May 28, 2021 09:20 AM

CX Daily: Yuan’s Strength Seen Continuing as Dollar Weakens


Yuan /

Yuan’s strength seen continuing as dollar weakens

As China’s yuan surged to a fresh three-year high against the U.S. dollar this week, analysts predict the currency will remain strong as the Chinese central bank has yet to show signs it’s concerned about the pace of appreciation and the greenback’s weakness looks set to continue.

The yuan has been on a tear since the end of March when it was trading in the onshore market at around 6.57 yuan per dollar. After rising beyond 6.4 yuan for the first time since mid-June 2018 in intraday trading Tuesday, the Chinese currency has continued to strengthen and reached around 6.37 Thursday evening Beijing time. The currency has gained 0.93% since Friday’s close.

The currency’s appreciation is being driven mainly by the weakening dollar, although confidence in the Chinese economy and the economic outlook are also attracting strong fund inflows from international investors, which is also boosting demand for the yuan, analysts say.


China-U.S. /

China and U.S. lead trade negotiators talk for first time since Biden took office

Chinese Vice Premier Liu He spoke with U.S. Trade Representative Katherine Tai over the phone Thursday morning, the Chinese commerce ministry said, marking the first time the two countries’ lead trade negotiators have talked since U.S. President Joe Biden took office in January.

“In a spirit of mutual equality and mutual respect, the two sides conducted candid, pragmatic and constructive exchanges,” the ministry said in a statement. “The two sides agreed that the development of bilateral trade is very important.”

The two countries’ lead trade negotiators “exchanged views on issues of mutual interest and agreed to maintain communications,” the statement said, without elaborating.

Salary /

Hong Kong bourse offers record base salary to new CEO

Nicolas Aguzin, the new chief executive of the company that runs the Hong Kong Stock Exchange, will get the highest base salary it has ever paid to its head since listing in 2000, publicly available data show.

The 52-year-old financial industry veteran joined Hong Kong Exchanges and Clearing Ltd. (HKEX) Monday, with a base annual salary of HK$10 million ($1.29 million) during his tenure through May 2024, according to a company filing released last week.

Funds /

State-owned capital manager to set up funds for SOE restructuring

Beijing-backed investment giant China Reform Holdings Corp. Ltd. plans to set up a series of funds that will invest in state-owned enterprises (SOEs) to help drive corporate restructuring, the company said in a press release Wednesday.

The plan is for the funds to contain 70 billion yuan ($11 billion) in total, with the first batch being worth half that. State-owned China Reform will contribute at most 10 billion yuan to set up a parent fund, which will then partner with local governments and other entities to set up sub-funds, according to the release.

Espionage /

China charges ex-professor at Japanese university with spying for Tokyo

Chinese national Yuan Keqin, a former professor at a Japanese university, was charged with spying for Japan, the Chinese foreign ministry said Wednesday.

Yuan was detained by the national security authorities on suspicion of espionage in 2019.

Zhao Lijian, a spokesperson for China’s foreign ministry, said during a press conference that Yuan had “made a full confession to his crimes.”

Quick hits /

Beijing offers vaccines to help Taiwan fight Covid surge

China Oceanwide Holdings defaults on $280 million of offshore bonds



In a bid to find new sources of growth, Pinduoduo has invested heavily since late 2020 in a new grocery service, aiming to grab a share of a business that boomed during the pandemic lockdown. Photo: VCG

E-commerce /

Pinduoduo’s loss narrows on tripling first-quarter revenue

Chinese e-commerce upstart Pinduoduo Inc. booked a smaller loss in the first quarter as its revenue more than tripled, driven by its direct sales business, though the company is facing stricter regulatory scrutiny.

Nasdaq-listed Pinduoduo booked a net loss of 2.9 billion yuan ($443.5 million) in the first quarter of this year, down from 4.1 billion yuan in the same period last year, according to its latest unaudited quarterly results released Wednesday.

Pinduoduo’s total revenues in the first quarter expanded 239% year-on-year to 22.2 billion yuan, primarily due to an increase in revenues from its online marketing services and contribution from merchandise sales, the company said.


NetEase’s music arm files for $1 billion Hong Kong IPO

Chinese gaming giant NetEase Inc.’s music streaming arm filed for an initial public offering (IPO) in Hong Kong as the Tencent Holdings Ltd. rival ratchets up competition in online content.

The Hangzhou-based company submitted a listing application for Cloud Village Inc. to the Hong Kong stock exchange, according to a filing Wednesday. Cloud Village holds NetEase’s music streaming platform in China and also operates streaming and advertising through the platform. The filing didn’t provide details of the share sale.

An IPO of the music unit could raise about $1 billion, according to a person familiar with the matter who asked not to be identified as the information is private.

Electric cars /

Li Auto admits its self-driving tech is sub-par, and its stock jumps

The share price of Li Auto Inc. (NASDAQ: LI) soared Wednesday despite the Chinese electric vehicle (EV) upstart announcing a slide back into loss and admitting its self-driving technology is not as good as its competitors’ products.

The strong one-day rise indicates that investors still see potential in the Nasdaq-listed automaker, which beat expectations but still posted a net loss of 360 million yuan ($56 million) for the first three months, reversing the 107.5 million yuan net profit it booked in the prior quarter and widening its 77.1 million yuan loss from the equivalent period last year.

Xiaomi /

Xiaomi grabs more market share from Huawei on surging smartphone sales

Tech giant Xiaomi Corp. reported surging first quarter revenue and profit growth on the back of increased global smartphone sales as ailing heavyweight Huawei Technologies Co. Ltd. continues to relinquish market share.

Xiaomi’s total revenue grew 54.7% year-on-year to 76.9 billion yuan ($12 billion) in the three months through March, about two-thirds of which was from smartphone sales that were up nearly 70%, according to its latest earnings report released Wednesday. The company reported adjusted first quarter net profit of 6.1 billion yuan, up 163.8%.

Quick hits /

EHang unveils long-range self-flying vehicle for intercity travel

Hong Kong tycoon Li Ka-shing gets fully vaccinated against Covid

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Today's CX Daily was compiled and edited by Kevin Guo (

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