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
- TikTok Deal Could Challenge Microsoft CEO’s Light Touch on Acquisitions — If Microsoft prevails in its bid to buy TikTok’s U.S. operations from Beijing-based ByteDance, the software giant is likely to have to take a more hands-on role than it has with previous acquisitions.
- China to Expand Testing of a Digital Currency — China said it would expand a pilot program for its digital currency to include a number of large cities, advancing a pioneering initiative by a major central bank to launch an electronic payment system.
- Company Fined for Importing Sweetener U.S. Says Was Made With Chinese Prison Labor — A U.S. importer has been fined $575,000 for importing powdered food sweetener that was made by prison labor in China, in violation of federal trade laws, the U.S. Customs and Borders Protection said.
- ‘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.
The Financial Times
- China retail sales fall for seventh straight month — Households’ reluctance to spend casts doubts over country’s economic recovery.
- Aberdeen warns of ‘dramatic’ undervaluations in China delistings — UK fund manager says Trump administration measures could hit $1tn in equity investments.
- Lenovo’s sales strong despite growing threat of US sanctions — Computer maker’s American market share grows as other Chinese tech companies fall foul.
The New York Times
- U.S. Labels Chinese Language Education Group a Diplomatic Mission — State Department officials said the move was aimed at informing American schools of potential propaganda from the government group’s programs, largely known as Confucius Institutes.
Caixin
- Exclusive: China Eyes National Commodity Indexes as Demand Grows for Hedging Tools — China’s securities regulator is coordinating a move to set up a company to compile indexes that could be used as benchmarks for commodity futures trading.
- Hong Kong’s Police Credit Union Moves Assets to Chinese Banks — Credit union says it has been transferring assets to Chinese banks since May amid rising China-U.S. tensions.
- Guizhou Officials Seek to Reassure Bond Investors Amid Mounting Debt Concern — One of China’s poorest provinces, with officially alarming debt levels, outlines measures to ensure payment of locally issued bonds and vows zero defaults.
- China’s Economic Recovery Continues, but Analysts Warn of Weakening Momentum — Consumption continues to lag behind investment and exports.
- In Depth: China’s Tech Giants Caught Between Tightening Scrutiny at Home and Abroad — While hostility is growing from overseas regulators, there are signs the domestic antimonopoly body may start to intervene in the sector.
- Beijing to Reopen Market at the Center of City’s Biggest Covid-19 Outbreak — Merchants at the Xinfadi Wholesale Market will no longer be allowed to sell to individuals.
- Money-Losing Chinese Real Estate Veteran Sells Itself to Wall Street — Shares of KE Holdings rose nearly 90% in their New York trading debut, as the company also known as Beike raised $2.1 billion.
- China-U.S. Freight Rates Take to the Skies — Cost for shipping goods from China to U.S. has risen nearly 90% in the last three months as exporters worry about resumption of trade war.
- China Mobile Takes On China Broadcasting Network as 5G Partner — World’s largest mobile telecom operator is to build and operate the new wireless network while China Broadcasting Network is to contribute funding in project planned for next year.
- Pompeo Hints At ‘Broader’ Ban on Chinese Apps After Trump’s Executive Orders Targeting TikTok and WeChat — Recent utterances by U.S. secretary of state Michael Pompeo have spread unease among China’s tech companies with a presence in the U.S. and his latest speech delivered in Prague is no different.
South China Morning Post
- Chinese banks warned to ‘stay on high alert’ for possible pain of US financial sanctions — Talk of possible US financial sanctions against China has ratcheted up in recent weeks among bankers and researchers in Beijing as the looming risks are no longer negligible.
- China economy loses steam amid weak demand, coronavirus and floods, analysts say — Facing a multitude of headwinds at home and abroad, from floods along the Yangtze River, to coronavirus outbreaks in the West, and an inability to stimulate domestic demand, analysts said China’s economic recovery lost its head of steam in July.
- American Express: new yuan card settlement network promotes global use of China’s currency — American Express’ entry into China’s US$27 trillion payment market may help increase the use of the yuan across borders amid worsening US-China tensions, according to analysts.
- China’s Huawei, ZTE set to be shut out of India’s 5G trials over national security concerns — China’s Huawei Technologies and ZTE Corp. are set to be kept out of India’s plans to roll out its 5G networks as relations between the two countries hit a four decade low following deadly border clashes.
- Hong Kong transit passengers give Cathay Pacific a lift to start second half of the year — A jump in transit customers boosted Cathay Pacific Airways’ travel volumes in July, contributing to a 59 per cent monthly increase in passengers, the airline said on Friday.
