China Business Digest: China Industrial Profits Rise 11.5%; Dalian Counters Covid-19 Outbreak With Mass Testing
China’s industrial profits rose 11.5% year-on-year in June as the world’s second-largest economy bounced back from the global pandemic. Tencent plans to take search engine Sogou private with a $2.13 billion proposal. And on the coronavirus, China’s latest new outbreak occurred at a seafood distribution center in the coastal city of Dalian, leading to mass testing of 6 million residents.
— By Tang Ziyi (firstname.lastname@example.org)
** TOP STORIES OF THE DAY
Gold prices have soared on the back of rising demand for safe investment havens amid rising tensions between China and the U.S. On Monday, spot gold surged to $1,944.71 an ounce before being adjusted for inflation, beating the previous high set in 2011 by more than $20, Bloomberg reported.
China takes over U.S. consulate in Chengdu city
China’s foreign ministry said (link in Chinese) Monday that the government has shut down the U.S. consulate in the southeastern city of Chengdu. The move came after the U.S. ordered China to close its consulate in Houston within 72 hours, marking what Beijing called an “unprecedented escalation” of tensions between the two powers since they normalized diplomatic relations in 1979.
China industrial profits rose 11.5% in June
Official data released Monday showed (link in Chinese) that profits of major Chinese industrial enterprises rose 11.5% year-on-year.
The rise marked the second consecutive increase for the figure, and represented the quickest rate of expansion since March 2019, adding to signs that the Chinese economy is recovering from the Covid-19 pandemic.
Tencent proposes to take Sogou private for $2.13 billion
Sohu.com Ltd. said its search engine subsidiary Sogou Inc. received a preliminary, nonbinding proposal for Tencent Holdings Ltd. to acquire the 60.8% of the company’s New York Stock Exchange-listed shares it doesn’t already own for $9 each, or $2.13 billion.
World Bank urges China to advance reforms to improve business environment
China has been ranked for two years in a row by the World Bank as one of the top 10 economies with the biggest improvement in business environment, but the country still lags behind other advanced economies in areas such as taxation, access to credit, cross-border trade and bankruptcy process, the World Bank said in a report (link in Chinese) released Monday.
Credit Suisse expects windfall from $100 million investment in Ant
Credit Suisse Group AG invested nearly $100 million in Ant Group during its last funding round, setting the Swiss bank up for a potential windfall as the Chinese internet giant prepares to go public, Bloomberg reported, citing people familiar with the matter.
China increases soybean imports from Brazil
China’s soybean imports from Brazil soared to 10.5 million tons in June, up 93% year-on-year and growing 18.6% from the previous month, Chinese customs data showed. The growth is partly driven by rising demand for the feed as the country’s hog stocks recover from the deadly African swine fever.
Citic Securities plans $1.5 billion charge-up for its CLSA global unit
Leading brokerage Citic Securities Co. Ltd. said it plans to replenish the capital of its Hong Kong arm, whose main asset is global brokerage CLSA Ltd., with up to $1.5 billion to expand its international operations. The new funding will be carried out in steps starting with an initial round of up to $300 million.
Housing brokerage Beike Zhaofang files for U.S. IPO
Chinese housing rental platform KE Holdings Inc. has filed for a U.S. IPO to raise up to $1 billion. KE Holdings, also known as Beike Zhaofang, is a subsidiary of one of China’s largest real estate agencies, Beijing Lianjia Real Estate Brokerage Co. Ltd. KE Holdings is backed by internet giant Tencent Holdings Ltd.
** OTHER STORIES MAKING THE HEADLINES
• A court in India has subpoenaed Alibaba Group Holding Ltd. and its founder Jack Ma for a court hearing on allegations that the Chinese company wrongly sacked a former employee after his objection to what he believed as censorship and fake news on company apps, Reuters reported.
• Shenzhen-listed pharmaceutical company Hangzhou Tigermed Consulting Co. Ltd. plans to raise up to HK$10.7 billion ($1.4 billion) from its secondary listing in Hong Kong, according to a prospectus obtained by Caixin (link in Chinese). The company filed for (link in Chinese) the secondary listing on April 23.
• Luxury car sales volume jumped 27% year-on-year in June in China, as manufacturers rolled out more lower-end “starter” models to get aspiring buyers into the market.
• Hong Kong Airlines Ltd.’s bond issuer announced in a filing that the carrier had deferred an interest payment on a $683 million perpetual bond due on Sunday, as the company’s revenue shrank amid the pandemic.
• Billionaire investor Ray Dalio said conflict between the U.S. and China could expand into a “capital war” that he suggested would harm the dollar, Bloomberg reported.
** ON THE CORONAVIRUS
• On Sunday, the Chinese mainland reported 61 new Covid-19 cases with symptoms (link in Chinese), according to China’s top health body. Northwest China’s Xinjiang Uygur autonomous region reported 41 new cases, and the northeastern province of Liaoning added 14 cases.
The northeastern port city of Dalian started mass testing of its 6 million residents after the number of confirmed cases reached 38, mostly linked to a local seafood importer.
The new outbreak there began in a seafood distribution center, much like the recent outbreak in Beijing. The Dalian outbreak had spread to (link in Chinese) three provinces outside of Liaoning as of Monday morning, with cases connected to it reported in Heilongjiang, Jilin and Fujian provinces.
• Hong Kong reported 128 new Covid-19 cases on Saturday, of which 103 were locally transmitted. The city has now reported more than 100 daily new cases for five straight days.
Caixin’s coverage of the new coronavirus
• As of Monday afternoon Beijing time, the number of coronavirus infections globally exceeded 16 million, with the death toll surpassing 648,000, according to data compiled by Johns Hopkins University.
** AND FINALLY
A post from Yamy, Chinese rapper and captain of now-disbanded idol group Rocket Girls 101, went viral on social media platform Sina Weibo last week. In a post, she described the “emotional abuse” and “humiliation” she endured for over two years at the hands of Xu Mingchao, her boss and CEO of an entertainment company.
Her post stoked discussion about workplace bullying in the entertainment industry and beyond.
The final episode of idol competition show “Produce 101” comes to an end in Hangzhou, Zhejiang province, on June 23, 2018. Yamy rose to fame on the show. Photo: IC Photo
Contact reporter Tang Ziyi (email@example.com) and editors Yang Ge (firstname.lastname@example.org) and Gavin Cross (email@example.com)
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