CX Daily: Declines in China's Mortgage Rates are Spreading
Real estate /
Mortgage rates fall in China’s tier-2 cities
Lower mortgage rates are spreading from China’s top-tier cities to smaller tier-2 cities as housing-market growth slows under pressure from government curbs and economic headwinds.
February mortgage rates fell significantly in cities including Hangzhou, Nanjing, Zhengzhou and Hefei, according to a report Tuesday by online financial service platform Rong360.com. The declines started in December, when the national average mortgage rate for first-time homebuyers dropped amid slower growth in housing sales.
FINANCE & ECONOMICS
Wang Jingwu, head of the central bank's Financial Stability Bureau. Photo: IC
China won’t waver on rules to rein in financial risk, official says
Regulators will not waver in pushing through asset management rules that have caused turmoil in the financial sector, a senior central bank official said, amid concerns slowing growth could weaken China’s campaign against financial risks.
“All parties should not forget the original intent [of these rules] — to reduce and control financial risks,” Wang Jingwu, head of the PBOC’s Financial Stability Bureau, told us. “If regulators yield to pressure from financial institutions, then the rules’ effectiveness will be obliterated.”
Excavator sales surge hints at rising infrastructure investment
A total of 18,745 excavators were sold in China last month, more than in any February since 2011, which analysts argue is most likely driven by increasing infrastructure investment.
Last month’s figure was up 68.7% from a year earlier, according to data released by the China Construction Machinery Association. Breaking down the increase, domestic sales were up 77.7% to 17,286, and exports were up 5.2% to 1,459.
Shanghai’s high-tech board tests brokerages’ market mettle
As China speeds toward the launch of a Nasdaq-style new board, dubbed the “Sci-Tech Innovation Board,” domestic brokerage firms are facing a number of pressing challenges as they come to grips with a new IPO system, especially how to calculate a fair market value for a company and how to price its shares.
Brokerages, which sponsor IPOs, work within guidelines set by the regulators. They will have to provide an initial assessment of a company’s market value and then try to achieve that price by securing enough demand from investors. If there’s a significant difference between the preliminary appraisal value and the final valuation, the company may have to scrap its listing. An inaccuracy could also affect the sponsor’s performance in the Shanghai Stock Exchange’s internal assessment system.
Quick hits /
BUSINESS & TECH
Terry Gou, founder and chairman of Foxconn. Photo: VCG
Foxconn chief accuses Microsoft of ‘bullying’ over patent lawsuit
The head of Hon Hai Precision Industry Co. Ltd. has trashed a patent lawsuit filed by Microsoft against the company, accusing the tech giant of “scapegoating” it.
Microsoft Corp. filed suit Friday in a California federal court against Foxconn's Taiwan parent company, alleging it did not comply with a 2013 agreement to make royalty payments. Microsoft is demanding royalty reports and a review of Hon Hai’s books. Hon Hai's chief executive Terry Gou responded saying his company wouldn’t have to “pay a dime” because as a manufacturing contractor it was not subject to licensing fees for patents.
Share of spoils /
Apple, WeChat tussle over how to divvy up mini program revenue
Ubiquitous app WeChat is locked in a dispute with Apple Inc. over how they share revenue from the app’s popular mini programs, whose adoption has grown at lightning speed.
Apple normally takes 30% of any in-app purchase transacted via apps on its operating system, iOS, but since May 2018 WeChat has deactivated the function while it negotiates with Apple over how they should divide the revenue from mini programs. The negotiations are currently in a stalemate.
Boeing crash /
Hong Kong bans Boeing 737 Max planes from airspace
Hong Kong's Civil Aviation Department announced Wednesday a ban on all Boeing 737 Max aircraft in the city's airspace, effective at 6 p.m. local time.
A spokesperson for China's Ministry of Foreign Affairs said separately that the country had no timeline to resume flights of the aircraft model. The spokesperson said that China would contact the U.S. Federal Aviation Administration and Boeing, and inform domestic airlines to resume the jetliner model’s commercial flights after safety issues are solved.
Supply chain /
Lithium mine giant Tianqi extends reach into downstream battery production
Tianqi Lithium Corp.’s global mine-buying binge has helped the company rapidly gain control of half the world’s supply of lithium, a key component of electric vehicle batteries. Now, it wants to consolidate its reach across the whole production cycle.
This week the company said it intends to purchase a 49.9 million yuan ($7.44 million) stake in Xiamen Tungsten New Energy Materials Co. Ltd., a major manufacturer of lithium battery components. The move comes despite the company’s rapid buildup of debt. Its $4.1 billion purchase of a 23.77% stake in rival Sociedad Quimica y Minera de Chile SA, long drawn out because of several antitrust cases in the Chilean courts, is thought to have almost doubled its assets-to-liabilities ratio to 78%.
Quick hits /
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