China Business Digest: Trump Orders Effective Ban on Tencent, ByteDance; Chinese Exports Recover

Trump issued orders to ban U.S. “transactions” with ByteDance and Tencent in 45 days, injecting more confusion into talks between TikTok and Microsoft Corp., and raising the specter of collateral damage to the vast U.S. gaming industry. Meanwhile, China reported exports rose in July at the fastest pace in seven months. And an official with China’s central bank said the country could adopt a negative list for free trade agreements.

— By Tang Ziyi (ziyitang@caixin.com)

** TOP STORIES OF THE DAY

Trump issues orders to ban U.S. ‘transactions’ with Tencent and ByteDance in 45 days

U.S. President Donald Trump has signed executive orders to effectively ban ByteDance Ltd., the owner of short video app TikTok, and Tencent Holdings Ltd., the operator of instant-messaging app WeChat.

The orders, beginning in 45 days, will effectively ban “any transaction by any person, or with respect to any property, subject to the jurisdiction of the United States” with the two Chinese companies and their subsidiaries, according to two separate orders released by the White House on Thursday.

Crucially, the orders do not define “transactions,” saying those will be defined in 45 days.

U.S. moves to tighten disclosure requirements for Chinese listings

A high-powered group of U.S. regulators said American stock exchanges should set new rules that could trigger the delisting of Chinese companies, following mounting concerns that investors are being exposed to fraud. (Bloomberg)

China’s exports expand at fastest clip in seven months, imports fall

China’s exports grew 7.2% year-on-year to $237.6 billion last month, marking the fastest expansion since December, according to data from the General Administration of Customs released on Friday. The reading smashed the median forecast of a 1% increase in a Caixin survey (link in Chinese) of economists.

Imports dropped 1.4% year-on-year in July to $175.3 billion, reversing from a 2.7% rise the previous month. The reading was lower than the Caixin poll’s median forecast of 0.8% growth.

Key economic gauges continue to recover: Caixin survey

A Caixin poll of economists estimated (link in Chinese) that fixed-asset investment, a key driver of domestic demand that includes infrastructure investment, plunged 1.8% year-on-year in the first seven months this year, narrowing from a 3.1% decline in the first six months.

Value-added industrial output, which measures production by factories, mines and utilities, is estimated to have risen 5.1% year-on-year in July, accelerating from a 4.8% expansion the previous month. China’s retail sales, which include spending by governments, businesses and households, is estimated to have expanded 0.5% year-on-year last month, after contracting the previous month.

China could adopt negative list for future financial opening-up, PBOC official says

Zhu Juan, head of the Chinese central bank’s international department, said at a recent forum that the country could adopt a negative list for future financial opening-up associated with free trade agreements.

** OTHER STORIES MAKING THE HEADLINES

• China’s government cut around 1.5 trillion yuan ($215 billion) in taxes and fees in the first half of this year, according to data released (link in Chinese) by the Ministry of Finance.

• Cai Jianchun, a former China Securities Regulatory Commission official, has been appointed the new president of the Shanghai Stock Exchange.

• China’s Finance Minister Liu Kun said as of late July, over a half of the 1 trillion yuan quota for anti-Covid-19 special treasury bonds this year had been used to fund more than 24,000 projects, the state-run Xinhua News Agency reported (link in Chinese)

• Citic Securities Co. Ltd. and CSC Financial Co. Ltd., two of China’s biggest brokers, on Thursday denied (link in Chinese) for the third time in four months that they plan to merge after rumors of a tie-up pushed up both companies’ shares.

• The local banking regulator in Shanghai imposed penalties of 1 million yuan each on the credit card units of China Merchants Bank Co. Ltd. and Bank of Communications Co. Ltd., two of China’s largest commercial banks, for flaws in their customer data protection.

** ON THE CORONAVIRUS

• On Thursday, the Chinese mainland reported 37 new Covid-19 cases with symptoms (link in Chinese), including 10 imported cases and 27 locally transmitted, according to China’s top health body. Among them, the Xinjiang Uygur autonomous region reported 26 new cases with symptoms, and Beijing added one.

The mainland on Thursday reported 14 new asymptomatic cases.

• Hong Kong reported 95 new Covid-19 cases for Wednesday, of which 91 were locally transmitted, according to the city’s Centre for Health Protection.

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Caixin’s coverage of the new coronavirus

• As of Friday afternoon Beijing time, the number of coronavirus infections globally exceeded 19 million, with the death toll surpassing 715,000, according to data compiled by Johns Hopkins University.

Contact reporter Tang Ziyi (ziyitang@caixin.com) and editors Flynn Murphy (flynnmurphy@caixin.com) and Joshua Dummer (joshuadummer@caixin.com)

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