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
- ‘The Gold Standard:’ Why Chinese Startups Still Flock to the U.S. for IPOs — The U.S. remains a magnet for initial public offerings of Chinese technology companies, despite rising political, trade and regulatory tensions between the world’s two largest economies.
- Search For Next Tesla Fuels Rally in Chinese Auto Stocks — Makers of plug-in vehicles have led the advance amid a recovery in car sales in China and hopes that electric vehicles will become widely adopted.
- Covid-19 Vaccine Developer Soars in Shanghai Market Debut — Shares in China’s CanSino Biologics, one of several companies racing to develop a Covid-19 vaccine, leapt on their first day of trading on a Nasdaq-style tech board in Shanghai.
- U.S., Chinese Officials Jointly Pursue Mystery Seed Shipments — American agriculture officials said they are working with their counterparts in China to determine who is sending the seed packages to U.S. residents, adding that companies behind the shipments have been identified.
- Taiwan Seeks to Start Free-Trade Talks With U.S. — Taiwanese President Tsai Ing-wen said she wants to start talks on a free-trade pact with the U.S., part of a broad effort to deepen her island democracy’s partnership with Washington and resist pressure from Beijing.
- As Trump Administration Seeks WeChat Restrictions, Tencent Profit Surges — The Chinese internet giant played down threats from potential U.S. curbs on its flagship app, as higher spending through Tencent’s services and games drove better-than-expected profit and revenue in the second quarter.
- Tankers Waiting for Weeks off Congested China Ports, Oil Facilities — Crude-laden tankers have been lining up for weeks at a time off China’s coast as ports struggle to handle the millions of barrels of inbound oil that have swamped the country’s overfilled storage sites.
The Financial Times
- China holds military exercises near Taiwan in warning to US — Tensions mount in region as Taipei announces 10% increase in defence budget.
- Chinese investors miss out on best performing active funds — More than 85% of the most successful vehicles outperformed their passive rivals.
- The ‘Manganese King’: a cautionary tale for China-owned foreign groups — Chinese minerals tycoon’s unlikely rise from street vendor shows dominance of state ties in business.
- Tencent says US ban will not hit China business — Chinese tech group plays down Washington’s actions as it reports strong results.
Caixin
- Calpers Investment Chief Steps Down From $400 Billion Fund — China-born American citizen Ben Meng’s abrupt departure after months of controversy prompts California’s top finance official to demand an inquiry.
- National Reserves Collect 18% Less Wheat in Year Through August — China added 42.9 million tons to its stockpiles in the year through Aug. 5, representing a drop of 9.4 million tons from the same period of 2019.
- Huawei Copies Korean Rivals by Manufacturing Own Display Driver Integrated Chips — Besieged Chinese tech firm Huawei is exploring a new business avenue – making the chips that drive displays for consumer electronics.
- JOYY’s Livestreaming Revenue Up 40% in Second Quarter of 2020 — Chinese video-based social media company JOYY raked in 5.6 billion yuan ($793.7 million) in livestreaming revenue in the second quarter of 2020, up 40.1% from the same period in 2019, as the Covid-19 pandemic led to a surge in demand for online entertainment.
South China Morning Post
- China’s plan to boost railway freight falls behind target, knocking air pollution battle off track — China’s ambitious three-year plan to boost railway cargo volume and reduce long-distance trucking – a key plank in Beijing’s campaign to cut air pollution – is falling behind schedule, according to official data and media reports.
- Quantitative easing with Chinese characteristics? China’s July bond data hint at central bank’s rare move to buy government debt — The People’s Bank of China may have bought government bonds from domestic banks in July, a rare move that has analysts puzzling over the monetary authority’s policy intentions amid a record amount of government debt issuance.
- Hong Kong MTR sells US$1.2 billion green bond, largest issued in the city, after Covid-19 crisis leads to its worst financial performance in two decades — Hong Kong’s embattled rail operator has sold a 10-year green bond worth US$1.2 billion in a move seen as an attempt to alleviate the financial damage wreaked upon it by the Covid-19 pandemic.
- China’s top bank regulator sees surge of bad loans straining financial system in 2020, 2021 — China’s top banking regulatory official said on Thursday that the country’s banks have to deal with 3.4 trillion yuan (US$489.5 billion) worth of non-performing loans in 2020 – flagging a big risk for the banking system in the world’s second-largest economy.
- Some four in 10 US businesses considering leaving Hong Kong over national security law fears, survey finds — Nearly four in 10 American businesses operating in Hong Kong are considering relocating due to the national security law, an indication of rising corporate fears over the sweeping new legislation, though most are planning to stay, according to a poll by an influential US business group.
