Caixin
Apr 30, 2021 09:43 AM
CX DAILY

CX Daily: No More Regulatory Blind Eye for Internet M&A

Between 2016 and 2020, China’s market regulator investigated more than 90 cases involving suspected illegal market concentration activities and approved 41 with restrictive conditions. Photo: VCG
Between 2016 and 2020, China’s market regulator investigated more than 90 cases involving suspected illegal market concentration activities and approved 41 with restrictive conditions. Photo: VCG

Antitrust /

In Depth: No more regulatory blind eye for internet M&A

Chinese antitrust regulators are through turning a blind eye to the kind of deal-making that helped the likes of Alibaba Group Holding Ltd. and Tencent Holdings Inc. become internet titans.

As part of a sweeping crackdown on anti-competitive activities by China’s big tech companies, the State Administration for Market Regulation (SAMR) issued new guidelines for the “platform economy” on Feb. 7 that bring several grey areas under its regulatory purview.

Since December, regulators fined 13 companies, including Alibaba, Tencent and Baidu, for failing to seek anti-monopoly approval for their internet-related investments and acquisitions. Meanwhile, Chinese lawmakers are making major revisions to the Anti-Monopoly Law for the first time in 13 years to give it more teeth. The existing law has long been criticized for being too lenient on the country’s sprawling and powerful internet giants.

Tax evasion /

Surrogacy scandal star hit with allegations of tax evasion

Star Chinese actress Zheng Shuang faces an official investigation after allegations she evaded taxes through a contract that paid most of her salary for a television series to a company controlled by her mother.

The outlawed but relatively common arrangement known as a “yin yang contract” has loomed over country’s film and TV industry since 2018, when a tax evasion probe into A-list actress Fan Bingbing signaled a crackdown on shady bookkeeping practices that sent chills through the sector.

FINANCE & ECONOMY

Securities

On April 27, China Fortune Securities was officially listed on the Shanghai United Equity Exchange to transfer its shares to Morgan Stanley. Photo: VCG

Morgan Stanley /

Morgan Stanley set to take greater control over two China joint ventures

U.S. financial services giant Morgan Stanley looks set to take almost full control of its two Chinese mainland joint ventures after a Chinese partner announced the stakes had been put up for sale, sources with knowledge of the matter said.

State-owned brokerage China Fortune Securities Co. Ltd., which holds 49% of brokerage Morgan Stanley Huaxin Securities Co. Ltd., is selling a 39% stake at a price of 569.6 million yuan ($88.1 million), according to a filing (link in Chinese) to the Shanghai United Assets and Equity Exchange on Tuesday. It is also selling (link in Chinese) its 36% stake in Morgan Stanley Huaxin Fund Management Co. Ltd., a mutual fund manager, for 389.3 million yuan.

Morgan Stanley, which last year gained regulatory approval to increase its stake in the securities joint venture to 51% from 49%, is already the largest shareholder in both companies and has first right of refusal to buy the stakes. If it does go through with the purchases and they are approved by the regulators, Morgan Stanley will own 90% of Morgan Stanley Huaxin Securities and 85% of Morgan Stanley Huaxin Fund Management.

Population /

China’s population kept growing in 2020, statistics bureau says

China’s National Bureau of Statistics (NBS) reported Thursday that the population of the country continued to increase in 2020 amid wide expectations of a population decline in the last decade.

“In 2020, our nation’s population continued to maintain growth,” the statistics bureau said in a statement, without elaboration, though it did say that details would be released in the results of the new census.

China launched its latest once-in-a-decade national census in November 2020, the results of which were previously scheduled to be released in early April but were delayed due to the need for “more preparation work,” the Financial Times reported, citing an NBS spokesperson.

Diplomacy /

China among a pack of economic competitors ‘closing in fast’ on the U.S., Biden says

U.S. President Joe Biden spent most of his speech to Congress Wednesday focused on America’s domestic priorities, from taxes to health care. But sprinkled throughout were references to China, underscoring just how much he’s focused on the world’s second-biggest economy.

“We’re in competition with China and other countries to win the 21st Century,” Biden said. President Xi Jinping, Biden said, is “deadly earnest” about China “becoming the most significant, consequential nation in the world.”

Biden reiterated previous comments that he believes the U.S. and China can find areas of cooperation — he cited countering climate change as an example — and that conflict isn’t inevitable. But he vowed that the U.S. will stand its ground when it thinks U.S. or global interests are at stake.

Shareholders /

Thousands of misbehaving shareholders forced to dump their stakes in banks and insurers

China’s top banking and insurance regulator said it forced out more than 2,600 shareholders allegedly involved in fund embezzlement or other misconduct since 2019.

Some of the affected banks and insurance companies have undergone restructuring and introduced new strategic shareholders, the China Banking and Insurance Regulatory Commission (CBIRC) said Wednesday in a statement (link in Chinese).

Quick hits /

Scandal-plagued Kangmei hit with bankruptcy restructuring suit

Henan sets up $4.6 billion fund to address local firms’ debt risks

Road to COP26: Balancing China’s twin economic and climate challenges

BUSINESS & TECH

PETROLEUM

A Sinopec gas station in Taiyuan, North China's Shanxi province, on Feb. 5. Photo: VCG

Petroleum /

Sinopec rebounds from pandemic plunge with $2.8 billion first-quarter profit

China Petroleum & Chemical Corp. posted net profits of 17.9 billion yuan ($2.8 billion) in the first quarter as the country’s largest oil refiner joined a lengthening list of Chinese state-owned enterprises to rebound strongly from the Covid-19 pandemic.

The petrochemicals titan, also known as Sinopec, reversed losses of nearly 2 billion yuan in the equivalent period last year, when the coronavirus outbreak triggered a collapse in production and a slump in oil prices.

The Hong Kong- and Shanghai-listed company’s net gains were up 22% compared with the first three months of 2019, well before the pandemic started. Revenues grew a modest 4.1% year-on-year to 577 billion yuan.

Health /

China forms new super agency to oversee disease prevention and control

China established a new vice-ministerial level agency to oversee the country’s vast disease control and prevention apparatus and to plug gaps in the public health system exposed by last year’s coronavirus outbreak.

The State Council, China’s cabinet, announced Wednesday the appointment of four officials to the new National Disease Prevention and Control Administration, including a head and three deputy heads, according to a statement (link in Chinese) on the Ministry of Human Resources and Social Security website.

Syngenta /

With IPO on its agenda, Syngenta Group reports accelerating growth

Chinese-owned global agricultural giant Syngenta Group reported a strong pick-up in revenue growth in the first quarter as a media report said the company formed last year through a merger of assets in Europe, Israel and China may be accelerating its IPO plans with an aim to list this year.

The Swiss-based group said sales rose 20% in the first quarter of 2021 to $7.1 billion, according to an announcement Thursday. That marked an acceleration from the full-year 2020 when the company’s revenue grew by a more modest 5% to $23.1 billion.

Air tickets /

Trans-Pacific air tickets soar after U.S. lifts student travel restrictions

Ticket prices for flights from China to the U.S. skyrocketed after the American government lifted travel restrictions Monday for students from China and several other countries.

An economy-class ticket for United Airlines’ direct flight from Beijing to Boston Aug. 31 was listed as 7,200 yuan ($1,100) before the news. The price nearly quadrupled to about 35,000 yuan Wednesday. Ticket prices at other airlines also jumped.

Quick hits /

China launches core of its first space station

Huawei crashes out of global top five smartphone-makers

Passage of food waste bill inscribes clean plate campaign into law

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