China Business Digest: Beijing Relaxes Entry Rules for 36 European Countries’ Citizens; Banks to Dispose of $490 Billion of Bad Loans

China has relaxed entry restrictions for 36 European countries’ citizens after virtually shutting the country’s borders to foreigners earlier this year. Chinese banks are expected to dispose of 3.4 trillion yuan ($490 billion) of bad debt this year. Meanwhile, PC giant Lenovo reported solid profit and revenue growth for its latest reporting quarter.

— By Tang Ziyi (ziyitang@caixin.com)

** TOP STORIES OF THE DAY

China eases entry rules for citizens of 36 European countries

Citizens of 36 European nations, including Germany, France and the U.K., will be allowed to apply for a Chinese visa “free of charge” without an invitation letter if they already hold a valid residence permit, according to a notice (link in Chinese) published this week by the Chinese embassy in Berlin.

That measure offers a route back into the country for thousands of people displaced by border closures and canceled flights during the coronavirus pandemic.

China to dispose of 3.4 trillion yuan of NPLs this year

China’s banking sector is expected to dispose of 3.4 trillion yuan of nonperforming loans this year to contain financial risks amid the pandemic, up from 2.3 trillion yuan last year, Guo Shuqing, chairman of the China Banking and Insurance Regulatory Commission, said (link in Chinese) in an interview with the state-run Xinhua News Agency.

Home computing trends reboot Lenovo profits during global pandemic

Global PC giant Lenovo Group Ltd. logged a return to solid profit and revenue growth in its latest reporting quarter, as the company and its peers benefited from strong demand from people working and studying at home during the Covid-19 outbreak.

California pension investment chief steps down from $400 billion fund

The abrupt departure of Ben Meng, the investment head of California’s mammoth state pension fund, last week after months of controversy over his connections to China and his ethics triggered pressure from the state’s financial chief, who has demanded an inquiry.

Government wheat purchases tumble

China’s authorities purchased 42.9 million tons of wheat from the country’s major wheat-growing regions from the start of the year to Aug. 5, almost 10 million tons from the same period last year, official data showed (link in Chinese). That’s because farmers are storing more grain amid the pandemic, an analyst said (link in Chinese).

Five city commercial banks in Shanxi to merge

Five of the six city commercial banks in the northern province of Shanxi are expecting an overhaul that will see them merged into one, following a series of corruption investigations shaking the coal-rich province’s financial system, sources with knowledge told Caixin.

Commercial banks’ NPL ratio rises to 11-year high

The NPL ratio for China’s commercial banks rose to an 11-year high of 1.94% at the end of this year’s second quarter, up 0.03 percentage points from a quarter earlier, data from the China Banking and Insurance Regulatory Commission showed.

The figure reflects the pandemic’s ongoing impact on China’s banking sector. Regulators earlier warned of rising risks and business pressures.

U.S. financial regulators release report detailing dispute with Chinese counterparts

A report from a group of U.S. regulators has revealed details of recent disagreements between the U.S. and China over proposed working plans for cross-border cooperation on audit inspections of U.S.-listed Chinese companies, underscoring rising geopolitical tensions between the world’s two largest economies. (Read the full story here.)

** OTHER STORIES MAKING THE HEADLINES

• China plans to expand its railway network to 200,000 kilometers by 2035, a nearly 44% increase from the end of 2019, according to a plan (link in Chinese) released by the country’s state-owned rail operator.

• China’s top banking regulator inspected over 1,800 rural banks, or 80% of the total, from 2018 to 2020, and had taken measures to prevent and punish shareholder misconduct, a senior official at the watchdog said.

• Huawei Technologies Co. Ltd. plans to launch laser-based, range-finding products for self-driving cars in two years and significantly lower the high cost of one of autonomous cars’ most important pieces of hardware.

** ON THE CORONAVIRUS

• On Wednesday, the Chinese mainland reported 19 new Covid-19 cases with symptoms (link in Chinese), including 11 imported cases and eight locally transmitted ones, according to China’s top health body. The local cases were all in the Xinjiang Uygur autonomous region.

• The government in the southern city of Shenzhen on Thursday reported (link in Chinese) that a sample of frozen chicken wings imported from Brazil tested positive for the coronavirus.

• Hong Kong International Airport said it will resume transit services for passengers from airports on the Chinese mainland to other destinations from Aug. 15 to Oct. 15.

 Read more 
Caixin’s coverage of the new coronavirus

• As of Thursday afternoon Beijing time, the number of coronavirus infections globally exceeded 20.6 million, with the death toll surpassing 749,000, according to data compiled by Johns Hopkins University.

** LOOKING AHEAD

Aug. 14: Release of China’s investment, industrial output and retail sales data

Aug. 17: JD.com to report second-quarter financial results

Aug. 20: Alibaba to report second-quarter financial results

Aug. 21: Meituan Dianping, Pinduoduo to report second-quarter financial results

Contact reporter Tang Ziyi (ziyitang@caixin.com) and editors Yang Ge (geyang@caixin.com) and Joshua Dummer (joshuadummer@caixin.com)

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China Business Digest: Tencent Profits Jump; China Reports More Imported Cases from Middle East, Central Asia

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