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.
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The Wall Street Journal
- SEC Pursues Plan Requiring Chinese Firms to Use Auditors Overseen by U.S. — Under proposal, companies would be shut out of U.S. exchanges if they don’t comply.
- Major Chinese Chip Company Defaults on Debt — Ratings firm downgrades Tsinghua Unigroup after failure to repay maturing bond.
- Africa’s First Pandemic Default Tests New Effort to Ease Debt From China — Effort to ensure that China and bondholders participate in debt restructurings could help resolve Zambia’s default.
- Tech War With U.S. Turbocharges China’s Chip-Development Resolve — Nation’s leadership pours money into grooming semiconductor talent and building new facilities, citing need for self-sufficiency.
- Treasury Yields Test Recent Highs as Chinese Corporate Bonds Weaken — Traders watch for 10-year yield to hit 1%.
- Huawei Sells Off Honor Phone Business as U.S. Sanctions Bite — State-led consortium takes over budget brand as Chinese tech company blames pressure from U.S. curbs on its supply chain.
- Japan, Australia Forge Closer Military Ties to Counter China — U.S. allies smooth way for more joint training and quick military support.
The Financial Times
- Fear is the new normal for Hong Kong democrats — Critics of government crackdown wonder whether to stay or leave.
- China SOEs nervousness derails $2.4bn in planned bond sales — World’s second-largest bond market rattled by string of high-profile defaults by state-owned groups.
- China presses shipping line to rein in record freight rates — The head of France’s CMA CGM says authorities are concerned a rebound in rates threatens Chinese exports.
- China clamps down on frozen food over coronavirus fears — Beijing focuses on cold chain goods as part of zero-tolerance approach to Covid.
- How China’s big tech companies upset Beijing — Hands-off approach has lasted a decade, but antitrust officials are ready to step in.
The New York Times
- America’s Internet Has China Envy — But is China a peek at the future of technology, or a digital island all its own?
Caixin
- Chinese Bank’s Blockchain Bond Listing Suspended Days After It Was Announced — The exchange said that China Construction Bank’s $3 billion listing has not been cancelled completely, but no new date has been given.
- Exclusive: Tsinghua Unigroup Fails to Extend $197 Million Bond Payment — Chinese electronic chipmaker joins parade of state-owned enterprises facing default after creditor vote to rollover the debt was ruled invalid.
- JD.com’s Third-Quarter Revenue Outperforms, Rising 29% — Chinese e-commerce giant beats estimates, joining rivals Alibaba and Pinduoduo, as post-pandemic shoppers continue the online migration.
- Agricultural Drone Maker XAG Closes $183 Million Funding Round — Chinese farming technology startup XAG on Monday announced the completion of a 1.2 billion yuan ($183 million) new funding round led by Baidu Capital and SoftBank Vision Fund 2.
- Shunwei Capital-Backed 17 Education Eyes $100 Million US IPO — 17 Education & Technology Group, a provider of K-12 education services in China, has listed the size of its proposed initial public offering (IPO) in the US at $100 million, a placeholder amount likely to change, according to a filing.
- JD Health Passes Hong Kong Stock Exchange Hearing En Route to IPO — The doctor is officially in at the offices of JD Health, the online health unit of JD.com. That’s the latest word on the company whose planned IPO received a clean bill of health after the requisite hearing with the Hong Kong Stock Exchange, according to an announcement late Sunday.
- U.S. Throws Huawei a New Bone with More Access to Older 4G Technology — The list of Washington-approved tech firms allowed to sell to China’s embattled Huawei keeps growing.
South China Morning Post
- Barack Obama: ‘I could not have a trade war’ with China due to global financial crisis — Former US president Barack Obama has said he would have pushed China “much harder” on trade issues if it was not for the global financial crisis of 2008-09.
- Chinese art collectors’ ‘revenge buying’ makes Shanghai fairs worth the trip for galleries, and parties light up the night — Shanghai was the world’s party capital last week. Art galleries, auction houses and luxury brands pulled out the stops to put collectors and patrons in a celebratory mood during the first major art fair week held offline since the beginning of the Covid-19 pandemic.
- Japan and Australia agree on military pact with eye on China’s influence in Indo-Pacific — Japan and Australia on Tuesday reached an agreement for their armed forces to carry out joint exercises, visit each other’s countries and, potentially, conduct military operations together, Japanese Prime Minister Yoshihide Suga said after hosting a visit by Australian leader Scott Morrison.
- China debt defaults stoke unease about ‘broader market contagion’ — A series of defaults on bonds issued by Chinese state-backed companies has sent shock waves through the world’s second largest debt market in recent days, raising questions about local government guarantees and the credibility of domestic ratings.
