CX Daily: China's Services Didn't Follow Manufacturing's Rebound
China’s services activity expands at weakest pace in 7 months: Caixin PMI
The Caixin China General Services Business Activity Index fell to 51.3 in September from 52.1 in the previous month, indicating that China's services sector expanded at the slowest rate in seven months, even as new business increased at the fastest pace in 20 months.
The Caixin China Composite Output Index, which covers both manufacturers and service providers, inched up to 51.9 in September from 51.6 in the previous month, in part driven by faster growth in the manufacturing sector. Readings higher than 50 indicate expansion.
Total new business orders placed with services providers rose in September at the fastest pace since January 2018, driven by new products and firmer customer demand, according to the survey. New export business expanded at a slower pace than the previous month. This reflected that growth in new business was mainly driven by domestic demand, an analyst said.
FINANCE & ECONOMICS
Hong Kong bourse operator drops bid for London Stock Exchange
The operator of Hong Kong’s stock exchange abandoned its efforts to take over the London Stock Exchange Group (LSE), withdrawing before a Wednesday deadline requiring it to put forward a full, formal offer.
The unsolicited bid, first announced Sept. 11, was rejected outright by the board of the London exchange, which said it saw “no merit” in holding talks over the deal. Hong Kong Exchanges & Clearing Ltd. (HKEx) said Tuesday that despite discussions with regulators and shareholders, it was unable to “engage” with the management of the bourse. As a result, it decided not to proceed with the proposal, HKEx said.
Trade war /
Liu He to visit Washington as high-level trade talks resume
Chinese Vice Premier Liu He will visit Washington from Oct. 10 to 11 for a fresh round of high-level trade talks with the U.S., state-run Xinhua News Agency reported Tuesday.
Liu, who is China’s top trade negotiator, will meet U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin. Members of the Chinese delegation also include Commerce Minister Zhong Shan and PBOC Governor Yi Gang. This will be Liu’s 13th round of trade talks with the U.S. government, and his third since negotiations broke down significantly in May precipitating further escalations in the trade conflict.
EU urged to copy China’s Belt and Road plan to engage in Africa
The EU is being urged to copy China’s BRI to better channel the billions of euros in aid it sends to Africa each year in a report that highlights both Africa's explosive population growth and climate crisis that will result in “intense and disorderly migratory pressures” toward Europe in the years ahead.
The proposal for a single institution to deal with all aid to the continent is part of a report on the bloc’s external lending strategy circulated to EU diplomats and is due to be presented to the bloc’s finance ministers later this week. It includes the establishment of a “European Climate and Sustainable Development Bank” to consolidate the bloc’s development funding activities.
Quick hits /
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BUSINESS & TECH
Photo: IC Photo
U.S. blacklist /
Chinese companies protest inclusion on U.S. export blacklist
China’s foreign ministry said Tuesday that U.S. allegations of human rights violations by the Chinese government are “nonsense,” state-owned broadcaster CCTV news reported, after the U.S. Commerce Department added 28 Chinese entities to its Entity List for their alleged involvement in a government campaign targeting Muslim ethnic minorities in Xinjiang.
Eight tech companies were added to the list, including two surveillance-camera makers – Hangzhou Hikvision Digital Technology Co. Ltd. and Zhejiang Dahua Technology Co. Ltd. — and three AI startups — SenseTime Group Ltd., Megvii Technology Ltd. and Yitu Technologies. The public security bureau of Northwest China’s Xinjiang Uygur autonomous region and 19 bodies linked to the bureau were also added.
NBA apologizes as Rockets GM tweet sets off firestorm in China
The National Basketball Association (NBA) tried to defuse a fast-growing furor in its most important overseas market over a weekend tweet in support of Hong Kong protestors by Houston Rockets team General Manager Daryl Morey.
The NBA said that it is “regrettable” that Morey’s tweet offended Chinese fans and that it wanted to be a "unifying force to bridge cultural divides." Nevertheless, some of the NBA's major business partners, including the Chinese Basketball Association (CBA), said they would suspend business ties with the Rockets. The NBA has a host of licensing and retail deals in China, including a $500 million pact with Tencent Holdings Ltd. and a 30-plus-years partnership with state-run broadcaster CCTV.
Volvo and Chinese parent Geely to merge combustion engine units
Volvo Cars and Chinese parent company Geely plan to merge their internal combustion engine operations into a stand-alone company, a step the Swedish automaker says will cut costs as it shifts to a fully electrified lineup.
The combined venture would supply 2 million diesel and gasoline-powered engines, compared with the 600,000 Volvo produces today, giving the two companies more scale to reduce materials costs. It could also supply other car manufacturers, though none have expressed interest yet, Volvo Chief Executive Officer Hakan Samuelsson said.
Supply chain /
Samsung closes final smartphone factory in China
South Korean technology behemoth Samsung Electronics closed its final smartphone production unit in China, Reuters reported Wednesday, amid rising labor costs and comparatively lackluster economic growth.
The factory, located in the southern city of Huizhou, followed the shuttering of two other manufacturing bases in Tianjin and Shenzhen last year. It employed 6,000 workers and produced 63 million handsets in 2017, Reuters reported, citing South Korean media. Samsung has faced an uphill battle in China in recent years as domestic smartphone players have slashed its market share from 15% in 2013 to 1% earlier this year.
Singapore’s Grab recruits China partners in bid for ‘super app’ status
Singapore-based tech startup Grab Holdings Inc. is courting partners from China to help it become a Southeast Asian “super app” providing a plethora of services beyond its original ride-hailing and subsequent food delivery offerings.
Grab recently formed tie-ins with a series of Chinese companies, including online insurance group ZhongAn and health care service provider Ping An Good Doctor, which would allow Southeast Asian users to purchase insurance and access medical-related services such as consulting doctors online and purchasing medicines through the Grab app.
Quick hits /
China’s electronics-makers open new front in the living room
Alipay Golden Week data suggests slowing economy not stopping Chinese from spending abroad
Kobe Bryant-backed online educator VIPKid raises fresh funding from Tencent
Huawei sues rival Chinese phone maker in infringement case
Chinese home rental platform Q&K files for U.S. IPO
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