- JD.com ramps up China logistics expansion with US$432 million deal to acquire Kuayue Express — Subsidiary JD Logistics will acquire a controlling interest in Shenzhen-based courier services provider Kuayue Express.
- Film producers hang on as China’s economy creaks back into life, putting industry in shape to resume break-neck growth pace — Beijing Enlight Media, Wanda Film and Alibaba Pictures are the three most valuable private film companies in China, leading the world’s most populous nation in its growth into the largest global film market, according to Hurun Report.
- China’s high-speed railway network to double in length by 2035 under new blueprint — China’s unprecedented railway spending boom will continue for at least another 15 years and see its high-speed network nearly double in length, China Railway Group, the state-owned railway builder, said in a new blueprint published on Thursday.
- Hong Kong economy expected to shrink 6 to 8 per cent for year, marking first back-to-back contractions on record — Hong Kong’s economy is expected to shrink by between 6 and 8 per cent this year – in what would be the first back-to-back annual contractions since record-keeping began 1961 – as the city grapples with a third wave of coronavirus infections and escalating US-China tensions.
Bloomberg
- Jimmy Lai Says Don’t Buy His Stock. Investors Buy It Anyway — Jimmy Lai, the media mogul who owns the pro-democracy Apple Daily newspaper, warned investors not to buy his Next Digital Ltd. media empire’s stock because the company’s fundamentals don’t justify its recent rally. Moments later, the shares resumed their climb in Hong Kong.
- Alibaba and Xiaomi Get Into Hong Kong’s Benchmark Index — Alibaba Group Holding Ltd. will be included in Hong Kong’s Hang Seng in one of the biggest revamps in the benchmark index’s 50-year history.
- Xi Gambles With Third Rail of China Politics: the Dinner Menu — Xi Jinping wants 1.4 billion diners to clean their plates. But the Chinese president’s campaign against food waste risks touching a third rail in a country where meals are a cornerstone of private life.
- One of China’s Most Popular LGBT Organizations Halts Activities — One of China’s most active LGBT communities is ceasing public activities, just over a decade after its founding.
- China Approves Coal Merger to Create New Mining Giant — China has approved a merger of two coal miners to create a new giant in the world’s top producer and consumer of the fuel.
- Even the Most Eye-Popping Economic Data Is a Skip for Markets — Investors continued to shrug at economic data surprises this week, including in Australia and China, amid distortions caused by the pandemic.
- China’s Peer-to-Peer Lending Purge Leaves $115 Billion in Losses — China’s multi-year clampdown on its peer-to-peer lending industry has whittled the number to just 29 platforms, down from about 6,000 at its peak, according to the nation’s top banking regulator.
- Borrowing to Buy Stocks Pushes China’s Record Household Debt — After receiving dozens of phone calls and text messages from banks touting cheap, unsecured and easy-to-get consumer loans, Eric Zhang visited one of China’s largest lenders in June and borrowed 400,000 yuan ($57,600) at an interest rate of 4%.
- China Tech Shows There’s a Disconnect Between Shoppers, Merchants — It’s nowhere more evident than China’s tech sector.
- AI Unicorn SenseTime Is Said to Mull Hong Kong, China IPO — SenseTime Group Ltd., China’s largest artificial intelligence company, is exploring a dual listing in Hong Kong and China as it closes in on $1.5 billion of pre-IPO financing, according to people familiar with the matter.
- Korea Overtakes China as Top Asia Sustainable-Debt Seller — South Korea has overtaken China to lead Asia in sales of socially-responsible bonds this year, as global issuance of debt to fund the fight against Covid-19 surges.
- China’s Restraint Shouldn’t Be Confused With Resignation — U.S. Senator Marco Rubio has been the target of Chinese sanctions twice this summer, not that he cares much.
- Baidu-Backed Iqiyi Tumbles After Disclosing SEC Probe of Records — Iqiyi Inc., a Chinese Netflix-style streaming service that’s backed by Baidu Inc., tumbled as much as 19% after disclosing that the company is under investigation by the U.S. Securities and Exchange Commission.
Reuters
- Ant Group makes pre-listing filing in China for blockbuster IPO — Ant Group, the fintech arm of Chinese e-commerce company Alibaba Group Holding , has made a preparatory filing with China’s securities regulator for its planned blockbuster initial public offering.
- Chinese firms hit by new import hurdles in India, sources say — Chinese firms like Xiaomi are facing delays getting approvals from India’s quality control agency for their goods, five industry sources told Reuters, as the business environment deteriorates after a clash on their Himalayan border.
