Links for Monday, August 2, 2021

Notable China news from around the world.

BUSINESS AND TECHNOLOGY:

Xpeng to build new plant in Wuhan
U.S.-listed electric-car maker Xpeng has started building a new plant in Wuhan, per Caixin.

  • The facility, built in partnership with the local government, boasts an annual output of 100,000 vehicles, which would be worth $4.6 billion.
  • In July, Xpeng achieved its highest-ever monthly deliveries of 8,040 electric vehicles, a year-on-year increase of 228%.
  • More factories to come: Aside from its current plant in Zhaoqing, Xpeng is also building a new base in Guangzhou set to go online by the end of 2022.
  • More on EVs: See our guide to China’s booming electric vehicle ecosystem.

China gives driverless cars a big push
China is revamping regulations on driverless car testing to accelerate the commercialization of self-driving tech, per Caixin.

  • The regulations (in Chinese), published by the Ministry of Industry and Information Technology, allows qualified firms to conduct trials of autonomous vehicles on highways and city streets.
  • Driverless cars that can record driving data for at least 90 seconds before any crash or system failure can apply for the trial.
  • Human drivers are required in the self-driving trials, which means they are held responsible for any traffic violations.
  • Takeaway: The regulations are an attempt to bring some tailwind to a strategic industry that the general public still has reservations about.

China’s factory activity growth slips to 15-month low
China’s factory activity growth slipped sharply in July as demand contracted for the first time in over a year, in part due to high product prices, per Reuters.

  • The Caixin/Markit Manufacturing Purchasing Managers’ Index (PMI) fell to 50.3 last month from 51.3 the month before, the lowest level since April 2020.
  • The Chinese economy has largely recovered from COVID-19 disruptions, but is facing new challenges such as higher raw material costs, which dragged on profit growth at industrial firms in June.

One hundred and thirty-five Chinese companies make it to this year’s Fortune 500
Fortune magazine has just announced the list of the world’s top 500 companies by total revenue for the fiscal year 2021.

  • 135 companies from China (including Hong Kong) made the list.
  • Domestic internet companies did particularly well this year, but the three Chinese companies in the top 10 are national electric provider State Grid, and state-owned energy companies China National Petroleum and Sinopec.
  • JD, which entered the top 100 on the list for the first time, ranked 59th, was the highest-ranked Chinese internet company.
  • Tencent, which moved from No. 132 to 65, had the highest profit margin of all Chinese companies on the list at 33.2%.

Investors rethink strategy after a bad July
China tech selloff resumes, adding to month of huge losses / WSJ (paywall)
“Big Chinese tech stocks lost hundreds of billions of dollars in combined market value in July, reflecting rising investor concern about how the sector will fare under a barrage of regulatory pressure from Beijing.”
China presses on with crackdown on tech data and overseas IPOs / Bloomberg (paywall)
Investors lost hundreds of billions on China in July / WSJ (paywall)
“American investors are asking whether China Inc. is still worth the risk following a widening series of regulatory crackdowns that have wiped some $400 billion off the value of U.S.-listed Chinese companies.”
Sell tech, buy green is Wall Street’s playbook for trading China / Bloomberg (paywall)
Venture capital firms turn to India with China’s tech crackdown / Bloomberg (paywall)

What is Beijing thinking?
Xi Jinping’s capitalist smackdown sparks a $1 trillion reckoning / Bloomberg (paywall)
Tom Hancock and Tom Orlik write, “After 40 years of allowing the market to play an expanding role in driving prosperity, China’s leaders have remembered something important — they’re Communists.”
China watchdog says to continue with efforts to expand access for foreign investors / Reuters
“China’s banking and insurance watchdog said it would seek to stabilize the expectations of foreign investors by continuing with efforts to implement policies designed to expand their market access.”
China’s efforts to calm investor jitters help markets rebound / Reuters
“China stepped up attempts to calm frayed investor nerves after a wild markets rout this week by telling foreign brokerages not to ‘overinterpret’ its latest regulatory actions, setting the stage for a rebound in beaten-down stocks on Thursday.”

