CX Daily: U.S. Component Seller Denies China Military Ties
U.S. component seller denies China military ties as Washington prepares new blacklist
U.S. electronic-components maker TTI Electronics denied selling to the Chinese military days after another company issued a similar denial as the outgoing administration of U.S. President Donald Trump ratchets up its campaign to curb China’s tech aspirations during its final weeks.
TTI issued its denial as the U.S. prepares a list of companies from China and Russia that Washington considers “military end users,” Reuters reported late last month. The draft list includes 89 Chinese and 28 Russian entities. Any American company would have to obtain a special government license before selling to listed entities, the report said.
The statement issued by TTI, which is backed by billionaire investor Warren Buffett’s Berkshire Hathaway, made reference to the new list being compiled by the U.S. Commerce Department’s Bureau of Industry and Security (BIS). It said one of its own subsidiaries, TTI Electronics Asia PTE Hong Kong Ltd., was included on the list as a U.S. company that sold goods to military end users.
FINANCE & ECONOMY
Guangdong to pour $1.5 billion from bond sales into 4 rural banks
Guangdong province plans to issue 10 billion yuan ($1.52 billion) of special-purpose bonds to recapitalize four rural commercial banks, becoming the first local government to use part of this year’s quota of such borrowings to replenish bank capital.
Yunan Rural Credit Cooperatives will receive 4 billion yuan from the special-purpose bonds (SPBs), Puning Rural Commercial Bank 3.7 billion yuan, Jiedong Rural Commercial Bank 1.4 billion yuan, and Luoding Rural Commercial Bank 900 million yuan. Guangdong Yuecai Investment Holdings Ltd. Co., a financial holding company owned by the government of the southern China province, will take equity stakes in the four rural commercial banks for 10 years.
Some small and midsize banks, especially rural credit cooperatives, have suffered a surge in bad debt over the past few years after a rapid expansion in credit left a large amount of nonperforming loans on their books as economic growth slowed. The Covid-19 pandemic exacerbated the situation as many businesses and individuals were unable to repay debts on schedule.
Biden says he won’t soon remove Trump’s tariffs on China
U.S. President-elect Joe Biden said he won’t immediately remove the tariffs imposed on China by the Trump administration under the phase-one trade deal, according to New York Times.
“I’m not going to make any immediate moves, and the same applies to the tariffs,” Biden said in an interview with columnist Thomas Friedman.
Biden said he would first conduct a full review of the phase-one deal and speak with key allies in Asia and Europe to "develop a coherent strategy.”
Opinion: Biden’s Treasury pick Yellen to look to fiscal levers to promote economic recovery
China services recovery accelerated last month, Caixin PMI shows
Services activity in China continued expanding last month as both domestic and overseas demand grew, a Caixin-sponsored survey showed Thursday, adding to evidence that the economic recovery was gathering momentum as manufacturing also posted solid growth.
The Caixin China General Services Business Activity Index, which gives an independent snapshot of operating conditions in the services sector, rose to 57.8 in November from 56.8 the previous month, hitting the second-highest level since April 2010, below only June’s 58.4 reading. The index, better known as the Caixin China services PMI, has been in expansionary territory with readings higher than 50 for seven months in a row.
The Caixin China General Composite PMI, which covers both manufacturing and service companies, came in at 57.5 in November, stronger than 55.7 the previous month.
Technology gains push growth in Caixin New Economy Index
Temporary levies on Australian wines could last as long as nine months, commerce ministry says
China will maintain its temporary anti-dumping tariffs on Australian wines for as long as four months and could extend them to nine months “in special circumstances,” the commerce ministry said Thursday during an online press conference.
“The investigation committee will continue looking into the anti-dumping case through lawful procedures,” spokesperson Gao Feng said, “and make a final ruling based on the results.”
China’s commerce ministry announced preliminary anti-dumping duties on Australian bottled wine imports, ranging from 107% to 212%, in a statement last Friday. The duties went into effect the following day, Nov 28.
Quick hits /
WeBank waives interest for 160,000 in Danke loan disputes
Authorities discuss plan for mainland investors to trade bonds in Hong Kong
Agricultural province's former governor installed as Commerce Ministry party chief
BUSINESS & TECH
The bill represents a watershed moment in a long-running dispute between Washington and Beijing
House approves bill restricting Chinese companies listing in U.S.
The U.S. House of Representatives approved legislation that could lead to Chinese companies including behemoths like Alibaba Group Holding Ltd. and Baidu Inc. getting kicked off American exchanges if Washington regulators aren’t allowed to review their financial audits.
The legislation easily cleared the Senate in May and won bipartisan support in the House. Passage sends the bill to President Donald Trump, who is expected to sign it into law.
In addition to requiring companies to allow U.S. inspectors to review their financial audits, the bill — originally introduced by Senators John Kennedy, a Louisiana Republican, and Chris Van Hollen, a Maryland Democrat — requires companies to disclose whether they are under government control.
Delta resumes only nonstop flights to China by U.S. airlines
Delta Air Lines Inc. resumed nonstop flights to China Wednesday even as its major U.S. competitors continue to stop first in South Korea.
The change extended Delta’s rebuilding of China service since U.S. airlines suspended flights in February because of the coronavirus pandemic. The carrier’s two weekly flights between Seattle and Shanghai, and two between Detroit and Shanghai, previously included a stop in Seoul.
United Airlines Holdings Inc. ended nonstop flights between San Francisco and Shanghai Nov. 25, adding a 90-minute stop in Seoul that allows for a crew change and avoids an overnight stay in the Chinese city. American Airlines Group Inc. resumed passenger service Nov. 11 between Dallas-Fort Worth International Airport and Shanghai, with a stop at Seoul’s Incheon International, because of coronavirus testing requirements for crew members, the airline said.
Consumer goods /
Prices for everyday goods in China post first drop in five years
China faces its first decline in prices for everyday consumer goods in five years, as a growing move toward online shopping further pressured prices and led to lower overall sales, a report by consulting firm Bain and Co. Inc. says.
Average selling prices for fast-moving consumer goods (FMCG) like home care, packaged foods and makeup, dropped by an average 2.1% between January and September, reversing a 3.4% increase for all of 2019, according to the report. Overall, the Chinese urban FMCG market during the first nine months of 2020 suffered a modest 0.1% deflation in overall sales value.
To lure customers, many online merchants also offered promotions, putting pressure on prices. Online sales accounted for 26.7% of all FMCG buying in the first nine months of the year, up from 21.9% in 2019, as many consumers were forced to do much of their buying online during China’s Covid-19 outbreak, especially in the first half of the year.
Chinese businesses see a 2-year slog for full profit rebound
Most businesses operating on the Chinese mainland expect profitability to return to pre-pandemic levels by the end of 2022, according to a report published Wednesday by HSBC Holdings Plc, the biggest player in global trade finance.
The study was based on a survey of more than 10,000 enterprises worldwide conducted jointly by HSBC and market research company Kantar Group. Among the 1,000 participating companies on the Chinese mainland, 78% projected that full recovery from the pandemic would take two more years. At the same time, 83% of the Chinese companies said they were optimistic about the business outlook.
Business in China will recover at slightly faster than the global pace and will lead the world, the report found, cautioning that possible coronavirus resurgence and geopolitical issues may pose uncertainties.
Quick hits /
Hong Kong to provide free Covid-19 vaccines from mid-2021
Tianjin bans private companies from collecting biometric data
Internet earnings wrap: Trip.com flies back to profits, while Baidu continues to stagnate
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