China Business Digest: Regulators Step Up Dismantling of Financial Empire of Xiao Jianhua; NYU Hosts Stranded Students at Shanghai Campus
Nine financial businesses controlled by fallen tycoon Xiao Jianhua were placed under state custody. Huawei’s troubles keep coming as its orders are no longer accepted by the world’s largest contract computer chipmaker in response to U.S. sanctions, and the U.S. FCC began drawing up a list of suspect gear. Meanwhile, five new coronavirus cases were confirmed in the Xinjiang Uygur autonomous region. New York University decided to host more than 3,000 Chinese students in Shanghai due to travel restrictions amid the pandemic.
— By Guo Yingzhe (firstname.lastname@example.org) and Han Wei (email@example.com)
Regulators take over nine financial firms linked to fallen tycoon
The Chinese government seized nine financial companies formerly controlled by the mysterious fallen tycoon Xiao Jianhua for alleged infractions in a major move to break down Xiao’s financial empire under the umbrella of Tomorrow Holding Co. Ltd. The nine companies have combined total assets amounting to more than 1.2 trillion yuan ($171.5 billion).
NYU to host more than 3,000 students at Shanghai campus
New York University’s Shanghai campus said Friday it will host about 2,300 Chinese undergraduates and 800 graduate students from NYU and NYU Abu Dhabi for the fall semester due to the Covid-19 pandemic. It is part of the university’s "Go Local" plan developed in response to travel restrictions caused by the pandemic. NYU joined several U.S. universities including Duke University and Cornell University to develop alternative local study plans for stranded students.
U.S. extends clampdown on Huawei with FCC list of suspect gear
The U.S. Federal Communications Commission, also known as the FCC, has begun the process of drawing up a list of telecommunications equipment deemed to pose a security risk, as the agency continued efforts to limit the reach of Huawei Technologies Co. Ltd. and ZTE Corp. (Bloomberg)
TSMC cuts off chip sales to Huawei under U.S. sanctions
Taiwan Semiconductor Manufacturing Co. Ltd. (TSMC) stopped taking new orders from Huawei in mid-May to comply with U.S. sanctions and currently has no plans to ship chips to its No. 2 customer after mid-September, the world’s largest contract chipmaker by revenue said. (Read the full story.)
Regions in central, eastern China issue highest-level flood warnings
Several regions in central and eastern China declared “code red” flood alerts over the last two days, according to official statements. The central city of Wuhan and the eastern provinces of Zhejiang, Jiangsu and Jiangxi face imminent flooding threats as they are being battered by heavy rains. Meanwhile, a second wave of flooding has emerged along the Yangtze River, according to the Ministry of Water Resources (link in Chinese).
18 provincial-level governments get nod to help recapitalize small, midsize banks
China’s top banking regulator will support (link in Chinese) 18 provincial-level governments in recapitalizing some small and midsize banks with money raised from the sale of government bonds, an official said on Thursday. Policymakers want to replenish those banks’ capital and encourage them to channel more credit to small businesses through the program.
News app Qutoutiao removed from app stores following state TV exposé
Qutoutiao, a Chinese news aggregator app, had been removed from the country’s Android app stores after being singled out on Thursday for allegedly selling dubious ads in a high-profile annual consumer rights show produced by state-owned broadcaster CCTV. The share price of Nasdaq-listed Qutoutiao Inc., the company behind the app, closed down 23% that day. (Read the full story.)
Chinese banks’ risks are controllable, banking regulator says
Small and medium-sized financial institutions have maintained stable operations and are making marginal improvements to their businesses, and their risks are totally controllable, said Xiao Yuanqi, the top banking regulator’s chief risk officer. (Read the full story.)
Credit Suisse revamps management of China venture
Credit Suisse Founder Securities Ltd., a China joint venture of Credit Suisse Group AG, has launched a major management shakeup shortly after the Swiss banking giant increased its stake to a controlling interest of 51% in April under China’s new policy that eased controls on foreign ownership. (Read the full story.)
** OTHER STORIES MAKING HEADLINES
Economy & Finance
• China’s fiscal revenue fell 10.8% year-on-year in the first half of 2020, official data (link in Chinese) show. The decline narrowed from a 13.6% drop over the first five months.
• China’s banking watchdog said that trust products cannot provide guaranteed returns and the companies behind them should not make implicit guarantees, after an embattled trust firm illegally guaranteed returns for its trust products involving billions of dollars.
• Overseas investors increased their net holdings by $59.6 billion in domestic bonds and by $13.3 billion in stocks over the first half of the year, according to the foreign exchange administration (link in Chinese).
• The share of China’s yuan in global foreign exchange reserves rose to 2.02% at the end of March, a record high, according to official data (link in Chinese).
Business & Tech
• Chinese clinical research service provider Hangzhou Tigermed Consulting Co. Ltd. has won approval from the Hong Kong Stock Exchange for its second listing. The listing could raise about $1 billion in what would be Asia’s largest health care listing this year, according to people familiar with the matter. (Bloomberg)
• State-owned China Three Gorges Corp. is emerging as the leading bidder for Spanish solar park assets owned by X-Elio Energy SL, in what could become one of few Chinese acquisitions in Europe this year, people familiar with the matter said. (Bloomberg)
• Chinese autonomous truck startup TuSimple Inc. has reached a strategic agreement with U.S. truck-maker Navistar International Corp. to co-develop self-driving trucks. (Read the full story.)
** ON THE CORONAVIRUS
• At least five new symptomatic coronavirus cases were confirmed on Thursday and Friday in Urumqi, the capital of the Xinjiang Uygur autonomous region, according to the region’s health authority (link in Chinese). Eight new asymptomatic cases were also confirmed over the same period.
• South China’s Guangdong province has tightened cross-border travel restrictions for visitors from neighboring Hong Kong amid a new wave of coronavirus infections in the city. Travelers from Hong Kong must now show proof they have tested negative for the virus in the last 72 hours before they will be allowed to enter the Chinese mainland through Shenzhen (link in Chinese) or Zhuhai (link in Chinese). A few groups are exempted from the requirement.
• The Chinese mainland reported 10 new coronavirus cases showing symptoms on Thursday, nine of those imported, official data showed (link in Chinese). One local infection was found in Xinjiang. The mainland added five new asymptomatic cases on the same day.
• As of Friday morning Beijing time, the number of global coronavirus infections surpassed 13.7 million, with the death toll passing 589,000, according to data compiled by Johns Hopkins University.
• Coronavirus infections in India surpassed 1 million on Friday, Johns Hopkins data show, making it the third country to cross the mark after the U.S. and Brazil.
** AND FINALLY
The Spanish government held a mourning ceremony on Friday for those who lost their lives during the Covid-19 pandemic. The number of coronavirus infections in the country reached more than 258,000 on Friday, with the death toll surpassing 28,000, Johns Hopkins data show.
Contact reporter Guo Yingzhe (firstname.lastname@example.org) and editors Yang Ge (email@example.com) and Gavin Cross (firstname.lastname@example.org)
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