Caixin
May 12, 2021 09:02 AM
CX DAILY

CX Daily: Why China’s Electricity Market Overhaul Is Failing

Power /

In Depth: Why China’s electricity market overhaul is failing

A key part of China’s six-year-old effort to reduce electricity price distortions by introducing competition in power distribution is failing. Less than a third of the pilot projects cleared by the government have obtained licensing, and very few are making money, according to the China Energy Research Society.

“Our incremental power distribution pilot project has been met with dissatisfaction from the local government, our clients and our shareholders. Nobody likes it,” Ning Zhilin, the head of a test program in Cangzhou, Hebei province, told a seminar organized by industry players on March 28. More than 40 incremental power distributors joined the meeting to explore solutions for the struggling industry.

China is the world’s largest electricity producer, generating more power than the next three countries combined—the U.S., India and Russia. The country’s electricity market has long been plagued by price distortions and lack of competition. In 2015, the State Council renewed efforts to overhaul the industry, hitting on the idea of bringing privately operated distribution networks into competition with existing state-owned networks to improve efficiency and reduce prices.

Population /

China’s population tops 1.4 billion, even as growth rate slows, census shows

China’s population continued to grow at a slower but steady pace over the last decade, topping 1.4 billion, latest census results released Tuesday show.

The Chinese mainland population increased by 5.38% to 1.41 billion from 2010 to 2020, Ning Jizhe, head of the National Bureau of Statistics (NBS), said at a press conference. The annual average growth rate of 0.53% in the decade was down from 0.57% growth in the 2000-10 decade.

The data showed the population kept growing at a slow pace, which will continue to slow before reaching a future peak, Ning said. He said it is unclear when that would be as it depends on many variables, such as changes in age demographics and fertility policies.

FINANCE & ECONOMY

digital yuan

The digital yuan is accepted as a payment option at a retailer in Shanghai.

Digital yuan /

China’s digital yuan gets access to Alibaba’s 1 billion-person user base

Alibaba Group Holding Ltd.’s online grocery service and food delivery units are included in China’s digital yuan pilot program, giving the sovereign electronic currency system access to the internet giant’s 1 billion users.

Users of Alipay, Alibaba’s mobile and online payment platform, find a “digital yuan” option in their payment options. Now users can make payments using digital yuan in Alibaba’s ele.me food delivery system, Tmall supermarket, and Hema grocery stores.

China is accelerating the rollout of its virtual yuan. So far, several cities, including Beijing, Shenzhen, Chengdu, and Suzhou, have used the digital currency to provide millions of yuan of coupons to local residents since October as part of ongoing pilot programs.

Debt /

China’s debt-laden developers get over repayment hump

For the first time in nine months, China’s real estate developers borrowed more money with bonds than they repaid or repurchased — not because they borrowed more, but because they had less to repay.

Developers’ net borrowing through bonds in April — the value of newly issued bonds minus the value of those repaid or bought back — came in at 25.4 billion yuan ($4 billion), according to a report released Friday by GF Securities Co. Ltd.

The fact that the figure turned positive last month offers hope that China’s struggling real estate industry has gotten over the repayment hump, and could leave companies with more room to borrow later this year.

Economy /

China’s factory prices surge amid higher commodity costs, supply shortages

Inflationary pressure in China continued to build in April as factory-gate prices jumped at the fastest pace in three and a half years and consumer prices rose the most since September, official data showed Tuesday,

The producer price index (PPI), which gauges changes in prices of goods circulated among manufacturers and mining companies, rose 6.8% year-on-year, accelerating from a 4.4% pace in March, data from the National Bureau of Statistics (NBS) showed (link in Chinese). That was the biggest jump since October 2017 and exceeded the median estimate of a 6.5% rise in a Caixin survey (link in Chinese) of economists.

The consumer price index (CPI), which measures changes in prices of a basket of consumer goods and services, rose 0.9% year-on-year (link in Chinese), more than double the pace in March although slightly lower than the median estimate of a 1% rise in the Caixin survey.

Insurers /

Online insurance upstart Yuanbao bags $156 million in new funding

Little-known Chinese insurance technology startup Yuanbao raised nearly 1 billion yuan ($156 million) in its series C funding round, the company said Monday on social media.

The round was led by Source Code Capital with participation from investors including Cathay Capital, Hike Capital, Northern Light Venture Capital, Qiming Venture Partners and Susquehanna International Group, Yuanbao said.

Quick hits /

China is hot again as foreign bond buyers yearn for yield

China’s credit rebound may spell trouble for Huarong investors

Opinion: Ant Group must learn that there is a difference between finance and technology

BUSINESS & TECH

AMAZON

Amazon said it would take “swift actions” against merchants that violate its rules, including suspending or revoking their permission to sell products on the platform. Photo: VCG

Amazon /

Chinese products purged in Amazon crackdown on fake reviews, sources say

Amazon.com Inc. removed some products sold by Chinese merchants from its global shopping platforms as part of a companywide crackdown on fake reviews, according to sources close to the world’s largest online retailer.

Although the number of affected vendors is unclear, the clampdown hit several brands owned by listed Chinese companies. They mainly use the platform to sell consumer electronics and other household goods across international borders.

Amazon is rooting out illicit behavior on its platforms ahead of its annual Prime Day promotion, which typically brings in tens of billions of dollars in sales by offering members discounts on a wide range of products.

Tech /

No signs of spring for China tech stocks in May

Chinese internet stocks sank by more than 3% in Hong Kong Tuesday, pushing losses for the group past 10% over the past two weeks as part of a global high-tech sell-off combined with concerns about growing regulation of the sector in China.

The Hang Seng TECH Index ended down 3.3% for the day at HK$7.57, bringing its losses since April 29 to just over 10%. The index was launched last August, in a nod to a growing tide of companies like Alibaba, JD.com and NetEase which were making secondary listings on the bourse to complement their older New York listings.

Most of those companies are also components of the index and recorded similar declines over the past two weeks.

Consumer protection /

Pinduoduo, Meituan warned to focus more on consumer protection

A Chinese consumer protection watchdog told Pinduoduo and Meituan to focus less on boosting traffic and more on protecting consumers as part of an ongoing national campaign against market abuses by internet giants.

E-commerce upstart Pinduoduo Inc. and takeout titan Meituan were summoned by Shanghai Consumer Council (SCC) Monday over consumer protection issues, the SCC said.

Self-driving /

Self-driving truck startup Plus aims for U.S. listing in SPAC deal

Self-driving truck startup Plus announced plans to go public in the U.S. through a backdoor listing using a type of shell company, aiming to become the second autonomous driving technology specialist to list on an American exchange since rival TuSimple made its debut on the Nasdaq last month.

Silicon Valley-based Plus, which splits its operations between the U.S., China and Europe, agreed to merge with special-purchase acquisition company (SPAC) Hennessy Capital Investment Corp. in a deal that will give the combined company a market value of $3.3 billion, according to a statement Plus released Monday.

Quick hits /

Internet security apps called out for personal data abuse

Pony.ai works with Luminar to build lidar-powered sensing system for driverless cars

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