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
- China’s EV Price War Is Just Getting Started — With a historic round of price cuts this month, Tesla, Li Auto and a host of others have extended China’s monthslong electric-vehicle price war into a new quarter.
- Is There Light at the End of the Tunnel for Hong Kong? — Proposed regulatory changes are welcome news for the city’s stock market, but they probably aren’t enough.
- China Approves Self-Driving Startup’s U.S. Listing Amid Signs of Easing Rules — China’s securities regulator gave self-driving startup Pony.ai the nod to list in the U.S., in a sign that Beijing’s grip on companies seeking to raise capital overseas may be easing.
- Kering Shares Hit After Profit Warning — Shares in Kering dropped after the Gucci owner said it expected sharply lower operating profit in the first half, as it grapples with sluggish demand in China.
- China Central Bank Remarks Suggest Bond-Trading Liquidity Boost Not Imminent — The PBOC has reinforced views that it is unlikely to deliver a big liquidity boost via bond trading after the finance ministry voiced support for the central bank to resume such trading.
- SenseTime Shares Surge on New Language Model It Says Rivals GPT-4 Turbo — Shares of the AI software company surged 31% in Hong Kong on its latest generative AI model which it said had improved linguistic, creative and scientific capabilities.
- Tianqi Lithium Shares Dive After Warning of Wider Losses — The Chinese lithium producer warned of widening losses caused by weak product prices and a tax dispute in Chile.
- The Folly of China’s Real-Estate Boom Was Easy to See, but No One Wanted to Stop It — Developers, home buyers and Western bankers all ignored warning signs, but not two accountants who went looking for “financial anomalies” and “shenanigans.”
- GM Raises Profit Outlook for 2024 After Strong First-Quarter Earnings — Pickup trucks and resilient consumer spending powered GM’s 24% increase in quarterly profit, but China remains a trouble spot.
- TikTok Isn’t Going Away—at Least Not Yet. Here’s What to Know. — The Chinese owner will have up to a year to sell the app. If it doesn’t, then TikTok will be banned in the US.
- Gucci Owner Kering Expects Sharp Drop in Operating Profit After China Weighs on Sales — Chairman and Chief Executive Francois-Henri Pinault said Kering’s performance “worsened considerably in the first quarter.”
- Ericsson Lays Off More Than 200 Employees in China — Ericsson has laid off 240 employees in China, part of a restructuring in the country that will affect one of its largest research hubs globally.
The Financial Times
- What’s next for TikTok after US Congress approves ban — Video app vows legal battle to prevent effort to separate it from Chinese parent.
- EU conducts ‘dawn raid’ on Chinese security equipment supplier — Separate Brussels probe targets Chinese medical market amid growing trade tensions with Beijing.
- US Senate passes $95bn bill including aid for Ukraine — China criticises appropriation for more military assistance to Taiwan.
- US Congress approves bill banning TikTok unless Chinese owner sells platform — Move could lead to obsolescence of video app used by 170mn Americans.
- Chinese speculators super-charge gold rally — Huge bullish bets on Shanghai exchanges show growing clout of Asian traders in market for precious metal.
- Opinion: The China-Russia trade friendship may not be quite what you think — Commercial ties between the two powers appear to be catching up from an abnormally low base. By Agathe Demarais.
- Opinion: Why China’s market slump is far from a crisis — Investors should not write off the country’s growth potential. By Dina Ting.
- Opinion: China’s search for an answer to ChatGPT is just beginning — At depressed valuations, SenseTime offers a low-risk bet on a potential winner. By Lex.
The New York Times
- Blinken Goes to China With Potential Trouble on Horizon — The secretary of state’s visit comes as Democrats and Republicans are vying to appear tougher on China.
- ‘It Is Desolate’: China’s Glut of Unused Car Factories — Manufacturers like BYD, Tesla and Li Auto are cutting prices to move their electric cars. For gasoline-powered vehicles, the surplus of factories is even worse.
- Opinion: A Dangerous Game Is Underway in Asia — Although U.S. officials claim that the recent mobilization of allies and partners is not aimed at China, don’t believe it. By Mike M. Mochizuki and Michael D. Swaine.
Caixin
- China’s Central Bank Steps Up Rhetoric Against Rally in Long-Dated Government Bonds — PBOC signals that a mismatch between market prices and the country’s promising economic outlook will be corrected.
- Private Equity Dealmaking in China Slumped to 10-Year Low in 2023, Bain Says — Value of deals in Greater China fell 37% to $41 billion last year as a global slowdown and macroeconomic uncertainties weighed.
- TikTok Shop Faces Regulatory Hurdles in Bid to Become No. 1 in Vietnam, Expert Says — Following official criticism, ByteDance’s short-video juggernaut has slowed the pace of its expansion in the country.
- In Depth: China’s Insurers Scale Back High-Yield Investment — Long-running real estate crisis and increasing risks in local government debt make insurance asset managers more cautious about debt of developers and LGFVs.
- China Begins to Limit Use of Facial Recognition for Hotel Check-In Amid Privacy Concerns — Hotels in Beijing, Shanghai, Shenzhen and Hangzhou ordered to stop using the biometric identity verification method for check-in.
