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
- Alibaba Online Orders Amid Coronavirus Fuel Sales Recovery — Alibaba said fiscal first-quarter profit more than doubled from the same period a year ago, as the coronavirus outbreak led to more shoppers buying daily necessities and other products online.
- Pentagon Approves Five Drone Makers for Military Sales — The U.S. Department of Defense has given five small drone manufacturers permission to sell to the U.S. military and federal agencies, in the wake of last year’s ban on these agencies buying Chinese-made drones.
- How China Targets Scientists via Global Network of Recruiting Stations — China is targeting top scientific and technological expertise in the U.S. and other advanced nations through an expanding network of more than 600 talent-recruitment stations around the world, a new report has found.
- China’s Chip Fab Purchases Will Be Big in Japan — China desperately wants a chip-making industry of its own, but U.S. dominance in chip making equipment is a huge vulnerability. Non-U.S. vendors like Tokyo Electron could benefit.
- Copper Prices Rise Above $3 Amid Growth Hopes — Copper rose above $3 a pound for the first time in more than two years, extending a recent rally driven by steady Chinese demand and disruptions to global supply.
- Senators Warn Trump Saudi-Chinese Uranium Plant Risks Spread of Nuclear Weapons — A bipartisan group of U.S. senators warned President Trump on Wednesday that Saudi Arabia’s undeclared nuclear and missile programs pose a serious threat to efforts to stop the spread of nuclear weapons in the region and requested briefings on the subject.
- Fundraising at Company Tied to Steve Bannon and Guo Wengui Faces Probe — A media company linked to former Trump political adviser Steve Bannon and exiled Chinese businessman Guo Wengui raised more than $300 million this spring in a private offering now being investigated by federal and state authorities, say people familiar with the matter.
- U.S.-China Trade Talks Delayed, Not Derailed — U.S. and Chinese trade negotiators plan to confer by video in the coming days over progress in fulfilling terms of the “Phase One” trade deal and U.S. actions against Chinese technology firms, according to officials in both nations.
- Premium Retailers Ride China’s Recovery From Covid-19 Crisis — The coronavirus pandemic has created a divide in China’s consumer economy, with makers of premium products rebounding strongly but those catering to mass-market consumers finding it tougher to return to growth.
The Financial Times
- Alibaba: diverging mirror — Domestically the Chinese ecommerce group has run into fierce competition from Tencent. It is counting on the US for growth.
- Deglobalisation does not mean more deregulation — Welcome to a new world of trade policy as the US, EU and China compete to write the rules.
- China cautious on hitting back at US companies after Huawei sanctions — Beijing is unlikely to upset the innovation and economic benefits brought by American groups, say analysts.
The New York Times
- U.S. Suspends Bilateral Agreements With Hong Kong, Escalating Tensions With China — The actions are part of the Trump administration’s broader efforts to punish China for its attempts to stifle political dissent in Hong Kong.
Caixin
- Overseas Investors Favor Shenzhen Over Shanghai as Tech Looks a Better Bet Amid Pandemic — Average daily value of A-shares changing hands via Shenzhen-Hong Kong stock connect program more than doubled to $6.2 billion in first half.
- Record Influx of New Investors Into China’s Stock Market in July — New accounts double to 2.4 million last month from June as market surge entices more investors to disregard uncertainties around pandemic and trade tensions.
- Pandemic Bureaucracy Makes Iron Ore a Lot More Expensive — One trader estimates 30% of China’s imported ore is stuck on ships anchored offshore while their crews wait to be checked for virus.
- GM to Launch 5G-Connected Cars in China From 2022 — General Motors will equip all new Cadillac models and most new Buick and Chevrolet cars in China with 5G connectivity from 2022, as the country accelerates the deployment of 5G networks that enable emerging technologies like autonomous driving, according to a report by CNBC.
- Chinese Delivery Robot Startup PuduTech Closes $14.5 Million Funding Round — Chinese indoor delivery robot startup PuduTech received two significant investments in less than two months, in a clear sign that investors are betting on a future in which robot-staffed hospitals, restaurants and hotels are commonplace.
- JD.com Healthcare Arm Raises $830m Series B Funding From Hillhouse — JD Health, the healthcare arm of China’s JD.com, has entered a deal to raise more than $830 million from Hillhouse Capital in a non-redeemable Series B preference share financing, JD.com said in its earnings release Monday.
South China Morning Post
- China’s sovereign digital currency plan becomes a hot guessing game amid leaks and expectations — Discussions about China’s much-hyped sovereign digital currency started heating up again after the Ministry of Commerce unveiled a plan last week to expand trials of the digital yuan across the country, fanning speculation that its use could be much wider than expected.
