Caixin
Oct 23, 2020 11:16 PM
CHINA BUSINESS DIGEST

China Business Digest: China Sets Up $22.5 Billion State-Owned South-to-North Water Diversion Group; Hong Kong Connect Opens China ETF Market to Global Investors

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Hong Kong’s securities regulator fined Goldman Sachs $350 million for its role in a bond offering scandal involving Malaysia’s 1MDB. Meanwhile, a new report shows that China should slash its greenhouse gas emissions by as much as 85% by 2050 to hit its bold carbon neutrality target. Four exchange-traded funds launched in Shenzhen and Hong Kong Friday, opening the fast-growing $157 billion China ETF market to global investors.

By Guo Yingzhe (yingzheguo@caixin.com)

** TOP STORIES OF THE DAY

Guangzhou to set up China’s fifth futures exchange by year-end

China is planning to open a new futures exchange in the southern metropolis of Guangzhou in mid-December, knowledgeable sources told Caixin. If all goes to plan, it will become the Chinese mainland’s first new futures exchange in 14 years, and the fifth futures exchange managed by the China Securities Regulatory Commission (CSRC).

Hong Kong regulator fines Goldman Sachs over 1MDB scandal

Hong Kong’s securities regulator has fined Goldman Sachs (Asia) LLC $350 million for its role in the bond offering scandal of Malaysian state-owned development firm 1Malaysia Development Berhad (1MDB), and reprimanded the company for “serious lapses and deficiencies in its management supervisory, risk, compliance and anti-money laundering controls.”

China sets up $22.5 billion state-owned South-to-North Water Diversion Group

China South-to-North Water Diversion Group held its founding ceremony (link in Chinese) Friday in Beijing. Premier Li Keqiang said the founding of the group, with registered capital of 150 billion yuan ($22.5 billion), is an important measure to improve management of China’s South-to-North water diversion project and optimize the country’s water allocation resources. The South-to-North water diversion project is by far the world’s largest such undertaking and has served as a lifeline for water supply in northern China for the past few years.

Hong Kong connect opens China ETF market to global investors

China’s fast-growing $157 billion market for exchange-traded funds (ETFs) became directly accessible to overseas investors Friday at least four years after the plan was hatched.

Mongolia delivers first batch of donated sheep to China

Mongolia delivered the first batch of sheep that the landlocked nation promised China eight months ago in support of its neighboring country’s fight against the Covid-19 pandemic. Four thousand sheep entered China after being quarantined in the Mongolian border city of Zaman Ude for 30 days. The rest of the 30,000 sheep offered by Mongolian President Khaltmaa Battulga are expected to enter China by mid-November, officials said.

Huawei’s revenue rose 9.9% in first three quarters

Huawei Technologies Co. Ltd.’s revenue rose 9.9% year-on-year to 671.3 billion yuan ($100.6 billion) in the first three quarters, achieving an 8% net profit margin, the company said Friday, adding that the results have “basically met expectations.”

Lufax sets IPO fundraising target at up to $2.4 billion

Chinese fintech giant Lufax Holding Ltd. has updated the prospectus for its U.S. IPO, aiming to issue 175 million American depository shares and raise up to $2.4 billion.

S&P China files for securities rating business

S&P Ratings (China) Co. Ltd., the first wholly foreign-owned credit ratings agency in the Chinese domestic bond market, said Thursday (link in Chinese) that it has registered with the CSRC to provide ratings services for exchange-traded bonds, becoming the first wholly foreign-owned ratings agency to do so. Previously, it had been allowed by the central bank to rate bonds on the interbank market.

Environmental violations dog struggling Evergrande’s Hainan mega-resort

A major seaside resort being developed by cash-challenged China Evergrande Group is on a list of projects that have come under fire after construction continued despite a government call for a halt to work over environmental violations. (Read the full story.)

Digest stock chart

** OTHER STORIES MAKING THE HEADLINES

Economy & Finance

• China should slash its greenhouse gas emissions by up to 85% by 2050 to hit its bold carbon neutrality target, a report by Boston Consulting Group said. (Read the full story.)

• China’s central bank has successfully completed the technical processes to enable its digital currency to be used without an internet connection, and will apply the function in trial projects, an official said Thursday. (Read the full story.)

• An agriculture ministry official has reassured the public about the recent surge in corn prices in China, pinning the increase partly on speculators betting on short-term shortages despite expectations of a good harvest this year.

Business & Tech

• JD.com Inc. is expanding its use of autonomous delivery robots to Changshu, East China’s Jiangsu province, planning to put 100 such robots into operation in the city by the end of this year. (Read the full story.)

• China’s three major wireless carriers posted broadly solid revenue growth in their latest quarterly reports, as their 5G subscriptions accelerated with a little encouragement from Beijing. (Read the full story.)

1 Chinese oil giant CNOOC Ltd. (link in Chinese) plans for natural gas to account for 50% of its total oil and gas output by 2035, up from 21% in the third quarter of this year. The company’s revenue fell 29.5% year-on-year in the first three quarters.

• Taiwan’s United Microelectronics Corp. looks ready to settle an intellectual property suit with the U.S. Department of Justice by agreeing to pay a $60 million fine, the chipmaker said Thursday. It has been charged with a conspiracy to steal technology from U.S. chipmaker Micron Technology Inc. for the benefit of a Chinese mainland company. (Nikkei Asia)

• China has installed more than 500,000 5G base stations this year, achieving its 2020 goal ahead of schedule, an official from the Ministry of Industry and Information Technology said at a Thursday briefing (link in Chinese).

• The iPhone 12 went on sale in China on Friday with long queues forming around Apple stores, with the attention focusing not on excited customers, but on the scalpers taking advantage of them. (Read the full story.)

• Chinese fast-food chain Dicos said it is rolling out plant-protein menu items supplied by a Shenzhen company that makes artificial meat mainly out of soybean proteins. (Read the full story.)

Coronavirus

• As of Friday evening Beijing time, the number of coronavirus infections globally exceeded 41.7 million, with the death toll surpassing 1.1 million, according to data compiled by Johns Hopkins University.

• Spain’s coronavirus infections have surpassed 1 million, making it the country with the third most cases in Europe behind Russia and France, Johns Hopkins data showed.

** AND FINALLY

The first 4,000 of the 30,000 sheep that Mongolia has promised to donate to China in support of its neighbor’s fight against Covid-19 arrived at the Erenhot port Thursday.

DIGEST

** LOOKING AHEAD

Quarterly financial results:

Oct. 28: ZTE

Oct. 29: BYD

 

Contact reporter Guo Yingzhe (yingzheguo@caixin.com) and editors Yang Ge (geyang@caixin.com) and Michael Bellart (michaelbellart@caixin.com)

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