Links for Tuesday, September 7, 2021

Notable China news from around the world.

BUSINESS AND TECHNOLOGY:

NEEQ market surges after Xi Jinping plug
Stocks on China’s over-the-counter market, known as the New Third Board, surged after leader Xí Jìnpíng 习近平 last week talked up plans for a new national stock exchange in Beijing.

  • Shares of all 66 premium companies on the National Equities Exchange and Quotations Co. Ltd. (NEEQ), owner of the newly established Beijing Stock Exchange, closed up on Monday.
  • The total market value of the 66 stocks increased 20% from last Thursday.
  • The 66 “select tier” companies are likely to become the first batch to trade on the new Beijing exchange, Caixin reports.
  • Takeaway: The exchange is an attempt to expand funding opportunities for Chinese companies as hurdles to IPO increase in the U.S.

Delivery companies raise worker salaries by 900 yuan a month
Six major parcel delivery companies last week announced they will increase delivery fees to boost couriers’ incomes, per China Daily.

  • Express delivery companies such as ZTO, YTO, and STO among others will charge an extra 0.1 yuan (2 cents) per parcel, with all the extra money going to couriers.
  • Couriers deliver 300 packages on average a day, which means an extra monthly salary of 900 yuan ($139), per Sina Finance (in Chinese).
  • The raise comes on the heels of heightened government scrutiny and Xi Jinping’s push for “common prosperity”: In July, seven government departments jointly issued a statement that outlined the need for delivery companies to attend to workers’ needs.

Chinese rehab bot-maker gets Saudi backing
Fourier Intelligence, a Chinese developer for robots in physical therapy, has received backing from Aramco Ventures, an investment arm of petroleum giant Saudi Aramco, per Nikkei Asia.

  • The Chinese company looks to deepen its ties to Saudi Arabia, with plans to open a joint rehabilitation center there as part of its international expansion.
  • Priced at tens of thousands of dollars, Fourier’s customers are mostly medical institutions. “But in the future, we want to lower the price and enable individuals to buy them,” said the CEO Alex Gu (顾捷 Gù Jié).
  • Context: As China’s population ages, the market for physical rehabilitation is expected to soar more than sixfold to $34 billion by 2025. Fourier’s sales roughly doubled last year to about $46 million.

High-frequency trading: the next crackdown?
Quantitative trading — a sector that has grown rapidly alongside China’s stock market — should be regulated in a way that “best suits” the country, per the state-run Securities Times (in Chinese).

  • The “highly liquid” mainland stock market provides “fertile soil” for high-frequency trading, according to the article, but it can also amplify volatility.
  • High-frequency trading may also put average investors at a disadvantage because those with faster communication speed have an advantage, the article said.
  • Context: ​​In 2020, Chicago-based high-frequency trading firm Citadel Securities agreed to pay a $97 million settlement for alleged trading irregularities during a 2015 market rout in China.

Weibo bans BTS fan accounts
Chinese social media site suspends K-pop fan accounts / NYT (paywall)
China’s Weibo bans BTS fan account for illegal fundraising / AP
“Chinese social media platform Weibo banned a fan club of popular South Korean K-pop band BTS from posting for 60 days, saying it had raised funds illegally, days after photographs of a customized airplane funded by the fan club were posted online.”

Beijing and Didi deny government-led investment, as company ramps up data management
Chinese ride-hailing giant Didi could get state investment / WSJ (paywall)
Didi denies media reports of government-led investment / Bloomberg (paywall)
Beijing city denies it is advising companies to invest in Didi / Reuters
“Reports that China’s Beijing city government is advising state-owned companies to invest in embattled ride-hailing giant Didi Global Inc are untrue, the city government told Reuters in a faxed statement.”
Didi’s founder heads up data security committee, yielding to China’s regulatory demands as ‘a matter of survival’ / SCMP (paywall)
“Didi Chuxing has set up a committee headed by its founder to oversee the overhaul of its data management, as the ride-hailing giant accedes to regulators’ demands in a move described internally as ‘a matter of survival’.”

