China Business Digest: Beijing Comes Off High Alert; Chinese Oil Giants Bleed Red Ink
Wall Street cheers up after reports of positive data on Gilead’s potential Covid-19 drug, despite previously disappointing tests in China. Beijing finally lowers the city’s public health emergency response level as the annual meeting of the country’s top legislature is scheduled. Also, Chinese oil giants report a painful first quarter.
— By Guo Yingzhe (email@example.com) and Han Wei (firstname.lastname@example.org)
** ON THE CORONAVIRUS
Chinese in Russia face new hurdle to return home
Chinese authorities will require all passengers flying back from Russia to show a negative test for coronavirus before boarding a flight starting May. 1. It is China’s latest effort to control importing the disease from aboard. Some Chinese merchants in Russia said the new policy will dampen their hopes for treatment in China.
Gilead reports positive data for remdesivir, firing up stocks
U.S. drugmaker Gilead Sciences Inc. said Wednesday a government-funded clinical trial treating Covid-19 patients with its experimental drug remdesivir “met its primary endpoint” and showed “positive data.”
The news sparked hopes for a cure for the deadly disease, although an earlier study testing the drug in severely ill patients in China showed disappointing results. Wall Street hit session highs in early afternoon trading after top U.S. infectious disease expert Anthony Fauci expressed optimism about remdesivir.
Beijing lowers public health emergency from highest level
The government of Beijing will lower the capital’s public health emergency response from level one to level two starting Thursday as the Covid-19 outbreak has come under control, according to a municipal government briefing (link in Chinese) on Wednesday.
Arrivals from parts of China classified as low risk no longer need to undergo 14 days of home isolation after the downgrade.
The medical mystery of positive Covid-19 tests in recovered patients
Doctors and scientists are grappling with the mystery of patients who continue testing positive for the Covid-19 virus weeks after recovery, even as China has declared the pandemic’s initial epicenter in the city of Wuhan to be free of cases.
More than 30 patients in Hubei province, of which Wuhan is the capital, have recovered from the disease in terms of symptoms but continue to test positive, a health official said. (Read the full story.)
Other virus news
• The Chinese mainland reported (link in Chinese) 22 new Covid-19 cases on Tuesday, all but one of them imported.
• As of Wednesday evening Beijing time, global infections have reached over 3.1 million, with over 217,000 deaths, according to data compiled by Johns Hopkins University.
Caixin’s coverage of the new coronavirus
** TOP STORIES OF THE DAY
Chinese oil giants report record losses
China’s top state-owned oil companies Sinopec and CNPC both reported hefty losses for the first quarter, citing the slump in oil prices and declining demand amid the pandemic. Sinopec booked a net loss of 19.8 billion yuan ($2.8 billion) in the first quarter, compared with a net profit of 14.8 billion yuan a year ago. CNPC lost 16.2 billion yuan during the period, compared with a 10.2 billion yuan net gain last year.
Scandal-plagued Luckin Coffee delays release of annual report
Nasdaq-listed Luckin Coffee Inc. will not release its 2019 annual financial report on time Thursday as the company investigates a billion-yuan accounting scandal, Luckin said Wednesday. The coffee giant said it will aim to file the report within a 45-day extension allowed by U.S. securities regulators during the outbreak.
Annual session of China’s top legislature to start on May 22
The NPC’s annual session was initially scheduled to kick off on March 5, but had to be postponed due to the Covid-19 outbreak.
Huayi Brothers Media reports huge loss, plans private placement
One of China’s largest private film studios, Huayi Brothers Media Corp., reported an immense loss (link in Chinese) in 2019 and the first quarter of 2020 as several movies it produced did not make it to the cinemas as scheduled because of the outbreak.
The Shenzhen-listed company has made plans (link in Chinese) to privately issue new shares to raise up to 229 million yuan ($32.3 million).
China’s Zijin Mining seeks gold elsewhere after losing Papua New Guinea mine
Zijin Mining Group Co. Ltd., China’s largest gold producer, may face a drop in production with the loss of operating rights at a gold mine in Papua New Guinea, which will likely further hurt profits amid the Covid-19 pandemic.
Papua New Guinea’s government said Friday it will take control of the Porgera gold mine after refusing to extend the lease of Zijin’s local joint venture. (Read the full story.)
Default by Anxin Trust sparks investor anger
The default of an investment product issued by Anxin Trust Co. Ltd. has sparked anger among investors. Previously, the company was punished for allegedly misappropriating investment funds and concealing risks.
Hundreds of investors protested (link in Chinese) in front of Anxin’s Shanghai office on Tuesday over the default of the product, which should have been repaid on that day. Started in 2013, the product took in 2.8 billion yuan from more than 1,000 retail investors for use in a village renovation project in the southwestern province of Guizhou.
** OTHER STORIES MAKING THE HEADLINES
Economy & Finance
• Some brokerages have been competing for clients by lowering underwriting fees (link in Chinese) to unreasonably low levels in the bond market of late, raising financial regulators’ concerns.
• Hong-Kong listed HSBC Holdings PLC reported a 48% year-on-year decline in its profit before tax in the first quarter.
• China penalized financial institutions and their staff a total of 183 million yuan for money laundering violations in the first quarter, nearly four times year-on-year.
• China has cut taxes and fees by 742.8 billion yuan in the first quarter, according to official data (link in Chinese).
• Industrial and Commercial Bank of China Ltd., the world’s largest bank by assets, reported a 3% year-on-year growth in net profits in the first quarter.
• Postal Savings Bank of China Co. Ltd., one of the country’s six largest state-owned lenders, reported an 8.5% year-on-year growth in net profits in the first quarter.
Business & Tech
• China’s electricity consumption (link in Chinese) is expected to rise between 2% and 3% this year, despite the Covid-19 pandemic leading to a 6.5% year-on-year drop in electricity usage in the first quarter.
• Chinese e-commerce giant JD.com Inc. has filed for a second listing confidentially in Hong Kong. (Bloomberg)
• A U.S. court dismissed a motion filed by JD.com to clear the company’s name from a case of alleged rape against its founder and CEO Liu Qiangdong, also known as Richard Liu.
• As spending on wind power stations nearly tripled year-on-year in the first quarter, China’s power generation facilities received more investment than its power grids for the first time in any quarter since 2013.
• Liu Jinming, an official at the Inner Mongolia branch of the China Banking and Insurance Regulatory Commission, was expelled (link in Chinese) from the Communist Party and removed from his civil servant position due to his involvement in the Baoshang Bank Co. Ltd. scandal, according to (link in Chinese) the nation’s top anti-graft organ on Wednesday.
• China on Wednesday named (link in Chinese) Huang Runqiu as the new environment minister. Huang is a deputy head of Jiusan Society, one of the major parties participating in China’s political affairs.
• China named (link in Chinese) Tang Yijun, former governor of Northeast China’s Liaoning province, as the new justice minister on Wednesday.
• Zhang He, a former deputy governor of North China’s Hebei province, has come under investigation by the state’s top anti-corruption agency, an official statement said (link in Chinese).
** AND FINALLY
Barkhor Street, a renowned tourist attraction in Lhasa, capital of the Tibet autonomous region, has grown crowded once again after a three-month lockdown due to the virus outbreak was lifted.
Local residents and tourists walk down Lhasa’s famous Barkhor Street on Tuesday.
Contact reporter Guo Yingzhe (email@example.com) and editors Yang Ge (firstname.lastname@example.org) and Michael Bellart (email@example.com)
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