Caixin
Jun 04, 2019 03:51 PM
CX DAILY

CX Daily: The Wake of China's 'Unreliable' Blacklist Announcement

Vice Minister of Commerce Wang Shouwen
Vice Minister of Commerce Wang Shouwen

The wake of China's ‘unreliable’ blacklist announcement

1. China on Sunday said its blacklisting plans shouldn’t be over-interpreted and are meant to maintain fair trade. Vice Minister of Commerce Wang Shouwen reiterated that China will look at whether companies discriminate against a Chinese company by blocking or cutting off its supplies; whether they do so for non-business purposes and against market rules; whether they cause actual damage to a Chinese company or industry; and whether they threaten China’s national security.

2. The U.S.-based Institute of Electrical and Electronics Engineers (IEEE), one of the world’s largest science publishers, has lifted a ban limiting Huawei employees’ participation in the peer review process, saying Monday it would no longer ban Huawei staff from certain peer review procedures for research papers published by the IEEE.

3. China has started to investigate FedEx over the alleged sending of several Huawei parcels to the U.S. instead of their intended destinations, according to a Saturday report by state-owned Xinhua news agency.

FINANCE & ECONOMICS

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Employees work at a tool manufacturer in East China’s Jiangsu province on May 26. Photo: IC Photo

Economy /

Light industry grows for third straight month: Caixin survey

The Caixin China General Manufacturing PMI came in at 50.2 in May, unchanged from the previous month, suggesting improvement in the sector for the third straight month as increases in new orders picked up pace while that of new export orders returned to expansionary territory. Export orders increased at a pace not seen since January, which was the best reading since March 2018.

In contrast, China’s official manufacturing PMI, released by the National Bureau of Statistics on Friday, fell to 49.4 in May from 50.1 the month before. However, the Caixin manufacturing PMI focuses on light industry, while the official one focuses on heavy industry. The geographic distributions of the companies covered in the two surveys are also different.

Trade war /

China blames U.S. for trade talks setbacks

The U.S. is entirely responsible for recurring setbacks in negotiations with China during their ongoing trade conflict, Beijing said in a white paper released Sunday, providing a detailed recap of the clash that dates back to more than a year ago.

The trade war began with the U.S. government’s initiation of a Section 301 investigation against China’s trade practices in March 2018 and the announcement of initial punitive tariffs by Washington later that month. The U.S. took those actions despite China sending a trade delegation to Washington for talks a month earlier – one of several instances of U.S. “backtracking” described in the paper.

Bank seizure /

Central bank says Baoshang takeover is one-off event

The recent government takeover of Baoshang Bank, a private Chinese bank, was a one-off case and won’t be followed by further takeovers in the near future, China’s central bank said, in a bid to ease market concern.

Regulators assumed control of Baoshang May 24, in the country’s first direct takeover of a commercial lender in 20 years, prompting fears about broader risks for other Chinese lenders. But Baoshang is a special case, as Tomorrow Holding, Baoshang’s largest shareholder, embezzled a large amount of the bank’s funds, the PBOC said Sunday.

Quick hits /

Former PBOC head expects progress on WTO reforms at G-20

 

BUSINESS & TECH

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An engineer from British mobile operator EE inspects Huawei's 5G-related equipment in London, England, March 15, 2019. Photo: VCG

Huawei ban /

How Huawei prepared for American sanctions

Huawei's not lying when it says that it saw it coming. When rival ZTE was hit by the U.S. ban last spring, the company stepped up its search for hardware replacements from domestic suppliers. After the detention of its CFO Meng Wanzhou in Canada in December, Huawei accelerated procurement to stockpile more imported components.

Observers may fret about the company's prospects in developing chips, which many believe lag behind U.S. competitors, and software, for which there is often no replacement. Others say Huawei's 5G technology actually “outpaced rivals by at least 1 to 1.5 years,” which, if true, could buoy the company for a while yet.

Check out our feature.

M&A / EU

France wants to overhaul EU merger rules to fend off China, U.S.

French Finance Minister Bruno Le Maire will demand an overhaul of the European Union’s antitrust rules that France says leave the continent’s economy and companies vulnerable to U.S. and Chinese rivals, particularly in the digital sector.

Addressing an international conference on competition and the digital economy, Le Maire will say the European Commission should take a broader view before blocking potential mergers within Europe and look more closely at the benefits. Clipping the wings of foreign tech giants and helping to foster the emergence of “European champions” are tactics France is hoping will lead to a higher profile for Europe on a global stage increasingly dominated by the U.S. and China.

M&A /

Steel giant Baowu closes in on world’s biggest steelmaker with Magang merger

China’s biggest steel producer, state-owned China Baowu Iron and Steel Group, will take a 51% stake in a smaller rival, Magang Group Holding Co. Ltd., in the latest move to consolidate the bloated industry. The deal still needs to receive regulatory approval.

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The move will bump up Baowu’s total production capacity, bringing it closer to that of Arcelor Mittal SA, the world’s largest steelmaker. The Chinese government wants 60% of capacity to be handled by the country's largest steelmakers by end of the decade.

Quick hits /

Huawei to sell off undersea cable business

China gymnast hero Li Ning’s brand makes comeback with MSCI inclusion

Everbright Securities unit latest to get sued in wake of bungled British deal

No more fake discounts during China’s annual ’shopping festivals,’ Beijing says

China will issue licenses for commercial applications of 5G internet technology 'soon'

Baidu names new tech chief after nine years without CTO

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