Caixin Global – Latest China News & Headlines

Home >


CX Live is Caixin Global's real-time news portal, featuring 24-hour breaking news, short-form analysis, and roundups from business and social media in China.

By Qin Min and Han Wei / May 21, 2019 04:29 AM / Business & Tech

Photo: IC Photo

Photo: IC Photo

China’s top state chipmaker Tsinghua Unigroup Co. Ltd. is reshuffling subsidiaries to consolidate its semiconductor business into a listed arm.

Shenzhen-listed Unigroup Guoxin Microelectronics Co. Monday halted its share trading pending a major asset acquisition. Unigroup Guoxin said it plans to issue new shares to fully acquire Beijing Unigroup Liansheng Technology Co., a unit controlled by parent Unigroup.

The main asset of Unigroup Liansheng is Linxens, a French smart chip components maker that Unigroup acquired last year for a reported 2.2 billion euros ($2.6 billion). The Chinese company has yet to disclose the actual price of the deal.

A source close to Unigroup said the reshuffle is part of Unigroup’s efforts to consolidate its semiconductor assets into the listed arm to enhance business coordination.

Unigroup Guoxin reported 2.5 billion yuan ($360 million) of revenue in 2018, up 34% year on year. Net profit rose 24% to 348 million yuan.

Unigroup Guoxin hasn’t disclose detailed plans for the asset acquisition and said negotiations are still underway.

Related: Networking-Gear Maker Takes Aim at Huawei With Foray Into 5G, CEO Says


By Han Wei / May 21, 2019 04:09 AM / Business & Tech

Photo: VCG

Photo: VCG

Xiaomi Corp. reported stronger-than-expected 27% revenue growth for the first quarter as the smartphone maker gears up for a new business strategy focusing on internet of things powered by artificial intelligence (AIoT).

Hong Kong-listed Xiaomi posted 43.8 billion yuan ($6.33 billion) of revenue for the three months ended March 31, up from 34.4 billion yuan a year earlier and beating an average estimate of 42 billion yuan in a survey of analysts by Refinitiv. Revenue from international markets grew 34.7% year-on-year to 16.8 billion in the first quarter.

Adjusted net income for the first quarter rose to 2.1 billion yuan from 1.7 billion yuan a year ago, according to Xiaomi’s unaudited results announced Monday.

“We will continue to focus diligently on our “Smartphone + AIoT” dual-engine strategy and greatly expand the number of devices connected to our platform,” the company said.

Xiaomi’s smartphone business booked 27 billion yuan of revenue in the first quarter, a 16.2% rise from a year ago. Smartphone sales totaled 27.9 million units, the company said.

Despite a slowdown in China’s smartphone market as the economy cools, Xiaomi said it expected supportive government policies to benefit the industry. Beijing-based Xiaomi ranked fourth globally in terms of the volume of smartphone shipments during the first quarter, according to Canalys.

Earlier this year, Xiaomi announced a plan to invest 10 billion yuan in the AIoT sector over the next five years as the company seeks to expand into the booming market for smart homes backed by internet of things (IoT).

As of March 31, the number of connected devices, excluding smartphones and laptops, on Xiaomi’s IoT platform reached 171 million units, a year-on-year increase of 70%, Xiaomi said.

Related: Chart of the Day: Xiaomi CEO’s Peerless Pay Packet


By Zhao Runhua and Hou Qijiang / May 20, 2019 06:56 PM / Business & Tech

Photo: VCG

Photo: VCG

Chinese e-commerce newcomer Pinduoduo has announced strong Q1 performance on Monday – in fact, stronger than expected.

Beating markets’ expectations, the company’s total revenues for the first three months of 2019 surged 228% year-on-year to 4.5 billion yuan ($677.3 million).

The rise was largely driven by revenues from marketing services, paid for by online merchants in order to spur purchases and payments by the app’s users, an unaudited official release shows.

Pinduoduo had a monthly average of 289.7 million users in the quarter – 74% more than the same time last year. And in the twelve-month period ending March 31, 2019, the app boasted 440 million active merchants, up 50.23% year-on-year.

