CX Daily: China, EU to Hold Summit Monday
China, EU to hold ‘decisive’ summit Monday, European Chamber president says
The EU and China will hold a summit Monday to conclude bilateral investment treaty negotiations,the president of the European Union Chamber of Commerce in China said Thursday.
“The summit will be conducted by (German Chancellor) Angela Merkel who sits in the chair of the European Council, (President of the European Council) Charles Michel and (President of the European Commission) Ursula von der Leyen on the European side, as well as President Xi Jinping on the Chinese side,” Joerg Wuttke said during a press conference issuing the chamber’s annual position paper.
The summit will be “decisive in order to see how far and how much political capital can be spent in order to get this investment agreement to conclusion before the end of the year,” Wuttke said
FINANCE & ECONOMICS
As Goldman Sachs moves to take full control of its joint venture, it is also carrying out a shake-up of top management.
Investment banking /
Exclusive: Goldman Sachs to buy out partner in China securities venture
U.S. investment bank Goldman Sachs Group Inc. plans to take full ownership of its Chinese securities joint venture and appointed a new chair to lead the company, sources with knowledge of the matter told Caixin, the latest foreign financial institution to take advantage of China’s market opening policies.
Goldman Sachs, which already controls 51% of Goldman Sachs Gao Hua Securities Co. Ltd., is buying the remaining 49% it doesn’t own from its partner, Beijing Gao Hua Securities Co. Ltd., the sources said. The price has been agreed and work is now underway to complete the deal, they said. A spokesperson for Goldman Sachs declined to comment.
The U.S. investment bank is moving quickly to take full control of the local brokerage after gaining approval from the China Securities Regulatory Commission (CSRC) in March to boost its stake to 51% from 33% as the government scrapped restrictions on foreign ownership of a range of financial sector institutions including securities firms.
Frothy ChiNext finally sees one stock fall below its IPO price
A ChiNext stock has fallen below its IPO price. That’s usually not news, but ever since the Shenzhen Stock Exchange began to welcome listings under a new registration-based IPO system on its Nasdaq-style board Aug. 24, the prices of most newly listed stocks have surged, with every one holding gains above their IPO prices. Until Wednesday, at least.
That’s the day shares of cultural services provider Beijing FengShangShiJi Culture Media Co. Ltd. closed below the offering price, making the stock the first listed on ChiNext to do so since the new IPO system was instituted. FengShangShiJi shares closed at 133.43 yuan ($19.50) Wednesday, below its IPO price of 138.02 yuan.
Stock buyers might cheer, but it’s not a great sign for regulators that want to keep speculators from running rampant as China tries out a looser, more market-driven system for conducting IPOs.
China sells 51% more excavators in first 8 months than a year ago
China’s sales of excavators soared 51.3% in the first eight months this year to 20,939 units, boosted by an infrastructure boom the government is relying on to revive an economic slowdown caused by the Covid-19 pandemic.
The total of excavator sales in the first eight months is already close to 90% of sales for the whole of 2019, according to the China Construction Machinery Association. The upward trend is expected to continue through the year. Chinese heavy equipment giant Sany Heavy Industry Co. Ltd. is confident of maintaining stable sales growth in the second half, the company’s Secretary of the Board Xiao Youliang said at an investor-day event Tuesday.
Lou Jiwei: U.S. is playing a ‘negative-sum game’ with China
"The U.S.’s thinking is to play a 'negative-sum game,' in which the winning player is the one who loses the least," said Lou Jiwei, director of the foreign affairs committee of the Chinese People’s Political Consultative Conference, in a recent seminar. "In my opinion, China and the U.S. must be rational to avoid unnecessary friction."
"In the long run, globalization is inevitable and driven by capital gains," Lou said. "Countries should make structural reforms to resolve the problems of globalization, such as the worsening income gap and the shift of job opportunities. The decoupling of the U.S. and China will cause both countries to lose, and won’t be achieved anyway. I believe the China-U.S. relationship will eventually get back to normal after some short-term turbulence."
Quick hits /
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BUSINESS & TECH
A Meituan driver makes a delivery during a downpour May 20 in Guangzhou, South China’s Guangdong province.
Driven by algorithms, food giants’ delivery riders win small reprieve
China’s food delivery giants are facing a reckoning after a viral article highlighted the grueling lot of their delivery riders and the tyranny of the algorithms that control their lives.
A six-month investigation by Chinese-language magazine People lays out in grim detail the human cost of a delivery system run by machines calibrated to maximize efficiency and profit.
It shows how the pressure to meet tight deadlines pushes riders to the brink, forcing them to zip around streets and alleys on electric bikes at hair-raising speeds, breaking road rules to avoid being penalized. The expose, which went viral on social media under the title “Delivery Rider, Stuck in the System,” also describes how they and members of the public are regularly maimed or killed in resulting road accidents.
Pairing up on 5G saves China Telecom and Unicom $8.8 billion
China Unicom and China Telecom Corp. Ltd., two of China’s three biggest state-owned telecommunications operators, now have 300,000 5G stations up and running across China, they said Wednesday at a press conference.
Wang Xiaochu, China Unicom’s chairman, said that the pair’s collaboration on 5G construction saved the two companies 60 billion yuan ($8.8 billion) in investment.
Combined, the number of stations opened is on par with that of China Mobile Ltd., the country’s other telecommunications giant. The top three had budgeted a combined 180.3 billion yuan of capital expenditure on 5G construction, according to their 2019 annual reports.
Yum China Hong Kong debut leaves investors hungry
Shares of Yum China Holdings Inc., operator of KFC and Pizza Hut restaurants on the Chinese mainland, fell about 4% on their first day of trading in Hong Kong.
The stock was down 4.03% late Thursday at HK$395.40 ($51.02). It set its Hong Kong IPO price at HK$412 around Sept. 3 in the U.S., where its stock has been traded since its New York listing in 2016. Yum China’s listing makes it the latest high-profile Chinese company to make a secondary listing in Hong Kong to complement an existing older listing in New York. First-day performances for such secondary listings are usually somewhat predictable as they tend to track the movement of the New York-traded stock.
Fire at Jiangsu circuit board plant threatens supplies to automakers
A fire at a printed circuit board factory in Kunshan, Jiangsu province, is threatening to disrupt supplies to global auto parts giant Robert Bosch GmbH and its customers.
The fire broke out around noon Monday at a Unimicron Technology (Kunshan) Corp. plant. No casualties were reported, and an investigation of the cause of the fire is underway. Printed circuit boards produced by Kunshan Unimicron support more than 50 products produced by Bosch, which initiated an emergency response to coordinate parts supplies globally, Caixin learned.
The Kunshan plant may have to halt production for four weeks. The accident may cut supplies of the circuit boards to some automakers that rely solely on Kunshan Unimicron for the essential components for building modern advanced autos, Caixin learned.
Quick hits /
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