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
- U.S. Stock Futures Slip on U.S.-China Tensions — Futures pared their declines after the latest employment report showed the economy added more jobs than expected last month.
- Trump Executive Orders Target TikTok, WeChat Apps — President Trump issued a pair of executive orders imposing new limits on Chinese social-media apps TikTok and WeChat, escalating tensions with Beijing and effectively setting a 45-day deadline for an American company to purchase TikTok’s U.S. operations.
- Pro-China Populists Consolidate Power in Sri Lanka — The Rajapaksa family cemented its grip on Sri Lanka in parliamentary elections, according to results released Friday, gaining enough seats to push through constitutional changes increasing executive power.
- Hong Kong’s Exiled Dissidents Become Fugitives From China — Samuel Chu, a Hong Kong native and an American citizen who has lobbied Washington, is being sought along with five others living abroad.
- China’s Chaotic Soccer League Hampers Xi’s World Cup Dream — Club soccer in China is in crisis. Since last year’s season ended in December, 13 of the 64 clubs in the country’s three professional divisions have dissolved.
- China Becomes a Refuge for U.S. Companies After Overcoming Covid-19 — Despite rising political tensions, American brands have suffered little commercial fallout among Chinese consumers, enabling them to capitalize on the economic rebound in China.
- China Trade Rides a Wave in July After Coronavirus Restrictions Ease — China’s exports picked up momentum in July for the second straight month, as global demand recovered with the easing of coronavirus-related restrictions.
- Billionaire Daniel Loeb’s Third Point Re to Merge With Sirius Group — Third Point Reinsurance, backed by U.S. hedge-fund manager Daniel Loeb, said it would merge with Sirius International Insurance Group, whose majority shareholder in China has been under financial pressure.
- Kicking Out Chinese Stocks and WeChat Is Another Nail in the Coffin of U.S.-China Links — The Trump administration’s latest moves against China could have profound impacts. But the winners and losers might not be who they seem.
- White House Seeks Crackdown on U.S.-Listed Chinese Firms — Chinese companies with shares traded on U.S. stock exchanges would be forced to give up their listings unless they comply with American auditing requirements, under a Trump administration proposal.
- U.S. Tensions With Beijing Are High, but Trump Still Has Fans in China — Beneath expressions of anger at Washington, two camps at opposite ends of China’s political spectrum like Trump’s confrontational approach—for different reasons.
The Financial Times
- Why is Silicon Valley so chilled about the cold war with China? — The Nasdaq has minted new records even as the Trump administration broadens its assault on Chinese tech.
- Trump’s TikTok and WeChat order wipes $75bn off China tech stocks — Tencent shares plummet as fears grow White House could ban all dealings with tech group.
- Trump team outlines crackdown on US-listed Chinese groups — Proposal recommends delisting companies that do not meet American accounting standards.
- Hong Kong’s wealthy move gold out of city on security law fears — Legislation heightens concerns of political and legal risk in Asian financial centre.
- Foreign holdings of Chinese bonds rise in global chase for yield — Institutions pile in to escape low rates in other big economies.
The New York Times
- Targeting WeChat, Trump Takes Aim at China’s Bridge to the World — The all-purpose app, which the administration is restricting along with TikTok, is how many Chinese living abroad stay in touch with each other, and with people back home.
- Trump’s TikTok and WeChat Edicts Are Straight Out of China’s Playbook — The foolish and dangerous move suggests that the United States, like China, no longer believes in a global internet.
Caixin
- Five Major Chinese Banks Clarify Rumors of Pay Cuts — Some financial SOEs are planning 5% pay cuts amid salary reform, Caixin has learned.
- China Could Adopt Negative List for Future Financial Opening-Up, PBOC Official Says — A negative list can bring more openness as it only bans some items and leaves everything else open, says Zhu Juan.
- Former Securities Regulator Moves to Head Shanghai Bourse — Cai Jianchun named president of the Shanghai Stock Exchange.
- China Allows Baoshang Bank to Go Bankrupt in Final Cleanup — Rare liquidation of a Chinese bank closes a chapter in authorities’ massive unwinding of tycoon Xiao Jianhua’s scandal-ridden Tomorrow Holding empire.
- Banks Fined for Breaching Privacy of Credit Card Holders — In crackdown on data breach, CBIRC penalizes China Merchants Bank and Communication Bank of China $143,812 each.
- Policy Lender Gets New Vice President From Central Bank — Zhou Xuedong, who led central bank seizure of Baoshang Bank, becomes vice president of China Development Bank.
- Flexible-Screen Maker Plans Shenzhen IPO, Dispelling Rumors of U.S. Listing — Unconfirmed reports said Royole was planning to raise $1 billion.