Some investors believe the results demonstrate Pinduoduo’s strong potential – though the company is still yet to profit and reported a net loss of 1.9 billion yuan for the quarter.

Related: Pinduoduo Gives Alibaba a Run for Its Dominance


By Zhao Runhua / May 20, 2019 06:50 PM / Business & Tech

A newer smart speaker by Baidu. Photo: VCG

A newer smart speaker by Baidu. Photo: VCG

China has blasted past the U.S. to be become the world’s smart-speaker capital.

Just last year, the U.S. was the global leader in shipments of the devices that listen, speak and play audio. But in the first quarter of this year, things changed dramatically.

China shipped more than double the number smart speakers than the U.S. did — 10.6 million units versus 5 million units, a Monday report from market data provider Canalys shows.

This gives China a 51% share of the global market for the quarter; thus, if the trend continues, the country will rapidly dominate the sector.

Canalys’ mobility unit VP Nicole Peng noted that China’s rapid development is largely due to local companies "pouring in a large amount of capital" and offering significant discounts for the products.

In terms of company performances, here’s how the global giants fared, in units shipped:

Amazon — 4.6 million

Google — 3.5 million

Baidu — 3.3 million

Alibaba — 3.2 million

Xiaomi — 3.2 million

Related: Chart of the Day: Smart Speaker Shipments Surge


By Peng Qinqin, Lin Jinbing and Huixia Sun / May 20, 2019 04:06 PM / Finance

Photo: IC Photo

Photo: IC Photo

The current focus of liberalization of interest rates in China is to unify two “tracks” of lending rates — one is the benchmark rates set by the central bank, while the other refers to the ones chiefly set by the market — the People’s Bank of China (PBOC) said Friday in its latest quarterly report.

This is the first time that the monetary authority has specified how it will conduct such a reform.

One of the PBOC’s major tasks this year is to advance the unification of China’s two “tracks” of interest rates this year.

Market participants say that they believe that the lending interest rates should be the first to go, because unifying two tracks of deposit interest rates may probably lead to a fiercer deposit competition among banks, in turn forcing them to raise interest rates on loans to companies, which is in contrast to government efforts to lower borrowing costs for companies amid an economic slowdown.

Related: In Depth: China Grapples With How to Let Market Steer Interest Rates


By Wei Yiyang and Zhao Runhua / May 20, 2019 04:03 PM / Politics & Law

Photo: VCG

Photo: VCG

We now know more about the bribery case against former JP Morgan Securities (JPMS) managing director Catherine Leung Kar-cheung – and who she was allegedly trying to bribe.

Leung offered a job to the son of Hong Jingnan, the former chairman of Hong Kong-listed logistics company Kerry Logistics Network, in exchange for giving JPMS the opportunity to work on Kerry’s IPO, according to materials released during a Monday trial. Hong was also a member of the Chinese People's Political Consultative Conference, China's top political advisory body.

Previously, Hong Kong’s Independent Commission Against Corruption (ICAC) accused Leung of job-for-IPO bribery, but did not specify the company or the chairman.

Kerry Logistics went public in Hong Kong in December 2013, raising nearly 2 billion yuan ($289.31 million).

Related: Former JP Morgan Banker Charged With Bribery in Hong Kong



By Li Liuqian and Tang Ziyi / May 20, 2019 02:28 PM / Business & Tech

Photo: VCG

Photo: VCG

A few Swiss drone manufacturers are eying forays into the booming Chinese market, Caixin learned in Switzerland last week.

A representative of drone startup SwissDrones said the company will begin selling nine drones in China this year, with the number anticipated to hit 25 by 2020.

Its peer Fixposition is in talks with a Chinese agricultural drone company to replace its American partner that currently provides supporting technology as part of its bid to enter the Chinese agricultural drone market, a company representative said.

Industry watchers said Swiss drone makers would fare better entering market sectors such as agriculture and logistics, rather than compete with market dominator DJI, whose drones are mainly used for filming in media and entertainment industries.

