Aug 20, 2020 08:49 PM

China Business Digest: China, U.S. to Talk in Coming Days; Alibaba Quarterly Earnings Beat Estimates



China and the U.S. agreed to hold calls in the near term after a meeting to review the progress of the phase one trade deal was canceled. Alibaba reported better-than-expected quarterly earnings despite uncertainties in the U.S. Fitch remains positive on China’s economic recovery. China’s top diplomat pays visits to Singapore and South Korea. Meanwhile, the U.S. suspended its extradition treaty with Hong Kong and ended reciprocal tax treatment on shipping with the city.

— By Guo Yingzhe ( and Han Wei (


Alibaba sales rebound to pre-pandemic level

Alibaba Group Holding Ltd. reported better-than-expected quarterly results as sales rebounded to the pre-pandemic level. Revenue rose 34% year-on-year for the quarter ended in June to 153.8 billion yuan ($22.2 billion), beating Wall Street estimates. Net income totaled 47.6 billion yuan, surging 124% from the same period last year. But the company still faces uncertainties from the pandemic and increasing tensions between the U.S. and China, executives said.

Fitch upbeat on China growth outlook

Fitch Ratings Inc. remained positive on China’s economic outlook supported by the country’s investment growth and room for fiscal policy. The credit-rating company recently revised its projection on China’s 2020 economic growth to 2.7% from the previous 1.2%. Fitch also affirmed China's long-term foreign-currency issuer default rating at A+ with a stable outlook, citing the country's robust external finances, a track record of strong macroeconomic performance and the size of the economy.

China's top diplomat visits Singapore and South Korea

China’s top diplomat Yang Jiechi is visiting Singapore and South Korea in what could be viewed as a bid to improve China’s relations with its Asian neighbors amid deteriorating relations with the United States. Yang is in Singapore on a two-day visit ending Thursday and will then travel to Busan Friday and hold talks with South Korea’s new National Security Adviser Suh Hoon Saturday.

China, U.S. to talk in coming days, commerce ministry says

China and the U.S. have agreed to hold phone talks in coming days, a spokesperson for the Ministry of Commerce, Gao Feng said at a briefing (link in Chinese) Thursday, as he answered a question about whether the two countries are planning to reschedule the postponed bilateral meeting on reviewing progress on the phase one trade deal.

On Tuesday, U.S. President Donald Trump said he called off last weekend’s trade talks with China.

U.S. ends pacts with Hong Kong on extradition, shipping tax

The U.S. suspended its extradition treaty with Hong Kong and ended reciprocal tax treatment on shipping with the city, the latest salvo in escalating tensions between Washington and Beijing. (Bloomberg)

Benchmark lending rates unchanged in August

China’s benchmark rates for bank loans have remained unchanged for a fourth consecutive month in August, adding to evidence that its monetary policy has shifted from easing to defusing financial risks amid an ongoing economic recovery.

The one-year national loan prime rate (LPR) remained at 3.85% for this month, and the five-year-plus LPR was unchanged at 4.65%, official data showed Thursday.

TikTok struggles with troubles in U.S., Japan

TikTok’s owner ByteDance Ltd. is proposing to settle consumer privacy litigation that has exposed it to hundreds of millions of dollars in damages as it prepares for a possible acquisition under threat of being shut down in the U.S. (Bloomberg)

Australian Treasurer Frydenberg snubs China dairy deal

Australian Treasurer Josh Frydenberg has secretly shunned the Foreign Investment Review Board and Treasury, which advised him to approve China Mengniu Dairy Co. Ltd. proposed A$600 million ($413 million) acquisition of Lion-Dairy & Drinks Pty. Ltd., but he hasn’t publicly announced the rebuff. (AFR)

Hong Kong bourse rides trading, IPO surge to record profit

Hong Kong Exchanges & Clearing Ltd., operator of the city’s stock exchange, said that its net profit rose 1% year-on-year to a record HK$5.2 billion ($674 million) in the first half of this year, benefiting from a spate of high-profile Chinese stock listings and a pick-up in trading as pandemic and political tensions stoked volatility. (Bloomberg)

Digest Stock Chart 0820


• Embattled drugmaker Kangmei Pharmaceutical Co. Ltd. has more trouble on the way after technically defaulting on a 105.8 million yuan ($15.3 million) interest payment for a medium-term note on Monday. Kangmei argued that the default was due to “operational mistakes by financial personnel.” (Read the full story.)

• Overseas investors favored the tech-savvy Shenzhen stock market over its rival in Shanghai in the first half this year, according to data from the operator of the Hong Kong Stock Exchange. (Read the full story.)

• China’s brokerages are tapping the capital markets for funds at a record pace to expand their businesses and feed a world-beating stock rally, as at least 10 securities firms listed in the Chinese mainland market have this year raised a combined 79.6 billion yuan from private share placements. (Bloomberg)

• As tensions grow between China and Australia, the superpower’s main coal supplier, work is being stepped up in Pakistan’s largest coalfield on a project that some experts believe might provide Beijing with an option for an alternative source of coal. (Nikkei Asian Review)

• Several local governments are trying to win approval to swap their off-balance-sheet debts into bonds to save on financing costs this year, as China faces mounting debt risks following the outbreak of Covid-19. (Read the full story.)

• The Supreme People’s Court of China has issued guidance on how the legal system should deal with criminal activity related to the new registration-based IPO regimen on Shenzhen’s ChiNext board, aiming to ensure consistent and unified rulings and decisions across the judiciary. (Read the full story.)

• Hong Kong’s unemployment rate fell from 6.2% in the April-to-June period to 6.1% in the May-to-July period, ending an increase for nine moving three-month periods, according to an official statement.


• The Chinese mainland reported (link in Chinese) seven new symptomatic Covid-19 infections on Wednesday, down from 17 a day earlier. All the new cases were imported. The mainland also added 22 asymptomatic cases.

• As of Thursday evening Beijing time, the number of global coronavirus infections had surpassed 22.4 million, with a death toll over 788,000, according to data from Johns Hopkins University.

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A “car market” was launched in the northeastern city of Shenyang on Tuesday as vendors sell food, snacks and cultural products in booths designed like colorful cars on a shopping street.


Release of second-quarter financial results:

Aug. 20: Alibaba

Aug. 21: Meituan Dianping and Pinduoduo


Contact reporter Guo Yingzhe ( and editors Yang Ge ( Michael Bellart (

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China Business Digest: White House Says No Sino-U.S. Trade Talks Scheduled; Apple Hits $2 Trillion Market Cap

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