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
- China’s Top Liquor Maker Is Worth More Than Its Biggest Bank — Hitting the bottle too much during the coronavirus lockdown could be a problem. Investors in Kweichow Moutai, however, are glowing with health.
- China Trade Deal ‘Fully Intact,’ Trump Says, as Top Adviser Stirs Confusion — President Trump said the U.S.-China trade deal remains in place shortly after a senior aide appeared to say on national television that the agreement was over, prompting confusion among investors.
- As Beijing Tightens Control, Taiwan Cracks Open Door to Hong Kong Activists — Many anti-Beijing activists in Hong Kong see Taiwan as an ally against Mainland encroachment—and a potential refuge. For now, though, Taiwan is playing its hand cautiously.
- How to Win Friends and Influence China in the Post-Covid World — Securing U.S. growth and economic security requires a realistic appraisal of both China’s and the U.S.’s strengths and vulnerabilities.
The Financial Times
- US designates Chinese media outlets as foreign missions — Move comes as Trump faces criticism for holding back on sanctions for Xinjiang abuses
- London lands $1.8bn listing of Chinese insurer via Shanghai link — Much-heralded connection between the two exchanges held up by stormy markets and low liquidity
- Chinese dollar debt: payment error — As Beijing’s debt-fuelled growth model struggles, it is likely to allow more defaults
The New York Times
- Betraying Frustration with China, E.U. Leaders Press for Progress on Trade Talks — A first summit meeting between a new European leadership and China’s Xi Jinping yielded little, not even a joint statement.
Caixin
- China’s Tztek to Acquire German Firm to Enter Semiconductor Testing Market — Tztek Technology, a Chinese smart industrial equipment maker, has agreed to buy German semiconductor wafer test equipment supplier MueTec Automated Microscopy and Messtechnik GmbH for 18.2 million euros ($20.5 million), according to a filing to the Shanghai Stock Exchange Monday.
- E-Commerce Giant Taobao Steps Into China’s Online Education Market — Taobao, an e-commerce platform owned by Alibaba, is seeking to penetrate China’s already crowded online tutoring market with a massive plan aimed at connecting more than 1,000 online education service providers with 100 million new students over the next three years.
- China-Developed Maglev Tech Passes Modest Milestone in Shanghai — It may sound modest, but a low-speed trial that took place Sunday in Shanghai could be paving the way for a futuristic Chinese rail network capable of speeds up to 600 kph (373 mph).
South China Morning Post
- National security law: foreign firms in Hong Kong look at plan B if free flow of information restricted — A number of foreign firms in Hong Kong are drawing up contingency plans, such as relocating some operations, as protection against any investment repercussions from the impending national security law, industry insiders say.
- Australia, US must boost defence, cybersecurity ties to counter China: report — Australia should boost cooperation with the United States in defence, cybersecurity and infrastructure development to ensure “strong and collaborative” leadership in the Pacific, a new report says, amid increasingly strained relations between Canberra and Beijing.
- Contract for Kenya’s China-funded railway ruled ‘illegal’ — When Chinese President Xi Jinping hosted African leaders at last week’s China-Africa Summit, he singled out Kenya’s Standard Gauge Railway, a multibillion-dollar Chinese-funded Belt and Road Initiative project, for helping to move cargo during the coronavirus pandemic.
- China’s banking system begins to crack at its grass roots as two bank runs take place within a week — China’s US$40 trillion banking system is seeing growing signs of trouble at its grass roots with bank runs happening at two small local lenders last week, a sign that a mountain of debt and an unprecedented economic contraction has started to take a toll.
- White elephant? China’s Belt and Road Initiative deserves more credit in pandemic-ruined economy — by Anthony Rowley. China’s infrastructure initiative, which has been unfairly singled out for criticism, has made more progress than similar projects proposed by the US and others. It should be seen as an exercise in positive thinking and innovation
Bloomberg
- China Punishes ByteDance, Tencent-Backed Apps in Clampdown — China has penalized 10 of the country’s most popular livestreaming apps, suspending some of their operations in a renewed crackdown on fast-growing services backed by Tencent Holdings Ltd. and ByteDance Ltd.
- Oil Climbs to Three-Month High on Demand Strength, Trade Hopes — Oil climbed to a new three-month high as signs of improving demand buoyed a market momentarily roiled by confusion over U.S.-China trade.
- Supply Chains Latest: Lighthizer’s Prescription? More Tariffs — With Covid-19 cases spiking in nearly a dozen U.S. states, this may seem like a strange time to constrain America’s ability to obtain critical medical supplies and drugs. But new tariffs are exactly the strategy that America’s top trade official said he believes are the best way to combat the coronavirus pandemic.
