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
- India Says It Blocked ‘Provocative’ Chinese Troop Moves in Himalayas — India said Monday its forces blocked Chinese troops from taking control of new territory high in the Himalayas, in the latest sign of tensions along the two country’s disputed border.
- Private-Equity Firm to Sell Stake in Online Retailer Three Squirrels — Capital Today, a private-equity firm based in China, plans to sell its stake in Three Squirrels, a Chinese online snacks retailer, according to people familiar with the matter.
- China’s Yuan Strengthens as Trade and Economic Concerns Fade — China’s yuan has rallied to its strongest levels in more than a year, as the country’s economy continues to recover and investors grow less concerned about fresh U.S. tariffs.
- Luxury Brands Dust Off Their Japanese Lessons — Covid-19 is making expensive European brands even more reliant on Chinese spending. The industry has been here before.
- China’s Big Banks Report Profit Drops — China’s major banks reported their biggest profit drops in more than a decade, as the economic impact of the pandemic led them to take large provisions against potential bad loans.
- China’s Attempts to Spur Consumption Show Signs of Working — A gauge of Chinese business activity outside the factory floor rose to its highest level in 2½ years in August, driven by the service sector.
- As KFC Recovers in China, Parent Yum China Plans Big Hong Kong Listing — China’s largest restaurant company has begun taking orders for a Hong Kong share sale that could raise more than $2.5 billion.
- U.S. Hotelier Agrees to Buy Hospitality Software Firm From Chinese Owners Ordered to Sell by Trump — A U.S. hotel operator has agreed to purchase hotel property management software firm StayNTouch Inc., a $46 million deal that came together after President Trump said the company’s existing Chinese ownership poses a threat to U.S. national security.
- China’s Theme Parks Ride a Boom as Tourists Have Nowhere to Go — With foreign vacations off limits, China is in the middle of a theme-park surge as domestic tourists seek amusements in their own backyards.
- CLSA’s CEO to Depart, in Latest Shake-Up at Chinese-Owned Broker — CLSA Chief Executive Rick Gould is leaving the Hong Kong brokerage after less than a year and a half in that role, in the latest senior departure from the firm owned by China’s Citic Securities.
- Herbalife Nutrition Agrees to Pay $123 Million to Settle China Bribery Allegations — Herbalife Nutrition Ltd. on Friday agreed to pay $123 million to settle charges that it provided corrupt payments to government officials in China and falsified its books and records.
The Financial Times
- Trump ban on Chinese drone parts risks worsening wildfires — Only a quarter of recommended controlled burning has been carried out because of order.
- Domestic demand drives China’s post-pandemic recovery — Services sector activity rose in August while PMI data showed manufacturing also expanded.
- Sinopec pushed into its first half-year loss by pandemic — China’s biggest oil refiner hit by effect of coronavirus on demand for fuel.
- China strikes debt deals with poor nations under G20 scheme — Half of requests to defer payments have been agreed — but key Angolan test awaits.
- Huawei focuses on cloud computing to secure its survival — Chinese company’s fast-growing unit still has access to US chips despite sanctions.
The New York Times
- With a Wary Eye on China, Taiwan Moves to Revamp Its Military — The self-governing democracy is taking steps to bolster its armed forces in order to deter or defeat an invasion from China — with or without American help.
- TikTok Deal Is Complicated by New Rules From China Over Tech Exports — In an 11th-hour twist, Beijing raised a potential hurdle for a sale of TikTok, further roiling the race to buy the Chinese-owned app.
Caixin
- Exclusive: Two More State-Owned Banks Join China’s Digital Currency Trials — Postal Savings Bank and Citic Bank have signed on to the pilot program.
- Japanese Financial Giant Wins Approval for Majority-Owned Chinese Securities Venture — Daiwa Securities will own 51% of the new company, with remaining stake controlled by two state-owned firms.
- Exclusive: China UnionPay Picks New President — Cai Jianbo, who also serves as chairman of UnionPay International, has been promoted from executive vice president.