Most drone companies in Switzerland are startups founded within the past five years, according to Simon Johnson, vice president of the Drone Industry Association Switzerland. The country has around 80 drone startups, Alexandre Edelmann, an executive of the Swiss Foreign Ministry, told Caixin.

Related: Engineer Jailed for Leaking Drone Giant DJI’s Code Online



By Chen Xuewan, Luo Guoping and Zhao Runhua / May 20, 2019 01:42 PM / Business & Tech

Photo: VCG

Photo: VCG

The wait is over. After suspending share trading for four years, Hong Kong-listed Hanergy Thin Film has decided to privatize itself.

The firm, a subsidiary of world-famous solar energy giant Hanergy, will delist from Hong Kong on June 11, according to a plan approved by its shareholders on Saturday.

After the privatization, shares belonging to existing shareholders will be temporarily transferred to shares of China Common Rich Renewable Energy Investment, a Hanergy Mobile subsidiary founded in the British Virgin Islands in February, according to company announcements.

An affiliate of Hanergy Mobile will seek an IPO on the Chinese mainland, Eddie Lam Yat Ming, a vice chairman of Hanergy Thin Film Power, said Saturday, without giving a timetable. The affiliate, if listed on the mainland, would then purchase China Common Rich’s shares to allow the latter’s shareholders to become its own – yet some investors worry their shares could eventually become nothing if the plan fails.

Related: Scandal-Plagued Solar Firm’s Comeback Faces Same Old Doubts


By Shen Xinyue and Jason Tan / May 20, 2019 12:12 PM / Business & Tech

Photo: VCG

Photo: VCG

Beingmate has gotten its act together enough to be taken off the Shenzhen Stock Exchange’s delisting watchlist, but the once-leading infant formula maker still has a long way to go to convince investors that its fundamentals are strong.

A string of issues still shroud the company, market watchers said — including distribution networks that are complicated by family connections, inconsistent information disclosures, and a feud with its major investor, Fonterra Co-operative Group.

Beingmate was founded in 1999 by childcare expert Sam Xie, and went public in 2011. By 2013, it was the leader of the sector in China, the world’s largest market for infant formula, reaping a net profit of 721 million yuan ($104.76 million).

But in subsequent years it amassed debt and saw a rotating cast of CEOs.

So has it finally turned things around? Check out later today for our in-depth look at the prospects for this once-high-flying dairy maker.

Related: Beingmate Says It’s Being Good, and Wants Stock Exchange to Stop Stigmatizing It



By Teng Jing Xuan / May 20, 2019 10:46 AM / Environment

The Xiangshui explosion left a crater measuring 100 meters in diameter. When Caixin reporters visited the site at the end of April, the crater was still filled with a pungent mix of black, green and red liquids.Photo: Yang Rui/Caixin

The Xiangshui explosion left a crater measuring 100 meters in diameter. When Caixin reporters visited the site at the end of April, the crater was still filled with a pungent mix of black, green and red liquids.Photo: Yang Rui/Caixin

Ironically, the Jiangsu Tianjiayi Chemicals factory was about to undergo a safety inspection the day an explosion destroyed the fertilizer and pesticide plant.

County inspectors had gathered in the compound in eastern China’s Jiangsu province. The heaviest-polluting workshops had been shut down by workers who had been tipped off about the upcoming inspection, and rainwater drains usually used for secretly dumping liquid waste had been scrubbed.

Then, at around 2:30 p.m. an explosion ripped through the compound, killing at least 78 people and leaving a 100 meter crater.

Read our in-depth look into the toxic mix of safety violations and cost-cutting that led to the deadly March 21 explosion.


By Qin Min and Han Wei / May 18, 2019 05:15 AM / Business & Tech

Photo: VCG

Photo: VCG

The Yunnan branch of China Unicom, one of the three big state telecom carriers, will set up a new joint venture with three private partners to develop telecom networks across the southwestern province, marking a major step forward in the state telecom giant’s mixed-ownership reform.