- Foldable Phone-Maker Plans Shenzhen IPO, Dispelling Rumors of U.S. Listing — Chinese flexible screen pioneer Royole Corp. is eyeing a hometown IPO in Shenzhen, tapping Citic Securities for support.
South China Morning Post
- China no longer top clothes exporter to US as Vietnam gains market share — Seven months ago, China was still the largest supplier of products for fashion companies in the United States, but its significant advantage over Vietnam has since evaporated because of the coronavirus and the decoupling tensions between the world’s two biggest economies.
- US Senate approves TikTok ban on government devices — The US Senate unanimously approved a bill Thursday to ban TikTok, the Chinese-owned hit video-sharing app, from use on government-issued devices, the final step before the proposal heads to President Donald Trump to be signed into law.
- Twitter begins labelling ‘state-affiliated media’, including Chinese outlets — Twitter launched a crackdown on Chinese and Russian government-linked news outlets on Thursday, labelling sites including People’s Daily, China Daily and Global Times as “state-affiliated media” and preventing them from being recommended to users or otherwise amplified on the social media platform.
- US beats China in coronavirus funding to WHO, despite threats to withdraw — The United States has so far contributed more than China to the World Health Organisation’s coronavirus response, despite its threats to withdraw from the international body over alleged missteps in the early stages of the pandemic.
- China’s new Yantai deep water port receives first iron ore mega ship from Brazil’s Vale — Brazilian miner Vale this week docked its first skyscraper-sized ore ship at one of China’s newest deep water ports, putting into motion Beijing’s strategy to diversify its sources of iron ore.
- Taiwan and US in talks for sale of advanced military drones, sources say — The United States is negotiating the sale of at least four sophisticated aerial drones to Taiwan for the first time, aircraft that can keep watch over huge swathes of sea and land, according to six US sources familiar with the talks.
- Octopus offers sweeteners to entice small Hong Kong vendors to go cashless amid coronavirus surge — Competition appears to be heating up among cashless payment providers attempting to win over smaller merchants such as market vendors, cafe owners and taxi drivers amid the escalating coronavirus outbreak in Hong Kong, with sector stalwart Octopus Cards unveiling fresh sweeteners on Thursday.
- Beating the gloom: enterprising Hongkongers find ways to boost income, running yoga classes or selling at bazaars and online — An estimated 240,700 people in Hong Kong were out of work as of June, as the coronavirus pandemic took its toll on the economy. The bleak jobs market has driven some to get creative and put their talents and hobbies to good use.
- Cathay Pacific can cut schedules until March 2021, aviation bosses say, as they relax ‘use it or lose it rule’ for airlines on runway slots — Cathay Pacific and other airlines battling a collapse in travel because of the coronavirus pandemic can keep cutting flight schedules in and out of Hong Kong until March 2021, without losing lucrative airport runway slots.
- After Chengdu, ‘nobody knows what is next’, say US firms in geopolitical crosshairs — In the days following China’s retaliatory closure of the US consulate in Chengdu at the end of July, Benjamin Wang received “maybe 20 phone calls” from the top bosses of American firms in the region, “who did not know what was going on” in the crumbling superpower relationship.
- Hong Kong should reform tax code to spur entrepreneurship amid slumps and help city catch up with regional rivals — Hong Kong’s government, owner of one of the world’s largest currency reserves, should consider amending its tax code to let companies transfer losses among units, so that it can maintain the financial centre’s competitiveness with regional rivals, an advisory body said.
- China’s forex reserves rise more than expected in July to US$3.154 trillion — China’s foreign exchange reserves rose more than expected in July as the dollar weakened and the yuan firmed as the world’s second-largest economy showed further signs of recovery.
- China’s exports show surprising surge in July, powered by demand for lockdown goods overseas — Powered by rising overseas demand for electronics, medical supplies and other goods to be used in coronavirus lockdowns around the world, China’s export growth surged past expectations in July, with outbound shipments up 7.2 per cent from a year earlier.
Bloomberg
- Trump Ban on Top Messaging App Risks Snarling Global Business — Banning WeChat, the world’s most-used messaging app, has the potential to upend the international businesses of companies from Apple Inc. to Walmart Inc. and shut down personal communications between America and China.
- Why Tencent and WeChat Are Such a Big Deal in China: QuickTake — Tencent Holdings Ltd., one of Asia’s biggest companies, is little known beyond the tech world. But its WeChat super app has more than 1 billion users worldwide. What started in 1998 when a small group of friends cloned an Israeli instant-messaging service and adapted it for the Chinese market has become part of the fabric of life for people who use it to chat, shop, watch videos, play games, flirt, order food and taxis and more.
- Oil Trades Below $42 With Tension Between U.S. and China Flaring — Oil in New York fell as U.S. President Donald Trump’s latest attack on Chinese tech companies stoked tensions between the two countries, weighing on risky assets.