China reacts to new U.S. disclosure rules for Chinese IPOs
SEC to set new disclosure requirements for Chinese company IPOs / WSJ (paywall)
“The Securities and Exchange Commission will increase scrutiny of Chinese companies that aim to sell shares in the U.S. following new restrictions from China’s government on companies that raise capital offshore.”
China seeks more communication with U.S. on overseas IPOs / Bloomberg (paywall)
“The China Securities Regulatory Commission is seeking to step up communication with the SEC to find a suitable resolution, it said in a statement Sunday, after the U.S. regulator said it would require Chinese companies seeking listings to improve risk disclosures.”

Oil hit over China and Delta variant concerns
Oil prices hit by concern over Chinese economy and higher supply / Reuters
“Oil prices tumbled about 4% on Monday as weak economic data from China and the United States, the world’s top oil consumers, and higher crude output from OPEC producers stoked fears of weakness in oil demand and oversupply.”
Wall Street set to open higher; Oil hit by China demand concerns / Reuters
Crude oil retreats as Delta’s persistent menace rattles nerves / Bloomberg (paywall)
“Oil tumbled by the most in two weeks as a fast-spreading delta variant posed a threat to demand and as data out of China signaled a slowdown.”

More regulations for tech giants
Tech giants’ rise requires new financial oversight, BIS says / Bloomberg (paywall)
China orders 25 tech giants to fix raft of problems / Bloomberg (paywall)

Evergrande surges after $418 million sale
Evergrande rises after $418 million stake sale in internet unit / Bloomberg (paywall)
“China Evergrande Group shares surged after the debt-laden developer announced plans to sell more of its internet unit for HK$3.25 billion ($418 million) to ease funding pressure.”
China’s Evergrande to sell stakes in HengTen internet unit for $418 mln / Reuters
“China’s most indebted property developer Evergrande Group has agreed to sell stakes in its internet unit HengTen Networks Group Ltd worth a total of HK$3.25 billion ($418.2 million), an exchange filing showed on Sunday.”

A new tech-focused university planned in Dongguan
China’s ‘MIT of Greater Bay Area’ is a bid to turn southern region into innovation powerhouse / SCMP (paywall)
“A new university is planned to open in Dongguan in 2023, and offer a focus on science and technology to enhance the area as an economic and business hub.”
China’s tech hub Shenzhen sees economic performance tumble against competition in the first half / SCMP (paywall)

iPhone factory faces worker shortage after Zhengzhou floods
World’s largest iPhone factory escapes Henan floods but facing worker shortage as it ramps up production, local media reports / SCMP (paywall)

Solar power and coal
Behind the rise of U.S. solar power, a mountain of Chinese coal / WSJ (paywall)
Two U.S. companies seek continued tariffs on imported solar panels / WSJ (paywall)
Coal projects in Asia face dwindling financing as climate pressure mounts / WSJ (paywall)

SCIENCE, HEALTH, AND ENVIRONMENT:

Beijing takes strict measures to prevent Delta variant spread
Transport into Beijing cut to guard capital ‘at all costs’ against COVID-19 surge / SCMP (paywall)
“Despite the high coronavirus vaccination rate in Beijing, some flights, trains and buses to the Chinese capital have been cancelled and other control measures stepped up to stop an outbreak of the COVID-19 Delta variant spreading through the city…More than 350 people in 27 mainland cities have been infected, including confirmation on Monday afternoon of seven infections in the central city of Wuhan.”
Beijing announces new COVID-19 measures / That’s Beijing on WeChat
“Residents are advised not to leave Beijing, except for essential purposes. Those who leave or travel to Beijing must have a negative COVID-19-test result issued within 48 hours of departure. Travelers must also show a green health code.”
China reports 75 new COVID-19 cases as Delta cluster expands / Reuters
China tracks thousands of visitors to theatre to stop latest COVID-19 outbreak / SCMP (paywall)
Wuhan finds COVID-19 cases as Delta variant drives China’s outbreak / Sixth Tone

