Jun 11, 2020 09:00 PM

China Business Digest: Foreign Ministry Responds to Concerns on HK Internet Access; U.S. Stocks In Worst Sell-Off Since March Crash



The Ministry of Foreign Affairs commented on concerns that the new Hong Kong security legislation may affect local internet access. Didi Chuxing is clouded by possibly another assault case involving a driver. Beijing reported a new coronavirus infection Thursday, nearly two months after the last one. Hong Kong plugs in a second virtual bank, and American stocks crash.

By Guo Yingzhe ( and Han Wei (


U.S. stocks in worst sell-off since March crash

U.S. equity markets tumbled the most in 12 weeks on a grim economic outlook and fears of new spikes in Covid-19 cases. The Dow Jones Industrial Average lost 1,861 points, or nearly 7%, to finish its worst day since March as weeks of optimism faded. The S&P 500 Index sank almost 6%, and the Nasdaq finished 5.3% lower.

Foreign ministry responds to concerns on Hong Kong internet access

The newly proposed national security law for Hong Kong targets only a small group of activities, Hua Chunying, spokeswoman of China’s Ministry of Foreign Affairs, said at a regular press conference Thursday in response to questions on whether the new legislation will affect internet access in Hong Kong.

Though details of the law haven't been settled, “one thing is clear, that the national security law for Hong Kong targets only a narrow category of acts that gravely jeopardize national security,” Hua said.

Police investigates alleged sexual assault by Didi driver

Police in Zhengzhou, Henan province, launched an investigation of a possible rape case involving a driver who likely works for ride-hailing platform Didi Chuxing. Police announced the investigation Thursday night after a video circulated online showing a male driver assaulting a female passenger. The user who released the video claimed it was recorded from an underground livestreaming site.

Didi said it reported the incident to police and was trying to identify the driver. The ride-hailing giant was rattled by several driver-assault cases in recent years and was forced to halt its carpool service for more than a year.

Hong Kong plugs in second virtual bank

Hong Kong-based Airstar Bank, an internet-only lender backed by smartphone maker Xiaomi Corp., officially opened for business Thursday, the second virtual bank to start operation in the Asian financial hub. The bank is owned 90% by Xiaomi and 10% by Hong Kong-based investment banking firm AMTD Group. It won a license in May 2019 and started a pilot run in March.

NetEase shares jump in Hong Kong debut

The share price of NetEase Inc. jumped more than 6% in its trading debut in Hong Kong on Thursday. The gaming giant is the second major U.S.-listed Chinese tech company to do a secondary listing in the Asian financial hub after Alibaba Group Holding Ltd. since last year. said to raise $3.9 billion in year’s second-largest listing

Chinese online retail giant Inc. raised HK$30.1 billion ($3.9 billion) in its Hong Kong share sale, people familiar with the matter said, cementing the world’s second-biggest listing this year. (Bloomberg)

U.K. chipmaker Arm in boardroom battle over China venture control

SoftBank Group Corp.-backed Arm Ltd. clashed publicly with its Chinese joint venture over the unit’s leadership, casting a rare spotlight on a power spat within the British high-tech chip designer.

In a statement Wednesday, Arm said the board of its China joint venture, Arm Technology (China) Co. Ltd., agreed to remove Chairman and CEO Allen Wu. However, the joint venture issued a separate statement hours later saying Wu was still in charge and it was operating normally. The parent then fired back in another statement accusing Wu of conflicts of interest and violations of employee rules. (Read the full story.)

Auto sales up, new-energy car sales down

China’s auto market has been recovering as auto sales rose 14.5% year-on-year to nearly 2.2 million units last month, up 10.1% from April, industry data showed (link in Chinese).

But new-energy car sales remained sluggish as authorities had cut subsidies. In May, sales of new-energy vehicles in China were 82,000 units, down 23.5% (link in Chinese) year-on-year, marking the 11th consecutive month of decline.

Banks cease structured deposits as regulator tightens grip

Several large state-owned banks have ceased accepting structured deposits as China’s top banking regulator is telling some lenders to reduce such products, trying to crack down on regulatory arbitrage, sources familiar with the matter told Caixin (link in Chinese).

Regulators want to crack down on “fake” structured deposits and regulatory arbitrage practices, as many companies use cheap money raised from selling bonds or other financing channels to invest in these bank products, industry insiders said. (Read the full story.)

Floods hit southern China

Days of heavy rain have led to devastating floods (link in Chinese) in southern China since the start of the month, leaving at least a dozen dead as of Wednesday, official data showed.

Millions of people in 11 provincial-level regions have been affected, according to a Tuesday statement (link in Chinese) from the Ministry of Emergency Management.

Digest Stock Chart 0611


Economy & Finance

• Scandal-plagued Kangde Xin Composite Material Group Co. Ltd. was placed under investigation by China’s top securities watchdog for alleged illegal information disclosure in the bond market, the company said in a filing (link in Chinese) with the Shenzhen Stock Exchange.

Matrix Partners China Management Ltd., a venture capital firm that has backed major Chinese tech firms at their early stages, has raised $750 million for its flagship venture investment vehicle. (Deal Street Asia)

• China’s overall credit growth hit a two-year high in May thanks to looser monetary policy aimed at assisting businesses hit by the Covid-19 pandemic. Total social financing rose 12.5% year-on-year to 268.39 trillion yuan ($38 trillion) at the end of last month, marking the highest monthly growth in about two years, central bank data showed Wednesday.

Business & Tech

• The European Data Protection Board has set up a task force to investigate TikTok, a viral short video app owned by Chinese internet giant ByteDance Inc., about its data processing activities and privacy practices across the European Union.

• Beijing’s internet watchdog has ordered Twitter-like platform Sina Weibo to freeze its popular topics list for one week as punishment for allegedly interfering with online communications order.

• China’s 5G smartphone shipments hit 15.6 million units last month, accounting for 46.3% of its total mobile phone shipments, industry data showed (link in Chinese).

• Huang Wei, a vice president of Chinese film-making firm Bona Film Group Ltd., died after falling off a building at the age of 52 on Wednesday.


• The city of Beijing reported a new coronavirus infection on Thursday, according to a briefing (link in Chinese) by the local government. Previously, the city had not reported any new cases for nearly two months.

• The Chinese mainland reported 11 new symptomatic coronavirus cases on Wednesday, all imported, official data showed (link in Chinese). No new deaths were reported. The mainland added four new asymptomatic cases on the same day.

• A Thailand official said several countries, including China and Japan, are interested in discussions about travel bubbles, as the nation considers protocols for the eventual return of foreign tourists. (Bloomberg)

• Coronavirus infections in the U.S. have surpassed 2 million and its death toll has reached over 112,000, as the country remained the worst-hit in the world, according to data compiled by Johns Hopkins University

• As of Thursday afternoon Beijing time, the number of coronavirus infections globally surpassed 7.39 million, with the death toll passing 417,000, Johns Hopkins University data showed.


Hong Kong Ocean Park is ready to welcome visitors again on Saturday after being closed for more than four months due to the coronavirus pandemic. Staff have been disinfecting the facilities in the park to prepare for the reopening.


Staff at Hong Kong Ocean Park disinfect the facilities to prepare for reopening, June 11.


June 15: Release of China’s investment, industrial output, and retail sales data

 Contact reporter Guo Yingzhe ( and editors Yang Ge ( and Joshua Dummer (

 Read more 
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