- Mystery Seeds Raise Questions About Online Sales Tactics in China — Questionable online sales tactics used by some foreign merchants have been brought into focus after the federal government said this week that mysterious seed packages arriving from China may be an e-commerce scam.
The Financial Times
- China tech stocks rally as investors bet on decoupling with US — Washington’s threat to ban Chinese apps prompts traders to focus on domestic names.
- Former Ofcom board member rejoins Chinese state broadcaster — Nick Pollard rehired by CGTN as UK media regulator weighs punishment for TV network.
- Australian university in censorship row over China’s Hong Kong policy — University of New South Wales accused of hampering free speech for fear of offending Beijing.
- Virus drives shift away from coal except in China — First half of 2020 marks historic decline in capacity of power plants using the fuel.
- Australia challenges China’s graphite crown in EV batteries — Mines use Sino-US brawl to break into vital anode material market.
- US to widen action against Chinese tech groups beyond TikTok — Pompeo vows further clampdown as ByteDance tries to salvage sale talks with Microsoft.
- China’s soaring corn prices prove fertile ground for speculators — Rising cost of crop despite fall in global demand poses problem for Beijing.
The New York Times
- How TikTok’s Owner Tried, and Failed, to Cross the U.S.-China Divide — The founder of ByteDance, Zhang Yiming, dreamed of building a global tech company based in China. Then the geopolitical reality set in.
- U.S. Identifies Some of the Mysterious Seeds Mailed From China — The 14 varieties identified include common ones, such as hibiscus, morning glory and lavender. Still, experts warned recipients not to plant them.
- Why Did Hong Kong Delay Its Election — by a Year? — The government blames the pandemic. More likely, it was afraid to lose.
- U.S. Small Business Bailout Money Flowed to Chinese-Owned Companies — Millions of dollars of Paycheck Protection Program loans went to China-backed businesses in critical sectors, a study found.
Caixin
- Exclusive: Ant Group Aims to Raise $30 Billion in Record-Shattering IPO — The financial giant looks to sell 10% of its shares in Shanghai and another 5% in Hong Kong, sources say.
- China’s Top Leaders Lay Out Economic Agenda as Focus Shifts From Pandemic Support — The Politburo meeting reaffirmed the government’s new strategy of a ‘dual circulation’ growth model prioritizing domestic consumption and upgrading.
- China Plans to Give Foreign Investors More Market Access — Updated ‘encouraged industry’ list adds 125 items, expands 76 others.
- China Dodges Corporate Bond Default Bullet but Outlook Is Darkening — More companies face repayment obligations in second half while investors are wary of buying more debt, Fitch Ratings says.
- Washington Rejects Request for Chinese Airlines to Run More Flights to U.S. — Department of Transportation bases refusal on China’s own restrictions on incoming international flights, particularly to Beijing.
- Cover Story: How Ant Grew Into an Elephant-Sized Behemoth — Long-awaited IPO could value the Alibaba payment unit at $200 billion reflecting careful construction of its own comprehensive financial and business ecosystem.
- Alibaba Buys Bigger Stake in Hong Kong-Listed Real Estate Firm — Share and notes deal which could grow stake in E-House to more than 13% signals e-commerce giant’s push into property sector.
- Huawei’s New Lead Could Wither Amid Foreign Struggles — Despite beating Samsung in phone shipments this quarter, the Chinese giant is still losing overseas market share amid U.S. pressure.
- China Regulators to Punish Luckin Coffee for Financial Fraud — Finance Ministry confirms fabricated sales results while market regulation agency finds unfair competition, though neither specifies planned penalties.
- Apple Takes Down Over 30,000 Apps from China Store Amid Government Crackdown — Apple kicked more than 30,000 apps off its Chinese App Store on Saturday, including over 26,600 games, possibly in response to a Chinese policy requiring paid games or games offering in-app purchases to obtain a government license before publication, according to statistics provided by research firm Qimai.