Possibility of booster shots for vulnerable people
China considers plans to give most vulnerable people vaccine booster shots / SCMP (paywall)
Shao Yiming, an infectious diseases researcher at the Chinese CDC, said that “for the elderly with weaker immune systems and patients with underlying diseases, as well as people who need to travel to high-risk areas for work, or workers who face high exposure risks, [we] are studying whether there is a need for a third booster shot and when.”

Nanjing outbreak linked to Russia flight
Recent COVID outbreak in China’s Nanjing linked to flight from Russia-official / Reuters
“Cases in the early stage of the outbreak were workers at Nanjing Lukou International Airport who cleaned an airplane after it arrived on a flight from Russia, [a health official in Nanjing] said. The gene sequence of the virus found in samples of the workers were identical to that from an infected person arriving from the flight, he said.”

China’s COVID-19 app crashes
China’s COVID-19 tracking app crashes as traffic surges amid fresh coronavirus outbreak / SCMP (paywall)

COVID-19 hits Zhengzhou
Flood-hit Chinese city of Zhengzhou starts mass COVID-19 tests after spike in cases / SCMP (paywall)
COVID-19 reaches flood-hit city of Zhengzhou as virus continues to spread across China / SCMP (paywall)

Virus sequence database mystery
Those virus sequences that were suddenly deleted? They’re back / NYT (paywall)
“Chinese researchers have uploaded genetic sequences of coronaviruses to a scientific database more than a year after they took them offline.”

POLITICS AND FOREIGN AFFAIRS:

Zhengzhou floods death toll revised to at least 302
The death toll from flooding in China rises sharply, to more than 300. / NYT (paywall)
‘We were lucky the dam didn’t give way’: How central China floods exposed risk of worse disaster / SCMP (paywall)
China orders Henan flood probe after death toll surges / Bloomberg (paywall)

Will China’s tutoring ban just make the rich richer?
China targets costly tutoring classes. Parents want to save them. / NYT (paywall)
“Many families and experts say Beijing’s education overhaul will help the rich and make the system even more competitive for those who can barely afford it.”

China’s education ministry names new Party chief
China’s education ministry says Huai Jinpeng is its new party chief / Reuters

Hong Kong and Taiwan at the Olympics
Taiwan’s gold medal win over China in badminton raises tension. / NYT (paywall)
“On Saturday, the Taiwanese badminton duo Lee Yang and Wang Chi-lin prevailed over Liu Yuchen and Li Junhui of China, winning Taiwan’s first gold medal in the sport…In a Facebook post afterward, Lee said his gold medal was ‘dedicated to my country, Taiwan.’”
Hong Kong police arrest man for booing national anthem / AP
As China absorbs Hong Kong, why do both get Olympic teams? / AP

Hong Kong under the National Security Law
Hong Kong protester is sentenced to 9 years in first security law case / NYT (paywall)
“A Hong Kong court sentenced a protester to nine years in prison on Friday for terrorism and inciting secession, the first demonstration of the teeth of a sweeping new national security law aimed at those who might speak out against Beijing.”
Hong Kong cuts ties with teachers union, saying it incited protests / WSJ (paywall)
Hong Kong-born former CIA officer accused of spying for China ‘can’t remember things’ / SCMP (paywall)
Hong Kong authorities arrest pro-democracy singer for ‘corrupt conduct’ / Reuters
He sang 2 songs at an election rally. Hong Kong says he violated the law. / NYT (paywall)

Maritime disputes
China says Taiwan Strait crossing by U.S. warship shows America as ‘biggest destroyer of peace’ / SCMP (paywall)
“China accused the United States on Thursday of being the single biggest cause of friction and threats in the Taiwan Strait, soon after a U.S. warship crossed the waterway for the seventh time this year.”
British navy ‘shows global ambitions’ with aircraft carrier’s South China Sea mission / SCMP (paywall)
“The presence of Britain’s new aircraft carrier and scheduled permanent deployment of two warships to Asia reflects the country’s ambition to become a major global player and its commitment to U.S. plans to contain China, according to military analysts.”