Soros-BlackRock “war of words” over China investment
George Soros ups the ante in war of words with BlackRock over China, exposing contrast of bets on world’s second-biggest market / SCMP (paywall)
Soros says BlackRock’s China investments likely to lose money – WSJ / Reuters
Last month, via the Financial Times: BlackRock calls for investors to lift allocations to China’s markets.
See also:
Opinion: How Common Prosperity will affect China’s private sector / Caixin (paywall)
Edward Tse, founder and CEO of Gao Feng Advisory Company, downplays private sector fears about the equality push, writing, “One can expect continued growth in demand for a wide range of products and services leading to better healthcare and an improved lifestyle.”

Beijing to open up markets to foreign investors, but Shanghai says no to VIEs
China to push on with opening capital markets to foreign investors / Reuters
“China will further open its capital markets to foreign investors, the country’s top securities regulator said on Monday, adding that it will pursue pragmatic cross-border cooperation to regulate overseas-listed Chinese companies.”
Shanghai suspends key approval on route to offshore listings / Bloomberg (paywall)
“Officials in China’s financial capital of Shanghai are closing a route used for decades by companies operating in the technology sector to draw foreign investment.”

Chinese companies still push for New York IPOs
Chinese companies seek to reopen path for New York IPOs / Nikkei Asia
“A flock of Chinese companies is attempting to push ahead with close to $1 billion-worth of initial public offerings in New York, shrugging off hurdles put in place by regulators in Beijing and Washington to curtail such share sales.”

Beijing to set tutoring prices as educational crackdown hits real-estate
China says government to set prices for after-school classes / Bloomberg (paywall)
“China said local governments should set the fees for after-school tutoring institutions that offer compulsory education subjects, another step in the country’s efforts to overhaul the private education sector.”
China freezes tutoring firms’ fees, enrollment pending approvals / Bloomberg (paywall)
China’s educational crackdown hits apartment prices in its biggest cities / WSJ (paywall)
“The market for what had been some of the most desirable apartments in China’s biggest and wealthiest cities has seized up, as Beijing intensifies a campaign to open access to education.”

Beijing offers up to $155,000 rewards for fraud whistleblowers
China doubles reward for consumer fraud whistleblowers to up to $155,000 / Nikkei Asia

Regulations loom over finance, property, and esports despite Beijing reassurances
China’s esports powerhouse status undermined by tough new gaming rules for under 18s / Reuters
“China is the world’s biggest esports market with an estimated 5,000-plus teams, but the government’s tough new rules aimed at curbing gaming addiction are set to make careers like Zhang’s hard to emulate.”
China’s Vice Premier Liu reassures businesses amid crackdowns / Bloomberg (paywall)
China finance regulators pledge to tighten supervision / Bloomberg (paywall)
China official says intelligent vehicles can pose security risks / Bloomberg (paywall)
What if China’s property crackdown goes overboard too? / WSJ (paywall)
China cracks down on tech sector as curbs on user data take effect / RFA

Quant traders shrug off regulatory talk
China state media calls for regulation over quantitative trading / Bloomberg (paywall)
China’s ‘quant’ traders fend off regulatory flak / Reuters

A boost in China’s imports and exports, despite COVID-19 setbacks
China’s economy gets welcome boost from surprisingly strong August exports / Reuters
“China’s exports unexpectedly grew at a faster pace in August thanks to solid global demand, helping take some of the pressure off the world’s second-biggest economy as it navigates its way through headwinds from several fronts.”
China’s exports strengthen, despite COVID-19 disruptions / WSJ (paywall)
China’s iron ore imports hit record in boost to Australia / Bloomberg (paywall)
China trade surges to new records on strong U.S., EU demand / Bloomberg (paywall)

Tech stocks jump after Tencent buys back shares
Chinese technology stocks jump after Tencent buys back shares / Bloomberg (paywall)

Aibee, a China-backed AI startup, seeks new funds
Sequoia China-backed AI startup Aibee said to seek new funds / Bloomberg (paywall)