Yunnan Unicom signed an agreement Friday with Hengtong Optic-Electric Co. Ltd., Ningbo Akin Electronic Technology Co. Ltd. and Anhui Sinonet & Xinlong Science & Technology Co. Ltd. on the new venture. The three private investors would jointly hold 85% of the venture, Caixin learned.

The tie-up marks the first mixed-ownership reform initiative in a provincial subsidiary of China Unicom as the central government pushes state enterprises to invite private investors to invigorate business. China Unicom was one of the first to join the pilot reform program two years ago when it formed a partnership with some of China’s biggest high-tech names, which were invited to buy a stake in one of its major units.

Yunnan Unicom has been operating at a loss for several years, and its business has long lagged behind archrival China Mobile in the province. In 2018, the company reported about 1 billion yuan ($145 million) of net loss. Yunnan Unicom started negotiations with potential private investors in October and reached preliminary agreements with the three companies in December.

Related: Unicom Ties Up With Outside Investors in Autonomous Driving


By Wang Juanjuan and Denise Jia / May 18, 2019 05:08 AM / Finance

Photo: IC Photo

Photo: IC Photo

China’s securities regulator concluded an investigation of one of China’s largest listed drugmakers, finding the company fabricating its financial reports from 2016 to 2018.

Shanghai-listed traditional Chinese medicine supplier Kangmei Pharmaceutical Co. Ltd. used fake bank deposit slips to inflate its cash reserves, forged documents for non-existent business activities, and transferred company funds to related parties to trade in its own stock, the China Securities Regulatory Commission (CSRC) said Friday.

Kangmei’s auditor, GP Certified Public Accountants Co. Ltd., the largest auditing company in Guangdong, was also put under investigation for failure to perform due diligence.

Kangmei disclosed April 30 that it was targeted by regulators on suspicion of false financial reports involving a 29.9 billion yuan ($4.4 billion) overstatement of cash on hand.

But the company’s founder and chairman Ma Xingtian described the overstatement as an “accounting error” as results of loopholes in internal controls and financial management. After correcting the accounts, the company’s net profit in 2016 and 2017 would have been reduced by half.

Kangmei was previously involved in several bribery cases involving government officials. According to court documents released last June, the company bribed Cai Ming, former director of the drug safety supervision department at the Guangdong Province Food and Drug Administration, to the tune of 300,000 yuan from 2014 to 2015.

In February, the company was rattled by default risks on $300 million of bonds. The crisis was eased later after the Guangdong provincial government stepped in.


By Peng Qinqin and Denise Jia / May 18, 2019 04:59 AM / Finance

Photo: VCG

Photo: VCG

The Chinese yuan broke the psychologically important 6.9 yuan per dollar level amid escalating trade conflict between the world’s two biggest economies, spurring large inflows of dollars to the onshore yuan market.

The onshore yuan closed at 6.91 per dollar, down 0.46% from Thursday’s official close, while the offshore yuan fell to 6.95 per dollar.

For the seventh trading session in a row, China’s central bank weakened the central parity rate of the Chinese yuan to 6.8859 against the dollar Friday, 171 basis points or 0.25% lower than Thursday, according to the China Foreign Exchange Trade System.

The central parity rate is based on a weighted average of prices offered by market makers before the opening of the interbank market each business day. The central bank allows the yuan to rise or fall by as much as 2% from the central parity rate each day in the onshore spot market.

Traders noticed increasing dollar inflows to the onshore yuan market after midday. When the offshore yuan broke the 6.9 level on Monday, market participants had expected the central bank to defend the currency from weakening past the critical 7 per dollar mark.

“The central bank doesn’t want the yuan exchange rate to be driven by market sentiments,” said Xie Yaxuan, chief economist at China Merchants Securities. He said he expected a low possibility of breaking 7 under the premise that the U.S. dollar doesn’t strengthen significantly.

Related: Yuan Falls to 2019 Low on Setback in Trade Talks


By An Limin and Zhao Runhua / May 17, 2019 06:44 PM / Business & Tech

Photo: VCG

Photo: VCG

In an industry already haunted by disappointing sales, things may get even worse for Chinese car manufacturers soon.

