May 08, 2020 11:03 PM

China Business Digest: China to Gradually Allow Crowded Events; China-U.S. Trade Negotiators Affirm Deal

China’s cabinet is taking steps to reopen indoor entertainment venues and resume holding big events, just as Guangdong and Shanghai further lowered their emergency response levels. Meanwhile, Vice Premier Liu He’s phone call with top U.S. trade negotiators has affirmed the phase-one deal despite a threat by the U.S. president. And scores of mainland-listed firms say the coronavirus will delay their annual reports, but regulators are skeptical of some.

— By Isabelle Li (liyi@caixin.com)

** ON THE CORONAVIRUS

China’s cabinet seeks to gradually reopen theaters and resume large events

China is looking to take steps to reopen cinemas, museums, art galleries and stadiums after keeping them shut for months in an effort to control the Covid-19 outbreak, according to a document (link in Chinese) released Friday afternoon by the State Council, the country’s cabinet.

Guangdong and Shanghai lower their emergency response levels

The southern province of Guangdong and the city of Shanghai each announced (link in Chinese) Friday that they will lower their public health emergency response from level two to level three on Saturday.

After the adjustment, Guangdong will begin taking steps to resume large events such as the Canton Import and Export Fair and will reopen public indoor spaces like museums and libraries, a provincial health official said Friday.

Japan approves Gilead’s remdesivir to treat Covid-19 cases

Japan gave expedited approval (link in Chinese) to Gilead Sciences Inc. for its antiviral drug remdesivir to be used to treat Covid-19 in the country, the company announced Thursday.

It took three days for the drug to receive approval. Remdesivir, though a promising candidate, is still undergoing clinical trials for further assessment on its effectiveness and safety.

Russia reported more than 10,000 new cases each day this week

Russia, which is planning to roll back its strict lockdown in stages, remains at high risk after reporting its highest daily spike of 11,231 new cases on Thursday.

The country has reported more than 10,000 cases each of the past five days, and is now the sixth-worst afflicted by Covid-19, with a total of 177,160 confirmed infections.

China reports a local case in Jilin

Only one symptomatic case was added to Chinese records Thursday, and it was in Northeast China’s Jilin province. But it was notably a domestic, rather than an imported case — the country’s first in about a week, according to figures from China’s National Health Commission (link in Chinese).

A further 16 asymptomatic cases were recorded on Thursday, bringing the total number of asymptomatic infections being tracked by China’s doctors to 854.

Other virus news

• More than 3.86 million coronavirus cases have been recorded around the world, including more than 269,800 deaths, as of Friday afternoon Beijing time, according to data compiled by Johns Hopkins University.

** TOP STORIES OF THE DAY

Liu He’s phone call with U.S. trade negotiators affirms phase one deal

Chinese Vice Premier Liu He, U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin agreed over the phone Friday to create a “favorable atmosphere and conditions” to implement the phase-one trade deal, the state-run Xinhua News Agency reported. The call came four days after Trump threatened to “terminate” the deal.

Chinese Cloud Company Kingsoft Surges 40% on Debut Day

Chinese cloud computing services provider Kingsoft Cloud Holdings Ltd. raised $510 million in its U.S. initial public offering (IPO) Friday, the first U.S. listing of a Chinese company after a series of financial fraud scandals involving peers.

The company priced its IPO of 30 million American Depositary Shares on Nasdaq at $17 apiece, the midpoint of its suggested range of $16 to $18 share, and sold 5 million more shares than expected. The stock debuted at $20.37 and further climbed to $23.84, a 40% jump from the IPO price.

Didi’s president says ride-hailing business is in the black

The core business of Chinese ride-hailing giant Didi Chuxing has finally turned a profit (link in Chinese), company President Liu Qing said in an interview Wednesday. It is the first time the business has ever reported a profit. Didi has spent years burning through cash to rapidly increase its market share. In the interview, Liu did not disclose either the size of the profit or how it was calculated.

Around 120 mainland-listed firms will delay annual financial disclosures

About 3% of the companies (link in Chinese) listed on mainland bourses will delay releasing their annual financial results after the regulators said those affected by the coronavirus pandemic were allowed to do so.

Among them, 20 firms have delayed their disclosures until June 30, and some have not yet announced a release date.

Half of the firms are not from the coronavirus epicenter of Hubei, and while companies all over China faced hardship during the crisis, regulators have questioned some that they suspect of taking advantage of the allowance.

Tencent-backed Chinese AI chip firm secures another 700 million yuan

Shanghai-based artificial intelligence (AI) chip firm Enflame Tech said Thursday it had completed a 700 million yuan ($98.7 million) series B funding round led by high-tech fund SummitView Capital that valued the company at 5.2 billion yuan.

Tencent did not lead the round, but did invest an undisclosed sum, the third time it has invested in Enflame since it was founded in 2018. The Chinese tech giant is its biggest stakeholder with 23.2% of the company.

Creditors Approve Jia Yueting’s Debt Restructuring Plan

Embattled Chinese entrepreneur Jia Yueting moved one step closer to resolving his $2 billion debt after more than 80% of creditors voted in favor of a restructuring plan in his personal bankruptcy case.

Under the plan, Jia will set up a creditor trust and transfer the equity and earnings rights of his electric car startup Faraday Future to the trust. In exchange, creditors agree to release claims against him and his wife in China after creditors have 40% of their debt repaid from the trust.

A U.S. bankruptcy court will hold a hearing May 21 to decide whether to approve the restructuring plan. Read the full story here (link in Chinese).

** OTHER STORIES MAKING THE HEADLINES

• Hong Kong-listed Chinese developer Sunac has sold 5% more (link in Chinese) of it stake in property group Jinke Co. Ltd., cashing in more than 2 billion yuan. This is the second time in a month that Sunac has sold down its holding in Jinke.

• The first-quarter financial results of Chinese developers have beaten market expectations despite fallout from the Covid-19 pandemic, indicating the country’s housing market might experience a recovery later this year.

• Jiao Huiqiang, Beijing’s deputy chief procurator, has been placed under investigation on suspicion of violating laws and regulations, the Communist party watchdog said Friday (link in Chinese).

• Citic Bank apologized (link in Chinese) for alleged violations of user privacy after a Chinese talk show celebrity complained on social media that the bank sent transaction records from his personal account to his employer without consent.

• China’s foreign exchange reserves reported positive growth once again after slumping by more than $47 billion in the first quarter. They totaled about $3.09 trillion at the end of April, 1% more than a month prior, the State Administration of Foreign Exchange said Thursday.

**FINALLY

An unusual scene occurred Friday morning at a government service center in Beijing’s Haidian district, where a cofounder of cryptomining giant Bitmain Technologies Ltd. tried to wrest control of the company by wresting the company’s business license from its legal representative and chief financial officer. The incident stems from long-running dispute that started with a falling out between Bitmain cofounders in 2019. Read the full story here .

A Bitmain cofounder and one of its executives speak to an official Friday after getting into a scuffle over the company’s business license at a government service center in Beijing. Photo: Hu Yue/Caixin

**LOOKING AHEAD

May 12: China CPI and PPI data

May 15: China’s investment, industrial output and retail sales data

Contact reporter Isabelle Li (liyi@caixin.com) and editors Flynn Murphy (flynnmurphy@caixin.com) and Michael Bellart (michaelbellart@caixin.com)

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