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
- Investors Find New Safe Place to Hide: Chinese Bonds — Foreign capital flowed into locally denominated Chinese government bonds in the second quarter at the fastest pace since late 2018.
- Attacking the Hong Kong Dollar Makes Little Sense for the U.S. — The Hong Kong dollar’s peg to the greenback would be a strange target in retaliation against Beijing, and doesn’t seem particularly vulnerable either.
- Chinese Data Center Stock Rally Does Not Compute — New infrastructure stimulus plans will provide a real boost, but valuations have gotten stretched and competition will likely intensify.
- U.S. Weighs Limited Options to Punish China Over Hong Kong — As U.S. officials consider punishing China over its recent security law in Hong Kong, the city’s status as a global financial center limits the menu of effective levers available to Washington.
- Why China Isn’t Expected to Power a Global Recovery — During the 2008-09 financial crisis, China’s soaring demand boosted growth world-wide. China isn’t poised to help as much now, as the country shows restraint on stimulus spending and takes advantage of increased self sufficiency.
- Pandemic Crushes Garment Industry, the Developing World’s Path Out of Poverty — When the coronavirus shut stores in the U.S. and Europe, clothing factories closed across Asia, and hundreds of thousands of workers, a vast majority of them women, lost jobs. The disruptions might lead to a permanent shift in the industry.
- U.S. National Security Panel Examining Chinese Investors’ Purchase of Pharma Firm — The inquiry focuses on the 2017 acquisition of South Carolina-based Ritedose after national-security officials learned it was in talks with the Pentagon over a project involving injection devices for a coronavirus vaccine.
- Traders Bet on Rally for China’s Markets — A dramatic rally in shares of Chinese companies has unleashed a frenzy of trading activity, with many investors positioning for an even bigger advance.
The Financial Times
- Joe Biden goes looking for trade allies against China — US presidential candidate’s plans aren’t as terrible as Trump’s, which is cause for relief in Brussels and Tokyo.
- Hong Kong migration to UK could hit 200,000 — Government estimate is a fraction of 3m citizens of the former British colony offered route to citizenship.
- China imposes sanctions on US lawmakers in retaliation to Xinjiang measures — Senators Marco Rubio and Ted Cruz among US officials targeted by Beijing.
- US businesses balk at security law but most opt to stay in Hong Kong — Three-quarters of survey respondents say they are worried by legislation imposed by Beijing.
- Chinese fund groups retreat from global growth drives — Harvest Global cuts international sales team while GF Fund Management drops UK licence.
- China Moly strikes $550m precious metal deal with Elliott-backed miner — Payments from Triple Flag to mark first ‘streaming’ deal by Chinese mining company.
The New York Times
- Outspoken Chinese Professor Is Said to Be Released From Detention — Xu Zhangrun, a law professor in Beijing known for criticizing the Communist Party, was allowed to go home after being detained a week ago, people familiar with him said.
- Defying U.S., China and Iran Near Trade and Military Partnership — The investment and security pact would vastly extend China’s influence in the Middle East, throwing Iran an economic lifeline and creating new flash points with the United States.
- The Chinese Decade — The coronavirus has given Beijing a strategic opportunity — but one that might not last.
Caixin
- Sichuan Trust to Sell Its Offices in Desperate Bid to Repay Debt — Asset sale just a drop in the bucket compared with massive debt hole, industry source says.
- Banking Regulator Warns of Post-Virus Rebound in Bad Loans — Macroeconomic policies have offset default risks, which will take time to emerge, CBIRC says.
- Rule Change to Fund Custody Licenses Helps China Meet U.S. Trade Deal Commitment — Domestic branches of foreign banks are now allowed to apply for authority to hold fund assets in safekeeping.
- GF Securities Penalized for Role in Kangmei’s $12.6 Billion Fraud — Brokerage house is banned from sponsoring listings for six months and from bond underwriting for a year as CSRC singles out 14 individuals for punishment.
- 5G-Based Pilot ‘Smart’ Power Project Launches in East China — State Grid backs system with aim of better managing its distribution by taking advantage of 5G features like high-speed video and location tracking.
- TikTok Releases Transparency Report as Global Scrutiny Mounts — App said it deleted some 50 million videos in the second half of 2019, a third of which were uploaded in India.
- For Electric-Vehicle Maker Nio, Government Tie-Up Has Its Benefits — Automaker gets $1.4 billion credit line from Anhui province-based banks.
