China Business Digest: September Foreign Trade Surges; Qingdao Cuts Flights After New Covid-19 Flare-Up
China’s trade continues to recover from the fallout of the Covid-19 pandemic. Major developers reduce borrowing amid tightening regulation. Qingdao cancels flights after a new cluster of coronavirus cases. Meanwhile, Starbucks challenger Luckin and its collaborators are being fined $9 million for their roles in a high-profile fake sales scandal. And retail sales of passenger cars in China grew for the third straight month in September by 7.3% year-on-year.
— By Tang Ziyi (firstname.lastname@example.org) and Han Wei (email@example.com)
** TOP STORIES OF THE DAY
Former state power executive faces bribery charges
Yun Gongmin, former general manager and deputy party chief of China Huadian Corp., was detained and will be indicted for taking bribes, China’s top prosecutors said Tuesday. Yun, 70, retired from China Huadian in 2013 after seven years as general manager. He was placed under party investigation in October 2019.
Major property developers record borrowing slump
The 40 major real estate companies in China booked a 51% decline in new borrowing in September amid tight control on fundraising. The companies raised a combined 40 billion yuan in September, a new monthly low this year, according to Tongce Real Estate Consulting. Under strict regulatory requirements, larger companies have taken efforts to reduce debt and enhance cash management, Tongce said.
Qingdao tightens travel control after new flare-up
The port city of Qingdao canceled more than half of flights in and out of the city Tuesday after a new cluster of Covid-19 infections was reported. A total of 265 flights were canceled, more than 55% of the number of scheduled flights Tuesday, a city official said. The eastern city in Shandong province recorded six new locally transmitted cases Monday.
China’s exports rise 9.9%, imports up 13.2% in September
China’s exports of goods rose 9.9% year-on-year to $239.8 billion last month, the fastest expansion since March 2019, according to data (link in Chinese) released Tuesday by the General Administration of Customs. Imports grew 13.2% year-on-year to $202.8 billion in September, the highest growth since December.
Luckin and collaborators fined $9 million for falsifying financial records
China’s market regulator disclosed details Monday of penalties levied against Luckin Coffee Inc. and related parties for engaging in unfair competition by fabricating sales. Two domestic operating entities of Luckin and 43 related third-party companies that colluded with the company will be fined 61 million yuan ($9.04 million), the State Administration for Market Regulation said.
Guolian, Sinolink terminate $13 billion merger deal
Shanghai and Hong Kong-listed Guolian Securities Co. Ltd. and Shanghai-listed Sinolink Securities Co. Ltd. called off a proposed merger that could have created a 93 billion yuan industry behemoth less than a month after the plan was announced Sept. 20. The two companies said they failed to agree on some core terms of the deal.
Alibaba and Pinduoduo battle to dominate China’s online bargain basement
After facing one of the first serious threats in years to its core e-commerce business, industry behemoth Alibaba Group Holding Ltd. is finally showing early signs of turning the tide in its ongoing battle with up-and-comer Pinduoduo Inc. But the shift hasn’t come easy, and there’s no guarantee the tables might not turn yet again. (Read the in-depth story here.)
China’s passenger car sales rise for third straight month
Retail sales of passenger cars in China, which include sedans, sport utility vehicles and multipurpose vehicles, grew 7.3% year-on-year to 1.9 million units last month after the world’s largest auto market contained its coronavirus outbreak, data from the China Passenger Car Association showed (link in Chinese) Tuesday.
** OTHER STORIES MAKING THE HEADLINES
• Chinese domestic equities are worth more than $10 trillion for the first time since 2015, helped by Beijing’s policies to encourage trading, a flurry of new listings that arrived with eased rules and the strengthening yuan. (Bloomberg)
• China and Cambodia on Monday signed a free trade agreement (FTA) at a ceremony in Phnom Penh, the Cambodian capital. The FTA, Cambodia’s first such bilateral deal, covers a wide range of cooperation in areas of investment, trade, tourism, transportation and agriculture. (Nikkei Asia)
• Chinese policy lender Agricultural Development Bank of China announced Monday President Qian Wenhui had been appointed its new Communist Party chief.
• Major state-owned Chinese firms will be encouraged to sell stakes of themselves to outside strategic partners under a new three-year program that marks the latest move in Beijing’s campaign to make them more efficient and market oriented.
• Chinese carmaker BYD Co. Ltd. said it expected to earn 600 million yuan more profit over the first three quarters than it had predicted in August, thanks to robust sales of its electric vehicles last month.
• SAIC Motor Corp Ltd., China’s largest carmaker, has Tesla Inc. in its crosshairs. The state-owned giant has plans to launch a high-end new-energy vehicle brand, Caixin has learned, in the latest local challenge to Tesla in one of the world’s biggest electric vehicle markets.
** ON THE CORONAVIRUS
• On Monday, the Chinese mainland reported 13 new Covid-19 cases with symptoms (link in Chinese), of which seven were imported and six were locally transmitted, according to the country’s top health body. The six locally transmitted cases were all in East China’s Shandong province, where a cluster of new infections tied to a hospital in the coastal city of Qingdao has emerged.
Caixin’s coverage of the new coronavirus
• As of Tuesday afternoon Beijing time, the number of coronavirus infections globally exceeded 37.8 million, with the death toll surpassing 1.08 million, according to data compiled by Johns Hopkins University.
** LOOKING AHEAD
Oct. 15: Release of China’s September CPI
Oct. 19: Release of China’s third-quarter GDP
Contact reporter Tang Ziyi (firstname.lastname@example.org) and editor Yang Ge (email@example.com)
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