Caixin
Jan 28, 2021 08:18 AM
CX DAILY

CX Daily: U.S. Chip Industry Group Calls For Rethink Of Trump-Era China Prohibitions

A major U.S. semiconductor industry association called on U.S. President Joe Biden to reconsider the many restrictions imposed on the sector’s exports to China under his predecessor.
A major U.S. semiconductor industry association called on U.S. President Joe Biden to reconsider the many restrictions imposed on the sector’s exports to China under his predecessor.

Chips /

U.S. chip group calls for rethink of Trump-era China prohibitions

A leading U.S. semiconductor association called on new U.S. President Joe Biden to rethink the country’s recent strategy of using export restrictions to stymie China’s high-tech ambitions, aiming to undo a key plank of former President Donald Trump’s China policy.

U.S. makers of chips and other high-tech products have complained that the Trump policy, which bans them from selling to many Chinese tech firms without a special license from Washington, puts them at a disadvantage to competitors from other developed markets that don’t require such permission.

The Trump administration began rolling out such bans nearly two years ago when it first put smartphone giant Huawei on an “entity list” that required the company to get special permission when buying U.S. products. After that, it imposed a steady stream of similar bans on a wide range of Chinese companies.

FINANCE & ECONOMY

1

Yi Gang

Economy /

China’s central bank won’t exit prematurely from stimulus, Yi says

China’s central bank won’t exit “prematurely” from its supportive monetary policies while at the same time keeping debt risks under control, People’s Bank of China Governor Yi Gang said.

Monetary policy will continue to “prop up the economy,” Yi said Tuesday on a panel hosted by the World Economic Forum. Officials will remain mindful of risks, such as a rising macro leverage ratio and more nonperforming loans, he said.

“Looking forward, I think our monetary policy will continue,” he said. “We will keep a delicate balance between supporting the economic recovery, at the same time preventing risk.”

Debts /

R&F Properties to sell $500 million of junk bonds to retire debt

China’s debt-ridden developer Guangzhou R&F Properties Co. Ltd. plans to borrow $500 million by selling high-yield junk bonds abroad to retire old debts as the company faces imminent repayment pressures.

Hong Kong-listed R&F Properties’ Easy Tactic Ltd. unit will sell two-year notes with an annual yield of 11.75%, the company said Tuesday. Proceeds will be used to repay R&F Properties’ debts due within one year.

It will be the company’s second-priciest bond sale, with a yield only slightly lower than the 12% set for its $360 million dollar bond issuance in November. It will also be the second-costliest of all developers’ bond sales overseas so far this year with a yield more than double the industry average of 5.36% and more than four times that of two-year Chinese government debt.

SOE in troubled province defaults on trust loan

China may bar new borrowing by high-debt, high-risk local governments

Peking University’s tech conglomerate gets more time for bankruptcy restructuring

China-U.S. /

U.S. should make the first move on reopening consulates, Chinese envoy says

Chinese Ambassador to the U.S. Cui Tiankai told China’s national broadcaster CCTV Tuesday that Beijing and Washington have not yet engaged in talks on reopening each other’s consulates that were closed last year in a tit-for-tat diplomatic confrontation.

Cui said that the new U.S. administration under President Joe Biden, who took office last week, should take the first step in correcting the current situation as a good faith gesture. Previously, Cui had signaled during a think tank event in December that China was willing to consider reopening the U.S. consulate if Washington reciprocated.

Covid-19 /

China punishes U.S. returnee who kept Covid symptoms secret

A Chinese national who kept her Covid-19 symptoms secret as she returned home from the U.S. has been given a suspended jail sentence in a rare example of a person facing prison time for breaching China’s coronavirus protocols.

Longtime Massachusetts resident Li Jie flew with her family to Beijing in March as the Covid-19 epidemic began in the United States. She was diagnosed with the disease on arrival and was later found to have concealed her symptoms to secure passage back to China. Last week, online legal database China Judgments Online published a verdict revealing that Li was convicted in October of obstructing the prevention and control of infectious diseases and was sentenced to one year’s imprisonment, suspended for one year.