- China’s economic recovery underwhelms as consumer comeback stays elusive — China’s retail sales slipped in July, dashing expectations for a modest rise, as consumers in the world’s second-largest economy failed to shake off wariness about the coronavirus, while the factory sector’s recovery struggled to pick up pace.
- China air pollution falls 10.8% because of coronavirus slowdown — China saw average concentrations of lung-damaging airborne particles known as PM2.5 fall by 10.8% from January to July as industry slowed because of the coronavirus, data showed on Friday, though levels were still well above WHO recommendations.
- For China’s landlords, rent-to-riches dreams fade in red flag for fragile economy — Not yet 30, Beijing office worker Li thought she was already on her way up China’s private property ladder with two apartments bought and rented out. Then came the new coronavirus, jobless tenants leaving town and a rent falloff.
- Chinese flat-rolled aluminium products in EU anti-dumping probe — The European Commission on Friday began an investigation into whether China is dumping flat-rolled aluminium products in the 27-country European Union based on a complaint by a European group of producers.
- Trucks, excavators to help push China’s diesel demand to record — China’s diesel demand is likely to hit a record this year powered by trucking activity, as Beijing’s aggressive stimulus fuels a construction and delivery boom and a speedy recovery in heavy machinery sales, analysts say.
- Sinopec merges two Guangdong-based refineries, lifts more U.S. oil — China’s Sinopec Corp has merged two subsidiary refineries in Guangdong, two company sources said, as the state refining giant looks to improve operations in the face of rising competition in South China.
- China produces record crude steel in July on strong demand — China produced a record amount of crude steel in July as the government boosted infrastructure spending, while the manufacturing sector rebounded as the world’s second-largest economy reopened after lockdown restrictions.
- A faltering U.S.-China trade deal is now the nations’ strongest link — Top U.S. and Chinese trade officials are expected to recommit to a Phase 1 trade deal during a review on Saturday, even though China’s promised purchases of U.S. exports are far behind schedule.
- Evergrande sells property management unit stake for $3 billion ahead of possible IPO — China Evergrande Group said it sold 28% of a property management unit for HK$23.5 billion ($3 billion), bringing in strategic investors ahead of a possible IPO for the unit.
- China’s July refinery output hits new monthly peak as top plants return from overhauls — China’s refinery output jumped 12% in July from the same month a year earlier, hitting the highest on record for any single month, as several major state plants resumed operations after maintenance overhauls.
- China’s property investment in July quickens to over one-year high — China’s July property investment grew at the quickest clip since April last year, underpinned by solid construction activity and easier lending as the economy gradually recovers from the coronavirus crisis.
- China launches anti-subsidy probe on polyphenylene ether imports from U.S. — China’s commerce ministry said on Friday it has started an anti-subsidy 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.
- Exclusive: China pushes First Capital merger in drive to take on Wall St. — 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 central bank to conduct MLF operations on Monday as 400 billion yuan of such loans expire — China’s central bank said it would conduct medium-term lending facility (MLF) operations on Monday, as a batch of 400 billion yuan ($57.6 billion) worth of such loans expired on the day
- Chinese firms flood into U.S. IPOs despite delisting threat — The U.S. government is threatening to delist Chinese companies that do not meet U.S. accounting standards, but mainland firms are rushing to offer their shares on New York exchanges, sometimes in blockbuster deals.
Xinhua
- China’s industrial output up 4.8 pct in July — China’s value-added industrial output, an important economic indicator, continued to recover as factories stepped up production amid effective COVID-19 control, official data showed Friday.
- China 10-year treasury bond futures open higher Friday — China’s 10-year treasury bond futures opened higher on Friday, with the contract for settlement in September 2020 opening 0.08 percent higher at 99.45 yuan (about 14.3 U.S. dollars).
Other Publications
- The Diplomat: The Xinjiang Camp Debt Trap — New revelations bring to light financial abuses of those interned in China’s “training centers” in Xinjiang.
- Foreign Policy: Kamala Harris Is a Soft-Power Boon for America’s Global Image — amala Harris wants to “cooperate with China on global issues like climate change” but not “allow [its] human rights abuses to go unchecked.” She wants to block weapons sales to Saudi Arabia and end U.S. support for the war in Yemen but maintain the counterterrorism partnership with the kingdom.
- Business Insider: Amid rising US-China trade tensions, electronics manufacturers like Foxconn will need to build facilities within the markets they plan to sell — As with Foxconn, the success of global electronics manufacturers — particularly those competing in price-sensitive consumer segments — will be predicated on their ability to adopt manufacturing strategies that serve the national interests of the markets they intend to serve.