- China unemployment rate: how is it measured and why is it important? — How is China’s unemployment measured?The official surveyed unemployment rate for urban workers in China rose to historic levels in the wake of the coronavirus pandemic, touching a nearly two-decade high of 6.2 per cent in February. Since then, the figure has gradually retreated to near pre-pandemic levels.
- China’s R&D, tech investment inflows show deepening global economic integration despite US decoupling push — China’s economy deepened its integration with the rest of the world in October, with foreign investment increasing amid strong spending in R&D and the tech sector, even as the Trump administration ramped up efforts to decouple the country from the United States.
- China-Australia relations: barley farmers begin harvest under cloud of Beijing’s tariffs — Out in Australia’s grain fields, farmers have started harvesting one of their biggest ever barley crops, after drought-relieving rains convinced many to plant to the edges of their paddocks.
- Alibaba says Singles’ Day record sales show resilience in economy as firm seeks to turn future editions into ‘fun-filled’ event — Alibaba Group Holding, which operates the biggest e-commerce platform, said the latest Singles’ Day shopping gala has produced “satisfactory” results, pointing to a resilient economy amid a rebound in consumption, chairman and chief executive Daniel Zhang Yong said.
- New rule allows MPF fund managers to invest in Shanghai, Shenzhen shares, enabling 4.5 million savers to tap mainland China’s booming stock market — The Mandatory Provident Fund (MPF) will be able to offer a greater range of investment options after a government rule change that allows fund managers to plough more of the HK$1 trillion (US$129 billion) pot into the shares of companies listed in mainland China.
- Hong Kong unemployment rate remains at 16-year high of 6.4 per cent as effects of coronavirus pandemic continue to be felt — Hong Kong’s unemployment rate has remained at a 16-year high of 6.4 per cent but fears are mounting over the impact of the government’s wage subsidy scheme ending this month.
- Hong Kong can reap the rewards of world’s biggest free-trade pact even as an outsider, analysts say — The world’s biggest free-trade pact, signed on the weekend by China and 14 other Asia-Pacific nations, could help Hong Kong minimise the damage wrought on its economy by the souring of Washington-Beijing relations and the coronavirus pandemic, according to city analysts.
- Ant Group IPO resumption will depend on how company adapts to new fintech rules, CSRC official says — The speed at which Ant Group revives its nearly US$40 billion initial public offering will depend on how quickly the company responds to the “changing regulatory environment” in China, according to Fang Xinghai, the vice-chairman of the China Securities Regulatory Commission.
Bloomberg
- Australia Seeks to Build Defense Ties to Counter China Squeeze — Australia is taking the next step toward building a coalition of “like-minded” democracies pushing back against what they view as Beijing’s increasing expansionism in the Indo-Pacific — even as the list of trade reprisals against it grows.
- Nations Squeezed in China Tussle Look To Biden — It’s not just the neighbors who are anxious. Pretty much every country is grappling with how to deal with China and wondering how the incoming U.S. administration of Joe Biden might change things.
- Taiwan, Hong Kong Activists Alarmed Over China Watch List — Taiwanese and Hong Kong activists expressed alarm over reports that China was compiling a global watch list of those who have voiced views deemed separatist, a move that would mark a major escalation in Beijing’s pursuit of its critics.
- China Gives Long Explanation for Pummeling Australia on Trade — China gave one of its most detailed explanations yet for souring ties with Australia, calling on the nation to stop trying to impose its will on others.
- China’s Yuan Jumps to Strongest Since 2018 as Optimism Prevails — China’s yuan climbed to the strongest level in more than two years, fueled by optimism on the country’s economic recovery and its interest-rate premium over the rest of the world.
- Courier Giant SF Express Said to Mull Hong Kong Share Sale — SF Holding Co., one of China’s largest express delivery companies, is considering raising funds through a share sale in Hong Kong, according to people familiar with the matter.
- China Should Set 5% Growth Target, Government Economist Says — China should set an economic growth target of about 5% over the next five years, although the expansion will likely fluctuate this year and next because of the coronavirus pandemic, a government-affiliated economist said.
- Here’s What People Are Saying About China at the Bloomberg NEF — The challenges posed by China’s rise and the incoming Biden administration’s future approach toward Beijing dominated discussions on the first day of the Bloomberg New Economy Forum, as leading global thinkers offered insights into the world’s most important bilateral relationship.
- Top Chinese Official for Hong Kong Signals More Changes to Law — China signaled further changes to Hong Kong law, in the wake of moves by Beijing to impose a sweeping national security law and require loyalty from city lawmakers.
