China Business Digest: Britain to Kick Huawei Out of 5G Network; China Steps Up Purchases of U.S. Corn
Huawei Technologies faces another blow as the U.K. bans its 5G gear. Passenger flights between China and France will be slashed amid a flight-control row. China expands U.S. corn purchases to meet trade-deal targets while the country’s goods exports and imports growth in June beat market expectations. Meanwhile, the country’s domestic equities may soon hit the $10 trillion milestone five years after a market crash.
— By Isabelle Li (firstname.lastname@example.org) and Han Wei (email@example.com)
** TOP STORIES OF THE DAY
U.K. imposes sweeping ban on Huawei in 5G networks
The British government said it will ban equipment from China’s Huawei Technologies Co. Ltd. in the country’s 5G telecom network and will completely eliminate all existing Huawei gear by the end of 2027. It was a major reversal after the U.K. in January said it would grant the Chinese telecom giant restricted access to the country’s next-generation wireless network.
France cuts China flights in tit-for-tat measure
The French government will restrict Chinese airlines to one passenger flight a week in response to flight curbs by Beijing authorities. The decision will cut the overall number of weekly flights between China and France to two from four.
China books record deal for U.S. corn
China made its biggest purchase ever of U.S. corn in a step to meet agriculture targets in the first phase of a trade accord, Bloomberg reported Tuesday. American exporters sold 1.762 million metric tons of corn Tuesday, the fourth-biggest spot deal on record for the grain, the report said, citing data from the U.S. Department of Agriculture.
China’s exports, imports return to growth
Exports grew 0.5% year-on-year in dollar terms last month, while imports rose 2.7% year-on-year, according to Tuesday data from the General Administration of Customs.
China’s stock market closes in on $10 trillion milestone
China’s investors have waited five years for stock values to return to $10 trillion, and that milestone may be reached as soon as this week. The country’s domestic equities are worth about $9.7 trillion after this month’s rally, according to data compiled by Bloomberg as of July 13.
Two state-owned coal giants confirm merger talks
Yankuang Group Co. Ltd. and Shandong Energy Group Co. Ltd. are in merger talks, according to a notice filed by Yankuang’s listed arm to the Shanghai Stock Exchange on Monday. The combined assets of the two groups will be worth more than 600 billion yuan ($42.8 billion), ranking second among Chinese state-owned coal enterprises.
Shenzhen Stock Exchange accepts first registration-based ChiNext listings
The Shenzhen Stock Exchange gave the green light on Monday to the first three companies seeking to list on its Nasdaq-style ChiNext board under a registration-based IPO mechanism.
Huawei reports resilient first-half results
Embattled telecom giant Huawei reported (link in Chinese) 454 billion yuan ($64.8 billion) in revenue for the first half of this year, up 13% from a year earlier. While the company was able to maintain growth despite strong global headwinds, the latest figure was slower than the 23% growth it recorded in the first half of 2019.
Rule change to fund custody licenses helps China meet U.S. trade deal commitment
China has allowed local branches of foreign banks to apply for fund custody licenses, according to recently revised regulations. The move is seen as part of Beijing’s efforts to further open up its financial sector and a concrete measure to meet its commitment to the phase-one trade deal with the U.S.
Jack Ma sells down $8.2 billion worth of Alibaba shares
Retired Alibaba founder Jack Ma’s holding in the e-commerce company dropped to 4.8% from a previous 6.2% in the company’s last fiscal year, according to its annual report filed last week. The stake sell-down was worth about $8.2 billion.
** OTHER STORIES MAKING HEADLINES
• Luckin Coffee Inc. has appointed Guo Jinyi, one of Luckin’s founders who stepped up as acting CEO in May, as its new chairman and CEO to replace former chairman and co-founder Lu Zhengyao.
• Embattled Sichuan Trust Co. Ltd., which failed to repay over 20 billion yuan to investors, said it is trying to repay the debt within a year by selling its underlying assets, including its offices.
• China’s dominant electricity grid operator, State Grid, has launched the first phase of a 5G-based “smart” power grid system in the coastal city of Qingdao in partnership with Huawei Technologies and China Telecom.
** ON THE CORONAVIRUS
• Japan is planning to start letting foreign residents who left the country before April 3 to return, starting in August, according to the Nikkei Asian Review.
• Areas of Sydney have been declared coronavirus hotspots by the Queensland state government, as Australia’s total virus cases exceed 10,000 and health authorities fear the second wave of infections in Melbourne has now spread to Australia’s largest city, Bloomberg reported.
• A suspected cluster of Covid-19 infections has broken out at an oil refinery operated by a subsidiary of China National Chemical Engineering Group in the city of Omsk in Russia’s Siberia region. At least 12 Chinese workers employed by the state-owned chemical enterprise tested positive, with their close contacts quarantined as of Sunday, Caixin has learned.
• The global number of infections reached over 13.1 million as of Tuesday afternoon Beijing time, while the death toll reached more than 573,000, according to data from Johns Hopkins University.
• The Chinese mainland reported (link in Chinese) three new imported cases of the virus with symptoms on Monday, all in Shanghai, according to the National Health Commission. The country also added five new asymptomatic cases, all also imported.
Caixin’s coverage of the new coronavirus
** AND FINALLY
As more and more places on different continents report resurgences in the past few weeks, the pandemic is not yet close to a conclusion, but life continues, even in virus-hit countries. Check out the gallery here (link in Chinese).
July 16: Release of China’s investment, retail sales and industrial output data
Contact reporter Isabelle Li (firstname.lastname@example.org) and editors Yang Ge (email@example.com) and Joshua Dummer (firstname.lastname@example.org)
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