- Hong Kong and Shenzhen Bourses Widen Access to Each Other’s Investors With ETF Deal — New arrangement comes as China aims to further open up its financial markets to overseas.
- AmEx Becomes First Foreign Firm to Do Bank Card Clearing in China — Services are offered by a 50-50 joint venture between AmEx and Chinese payment services provider Lianlian.
- Cover Story: How China Is Racing to Catch Up With Money Launderers — Rapid evolution of financial criminality has left a 13-year-old anti-money laundering statute in the dust, forcing authorities to press for tougher, more effective rules and penalties.
- L.A.-Hong Kong Internet Cable Sits Unused After U.S. Flags Security Threat — Google and Facebook-backed plan put on hold due to concern over local partner company amid deteriorating U.S.-China relations.
- TCL Technology Takes Over China-Based Samsung LCD Plant — Deal will see Chinese company pay $1.08 billion in cash and shares for 60% of the factory owned by the South Korean giant, which is moving out of the space.
- Tsingtao Drinks Up Nestle’s China Water Business as Swiss Giant Looks to Offload Underperforming Units — Brewery inks deal to buy two brands, three factories and to license the multinational’s ‘Pure Life’ water brand.
- Sequoia Capital China Files for Three New Funds With SEC — Sequoia Capital China, the domestic arm of Silicon Valley venture capital major Sequoia Capital, has submitted filings for three new funds with the U.S. Securities and Exchange Commission (SEC) on August 27.
- ZTE Grows China Market Revenue As U.S. Sanctions Bite — Amid U.S. sanctions, Chinese telecom equipment maker ZTE counted its home China market as its biggest revenue source — and the only source to post growth — during the first half of 2020.
South China Morning Post
- China revises list of technologies banned, restricted for export — China issued on Friday a revised list of technologies that are banned or restricted for export amid the country’s rapid development in science and technology.
- Hong Kong to record highest deficit in history as top officials argue city must ‘reserve financial strength’ to cope with storms ahead — Hong Kong will record the highest deficit in its history this financial year and must reserve cash to cope with a possible winter resurgence of Covid-19 and escalating tensions between China and the US, the city’s top officials have warned.
- Chinese-born Australian CGTN journalist Cheng Lei detained in China — A Chinese-born Australian journalist for CGTN, the English-language channel of China Central Television, has been detained in China, Australia’s government said on Monday.
- Australia to investigate foreign interference at universities, amid China concerns — Australia’s parliament is set to probe alleged foreign interference at public universities, a government minister said on Monday, as concerns grow about Chinese influence.
- China’s economic recovery continues as services sector grows at fastest pace in over two and a half years in August — China’s non-manufacturing sector expanded as its fastest pace since January 2018 last month, highlighting continued recovery in the economy from the coronavirus damage early in this year.
- China Construction Bank posts worst earnings in more than a decade on bad loan surge — China Construction Bank, the world’s second-largest lender by assets, reported its worst earnings in more than a decade as a cascade of loans to businesses across China are going bad.
- China’s urbanisation has fuelled economic growth, but without redirection it will come at a cost — Urbanisation, the process by which people leave rural areas for cities, has powered China’s economic development in recent decades and altered the country’s natural and social landscapes as new towns mushroomed across the country.
- US sanctions over South China Sea will not affect blacklisted Chinese construction giant CCCC, company says — The dredging business of state-owned engineering giant China Communications Construction Company (CCCC) will not be adversely affected by fresh US sanctions, but questions remain as to whether there could be reputational damage to its Australian and US subsidiaries, including a marine engineering group in Texas.
- China’s internet watchdog tightens online controls with new app to squash rumours — China’s cyberspace watchdog has launched a new smartphone app to spearhead its latest campaign against online misinformation in the world’s biggest internet market.
- Seacoast Royale extends brisk sale for a fourth weekend as Hong Kong buyers snap up homes amid low rates and easing Covid-19 — The Seacoast Royale apartment complex in Tuen Mun extended its brisk sales for the fourth weekend, as decreasing cases of coronavirus in Hong Kong spurred more homebuyers to venture out of lockdown to take advantage of low borrowing rates amid a flood of liquidity.
