CX Daily: Tesla Kicks off Delivery of China-made Vehicles
Tesla kicks off delivery of China-made vehicles
Tesla Inc. delivered its first China-made sedans to the public Tuesday as the U.S. electric-car maker officially kicked off production at its China plant in a key step to tap the world’s largest auto market. The public rollout of the plant’s Model 3 electric cars came one year after Tesla broke ground on its multibillion-dollar Gigafactory near Shanghai — the first outside the United States. A week earlier, Tesla delivered 15 of the autos to employee customers.
Chief Executive Officer Elon Musk also announced plans to start China production of the Model Y crossover, an SUV unveiled in March 2019 and scheduled to hit the market this summer. Tesla slashed prices Jan. 3 on China-made Model 3s to as low as 300,000 yuan ($43,035) after the company secured a 10% tax break for electric cars from Chinese regulators. The price tags for the China-made Model Y will be between 444,000 yuan and 535,000 yuan, Tesla said Tuesday.
FINANCE & ECONOMICS
Exclusive: In wake of Baoshang Bank’s collapse, regional lender comes to the rescue
The bank that lost billions of yuan on its investments with troubled Baoshang Bank Co. Ltd. is now coming to its rescue, we have learned. Hong Kong-listed Huishang Bank Corp. Ltd. disclosed a plan to purchase part of the assets and liabilities of a banking institution — an institution that we have learned is Baoshang Bank, which regulators took the rare step of taking over in May.
Huishang Bank also said it plans to invest in a new provincial-level commercial bank, according to a filing Tuesday with the Hong Kong Stock Exchange. The city commercial bank said that it will make a one-time capital contribution of no more than 3.6 billion yuan ($518.5 million), giving it a stake of as much as 15% in the new bank. This investment is also related to Baoshang Bank, sources with knowledge of the matter told us.
Tax cuts /
Government says 2019 tax cuts boosted growth
China’s economic growth was boosted by about 0.8 of a percentage point last year, following tax cuts of more than 2 trillion yuan ($288 billion), the government said.
The tax cuts were worth more than 2% of gross domestic product, according to a Monday statement from the tax authority. That means the nominal value of the economy most likely grew to about 100 trillion yuan at the end of 2019, according to Bloomberg calculations, up from 92 trillion in 2018. Tax revenue rose 1.8% in the year to about 14 trillion yuan in 2019, the State Taxation Administration said, lower than the 9.5% increase in 2018. Revenue growth fell due to the cuts. That decision aimed to boost investment and consumption.
Asia head for money manager Vanguard leaves job
Chinese financier Charles Lin, Asia head of Vanguard Group Inc., left the major American money manager after leading its expansion across the region since taking on the role in late 2018, we have learned.
A representative of the firm declined to comment on why Lin left, saying that its business plans and organizational structure in Asia remain unchanged. Lin declined to answer our inquiries about his departure.
Quick hits /
Opinion: Chinese growth really can be faster
BUSINESS & TECH
Starbucks challenger serves up vending machines, new fundraising plan
Starbucks China rival Luckin Coffee Inc. Wednesday announced a move into vending machines alongside plans to raise a fresh $800 million to continue fueling its breakneck expansion.
Luckin unveiled two lines of vending machines in its latest expansion, one for its coffee products and the other serving cold beverages in partnerships with names like PepsiCo, Nestle and two of China’s biggest dairies. Luckin also disclosed that it had about 4,500 stores at the end of last year, enough to make it China’s biggest coffee chain based on Starbucks’ most recent count of 4,200. In separate announcements aimed at financial markets, Luckin also said it was planning to raise the $800 million through a combination of selling shares and issuing a convertible bond.
Citic to sell down stake in McDonald’s China for $300 million
Chinese state-owned conglomerate Citic Ltd. is planning to significantly reduce its stake in McDonald’s China Co. Ltd. more than two years after it bought into the fast-food chain as rising costs pinch the franchise’s profit.
McDonald’s China said in a statement Wednesday that Citic is looking for buyers for a 22% stake, which will bring its share in the chain’s China operations down to 10%. The bottom price for the stake is set at 2.17 billion yuan ($312 million), and the bidding process is ongoing, according to a disclosure document filed by Citic with the Beijing Equity Exchange.
Video app Douyin shatters some stereotypes about its enormous user base
Short video app Douyin has passed 400 million daily active users, its operator said Sunday in a visual report that includes previously undisclosed insights on the app’s domestic users and the types of videos they view and create.
ByteDance Ltd., which also runs Douyin’s embattled international analogue TikTok, said the number of domestic users was up 60% from January 2019. Among the key insights: Northeast China’s rust belt may be economically unproductive, but it sure makes plenty of content. The trio of Liaoning, Jilin and Heilongjiang provinces made the top five Chinese regions by number of users who post videos. Beijing took the top spot, with Shanghai at No. 3.
First China biotech IPO in two years lands in U.S.
I-Mab Biopharma Co., a Chinese drug developer, launched what is set to be the first U.S. initial public offering by a Chinese biotech company in more than two years.
I-Mab started taking orders on Monday for the IPO, which could raise as much as $111 million — down from the $200 million people familiar with the matter said last year. If the deal goes through, it will be the first U.S. listing by a Chinese biotech company since Zai Lab Ltd.’s $173 million offering in 2017, according to figures compiled by Bloomberg. Since 2004, only five biotech companies from the mainland have completed IPOs in the U.S.
Quick hits /
Former top Chinese lottery official sentenced to 11 years for corruption
Tencent-led buyers seek 1 billion euro loan for Universal Music deal, report says
Mobile payment prevalence highlights security concerns, survey finds
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