China Business Digest: Vaccine Development Faces Headwinds as Virus Wanes; U.S. Cases Top 1 Million
China Business Digest aims to provide readers with a quick daily rundown of the top China business and finance stories, plus whatever is driving markets for the day. Please let us know if you have any feedback.
China’s easing outbreak offers hope to the world, but the decline in the number of patients may impede Chinese efforts to develop vaccines. The country’s top power utility posts a rare quarterly loss. The American caseload exceeds 1 million as some states move toward reopening.
— By Tang Ziyi (email@example.com) and Han Wei (firstname.lastname@example.org)
** ON THE CORONAVIRUS
Vaccine research faces headwinds as virus ebbs
Researchers in China are facing difficulties pushing forward studies on potential Covid-19 vaccines because of a lack of qualified patients to participate in trials. Three candidate treatments under study by Chinese institutions have entered the second phase of human trials, but their prospects (link in Chinese) for the most crucial third phase of testing remain uncertain, experts say.
U.S. cases hit 1 million
The total caseload in the U.S. surpassed 1 million Tuesday, according to Johns Hopkins University. Total deaths exceeded 57,000. But the number of people admitted to hospitals in New York is declining, sparking hope. Meanwhile, several states including South Carolina and Georgia are moving toward reopening.
China warns of imported cases from South Asia
An official at China’s top health commission has warned that the country’s southwestern regions are at potential high risk of importing virus cases (link in Chinese) from South Asia, given the long border and insufficient medical resources there. Beijing has sent a group of experts to the regions to help make guidelines for local epidemic control, the official said.
On Monday, the Chinese mainland reported six new cases of Covid-19 (link in Chinese), including three imported cases, according to official data.
Global cases pass 3 million
As of Tuesday Beijing time, global cases surpassed 3 million, with the total death toll at more than 211,000, according to data compiled by Johns Hopkins University. The U.S. had nearly 1 million cases, including over 56,000 deaths. (Read our related in-depth story.)
In the U.S., the White House said it will cooperate with diagnostic companies to provide enough tests to screen at least 2% of residents in all 50 states, multiple media outlets reported.
Caixin’s coverage of the new coronavirus
** TOP STORIES OF THE DAY
Citic Securities, Singapore Exchange link up for new products
China’s state-backed brokerage Citic Securities and Singapore Exchange Ltd. (SGX) set up a partnership (link in Chinese) to jointly develop new bond and risk-management products for international investors eyeing the Chinese market. The partnership will cover fixed income, currencies and commodities (FICC), real estate investment trusts (REITs), and equity and debt capital markets, the companies said.
State Grid reports rare quarterly loss
State Grid Corp. of China, one of China’s two largest state-owned power utilities, posted a net loss of 920 million yuan ($130 million) for the first quarter, its first quarterly loss in five years, reflecting the effects of the Covid-19 pandemic.
ChiNext launches registration-based IPO system
China’s Nasdaq-style ChiNext board is officially launching a widely expected trial of a registration-based IPO system to cut red tape and loosen restrictions on new listings, including those for money-losing startups.
A registration-based IPO system is more market-oriented than an approval-based one, under which the country’s top securities regulator vets every application and approvals can take months or even years. Currently, registration-based IPOs are allowed only on the Shanghai Stock Exchange’s high-tech STAR Market, a competitor to Shenzhen’s ChiNext. (Read our related in-depth story.)
China’s central bank expands fintech ‘regulatory sandbox’
The People’s Bank of China said Monday it would expand a pilot program for fintech innovation regulation (link in Chinese) to five cities and one area, including Shanghai and Shenzhen, after the program launched in Beijing in December.
Such a program, also known as a “regulatory sandbox,” allows fintech innovation to operate in a smaller environment separate from the wider financial market, which aims to encourage innovation in a risk-controlled manner. In Beijing, the program covered regulation of fintech applications including those related to big data, artificial intelligence and blockchain.
Securities regulator responds to Luckin scandal
China’s top securities regulator said Monday that it supports overseas securities regulators (link in Chinese) when they investigate financial fraud by listed Chinese companies within their jurisdiction. It made the comments in relation to the case of U.S.-listed retailer Luckin Coffee Inc., which has admitted it massively overstated revenues last year.
The securities regulator vowed to severely crack down on financial fraud (link in Chinese) by listed companies as it heavily undermines market confidence and investor interests.
Banks halt sales of products linked to crude oil futures
Six Chinese banks have stopped retail investors from opening positions in products linked to crude oil futures following an epic crash in oil prices last week that left many investors deep in debt to one of the lenders.
** OTHER STORIES MAKING THE HEADLINES
Economy & Finance
• Lufax Holding Ltd., one of China’s largest online lenders, has secured a $1.29 billion line of credit (link in Chinese) from a group of overseas banks including HSBC and Citibank, multiple Chinese media outlets reported.
• An arrest warrant has been issued for Zhang Jianguo, former executive deputy president of Huarong Xiangjiang Bank Corp. Ltd., who is suspected of taking bribes, according to an official statement (link in Chinese). The bank is controlled by scandal-ridden bad-debt management firm China Huarong Asset Management Co. Ltd. (Read our related in-depth story.)
• China’s venture capital fundraising fell by more than 50% quarter-on-quarter to $8.9 billion (link in Chinese) in the first three months of this year, a KPMG report shows.
Business & Tech
• Forty-one-year-old Wu Wenhui and his team of founding members of Hong Kong-listed China Literature Ltd. will retire and be replaced by senior executives from major backer Tencent Holdings Ltd.
• Liquor giant Kweichow Moutai Co. Ltd.’s first-quarter net profit rose 16.7% year-on-year (link in Chinese) to 13.1 billion yuan.
• Property giant China Vanke Co. Ltd.’s first-quarter net profit increased 11.5% year-on-year (link in Chinese) to 1.2 billion yuan. Revenue dropped 1.2%.
** AND FINALLY
Nearly 400 million Chinese people, or almost 30% of the country’s population (link in Chinese), used online takeout services in March, according to a Tuesday report released by the state-run China Internet Network Information Center.
A Meituan courier makes a delivery on Feb. 14 in Changsha, Central China's Hunan province.
** LOOKING AHEAD
April 30: Caixin China manufacturing PMI
May 7: Caixin China services PMI
Contact reporter Tang Ziyi (email@example.com) and editors Yang Ge (firstname.lastname@example.org) and Joshua Dummer (email@example.com)
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