- Nearly 235 million social media profiles from Instagram, TikTok and YouTube exposed in data leak — A Hong Kong-registered company that sells data on social media influencers has exposed as many as 235 million user profiles scraped from Instagram, TikTok, and YouTube on the web without a password or any other authentication required to access it, according to a report by British research firm Comparitech.
- Investors are piling into China’s offices, shops and retail space, defying spending slumps across Asia-Pacific real estate markets — Property buyers piled into China’s commercial and retail real estate in the three months ended June even as the country was barely out of its coronavirus outbreak, outpacing demand across the rest of the Asia-Pacific region, according to a report.
- China’s July new stock accounts more than double to 2.43 million as traders continue their headlong dive into market to sustain rally — The Chinese population is continuing its headlong plunge into the stock market, a second monthly surge that sustains the momentum behind one of the world’s best-performing major benchmarks this year.
- Coronavirus: China seeks solution to unemployment crisis with flexible jobs — In June, Qiu Xiaogang decided to close his Happy Noodle Shop near an expressway in northern China’s Inner Mongolia autonomous region and set up a street food stand to sell grilled meat skewers.
- China keeps loan rate steady for fourth straight month — China as expected kept its benchmark lending rate steady for the fourth straight month on Thursday.
- China’s wish to end US dollar dominance is unlikely to come true with no genuine challenger in the wings — One thing that Beijing hates about the world is the dominance of the US dollar, and China has been working for over a decade to undermine its role in global trade and investment. But China’s wish to dethrone the US dollar as the main anchor currency may not come true any time soon even though it has weakened recently, analysts said.
- China’s population: the big picture of a greying society — China is the world’s most populous country, home to more than 18 per cent of the people on the planet.
- Washington’s suspension of US-Hong Kong reciprocal tax exemption deal for shippers a ‘lose-lose situation’, experts warn — The United States’ suspension of a reciprocal tax exemption arrangement with Hong Kong for shipping companies will jack up the cost of trade and fuel uncertainty and anxiety for the pandemic-ravaged industry, ending up in a “lose-lose” situation, stakeholders warn.
Bloomberg
- Foreign Drug Giants Undercut by Up to 95% in China Bidding — Global drugmakers from Merck & Co. to Novartis AG lost another slice of their lucrative China business, as domestic competitors undercut them with bids more than 95% lower to supply treatments to public hospitals.
- China Expects Trade Deal Talks With U.S. to Take Place Soon — China confirmed plans to talk with U.S. officials soon to review progress on their preliminary trade deal, a rare engagement between the world’s largest economies as relations deteriorate on other issues ranging from human rights in Hong Kong to technological dominance.
- China’s Stock Mania Lures Most New Stock Traders Since 2015 — China’s July stock surge lured the biggest intake of new investors in five years, and more people are expected to follow suit even as the rally’s momentum fades.
- Asia Wealth Management Hits Snag With Bankers Stuck at Home — Private bankers in Hong Kong and Singapore had their wings clipped by the pandemic, thwarting their pursuit of millionaires scattered across a region where wealth is growing faster than anywhere else.
- Chinese Court Lowers Interest Rates Allowed on Private Loans — China’s Supreme Court ordered interest rates on private loan agreements between individuals and small businesses to be lowered by as much as 10 percentage points, a ruling it said will foster economic growth and stabilize the sector.
- Swiss Watch Export Decline Moderates in July as China Rebounds — Swiss watch exports moderated their monthly decline, helped by rebounding demand in China.
- Tycoon Lim’s Hong Kong Cruise Operator Halts Debt Payments — A cruise ship operator controlled by Malaysian tycoon Lim Kok Thay suspended all payments to creditors, triggering a 36% drop in the company’s shares and denting investor confidence in Lim’s wider business empire.
- China Electric Scooter Duo Gets Rich With Vin Diesel’s Help — Vin Diesel made a fortune playing the American muscle-car driving anti-hero in the “Fast & Furious” films. These days, he’s helping a husband-and-wife team from China get even richer selling electric scooters.
- Hong Kong Mortgage Relief Won’t Revive Weak Property Market — The Hong Kong Monetary Authority’s move to relax loan rules for the first time in more than a decade is unlikely to provide a significant boost for a commercial property market battered by the pandemic and a deep recession.
- China Brokers Race to Raise Funds to Fuel Stocks Frenzy — China’s brokerages are tapping the capital markets for funds at a record pace to expand their businesses and feed a world-beating stock rally.