JD.com founder takes a step back
Chinese tech giant JD.com founder Richard Liu to step back from daily business / WSJ (paywall)

Chinese developer Oceanwide mulls office sale
Chinese developer Oceanwide weighs office sale for $3 billion / Bloomberg (paywall)

Chinese firms strengthen sexual-harassment policies
Chinese firms adopt more rigorous sexual-harassment policies after Alibaba scandal / WSJ (paywall)

More company pledges for “common prosperity”
China’s Alibaba to invest billions by 2025 for ‘common prosperity’ / Reuters via Guardian
Last month, via SCMP: Tencent earmarks US$7.7 billion for ‘common prosperity’ to answer Xi Jinping’s call for equality.
Related: Does ‘common prosperity’ mean the end of capitalism in China?

China’s SMIC plans to build big chip production in Shanghai
China’s SMIC to build $8.87 billion chip production line in Shanghai / WSJ (paywall)
“Semiconductor Manufacturing International Corp., China’s largest chip maker, said it is teaming up with the Shanghai government to build an $8.87 billion chip production line in the city, furthering China’s ambitions for semiconductor self-sufficiency in the middle of a global chip shortage.”

Hong Kong’s retirement plan drained over exodus
Hong Kong permanent retirement outflows hit seven-year high / Bloomberg (paywall)
“Outflows from Hong Kong’s mandated retirement plan from people leaving the city hit the highest in at least seven years in the three months through June amid China’s tightening grip on the city and strict quarantine measures. “

SCIENCE, HEALTH, AND ENVIRONMENT:

Gene test under scrutiny for Chinese military ties
BGI prenatal gene test under scrutiny for Chinese military links / Reuters
“Health regulators in five countries are examining a prenatal test that collects the DNA of women and fetuses for research, while some doctors that promoted it and clinics that sell it say they were unaware the company that produces it also conducts research with the Chinese military.”

Landing a hypersonic drone
Chinese air force may have cracked how to land a hypersonic drone / SCMP (paywall)

Twin pandas born at Madrid Zoo
Wiggling twin panda cubs are born at the Madrid Zoo / AP

Chang’e-5 orbiter heads back to the moon
China’s Chang’e-5 orbiter is heading back to the moon / Space News

New panorama shots from China’s Mars rover
China’s Zhurong Mars rover returns panorama ahead of planetary blackout / Space

Will removing wild animals from the menu stop another pandemic?
What can stop people eating wild animals? A new study looks for answers / SCMP (paywall)

Chinese researchers find Sinvoac booster aids COVID-19 immunity
Delta vaccine: Chinese researchers find Sinovac booster aids immune response to devastating variant / SCMP (paywall)

Hong Kong reopens China border after COVID-19 restrictions
Hong Kong to reopen China border for some residents as govt eases COVID-19 rules / Reuters
China-to-Hong Kong travelers will no longer need quarantine / AP

China’s will “follow its own climate road map” ahead of COP26 summit
China ‘tells U.S. envoy John Kerry it will follow its own climate road map’ / SCMP (paywall)
Ban on overseas coal projects could enhance China’s standing at COP26 climate summit / SCMP (paywall)
“China is under pressure to set more ambitious climate targets ahead of November’s United Nations COP26 summit in Glasgow, with diplomats and negotiators calling on the country to achieve carbon neutrality by 2050 – a decade earlier than pledged by President Xi Jinping last September.”

Lab leak theory
Details emerge about COVID-19 research at Chinese lab / The Intercept
“The Intercept has obtained more than 900 pages of documents detailing the work of EcoHealth Alliance, a U.S.-based health organization that used federal money to fund bat coronavirus research at the Chinese laboratory…The documents raise additional questions about the theory that the pandemic may have begun in a lab accident.”

POLITICS AND FOREIGN AFFAIRS:

Germany’s new China ambassador dies “sudden death”
Germany’s ambassador to China Jan Hecker dies suddenly days after taking office / SCMP (paywall)
Merkel confidant dies days after becoming China ambassador / Bloomberg (paywall)
German ambassador to China, ex-Merkel adviser, dies at 54 / AP
“The Foreign Ministry announced Jan Hecker’s ‘sudden death’ in a short statement in the early hours of Monday. It didn’t give details of when or where Hecker died, or specify a cause of death.”

