Caixin
Oct 12, 2019 07:34 AM
CX DAILY

CX Daily: China and U.S. Reach A Partial Trade Accord

Chinese Vice Premier Liu He (left) arrives at the Office of the U.S. Trade Representative Thursday morning for the 13th round of trade talks. Photo: Bloomberg
Chinese Vice Premier Liu He (left) arrives at the Office of the U.S. Trade Representative Thursday morning for the 13th round of trade talks. Photo: Bloomberg

Trade War /

China, U.S. reach ‘substantial phase one’ trade deal, Trump says

Speaking in the Oval Office during a meeting with Chinese Vice Premier Liu He Friday afternoon, President Trump said trade negotiators reached “a very substantial phase one deal” to thaw the 18-month trade war, according to U.S. media reports.

Trump said the deal includes as much as $40 billion to $50 billion in Chinese purchases of agricultural products and a commitment to further open up China's financial sector. In exchange, the U.S. agreed not to proceed with a hike in tariffs to 30% from 25% on $250 billion of Chinese goods set to go into effect next Tuesday.

U.S. businesses were cheered by the tentative trade deal. “The decision to delay planned tariff hikes is welcome news to U.S. retailers and consumers heading into the busy holiday shopping season,” said David French, senior vice president for government relations at the National Retail Federation.

The Dow Jones Industrial Average was up more than 480 points earlier the day before closing up 320 points.

FINANCE & ECONOMICS

csrc

China Securities Regulatory Commission provides specific timetable to remove foreign ownership limits for domestic finance companies. Photo: VCG

Market opening /

China sets timetable to scrap caps on foreign financial ownership

China’s securities regulator pushed ahead with its promise to remove foreign ownership limits for domestic finance companies next year, a positive gesture from Beijing as a new round of trade negotiations with the U.S. took place in Washington.

Foreign companies would be allowed to take total control of mainland-based futures companies, mutual funds and securities businesses starting as early as Jan. 1, 2020, China Securities Regulatory Commission (CSRC) spokeswoman Gao Li said Friday at a routine press conference.

The announcement of a specific timetable on the issue came the same day President Donald Trump met with Chinese Vice Premier Liu He at the White House after two days of trade talks.

Bankruptcy /

In landmark case, Wenzhou court approves China’s first de facto personal bankruptcy

A court in eastern China made a landmark ruling in the country’s first de facto personal bankruptcy case, setting a precedent that could support government efforts to set up a system allowing millions of indebted individuals and their creditors to resolve their financial disputes.

The Intermediate People’s Court in Wenzhou, a city renowned for its private entrepreneurship and private lending, published a statement Wednesday saying it approved the legality of a bankruptcy agreement between an individual surnamed Cai and his creditors. Chen Weiguo, a senior court official, said this was the first such case in the country following a guideline published in July by government bodies including the Supreme People’s Court to promote the establishment of a personal bankruptcy system.

Household debt /

Finance watchdog targets aggressive credit card marketing by banks

The China Banking and Insurance Regulatory Commission, the country's banking watchdog, will crack down on credit card marketing to vulnerable groups saying in a notice that some banks have aggressively promoted credit cards to low-income people and high-risk clients.

This includes banks targeting college students who generally do not have the means to repay their loans, failing to police credit limits once people are signed up, and extending excessive credit to clients who are already indebted to other lenders. Financial institutions are instructed to evaluate themselves and report to the CBIRC’s regional offices before Nov. 30. Those will in turn implement spot checks and report to the CBIRC’s Financial Rights Protection Bureau before Dec. 15.

Pork /

Pig disease drives China’s imports of U.S. pork to highest ever

In the week ended Oct. 3, imports soared to 142,200 metric tons, a weekly record, according to U.S. Department of Agriculture data. For all of September, shipments were 19,900 tons.

China signaled it may import as much as 400,000 tons to stem a domestic shortfall. The swine fever outbreak killed millions of pigs.

Securities /

MSCI to add STAR Market shares to global indexes

Beginning in November, equity securities on China’s Nasdaq-style Sci-Tech Innovation Board of the Shanghai Stock Exchange, also known as the STAR Market, will be eligible for inclusion in the MSCI Global Investable Market Indexes (GIMI), MSCI said Thursday in a statement.

The move could introduce more liquidity into China’s equity markets and offer broader access for global investors to the world’s second-largest economy. Chinese authorities have stepped up efforts to open up the financial sector and encourage steady inflows of global funds into domestic markets, in part to help balance pressures on the yuan after an exodus of capital in 2015.

Quick hits /

Chinese steel wheels hit by EU tariffs as high as 66.4%

Top banks pledge $420 billion of credit for Yangtze Delta region

Citic Bank International boss put in charge of mainland business

BUSINESS & TECH

Wuxi bridge /

6

Bridge collapse in Jiangsu kills 3

A highway bridge in Wuxi city in eastern China’s Jiangsu province partly collapsed around 6 p.m. Thursday, killing three and injuring two, officials from the city confirmed.

In videos spread on social media, a section of an overpass at a busy intersection of the 312 national highway appeared to sway before toppling to one side. Wuxi is the largest stainless steel distribution center in East China and one of the largest in the whole country. Local residents of Wuxi said that the vehicles along the overpass often appeared to be overloaded.

Transportation /

Kuwait plows $200 million into China’s high-speed rail network

Kuwait’s sovereign wealth fund became the first foreign investor in China’s state-of-the-art high-speed rail network, as the nation looks to bring more private money into a system whose construction has cost billions of dollars.

The Kuwait Investment Authority contributed $200 million to a 2.4 billion yuan ($337 million) high-speed rail investment fund organized by China’s largest investment bank, CICC, according to a statement from CICC Capital. Other investors include Agricultural Bank of China, one of China’s big four state-run banks, which attended a Thursday ceremony to announcement the investment.

M&A /

CK Asset sells Dalian housing project to Sunac China for more than $560 million

CK Asset Holdings, the property developer founded by Hong Kong billionaire Li Ka-shing, sold a real estate project in the northeastern Chinese city of Dalian to Sunac China Holdings, we've learned.

The sale valued the project at more than 4 billion yuan ($563 million), according to people familiar with the matter, adding that Sunac is applying for syndicated loans to pay for the deal. CK Asset Holdings previously owned 100% of the project, which covers 142,900 square meters in Dalian’s Xigang district, according to the company’s 2018 annual earnings report.

Personnel /

Tech entrepreneurs dominate latest Hurun rich list

Four of the 10 richest Chinese this year came from the high-tech realm, followed by three tycoons from real estate, one from manufacturing and three from other areas, according to the latest edition of the Hurun Report’s rich list.

Jack Ma topped the list for another year with wealth of $39 billion. Pony Ma, chairman of China’s second-largest internet company Tencent, came in second with net assets worth $37 billion, according to the list, which ranks those with wealth in excess of 2 billion yuan or about $280 million. Colin Huang Zheng, founder of e-commerce upstart Pinduoduo and Zhang Yiming, founder of the company behind short video app sensation TikTok, both jumped in the rankings.

Quick hits /

Apple CEO defends decision to block app used to track Hong Kong police movements

BYD suffers third successive drop in monthly EV sales

U.S.-listed Chinese KOL company falls 9% after flood of class lawsuits

Chinese AI startup develops image recognition system with Japan shipping giant

Australian magnesium giant's China partner faces debt restructure

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