- World Leaders Urge U.S.-China Reset as Virus Rages: NEF Update — The first day of the four-day Bloomberg New Economy Forum concluded with business and political leaders taking on issues from the economic fallout of the coronavirus pandemic to the future of global trade and climate change.
- U.S. Needs Patience With China, Top Regulatory Official Says — The U.S. is pushing too fast for change from China and should instead take a more patient approach, a senior Chinese regulatory official said, adding that he’s hoping for better relations under president-elect Joe Biden.
- Baidu to Buy YY for $3.6 Billion to Get Into Chinese Live Video — Baidu Inc. agreed to buy Joyy Inc.’s livestreaming business for China, a deal that will mark the search engine giant’s biggest foray into the fastest-growing arena of digital video.
- Bill Clinton Says China’s Direction Under Xi Upended U.S. Ties — Former President Bill Clinton said Xi Jinping’s long-term reign has upended U.S.-China relations, and will require Joe Biden’s incoming administration and its allies to take a more coordinated approach to dealing with Beijing.
- Singapore Watching Hong Kong Turmoil With ‘Concern,’ PM Lee Says — Singapore is concerned about the situation in Hong Kong and hopes the financial hub could “settle down to a new normal,” Prime Minister Lee Hsien Loong said.
- Hong Kong Needs to Tackle Its Worsening Inequality — The territory is among the most unequal globally, and a post-protest, post-pandemic welfare fix is possible and affordable.
- U.S., China and the Covid-19 Vaccine Race — As the post-pandemic world order takes shape, it’s clear that the U.S. still has huge advantages.
- China’s Latest Defaults Feed Growing Anxiety in Banks, Markets — The uncertainty as China’s lenders come to realize the size of the risks they’re sitting on will be brutal.
- China’s Crackdown on Ant Isn’t Stopping Hong Kong’s Hot Financial Core — The city’s enthusiasm for investing survives a purge of lawmakers and a crushed Ant IPO.
- Paulson Calls for New Round of U.S., China Talks: NEF Update — The four-day Bloomberg New Economy Forum kicked off on Monday morning with business and political leaders taking on issues from the economic fallout of the coronavirus pandemic to the future of global trade and climate change.
- China Calls for Rejecting Protectionism as It Braces for Biden — Chinese Vice President Wang Qishan called for global solidarity and a shift away from protectionism as Beijing grapples with the prospect of a new administration in Washington.
- Kissinger Warns Biden of U.S.-China Catastrophe on Scale of WWI — Former U.S. Secretary of State Henry Kissinger said the incoming Biden administration should move quickly to restore lines of communication with China that frayed during the Trump years or risk a crisis that could escalate into military conflict.
- China Credit Pain Worsens as Two State-Linked Firms Default — A top Chinese chipmaker and a major car manufacturer announced debt defaults on Monday, expanding a list of distressed state-linked firms that have roiled the country’s credit market in recent days.
- China Plans Euro Bond Market Return as Tensions With U.S. Mount — The People’s Republic of China is turning to Europe’s bond market for funding, as tensions between Beijing and Washington flare up.
- China’s Luxury Thirst Keeps Eastern Europe Cranking Out Cars — Chinese appetite for high-end cars is proving a boon for eastern European economies that had earlier fretted about an over-reliance on auto plants.
- Biden Transition Teams Hint at Economic Policy From China to Climate — His transition team is progressive and has some big ideas, but they’ll also be practical.
Reuters
- China will promote economic growth to a ‘reasonable’ range: Premier Li — China will promote economic growth to a “reasonable” range while pursuing higher quality development, Premier Li Keqiang was quoted as saying on Tuesday by state radio.
- Putin says India, China may start producing Russia’s Sputnik V COVID-19 vaccine: RIA — India and China may start producing Russia’s Sputnik V vaccine against COVID-19, the RIA news agency cited President Vladimir Putin as saying on Tuesday.
- Exclusive: BMW deal to lift stake in China venture unaffected by Brilliance parent’s debt issues — German carmaker BMW said on Tuesday there was no indication that its deal to increase its stake in its joint venture with Brilliance China Automotive would be affected by debt issues at Brilliance’s parent.
- China’s irritated trade partners push back on coronavirus food tests — Major food-producing countries are growing increasingly frustrated with China’s scrutiny of imported products and are calling on it to stop aggressive testing for the coronavirus, which some say is tantamount to a trade restriction.
- British diplomat saves drowning student in southwest China — A British diplomat leapt into a river in southwest China to rescue a drowning student over the weekend, Britain’s embassy in Beijing and Chinese state media said.
