China Business Digest: U.S. Crude Crashes Below Zero; Shenzhen Checks Business Relief Loans Used to Buy Houses
U.S. crude futures go negative as traders fret over a slump in demand. Jingzhou, one of the cities hit hard by the Covid-19 epidemic in Hubei province, moves to stimulate recovery of the real estate market, and an unusual surge in housing prices in the southern city Shenzhen prompts banking regulators to probe whether relief loans to small and micro businesses flowed into the property market. Meanwhile, China’s governments took in 26% less revenue year-on-year in March, the steepest drop on record.
― By Denise Jia (firstname.lastname@example.org)
** ON THE CORONAVIRUS
Beijing’s Chaoyang district on alert as the country’s only ‘high-risk zone’
Beijing’s Chaoyang district, a major commercial center, was designated as China’s only high-risk zone for Covid-19 infections over the weekend, according to an update on the mobile app of China’s cabinet, the State Council. A cluster of new cases emerged there last week when a person came back to Beijing from abroad and infected three family members.
Pang Xinghuo, deputy chief of Beijing’s health commission, explained in a press conference Monday afternoon (link in Chinese) that any place in which a cluster of infections emerges within the last 14 days and has had more than 50 total cases is considered a “high-risk” location under state regulations.
Hubei virus risk downgraded
The entire province of Hubei, where China’s Covid-19 epidemic erupted late last year, is now at “low risk” from the coronavirus, according to a list published Friday by provincial authorities.
All 76 city- and county-level prefectures, as well as all 13 districts of the disease-hit provincial capital of Wuhan, achieved the highly symbolic rating for the first time since the province began using risk levels at the start of March.
The downgrade reflects how the central province’s outbreak has been brought under control after case numbers spiked in January and February, overwhelming hospitals and sparking unprecedented months-long lockdowns. Hubei logged four new virus cases Sunday, all of them in Wuhan, according to the provincial health commission.
Singapore reports highest daily spike with 1,426 new cases
Singapore just had its single highest daily spike in infection numbers since the Covid-19 outbreak began in January, as the country’s Ministry of Health (MOH) preliminarily confirmed 1,426 new cases as of noon Monday. This brings the total number of cases in Singapore to 8,014.
Among them, 16 are Singaporeans and permanent residents, while the vast majority are foreign workers residing in dormitories. The MOH said it is still working through the details of the cases and would provide further updates on Monday night.
Total Covid-19 death toll surpasses 160,000 worldwide
The number of global Covid-19 infections now stands at over 2.4 million, with more than 166,000 deaths worldwide, according to the latest data from Johns Hopkins University.
The Chinese mainland reported 12 new cases on Sunday, bringing its total number of confirmed cases since the outbreak began to 82,747 with 4,632 deaths, according to the latest national data (link in Chinese).
Other virus news
• Beijing will make business visitors staying at local hotels take nucleic acid tests to ensure they don’t have the coronavirus and more effectively guard against a resurgence in cases, municipal authorities announced (link in Chinese) Sunday.
• Northeastern Heilongjiang province punished 18 Communist Party members and civil servants responsible for public health matters for dereliction of duty following a new local flareup of Covid-19. The provincial capital of Harbin has recorded 45 new coronavirus cases since April 9, many of which were “imported” cases.
** TOP STORIES OF THE DAY
U.S. crude crashes below zero
U.S. crude futures fell below zero amid slumping demand due to the Covid-19 pandemic. West Texas Intermediate crude oil futures for May delivery expiring Tuesday plummeted by as much as 316% to -$39.55 a barrel, meaning producers would have to pay for oil to be taken off their hands.
International benchmark Brent crude for June delivery declined by 6.2% to $26.35 a barrel. The June WTI contract fell about 18% to $20.41 a barrel.
Demand for crude oil is projected to fall by 29 million barrels a day this month, according to the International Energy Administration, as Covid-19 forces countries around the world to issue stay-at-home orders to slow the spread of the disease. Meanwhile, the sharp drop in demand has storage tanks in Cushing, Oklahoma, a key U.S. oil hub, filling up at an astounding rate.
Jingzhou launches policies to boost housing
Jingzhou, one of the cities hit hard by the Covid-19 epidemic in Hubei province, issued policies (link in Chinese) to stimulate a recovery of the real estate market.
The policies include reducing down payment requirements for first-time home buyers and waiving a housing purchase tax.
In the first three months of this year, new housing sales decreased by 66.6% and existing home sales declined by 45% from the same period of last year.
Shenzhen probes business relief loans used to buy houses
A recent unusual surge by housing prices in China’s southern city Shenzhen raised red flags for regulators who started a probe into whether relief loans to small and micro businesses amid the Covid-19 pandemic flowed into the property market.