- Foxconn Plans to Invest $1 Billion to Expand iPhone Production at Indian Factory: Reuters — Taiwanese contract manufacturer Foxconn plans to invest $1 billion to expand its iPhone production at a plant in southern India, Reuters reported Saturday citing two sources, as Apple quietly decouples some of its manufacturing from China amid the escalating tech war between Beijing and Washington.
- Platform Serving China’s Takeout Delivery Workers Jumps 28% in Nasdaq Debut — It won’t smash any records for its size. But the latest New York IPO by a China tech firm is still looking impressive in its trading debut.
- SenseTime Builds AI Computing Platform in Shanghai Amid ‘New Infrastructure’ Push — Chinese artificial intelligence (AI) specialist SenseTime has started construction of a new-generation AI computing platform in Shanghai in a bid to contribute to the city becoming a global AI powerhouse.
South China Morning Post
- China bets on Hainan duty-free shopping mecca to boost spending at home — China has increased duty-free shopping limits for mainland tourists visiting Hainan as part of its free-trade port plan. Beijing hopes it can transform the island into a shopping hub that will compete with centres in Japan and Europe.
- Robotics start-up CloudMinds returns to China after US sanctions hurt its business in Silicon Valley — Cloud robotics and artificial intelligence start-up CloudMinds has abandoned plans to go public in the US, as it eyes a move to Shanghai and listing on China’s new Nasdaq-style board, after its business was hit by rising tensions between the world’s two largest economies.
- China sharpens economic espionage penalties in ‘tit-for-tat provision’ against US accusations of trade secret theft — China is amending its criminal code to cover trade secrets theft by foreign businesses, a change that could give Beijing a tool to retaliate against the United States for alleged economic espionage.
Bloomberg
- China Rebound Emboldens Calls for Emerging Market Gains to Last — Emerging markets have a lot going for them right now.
- Hong Kong Is Set to Tighten Virus Control Measures Amid New Wave — Hong Kong is poised to tighten virus control measures as it battles with a new wave of local cases, according to local media.
- Some Chinese Ports Are Jammed Again on Intensive Testing of Food — Intensive testing of meat, seafood and other products for the coronavirus has tripled customs clearance times at some major Chinese ports, raising concerns the delays could ensnare global trade flows.
- Elon Musk and Tesla: A Plan to Succeed in China — CATL chairman Zeng Yuqun’s partnership with Elon Musk could boost the Chinese company’s global market share at a time of falling battery sales.
- Cathay Shareholders Approve $5 Billion Plan to Avoid Collapse — Cathay Pacific Airways Ltd.’s shareholders approved a plan to raise HK$39 billion ($5 billion) in a government-backed rescue that includes the sale of preference shares and a rights issue.
- China’s Stock Market Is Closing In on $10 Trillion Milestone — China’s investors have waited five years for stock values to return to $10 trillion, a milestone that would seal the market’s recovery from its biggest crash in history.
- Johnson Urged to Ban Huawei in U.K. 5G Networks by End-2021 — Boris Johnson is under pressure to announce a ban on telecoms companies from installing new equipment made by Huawei Technologies Co in Britain’s fifth-generation mobile networks from as soon as the end of 2021.
- Hong Kong’s Resilient Dollar Looks More Shakey After Decline — The Hong Kong dollar is suddenly appearing more vulnerable, after weeks of trading at the strong end of its band against the greenback.
- China Presses Global Yuan Role as U.S. Tensions Spread to FX — Faced with the prospect of restricted access to U.S. dollars, China’s answer is to get more people to use its own currency instead.
- Zero-Fee Trading in Hong Kong Marks New Front in Broker War — Less than a year since Charles Schwab Corp. reshaped the U.S. discount broker industry with zero-fee trading, a Hong Kong firm is following suit in a move set to deepen the pain for the city’s many hard-pressed trading houses.
- Chinese Biotech Beigene to Raise $2.1 Billion in Share Sale — Chinese biotech company Beigene Ltd. plans to raise $2.1 billion in a direct offering of 145.8 million shares to fund drug research and market its treatments in the U.S. and China, said the Nasdaq-listed company on Monday.
- China’s Next Trillion-Dollar War Is Over 5G Manufacturing — A world embroiled with Covid-19 still needs a factory floor. Beijing is moving fast to own this one.
