China Business Digest: U.S., Chinese Officials Optimistic on Trade Deal; Ant Files for Blockbuster IPO in Hong Kong and Shanghai
Top U.S. and Chinese officials said they are optimistic about their phase one trade deal after a phone call to discuss issues. Meanwhile, an ambitious semiconductor project in the central Chinese city of Wuhan risks stalling as it struggles to obtain new funds. Ant Group filed for its long-anticipated IPOs in Hong Kong and Shanghai, but two senior executives have left.
— By Mo Yelin (firstname.lastname@example.org) and Han Wei (email@example.com)
** TOP STORIES OF THE DAY
Ant files for IPO in Hong Kong and Shanghai
Ant Group filed for its long-expected initial public offering in Hong Kong and Shanghai Tuesday. The deals could raise more than $20 billion in one of the world’s largest offerings. Documents filed with the exchanges for the first time disclosed financial details of the fast-growing fintech giant.
Regulators step up efforts to recapitalize small, midsize banks
China’s financial regulators are considering expanding the types of instruments struggling small and midsized banks can sell to local governments to make it easier and quicker for them to strengthen their balance sheets and boost credit to businesses, sources familiar with the issue told Caixin.
China determined to maintain ‘normal’ monetary policy
China will maintain a “normal” monetary policy, a senior central bank official said on Tuesday, as Beijing holds off on more easing for the post Covid-19 economic recovery to gather pace. (Reuters)
Exclusive: Two senior executives leave Ant Group ahead of IPO
Two senior executives have left Ant Group Co. Ltd. this month, sources with knowledge of the matter told Caixin, as the fintech affiliate of Chinese internet giant Alibaba Group Holding Ltd. moves closer to a long-anticipated IPO.
Yu Shengfa, a vice president and chief risk officer, left the company in early August, the sources said. Chief Technology Officer Hu Xi has stepped down from the position to rejoin Alibaba. [link to Ziyi’s ANT]
$18.5 billion Wuhan chip project could stall at any time
An ambitious semiconductor project under construction in the central Chinese city of Wuhan could stall at any time due to funding difficulties, in the latest setback for the country’s chip ambitions.
Launched in November 2017, Wuhan Hongxin Semiconductor Manufacturing Co. Ltd. was designed to make logic chips with a planned investment of 128 billion yuan ($18.5 billion). However, at the end of June, the project had a capital shortfall of 112.3 billion yuan, according to a report released late last month (link in Chinese) by the local government. The report’s analysis determined the project faces the risk of “coming to a standstill at any time.”
Cover Story: Stalled Guinea project highlights China’s struggle to reforge iron ore supply
Simandou, a 110-kilometer (68 miles) range of hills deep in the hinterland of Guinea in West Africa, boasts the world’s largest untapped iron ore reserves. The rich assets have lured global investors, especially from ore-thirsty China. But pulling the mineral out of the ground has turned out to be a thorny challenge with entangled interests and risks stemming from technical, capital and political uncertainties. (read the full story)
Top U.S., Chinese officials optimistic on phase one trade deal after phone call
Top U.S. and Chinese officials, who spoke by phone on Monday, see progress on resolving issues over their phase one trade deal reached in January and both sides are committed to the success of the agreement, the U.S. Trade Representative’s Office said. (Reuters)
Zoom encounters widespread video conferencing outages
Popular video conferencing platform Zoom encountered widespread outages Monday during the first day of school for many students as they scrambled to log in to courses remotely.
“We have identified the issue causing users to be unable to authenticate to the Zoom website (zoom.us) and unable to start and join Zoom Meetings and Webinars, and we are working on a fix for this issue,” the video calling giant said on its website.
** OTHER STORIES MAKING THE HEADLINES
• E-commerce site Taobao Taiwan was ordered to re-register as a Chinese mainland-backed company in Taiwan within six months, or risk having to leave the island.
• China bottled water giant Nongfu Spring Co. is seeking to raise as much as HK$8.35 billion ($1.1 billion) in what could be the world’s second biggest initial public offering by a food and beverage company this year. (Bloomberg)
• Japan’s Kirin Holdings Co. Ltd. has pulled out of a $430 million deal to sell its wholly owned Australian dairy firm Lion Dairy to Chinese giant China Mengniu Dairy Co. Ltd. after media reports said the Australian government would seek to veto it.
• Tesla has begun accepting pre-orders for Model Y electric SUVs from Chinese consumers. The U.S. automaker said the models are expected to be manufactured at its Shanghai plant as soon as 2021.
** ON THE CORONAVIRUS
• Urumqi airport is gradually resuming flights into and out of the city after the capital of northwest China’s Xinjiang Uygur autonomous region reported zero new Covid-19 cases for six straight days.
• Researchers in Hong Kong have discovered the first confirmed case of a person being reinfected with the Covid-19 virus. The 33-year-old man, who was first diagnosed with the virus in April, was confirmed to have been infected again at an airport screening on his return to Hong Kong from Europe this month.
• China has suspended Etihad Airways’ services from Abu Dhabi to Shanghai for one more week starting on Aug. 24 due to Covid-19 infections being identified on an Aug. 15 flight, the Shanghai city government said on Tuesday. (Reuters)
• As of Tuesday afternoon Beijing time, the number of coronavirus infections globally surpassed 23.6 million, with the death toll passing 813,000, according to data compiled by Johns Hopkins University.
• The Chinese mainland reported (link in Chinese) 14 new symptomatic Covid-19 infections on Monday, down from 16 a day earlier. All of the new cases were imported. The mainland also added 16 asymptomatic cases.
** AND FINALLY
The Qixi Festival, also known as Chinese Valentine’s Day, falls every year on the seventh day of the seventh lunar month. The holiday gives couples a chance to express their love, while driving sales of flowers and other goods associated with the increasingly commercialized celebration.
In Shanghai, a couple kisses in front of a wall with “I love you” written in different languages on Saturday, three days before the Qixi Festival, or Chinese Valentine’s Day.
Contact reporter Mo Yelin (firstname.lastname@example.org) and editor Joshua Dummer (email@example.com)
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