- Chinese Chipmaker SMIC to Establish Joint Venture for Wafer Production — Chinese contract chipmaker Semiconductor Manufacturing International Corp. (SMIC) has unveiled plans to establish a joint venture to develop a new wafer plant in Beijing, as the company tries to increase semiconductor output and reduce costs.
South China Morning Post
- League of Legends World Championship to be held in China for two consecutive years amid pandemic — The annual League of Legends World Championship, the e-sports industry’s most popular international tournament, will be staged for two consecutive years in China, where gamers outnumber the US population.
- China clung to US dollars in 2015 as its stock market crashed and capital flowed out, SAFE figures show — Despite the stock market rout and capital exodus of 2015, China’s holdings of US dollars as a proportion of its foreign exchange remained rock solid throughout the year, figures from an official report show.
- China’s agricultural imports surge in June, as worsening US ties stoke fears of supply disruptions — Chinese imports of agricultural goods surged in June as buyers stockpiled farm products to hedge against possible supply disruptions caused by deteriorating relations with the United States and fill gaps in domestic production, analysts said.
- ByteDance founder ‘understands’ but ‘disagrees’ with US conclusion that TikTok must be sold, adding that ‘end solution’ still unknown — As TikTok faces a potential forced sale in the US, the founder of its Chinese parent company ByteDance said on Monday that it “disagrees” with the conclusion of the US government panel that reviews the national security implications of foreign investments, when it said ByteDance must fully divest TikTok’s US operations.
- Hong Kong property deals expected to fall 10 per cent in August, with second-hand home sales plunging by a fifth, as Covid-19 risk rattles buyers, sellers — Property transactions in Hong Kong may drop by about a 10th in August, with second-hand home sales leading the way with a 20 per cent plunge, as a third wave of Covid-19 infections deters buyers, according to real estate analysts.
- China’s small factory activity strengthened in July to highest level since January 2011 — China’s manufacturing sector showed a further rebound in July to its strongest level since January 2011, but weak foreign demand and downward pressure on employment showed there is still some way to go to reach pre-coronavirus levels.
- TikTok owner ByteDance blasts Facebook for ‘plagiarism and smears’ amid threat of US ban — China’s ByteDance, the owner of troubled short video sensation TikTok, took aim at Facebook in a statement on Sunday night that accused the social media giant of “plagiarism and smears”
- China’s economic future depends on closing its wealth gap otherwise new domestic strategy won’t work — China announced last week its new strategy to cope with a less accommodating international environment, so-called dual circulation, under which it will pursue growth in both its domestic and foreign trade sectors, but with the priority on the domestic market.
- China promises state support to keep BeiDou satellite system at cutting edge — China has credited its “conquering” of critical technologies for the success of its satellite navigation system BeiDou, and said it will double down on state support for advanced technology development.
- Without jobs, some in Hong Kong tighten belts and deplete savings as they face an uncertain future — This is the first instalment of a five-part series in which the Post takes a look at unemployment in Hong KongThe Covid-19 pandemic, coming on the heels of anti-government protests that began in June last year, has hit Hong Kong’s economy hard, leaving tens of thousands of people struggling.
- Hong Kong third wave: Financial Secretary Paul Chan warns government handouts won’t last, even as Covid-19 piles more pressure on economy — Hong Kong’s economy faces even greater pressure from the coronavirus crisis in the coming months but endlessly rolling out government support packages cannot be the long-term solution, the city’s financial chief has warned.
- China gives its 160 million individual investors the green light for class action lawsuits in historic reform after scandals involving Luckin Coffee, Kingold Jewelry — China will allow the nation’s army of small investors for the first time in history to file class action lawsuits in cases such as fraud and price manipulation, as policymakers stiffen penalties in the wake of scandals involving local businesses on stock exchanges at home and abroad.