South China Morning Post
- Cause for concern: US watching China’s ‘breathtakingly fast’ space development ‘very, very closely’, top commander says — Head of US space command warns that China’s space development is making its terrestrial forces ‘more precise, more lethal and more far ranging’.
- Baidu closes Wikipedia-like app as focus shifts to generative AI service Ernie Bot — Launched in 2006, Baidu Baike gained popularity partly because access to Wikipedia was unreliable and eventually blocked in China.
- China’s security ministry hails move to reward postal and parcel workers for spy tip-offs in eastern province — In Jiangsu, workers who report clues could be rewarded with up to US$4,100, particularly if it leads to a criminal case involving national security.
- Kuaishou’s top e-commerce influencer accuses platform of unfair treatment in rare public spat — The top influencer on Kuaishou Technology, China’s No 2 short video platform, has complained about being unfairly treated in a rare open spat between a live streaming star and a major internet platform.
- Opinion: Western protectionism will fail – China’s success isn’t down to subsidies — Complaints of Chinese overcapacity and dumping may be useful in justifying US, EU subsidies and trade barriers but China’s success is really due to its innovation and scale. By Andy Xie.
Nikkei Asia
- Hong Kong hit by third straight weak IPO as AI player Mobvoi disappoints — Google-backed Chinese artificial intelligence company Mobvoi went public in Hong Kong on Wednesday and saw its stock promptly drop more than 20% during midday trading.
- Solomon Islands election yields no majority for pro-China party — The election was the first since incumbent Prime Minister Manasseh Sogavare switched diplomatic recognition from Taiwan to China in 2019 and struck a security deal with China in 2022, drawing the Pacific Islands nation closer to Beijing.
- China wants ability to invade Taiwan by 2027, U.S. admiral says — The timeline is based on Chinese President Xi Jinping asking “his military to be prepared if tasked to execute in 2027,” said Aquilino, who spoke to Nikkei and other outlets while visiting Japan.
Bloomberg
- Xi’s Armada Is Winning the Battle for Energy in the South China Sea — Tensions are soaring, but Southeast Asian nations are struggling to push back on Beijing’s contested claims and tap the energy resources their growing economies need.
- Chinese Tourists Are Again Embracing International Travel — Countries that have relaxed entry requirements are best poised to reap the economic rewards in 2024.
- China’s Prices Are Just Too Low for Buyers to Sweat About Tariffs — China can withstand any new tariffs the world throws at it – even the punitive ones Donald Trump is planning if he wins a second presidential term – because its prices are simply too competitive to resist.
- Opinion: The US and China’s Newfound Friendship Can’t Last — Secretary of State Blinken is off to Beijing to keep a delicate balance, but four issues are set to tip the relationship back into high tension. By Hal Brands.
- Opinion: Xi Wants a Central Bank That Looks a Lot Like the Fed — Imitation is the sincerest form of flattery. And smart statecraft. By Daniel Moss.
Reuters
- Tuscany’s luxury suppliers feel chill from China and changing trends — Waning Chinese demand for luxury goods has compounded the problems of Tuscany’s traditional leather companies as the big fashion houses they supply reshape their strategies.
- How Volvo landed a cheap Chinese EV on U.S. shores in a trade war — A made-in-China electric vehicle will hit U.S. dealers this summer offering power and efficiency similar to the Tesla Model Y, the world’s best-selling EV, but for about $8,000 less.
- German far-right politician digs in after aide accused of spying for China — The case has fed wider anxieties over Europe as a target for Chinese and Russian spying operations.
Other Publications
- Foreign Policy: Is the U.S. Preparing to Ban Future LNG Sales to China? — The Department of Energy’s “temporary pause” opens the door.
- Foreign Policy: New Zealand Becomes the Latest Country to Pivot to the U.S. — Beijing’s bullying tactics have pushed Wellington into Washington’s welcoming arms.
- Foreign Affairs: The Axis of Upheaval — How America’s Adversaries Are Uniting to Overturn the Global Order.
- The Economist: Congress tells China: sell TikTok or we’ll ban it — Only America’s courts can save the video app now.
- MIT Technology Review: This solar giant is moving manufacturing back to the US — Tariffs and IRA tax incentives are starting to reshape global supply chains—but vast challenges lie ahead, explains Shawn Qu, founder of Canadian Solar.
- Breaking Defense: Opinion: In a Taiwan conflict, tough choices could come for Big Tech — Washington could do more to incentivize tech companies to distance themselves from China, but CEOs should examine how they’d react to a fight in the Pacific, CSET’s Sam Bresnick and Emelia Probasco argue. By Sam Bresnick and Emmy Probasco.
- The Information: Shein’s China-U.S. Imports Boost Flexport — As logistics company Flexport looks to turn itself around after messy executive drama and a broader freight market slump last year, it’s leaning on an increasingly important customer: Shein.
- Semafor: China is extending its lead over the US in Africa’s energy transition — China’s manufacturing “overcapacity,” fueled by government subsidies, is giving its companies an edge over the United States in Africa’s transition to green energy, analysts say.
