China Business Digest: Border City Now ‘Low Risk’ After Outbreak Subsides; New Rules to Boost Debt-to-Equity Swaps
A Chinese border city at the center of a flare-up of infections imported from Russia is downgraded to “low-risk,” sending yet another signal that China’s Covid-19 epidemic is well under control. Cabinet meeting again addresses support for the virus-hit economy, and a new funding arrangement will be available for banks’ investments in debt-to-equity swaps.
— By Mo Yelin (email@example.com) and Han Wei (firstname.lastname@example.org)
** ON THE CORONAVIRUS
Cabinet meeting vows support for virus-hit businesses
A cabinet meeting chaired by Premier Li Keqiang vowed Wednesday to step up measures to support business recovery from the disruption caused by the pandemic. The meeting listed 90 measures including tax and fee cuts, toll road fee waivers and special loan programs to bolster small businesses affected by the outbreak.
Heilongjiang border city downgraded to “low risk”
Suifenhe, a small city in northeastern China’s Heilongjiang province on the border with Russia, has been downgraded to “low risk” from Wednesday, the local government announced. This is a significant development in the city’s fight with Covid-19 after a short period last month when it saw a flare-up of cases imported from the country’s neighbor. Many people previously worried that the regional outbreak could threaten a second wave of infections in China.
China reports two new cases on Tuesday
Both new cases reported Tuesday on the mainland were imported, according to (link in Chinese) China’s health ministry. No new deaths were reported. Twenty new asymptomatic cases were reported, 17 of those domestic. As of the end of Tuesday, China had 903 asymptomatic coronavirus cases under medical observation.
Other virus news
• France’s first Covid-19 infection might have been in late December, almost a month before Europe’s first officially recorded cases, a new study has claimed.
• As of Wednesday afternoon Beijing time, global infections have reached over 3.67 million, with over 257,000 deaths, according to data compiled by Johns Hopkins University.
• The U.K. has surpassed Italy to become the hardest hit country from Covid-19 in Europe in terms of death toll. As of Wednesday morning, there were 29,501 deaths recorded in the U.K., compared with 29,315 in Italy.
Caixin’s coverage of the new coronavirus
** TOP STORIES OF THE DAY
China expands funding source for banks’ debt-to-equity business
China’s top banking regulator issued new rules to allow banks’ asset investment subsidiaries to issue investment plans backed by debt-to-equity assets to expand funding sources for the program designed to reduce leverage in the economy.
Bank of China offers to settle oil futures product losses
Investors in Yuan You Bao, an oil futures investment product issued by Bank of China, said they received calls from the bank to discuss a settlement for the doomed product under which the bank would shoulder part of the losses. But some investors said they won't accept the offer and hope to take legal steps against the bank.
May Day tourism spending plummets
Tourism spending over China’s May Day holiday from May 1 to May 5 was only 47.5 billion yuan ($6.72 billion), down from 117.6 billion yuan over last year’s three-day break. A total of 115 million trips were made during the period, down from 195 million for last year’s.
Shanghai Disneyland to reopen on May 11
The Walt Disney Co. announced on Wednesday that its Shanghai park will reopen on Monday, following months of closure during the Covid-19 pandemic. There will be an initial daily cap on visitors, who will need to book tickets in advance to reduce the risk of contagion, according to a company statement.
Leading chipmaker SMIC to make new listing on Shanghai’s STAR Market
Hong Kong-listed Semiconductor Manufacturing International Corp. (SMIC) said Tuesday that its board had agreed to issue new shares on the mainland. The company will sell no more than 1.68 billion shares, with pricing to be determined later. The shares will trade on Shanghai’s new STAR Market for high-growth tech companies.
** OTHER STORIES MAKING THE HEADLINES
• U.S. regulators are drafting rules to clarify how domestic companies can work with sanctioned Huawei Technologies Co. in organizations that set standards for the next-generation 5G wireless networks, Reuters reported.
• Starting Wednesday, all toll roads and bridges in China will resume charges, ending a toll-free policy in place since Feb. 17.
• Scandal-tainted Chinese online tutoring company GSX Techedu has reported staggering growth in both net revenue and net profit in the first quarter of 2020. GSX Techedu made headlines last month, when it was targeted by a U.S. short seller which accused it of substantially inflating its 2019 revenues.
• A U.S.-based brokerage has asked customers who borrow money to trade in small-cap listed Chinese companies to stump up more cash as insurance against a possible crash in prices in the wake of Luckin Coffee’s fraud scandal and short-seller attacks on Chinese video streaming service iQiyi and GSX Techedu Inc.
• Chinese electric-car upstart Nio said it delivered a total of 3,155 vehicles in April, more than double the previous month, representing 180.7% growth year-on-year.
• Chehaoduo, an online used car and new car trading platform in China, announced that (link in Chinese) it has raised additional financing of $200 million from investors that include Sequoia Capital China and SoftBank Vision Fund.
• Shenzhen-listed New Hope Dairy has announced (link in Chinese) it will acquire smaller Ningxia rival Huanmei for 1.7 billion yuan ($239 million).
• uCloudlink, a mobile data traffic sharing marketplace based in China, filed on Monday with the U.S. Securities and Exchange Commission to raise up to $50 million in a New York IPO.
** AND FINALLY
Starting Wednesday, Hong Kong residents can apply to receive a new highly reusable face masks for free from the city’s government. Hong Kong’s secretary for innovation and technology said Tuesday that the new masks can be used up to 60 times between washings.
The new highly reusable “CU Mask,” which the Hong Kong government has made available to residents for free starting Wednesday, comes in three sizes: one for adults and two for children.
** LOOKING AHEAD
May 7: Caixin China services PMI
May 7: China import and export data
Contact reporter Mo Yelin (email@example.com) and editor Yang Ge (firstname.lastname@example.org)
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