- West China Hospital’s COVID-19 vaccine candidate enters mid-stage human trial — An experimental coronavirus vaccine developed by West China Hospital has entered a mid-stage human test, authorities of China’s southwestern province of Sichuan said on Tuesday.
- Factbox: China state enterprises facing debt problems — Chinese banks and fund managers dumped their holdings of riskier bonds last week after a series of credit shocks involving state-owned enterprises (SOEs) jolted China’s corporate bond market.
- China should set around 5% GDP goal for 2021-2025: think tank economist — China should set an average annual economic growth target of around 5% for the 2021-2025 period, a senior economist at a top government think tank said on Tuesday, in line with a Reuters report.
- China makes rare, but small, draw on crude oil inventories: Russell — A combination of record refinery processing and an easing of import volumes, as the last of the cheap crude bought during a brief price war in April was delivered, led to a likely small draw on inventories in October.
- China’s securities regulator hopes Sino-U.S. ties better with Biden administration — A top Chinese securities regulator said on Tuesday that he hopes Sino-U.S. relations will be much improved under a Biden administration.
- Senior Chinese official says authorities working on more Hong Kong reforms, including judiciary — A senior Chinese official said on Tuesday that authorities are working on reforms related to semi-autonomous Hong Kong’s mini-constitution, including its judicial system.
- Biden says U.S., allies need to set global trade rules to counter China’s influence — U.S. President-elect Joe Biden said on Monday the United States needed to negotiate with allies to set global trading rules to counter China’s growing influence but declined to say whether he would join a new China-backed Asian trade pact signed on Sunday.
- Trump supporter hired for Commerce Department post, to push hardline China policies until January: sources — Corey Stewart, an ardent supporter of President Donald Trump, has been named to a newly created senior post at the U.S. Department of Commerce, where he can help push through hardline policies on China before the end of the administration, according to people familiar with the matter.
- Nissan plans to invest heavily in China luxury segment, COO says — Japan’s Nissan Motor Co plans to invest heavily in China’s luxury auto segment, its chief operating officer told Reuters on Monday.
Xinhua
- China’s economy continues to recover from lockdown malaise: UK analyst — The latest economic data from China offer further evidence that the Chinese economy is continuing its recovery from its February lockdown malaise, a UK market analyst said on Monday.
- China’s local gov’t bond issuance hits 442.9 bln yuan in October — China’s local government bond issuance reached 442.9 billion yuan (about 67.35 billion U.S. dollars) in October, data from the Ministry of Finance showed Tuesday.
- China’s Hubei to host conference on 5G, industrial internet — A national conference on 5G and the industrial internet will open Thursday in the city of Wuhan, capital of central China’s Hubei Province, which was once hard hit by the COVID-19 epidemic.
- Ireland’s exports to China up nearly 22 pct in first nine months — Ireland’s goods exports to China increased by 21.48 percent to 7.91 billion euros (about 9.4 billion U.S. dollars) in the first nine months of this year compared with the same period last year, according to the latest figures released by the country’s Central Statistics Office (CSO).
Other Publications
- CNBC: U.S. companies with China operations look to the Asian giant for growth — “Anecdotally, people are getting pressure from headquarters since the China economy (is recovering),” said Greg Gilligan, chairman of the Beijing-based American Chamber of Commerce in China. “They’re expected to carry a little more weight in the next fiscal year.”
- The Economist: The World in 2021: African countries will remain best friends with China — They will reject calls to loosen their ties.
- The Economist: The World in 2021: Europe won’t benefit from America’s spats with China — The continent will lose from the unravelling of free trade.
- Foreign Policy: China and Russia Have Iran’s Back — Tehran May Be Less Open Than Ever to Threats or Persuasion.
- Jamestown Foundation: China’s Vaccine Diplomacy Revamps the Health Silk Road Amid COVID-19 — In 2015, China’s National Health and Family Planning Commission released a three year plan to establish “health cooperation networks” with countries participating in China’s grand foreign policy Belt and Road Initiative (BRI). The Health Silk Road was officially established as a joint initiative with the WHO at the beginning of 2017.
- Nikkei Asian Review: RCEP tariff plans highlight China’s high hopes for EVs — Tariffs under new megadeal shed light on industrial priorities.
- The Atlantic: Why Obama Fears for Our Democracy — In an exclusive interview, the former president identifies the greatest threats to the American experiment, explains why he’s still hopeful, and opens up about his new book. “If we hadn’t been going through a financial crisis, my posture toward China would have been more explicitly contentious around trade issues. But I couldn’t have a trade war in 2009 or 2010.”
- AP: China positions rocket ahead of ambitious lunar mission — China on Tuesday moved a massive rocket into place in preparation for launching a mission to bring back materials from the moon for the first time in four decades.
