China Business Digest: Consumer Inflation Accelerates; Twitter Emerges as Potential U.S. TikTok-Buyer

China’s consumer inflation continued to accelerate in July on faster-rising food prices. Meanwhile, Twitter has emerged as another potential buyer of TikTok’s U.S. business following Microsoft. And China says “frank dialogue” is the way to improve cross-border auditing cooperation with the U.S. after Washington threatened to delist Chinese companies that fail to meet its auditing requirements.

— By Timmy Shen (hongmingshen@caixin.com)

** TOP STORIES OF THE DAY

Consumer inflation edges up amid faster-rising food prices

The consumer price index (CPI), which measures prices of a basket of consumer goods and services, rose 2.7% year-on-year in July, up from a 2.5% increase in the previous month and marking the second straight month of acceleration, official data showed. Food prices continued to drive up consumer inflation, rising 13.2% year-on-year in July, faster than 11.1% growth in the previous month.

Huawei says supply of flagship chipsets to end under U.S. sanctions

Huawei Technologies Co. Ltd. confirmed that supplies of its self-developed flagship chipset will stop after Sept. 15 under U.S. sanctions barring major chipmaking partners from working with the Chinese telecom giant.

Twitter joins Microsoft as another possible purchaser of TikTok’s U.S. business

Twitter Inc. has held preliminary talks on absorbing TikTok’s U.S. operations, becoming the latest possible bidder for the hugely popular Chinese short video app that the Trump administration has threatened to ban unless it finds a domestic buyer for its U.S. business, according to a report by The Wall Street Journal.

China calls for ‘frank dialogue’ in response to U.S. threat of delistings

China’s securities watchdog said on Saturday that the right way to improve cross-border cooperation for audit inspections is by having frank dialogue (link in Chinese), and that China has been proposing joint accounting inspection plans repeatedly since 2019 and has shown “full sincerity for cooperation.” China’s call came after the U.S. on Thursday put out a report recommending regulators delist U.S.-listed Chinese companies that fail to meet auditing requirements by January 2022.

TikTok’s ticking clock in Trump faceoff

The U.S. president’s threat of a ban on ByteDance Ltd.’s short-video app has stoked fears across the American political spectrum of Chinese hacking and spying while giving rivals an opportunity. (Read this week’s cover story.)

** OTHER STORIES MAKING THE HEADLINES

Finance & Economy

• A Shanghai court has ruled that an Everbright Securities Co. Ltd. subsidiary must pay over 3.5 billion yuan ($502 million) to cover losses of its two partner investors of an ill-fated overseas acquisition.

• China will adopt a more flexible, appropriate and targeted monetary policy, Yi Gang, governor of the People’s Bank of China, said in an interview (link in Chinese) with the state-run Xinhua News Agency.

• Economists surveyed by Caixin (link in Chinese) estimated that China’s credit growth slowed down in July and financial institutions offered about 1.18 trillion yuan of new yuan loans in the month.

• Liu Hui, an executive assistant president of China Merchants Bank Co. Ltd., has been warned by the Shanghai Stock Exchange (link in Chinese) over her purchases of the company’s shares on March 9, fewer than 30 days before the bank released its 2019 annual report. She has promised not to sell the shares within the next three years and any profits earned in the future from the investment will belong to her employer.

Business & Tech

• China’s universities and colleges are turning out a record 8.74 million graduates in 2020, but they’ll be entering one of the toughest job markets in recent years.

• Chinese electric-car maker XPeng Inc. has filed to list on the New York Stock Exchange, about a week after hometown rival Li Auto made a strong debut on the Nasdaq amid buoyant investor interest in new-energy cars.

• Internet giant Sohu.com Ltd. recorded a 9% year-on-year decline in total revenues in the second quarter.

• Chinese electronics giant Xiaomi Corp. continued to lead India’s smartphone market, controlling 29.4% of it in the second quarter, a slight decrease from 31.2% in the previous quarter, according to research firm IDC.

• Chinese shared-workspace provider Ucommune Group Holdings Ltd. has withdrawn its plan for a $100-million IPO in the U.S. (Deal Street Asia)

• Shanghai Aiko Solar Energy Co. Ltd. will invest 20 billion yuan to build photovoltaic cell manufacturing plants in East China’s Zhejiang province, Bloomberg reported, citing an agreement between the company and the local government.

• Part of the Mingqin Mansion City Wall relic in Xi’an, capital of Northwest China’s Shaanxi province, collapsed on Saturday, injuring four.

• On Sunday, the Chinese mainland reported 49 new Covid-19 cases with symptoms (link in Chinese), including 35 imported cases and 14 that were locally transmitted, according to China’s top health body. All 14 of the local cases were reported in Xinjiang.

The mainland reported 31 new asymptomatic cases Sunday.

• Shanghai on Sunday reported 18 imported cases, all among Chinese workers returning from the United Arab Emirates, according to the city’s health authority (link in Chinese).

• As of Monday afternoon Beijing time, the number of coronavirus infections globally exceeded 19.8 million, with the death toll surpassing 730,000, according to data compiled by Johns Hopkins University.

** LOOKING AHEAD

Aug. 10: Sohu to announce second-quarter financial results

Aug. 11: China Literature to announce second-quarter financial results

Aug. 12: Tencent to announce second-quarter financial results

Aug. 13: Lenovo, NetEase, Baidu and iQiyi to announce second-quarter financial results

Contact reporter Timmy Shen (hongmingshen@caixin.com) and editor Yang Ge (geyang@caixin.com)

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