CX Daily: China's Private Sector Support has Come at a Cost
Credit growth rebounds on stronger corporate borrowing
China’s credit growth rebounded in November after an October slump as banks stepped up lending to fund infrastructure spending and government debt swaps. But M2 growth weakened below expectations.
Total social financing (TSF) grew faster than expected, by a net 1.75 trillion yuan ($249 billion) in November, according to data released Tuesday by the central bank. That compares with about 619 billion yuan in October and 1.6 trillion yuan in November 2018. A median estimate of economists was 1.59 trillion yuan, according to our survey of 23 domestic and foreign institutions.
Banks issued 1.39 trillion yuan of new loans in November, more than double the previous month’s 661.3 billion yuan and higher than the survey estimate of 1.25 trillion yuan. Outstanding yuan loans grew 12.4% from a year earlier, unchanged from the October gain.
FINANCE & ECONOMICS
China’s private sector support comes at a cost
China’s unprecedented drive to bolster its cash-strapped private sector has come at a cost. More loans have been made to the country’s underserved private companies, which have long lacked the same access to credit as their state-backed peers, but the achievement has meant lost business for smaller lenders.
Local authorities pledged to bail out private businesses in the face of a sharp decline in domestic equity markets last year, but potential rescues might end up encouraging more irresponsible corporate borrowing. These side effects have cast a shadow on the government’s achievements in shoring up the private sector
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Trade war /
Trump agriculture chief sees China reprieve on new tariffs
The U.S. is unlikely to impose extra tariffs on a new $160 billion swath of Chinese goods including toys and smartphones come Sunday, Agriculture Secretary Sonny Perdue said.
The Dec. 15 deadline for new tariffs is just one of a number of events this week putting concerns over trade back on the front burner for investors and policymakers around the world. The WTO's dispute system faces paralysis with a U.S. boycott of new judges set to leave the appellate body without enough adjudicators to hear cases come Wednesday.
China’s slowdown leaves excavator sales in a hole
Sales of excavators by China’s biggest manufacturers this year have increased by less than a third of the level of 2018 as housebuilding and infrastructure investment booms that took off in 2016 have petered out amid government curbs on the property market and slowing economic growth.
Foreign investment /
German industry group warns of overreacting to China investment
“We are far from seeing a Chinese takeover wave in German or European industry,” Carl Martin Welcker, president of the country’s VDMA Mechanical Engineering Industry Association, told journalists Tuesday in Frankfurt. “We in machinery have consistently made positive experiences with Chinese investors” and “don’t see any disadvantage for Germany if the Chinese are guaranteeing our jobs.”
Germany has stepped up protectionist measures ever since China’s Midea Group Co. Ltd. swallowed robot-maker Kuka AG in 2016. After Chancellor Angela Merkel’s cabinet blocked a Chinese bid for the first time last year by vetoing the potential purchase of machine tool manufacturer Leifeld Metal Spinning AG, Economy Minister Peter Altmaier recently proposed ramping up efforts to tighten restrictions.
Quick hits /
Shipments drop on China’s busiest coal railway
Hohhot financing vehicle narrowly avoids bond default
Opinion: Untangling the WTO crisis
BUSINESS & TECH
ByteDance eyes another TikTok-like success with new music app
TikTok owner ByteDance is testing a new music app in emerging markets as it tries to pull off another global sensation akin to its viral video-sharing service. The new app aims to challenge the likes of Spotify and Apple Music in countries where paid music services have yet to garner large audiences.
Called Resso, the new app is now available in India and Indonesia, two of Asia’s most populous countries and places already keenly familiar with TikTok. Since an initial launch six months ago, Resso has been installed by about 27,000 users across the iOS App Store and Google Play, according to data compiled by Sensor Tower, which said the numbers indicate promotion of the app began in earnest at the end of November.
Pig breeder fattens up as industry consolidates in wake of swine fever
One of China’s major pig breeders announced a major expansion involving more than $1 billion in new investment as consolidation picks up in a sector ravaged over the past year by the outbreak of African swine fever.
Muyuan Foods Co. Ltd. is setting up 19 new subsidiaries in Anhui, Shandong, Jiangsu, Hebei and Hubei provinces, the company said in two separate announcements, one issued late Tuesday and the other a week earlier. Muyuan also said it will set up four joint ventures with Huaneng Guicheng Trust to support the new expansion partly by providing capital to Muyuan’s subsidiaries.
China’s curing cancer faster and cheaper than anywhere else
An experimental cancer therapy, in which white blood cells were removed from a patient's body, genetically engineered to attack cancer, then infused back in has been promising. Called Chimeric Antigen Receptor-T cells, or CAR-T, it’s being hailed as one of the most exciting developments in cancer research, resulting in high rates of remission. It's also expensive, and engineering a person's cells takes time.
But instead of the two to three weeks taken by current treatments from American and European drug makers, a Shanghai-based Chinese startup called Gracell Biotechnology Ltd. is churning out cancer-killing immune cells overnight, and at a much cheaper price. Gracell plans to price its CAR-T treatment for about 500,000 yuan ($71,000), well below the $475,000 price tag for Novartis’s Kymriah, the Swiss company’s CAR-T therapy used to treat some types of blood cancer.
Didi considered safest ride-hailing platform despite murders, survey shows
Didi Chuxing has been rated the safest ride-hailing platform in China, even though two of its passengers were murdered last year. The company scored 4.1 out of a possible 5 points for safety, the highest among ride-hailing platforms in China, according to a survey conducted by Aurora Mobile, a big data solutions provider.
The company interviewed some of the survey’s respondents, among whom 74.9% said Didi’s services were safer compared with a year ago. Didi, which also has the lion’s share of China’s ride-hailing market, was followed by Caocao Chuxing and Shouqi Yueche, which tied for second-highest in safety with 4.08 points, the survey said.
Quick hits /
First Chinese medical device-maker to list in Hong Kong surges 30% on debut
Alibaba co-founder Joe Tsai invests $10 million in G2 Esports
Shanghai court freezes assets of Wanda Group founder’s son Wang Sicong
Velodyne Lidar cuts direct sales team in China
Xiaomi budget brand Redmi releases cheaper than expected 5G smartphone
BAIC slump persists with bleak November NEV figures
Chinese cellphone maker Oppo expands smart hardware offerings
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