CX Daily: South Korea Likely To Outpace China In New Shipbuilding Orders In Second Half, Report Says

Shipbuilding /

South Korea likely to outpace China in new shipbuilding orders in second half, report says

China is on track to be overtaken by South Korea in shipbuilding orders in the second half of the year, a new report argues, as rising raw material costs erode local shipbuilders’ advantages and discourage them to seek new business while those in their eastern neighbor rack up orders.

With rapid growth, South Korea is likely to outpace China in terms of new shipbuilding orders, shipping services provider Clarksons PLC estimated in a report on the global shipping market. New orders to China’s shipbuilders stood at about 10.59 million compensated gross tons in the first half of the year, the largest in the world and slightly higher than the 10.47 million tons received by the South Koreans.

The report points to fierce competition between Chinese and South Korean shipbuilders, as manufacturers in both countries try to seize opportunities in a booming global shipping market.

Liquidity /

China likely to reduce banks’ reserve requirement again

China’s cabinet called for a reduction in the amount of money that banks need to hold in reserve, freeing up liquidity to support businesses that have recently been rattled by surging commodity prices.

The State Council said the country will use monetary policy tools “in a timely way,” including a cut to banks’ required reserve ratio (RRR) that enable lenders to have more money available to lend to businesses, according to the readout of a Wednesday State Council executive meeting chaired by Premier Li Keqiang.

FINANCE & ECONOMY

Market makers accounted for just 42.4% of all spot transactions on China’s interbank bond market in 2019, a report shows.

Bonds /

Exclusive: Bond market makers disciplined for phony trades

The self-regulator of China’s interbank bond market disciplined three market makers over round-trip trading, the first punishment of such phony transactions.

The National Association of Financial Market Institutional Investors (NAFMII), the regulator, gave a notice of criticism to China Minsheng Bank. It also summoned Guosen Securities Co. Ltd. and Guangdong Nanyue Bank for regulatory talks. The three financial institutions were ordered to make in-depth rectification.

Round-trip trading refers to the unethical practice of purchasing and selling the same bonds at the same prices over and over again to create fake trading volume. The transactions in question took place in multiple sessions in the fourth quarter of 2020 and didn’t reflect reasonable economic purpose, making them in essence fictitious trades, NAFMII said in a statement.

Manipulation /

‘China’s Carl Icahn’ set to leave prison after serving five years

Xu Xiang, a former star fund manager once known as “China’s Carl Icahn,” is due to be released from prison this week after serving a five and half year sentence for manipulating stock prices, handed out in the wake of the country’s 2015 stock market crash.

In June 2017, Xu and his firm Shanghai Zexi Investment Management Co. Ltd. were blacklisted (link in Chinese) by the Asset Management Association of China, an industry group. That means he has since been banned from the fund management industry.

Along with his incarceration, Xu was also fined 11 billion yuan ($1.7 billion), one of the highest fines levied for a financial offense in China, which has yet to be paid off.

Digital payments /

Cross-border digital payments trial to start by year-end

A trial of cross-border payments using central bank digital currencies (CBDCs) is expected to begin by the end of 2021, Hong Kong Monetary Authority (HKMA) Chief Executive Eddie Yue said.

The test will involve banks and exchanges in Hong Kong, the Chinese mainland, Thailand and the United Arab Emirates, Yue said Tuesday at a seminar in Hong Kong. He addressed an update on the multi-CBDC program to Agustín Carstens, the general manager of the Bank of International Settlements (BIS).

Covid-19 /

Wuhan reports 52 Covid cases in arrivals from Afghanistan

Fifty-two travelers arriving in central China’s Wuhan tested positive for Covid-19 in one of the largest clusters of imported infections recorded in China, the Hubei provincial health authority reported Wednesday.

The travelers flew from Afghanistan to Wuhan Friday on a chartered flight operated by Xiamen Air. Among the positive cases, 22 were confirmed with Covid-19 while 30 were asymptomatic, the Hubei health commission said.

Quick hits /

Hunan vice governor appointed vice minister of Finance

Exclusive: China to roll out new lending tool to support green push

BUSINESS & TECH

Vice Chairman and President Gu Hongdi said the listing in the Asian financial hub was partly motivated by the ability to build ties with the Chinese mainland’s capital market.Photo: IC Photo

IPO /

Xpeng shares skid in Hong Kong debut amid China tech fallout

Xpeng Inc.’s $1.8 billion listing on the Hong Kong Stock Exchange got off to a troubled start, with the Chinese electric-vehicle (EV) maker’s share price tumbling by more than 8% Thursday as investors flee from any company at risk from a widening government crackdown on the Asian nation’s tech sector.

The plunge came after the Guangzhou-based carmaker, which listed in New York last year, reversed modest intraday gains of 1.8% Wednesday to close level with its offering price of HK$165 ($21.24).

The volatility reflected the chill that has swept through Chinese technology equities on both sides of the Pacific in the wake of Beijing’s crackdown on foreign-listed tech titans, notably ride-hailing giant Didi Global Inc., in the past week.

Henry Kissinger /

China, U.S. should avoid trying to monopolize tech, Kissinger says

Neither China nor the U.S. should seek monopolies in the fields of technology or artificial intelligence (AI), according to Henry Kissinger.

Speaking at the World Artificial Intelligence Conference Thursday, the former U.S. Secretary of State said (link in Chinese) that Beijing and Washington must maintain dialogue and refrain from seeking hegemony in order to safely develop AI and other cutting-edge technologies.

Hospitals /

Hospital staff salaries set for ‘dynamic adjustment’ in new round of reforms

Extensive reforms of salary systems in China’s cash-strapped public hospitals will soon be carried out nationwide, the country’s top health authority said.

The reforms will include “reasonable determination and dynamic adjustment” of salary levels at public hospitals, an official said, so payments comply with medical professionals’ work.

The State Council, China’s cabinet, passed guidelines for the reforms in June and they will be published soon, Zhu Hongbiao, an official with the National Health Commission’s department of health care reform, said at a press conference (link in Chinese) Tuesday.

Tour /

New Chinese tour giant takes shape with merger of giants Caissa, UTour

Caissa Tosun Development Co. Ltd., a leading tour operator backed by the financially struggling HNA Group, announced a plan to buy Alibaba-backed rival UTour Group Co. Ltd. for nearly $1 billion, in a deal that would create a new national champion in the space.

In a noteworthy but ultimately inconsequential development, three HNA-nominated members objected to the deal among the 11 Caissa directors who voted on the deal, allowing it to ultimately pass, according to the announcement dated June 29.

Quick hits /

Niu’s electric scooter sales jumped 58% in second quarter

Japan eatery chain Watami returns to China for taste of recovery

Medical data firm LinkDoc scrubs U.S. IPO as China crackdown continues

Energy Insider /

Energy Insider: Baowu Steel prepares for mixed-ownership projects; first hydrogen heavy-truck fleet in operation

Thanks for reading. If you haven't already, click here to subscribe.

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