China Business Digest: FTSE to Add Chinese Government Bonds to Flagship Index; China Combines QFII and RQFII, Expanding Foreign Investor Access
China finalizes a plan to revamp two major programs for inbound investment and expand foreign investment options. A fire at a Huawei research facility in southern China kills three. Indebted property developer Evergrande denies it’s seeking government support for a backdoor listing. Meanwhile, FTSE Russell says it will add Chinese government bonds into its flagship World Government Bond Index next year. And two asymptomatic Covid-19 cases linked to imported seafood are detected in the port city of Qingdao.
—By Timmy Shen (email@example.com) and Han Wei (firstname.lastname@example.org)
** TOP STORIES OF THE DAY
China revamps foreign investment programs to expand access
China combined two major inbound investment programs while broadening the scope for foreign institutional investment in a move to further open the country’s capital markets. Starting Nov. 1, the Qualified Foreign Institutional Investor (QFII) program and its yuan-denominated sibling, the Renminbi Qualified Institutional Investor (RQFII) program, will be integrated, top regulators said. Foreign investors will be allowed to invest in a wider range of products under the combined program.
Evergrande wins approval to spin off management unit
China Evergrande Group won approval from the Hong Kong Stock Exchange to spin off its property management unit, paving the way for the company to raise much-needed capital. The unit, recently valued at $11 billion in a stake sale to strategic investors, could help replenish the indebted developer’s finances. Evergrande stepped into the spotlight amid reports that the developer sought government help to avoid a cash crunch.
Fire at Huawei research facility kills three
Three people were found dead after a fire at an unfinished research facility of Huawei Technologies Co. Ltd in Dongguan, southern China’s Guangdong province, local authorities said Friday. The three dead were property management staffers at the industrial park where the facility is located. Causes of the incident are still under investigation.
Chinese developer Evergrande denies seeking government support
A letter circulating online Thursday showed indebted property developer China Evergrande Group is seeking government support for a backdoor listing. But the debt-ridden company has denied the document’s authenticity and said it has taken up the matter with police.
National broadband company debuts to lead cable TV consolidation
Unified National Network debuted Thursday in Beijing with 101.2 billion yuan ($14.9 billion) in registered capital, to carry on a decade-long, state-driven restructuring to consolidate the country’s fragmented cable TV industry. The company is majority owned by China Broadcasting Network Corp. Ltd., which was formed six years ago with a goal of consolidating many of China’s regional cable TV companies.
Will Huawei become China’s Tesla challenger?
Telecom giant Huawei Technologies Co. Ltd. is quietly building up expertise in key smart car technologies at the heart of a coming electric-auto revolution, raising speculation it may build cars. (Read the in-depth story here.)
China’s steel mill smoke to become fuel in Japanese firm’s recycling plants
Japanese trading house Mitsui & Co. Ltd. plans to start producing fuel ethanol from steel mill emissions under its new waste-to-fuel business in China. (Nikkei Asian Review)
FTSE Russell to include Chinese government bonds to its index
Global index provider FTSE Russell will add Chinese government bonds to its flagship World Government Bond Index next year, in a move that analysts said will bring a huge capital influx to the Chinese bond market. The inclusion is scheduled to start in October 2021.
China to invest a greater share of its land sales windfall in rural areas
More than half of the profits that local governments make from transferring land-use rights will have to be spent on agricultural and rural areas by 2025, China’s top policymakers said.
** OTHER STORIES MAKING THE HEADLINES
• The number of robots operating on Chinese factory floors rose 21% last year, outpacing that in the U.S. (Bloomberg)
• Zhejiang Geely Holding Group Co. Ltd. on Wednesday debuted an open-source electric-vehicle platform that will eventually be available for other companies to use.
• Miniso Group Holding Ltd., a low-cost store chain backed by Tencent Holdings Ltd., filed its prospectus on Thursday for a New York IPO.
• Ant Group Co. Ltd., which operates Alipay, launched a blockchain-based cross-border trade platform ahead of its blockbuster IPO. (Reuters)
• British asset manager Baillie Gifford & Co. Ltd. set up a wholly owned unit in Shanghai, becoming the latest foreign institution to target domestic investors in the world’s second-largest economy.
• International Finance Corp., a member of the World Bank Group, is considering a 560 million yuan loan to pig breeding and farming firm Guangxi Yangxiang Co. Ltd. (Deal Street Asia)
** ON THE CORONAVIRUS
• Two workers in the eastern port city of Qingdao tested positive on Thursday but showed no symptoms, according to the city’s health authority (link in Chinese). The authority didn’t comment on the pair’s recent travel history, but noted they had touched imported seafood.
• On Thursday, the Chinese mainland reported eight new Covid-19 cases with symptoms (link in Chinese), all imported, according to China’s top health body.
• As of Friday afternoon Beijing time, the number of coronavirus infections globally exceeded 32.2 million, with the death toll surpassing 983,000, according to data compiled by Johns Hopkins University.
** AND FINALLY
A space research institute in Shenzhen is recruiting test subjects for a 15-day experiment that aims to simulate gravity-free conditions (link in Chinese). The goal is to better understand how the human body reacts to space travel, the institute said. Test subjects will each be paid 15,000 yuan for their time.
SPACEnter Space Science and Technology Institute
** LOOKING AHEAD
Sept. 28: Weibo reports quarterly results
Sept. 30: Release of Caixin China manufacturing PMI
Oct. 9: Release of Caixin China services PMI
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