Is China’s project in El Salvador edging out U.S. power?
A project in El Salvador shows how China is exerting growing power in America’s backyard / NBC
“American intelligence and military officials say the port project would give China a significant economic and strategic foothold in what has traditionally been an American sphere of influence.”

Uyghur rights activist barred from Kazakhstan
Prominent campaigner for Uyghur rights in Xinjiang barred from Kazakhstan / AFP via Guardian
“A prominent campaigner who has documented the plight of Muslim minorities in China’s Xinjiang region says he has barred from entering neighbouring Kazakhstan.”

Cleaning up after the death of Apple Daily in Hong Kong
In Hong Kong, Jimmy Lai’s media company moves to close down / NYT (paywall)
Directors of Hong Kong’s Apple Daily publisher quit, citing national-security crackdown / WSJ (paywall)
Next Digital board cites Hong Kong ‘climate of fear’ in resigning / Bloomberg (paywall)
Jimmy Lai’s Next Digital heads for liquidation after national security raid / RFA

Hong Kong pro-democracy groups labelled “foreign agents,” and more under the National Security Law
Group behind Hong Kong’s Tiananmen vigil denies foreign ties / AP
Hong Kong activists slam government for foreign agent label / AP
“The Hong Kong government is arbitrarily labeling pro-democracy organizations as foreign agents, making them subject to prosecution under a tough national security law, a leader of the group that has organized the city’s annual Tiananmen candlelight vigils said Tuesday.”
Protest fund facing foreign collusion probe to stop taking donations ‘until further notice’ / SCMP (paywall)
“The 612 Humanitarian Relief Fund is closing almost a month earlier than expected after police investigation into its activities.”
HK pro-democracy body won’t comply with police request: SCMP / Bloomberg (paywall)
Hong Kong protests: man, 57, arrested on suspicion of harassing District Court judges over cases stemming from 2019 unrest / SCMP (paywall)
Hong Kong: international companies reconsider future in wake of security law / Guardian

U.S. visa extensions for Hongkongers
U.S. visa extension to offer 18-month work permit to ‘eligible’ Hongkongers / RFA

Beijing pushes Guangdong integration
China offers tax breaks to boost Macau-Guangdong integration / Bloomberg (paywall)
“China plans to push forward cooperation between Macau and Guangdong over Hengqin Island, aiming for a ‘big increase’ in Macau residents living and working in the zone by 2024, according to guidelines carried by the official Xinhua News Agency.”
China to expand Shenzhen’s Qianhai zone, eyeing H.K. / Bloomberg (paywall)
“China announced an expansion of the Qianhai economic cooperation zone in Shenzhen on the same day as a visit of Hong Kong Chief Executive Carrie Lam to the border city.”
China announces border ‘cooperation’ zone in macau, eyes high-end chip development / RFA
Guangdong-Macao in-depth cooperation zone in Hengqin to bring great opportunities to Macao / Xinhua

China pledges “self-reliant” aviation by 2025
China to step up aviation self-reliance by 2025 amid U.S. tensions, Shanghai to manufacture key engine parts / SCMP (paywall)
“Efforts by China to make its aviation industry more self-reliant will increase in the next five years, with plans in place to manufacture key parts for commercial engines in Shanghai by 2025.”

Taiwan says 19 Chinese warplanes entered ADIZ, looks to boost air force
Taiwan says 19 Chinese military aircraft entered ADIZ Sunday / Bloomberg (paywall)
China sends 19 aircraft into Taiwan’s air defence zone / Guardian
Taiwan reveals high cost of PLA aggressive sorties with air force budget boost proposal / SCMP (paywall)
“Taiwan independence” a dead-end: FM spokesperson / Xinhua

Taiwan warns Honduras over hinted switch to Beijing
Taiwan warns Honduras of ‘false’ incentives to switch allegiance to Beijing / AFP via SCMP (paywall)

Chinese FM to visit Southeast Asia and South Korea
Chinese foreign minister on fresh mission to Southeast Asia and South Korea / SCMP (paywall)
Chinese FM to visit S.Korea amid stalled N.Korea talks / Reuters
“China’s foreign minister will visit South Korea next week amid stalled denuclearisation talks with North Korea, Seoul’s foreign ministry said on Tuesday.”

