Caixin
May 14, 2019 03:51 PM
CX DAILY

CX Daily: China Announces New Tariffs On About 5,000 U.S. Goods

Trade war escalates as China strikes back with tariff increases on American goods

Beijing struck back by raising tariffs on U.S. products worth $60 million annually in retaliation for Washington’s latest move to increase duties on $200 billion of Chinese imports. In a late Monday statement, the Chinese government said the increased tariffs of as much as 25% will affect nearly 5,000 U.S. products starting June 1 in response to U.S. "unilateralism and trade protectionism."

The renewed clash came as the latest round of high-level talks ended Friday without a deal and the Trump administration slapped higher tariffs on Chinese products, although both sides have signaled intentions to continue conversations. In a commentary, China's state broadcaster CCTV said China doesn’t want to fight a trade war initiated by the U.S. but is not afraid of it. "If we talk, our door is always wide open; if we fight, we'll fight to the last," the commentary said.

FINANCE & ECONOMICS

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A residential building complex on the Dayun River in Huai 'An city, east China's Jiangsu province, April 14, 2019. Photo: VCG

Real estate /

Jump in a lower-tier city's land prices hints at sharp recovery in real estate

One day in April, 13.2 billion yuan ($1.68 billion) of land sold at an auction in Hefei, capital of Anhui province, with the sale prices in eight of the transactions exceeding the initial bid prices by at least 80%. Already in March, land auction sales prices in second-tier cities on average exceeded the initial bid prices by less than 30%, according to our calculations.

The scene in Hefei hints at a sharp recovery in China’s property market since March, which had suffered after authorities imposed tightening measures last year. Recent land sales stand in stark contrast to 2018, when 1,808 plots failed to be sold at auction in 16 major cities — up 93.16% from a year earlier, according to one property consulting firm.

Misconduct /

Guangdong’s largest auditor probed after client overstates cash holdings by billions

GP Certified Public Accountants Co. Ltd., the auditor of an embattled pharmaceutical company, is being probed by the China Securities Regulatory Commission, sources told us.

GP Certified is the auditor of traditional Chinese medicine supplier Kangmei Pharmaceutical Co. Ltd., which is also under investigation for allegedly violating information disclosure laws. Kangmei announced last month that it was making massive corrections to its financial report for 2017, including an overstatement of 29.9 billion yuan ($4.4 billion) in the company’s cash holdings, which set a record of its kind according to our calculation. Kangmei’s stock is a component of MSCI Inc.’s global indexes.

Policy /

China has ample policy tools for uncertainties, central bank says

Officials of China’s central bank said Friday that there are plenty of policy tools and ample room to maneuver for the country to respond to internal and external uncertainties.

The comments came hours after the U.S. increased tariffs on Chinese goods and followed official reports of slower credit growth in April. The loss of credit momentum fueled concerns over slowing economic growth and sparked speculation of further loosening of monetary policy.

China's Nasdaq /

Much-anticipated high-tech board gets first IPO review suspension

Ninebot, a robots and short-distance transportation vehicle maker, formally requested that its review for listing on China's new Nasdaq-style high-tech board be suspended Sunday — the first road-bump in the board's launch.

In April, Ninebot, long seen as one of the strongest candidates for a listing, decided to convert preferred stocks some investors were holding to ordinary shares. The company then received documents from regulators demanding an explanation and audit materials. Ninebot later applied to suspend the review temporarily to allow more time to respond to the regulator's requirements.


BUSINESS & TECH

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Beijing Daxing International Airport

Gallery /

Beijing's new airport conducts first test flight this week

Air China, China Eastern Airlines and China Southern Airlines sent their flagship Boeing and Airbus planes on test flights at Beijing Daxing International Airport Monday.

The airport's official opening is planned for the end of September, according to the city’s top economic planner. Many spectators gathered to watch the test flights.

Auto /

China’s car sales appear to be in free fall

China’s auto sector extended last year’s declines in the first four months of 2019, with little indication a turnaround is on the horizon.

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For the first four months, total sales of passenger vehicles fell nearly 12% to about 6.6 million units, according to the latest figures from the China Passenger Car Association. April recorded a 17% YOY decline to just 1.5 million units, the industry association’s data showed.

E-commerce /

Pinduoduo gives Alibaba a run for its dominance

Pinduoduo burst onto Alibaba’s radar screen with rapid revenue growth, profit metrics on a par with those of the market leader and a down-market strategy challenging Alibaba’s emphasis on higher-end products and consumers. Now that JD.com is losing momentum, it's Pinduoduo Inc. that has emerged as the chief rival to Alibaba Group in China’s trillion-dollar online retail market.

In 2018, Pinduoduo reported 652% growth in sales to 13 billion yuan ($1.9 billion) with 419 million annual active users, surpassing JD.com and moving closer to Alibaba’s 699 million. While the two incumbents control a combined 75% of the market, Pinduoduo Inc. managed to seize 5.2% in only four years of existence. Check out our deep dive on the company that's causing Alibaba to question its own merchants' loyalties.

Pollution /

Environmental inspectors paint damning picture of provincial failings

Eight of China’s provinces have been criticized for failing to remedy previously discovered pollution and environmental protection issues.

The criticism came from four central government environmental supervisory groups that carried out follow-up inspections of problem areas found between 2017 and 2018. The teams, which visited 10 provinces in late 2018, released findings for eight of the provinces this month, Anhui, Shandong, Sichuan, Hubei, Hunan, Shanxi, Guizhou and Shaanxi. All eight reports offer damning evidence that local governments failed to enforce environmental protection laws or take steps to rectify the issues.

Quick hits /

Market watchdog orders Mercedes fixes after customer complaint

Leshi’s listing suspended as delisting looms

Shenzhen-listed photo provider back in operation after black hole blunder

U.S. college admissions scandal hurts Shanghai-listed pharma company

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