- Macau’s July gambling revenue falls by 94.5 per cent as visa ban amid Covid-19 pandemic thwarts growth in world’s ‘sin capital’ — Macau gaming revenue plunged by more than 90 per cent for a fourth straight month, as China’s ban on tourist visas continued to deprive the gambling hub of its biggest source of clients.
- Top aide to Taiwan President Tsai Ing-wen quits after family linked to corruption investigation — The chief of staff to Taiwanese President Tsai Ing-wen has resigned over a corruption investigation involving his family, saying he wanted to protect the president from being damaged by the fallout months after being sworn in to a second term.
- TikTok’s Chinese owner ByteDance ‘prefers independent spin-off over Microsoft sale’ as Donald Trump threatens ban — TikTok could become totally independent from its Chinese owner ByteDance to continue operating overseas, according to a source who has been briefed on the discussions.
- China’s economic recovery under threat from fresh coronavirus outbreaks and floods, analysts say — Fresh clusters of coronavirus cases along with severe flooding may hold back China’s recovery from the pandemic as consumption and construction are likely to be hit, according to analysts.
- Hong Kong restaurant takings fall 26 per cent as Covid-19 bites — Restaurant takings for the second quarter have dropped 26 per cent on last year as Hong Kong’s food and catering sector feels the squeeze from the impact of Covid-19.
- Samsung Electronics crafts India smartphone comeback as anti-China wave surges — Samsung Electronics is forging a comeback in India’s smartphone market with a new range of budget devices and a ramped-up online presence, aiming to recoup ground ceded to Chinese rivals such as Xiaomi.
- Ant Group’s plan is just the spark that is needed to revive Chinese companies’ dual-listing ambitions — The high-stake share-offering plan by Ant Group is likely to revive a practice that was once popular among Chinese companies seeking to go public: dual-listings in the mainland and Hong Kong.
- China’s biggest beer festival goes ahead as coronavirus cancels out Oktoberfest — Germany’s Oktoberfest may be cancelled this year because of the coronavirus pandemic but the eastern Chinese city of Qingdao is going ahead with its three-week beer festival.
- Hong Kong bank deposits expand by US$29 billion in June, biggest jump in over two years as hot money chases JD.com, NetEase mega IPOs — The amount of money deposited in Hong Kong’s banks jumped the most in more than two years in June as investors chased a flurry of big initial public offerings (IPOs) and other opportunities.
Bloomberg
- HSBC Paints Grim Outlook In ‘Hugely Unpredictable’ Times — HSBC Holdings Plc joined the chorus of banks warning about a difficult economic outlook to cap a costly earnings season.
- Rebound Hangs in Balance for Emerging Markets as Headwinds Grow — Emerging-market stocks and currencies are within touching distance of erasing their pandemic-fueled losses of 2020. Too bad the virus is still running riot, economies are shrinking and central banks are getting low on firepower.
- Gold Erases Gains on Positive Economic Data After Jump to Record — Gold opened the week with a surge to a record, before erasing gains as European equities rebounded on positive economic data and the dollar nudged higher.
- Zoom Halts Direct Sales in China, Will Rely on Local Partners — Zoom Video Communications Inc., the popular conferencing app facing scrutiny over whether it transmits data to Beijing, will halt all sales of products in China except through locally based partners.
- Trump’s TikTok Assault Opens New Front in Tech War With China — By going after TikTok, the U.S. is expanding a fight against Beijing using Chinese-style restrictions on tech companies in a move that could potentially have enormous ramifications for the world’s biggest economies.
- South Korea and Japan Flap Could Hit Trump’s Plans on China — A South Korean court is set to start liquidating assets of a Japanese company to compensate Koreans conscripted to work during colonial occupation, straining ties between two key U.S. partners just as the Trump administration needs their help in countering China.
- Alibaba Boosts Investment in EV Maker Xpeng Before New York IPO — Chinese electric-car startup Xpeng Motors is raising more funds from Alibaba Group Holding Ltd. and other investors ahead of its planned initial public offering in New York, according to people familiar with the matter.
