CX Daily: China Local Governments’ Fiscal Stress May Roll Over to 2023, Think Tank Warns

Fiscal /

China local governments’ fiscal stress may roll over to 2023, think tank warns

China’s local governments struggled to balance revenue and spending last year as massive tax relief, “zero-Covid” outlays and a property market meltdown drained their coffers. One state-backed think tank warns that the fiscal strain could continue to plague localities in 2023.

The Chinese Academy of Fiscal Sciences (CAFS) Monday published a report based on surveys with 521 city- and county-level finance departments, detailing how local governments have relied heavily on transfer payments — funds distributed by upper-level governments to lower-level ones — and accumulated huge debts to finance their day-to-day operations and underpin local economies.

Land sales slump isn’t killing local budgets, finance minister says

Containers /

How a global shortage turned into a shipping container glut

In late February, the Taicang factory of China International Marine Containers (Group) Co. Ltd. was unusually quiet. Only a few delivery trucks loaded with steel plates parked in front of a gate for incoming materials. The gate for container deliveries was closed.

Inside the plant, a worker was operating a machine to pile up newly built containers six layers high. Since 2022, new containers have stacked up in the plant, which has annual capacity to produce 700,000 standard containers. Only one of the three production lines is in operation, and three daily work shifts have been reduced to one, a worker told Caixin.

FINANCE & ECONOMY

Tian Huiyu

Corruption /

Corruption charges filed against former China Merchants Bank president

Tian Huiyu, the former president of China Merchants Bank Co., was charged with committing violations including taking bribes, insider trading and abuse of power after nearly a year of investigations.

Shanghai- and Hong Kong-traded China Merchants Bank (CMB) is China’s seventh-largest commercial lender by total assets, behind the nation’s “Big Six” state-owned banks. The downfall of Tian, who served as CMB president for almost nine years before being removed by its board in April 2022, has been one of the most-watched corruption cases in China’s sweeping campaign to clean up financial misconduct.

Law /

Political adviser calls for law to protect private sector as growth slows

Pi Jianlong, a member of the Chinese People’s Political Consultative Conference, urged the country’s top lawmakers to enact a legislation that specifically protects the rights of private businesses and curbs state functionaries from illegally interfering in economic disputes.

Pi told Caixin he would submit a proposal for the law during the “Two Sessions,” the country’s most important annual political gatherings, which kick off Saturday in Beijing.

Quick hits /

China is willing to take constructive part in debt talks, premier says

Opinion: U.S.-China trade decoupling is underway

BUSINESS & TECH

The GE Beijing R&D Building in Beijing in September 2020. Photo: VCG

Survey /

U.S. firms weigh China alternatives amid political tension, survey shows

A majority of U.S. companies say they are maintaining their operations in China, while uncertainty in bilateral relations remains to be their top business challenge, a recent American Chamber of Commerce in China report showed.

In an annual Business Climate Survey released Wednesday, nearly three-quarters of the surveyed members reported that they have no plan to move their supply chain outside of China. However, the poll did find a 10 percentage points increase in the number of companies considering or having already started to relocate manufacturing and sourcing outside of China, up from 14% in 2022.

Patent /

Xiaomi goes toe-to-toe with Huawei in license, patent disputes

Chinese smartphone-maker Xiaomi Corp. is negotiating with Huawei Technologies Co. Ltd. to obtain licenses to use its telecom and phone technology after the tech conglomerate reported it to China’s national IP regulator for allegedly infringing some of its patents.

Xiaomi told Caixin it is “actively” trying to resolve the issue after the country’s National Intellectual Property Administration (NIPA) accepted Huawei’s case earlier this year.

Honor /

Huawei spinoff Honor takes on Apple in Europe

Chinese smartphone maker Honor aims to take on Apple Inc. and Samsung in the premium phone market in Europe, Chief Executive Officer Zhao Ming told Caixin during the Mobile World Congress (MWC) in Barcelona, Spain.

Honor, which was spun off from Huawei Technologies Co. Ltd., is gearing up an expansion in the European market this year and expects sales there to double annually over the next few years, Zhao said.

Jockey /

Interview: Jockey Club’s CEO lays out plan to develop horse racing in Greater Bay Area

“What probably a lot of people don't know is that we are a little IT company,” said the organization’s CEO Winfried Engelbrecht-Bresges. “We have 700 people in our IT development office, now with 200 in Shenzhen. And we will expand it even more.”

A former professional soccer player in his youth, Engelbrecht-Bresges joined the HKJC in 1998 and has been chief of the club since 2007. He is known for sporting a red tie that he often wears for good luck.

Quick hit /

Investors bet China’s telecom majors have a lot to gain from digitalization plan

Long Read /

How China’s military gearheads are driving a new trend in toys

GALLERY

Xi hosts Belarusian President

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