- India Takes Another Step to Block China Products With New Rules — India has amended rules for purchases by government departments, making it mandatory for suppliers to mention the country of origin in a move to push for local products and keep out Chinese manufacturers.
- Epidemic of Contaminated Waste Is Following the Coronavirus — The world is struggling to deal with the spread of another medical problem created by the coronavirus — a deluge of contaminated waste.
- Tencent Smashes Record High After Stock’s $307 Billion Rebound — Tencent Holdings Ltd.’s shares just hit three milestones in a single day.
- What People Buy as Countries Come Out of Coronavirus Lockdown — Consumer behavior in China and South Korea as the pandemic eased offers clues to how Americans will act.
- Coronavirus Couldn’t Pop China’s Economic Bubble. What Will? — The country’s rapid rebound from the coronavirus means it’s poised for another year of growth while the U.S. contracts.
- China’s $941 Billion Fund Cuts Active Portfolio After Gao Leaves — China’s $941 billion sovereign wealth fund shifted more than 60% of one of its largest actively managed equity portfolios to passive strategies after its long-time manager Susan Gao left, according to people familiar with the matter.
- Hong Kong Exchanges CEO Sees IPO Boom After Security Law — Exchange CEO Charles Li sees a big year for initial public offerings. The winds are in his favor.
- Bank of China Is Said to Weigh Ending Wirecard’s Credit Line — Bank of China Ltd. is discussing ending a credit facility to Germany’s Wirecard AG, a move that would complicate the beleaguered company’s fight for survival after it was engulfed by a multi-billion-dollar accounting scandal.
- Tyson’s Virus Transparency Made It Vulnerable to China Ban — Tyson Foods Inc. is the only major U.S. meat company still regularly releasing results as it conducts coronavirus testing for employees. It’s also the only American meat producer to see China slap a ban on some of its shipments.
- China’s Economy Will Resume Growth This Quarter, Economists Say — Economists upgraded their forecasts for China’s economic growth this quarter and for 2020, signaling more optimism that the country is on track for a gradual recovery.
- China in Recession and Heading for Full-Year Decline: Beige Book — China’s economy contracted in the three months to June from a year earlier, signaling the start of a recession despite marginal improvements over the previous period when the coronavirus roiled the economy, according to China Beige Book.
- Hong Kong Economy Gets a Boost From Staycations, Dining Deals — People walking through the Lan Kwai Fong area of Hong Kong over the weekend might have been surprised to see a truly uncommon sight for 2020: a busy restaurant.
- China Accelerates Capital Market Reform to Counter Virus, U.S. — Faced with the twin threats of a slumping economy and rising tension with the U.S., China is speeding up efforts to boost stock trading and open its capital markets.
Reuters
- China puts final satellite for Beidou network into orbit – state media — China on Tuesday successfully put into orbit the final satellite of its Beidou navigation network, rival to the U.S.-owned GPS.
- EU presses China over trade, warns on Hong Kong law — The European Union told China on Monday to make good on a promise to open up its economy and warned of “very negative consequences” if Beijing goes ahead with a new security law on Hong Kong that the West says will curtail basic rights.
- Kiribati’s pro-China leader Taneti Maamau wins re-election — Kiribati leader Taneti Maamau has won a closely watched presidential run-off after campaigning on a pro-China platform, shortly after the Pacific island nation switched diplomatic ties to Beijing from Taiwan.
- Global steel output falls 8.7% in May, but China lifts production — Global crude steel output slipped 8.7% in May to 148.8 million tonnes as many steelmakers shut operations due to the COVID-19 pandemic, even as top producer China was resilient and pumped out more of the metal.
- Delta to resume flights between U.S. and China — Delta Air Lines Inc said on Monday it would resume flights between Seattle and Shanghai on June 25, making it the first U.S. airline to restart operations between the United States and China after flights were suspended in February due to the COVID-19 pandemic.
- EU business body fears China-EU investment deal will not be finished this year — The president of the European Union Chamber of Commerce in China said on Tuesday that he doubts a long-awaited China-EU investment agreement will be finished this year.
- Chinese firm gets approval to begin human testing for potential coronavirus vaccine — China has approved a coronavirus vaccine candidate developed by Chongqing Zhifei Biological Products’ unit to begin human testing, the company said in a filing on Tuesday.
Xinhua
- China’s central bank issues 10 bln yuan of bills in Hong Kong — China’s central bank on Tuesday issued 10 billion yuan (about 1.42 billion U.S. dollars) of six-month renminbi central bank bills in Hong Kong with an interest rate of 2.21 percent.