- China Mulls Bond Issue to Help Pay Clean Energy Subsidies — Chinese officials are considering a proposal to sell bonds to pay renewable energy subsidies owed to developers, according to people familiar with the matter.
- Hong Kong’s City’super Owner Said Near Sale to Chinese-Led Group — A group led by China Resources Capital Management Ltd. is close to buying a majority stake in City’super, valuing the high-end Hong Kong supermarket chain at almost $300 million, people with knowledge of the matter said.
- China’s Star Board Among World’s Top Three IPO Venues: ECM Watch — China’s technology focused Star board may be just over a year old, but it already ranks among the world’s top three initial public offering venues.
- Chinese Tech Stocks Soar as U.S. Measures Spur Support Hopes — Mainland-listed technology shares surged on Monday, driven by expectations of support from Beijing in response to U.S. moves on Chinese-owned software companies.
- Goldman, BofA Left Off Ant IPO for Work With Alibaba Rivals — Goldman Sachs Group Inc. and Bank of America Corp. were left off Ant Group’s upcoming stock sale in Hong Kong because of their past work with rivals of its affiliate Alibaba, according to people familiar with the matter.
- Asia’s Factories See Modest Pickup Alongside Chinese Rebound — Factory managers in Asia broadly saw a modest pickup in activity in July as China’s demand kept up its momentum.
- Hong Kong Denies Mass Chinese Virus Tests Are Bid to Harvest DNA — Hong Kong denied plans to harvest residents’ DNA as part of a China-backed coronavirus-testing blitz, as deep political mistrust further complicates the city’s efforts to contain its worst outbreak ever.
- China Wealth Manager Hywin Plans Foray Into Singapore — Hywin Wealth Management Co. is weighing an expansion into Singapore to follow its Chinese clients and tap the surge of wealthy individuals in Southeast Asia.
- China to Help Hong Kong Boost Virus Tests, Build Mobile Hospital — China is sending mainland technicians and medical experts to Hong Kong to help the city boost testing for coronavirus and build a makeshift “cabin hospital” for Covid-19 patients amid a worsening outbreak in the territory.
- Apple Vendor Looks to Shift Production Lines to India, TOI Says — An Apple Inc. vendor is looking at shifting six production lines to India from China which may result in $5 billion of iPhone exports from the South Asian nation, The Times of India reported, citing people familiar it didn’t identify.
- U.S.-China Relations Have Precedent in World War I — The changing world order looks uncomfortably like the pre-World War I rivalry between Britain and Germany.
- China to Revise Cross-Border Investment Rules for Local PE Funds — China plans to revamp cross-border investment rules for domestic private-equity funds this year, the foreign-exchange regulator said in a statement Saturday.
- China Celebrates Completion of Rival Sat Navigation System — China is celebrating the completion of its BeiDou Navigation Satellite System that could rival the U.S. Global Positioning System and significantly boost China’s security and geopolitical clout.
- China’s Influx of Foreign Oil Slows Sharply in Tanker Movements — The volume of crude bound for China has plunged to its lowest level since early May, hinting at faltering demand in contrast to the buying bonanza that took place only a few months ago.
- Chinese Researcher Is Denied Bail in Case Over Military Ties — A Chinese researcher was ordered to remain in a California jail while she fights charges that she lied about her military service in China to get a U.S. visa.
Reuters
- Microsoft talks to buy TikTok’s U.S. operations spark ire in China — A potential shotgun wedding to Microsoft Corp for TikTok’s U.S. operations provoked an outcry on Monday on Chinese social media as well as criticism from a prominent Chinese investor in TikTok owner ByteDance.
- China will make monetary policy more flexible, targeted in second half: central bank — China’s monetary policy will be more flexible and targeted in the second half of the year, the central bank said on Monday.