- Coronavirus: students go back to school in China after authorities say pandemic is under control — Hundreds of millions of students across China have begun returning to the classroom, after education authorities hailed a “decisive victory” against the coronavirus.
- Plan to build new homes on brownfield sites in New Territories inefficient, not bold enough, Hong Kong think tank says — The Hong Kong government’s plan earmarking eight brownfield sites in the New Territories for public housing is time-consuming and inefficient, according to a prominent think-tank.
- Academic marginalisation of Hong Kong’s ethnic minority groups increases amid coronavirus pandemic — Children from ethnic minority groups in Hong Kong have long struggled to learn Cantonese, but a lack of access to computers or the internet during the Covid-19 pandemic is a further obstacle to their studies, according to advocates and parents.
- Amount spent by mainland Chinese on Hong Kong life insurance policies plummets 76 per cent as Covid-19 brings visitor arrivals to a standstill — The amount of money spent by mainland Chinese tourists on life insurance in Hong Kong has suffered the worst slump on record, plunging by three quarters as the Covid-19 pandemic prevented people from travelling to the city.
- US sanctions on China’s Huawei spell trouble for Shenzhen economy — When Ren Zhengfei, a former officer in the People’s Liberation Army, established Huawei in the Shenzhen special economic zone in 1987, the boomtown was still struggling to gain a meaningful spot in China’s economic landscape. It was dwarfed not only by neighbouring Hong Kong, but by other mainland Chinese cities.
- China’s service industries catching up as life returns to normal after coronavirus shock wave slammed economy — With a relaxation of rules for wearing masks and the loosening of social-distancing requirements, life has started to return to normal across China, allowing economic activities in the service sector to expand while offering a boost to balance the uneven recovery of the world’s second-largest economy, analysts said.
- Thailand delays US$724 million China submarine deal after public outcry over economic pain — Thailand delayed on Monday its US$724 million purchase of two submarines from China, following public outrage over the controversial deal as the kingdom’s economy flatlines due to the coronavirus pandemic.
Bloomberg
- Veolia Pounces on Rival to Create Waste Giant to Counter China — Veolia Environnement SA moved to buy its biggest rival in a bid to create a global waste and water giant and stay ahead of looming competition from China.
- Indian Stocks Slide Most Since May After Troops Clash With China — Indian stocks slipped, halting a six-day rally, after the government said troops clashed with Chinese soldiers along the disputed Himalayan border. Still, the main equity gauge capped a third straight monthly gain.
- Oil Climbs Above $43 in New York as Goldman Strikes Bullish Tone — Oil rose above $43 a barrel in New York to its highest closing level since early March amid a broader rally in equities and as China’s economic recovery continued.
- Evergrande Debt Continues to Pile Up Amid Cash-Flow Concerns — China Evergrande Group’s debt load increased from the end of last year even after the country’s most indebted property developer pledged to remake itself as a leaner company.
- Credit Suisse Plans to Double China Headcount in Five Years — Credit Suisse Group AG plans to double its headcount in China over five years as the firm accelerates its pursuit of the nation’s wealthy, seeking to move past a scandal that’s engulfed once-favored client and Luckin Coffee Inc. founder Lu Zhengyao.
- Chinese Hog Breeder Co-operates With Authorities Over Land Probe — Muyuan Foodstuff Co., China’s second-biggest hog breeder, said the company is co-operating with local authorities on an investigation into acquisition of farmland to expand herds.
- NIO Boosts Size of Share Sale Amid Electric-Car Stock Frenzy — China’s NIO Inc. boosted the size of its capital raising by almost 20% as investors rush stock sales by electric vehicle makers.
- China Vows to Make Czech Politician ‘Pay’ for Taiwan Trip — China’s foreign minister warned that a top Czech lawmaker would “pay a heavy price” for visiting Taiwan, exposing continued tensions with Europe even as Beijing sought to push back against U.S. overtures on the continent.
