CX Daily: Microsoft Continue Talks to Buy TikTok in U.S.
Microsoft, Bytedance founder confirm TikTok sales talks underway
Beleaguered ByteDance Ltd. got a bit of relief Sunday when Microsoft Corp. confirmed it is still looking to acquire the U.S. operations of TikTok, even after U.S. President Donald Trump said Friday he would “immediately” ban the short-video app.
In a Sunday statement, the American tech giant said it decided to continue discussing the plan after Microsoft CEO Satya Nadella had a discussion with Trump, and the company is aiming to reach a deal with ByteDance by Sept. 15.
However, the fate of the Chinese internet company’s globally popular app remains far from clear. On Monday, ByteDance founder and CEO Zhang Yiming sent out an internal letter (link in Chinese) that acknowledged for the first time the “real possibility of a forced sale of TikTok’s U.S. business … or an executive order banning the TikTok app in the U.S.”
• Trump says he will ban TikTok from operating in U.S.
FINANCE & ECONOMICS
With a valuation of roughly $200 billion, Ant is the world’s most valuable tech startup.
Cover Story: How Ant grew into an elephant-sized behemoth
It was a long wait for investors before Ant Group, the Chinese fintech giant affiliated with Alibaba Group Holding Ltd., announced its plan last month to go public, kicking off one of the world’s most anticipated share sales.
Rooted in Alipay, Alibaba’s payment platform set up in 2004, Ant has grown into an elephant-sized juggernaut that owns the world’s largest payment service and runs the biggest money-market fund. Ant’s full range of online financial services includes payment, banking, insurance, securities, wealth management, lending, corporate credit scoring and crowd funding. It also holds stakes in a wide variety of businesses.
At the same time, the company’s growing influence has brought Ant under frequent regulatory scrutiny. In less than two decades, Ant and other rising fintech companies have brought profound changes in China’s financial industry, pushing regulatory changes. Caixin learned that regulators are weighing whether Alipay and archrival WeChat Pay of Tencent Holdings should be spun off for antitrust reasons.
• Exclusive: Ant Group aims to raise $30 billion in record-shattering IPO
Caixin China Manufacturing PMI hits nine-year high
Manufacturing activity in China continued to recover from the fallout of the Covid-19 pandemic in July as businesses reported the fastest expansion of output and new orders since January 2011.
The Caixin China General Manufacturing Purchasing Managers’ Index (PMI), which gives an independent snapshot of the country’s manufacturing sector, rose to 52.8 from 51.2 in June, reaching the highest since January 2011, a report released Monday showed. Readings higher than 50 signal expansion.
The figure adds to evidence that China’s economic recovery may continue in the second half of 2020. China’s GDP grew 3.2% year-on-year in the second quarter, returning to growth after a record 6.8% contraction in the first quarter.
China dodges corporate bond default bullet, but outlook is darkening
Corporate bond defaults in China are likely to jump over the remainder of this year as the amount of maturing debt rises and companies in export-oriented industries remain under pressure from the global economic slowdown and the impact of the Covid-19 pandemic, global ratings firm Fitch Ratings Inc. warned.
A total of 16 Chinese mainland companies rated by Fitch failed to repay onshore bonds with a combined principal value of around 52.5 billion yuan ($7.5 billion) in the first half of 2020, according to a report released on Thursday. That compares with onshore defaults by 35 companies involving 72.7 billion yuan in the first half of 2019. The picture was gloomier in the offshore market, where 10 companies rated by Fitch failed to repay bonds with a combined principal of $3.32 billion in the first half of 2020, while only five companies defaulted on offshore bonds over the whole of 2019, data from the company show.
Foreign investment /
China plans to give foreign investors more market access
Foreign investors will be given wider market access to China’s manufacturing and services sectors, according to the country’s top economic planning agencies, in an effort to stabilize foreign trade and investment as the world’s second-largest economy recovers from Covid-19.
A new draft of a catalogue of listed industries, specifying sectors eligible for preferential policies to encourage foreign investor participation, was released for public comment Friday by China’s National Development and Reform Commission and the Ministry of Commerce. The 2020 edition is longer than last year’s list, adding 125 areas and amending 76 previously listed sectors to expand their coverage. Many of the revisions covered manufacturing, including raw materials, spare parts and end products, with a focus on the automobile, computer, communications and other electronics industries.
Quick hits /
Experts call for poverty alleviation legislation as 2020 deadline looms
Anti-graft watchdog announces former chairman of Donghai Securities placed under investigation
Editorial: China’s fiscal measures are helping the virus-battered economy, but they could be better
BUSINESS & TECH
The U.S. and China were negotiating a deal to increase the number of flights, but the talks broke down.
Washington rejects Chinese airlines' request for more flights to U.S.
The United States turned down a request by China-based airlines to increase the number of flights between the two countries on the grounds that Beijing refuses to allow American flights to the capital, Caixin learned.
The U.S. Department of Transportation Thursday rejected a proposed schedule that Chinese airlines filed Thursday, citing China’s own restrictions on international flights. That leaves Chinese and American carriers both flying a total four of round trips a week to the other’s country — the same as in June.
The two countries were negotiating a deal to increase the number of flights, but the talks broke down. One factor behind the collapse was that Washington wanted Beijing to drop its restrictions on international flights to the country once and for all, but the Chinese side was reluctant to comply, said a person close to China’s civil aviation regulator.
Huawei’s new lead could wither amid foreign struggles
Huawei Technologies took the crown in quarterly smartphone shipments for the first time by capitalizing on its home-field advantage in China, even as it steadily loses ground overseas.
The achievement of this long-held ambition owes largely to China being the first to open up its economy from a coronavirus lockdown. The dethroned smartphone king, Samsung Electronics, struggled elsewhere amid the global pandemic. At the same time, Huawei is losing share in other markets as a result of U.S. pressure. Without growth outside China, it is unclear whether the company will maintain its lead for long.
Real estate /
Alibaba buys bigger stake in Hong Kong-listed real estate firm
Alibaba Group Holding Ltd. agreed to buy HK$828.1 million ($118.5 million) of shares in Hong Kong-listed E-House (China) Enterprise Holdings Ltd., as the e-commerce giant expands its presence in the real estate sector to broaden revenue streams.
Alibaba will hold an 8.32% stake in E-House to remain the fifth-largest shareholder if the deal goes ahead, up from the 1.97% stake it currently holds, according to a statement released Friday by E-House. In addition, Alibaba agreed to subscribe for HK$1 billion of E-House’s convertible notes, the statement said. If the notes are fully converted and Alibaba purchases the HK$828.1 million of shares, Alibaba will become the second-largest shareholder of E-House with a 13.26% stake.
Quick hits /
Chinese chipmaker SMIC to establish joint venture for wafer production
Apple takes down over 30,000 apps from China store amid government crackdown
Zoom halts direct sales in China, will rely on local partners
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