China Business Digest: U.S. Stocks Recoup 2020 Losses; New Details on Hainan Free-Trade Port
Leaders from China and the European Union plan to resume a delayed March meeting online later this month, sending a positive signal on a bilateral partnership. Junshi Biosciences begins China’s first human trials of a potential antibody treatment for Covid-19. Meanwhile, Chinese officials disclose more details of the master plan to develop the southern island province of Hainan into a world-class free-trade port.
— By Mo Yelin (firstname.lastname@example.org) and Han Wei (email@example.com)
** TOP STORIES OF THE DAY
U.S. stocks rally on reopening optimism
U.S. stocks recouped all of their losses for 2020 as investors’ optimism about economic reopening grew. The S&P 500 Index advanced 1.2% Monday to close at 3,232.39, back above the level at the start of 2020. The Dow Jones Industrial Average rose 1.7%, boosted by aviation stocks. And the Nasdaq Composite index added 1.1% to set a closing record of 9,924.75. Despite the upbeat market, an agency said the American economy officially entered a recession in February, ending a record-long expansion.
China, EU leaders to hold online meeting in late June
A March summit for leaders from China and the European Union delayed by the Covid-19 pandemic will be held online in late June, Caixin learned. The meeting was originally scheduled for Beijing. Chinese Premier Li Keqiang was to meet with new European Commission and European Council presidents Ursula von der Leyen and Charles Michel. Rescheduling of the meeting is seen as a positive step toward a bilateral investment deal. China and the EU last week agreed to postpone a September summit at Leipzig, Germany.
JD.com Hong Kong share sale oversubscribed
China’s No. 2 e-commerce platform JD.com Inc.’s Hong Kong share sale of as much as $4.1 billion was multiple times oversubscribed by institutional investors. The offering is set to be the biggest initial public offering in Hong Kong this year following Chinese Internet company NetEase Inc.’s $2.7 billion share sale last week.
China to test new cross-border investment pilot programs in Hainan
China will launch the Qualified Domestic Limited Partnership (QDLP) and Qualified Foreign Limited Partnership (QFLP) pilot programs in Hainan to test freer cross-border investment in Hainan as part of the financial restructuring to be tested in the free-trade port. China will also gradually grant more freedom for local residents to exchange foreign currencies, a top central bank official said.
May exports resume contraction, but strong medical sales mitigate the pain
China’s exports resumed their contraction in May, dropping 3.3% in dollar terms from a year earlier, official customs data released on Sunday showed (link in Chinese). That was milder than an 8.4% decline forecast by economists in a Caixin survey. Sales of medical products — the backbone of last month’s exports — amounted to 63.2 billion yuan ($8.9 billion) in the first half of the month, more than the 61 billion yuan for such products in all of April.
China suspends debt repayment for loans to world’s poorest nations
China has agreed to suspend debt repayment for loans it made to 77 developing nations and regions as part of a G-20 debt relief program for the world’s poorest countries, Vice Minister of Foreign Affairs Ma Zhaoxu annouced (link in Chinese) at a press conference in Beijing on Sunday.
China’s first “negative list” for trade in services to roll out in Hainan
China will work to create the country’s first “negative list” for trade in services by the end of this year, specifying which industries are off-limits for foreign investors in the Hainan free trade port, Vice Minister of Commerce Wang Shouwen said at a Monday briefing (link in Chinese). Wang said the list will likely restrict them from areas related to cross-border deliveries, overseas consumption and the movement of personnel.
** ON THE CORONAVIRUS
Junshi Biosciences kicks off trials of China’s first Covid-19 antibody treatment
Shanghai Junshi Biosciences has launched phase 1 clinical trials of a Covid-19 antibody treatment, testing uninfected people’s tolerance for injections of an antibody to the coronavirus, the Hong Kong-listed company said in a filing on Sunday. This is China’s first Covid-19 antibody treatment trial (link in Chinese).
Caixin’s coverage of the new coronavirus
Other virus news
• As of Monday afternoon Beijing time, the number of coronavirus infections globally surpassed 7.03 million, with the death toll passing 403,000, according to data compiled by Johns Hopkins University.
• On Sunday, the Chinese mainland reported four new cases showing symptoms of infection (link in Chinese), all imported, according to official data. No new deaths were reported. The mainland added two new asymptomatic cases on the same day.
** OTHER STORIES MAKING THE HEADLINES
• In an interview with Caixin, Liu Bo, the president of Chinese smartphone-maker Oppo, has outlined the company’s plans to build its own custom-made chips, confirming widespread market talk that it would pursue the strategy. [link to liyi’s story]
• Lu Zhengyao, chairman of scandal-ridden Luckin Coffee Inc., is likely to face criminal charges in China after authorities discovered emails in which he instructed colleagues to commit fraud, a source close to domestic regulators told Caixin.
• Japanese automaker Toyota announced Friday (link in Chinese) that it has teamed up with five Chinese companies to establish a joint venture to develop fuel cells for commercial vehicles.
• Geely, China’s largest privately-owned automaker, intends to acquire a stake in Anhui province-based commercial vehicle manufacturer Hualing Xingma Automobile, the Shanghai-listed company said in a filing to the bourse (link in Chinese) on Sunday.
• Chinese mining behemoth Zijin Mining Group said it will acquire a 50.1% share in a Tibet mining firm for 3.88 billion yuan ($547.7 million), the Shanghai-listed company said in a filing (link in Chinese) to the bourse on Sunday.
• Cheng Wei, founder and CEO of Didi Chuxing, said in a statement on Saturday that he expects the company’s core ridehailing business will recover this month to the same level as last year.
• Chinese internet and gaming company NetEase revealed last week that it has set up a new game studio in Tokyo, Japan as part of its global expansion.
• Shanghai police have detained the controller of Anxin Trust Co. Ltd. over allegations he issued loans without following proper review procedures, after the company reported huge losses and failed to repay trust products worth billions by the end of last year.
• Swedish telecoms-gear maker Ericsson expects to take a second-quarter writedown of about 1 billion crowns ($109 million) on product inventory in China, Reuters reported on Monday, citing a statement from the company.
** AND FINALLY
China’s cabinet is now encouraging companies to provide feedback on a series of recent central government policies meant to support small and midsize companies in the wake of Covid-19. The State Council posted a video on its WeChat account on Monday detailing the policies, and requested companies give feedback directly via a mini-program on the social media platform.
A screenshot of the State Council video.
Contact reporter Mo Yelin (firstname.lastname@example.org) and editors Yang Ge (email@example.com) and Gavin Cross (firstname.lastname@example.org)
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