South China Sea tensions
Chinese research ship on maiden voyage to South China Sea amid distrust by neighbours / SCMP (paywall)
Britain sends navy patrol boats on Indo-Pacific mission / SCMP (paywall)
U.K. aircraft carrier visits Japan for drill amid China worry / AP
“Japan’s defense minister on Monday welcomed the British aircraft carrier HMS Queen Elizabeth as it made its first Japanese port call, saying the involvement of European nations in the Indo-Pacific region is key to peace and stability as China’s military strength and influence grow.”

U.K. national security review for graphene firm taken over by Chinese scientist
U.K. orders national security review of graphene firm’s takeover by Chinese scientist / Guardian
“Business secretary Kwasi Kwarteng has ordered a national security review of a takeover by a Chinese academic of a small Welsh manufacturer of graphene – the thinnest and lightest ‘supermaterial’ known.”

U.S. voices support for two Canadians detained in China
U.S. supports 2 Canadians marking 1,000th day in Chinese cells / AP
“U.S. Secretary of State Antony Blinken said Sunday that ‘people are not bargaining chips,’ adding the U.S. stands with Canada in calling for the release of two Canadians detained in China for 1,000 days.”

Hong Kong tycoons get new curbs on political power
Hong Kong tycoons limited to two election seats per family, SCMP says / Bloomberg (paywall)
“Hong Kong property tycoons will be limited to two seats per family on the body that chooses the city’s leader, the South China Morning Post reported, the latest move by China to curb traditional power bases in the Asian financial hub.”

NATO chief alarmed by China’s new nuclear missile silos
Nato chief alarmed by construction of new Chinese nuclear missile silos / DPA via SCMP (paywall)

Italy-China pledge cooperation as G20 nears
Italy’s Draghi, China’s Xi discuss Afghanistan, G20 summit / Reuters
“The two leaders also discussed cooperation between their countries at a bilateral level and in the context of a summit of the Group of 20 rich nations which Draghi will host in Rome next month, the statement said.”
Xi says China, Italy should strengthen cooperation in winter sports, industries / Xinhua

China tests overland trade route to Indian Ocean
China tests new Myanmar trade route in boost to ties: Post / Bloomberg (paywall)

China’s evolving industrial plans stokes U.S. concerns
China’s industrial planning evolves, stirring U.S. concerns / WSJ (paywall)
“But a subtle yet critical recalibration by Beijing begun almost 15 years ago has recently set off alarms in Washington about China’s goals and tactics — not least because China is catching up in many cases by adopting past U.S. approaches.”

Does “common prosperity” lead away from or towards the middle income trap?
Warning of income gap, Xi tells China’s tycoons to share wealth / NYT (paywall)
“By spreading wealth more evenly, the Communist Party says, more Chinese would have the spending power to drive the economy and reduce China’s reliance on Western capital and know-how, creating the foundation for a new stage of growth.”
Xi Jinping may be leading China into a trap / Bloomberg (paywall)
Matthew Booker argues that South Korea and Taiwan’s economic development “points to a need for the state’s role to retreat as markets advance. Ad hoc interventions by governments may work at more basic levels of development,” but at higher income levels, “economies become too complex for command-and-control management by individuals.”

SOCIETY AND CULTURE:

Foreign students beg to return to China
China’s foreign students beg Beijing to allow them to return to the country to resume university study / SCMP (paywall)

High costs to move a massive statue in Hubei
Moving a colossal statue is costing millions. Officials are angry. / Sixth Tone

Mountaineering without vision
A blind man’s epic quest to conquer Everest / Sixth Tone