China Business Digest: Hong Kong’s Streak of No Local Infections Ends; Draft Rules Target Trillions of Dollars of State Financial Assets

Hong Kong’s 23-day streak of zero local infections ends with mystery cases, while Beijing says most students will be allowed to return to campuses in early June. Meanwhile, the Ministry of Finance asks for public feedback on draft rules for managing the state’s trillions of dollars of financial assets. Tencent posts stronger growth on gaming business.

— By Guo Yingzhe (yingzheguo@caixin.com) and Han Wei (weihan@caixin.com)

** ON THE CORONAVIRUS

New cases end Hong Kong’s 23-day streak of zero local infections

Hong Kong reported a cluster of new infections after 23 days free from locally transmitted Covid-19 cases, sounding an alarm on the challenges of eradicating the virus. The new cases reported Wednesday surround a 66-year-old woman who had no recent travel history. Officials don’t yet know how she picked up the infection.

China to reopen cinemas in cities with low virus risk

China agreed to reopen cinemas and theaters in areas with low risk of Covid-19 infections in a step to restart businesses after months of lockdowns. Venues are required to implement traffic control and social distancing rules as they reopen.

Beijing to allow most students back to campus from early June

Beijing municipality will allow most students, including senior college students, middle and high school students, to return to their campuses from early June, according to a Wednesday briefing (link in Chinese). Official data showed that over 100 million Chinese students (link in Chinese) had returned to school as of Monday.

Schools are still on alert as regional outbreaks continue to appear and asymptomatic cases have been found on campuses in Chongqing and Hubei province, where the domestic outbreak began. Some cities are moving to test some, or even all, returning teachers and students.

Chinese mainland reports seven new cases

The Chinese mainland reported (link in Chinese) seven new Covid-19 cases on Tuesday, including one imported case in Shanghai, and six local infections in the northeastern province of Jilin where a cluster has been reported over the past few days.

As of Wednesday evening Beijing time, global infections reached 4.28 million, with over 292,000 deaths, according to data compiled by Johns Hopkins University.

Some foreign executives reportedly exempted from China travel ban

China’s Ministry of Commerce has told some key foreign companies they can apply for exemptions to the country’s entry ban for foreigners if they want to get executives back into China, according to people familiar with the matter. (Bloomberg)

Preprint servers try to deter bad coronavirus research

Online platforms that allow scientists to share unreviewed research are tightening publication rules amid a deluge of new coronavirus papers of varying quality, according to a report published Thursday in the journal Nature.

Two of the most popular preprint servers for coronavirus research, medRxiv and bioRxiv, have stepped up scrutiny of new submissions after some papers drew speculative or outlandish conclusions, the report said.

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Caixin’s coverage of the new coronavirus

** TOP STORIES OF THE DAY

Tencent reports strong revenue on gaming growth

Tencent Holdings Ltd. reported better-than-expected revenue growth in the first quarter as gaming sales posted the fastest increase since 2017. The company’s revenue rose 26% to 108.1 billion yuan ($15.2 billion) after online gaming sales leapt 31% during the coronavirus-stricken March quarter.

China seeks feedback for rules on managing state-owned financial assets

The Ministry of Finance began on Saturday to seek public feedback for draft rules (link in Chinese) on managing the trillions of dollars of state-owned financial assets.

The draft rules put the finance ministry and local finance authorities at the core of managing financial state-owned enterprises, a move aimed at better managing assets that were previously overseen by a variety of government bodies. The rules also specify that the state’s financial assets should be concentrated in key financial sectors, infrastructure and institutions.

JD.com-controlled delivery company Dada seeks Nasdaq listing

Online retail and delivery services provider Dada Nexus Ltd. has applied to the U.S. securities regulator for an IPO on the Nasdaq. Chinese e-commerce giant JD.com Inc. is Dada’s largest shareholder with a 51.4% stake in the company. Supermarket chain giant Walmart holds a 10.8% stake.

Delivery and e-commerce are among the sectors that may have benefited from the coronavirus pandemic, as many shoppers moved online after being told to stay at home to lower the risk of contagion.

Banking regulator urges joint-stock banks to close unlicensed businesses

China’s top banking regulator has urged national joint-stock commercial banks to rectify their unlicensed for-profit financial businesses outside the cities where they are headquartered, in a bid to curb financial risks stemming from rampant expansion. (Read our exclusive story.)

Overseas investors sold down A-shares in the first quarter

Overseas investors were cautious in the first three months of the year, pulling money from Chinese stock markets and adjusting their portfolios to increase exposure to sectors with the best prospects of weathering the fallout from the Covid-19 outbreak.

** OTHER STORIES MAKING THE HEADLINES

Finance & Economy

•The nonperforming loan ratio of commercial banks climbed to 1.9% at the end of March, up 0.05 percentage points from the end of last year, marking the highest level since March 2009, official data showed (link in Chinese).

• Pacific Securities Co. Ltd. (link in Chinese) has been named and shamed (link in Chinese) by the securities regulator in the southwest province of Yunnan for alleged illegal fundraising by its employees with its Inner Mongolia branch. The move came just days after the branch was punished by Inner Mongolia’s securities regulator.

• A local prosecutor has filed charges against Sun Deshun, a former president of state-owned China Citic Bank Corp. Ltd., for alleged bribe-taking, an official statement said (link in Chinese).

• White House officials said (link in Chinese) they do not want the funds in a retirement savings program for federal employees and military personnel to be invested in an international index fund that includes Chinese equities.

Business & Tech

• Shenzhen Hive Box Technology Co. Ltd., a major operator of delivery pickup stations in China, faces a consumer backlash over its decision to begin charging for storing packages for more than 12 hours.

• Chinese biotech company Kintor Pharmaceutical Ltd. filed for an IPO in Hong Kong Tuesday to raise nearly HK$1.9 billion ($240 million), the latest in a stream of health care listings in the city.

• Wanda Film Holding Co. Ltd., China’s biggest movie theater operator, was questioned again by the Shenzhen Stock Exchange regarding its asset impairment after it posted its first annual loss in five years as a publicly listed company.

• The revenue of Chinese home-appliance maker Haier Smart Home Co. Ltd. reached 200.8 billion yuan ($28.3 billion) in 2019, overtaking rival Gree Electric Appliances Inc. of Zhuhai (link in Chinese) with 200.5 billion, according to their annual reports. Midea Group Co. Ltd. remained the sector’s top earner with 2019 revenue of 279.4 billion yuan.

• Chinese cybersecurity major Qi An Xin Technology Group Inc. has filed a prospectus (link in Chinese) with Shanghai’s Nasdaq-style STAR Market on Monday to move towards an IPO.

** AND FINALLY

The National Library of China has reopened its doors to readers on Tuesday. Up to 1,200 visitors a day can now enter the library after making reservations in advance and scanning QR codes verifying their health.

Readers sit and read in the National Library of China in Beijing on May 12.

** LOOKING AHEAD

Economic data

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

Latest quarterly results

May 13: Tencent

May 15: JD.com

May 18: Baidu, iQiyi and Bilibili

May 19: Weibo, Sina

May 20: Xiaomi, Lenovo

May 22: Alibaba

A previous version of this story incorrectly reported the day that the Ministry of Finance began seeking public comment on draft rules for managing state-owned financial assets. It was Saturday.

Contact reporter Guo Yingzhe (yingzheguo@caixin.com) and editors Yang Ge (geyang@caixin.com) and Joshua Dummer (joshuadummer@caixin.com)

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