Caixin
Jun 25, 2019 02:47 PM
CX DAILY

CX Daily: Xi at the G-20

Banners for the G-20 meeting of finance ministers and central bank governors outside the meeting’s media center in Fukuoka, Japan, on June 8. Photo: VCG
Banners for the G-20 meeting of finance ministers and central bank governors outside the meeting’s media center in Fukuoka, Japan, on June 8. Photo: VCG

What to know about Xi at the G-20

China’s foreign ministry has now officially announced that Chinese President Xi Jinping will attend the G-20 summit, but there's much more at stake than just trade with the U.S. The ministry’s announcement lacked news of an official state visit to Japan, suggesting Japanese Prime Minister Shinzo Abe’s efforts to normalize relations between China and Japan are unlikely to further materialize, at least for now.

Little has been revealed about the meeting between Xi and President Trump other than that they would exchange views on “fundamental issues.” Recent U.S. moves to blacklist even more Chinese companies has injected pessimism into prospects of a trade resolution in the near future.

Xi is also expected to hold trilateral talks with Indian Prime Minister Narendra Modi and Russian President Vladimir Putin and attend an informal meeting of the leaders of BRICS, though details were not revealed. Lastly, China is expected to push for WTO reforms aimed at enhancing the organization’s authority and effectiveness, a commerce official said.

FINANCE & ECONOMICS

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China’s central bank increased the total outstanding quota of short-term commercial paper for five major brokerages to nearly 200 billion yuan in a bid to inject more liquidity into the interbank market. Photo: VCG

Liquidity /

Big brokerages tapped to cool interbank market jitters after fall of Baoshang

The PBOC is greenlighting a three-fold increase in short-term debt for China’s major brokerages in an effort to inject liquidity into an interbank market chilled by the Baoshang takeover. The central bank raised the quota for GF Securities Co. Ltd.’s outstanding short-term commercial paper to 17.6 billion yuan ($2.56 billion), the firm said Sunday.

The PBOC has also raised quotas for Shanghai-listed Citic Securities Co. Ltd. to 46.9 billion yuan, Huatai Securities Co. Ltd. to 30 billion yuan, Guotai Junan Securities Co. Ltd. to 50.8 billion yuan, and Haitong Securities Co. Ltd. to 39.7 billion yuan, according their filings. The figures total 185 billion yuan, more than three times over their previous combined quota.

Baoshang takeover /

Baoshang's fallout spreads to secretive corner of bond market

Beijing-based New China Fund Management recently said it was forced to default on some products after failing to get loans. The mid-size investment house is among a number of nonbank institutions that have felt a funding crunch as contagion fears spread in the wake of the Baoshang takeover.

Although China's regulators have taken a series of steps to ease market jitters, with some success, the falling dominoes of the Baoshang takeover are now hitting the most secretive corner of China’s bond market ― the market for so-called structured bonds. Analysts said nonbanks that are distanced by lenders are those that have most often used structured bonds as loan collateral.

Check out our deep dive.

Debt guarantee /

Bank of Beijing will cover $360 million debt of Citic Guoan

Bank of Beijing will fulfill its guarantee responsibilities for all of the principal and interest under a 2.5 billion yuan debt guarantee agreement, the bank said Friday night. Troubled Citic Guoan missed a first-quarter interest payment of 39.45 million yuan on the debt in March, and Bank of Beijing Co. made the payment instead.

Bank of Beijing said the action doesn’t mean a final loss for the bank as it had taken asset preservation measures to ensure that the book value of the assets can cover the risk, and it will try to recover funds from the debtor. But whether the guarantor can recover its loss is questionable as Citic Guoan is deeply mired in debt disputes and asset seizures.

Quick hits /

Supreme court calls for stronger punishments for illegal activities on tech board

Trump has gotten China to lower its tariffs — toward everyone else

Singaporean prime minister calls for united ASEAN amid U.S.-China tensions

China Railway Signal gets green light to list on Nasdaq-style tech board

Bitmain revives IPO plan as Bitcoin hits one-year high

 

BUSINESS & TECH

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A Sugon production line in Tianjin on May 29. Photo: IC Photo

Blacklists /

China defiant in face of latest U.S. high-tech blacklistings

New U.S. Huawei-style sanctions on two major Chinese supercomputer-makers took effect Monday, prompting one to suspend trading of its shares, while China’s national broadcaster CGTN called the move an ineffective bargaining chip ahead of a coming meeting between the U.S. and Chinese presidents.

The U.S. Department of Commerce announced its latest move Friday, targeting Chinese company Sugon and three of its affiliates, as well as the Wuxi Jiangnan Institute of Computing Technology, citing national security grounds. They were added to the department’s Export Administration Regulations catalog, meaning the sale of any U.S. technology, software or other high-tech products must be formally authorized by the government, amounting to an effective ban.

Tech war /

Huawei goes on offensive in ongoing clash with Washington

Embattled telecom giant Huawei Technologies Co. has sued the U.S. Commerce Department, demanding the return of company equipment that was seized while in the U.S. more than a year ago for potentially violating American export controls.

The lawsuit is the fourth so far this year between Huawei and Washington, and is unrelated to its May blacklisting. According to a Friday filing in Washington, Huawei sent the unspecified equipment from its Shenzhen headquarters to the U.S. for testing in an independent lab around July 2017. When the equipment was en route back to China, it was seized by an export arm of the Commerce Department for potentially violating U.S. technology export laws.

Huawei /

FedEx rejects package with Huawei phone sent to U.S. from U.K.

FedEx Corp. rejected a package containing a Huawei Technologies Co. phone being sent from the U.K. to the U.S. in what the shipping company says was a mistake. This latest mishap didn’t involve Huawei directly, unlike previous incidents, where two packages containing documents being shipped to Huawei in China from Japan were reportedly diverted to the U.S. without authorization.

“The package in question was mistakenly returned to the shipper, and we apologize for this operational error,” FedEx said in a statement regarding the latest incident. The shipping company clarified that it “can accept and transport all Huawei products except for any shipments to listed Huawei entities on the U.S. Entity List.”

Market exit /

Carrefour finds buyer for its China business

French supermarket chain Carrefour SA said Sunday that it has agreed to sell an 80% equity interest in Carrefour China to Chinese retailer Suning.com Co. Ltd. The 4.8 billion yuan ($699 million) deal values Carrefour’s Chinese business at 1.4 billion euros ($1.6 billion).

Carrefour’s retreat from the Chinese market follows years of struggle in the country, where e-commerce penetration is among the world’s highest. Last year, the company’s loss in China increased by 47.4% to 578 million yuan ($84.1 million).

Quick hits /

LinkedIn wants to adapt to China even more

Amazon’s merchants are feeling the trade war pain

Is the era of copycat carmakers ending in China?

Baidu offers more news search options after journalist accuses it of bias

Mengniu Dairy announces Olympics deal amid spat with rival Yili

New funding values Chinese artificial-heart maker at 1 billion yuan

China Literature eyes Southeast Asia expansion

State-owned Dongfeng Motor joins new-energy fund as subsidy cuts loom

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