Now, some fear that China’s new emission standards may be a “black swan,” a term used for unexpected incidents that lead to major chain reactions.

The country will soon adopt the sixth phase of its vehicle emission standards, which China claims is even stricter than the European Union’s. Once it goes into effect, dealers will no longer be able to sell vehicles with that don’t meet the rigid requirements.

As China grew increasingly aware of pollution, the government decided in mid-2018 to move up the implementation date for the new standards in certain prominent areas including Beijing, Chengdu and south China’s Pearl River Delta. The new rules will go into effect in July 2019 – one year earlier than their previously scheduled date.

A senior manager of a dealership told Caixin that the industry's inventories, already affected by sluggish sales, will be worsened as a result, because many consumers are holding off buying as they wait for newer cars that adhere to the forthcoming standards. As such, manufacturers are “messes” internally, busy reducing their current inventories by offering major discounts on cars that don’t meet the standards, the manager told Caixin.

Related: Why Vehicle Sales Have Dipped for the First Time in 28 Years


By Huang Rong and Zhao Runhua / May 17, 2019 06:36 PM / Business & Tech

Weng Jieming. Photo: IC Photo

Weng Jieming. Photo: IC Photo

China is giving its state-owned tech enterprises a deadline to act on a 2016 call to improve employee incentives.

The government released a document in 2016 encouraging state-owned enterprises (SOEs) involved in tech to issue equity incentives in addition to wages, to improve employees’ enthusiasm and promote creativity. But many have yet to make “substantial” efforts, Weng Jieming, vice chairman of the State-owned Assets Supervision and Administration Commission (SASAC), said Friday.

Centrally-managed SOEs that fall under the scope of the plan, which is aimed at boosting innovation in the lagging state-owned sector, must start setting up trial incentive reforms this year, Weng said.

Weng said some of the SOEs that already began offering staff alternative incentives saw their annual net profit grown more than 40% in 2018.

Related: Regulator Vows Flexibility in State Sector Revamp


By Niu Mujiangqu and Zhao Runhua / May 17, 2019 05:04 PM / Economy

Photo: VCG

Photo: VCG

With summer approaching, China’s housing markets are getting warmer too, according to April data released by the National Bureau of Statistics (NBS) Thursday.

Prices of new homes Beijing, Shanghai, Guangzhou, and Shenzhen rose 0.5%, 0.3%, 1.1%, and 0.4% from the previous month respectively. Meanwhile, the average price of new homes increased by 0.8% in the 31 second-tier cities surveyed by the NBS and 0.5% in 35 third-tier cities.

The Bureau also reported price increases in existing homes in many of the 70 cities it surveyed, some of which were hit by a slew of tightening measures targeting the industry.

Liu Jianwei, a senior statistician at NBS, said the price increases were within a “stable” range.

While loosened monetary policies were a major factor, local policies including housing discounts for qualified “talent” may also have contributed to heating up urban markets, chief analyst Zhang Dawei from real estate broker Centaline Property told Caixin.

Related: Jump in One Lower-Tier City's Land Prices Hints at Sharp Real Estate Recovery


By Timmy Shen / May 17, 2019 04:26 PM / Society & Culture

A march in support of same-sex marriage held in Taipei in 2015. Photo: IC Photo

A march in support of same-sex marriage held in Taipei in 2015. Photo: IC Photo

In a first for Asia, Taiwan legalized same-sex marriage on Friday, which is also the International Day Against Homophobia, Transphobia and Biphobia. 

Legislators in Taiwan voted in favor of a bill allowing same-sex couples to form “exclusive permanent unions” with a clause that states same-sex couples would be able to “register for marriage” at household registration agencies. Same-sex couples will be able to register for marriage after May 24. 

In 2017, Taiwan’s top judicial body ruled that it was “unconstitutional” to restrict same-sex couples from getting married. It gave the legislature two years to work amend laws accordingly, and set May 24 as a deadline for the changes.  

