CX Daily: China Experiments With Leniency When Prosecuting Companies

Leniency /

In Depth: China experiments with leniency when prosecuting companies

In December, prosecutors in the eastern city of Zhangjiagang decided to drop a case against a local stainless steel manufacturer that had been accused of polluting the environment.

Local environmental investigators found that the company had built a cleaning tank without completing an environmental impact assessment in 2018 and discharged wastewater that contained chemicals far in excess of what was allowed. In June 2020, three company representatives surrendered themselves to local police.

The case never made it to court, however, because the company submitted a plan to local prosecutors to correct its misconduct. The prosecutors instead asked local environmental authorities to punish the company through administrative measures, such as with fines.

Boeing /

Boeing 737 Max lands in Shanghai for flight tests to end grounding

A Boeing 737 Max jetliner arrived at a Shanghai airport Saturday for flight tests as the U.S. aviation giant seeks approval for the plane to return to service in China after a nearly 30-month grounding following two fatal crashes.

Flight-tracking site FlightRadar24 showed that the 737 Max jet departed from Boeing Field near Seattle at 8:17 a.m. local time. It arrived at Shanghai’s Pudong International Airport after stops in Honolulu and Guam.

FINANCE & ECONOMY

The headquarters of the People’s Bank of China in Beijing. Photo: IC Photo

Monetary policy /

Central bank report sparks speculation on interest rate, reserve requirement cuts

Analysts are speculating about whether China will cut interest rates or lenders’ reserve requirements in coming months as the central bank warns of inflation in its second-quarter monetary policy report.

The People’s Bank of China (PBOC) said in the Monday report (link in Chinese) that domestic inflationary pressure is generally controllable but warned that there could be a spillover from ultra-loose monetary policies overseas. The PBOC will closely monitor the situation and ensure prices remain basically stable, the PBOC said.

A cut to banks’ reserve requirement ratio (RRR) or policy interest rates is unlikely in the second half due to inflation concerns unless the State Council calls for such action, analysts at Citic Securities Co. Ltd. wrote in a Tuesday note (link in Chinese).

China-Lithuania /

China recalls ambassador to Lithuania over ‘Taiwan representative office'

China is recalling its ambassador to Lithuania over the country’s decision to allow Taiwan authorities to open a representative office using the island’s name, the foreign ministry said Tuesday in a statement.

The ministry said the Baltic state’s decision “severely undermines China’s sovereignty and territorial integrity.” China has also demanded that Lithuania recall its ambassador to China, the statement said.

“The red line of safeguarding national sovereignty and territorial integrity shall not be crossed,” the statement said. “We urge the Lithuanian side to immediately rectify its wrong decision, take concrete measures to undo the damage, and not to move further down the wrong path.”

Standard Chartered /

Review started on Standard Chartered’s application to open wholly owned brokerage in China

China’s top securities regulator started reviewing an application (link in Chinese) filed by a Standard Chartered PLC subsidiary to set up a Chinese mainland securities firm, according to information posted on the website of the China Securities Regulatory Commission.

The firm will be wholly owned by the British banking giant, a Standard Chartered spokesperson told Caixin.

Quick hits /

China bonds see worst rout in a year on inflation data

Opinion: There’s only one model that works for U.S.-China relations

Opinion: China should beware of EU dressing up trade protectionism as a carbon border tax

BUSINESS & TECH

An electric car developed by Evergrande’s new-energy vehicle unit sits on display at an auto show in Shanghai on April 19. Photo: VCG

Evergrande /

Evergrande NEV’s losses almost double, but report of sale pushes up share price

The new-energy vehicle business of cash-strapped real estate developer China Evergrande Group said it expects to report a widening net loss of 4.8 billion yuan ($740 million) for the first half of this year, citing heavy business development investments.

The preliminary net loss incurred by China Evergrande New Energy Vehicle Group Ltd. (Evergrande NEV) is almost double the loss of 2.45 billion yuan a year earlier, according to a filing Monday with the Hong Kong Stock Exchange. The amount was mainly attributable to the NEV business’s purchase of fixed assets and equipment, as well as research and development.

However, shares of Evergrande NEV rose 8% to close at HK$13.20 Tuesday after Reuters reported Monday night that its parent is in talks to sell stakes in the new-energy vehicle arm and the property management business, Evergrande Property Services Group Ltd., which is also listed in Hong Kong.

Films /

China’s box office flops as Covid flare-ups curb screenings

China’s weekly box office this month hit the lowest level since the beginning of July as some film producers halted the screening of their works and numerous cinemas suspended operations due to the latest Covid-19 flare-ups.

In the week through Aug. 8, the country’s cinemas sold 544 million yuan ($84 million) of tickets, a drop of 29% from the previous seven days, according to statistics from China Movie Data Information Network.

Music /

NetEase’s music service to delay Hong Kong IPO

Cloud Village Inc., the music streaming arm of Chinese gaming giant NetEase Inc., is postponing the launch of a Hong Kong initial public offering that was set to raise about $1 billion, according to people familiar with the matter.

The unit tested demand for its offering last week, but is not going ahead with taking investor orders, the people said, asking not to be identified as the information isn’t public. It intends to wait for better market conditions, one of the people said.

Cameras /

National crackdown on online spying results in dozens of arrests

A national crackdown on illegal surveillance led by departments including the cyberspace watchdog and police resulted in dozens of arrests and the seizure of more than 25,000 illegal webcams.

The Cyberspace Administration of China (CAC) said in a notice Monday that the three-month campaign aimed at activities including the illegal use of cameras to spy on people, the trading of such private videos and the passing on of spying techniques.

Quick hits /

Kuaishou shares rally from last week’s record low

Renault partners with Geely to sell hybrid vehicles in China

Energy Insider /

Power shortage worsens in Guangxi; Geely joins with Renault in hybrid vehicle push

GALLERY

Beijing’s private tutors close up shop

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