- Tianjin Container Freight Index remains flat — China Tianjin Container Freight Index (TCI), an indicator of northern China’s international container freight rates, remained at 537.63 points on Tuesday.
- Chinese shares close higher Tuesday — Chinese stocks closed higher on Tuesday, with the benchmark Shanghai Composite Index up 0.18 percent to end at 2,970.62 points.
Other Publications
- McKinsey: What insurers can learn from China’s continuing COVID-19 recovery — While the broad economic view in China may be encouraging, the outlook for the insurance industry is complex—some lines fared well, while others suffered significant declines and are just now recovering. For example, awareness of health insurance increased, translating to a 17 percent growth in sales from first quarter 2019 to first quarter 2020, while life (or mortality) products were down 1 percent over the same period. Meanwhile, demand for auto and liabilities policies slowed dramatically, affecting property and casualty lines.
- Forbes: China Drug Developer Soars 185% On Stock Debut, Lifting MIT Billionaire Alum’s Fortune — Shares in China biologic drug developer SinocellTech climbed by 185% on their debut on the Science and Technology Innovation Board of the Shanghai Stock Exchange on Monday, boosting the fortune of the company’s billionaire chairman Xie Liangzhi.
- Forbes: China’s Midyear Shopping Festival Boosts Outlook For Retail Brands — China’s midyear shopping festival, known as 618 because it runs from June 1 to 18 each year, was started by JD.com in 2004, but has since grown to include other platforms like Alibaba and Pinduoduo and now serves as an important indicator of the country’s e-commerce market.
- Forbes: Japan Just Knocked The U.S. Off The Top Of A Ranking Of The World’s Most Powerful Supercomputers — The machine, which cost around $1 billion to develop and build, is proof Japan remains a force to be reckoned with in the supercomputing world, though it is still overshadowed by China and America. The country has 30 machines in the latest Top500 list, putting it in third place behind China, which has 226, and the U.S., which has 114. America still leads in terms of aggregate computing power: its Top500 machines are capable of delivering a total of 644 petaflops compared with runner-up China’s 565.
- Business Insider: China’s Oil Industry Is In Crisis — Another Chinese oil firm has defaulted on a dollar-denominated bond, bringing the total value of defaults in all sectors of China’s offshore bond market to US$4 billion so far this year, more than double the value of defaults in the same period last year, Bloomberg estimates.
- TechCrunch: Telegram pledges to make anti-censorship tools for Iran and China — The encrypted instant messenger Telegram said on Monday it’s ramping up efforts to develop anti-censorship technologies serving users in countries where it is banned or partially blocked, including China and Iran.
- SupplyChainDive: Airfreight rates from China to US begin falling back to earth — Airfreight rates from China and Hong Kong to the U.S. have fallen nearly 50% from their peak in mid-May to reach $5.1 per kilogram on June 15, according to the latest numbers from the TAC Index.
- CNBC: Women in China are losing out in the workforce — that’s bad news for the economy — China’s rise as a global economic power over the last few decades has put women at a disadvantage and worsened gender inequality in its workforce, according to a report by think tank Peterson Institute for International Economics.
- Foreign Policy: Silicon Valley Can’t Be Neutral in the U.S.-China Cold War — If there is a silver lining to the coronavirus, it is that Americans are finally alert to the threat that an ambitious, authoritarian China poses. Polling shows that the U.S. public has become significantly more hawkish on China since the crisis began; a bipartisan consensus is coalescing around the idea that the Chinese Communist Party’s aims and values are incompatible with America’s. Unfortunately, some of the United States’ major tech companies are still trying to sit on an increasingly uncomfortable fence.
- Politico: Supreme Court gives Trump a win on his steel tariffs — The Supreme Court on Monday decided not to hear a case brought by U.S. steel importers against tariffs that President Donald Trump imposed on steel imports in 2018, effectively ending the legal challenge and leaving the steep duties in place on imports from Europe, China and many other countries.
- Nikkei Asian Review: China’s Hainan to be tariff-free to rival Hong Kong — China has designated the southern island province of Hainan as a free trade port and will offer tax and trade incentives to draw businesses and tourists, with an apparent goal of providing a mainland alternative to Hong Kong.
- Nikkei Asian Review: China gives thumbs up to hybrids with new green-car category — The Chinese government said on Monday it would create a new category under fossil-fuel-powered cars, that is expected to include hybrid vehicles, from January in a widely anticipated move to relax controls on automakers and to encourage production. Toyota and Honda to benefit.
- Nikkei Asian Review: Chinese chipmaker to triple output as decoupling accelerates — Yangtze Memory Technologies has broken ground on a new factory toward tripling its output capacity to 300,000 wafer equivalents a month, as part of China’s push to curb its dependence on American semiconductors.