U.S. to retry Hu Anming case
U.S. to retry University of Tennessee professor on fraud charges following mistrial, drawing outcry / SCMP (paywall)
“The U.S. Department of Justice will retry a fraud case that ended in a hung jury against a former University of Tennessee professor accused of lying about ties to a Chinese university.”
Context on SupChina: A scientist’s future hangs in the balance after another failure of the China Initiative.

U.S.-China relations
Chinese embassy blasts U.S. defense chief for ‘attack and smear’ in Singapore lecture / SCMP (paywall)
China’s ‘demands’ on Taiwan, regional issues seek to constrain U.S. action / SCMP (paywall)
Sherman talks signal firm U.S. support for Taiwan but ‘no blank cheque’ / SCMP (paywall)
U.S. lawmakers call on Hilton to cut link to Xinjiang project at site of bulldozed mosque / SCMP (paywall)
Biden nominates Huawei prosecutor Thea Kendler for key China export post / Reuters via SCMP (paywall)
Joe Biden, U.S. lawmakers working on parallel tracks to bolster China tech policy / SCMP (paywall)
U.S. trade representative’s top China adviser resigns / WSJ (paywall)
Mark Wu “cited family issues as another reason for his departure, which he said had nothing to do with the continuing USTR review of China policy.”
Japan-U.S. ties must not harm China, Chinese envoy warns / SCMP (paywall)

Friction over Uyghur activist detained in Morocco
Interpol suspends red notice for Uyghur activist Yidiresi Aishan / SCMP (paywall)
“Interpol has suspended a red notice for a Uygur man sought by Beijing after the international police body received ‘new information.’”

Beijing rejects EU request to meet Ilham Tohti
China stands firm against EU bid to meet jailed Uyghur scholar / Bloomberg (paywall)
“China blamed European demands to meet jailed Uyghur scholar Ilham Tohti for preventing diplomatic visits to Xinjiang, suggesting little chance of a breakthrough in a stalemate at the center of tensions between the two sides.”

Can the G7 help resolve trade disputes?
China ‘open minded’ on G-7 talks over issues at heart of U.S.-China trade war, WTO ambassador says / SCMP (paywall)
“China’s ambassador to the World Trade Organization (WTO) said there is scope for Beijing to work with the United States, the European Union and other Western nations on an agreement aimed at curbing the practices at the heart of the still-simmering U.S.-China trade conflict.”
China keeping ‘open mind’ on G-7 talks aimed at trade abuses / Bloomberg (paywall)

Duterte’s latest mood change
How Philippine leader’s U-turn over U.S. forces helps keep up the pressure on China / SCMP (paywall)
Philippine leader reverses course, keeps U.S. defense pact / WSJ (paywall)

SOCIETY AND CULTURE:

A morale boost for Hong Kong
Olympic success gives Hong Kong an emotional lift in hard times / NYT (paywall)

Is China’s grueling work culture geared for a revamp?
12-hour days, six days a week / NYT (paywall)

Young academics struggle to prove their worth
For young Chinese academics, it’s either get promoted, or else / Sixth Tone

Buying luxury is, well, a luxury
Chinese shoppers complain bagging a Hermès was never harder / Sixth Tone
“Luxury brands’ sales tactics come under scrutiny as supplies appear to have tightened since the start of the COVID-19 pandemic.”

Volleyball is still beloved, despite early ousting
For China’s most beloved team, it’s the end of an era / Sixth Tone