May 07, 2020 09:05 PM

China Business Digest: China Removes Quotas for Foreign Investment Programs; Insurer Plans Listing via Shanghai-London Connect

As many as 15% of recovered Covid-19 patients in China may have tested positive again, researchers find. China gives qualified foreign institutions unlimited access to domestic stocks and bonds in the latest opening effort. A Caixin-sponsored survey shows that activity in China’s services sector contracted for a third straight month in April. Although trade takes another hit, exports fare better than expected.

— By Isabelle Li (liyi@caixin.com) and Han Wei (weihan@caixin.com)

** ON THE CORONAVIRUS

As many as 15% of Covid-19 cases are reactivated, study finds

Between 5% and 15% of recovered Covid-19 patients in China may have tested positive with the virus again, China’s National Health Commission said Thursday in a press conference (link in Chinese). Most of the patients who retested positive didn’t show any symptoms, and it is unclear why the reactivation happens, a medical expert said. The finding indicates greater challenges in controlling the disease.

Researcher says remdesivir may help lower Covid-19 fatality rate

Gilead Sciences Inc.’s Covid-19 treatment candidate remdesivir may be able to lower the fatality rate of the novel coronavirus (link in Chinese), according to George Diaz, the U.S. doctor who treated the first confirmed U.S. Covid-19 patient in late January. Diaz, an infectious diseases expert, has been reviewing his hospital group’s use of the drug as part of phase three clinical trials. Speaking at an online seminar earlier this week, Diaz said the results are awaiting peer review.

U.S. researchers estimate remdesivir’s price

An analysis (link in Chinese) from the Institute for Clinical and Economic Review in the U.S. recently estimated remdesivir, putting its cost at $10 per 10-day treatment on the low end and as much as $4,460 on the high end. Gilead has not disclosed the price of the drug, which is still undergoing clinical trials.

China reports two new ‘imported’ cases

China reported two new confirmed cases (link in Chinese) of Covid-19 Wednesday in Shanghai and the southern province of Guangdong, according to the National Health Commission. Both cases were of people who entered the country from abroad, which authorities have taken to referring to as “imported.” There were no new fatalities.

Other virus news

• As of Thursday afternoon Beijing time, global infections have topped 3.76 million, with nearly 274,000 deaths, according to data compiled by Johns Hopkins University.

** TOP STORIES OF THE DAY

China scraps quotas for two foreign investment programs

China will remove quota restrictions on the dollar-denominated qualified foreign institutional investor (QFII) program and its yuan-denominated sibling, RQFII, to further open financial markets to overseas investors. Regulators will also simplify administrative requirements to make it easier for foreign institutional investors to remit funds and exchange currencies.

China Pacific Insurance wins approval for London GDR sales

China Pacific Insurance Group Co. won initial approval from the country’s banking and insurance regulator to issue global depository receipts on the London Stock Exchange, bringing the company a step closer to become the second Chinese enterprise to tap the Shanghai-London Stock Connect program. The deal is still pending approvals from other domestic and British regulators.

HKEx CEO Charles Li to step down by October 2021

Charles Li, CEO of Hong Kong Exchanges and Clearing Ltd. (HKEx), will step down when his contract ends in October 2021, the city’s stock exchange operator announced Thursday.

The announcement came after HKEx’s net profit dropped 13% in the first quarter. HKEx said it has started the hunt for his successor, and the 58-year-old executive said he could leave even earlier should a successor be in place.

Caixin PMI shows China’s services activity contracts for third straight month

China’s services activity shrank for the third month in a row in April due to weakening global demand, the Caixin China services PMI showed Thursday. The index came in at 44.4 in April, indicating a contraction, though the figure was up from 43 in March.

China’s trade shrinks, but export growth surprises

China trade shrank 5% year-on-year in April to about $355.2 billion, the General Administration of Customs reported Thursday. Although imports slumped 14.2% year-on-year to around $154.9 billion, exports unexpectedly grew 3.5% from the same period in 2019 to about $200.3 billion

Tencent-backed online publisher moves to quell author unrest

The newly installed management team at Tencent-controlled online reading platform China Literature met Wednesday with representatives of authors, who are increasingly unhappy about their pay as the company increasingly follows the industry trend toward a free-reading model.

The new managers said that paid literature offerings would be consolidated and expanded in the future. Authors were also told that they could decide which of their offerings would be free or paid. The new managers also said inappropriate places in their current contracts would be amended, and that new contracts would be introduced in the near future.

** OTHER STORIES MAKING THE HEADLINES

• China’s commerce ministry said foreign firms will have equal access to government support policies including those on land and tax cuts, according to Reuters.

• East China’s Anhui province appointed Yu Aihua (link in Chinese) as the new party chief of its capital Hefei on Thursday. The 54-year-old served as the head of Anhui’s provincial propaganda department for more than three years.

• China’s cabinet on Wednesday approved “cross-border e-commerce comprehensive trial zones” to be set up in 46 more parts (link in Chinese) of the country, including Xiongan New Area outside Beijing.

• Chinese toy retailer Pop Mart is raising more than $100 million (link in Chinese) from investors including Sequoia Capital in a pre-IPO fundraising round that gives the company a valuation of $2.5 billion, sources told Caixin. Pop Mart is also planning to list in Hong Kong.

**AND FINALLY

Though trading in cryptocurrencies is banned in China, are they still property? That’s the question a Shanghai court answered this week — giving a resounding “yes.” Ruling on a bitcoin robbery back in 2018, the court ruled that the digital tokens are a kind of virtual property and are protected by the relevant laws, local media outlet The Paper reported (link in Chinese).

Contact reporter Isabelle Li (liyi@caixin.com) and editors Michael Bellart (michaelbellart@caixin.com) and Joshua Dummer (joshuadummer@caixin.com)

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