May 29, 2020 11:09 PM

China Business Digest: South Korea Sees New Covid-19 Spike; Chinese Mainland Reports No New Cases

China Business Digest aims to provide readers with a quick daily rundown of the top China business and finance stories, plus whatever is driving markets for the day.

The Chinese yuan continues to trade near nine-month lows against the dollar as China-U.S. tensions escalate. Meanwhile, Premier Li Keqiang said that China will try to facilitate a net increase of more than 10,000 new companies per day this year despite the impact of the pandemic, and that Covid-19 relief funds should go to helping companies and individuals in need.

— By Timmy Shen (hongmingshen@caixin.com)

** ON THE CORONAVIRUS

New cases spike in South Korea

Concerns are growing over a potential new wave of Covid-19 cases in South Korea after it reported over 50 new cases for Thursday. The latest figure came after the country confirmed a nearly two-month high of 79 new cases the previous day.

Chinese mainland reports no new cases

The Chinese mainland reported no new symptomatic cases (link in Chinese) and had 70 existing ones for Thursday, according to official data.

As of Friday Beijing time, the U.S. death toll reached over 101,000, according to data compiled by Johns Hopkins University. Globally, the number of confirmed cases reached over 5.8 million and the death toll surpassed 360,000.

** TOP STORIES OF THE DAY

Chinese yuan weakens amid China-U.S. tensions

Over the past few days, the yuan has weakened against the dollar (link in Chinese) primarily due to escalating China-U.S. tensions, experts said. As of Friday morning Beijing time, the onshore yuan was trading around 7.15 to the dollar. On Wednesday, the offshore yuan weakened to 7.19, its weakest against the dollar in nearly nine months.

China still aims to found 10,000 new companies a day despite pandemic

Premier Li Keqiang said Thursday that China will try to facilitate a net increase of more than 10,000 new companies per day this year on average to stabilize employment, maintaining the same pace as last year despite the impact of Covid-19.

Premier says relief funds should be disbursed to companies and citizens in need

Proceeds from special treasury bonds issued to aid victims of the virus-hit economy should be distributed (link in Chinese) to people in need and enterprises, especially small and midsize ones, with a real-name registration system to prevent manipulation and fraud, Premier Li said Thursday at a press conference.

China’s regulator relaxes rules on bond issuance by insurer-backed banks

China’s banking and insurance regulator revised rules (link in Chinese) on bond issuance by banks supported by insurers, making it easers for such banks to raise capital through bond sales. The new rules remove a previous requirement that bond issuers should have total assets of at least 1 trillion yuan ($140 billion) and net asset of at least 50 billion yuan. They also change the required core tier-1 capital ratio of at least 8% to a vaguer and more relaxed requirement of “capital adequacy ratio in line with regulations.” Issuers also don’t need to have AAA credit ratings.

The China Banking and Insurance Regulatory Commission said the revised rules will help diversity the allocation of insurance assets and support the capital replenishment of small to medium-sized banks.

BNP Paribas Chinese unit fined for anti-money laundering violations

The Chinese unit of European banking giant BNP Paribas SA was fined 2.7 million yuan ($378,200) by China’s central bank for failure to verify client identification and report large and suspicious transactions as required.

Three senior executives of BNP Paribas (China) Ltd., a wholly-owned subsidiary of the Paris-based bank, were penalized with fines ranging from 45,000 yuan to 60,000 yuan for responsibility in the violations, including Chief Executive Officer Lai Changgeng and Chief Operating Officer and Deputy CEO David Goyon, according to a statement issued Wednesday by the Shanghai Branch of the People’s Bank of China.

China passes its first civil code

China’s national legislature approved the country’s first civil code on Thursday. The code, which will take effect on Jan. 1, covers areas including private property, personal privacy and inheritance.

China holds open attitude toward joining CPTPP

Premier Li said Thursday that China has a positive and open attitude toward joining the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), the Asia-Pacific’s largest free trade block, as Beijing sets its trade talk priorities for the year to drive an economic recovery.

Li’s comment appears to be the first time that a Chinese leader has publicly confirmed China’s interest in joining the agreement, which consists of 11 Asia-Pacific countries accounting for more than 13% of the global economy, including Japan, Canada and Australia.

GSX targeted again by Muddy Waters

New York-listed online education company GSX Techedu Inc. has been attacked again by short seller Muddy Waters Research, which revealed that “GSX openly recruits for bot operators” to inflate operational numbers, supplementing a report the short seller released last week that said more than 70% of the over 54,000 users in classes it analyzed were bots.

** OTHER STORIES MAKING THE HEADLINES

Finance & Economy

• Illegal “off-floor financing” activities in China’s stock market have increased once more, and some local securities regulators have released a list of platforms (link in Chinese) involved in such businesses that lure investors to participate through their websites or apps.

• Dajia Insurance Group, the company created to take over Anbang Insurance Group Co. Ltd.’s assets, nominated He Xiaofeng, the legal representative of Dajia and leader of the Anbang takeover group, as chairman of board. Sun Xianliang, a deputy director of the China Banking and Insurance Regulatory Commission, was nominated to be chairman of board of supervisors. Both nominations are subject to approval by the board and the regulatory commission.

• China Minsheng Banking Corp. Ltd. named Gao Yingxin as new party secretary (link in Chinese) to replace Zheng Wanchun, who is president of the largest privately owned bank in China and will be vice party secretary.

Gao, who recently resigned as executive director, vice chairman and chief executive of state-owned Bank of China’s Hong Kong subsidiary, is expected to become the chairman of Minsheng’s board, according to several industry insiders.

Business & Tech

• Nasdaq-listed online travel giant Trip.com Group Ltd., formerly known as Ctrip, reported an unaudited 42% year-on-year decline in net revenue in the first quarter.

• Chinese blind box toy brand Pop Mart plans to submit an IPO application to the Hong Kong Stock Exchange on Friday or no later than next week. (Read our exclusive story.)

• New York-listed Chinese video streaming platform Bilibili Inc. has announced plans to raise $650 million through the sale of convertible senior notes, as the company seeks more cash to expand its user base.

• Volkswagen AG has announced two investments in Chinese new-energy vehicles worth more than $2.2 billion. It plans to acquire a 50% stake in Chinese electric-vehicle partner Anhui Jianghuai Automobile Group Holdings Ltd. and increase its share in JAC Volkswagen, its joint venture with the Chinese automaker.

• Chinese electric-car maker Nio Inc. reported an unaudited 15.9% year-on-year decrease in total revenues in the first quarter and a 35.5% smaller net loss year-on-year.

• JD.com Inc. is set to invest $100 million in traditional retailer Gome Retail Holdings Ltd.’s convertible bonds, following an investment in Gome one month earlier by e-commerce rival Pinduoduo Inc.

** AND FINALLY

It is an increasingly popular activity in China for people to dress up in ancient clothing styles and visit historical sites. Traditional clothing hobbyists are now out and about again as the coronavirus outbreak has been contained.

A woman in traditional Chinese clothing poses for a photo at the Palace Museum in Beijing on May 27, 2020.

** LOOKING AHEAD

June 1: Release of Caixin China manufacturing PMI

June 3: Release of Caixin China services PMI

Contact reporter Timmy Shen (hongmingshen@caixin.com) and editors Yang Ge (geyang@caixin.com) and Gavin Cross (gavincross@caixin.com)

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