- Goldman Asia Hires Conor Yuan as EM Head of Credit Flow Trading — Goldman Sachs Group Inc. has hired Conor Yuan as its Hong Kong-based head of emerging markets credit flow trading in Asia, according to people familiar with the matter.
- China’s Battered Bonds Face More Pressure on Funding Pains — Concern about tighter liquidity in China is reverberating through the nation’s financial markets. Government bonds are heading for a fourth month of declines, a rally in stocks has been slowed, while the yuan has strengthened to its highest level since January.
- Genting HK Receives Interest from Investors for Cruise Brand — Cruise ship operator Genting Hong Kong Ltd. has received indicative letters from private investors interested in investing in one of its cruise brands, the company said in a filing to the Hong Kong Stock Exchange dated Aug. 28.
- Pimco: China Local Currency Bonds May Provide Good Hedge — Stephen Chang, portfolio manager for Asia at Pacific Investment Management Co., discusses the opportunities he sees in regional credit markets, the dollar’s fall and its implications for emerging markets. He speaks with Rishaad Salamat on “Bloomberg Markets: Asia.” (Source: Bloomberg)
- Soybeans Climb to Two-Year High on China Demand, U.S. Crop Woes — Soybean futures in Chicago advanced for the sixth day to the highest level since June 2018 on strong demand from China, worries about deteriorating U.S. crop conditions and a weakening dollar. Corn futures climbed to the strongest since March, while wheat was near the highest since April.
- China’s Chip Executives Worry They’re Next on U.S. Hit List — Dozens of senior Chinese government officials and business leaders gathered at the 2020 World Semiconductor Conference last week, but their usual agenda of trumpeting the nation’s chip innovation was colored by fears their industry might be next to suffer trade sanctions from the Trump administration.
- China’s Economic Recovery Continues on Strong Services — Chinese economic activity continued to rebound in August, with a gauge of the services industry at the strongest level since early 2018 while the expansion in manufacturing activity slowed slightly.
- Ping An Fund Manager Blasted for ‘Arrogance’ by Loctek Chairman — The outspoken chairman of Loctek Ergonomic Technology Corp. has publicly criticized a fund manager at China’s influential Ping An Asset Management Co.
- China Starts Second Australian Wine Probe as Tensions Mount — Australia’s winemakers have been hit by a second Chinese government probe, as trade tensions between the countries escalate.
- Bad Debt Wave Drags China’s Big Banks to Worst Profit Drop — China’s biggest banks posted their worst profit declines in more than a decade, putting pressure on their dividend plans, as bad debt ballooned and the government drew them into efforts to backstop a slumping economy.
- China Building Boom Splits Australia Into Two-Speed Economy — A twin-speed economy is developing in Australia and posing a challenge for the central bank, as Chinese demand for iron ore buoys the resource-rich west while eastern states struggle with Covid-19 outbreaks and border closures.
- China’s Mega Banks Post Profit Slump on Bad Debt Wave — China’s biggest banks suffered their worst profit decline in more than a decade as a cascade of loans to businesses across China are going bad. David Ingles reports on “Bloomberg Daybreak: Asia.” (Source: Bloomberg)
- ChiNext 3,000% Price Swings Show China Stocks Maturing — China has resisted the urge to intervene in the wild trading on ChiNext. That’s progress.
- Chinese Borrowers Face Fresh Tests as Debt Reprieve Nears End — Chinese firms that delayed debt payments during the coronavirus crisis are about to get the check.
- Billionaire-Backed Saxo Bank Reveals Hong Kong Expansion Plans — Online trading platform Saxo Bank A/S, which is part owned by Chinese billionaire Li Shu Fu, plans to do a lot more business in Hong Kong despite the increasingly tense political climate there.
- Trump’s China Sanctions Fail Russian History Test — Moscow’s experience suggests the prospect of forcing a change of behavior in Beijing is remote.
- As IPO Looms, All You Need to Know About Jack Ma’s Ant Group — Billionaire Jack Ma’s Ant Group is poised to pull off what could be the biggest initial public offering ever by simultaneously listing in Hong Kong and Shanghai. It’s said to be gunning for a valuation of $225 billion, making it the world’s fourth-largest financial company.