- Computer giant Lenovo’s profit beats expectations, helped by remote working trend — China’s Lenovo Group, the world’s biggest personal computer maker, posted a better-than-expected quarterly profit on Thursday, and said it is capturing opportunities emerging from remote working and education.
- Huawei aims to develop low cost lidar systems to boost autonomous driving deployment in China — Chinese telecoms giant Huawei has formed a team to focus on developing low-cost multichannel lidar sensors with the goal of making the technology affordable enough for all smart vehicles.
- China’s debt collection firms flourishing as coronavirus batters economy — It is not a good sign for any economy when debt collectors are booming and in China right now, the industry is on a hiring spree.
Bloomberg
- Slovenia Joins EU States in U.S. Push to Limit Huawei from 5G — Slovenia signed a declaration on 5G security, joining a group of countries agreeing with the U.S. to guard their networks in a way that could block China’s Huawei Technologies Co. from taking part.
- IPhone Maker Pegatron to Take Over Casing Unit to Fight Luxshare — iPhone assembler Pegatron Corp. is taking over Casetek Holdings Ltd., strengthening its position against rising Chinese rival Luxshare Precision Industry Co.
- China Tightens Bond Sale Rules for Developers to Curb Debt — China has taken a fresh step to rein in debt growth among the nation’s property developers, amid signs that a strong housing market recovery has prompted policy makers to refocus on risk prevention.
- After 50 Years, Swire’s Hang Seng Index Membership at Risk — Five decades ago, Swire Pacific Ltd. was a founding member of Hong Kong’s benchmark stock index. Now the family-run company risks losing its membership as Chinese technology firms increase their sway in the city’s equity market.
- SoftBank-Backed KE Raises $2.1 Billion in Above-Target IPO — KE Holdings Inc., a Chinese online property platform backed by SoftBank Group Corp. and Tencent Holdings Ltd., raised $2.1 billion in a U.S. initial public offering priced above the marketed range.
- By This Measure, China’s Yuan Is Best-Placed Since 2012 Rally — China’s yuan is flashing the strongest technical signal since 2012 for gains against the U.S. dollar.
- Aberdeen Asks U.S. to Shield Chinese Listings From Low-Ball Bids — Aberdeen Standard Investments Ltd. has urged the U.S. to protect minority shareholders in Chinese companies listed on American bourses from the risk of unfairly low take-private offers amid growing tensions between the world’s two biggest economies.
- China Investors Pick Winners From Xi’s New Economic Mantra — “Dual circulation” might not sound like the niftiest moniker for an equity strategy, but it’s a phrase that’s captured the attention of investors in China’s $9.4 trillion stock market.
- Swire Pacific Looks to China, Hong Kong for Recovery After Loss — Swire Pacific Ltd., the 204-year-old British trading firm based in Hong Kong, said its recovery is tied to growth in Asia’s financial hub and the Chinese mainland after months of political turmoil and the coronavirus pandemic tipped it into its first half-yearly loss since 2008.
- China’s Days as World’s Factory Are Over, IPhone Maker Says — A key supplier to Apple Inc. and a dozen other tech giants plans to split its supply chain between the Chinese market and the U.S., declaring that China’s time as factory to the world is finished because of the trade war.
- China’s Bond Data Hint PBOC Is Buying Government Debt — The People’s Bank of China may have bought government bonds from domestic banks in July, a rare move that has analysts puzzling over the monetary authority’s policy intentions amid a record amount of government debt issuance.
- China Mobile Revenue Rises as Pandemic Boosts Services Demand — China Mobile Ltd.’s revenue rose in the first half as the coronavirus pandemic prompted industries to accelerate steps toward digitalization, boosting demand at the country’s biggest phone company.
- India Bars China Ships From Oil Trade as Ties Strain Further — India’s state-owned oil majors have stopped hiring Chinese tankers to ship their crude and petroleum products after relations deteriorated between the two countries, although the move is unlikely to impact trade flows.
- Seven of World’s 10 Most Valuable Securities Firms Are Chinese — Bets on a merger of China’s two biggest brokerages have helped fueled a sector wide rally that has left the Communist Party-ruled nation with seven of world’s ten biggest securities firms in terms of market value.
Reuters
- Coach owner Tapestry’s loss smaller than expected on China recovery, cost cuts — Tapestry Inc reported a smaller-than-expected quarterly loss on Thursday, as a recovery in sales in China and a tight lid on expenses helped it weather some of the impact of the COVID-19 pandemic.
- Exclusive: ByteDance censored anti-China content in Indonesia until mid-2020, say sources — Chinese tech giant ByteDance censored content it perceived as critical of the Chinese government on its news aggregator app in Indonesia from 2018 to mid-2020, six people with direct knowledge of the matter told Reuters.