- China’s Baozun Said to Pick Banks for Hong Kong Second Listing — Chinese e-commerce service provider Baozun Inc. has selected banks for its planned second listing in Hong Kong, which could happen as soon as September, according to people familiar with the matter.
- U.S. Moves to Tighten Regulations for Chinese Stock Listings — A high-powered group of U.S. regulators said stock exchanges should set new rules that could trigger the delisting of Chinese companies, following mounting concerns that investors are being exposed to frauds.
- Li Ka-shing’s CK Group Seeks Cost Curbs on Dimming Outlook — For decades, Hong Kong tycoon Li Ka-shing profited by expanding in times of crisis. Now, the conglomerate he founded is hunkering down with controls on spending as geopolitics and the pandemic batter earnings.
- Yum China Is Said to Target September for Hong Kong Listing — Yum China Holdings Inc. is targeting a second listing in Hong Kong as early as September, people familiar with the matter said, adding to the list of billion-dollar share sales in the Asian financial hub this year.
- Tesla Supplier LG Chem Expects Battery Revenue to Double by 2025 — While the Covid-19 pandemic has dented demand for electric vehicles this year, a South Korean supplier expects its battery sales to reach a new high thanks to strength in Europe and a contract with Tesla Inc.’s factory in China.
- Japan’s Push to Cut China Reliance Boosts Southeast Asia — Japan’s quiet push to protect its supply chains in the era of Covid-19 may prove a boon for Southeast Asian nations looking to gain from the growing backlash against China.
- Dan Loeb’s Third Point Builds Positions in Alibaba, JD.com — Dan Loeb’s Third Point said it took advantage of jitters around China’s relationship with Hong Kong and the U.S. to build out its e-commerce exposure with new positions in Alibaba Group Holding Ltd. and JD.com Inc. during the second quarter.
- Can China Win the Financial Cold War? It Depends on U.S. Allies — The U.S. dominates the international system. Beijing’s best hope is for Washington to alienate its allies.
- Trump Signs Order Seeking to Return Drug Production to U.S. — President Donald Trump signed an executive order that would encourage the production of certain drugs and medical supplies in the U.S. following shortages during the Covid-19 pandemic.
- State Department Official Who Lobbied Against Huawei to Resign — The State Department’s top cyber policy official, who has spent the last few years warning U.S. allies about the dangers of relying on companies like China’s Huawei Technologies Co. to build 5G networks, is resigning to work on policy issues on behalf of technology companies.
Reuters
- Global equities snap four-day rally on U.S.-China frictions; dollar firm — World stocks ended four days of gains on Friday after U.S. President Donald Trump cranked up antagonism with Beijing by banning U.S. transactions with two popular Chinese apps: Tencent’s WeChat and ByteDance’s TikTok.
- Trump advisers urge delisting of U.S.-listed Chinese firms that fail to meet audit standards — Trump administration officials have urged the president to delist Chinese companies that trade on U.S. exchanges and fail to meet U.S. auditing requirements by January 2022, Securities and Exchange Commission and Treasury officials said on Thursday.
- PetroChina’s Ningxia refinery to resume operations in mid-August — PetroChina’s Ningxia refinery is scheduled to resume operation of its 100,000 barrels per day oil refining units in mid-August after an overhaul.
- China’s new yuan loans expected to fall in July: Reuters poll — China’s new bank loans are expected to fall in July after record lending in the first half of the year, but are still likely to be higher than a year earlier, amid sustained policy support to get the economy on a solid footing after the coronavirus.
- China says U.S. should stop arms sales to Taiwan — The United States should stop arms sales to Taiwan to avoid affecting bilateral relations, China’s foreign ministry said on Friday, after Reuters reported that Washington was negotiating the sale of at least four sophisticated aerial drones to Taiwan.
- China soybean imports rise 18% through July as Brazilian cargoes arrive — China’s soybean imports rose 18% this year through July versus a year ago, as large volumes of soybeans bought cheaply from top supplier Brazil arrived in the country, according to data from the General Administration of Customs.
- Instant View: China commodity imports surge in July from a year earlier — China’s imports of major commodities including crude oil, iron ore and soybeans all surged from a year earlier with the country snapping up raw materials as its economy revives following a hit from the coronavirus pandemic.
- Factbox: Taiwan, China and the United States — The United States is negotiating the sale of at least four sophisticated aerial drones to Taiwan for the first time, sources told Reuters, in a deal that is likely to further ratchet up Sino-U.S. tensions.
- China warns Japan a TikTok ban would affect relations: TBS — China has warned Japan that a ban on Beijing-based ByteDance’s short-video app TikTok would have a “large impact” on bilateral relations, broadcaster TBS reported on Friday, citing unnamed Japanese government sources.