- Serbian purchase of missile defence system shows ties deepening with China — Serbia has bought a new generation of medium-range, radar-guided surface-to-air missiles from China in a new sign of deepening cooperation between Beijing and Belgrade.
- China suspends extradition agreement with New Zealand — China said on Monday it will suspend its extradition agreement with New Zealand in response to Wellington suspending its existing extradition treaty with Hong Kong.
- TikTok owners will relocate to London from Beijing, Sun newspaper says — TikTok owner ByteDance will move its headquarters to London from Beijing under a deal approved by British ministers, The Sun newspaper reported.
- China opens anti-dumping probe on U.S. polyphenylene ether imports — China’s commerce ministry said on Monday it has started an anti-dumping probe into imports from the United States of polyphenylene ether, a polymer prized for its heat resistance and used in the automotive and electronics industries.
- China says chips for devices using Beidou navigation system in mass production — China said on Monday that 28-nanometre chips that enable mobile devices to receive signals from the Beidou navigation system are in mass production and mass manufacturing of high-precision 22-nanometre positioning chips will soon kick off.
- China’s new coal projects account for 90% of global total in first half – study — China built more than half of the world’s new coal-fired power plants this year and accounted for 90% of new planned capacity, a study showed on Monday, with Beijing still commissioning new projects even as capacity worldwide declines.
- China forex regulator vows greater opening, eyes reform on private equity investment — China will continue to expand financial market opening, including exploring reforms to the rules governing cross-border investment management involving private equity funds, the country’s foreign exchange regulator said on Saturday.
- Samsung Electronics to halt production at its last computer factory in China — Samsung Electronics Co will halt operations of its last computer factory in China, the South Korean tech giant said on Saturday, the latest manufacturer to shift production from the world’s second-biggest economy.
- U.S. imposes sanctions on Chinese company over abuse of Uighurs — The United States intensified its economic pressure on China’s Xinjiang province on Friday, imposing sanctions on a powerful Chinese company and two officials for what it said were human rights abuses against Uighurs and other ethnic minorities.
- Chipmaker SMIC inks $7.6 billion investment deal for wafer production — China’s Semiconductor Manufacturing International Corp (SMIC) said on Friday it would establish a joint venture company to develop wafer production units in Beijing to bump up its semiconductor output and reduce costs.
- Chinese electric vehicle maker Xpeng raises another $300 million, sources say — Chinese electric vehicle (EV) maker Xpeng Motors has raised an additional $300 million from investors including Qatar’s sovereign wealth fund, people familiar with the matter said.
Other Publications
- Forbes: Intel, Nvidia, Et Al., And American Semiconductor Hegemony — The story is all wrong. It is based on a crude misunderstanding of the structure of the industry. In fact, the U.S. is in firm control of the high ground in the semiconductor business, which dominates the rest of the industry (with one quasi-exception).
- Forbes: China Grand Pharmaceutical Latest From Country To Sell Stock Amid Price Surge — China Grand Pharmaceutical and Healthcare Holdings is looking to sell 172 million shares at HK$5.90 each, raising the equivalent of $130 million to fund research and technology investments. China Grand’s shares soared by 8% on Friday at the Hong Kong Stock Exchange to close at record high of HK$7.34. They’ve gained 80% in the past year.
- AP: China accuses US of harassing Chinese students, researchers — China on Monday accused the United States of “monitoring, harassing and willfully detaining” Chinese students and researchers in the U.S.
- CoinTelegraph: Tencent Builds Blockchain Platform for China’s Oldest Wine Producer — Chinese tech giant Tencent has revealed its plan for creating a blockchain-based wine traceability platform in collaboration with Changyu, China’s biggest and oldest wine producer, according to local news on July 31. It is said to be a nationwide first for the country’s domestic wine industry.
- Foreign Affairs: Beware the Guns of August—in Asia. How to Keep U.S-Chinese Tensions From Sparking a War — It is as if the previous half century of U.S.-Chinese relations never happened.