LGBTQ rights supporters also gathered outside the legislature in Taipei on Friday. “I’m deeply moved,” said Liu Tzu-wei, waiting in the rain for the ruling outside the legislature. “It’s really emotional to see my gay friends finally have the right to get married.” 

Follow us for a full story on the landmark bill, to come soon.


By Wei Yiyang and Liu Jiefei / May 17, 2019 03:59 PM / Business & Tech

Photo: VCG

Photo: VCG

A former JP Morgan executive faces bribery charges for allegedly offering a job to the son of a logistics company chairman in exchange for favorable treatment by the company during its IPO.

Catherine Leung Kar-cheung, former managing director of JP Morgan Chase's Asia-Pacific securities subsidiary, offered the job to the son in January 2010, the Hong Kong Independent Commission Against Corruption said Thursday. The offer was intended to secure the bank special consideration when the logistics firm, which was not named, looked for a bank to hire for its listing. It’s unclear when the IPO took place.

There had been no charges against Leung before she left the company in 2015.

This isn’t the first time the bank has been involved in corruption charges. In 2016, JP Morgan Chase agreed to pay $264 million to the U.S. Securities and Exchange Commission to settle charges that the bank provided favors including jobs for sons and daughters of foreign government officials to win business in the Asia-Pacific region.

JP Morgan Securities began more than a decade ago to hire candidates referred by its clients or potential clients under a client referral program. Employees at or above the rank of executive director or managing director, such as Leung, were also allowed to refer candidates for the junior posts of analyst or associate, ICAC’s statement said.

ICAC is pressing charges against Leung specifically, instead of the bank, Caixin learned from a person close to the matter, who asked not to be named because of the sensitivity of the issue. The referral program was terminated after the bank settled with the U.S. regulator, the person said.


By Isabelle Li / May 17, 2019 03:48 PM / Society & Culture

I.M. Pei's famous Louvre Pyramid in Paris. Photo: VCG

I.M. Pei's famous Louvre Pyramid in Paris. Photo: VCG

Celebrated Chinese-American architect I.M. Pei, who famously designed the Louvre Pyramid in Paris, passed away Thursday in the U.S. at the age of 102.

Pei won the Pritzker Architecture Prize, which is considered the field's highest honor. In addition to the once-controversial Pyramid, he designed the Bank of China Tower in Hong Kong, the East Building of the National Gallery of Art in Washington, D.C, and, more recently, the Suzhou Museum in east China’s Jiangsu province.

Born in southern China’s Guangzhou, Pei spent his childhood in Hong Kong and adolescence in Shanghai before moving to the U.S. for college.

Follow us for a full story about his life, to come soon.


By Yang Ge / May 17, 2019 01:05 PM / Business & Tech

Photo: VCG

Photo: VCG

China’s answer to Starbucks is just hours away from its trading debut in New York, in what will become one of the biggest new initial public offerings (IPOs) by a Chinese firm on the Nasdaq this year.

So far the signs are looking good for Luckin Coffee Inc., whose rapid-fire opening of thousands of its signature minimalist stores has put it on track to soon pass Starbucks in terms of China outlets.

The company’s American depositary shares (ADS) priced at the top of their range, at $17 to be exact, allowing Luckin to sell 10% more shares than its original plan due to strong demand, a source with direct knowledge of the deal told Caixin. At the end of the day, Luckin sold 33 million ADSs, raising a cool $561 million, the source said.

The shares will make their trading debut when U.S. stock markets open for business at 9:30 a.m. New York time Friday.

That debut will cap one of the fastest listings ever by a Chinese firm in New York. Luckin was founded just two years ago by a group of former rental car company executives, and only opened its first store a year and a half ago. It has been losing major money as it opens new stores at a breakneck pace and offers nonstop promotions to bring people through its doors.

Related: China Starbucks Challenger Boosts Fundraising Target for Fast-Moving IPO



Share this article
Open WeChat and scan the QR code
Copyright © 2017 Caixin Global Limited. All Rights Reserved.