- TikTok Poised for Deal to Avoid Millions in U.S. Privacy Damages — TikTok’s Chinese owner is proposing to settle consumer privacy litigation that has exposed it to hundreds of millions of dollars in damages as the video-streaming app prepares for a possible acquisition under threat of being shut down in the U.S. over national security concerns.
- New Fund Model May Help China’s Fickle Investors Stay the Course — Retail investors in China are notorious for churning — rushing lemming-like in and out of the stock market. It’s a dangerous way of treating life savings, especially when a pandemic has limited earnings visibility.
- GM Electrifies China Lineup to Challenge Tesla’s Early Lead — General Motors Co. made a case that it has a strategy to reverse its decline in China and chase after Tesla Inc.’s lead in selling electric vehicles in the world’s largest market.
Reuters
- In U.S.-China tech war, investors bet on China’s localisation push — As the U.S.-China “tech war” widens, investors are betting on China’s efforts to replace U.S. technologies with indigenous applications to run networks in the state sector.
- Breakingviews – Wall Street prefers China to Pennsylvania Avenue — American investors don’t appear to give a hoot about their politicians’ posturing at Beijing. Shares of Chinese companies in New York have rallied even as legislators try to delist them, and initial public offerings are popping. That may be partly investment banker greed, and perhaps traders’ short attention spans. But it’s also an implicit bet that President Donald Trump, and his crew of China hawks, are bluffing.
- Chinese EV maker Nio launches battery leasing service, eyes global market — Chinese electric vehicle (EV) maker Nio Inc has launched a battery leasing service that will allow drivers to buy an EV without owning the battery pack – one of the most expensive EV components – thereby lowering the starting price of its cars.
- China’s outstanding loans to small businesses up 27.5% year-on-year by end-July — China’s outstanding loans to small businesses stood at 13.7 trillion yuan ($1.98 trillion) by the end of July, up 27.5% from a year earlier, the central bank said on Thursday.
- Hong Kong will suspend some legal cooperation with U.S., China says — Hong Kong will suspend an agreement on mutual legal assistance with the United States, China’s foreign ministry said on Thursday, in a tit-for-tat response to Washington ending some agreements with Hong Kong.
- Australia government may block China Mengniu’s milk brands deal: media — Australia’s government may block China Mengniu Dairy Co Ltd’s purchase of some of the country’s best-known milk brands, the Australian Financial Review reported on Thursday, citing unidentified sources who blamed “diplomatic issues”.
- China’s Supreme Court slashes ceiling of legal private lending rate — China’s Supreme People’s Court said on Thursday that it will slash the ceiling of the private lending rate protected by law, a move to crackdown on usurious loans and lower the costs of country’s struggling small businesses.
- Telco SoftBank pleased 5G network given ‘clean’ status by U.S — Japanese wireless carrier SoftBank Corp said on Thursday it was pleased its 5G network had been given “clean” status by the U.S. government as part of a U.S. effort to exclude Chinese vendors from next-generation networks.
- China CNOOC’s interim profit tumbles, cuts costs further — China’s national offshore oil and gas producer CNOOC Ltd said first-half profit slumped by nearly two-thirds to the lowest since December 2017, as the coronavirus pandemic battered energy demand and sent oil prices to historical lows.
- China keeps lending benchmark LPR steady for fourth straight month, in line with market — China kept its benchmark lending rate for corporate and household loans steady as expected for the fourth straight month at its August fixing on Thursday.
Xinhua
- Economic Watch: China’s stable housing market offers healthier support for economy — After years of rapid growth, China’s once red-hot property market is entering a period of stable and sustainable development and will continue to shore up the economy, analysts said.
- U.S.-listed Chinese firms trade mostly lower — U.S.-listed Chinese companies traded mostly lower on Wednesday, with seven of the top 10 stocks by weight in the S&P U.S. Listed China 50 index ending the day on a downbeat note.
Other Publications
- CNBC: Apple seeing largest iPhone upgrade potential in China in at least 4 years, Morgan Stanley says — Morgan Stanley said that over 68% of the iPhone install base in China is comprised of devices that are at least 2 years old, the highest level in four years providing “significant iPhone upgrade potential.” Apple is expected to release a 5G iPhone later this year.
- Forbes: Why 200 Chinese Companies May Soon Delist From The U.S. Stock Exchange — unless foreign companies are compliant with the Sarbanes Oxley Act (SOX), they might even be kicked out. That’s around 200 Chinese firms, including names every China investor knows: Alibaba, Sina, Baidu. You name it. They each have a decision to make: comply with SOX, or list someplace else.