Opinion: Northeast city’s dismal Covid response should be setting off alarm bells

Quick hits /

IMF: What ongoing global uncertainty means for you

Executive at China’s biggest policy bank fired on suspicion of corruption

BUSINESS & TECH

douyin

Sponsoring the hugely popular Spring Festival Gala has long been a highly sought-after opportunity.

Videos /

ByteDance’s Douyin tapped as sponsor for China's biggest annual TV event after Pinduoduo gets dumped

Short-video giant Douyin forked out 1 billion yuan ($154 million) to secure an exclusive deal to sponsor the nation’s most watched TV gala over the Lunar New Year in two weeks after e-commerce giant Pinduoduo was dumped amid a public backlash over the deaths of two of its workers.

The Chinese equivalent of TikTok announced Tuesday its partnership with China’s biggest state-backed broadcaster CCTV to host the Spring Festival Gala that will be aired on the eve of Lunar New Year on Feb. 11, offering the company a massive platform not unlike the NFL Superbowl for advertisers in the U.S.

The company, which is owned by ByteDance, said it will distribute 1.2 billion yuan in digital “red envelopes” during the gala, a record amount and surpassing giveaways by previous sponsors. Baidu Inc. which spent 900 million yuan in 2019 and Kuaishou Technology handed out 1 billion yuan during last year’s celebration.

Tax rate /

Beijing scraps 58 high-tech companies’ qualification for lower taxes

China disqualified 58 companies’ eligibility for a significantly reduced corporate tax rate for high- and new-technology enterprises and asked them to pay back taxes at a higher rate.

The nation is suffering from fiscal revenue loss amid the fallout of the Covid-19 pandemic and a campaign to reduce tax burdens on enterprises over the past three years. As the government sells bonds to raise funds to fill the fiscal gap, it also needs to close loopholes in the tax system to collect as much revenue as possible.

Under China’s tax law, high- and new-technology enterprises (HNTEs) are eligible for a 15% corporate income tax, compared with the standard 25%. The Beijing Municipal Tax Administrative Bureau released a list of 58 companies disqualified as HNTEs but didn’t specify the reasons for their disqualification or disclose how much in taxes they need to pay. According to the rules for HNTE identification, companies disqualified as HNTEs can’t resubmit an application within five years.

IPO /

HSBC breaks own first-day margin loan record for Kuaishou IPO

Banks and brokerages lent out HK$270 billion ($34.8 billion) in margin financing for the retail portion of short video app Kuaishou’s IPO Tuesday, the first day of a four-day subscription period, according to Caixin’s calculations and media coverage.

The amount marks an oversubscription rate of more than 200 times, as the TikTok-like app aims to raise HK$1.05 billion via shares sold to retail investors.

HSBC Holdings Plc said it has aside HK$150 billion of loans for its customers to subscribe for Kuaishou’s shares, and the lender’s spokesman said more than two-thirds of the loans were taken up Tuesday, breaking the bank’s record of first-day subscription loan amount.

5G /

China Mobile to build out rural-focused 5G network with new telecom

Eight months after first announcing their intent to collaborate in 5G telecoms, China Mobile Ltd. and China Broadcasting Network Corp. Ltd. (CBN) announced a detailed plan that moves CBN one step closer to becoming the nation’s fourth major wireless carrier.

The pair will jointly commercialize the 700 MHz frequency for 5G communications, according to a China Mobile announcement late Tuesday. That spectrum is owned by CBN, a young company created by Beijing by cobbling together many of the nation’s regional cable TV networks. The company raised eyebrows in 2019 when it was awarded a 5G license alongside the country’s three main carriers, China Mobile, China Unicom and China Telecom.

Quick hits /

Baidu juices up intelligent driving tie-up with BlackBerry

Apple supplier OFilm plans to offload $1.7 billion of assets

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