CX Daily: China’s Bond Market Gets a Reprieve in WMP Overhaul

WMPs /

In Depth: China’s bond market gets a reprieve in WMP overhaul

China’s bond market got a reprieve this month when regulators gave providers of cash wealth management products (WMPs) an extra year to overhaul their wildly popular money market-like offerings under sweeping new rules for the asset management industry.

Industry participants read the delay as a compromise intended to prevent a dramatic selloff in the bond market, even though the revised regulations will drive down the future returns of such products, which are known as cash WMPs. The new rules for such funds take effect Jan. 1, 2023, while operators of other wealth management products need to comply by Jan. 1, 2022.

As of the end of March, Chinese banks issued 25 trillion yuan ($3.9 trillion) of WMPs, about 30% of which were cash funds, according to the China Banking Wealth Management Registration and Depository Center.

FINANCE & ECONOMY

Hong Kong Chief Executive Carrie Lam delivers an opening speech for the summit via an online video link Thursday in Beijing. Photo: Caixin

Hong Kong /

Caixin Summit: Hong Kong to complement China’s latest Five-Year Plan: Carrie Lam

Government agencies in Hong Kong have set up a joint working group to help implement China’s 14th Five Year Plan by boosting the city’s status as an international financial center, Chief Executive Carrie Lam said at the Caixin Summer Summit 2021 Thursday.

The city’s treasury and financial services bureau are working with local regulators and market development bodies to formulate a blueprint to complement the needs of China's economic and financial development and to meet the needs of international investors, Lam said in a video message at the event.

The city will also communicate with the central government in Beijing to gain support, she said.

Regulator /

Caixin Summit: Bank regulatory official warns of inflation’s impact on China’s businesses

A senior official at China’s top banking regulator Thursday urged the country’s banks to prepare to deal with how growing inflation will increase costs for businesses.

Cost-driven inflation will hurt the operations of domestic downstream industries that produce the finished goods that are sold directly to consumers, Yu Xuejun of the China Banking and Insurance Regulatory Commission said at the Caixin Summer Summit 2021. Some of these companies have been on the verge of sinking into the red.

Defaults /

Tianjin seeks to revive confidence after bond defaults

Top officials in northern China’s port city of Tianjin pledged no new defaults by state-owned enterprises in an effort to rebuild market confidence that was rocked by a flurry of debt crises involving government-backed companies.

Senior officials from the municipal government convened a meeting with executives from more than 100 financial institutions, Caixin learned. Attendees also included officials from the national securities and bond market regulatory bodies as well as the Shanghai and Shenzhen stock exchanges.

Covid-19 /

Caixin Summit: China needs to balance mass vaccination goals with stopping Covid’s spread, disease expert says

China needs to complete its mass vaccination program this year and continue non-pharmaceutical interventions to prevent the spread of Covid-19, infectious disease expert Zhang Wenhong told the Caixin Summer Summit 2021.

The country should continue efforts to inoculate the population and maintain prevention and control measures, said Zhang, director of the infectious diseases department at Huashan Hospital in Shanghai. International exchanges can be resumed when the prevalence of the disease is reduced to be similar to a seasonal influenza, he said.

“What we are trying to do is not to eradicate the infectious disease but to eliminate its prevalence,” he said via a video link Thursday.

Caixin Summit: Uneven vaccine distribution holding back global economy

Quick hits /

Bad-asset manager Huarong repays $250 million bond as default worries persist

Major Evergrande creditor says it has cut exposure to debt-ridden developer

Opinion: Why China can’t, and shouldn’t, control the yuan exchange rate (Part 1)

BUSINESS & TECH

The Swedish court’s ruling marks Huawei’s second unsuccessful appeal after the country's government barred local telecom operators last October from using 5G equipment produced by the company, citing national security concerns. Photo: VCG

Huawei /

Huawei vows to keep fighting after Swedish Court upholds 5G ban

Chinese telecom giant Huawei Technologies Co. Ltd. vowed to seek further legal action after a Swedish administrative court Tuesday upheld a local government ban on use of the company’s 5G equipment.

Because the verdict is not a final ruling, Huawei is assessing further legal remedies to defend its rights and interests, the company said in a statement. The Swedish Post and Telecom Authority (PTS) failed to provide any evidence that proved Huawei’s security problems during the trial, it said.

The court’s finding is another blow to Huawei’s business expansion in Europe.

Klaus Schwab /

Caixin Summit: Klaus Schwab advocates new business approach

The impact of the Covid-19 pandemic and the world’s high level of interconnectedness make now the right time to explore a new approach to business that could combine progress, people and society, said Klaus Schwab, founder and executive chairman of World Economic Forum.

The new approach would be a stakeholder model in which companies would seek the long-term wellbeing of people by taking into account the needs of all stakeholders and society at large, rather than focusing exclusively on short-term profits, Schwab said in a virtual interview at the Caixin Summer Summit.

IPO /

Shared bike operator Hello Inc. waves goodbye to New York IPO — for now, source says

Shared bike operator Hello Inc. has put its plans for a New York IPO on hold, a source said Thursday, just a day after the 11th hour withdrawal of another major Chinese high-tech listing by dating app Soul.

A source with direct knowledge of the situation told Caixin “the deal has been postponed,” while at the same time stressing it hadn’t been withdrawn. A company representative could not immediately be reached using the contact number provided on Hello’s original IPO prospectus.

Newspaper /

Hong Kong’s controversial Apple Daily shuttered after 26 years

Apple Daily, once one of Hong Kong’s best-selling newspapers, issued its last printed edition Thursday, marking the end of a 26-year run as the paper’s finances and staff came under increasing pressure over alleged violations of the region’s new national security rules.

The board of parent company Next Digital Ltd., owned by media tycoon Jimmy Lai, announced the paper’s closure Wednesday, according to state-run broadcaster CCTV. Its website also stopped operating.

Quick hits /

EV maker Xpeng gets nod for $2 billion Hong Kong listing

Tesla opens solar-powered charging station in Tibet's ‘city of sunlight’

Energy Insider /

Energy Insider: Guangdong kicks off renewable energy trading; China to release strategic metals from reserves

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Today's CX Daily was compiled and edited by Kevin Guo (xinguo@caixin.com).