Reuters
- Tight Chinese pork supply to ease by fourth quarter: agriculture official — Construction of pig farms and rapid restocking will ease tight pork supply from the fourth quarter, an official at China’s Ministry of Agriculture and Rural Affairs said on Monday.
- Sweden joins France, Germany in weighing measures against China over Hong Kong — Sweden said on Monday it supported Franco-German efforts for a robust response to China’s new security law on Hong Kong, joining Denmark and the Netherlands in pushing the European Union to consider countermeasures on Beijing.
- China canola oil hits three-and-a-half year high, open interest soars on supply woes — China’s canola oil futures prices rose to its highest in nearly three-and-a-half years on Monday, after previously charting gains for 10 out of 11 weeks, as lower imports due to tensions with Canada spurred supply concerns and higher trading interest.
- China urges coal miners to boost output ahead of summer power use — China’s central state planner urged miners to boost domestic coal output and storage to ensure sufficient energy supplies during the peak summer season, while asking local authorities to maintain coal import restrictions.
- Smartphone shipments in China fall 16% in June: government data — Smartphone shipments in China fell 16% in June compared with a year earlier, according to government data released on Tuesday.
- China’s export slump to ease in June as economies reopen, imports fall less: Reuters poll — The slump in China’s exports likely eased in June as some countries reopened their economies, while imports contracted less sharply on higher crude oil and commodities purchases, a Reuters poll showed on Monday.
- China vows ‘zero tolerance’ towards illegal market behavior — China will show “zero tolerance” towards securities and accounting fraud and will step up a crackdown on major capital-markets crimes, financial regulators said after a meeting of the Financial Stability Development Committee.
Xinhua
- Chinese banking sector’s assets up 9.8 pct — The total assets in China’s banking sector continued to expand in the first half of the year while the industry’s non-performing ratio saw a slight increase as the economy faced headwinds.
- China’s central bank injects 50 bln yuan into market — China’s central bank on Monday pumped cash into the banking system via reverse repos for the first time in July to maintain liquidity.
- Shanghai bourse ranks 2nd in global fundraising in H1 — China’s Shanghai Stock Exchange ranked second in global fundraising during the first half, backed by sizeable listings and the continuing popularity of the bourse’s sci-tech innovation board, commonly known as the STAR market, according to a report by global audit and consultancy firm KPMG.
- CITIC Securities posts surging net profits in June — CITIC Securities, one of China’s leading brokerage firms, reported rising net profits in June.
- China Securities reports net-profit surge — China Securities Co., Ltd., a leading Chinese securities broker, reported a 122.4 percent rise in net profits in June.
- IPTV sees steady growth of user base in China — IPTV, or Internet Protocol TV, registered a steady growth of its user base in China last year, according to an annual report on the country’s radio and TV sectors.
- China’s road logistics price index up in June — China’s road logistics price index went up in June, the latest data showed.
- China’s excavator sales surge 62.9 pct in June — China’s excavator producers reported surging sales in June, foreshadowing a quick demand recovery amid construction boom in the country, industrial data showed.
- Feature: Chinese firm’s upgrade of Tanzania’s largest port set to bolster handling capacity — Large vessels from across the world will soon be able to anchor in Tanzania’s largest Dar es Salaam Port following upgrades undertaken by China Harbour Engineering Company (CHEC).
- Guotai Junan Securities sees rising profits in June — Guotai Junan Securities Co., Ltd., a leading Chinese securities firm, reported rising net profits in June.
Other Publications
- AP News: Australia to offer residence option to 10,000 Hong Kongers — The Australian government says it will offer around 10,000 Hong Kong passport holders currently living in Australia a chance to apply for permanent residence once their current visas expire.
- TechCrunch: Microsoft spins out 5-year-old Chinese chatbot Xiaoice — Microsoft is shedding its empathetic chatbot Xiaoice into an independent entity, the U.S. software behemoth said (in Chinese) Monday, confirming an earlier report by the Chinese news site Chuhaipost in June. The announcement came several months after Microsoft announced it would close down its voice assistant app Cortana in China among other countries late last year.
- Politico: Trump national security adviser heading to Europe for talks on China — Robert O’Brien, President Donald Trump’s national security adviser, is traveling to Paris on Monday for a three-day trip to meet with European officials on China and other foreign policy issues, according to an administration official. O’Brien and Matthew Pottinger, the deputy national security adviser, are visiting France for a meeting with O’Brien’s counterparts from the United Kingdom, France, Germany and Italy.