- U.S. and China: AI Is the Next Top Gun — Computers are beating the military’s top pilots in simulations, and China is catching up to the U.S.
Reuters
- China central bank says it will improve benchmark interest rate system — China’s central bank said on Monday it will make interbank repo rates by depository institutions (DR) a key reference for monetary policy adjustment and financial market price-setting.
- China copper firm Daye ups output target after loss, delays smelter launch — China Daye Non-ferrous Metals Mining Ltd, the Hubei-based copper producer hit hard by the coronavirus outbreak earlier this year, on Monday defiantly raised its annual production target after posting a first-half net loss.
- China’s big banks face fallout as pandemic forebearance expires — China’s largest state-owned banks are readied for rising bad debt and increased margin pressure in the months ahead as forbearance policies designed to give borrowers breathing space during the coronavirus crisis expire.
- Scientists see downsides to top COVID-19 vaccines from Russia, China — High-profile COVID-19 vaccines developed in Russia and China share a potential shortcoming: They are based on a common cold virus that many people have been exposed to, potentially limiting their effectiveness, some experts say.
- China’s slower factory growth eclipsed by robust services in boost to economic recovery — China’s factory activity grew at a slower pace in August as floods across southwestern China disrupts production, but the services sector expanded at a solid rate in a boost to the economy as it continues to recover from the coronavirus shock.
- China starts anti-dumping investigation on certain glycol ethers imports from U.S. — China’s commerce ministry said on Monday it has launched an anti-dumping probe into imports from the United States of certain monoalkyl ethers of ethylene glycol and propylene glycol, which are widely used in areas including automobile brake fluid and deicing products for aircraft fuel.
- Vanguard’s China fund market strategy under a cloud after Asia setbacks — As Vanguard Group doubles down on mainland China’s $2.6 trillion mutual funds market, the U.S. asset manager faces challenges similar to those that forced it to abandon Hong Kong, Japan and Singapore.
- Facial recognition and bathtime bookings: How China’s universities are reopening — As COVID-19 cases in China sink to new lows, the world’s largest population of university students is heading back to campus in a migration defined by lockdowns, patriotic education and cutting-edge surveillance equipment.
- China-backed AIIB approves 70 million euro loan to Turkey to fight COVID-19 — Beijing-backed Asian Infrastructure Investment Bank (AIIB) said on Monday it would lend 70 million euros ($83.37 million) to Turkey to help the country deal with the COVID-19 pandemic.
- Growth in China’s services sector accelerates in August: official PMI — Activity in China’s services sector expanded at a much faster pace in August, official data showed on Monday, as demand across the economy continues to recover from a coronavirus-induced slump.
- Chinese investors snap up Hong Kong property as new security law deters foreigners — Mainland Chinese investors are scouring Hong Kong’s commercial property market for bargains after prices plunged 30%, signalling a new wave of demand following anti-government protests last year that kept a lid on investment activity.
- China’s Wang Yi tells other countries not to interfere in Chinese internal affairs — The Chinese government’s top diplomat, State Councillor Wang Yi, said on Sunday what was happening in the Xinjiang region and Hong Kong was an internal Chinese matter and that other countries should not interfere.
- Sinovac’s coronavirus vaccine candidate approved for emergency use in China – source — Sinovac Biotech Ltd’s coronavirus vaccine candidate CoronaVac was approved for emergency use as part of a programme in China to vaccinate high-risk groups such as medical staff, a person familiar with the matter said.
- France’s Macron expressed concerns about human rights to China’s Wang Yi — French President Emmanuel Macron expressed strong concerns about the situation in Hong Kong and human rights for China’s Muslim Uighur minority during a meeting on Friday with the Chinese government’s top diplomat, State Councillor Wang Yi, his office said.
- China embassy says Britain is distorting Beijing’s diplomatic efforts — British politicians are twisting facts in order to undermine bilateral ties with Beijing, China’s embassy in London said on Saturday in response to new claims that Beijing is pursuing a more aggressive diplomatic strategy.
