Jul 29, 2020 08:01 PM

China Business Digest: Hong Kong Recession Drags On; China Reports Most Daily New Virus Cases Since April


Digest Morning Chart 0729

Hong Kong recession continues with 9% GDP drop in the second quarter. EU says it will restrict exports of technologies to Hong Kong in response to the security law Beijing imposed on the city. Meanwhile, China unveils standardized notes backed by commercial paper and bankers’ acceptances. And the Chinese mainland’s report of 101 new Covid-19 cases marks its biggest daily increase since April.

— By Tang Ziyi ( and Han Wei (


Hong Kong recession extends into a fourth quarter

Hong Kong’s economy contracted 9% in the second quarter from a year earlier, extending its recession into a fourth straight quarter amid lingering concerns over the pandemic and the territory’s political stability. The second-quarter figure followed a 9.1% decline in the first quarter, the worst since 1974.

“The recent surge in Covid-19 cases has clouded the near-term outlook for domestic economic activity,” the government said in a release, saying there are hopes that the economy will gradually recover in the rest of the year.

China issues $163 million of standardized notes

The Shanghai Commercial Paper Exchange Corp. Ltd. (SCPE) delivered the first batch of standardized notes under China’s newly issued rules governing a new business designed to increase liquidity support for financial institutions and expand credit to small businesses. The 14 standardized notes, backed by commercial paper or bankers’ acceptances, have a total value of 1.14 billion yuan ($163 million)

Global NEV sales to surpass 31 million by 2030, Deloitte says

Global sales of new-energy vehicles (NEVs) will exceed 31 million units by 2030, or one-third of the total number of car sales, Deloitte said in a research report. Deloitte projected that global sales of NEVs will grow at 29% annually starting in 2020. NEV sales worldwide are expected to reach 2.5 million this year despite the impact of the Covid-19 pandemic, the accounting firm said.

EU to limit tech exports to Hong Kong

The EU said Tuesday it will limit the export of “sensitive” equipment and technologies for end-use to Hong Kong that could be used for repression or surveillance in the city, in response to the national security legislation for Hong Kong adopted by China’s legislature in June.

China says Hong Kong to suspend extradition treaties with Canada, Australia and the U.K.

China’s foreign ministry announced Tuesday that Hong Kong’s government would suspend extradition and criminal assistance agreements with Canada, Australia and the U.K.

A spokesman of the foreign ministry said the three countries had unilaterally suspended extradition agreements with Hong Kong over the national security law, which “constitute gross interference in China’s internal affairs.”

China and EU aim to conclude investment agreement by year-end

China and the EU will speed up talks on an investment deal to try to reach an agreement by the end of the year, Chinese Vice Premier Liu He and European Commission Executive Vice President Valdis Dombrovskis said in a statement (link in Chinese).

The two sides aim to strengthen coordination on macroeconomic policy and implement effective fiscal and monetary policies to support a global economic recovery, the statement said.

MSCI plans to launch thematic A-share indexes

Index provider MSCI Inc. said it will launch a series of thematic indexes based on the Chinese mainland stock market within a year.

Global investors’ interest in the A-share market has grown over the past few years.

Banks told to report data on consumer lending via Ant Group’s platforms

Shortly after China’s banking regulator issued new rules for online loans, the central bank started conducting a survey of commercial banks’ joint online consumer lending, indicating that regulators want to get a clear grasp of the $1 trillion market.

The People’s Bank of China sent the survey notice to commercial banks asking them to submit online consumer lending data as of December 2018, June 2019, December 2019 and the end of each of the first six months of 2020, Caixin learned from banking industry insiders. Specifically, the central bank required separate data on loans made through Ant Group’s lending platforms, Huabei and Jiebei.

Arm China asks Beijing to intervene in row with U.K. parent

Arm Technology (China) Co. Ltd. has called on the Chinese government to step in and “protect” the chip designer from its parent, Softbank Group Corp.-controlled British chip designer Arm Ltd., adding an explicitly political dimension to the ongoing dispute between the two companies. (Nikkei Asian Review)



• Chinese online travel agent Group Ltd. is in talks with potential investors to fund its delisting from Nasdaq as tensions rise between China and the U.S. (Reuters)

• Japan’s ruling party will urge the government to restrict the use of Chinese-developed apps like TikTok and better protect sensitive information, aiming to ensure that the country can keep working closely with the U.S. on security matters. (Nikkei Asian Review)

• A raft of U.S. private equity firms stand to reap big gains from Ant Group’s highly anticipated IPO. Silver Lake Management LLC, Warburg Pincus LLC, and Carlyle Group Inc. were the biggest U.S. backers in Ant Group’s latest funding round in 2018, investing at least $500 million each in the fintech giant, according to people familiar with the matter. (Bloomberg)

• State-owned power company China Three Gorges Corp. is exploring selling a stake worth as much as $4 billion in its overseas asset portfolio, sources said. (Bloomberg)

• Liquor-maker Kweichow Moutai Co. Ltd. (link in Chinese) reported its net profits rose 13.2% year-on-year in the first half this year.


• On Tuesday, the Chinese mainland reported 101 new Covid-19 cases (link in Chinese) with symptoms, marking the highest daily increase since April 12, according to China’s top health body. The Xinjiang Uygur autonomous region reported 89 new cases, including a cluster related to a local gathering (link in Chinese). Liaoning added eight locally transmitted cases, and Beijing reported one new case.

• Hong Kong reported 106 new Covid-19 cases on Monday, of which 98 were locally transmitted, as the city reported more than 100 daily new cases for the seventh consecutive day.

 Read more 
Caixin’s coverage of the new coronavirus

• As of Wednesday afternoon Beijing time, the number of coronavirus infections globally exceeded 16.7 million, with the death toll surpassing 660,000, according to data compiled by Johns Hopkins University.


Aug. 3: Release of Caixin China manufacturing PMI

Aug. 5: Release of Caixin China services PMI

Aug. 6: SMIC reports second-quarter financial results

Aug. 7: Release of China’s import and export data for July


Contact reporter Tang Ziyi ( and editors Yang Ge ( and Michael Bellart (

 Read more 
China Business Digest: AIIB Reappoints President Jin Liqun for Another 5 Years; Luxury’s Luster Dims Amid Pandemic Fallout

Register to read this article for free.
Share this article
Open WeChat and scan the QR code