China Business Digest: Benchmark Lending Rates Remain Unchanged; Virus Shows Signs of Evolving in New Outbreaks
The northeastern province of Jilin reports more locally transmitted Covid-19 cases as a doctor reports the virus in the new outbreaks manifests differently compared with those in Wuhan. Meanwhile, China’s benchmark lending rates remain unchanged in May. Banks report slower profit growth.
— By Timmy Shen (firstname.lastname@example.org) and Han Wei (email@example.com)
** ON THE CORONAVIRUS
New outbreak in China shows signs the virus may be changing
Chinese doctors found signs that the coronavirus may be changing in new cases in the northeast region compared with the original outbreak in Wuhan. Recent cases in Jilin and Heilongjiang showed delayed onset of symptoms, which may complicate control efforts, Qiu Haibo, one of China’s top critical care doctors, said Tuesday on state television. But fewer patients turned critical in recent cases, Qiu said.
Jilin reports more local cases
On Tuesday, the Chinese mainland reported five new infections (link in Chinese), including one imported case in the Inner Mongolia autonomous region and four locally transmitted cases in Jilin province.
Moderna releases positive data on its vaccine candidate
U.S. biotechnology company Moderna Inc. on Monday announced positive interim clinical data for its coronavirus vaccine candidate after a phase-one study.
U.S. death toll passes 91,000
The U.S. remains the worst-hit nation in the world. As of Wednesday Beijing time, the country had recorded over 1.52 million infections, with its death toll exceeding 91,000, according to data compiled by Johns Hopkins University.
Meanwhile, global infections reached nearly 4.9 million, including over 323,000 deaths.
Brazil now third-highest in infections
Brazil reported over 271,000 confirmed cases as of Wednesday Beijing time, making it the third-highest country in terms of total infections, surpassing the U.K., according to Johns Hopkins data.
Caixin’s coverage of the new coronavirus
** TOP STORIES OF THE DAY
Banks’ profits slow, affected by the pandemic
China’s listed commercial banks reported slower profit growth in the first quarter, reflecting effects of the Covid-19 outbreak and economic uncertainties, Ernst & Young said Wednesday. Banks reported average profit growth of 5.03% in the first quarter, 2.35 percentage points lower than a year ago.
Walmart to quadruple Sam’s Clubs in China
Walmart Inc. plans to expand its members-only warehouse chain, Sam’s Club, in China to 100 stores from 26 in the next eight years, betting on demand from increasingly affluent Chinese families, Bloomberg reported. The retailer is among the few winners in the coronavirus crisis that has upended every aspect of modern life. Sales surged as lockdown measures forced people to stay home and store more essentials.
Luckin Coffee chief expresses regret following delisting notice
Luckin Coffee Inc. Chairman Lu Zhengyao released a statement early Wednesday after the scandal-plagued company said it was notified that it would be delisted from the Nasdaq. Lu said the company has restructured its board of directors and reshuffled its management team based on preliminary results of an internal investigation. “But I’m personally deeply disappointed that Nasdaq unexpectedly asked the company to delist without waiting for the final results of the investigation,” he said, in his first public comments in more than a month.
Benchmark lending rates unchanged in May
On May 20, China’s one-year national loan prime rate (LPR) remained at 3.85% (link in Chinese), the same as April’s, while the five-year-plus LPR also remained unchanged at 4.65%, according to official data.
Hong Kong’s unemployment rate reaches new high
For the three months of February to April, Hong Kong’s seasonally adjusted unemployment rate rose to 5.2% from 4.2% in the January-to-March period, representing a 10-year high, according to government data.
Fidelity International seeks to set up mutual fund company in China
Asset management giant Fidelity International has applied to set up a wholly-owned mutual fund subsidiary in China, making the firm the third foreign institution to do so after access to the country’s lucrative fund market was widened in April.
** OTHER STORIES MAKING THE HEADLINES
Finance & Economy
• The Hong Kong Stock Exchange is looking to speed up its IPO process by shortening the time between price-setting and trading debuts. (Bloomberg)
• China’s top banking watchdog said (link in Chinese) that it has begun an investigation into a case involving Bank of China Ltd.’s “paper crude” futures trading product.
• The National Internet Finance Association of China released Tuesday a list of 73 mobile finance apps (link in Chinese) managed by 33 institutions that it plans to register, in a bid to further manage security and risks of apps developed by financial institutions.
• Ashley Alder, CEO of Hong Kong’s Securities and Futures Commission, has signed on to serve another three-year term effective from Oct. 1, to “ensure that the financial system functions reliably and with integrity throughout a period of exceptional stress.”
Business & Tech
• Computer giant Lenovo Group Ltd. reported a 10% year-on-year revenue decline to $10.6 billion in the first three months of this year, reflecting the impact of its factory shutdown during the virus outbreak, according to its latest earnings report.
• Chinese internet and online game operator NetEase Inc. recorded an 18.3% year-on-year net revenue increase to 17.1 billion yuan ($2.4 billion) in the first quarter, while its net income attributable to shareholders rose nearly 50% to 3.6 billion yuan, as the epidemic led to more people playing online games, its first quarter results showed.
• Chinese social media platform Weibo Corp., often called the Twitter of China, reported a 19% year-on-year revenue decline in the first quarter despite strong growth in new users.
• Chinese internet services provider Dr. Peng Telecom & Media Group Co. Ltd. recorded a net loss of 5.7 billion yuan in 2019, from a net profit of 337 million yuan the previous year, as its internet services business shrank, according to its annual report.
• California-based videoconferencing company Zoom Video Communications Inc. has suspended individual users from signing up in China. (Nikkei Asian Review)
• Wanda Film Holding Co. Ltd. has cited massive write-downs on investments it paid too much for in response to queries from the Shenzhen Stock Exchange on its massive losses.
• “PlayerUnknown’s Battlegrounds Mobile,” a battle royal title developed by Chinese internet giant Tencent Holdings Ltd., retained its position as the world’s highest-earning mobile game in April, followed by another Tencent title, “Honor of Kings,” as demand for digital entertainment increased amid the pandemic.
• Huayi Brothers Media Corp., once a highflyer in China’s movie industry, is now at risk of being delisted after losing money for two straight years. (Read our interview with its chairman on his plan to rescue the company.)
** AND FINALLY
Today, May 20, is a special day for couples in China as the Mandarin pronunciation of “520” sounds similar to “I love you” in the language.
Brands and merchants are in no position to miss the opportunity to leverage the special “holiday” to bring in cash. Prada, for example, launched a “Prada520” Weibo hashtag with its Chinese brand ambassador Cai Xukun, a 21-year-old star in China, drawing in hundreds of millions of views as of May 20.
Haidilao, a popular hot pot restaurant chain, even rolled out accessories such as earrings in the shape of lotus root slices, anises, peppers and mushrooms.
Many couples are also prepared to get married on the day. Some civil affairs offices across China saw groups of couples waiting in line to register for marriage.
On May 20, couples queue up register their marriages at a local civil affairs office in Lianyungang, Jiangsu province
** LOOKING AHEAD
May 20: Xiaomi, Lenovo results
May 21: Annual meeting of the Chinese People’s Political Consultative Conference (CPPCC)
May 22: Annual meeting of the National People’s Congress (NPC), Alibaba results
May 25: Meituan results, Memorial Day in the U.S.
Contact reporter Timmy Shen (firstname.lastname@example.org) and editors Yang Ge (email@example.com) and Joshua Dummer (firstname.lastname@example.org)
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