- BlackRock gets regulators’ approval to set up China mutual fund unit — BlackRock has become the first global asset manager to win regulatory approval to set up a mutual fund unit in China, as Beijing throws open its 17.7 trillion yuan ($2.58 trillion) sector.
- Chinese national arrested in U.S. probe of possible transfer of software to China — A Chinese national who is a researcher at a California university was arrested and charged with destroying a computer hard drive during an FBI investigation into the possible transfer of sensitive software to China, the U.S. Justice Department said on Friday.
- Trump administration says Sinochem and others backed by Chinese military — The Trump administration has determined that another 11 Chinese firms, including construction giant China Communications Construction Company, are owned or controlled by the Chinese military, the Pentagon said on Friday, laying the groundwork for new sanctions.
- Barrick, Chinese firm to challenge PNG’s ‘purported grant’ of mine lease — Barrick Gold and a Chinese partner on Friday said they would challenge Papua New Guinea’s apparent move to grant a 20-year lease for the Porgera gold mine to a state-backed firm, the latest escalation in their dispute with the country.
Xinhua
- Economic Watch: Chinese consumer sentiment perks up, bolsters economic recovery — As the COVID-19 epidemic tapers off in the country and pent-up consumption demand gradually unleashes, China’s economic recovery in the second half of the year will gain more momentum.
- China Focus: One year on, SW China’s pilot FTZ forges ahead despite pandemic — Every morning, trucks carrying dozens of tonnes of crabs and other aquatic products rumble from Myanmar through Wanding Port to a bustling Chinese fish market nearby, where the products are packed and transported to seafood lovers across China.
- Kenya’s modern railway cements trade, infrastructure relations with China — The Standard Gauge Railways (SGR) has cemented the Sino-Kenya trade and infrastructure relations, a senior executive of its operator said on Sunday.
- Economic Watch: China’s PMI remains in expansion territory as economy rebounds — The purchasing managers’ index (PMI) for China’s manufacturing sector decreased to 51 in August from 51.1 in July, the National Bureau of Statistics (NBS) said Monday.
- China’s non-manufacturing PMI rises in August — The purchasing managers’ index (PMI) for China’s non-manufacturing sector came in at 55.2 in August, up from 54.2 in July, the National Bureau of Statistics (NBS) said Monday.
- China’s central bank injects liquidity into market — China’s central bank Monday continued to pump cash into the banking system via reverse repos to maintain liquidity.
- China’s insurance sector reports premium income growth — Chinese insurers’ premium income increased 7 percent year on year to 3 trillion yuan (437.29 billion U.S. dollars) in the first seven months of the year, official data showed.
- China’s Zhejiang posts record delivery of 10 bln parcels in 8 months — The number of parcels delivered this year reached 10 billion on Monday morning in east China’s Zhejiang Province, home to e-commerce giant Alibaba.
- Over 10,000 enterprises set up in Guangxi’s FTZ — The number of newly registered enterprises in the pilot free trade zone (FTZ) of south China’s Guangxi Zhuang Autonomous Region has reached 10,561 over the past year, the FTZ said on Monday.
- China improves foreign investment complaint system — China’s Ministry of Commerce (MOC) on Monday issued the rules on handling complaints from foreign-invested enterprises, which will come into force on Oct. 1 this year, to improve the foreign investment complaint system.
- V-shaped recovery underway in China: BHP Group CEO — A “pretty solid V-shaped recovery” is underway in China, BHP Group CEO Mike Henry has said on CNBC’s “Squawk on the Street” business show.
- Chinese shares close lower Monday — Major Chinese stock indices ended lower Monday, with the benchmark Shanghai Composite Index down 0.24 percent, at 3,395.68 points.
Other Publications
- Nikkei Asian Review: China poised to overtake US in nuclear power by 2030 — China is on track to surpass the U.S. as the world’s top producer of nuclear energy as early as 2030, reflecting hesitance to build new capacity in Japan and Western nations even as emerging economies move ahead.