- China July trade surplus with U.S. at $32.46 billion — China’s trade surplus with the United States stood at $32.46 billion in July, Reuters calculations based on Chinese customs data showed on Friday, up from a $29.41 billion surplus a month earlier.
- China central bank says it will make policy more flexible and targeted — China’s central bank said on Thursday it would make its prudent monetary policy more flexible and targeted, and keep liquidity appropriately ample to support economic recovery.
- Siemens CEO says China business is doing better than last year — Siemens is seeing an improvement in its business in China but remains uncertain about the development of the United States market, Chief Executive Joe Kaeser said on Thursday.
Xinhua
- China’s central bank injects 10 bln yuan into market — China’s central bank Friday pumped cash into the banking system via reverse repos to maintain liquidity.
- Xinjiang’s border port sees surging China-Europe freight trains — Horgos port in northwest China’s Xinjiang Uygur Autonomous Region that borders Kazakhstan has seen a surge in the number of China-Europe cargo trains this year.
- ECLAC highlights China as Argentina’s top trade partner amid pandemic — The United Nations Economic Commission for Latin America and the Caribbean (ECLAC) on Thursday spotlighted China as an important trade partner for countries in the region, such as Argentina.
- AMC Entertainment reports 561-mln-USD quarterly loss amid pandemic — AMC Entertainment Holdings, Inc., the largest U.S. movie theater chain owned by Chinese conglomerate Wanda Group, reported Thursday a net loss of 561 million U.S. dollars in the second quarter due to the COVID-19 pandemic.
Other Publications
- Forbes: China’s Rare Earth Threat Sparks An International Backlash — Because rare-earth elements have essential uses in a range of civil and military technologies, such as weapons guidance systems, China’s control of supply is a powerful commercial and diplomatic bargaining chip.
- Forbes: Why Trump’s Potential WeChat Ban Will Tank Future iPhone Sales In China — If WeChat is removed from Apple’s App Store, this makes the device a very hard sell to Chinese consumers. Android users will be fine, because Android allows users to install apps outside of the official Google Play Store (a method known as “side-loading”). But iOS does not allow side-loading unless the device has been “jailbroken,” a.k.a. hacked.
- Foreign Affairs: The U.S. Has AI Competition All Wrong — Recognizing the true power of compute would mean reassessing the state of global AI competition. Unlike the other two elements of the triad, compute has undergone a silent revolution led by the United States and its allies—one that gives these nations a structural advantage over China and other countries that are rich in data but lag in advanced electronics manufacturing.
- The New Yorker: How Vulnerable is GPS? — When D.H.S. had first contacted Humphreys a few months earlier, the department was worried about one kind of G.P.S. vulnerability in particular—a disruption to the system called jamming. By transmitting interference, jammers are able to overwhelm a G.P.S. signal and render a drone’s receiver inoperable.
- POLITICO: TikTok finds safe haven in Europe — That’s mostly because in Europe, the app hasn’t become the same hot-button issue as it is in the U.S, where politicians have written jeremiads about their fears over the company. Meanwhile, European regulators haven’t yet decided among themselves who will take the lead in investigating the company.
- The Economist: Do Alipay and Tenpay misuse their market power? — Seen as safe and reliable, they have earned the trust of merchants and shoppers. And as with much in the world of the internet, they have benefited from network effects: anyone who wants to make or take digital payments has little choice but to use Alipay or WeChat, or typically both, because just about everyone else does.
- The Atlantic: For Whom the Tok Tiks — Today, Donald Trump issued an executive order that would ban TikTok’s clever videos from American shores entirely. Unless, as Trump has put it, a “very American” company buys TikTok from ByteDance, the platform’s Chinese owner, and repatriates its data.
- Nikkei Asian Review: China’s rise must be managed, not contested. Australia knows how — One in 40 Australian citizens was born in China.
- Nikkei Asian Review: China doubles loans to 68 nations, further tightening grip — Chinese loans to 68 heavily indebted developing countries doubled in the four years through the end of 2018, virtually matching the amount of World Bank lending to the same nations and giving Beijing greater global sway.
- Nikkei Asian Review: China’s rise forges new bond between Japan and Five Eyes — Intelligence sharing and TPP membership seen as next steps in weaving relationship.
- The Diplomat: The Disparate Reality and Reputation of Chinese Museums — China’s investment in domestic travel and tourism has significantly grown in recent years. The museum industry is no exception. Every two days, three new museums appear in China, and older museums around the country are being renovated. Despite the domestic push for progress in this industry, China is still not recognized as a “museum country,” resulting in a large disparity between mass investment and the international reputation of Chinese museums.
