China Business Digest: Consumer Inflation Slows; Survey Shows U.S. Firms in China Are Growing Gloomier
China’s consumer price index rose at a slightly slower clip in August, and the mainland operator of KFC and Pizza Hut said its retail shares were oversubscribed by 51.3 times as it prepares for a secondary listing in Hong Kong. The U.S. government offloads a cluster of luxury properties in Hong Kong. A survey finds that only three in every four people globally are willing to take a potential Covid-19 vaccine. Meanwhile, another new survey shows that American companies are becoming more conservative about their local investment plans.
— By Guo Yingzhe (email@example.com) and Han Wei (firstname.lastname@example.org)
** TOP STORIES OF THE DAY
Consumer inflation slows
China’s consumer price index (CPI), which measures changes in prices of a select basket of consumer goods and services, rose 2.4% year-on-year in August, down from a 2.7% increase the previous month, official data showed Wednesday.
The producer price index (PPI), which gauges changes in prices of goods circulated among manufacturers and mining companies, dropped 2% year-on-year last month, milder than a 2.4% dip the previous month. (Read the full story.)
U.S. government offloads luxury properties in Hong Kong
The U.S. government accepted a bid for a cluster of luxury residential properties in Hong Kong and expects to close the sale in late December. Analysts estimated the value of the property at as much as HK$4.7 billion ($606 million). The sale comes at a sensitive time as tensions are on the rise between the U.S. and China over Hong Kong. But the U.S. consulate said the sale is a “purely commercial decision."
Survey finds 74% of people willing to take Covid-19 vaccines
A recent survey by the World Economic Forum found that 74% of people questioned between July 24 and Aug. 7 said they would take a Covid-19 vaccine when available. But confidence in potential vaccines varies significantly among countries, ranging between 97% in China and 54% in Russia. The rate of people willing to take the inoculation in the U.S. is 67%.
Founder Group denies responsibility for $1.7 billion of subsidiaries’ bonds
State-owned Peking University Founder Group Corp., which is undergoing bankruptcy reorganization, has told overseas bondholders that it will not recognize $1.7 billion of dollar bonds issued by its overseas subsidiaries as its own debt. (Read the full story.)
U.S. firms in China grow gloomier over deteriorating bilateral relations: survey
American firms in China are becoming more conservative about their local investment plans, as they increasingly worry that U.S.-China trade frictions won’t be quickly resolved and could drag on for years, according to a new survey by the American Chamber of Commerce. (Read the full story.)
Chinese tech veterans to launch ‘domestic replacement’ fund amid sanctions
Chinese tech veterans, including former executives at Huawei Technologies Co. Ltd. and Semiconductor Manufacturing International Corp., plan to launch a fund that will invest in startups focused on semiconductors, 5G and artificial intelligence, according to Reuters.
The fund, which is expected to be up and running by the end of the year, is intended to support firms sanctioned by the U.S. government as relations between Beijing and Washington worsen.
Yum China’s listing more than 50 times oversubscribed
The retail portion of a fresh share offering by Yum China Holdings Inc., which operates KFC and Pizza Hut in China, was oversubscribed 51.3 times a day ahead of its secondary listing in Hong Kong, the company announced Wednesday.
Trading in ChiNext stocks suspends on speculation concerns
Trading in several stocks on Shenzhen’s Nasdaq-style ChiNext board has been temporarily suspended for inspection due to signs of abnormal speculative activity. (Read the full story.)
** OTHER STORIES MAKING HEADLINES
Economy & Finance
• The Japanese government has seen an overwhelming surge of interest in subsidies to bring manufacturing back as the coronavirus pandemic highlights the risk of having supply chains concentrated in a single region, particularly China. (Nikkei Asian Review)
• China’s new restrictions on cross-border casino trips threaten to deal a blow to Asian economies that depend on Chinese tourist spending, but will give a leg-up to the reopened gambling hub of Macao. (Nikkei Asian Review)
Business & Tech
• Boqii Holding Ltd., a Chinese pet products and services platform backed by Goldman Sachs Group Inc., filed to raise $115 million on Tuesday in a U.S. IPO, partly to finance its research and development initiatives. (Deal Street Asia)
• Chindata Group Holdings Ltd., a Chinese data center operator, filed on Tuesday for a Nasdaq IPO (Read the full story.)
• IRay Technology Co. Ltd., a provider of X-ray system components used in medical and industrial imaging applications, has kicked off the subscription process of an IPO on Shanghai’s Nasdaq-style STAR Market. (Deal Street Asia)
• Fallout from the pandemic continued to benefit China’s online education industry in the second quarter, with online language-training platform China Online Education Group, better known as 51Talk, turning losses into gains during the period. (Read the full story.)
• Helped by strong brand awareness, BYD Co. Ltd. sold far more new-energy vehicles (NEVs) than many of its younger competitors in August, but the Shenzhen-based automaker is now grappling with a problem: shrinking market share. Last month, its NEV sales volume dropped 8.6% year-on-year. (Read the full story.)
• International coffee chain Costa Ltd. has reportedly closed all its stores in China’s coastal city of Qingdao, as well as some in Beijing, Jiangsu and Zhejiang, as it reworks its retail strategy. (Read the full story.)
• The 2020 China International Aviation and Aerospace Exhibition, set for November in the southern city of Zhuhai, has been canceled because of coronavirus measures, according to Reuters.
** ON THE CORONAVIRUS
• On Tuesday, the Chinese mainland reported two new symptomatic Covid-19 cases (link in Chinese), all imported. It reported eight asymptomatic cases, also all imported.
Caixin’s coverage of the new coronavirus
• As of Wednesday evening Beijing time, the number of coronavirus infections globally surpassed 27.6 million, with the death toll at more than 898,000, according to data compiled by Johns Hopkins University.
** AND FINALLY
Food delivery drivers have received much public attention in China following a story (link in Chinese) by Portrait magazine published on Tuesday which cast light on their working conditions, such as rising pressure to make deliveries faster leading to traffic accidents.
A driver delivers food in heavy rain in Guangzhou, South China’s Guangdong province, on May 20.
Contact reporter Guo Yingzhe (email@example.com) and editors Flynn Murphy (firstname.lastname@example.org) and Gavin Cross (email@example.com)
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