Shenzhen’s housing price rally has been leading tier-1 cities in China since March. New condo prices rose by 0.5% in March from the previous month, and existing condo prices grew by 1.6% on a monthly basis, three times the national average among the biggest cities, data from the National Bureau of Statistics shows.
The Shenzhen branch of the central bank issued an internal notice Monday to commercial banks operating in the city, requesting them to report the outstanding amount of such business loans, check the authenticity of the borrowers’ operating conditions, when their businesses were founded and for how long they owned the properties used as collateral for the loans.
Chinese government revenue fell 26.1% in March
The Chinese government’s total revenue fell 26.1% year-on-year in March, according to statistics the Ministry of Finance announced Monday.
That is 16.2 percentage points more than the drop in the January-February period, and the biggest monthly drop on record, going back to 1996.
The state’s income will likely continue to record year-on-year decreases in the second quarter, but the extent should be narrowing as the country’s business and production activities are coming back to normal, ministry official Liu Jinyun said in a Monday press briefing.
Anbang to sell last of its stake in Chengdu Rural Commercial Bank
Embattled Anbang Insurance Group Co. Ltd. will sell over 2 billion shares it owned in Chengdu Rural Commercial Bank to two companies affiliated with the city government of Chengdu, capital of Southwest China’s Sichuan province, according to a Friday statement by the bank.
The two wholly-owned subsidiaries of different districts of Chengdu, will purchase a combined 20.5% stake in the rural bank, the lender said in a Friday statement.
In depth: Investors sip the bitter taste of the Luckin Coffee scandal
It was a self-confident, tech-savvy coffee-seller whose breakneck growth wowed investors and captured the hearts of Chinese consumers looking for a local champion.
But things boiled over for Luckin Coffee earlier this month when the biggest coffee chain in China disclosed that nearly half of its reported revenue in the last three quarters of 2019 — a total of 2.2 billion yuan ($311 million) — was fake.
Now, investors are being scorched by the fallout. The Nasdaq-listed company’s stock has plummeted 83% since the disclosure and investors have sold off hundreds of millions of shares on the open market. Read our full story on the scandal here.
Chinese cities start rearranging postponed political meetings
Cities in China have begun rescheduling this year’s annual sessions of their legislatures and political advisory bodies after the Covid-19 outbreak initially led to nationwide postponements.
A number of cities in Zhejiang, Shanxi, Sichuan and elsewhere have slated their local “Two Sessions” to open in mid-to-late April.
** OTHER STORIES MAKING THE HEADLINES
• Real estate group Greentown has taken over more land (link in Chinese) through acquisition of about 2.3 billion yuan of shares in four projects owned by Shanghai-listed firm Xinhu Zhongbao, according to a Sunday evening statement by the developer.
• Net profits of SOEs controlled by China’s central government dropped nearly 60% (link in Chinese) in the first quarter to around 130 billion yuan on revenue of 6 trillion yuan, according to a press release Monday by the State-owned Assets Supervision and Administration Commission under the State Council
• Chinese e-commerce upstart Pinduoduo has agreed to buy $200 million of convertible bonds (link in Chinese) issued by home appliance retailer Gome. If Pinduoduo exercises its conversion rights when the bonds mature, it could end up owning 5.62% of Gome.
** AND FINALLY
Tea farmers across southern China are heading to their fields to harvest their crop as “guyu,” the sixth of the traditional Chinese calendar’s 24 solar terms, began on April 19. “Guyu,” which literally means “grain rain,” is thought to be one of the best times of year to pick tea, as spring showers are thought to improve its taste.
Contact reporter Isabelle Li (email@example.com) and editor Gavin Cross (firstname.lastname@example.org)
Jul 10 19:00
Jul 10 18:54
Jul 10 17:22
Jul 10 16:31
Jul 10 13:03
Jul 09 19:19
Jul 09 19:10
Jul 09 18:49
Jul 09 16:40
Jul 08 18:10
Jul 08 15:57
Jul 08 13:46
Jul 07 18:50
Jul 07 13:17
Jul 07 04:13
- 1Tencent’s PUBG Mobile Game Hits $3 Billion Milestone
- 2Zoom Investment Grew From Li Ka-shing’s Disgust at Pricey Video Gear, Says His Tech-Savvy Companion
- 3Trending in China: Outrage Ensues as Updated U.S. Student Visa Policies Force International Students into a Dilemma
- 4In Depth: CATL Loses Electric-Car Battery Crown as Foreign Firms Muscle In
- 5For Electric-Vehicle Maker Nio, Government Tie-Up Has Its Benefits
- 1Power To The People: Pintec Serves A Booming Consumer Class
- 2Largest hotel group in Europe accepts UnionPay
- 3UnionPay mobile QuickPass debuts in Hong Kong
- 4UnionPay International launches premium catering privilege U Dining Collection
- 5UnionPay International’s U Plan has covered over 1600 stores overseas