- In China, fears of financial Iron Curtain as U.S. tensions rise — A sharp escalation in tensions with the United States has stoked fears in China of a deepening financial war that could result in it being shut out of the global dollar system – a devastating prospect once considered far-fetched but now not impossible.
- China data mystery prompts talk of stealth PBOC bond buying — A mysterious increase in Chinese government bond (CGB) holdings by unknown investors has prompted speculation that China’s central bank has bought the debt in recent months to bolster the country’s economic recovery.
- Exclusive: China pushes First Capital merger in drive to take on Wall Street — China plans to merge domestic broker First Capital Securities with smaller rival Capital Securities, three sources said, underscoring Beijing’s determination to consolidate the brokerage industry to take on the giants of Wall Street.
- China plans to expand railway network to 200,000 km before 2035 — China plans to expand its railway network, the second largest in the world, by one-third in the next decade and a half, as part of a long-term plan to rev up urbanisation and stimulate local economies.
- China central bank issues 30 billion yuan of offshore bills: HKMA — China’s central bank issued 30 billion yuan ($4.3 billion) of offshore bills in Hong Kong on Thursday, according to a notice published by the Hong Kong Monetary Authority.
- China’s banking sector expected to dispose $490 billion of bad loans in 2020: Xinhua — China’s banking industry is expected to dispose 3.4 trillion yuan ($489.91 billion) of bad loans in 2020 to contain financial risks in an economy weakened by COVID-19, the official Xinhua News Agency reported.
- China’s July air passenger numbers fall 34.1% year-on-year: regulator — China’s aviation regulator said on Thursday that passenger numbers in July fell 34.1% from a year earlier.
- China extends anti-dumping tariff on Indian fibre optic product — China is extending an anti-dumping tariff on a fibre optic product made in India, the Ministry of Commerce said on Thursday.
- China’s debt collectors flourish as consumers flounder in a COVID-hit economy — It’s not a good sign for any economy when debt collectors are booming and in China right now, the industry is on a hiring spree.
- Passengers from mainland China to be allowed temporary transit through Hong Kong — Hong Kong International Airport said on Thursday that passengers from mainland China would be able to transit through Hong Kong to other destinations from Aug. 15 until Oct. 15, in a boost for its dominant carrier Cathay Pacific Airways Ltd.
Xinhua
- China’s central bank injects 150 bln yuan into market — China’s central bank Thursday pumped cash into the banking system via reverse repos to maintain liquidity.
- China remains Mongolia’s top export destination, import supplier — China remains Mongolia’s top export destination in the first seven months of 2020, accounting for 68 percent of Mongolia’s total exports, the Mongolian National Statistics Office (NSO) said Thursday.
- Exports of Chinese “stinky” noodles soar in July — Exports of Luosifen, an iconic delicacy known for its pungent smell in the southern Chinese city of Liuzhou, registered soaring growth in July, with a total value of 7.85 million yuan (about 1.1 million U.S. dollars), data from Liuzhou customs showed.
- Against the odds, Chinese companies still committed to U.S. market: survey — Against the odds of escalating anti-China rhetoric and ongoing uncertainty, Chinese companies continue to be committed to the U.S. market, according to a new survey by the China General Chamber of Commerce-USA (CGCC).
- China’s FDI inflow up 15.8 pct in July — Foreign direct investment (FDI) into the Chinese mainland, in actual use, expanded 15.8 percent year on year to 63.47 billion yuan (about 9.14 billion U.S. dollars) in July, the Ministry of Commerce said Thursday.
Other Publications
- AP: China’s deadly summer floods have caused $25B in damage — Summer floods in China have left more than 200 people dead or missing and caused $25 billion in direct damage, an emergency management official said Thursday. The floods struck major river systems across the central and southern parts of the country.
- AP: Ricketts bans Chinese app on state phones, citing security — Nebraska Gov. Pete Ricketts has banned the Chinese app TikTok on state government phones, citing security concerns. Ricketts said Nebraska’s ban is intended to protect the state against cyberattacks.
- Business Insider: The Trump campaign accidentally gave YouTube ad money to Chinese state media — At least 22 Trump campaign ads ran on YouTube channels linked to the Chinese government this month alone, according to an analysis of thousands of YouTube videos by cybersecurity firm Omelas.
- The Economist: Xi Jinping is reinventing state capitalism. Don’t underestimate it — This ratcheting up of pressure partly reflects electioneering: being tough on China is a key strut of President Donald Trump’s campaign. It is partly ideological, underscoring the urgency the administration’s hawks attach to pushing back on all fronts against an increasingly assertive China. But it also reflects an assumption that has underpinned the Trump administration’s attitude to China from the beginning of the trade war: that this approach will yield results, because China’s steroidal state capitalism is weaker than it looks.
