Links for Wednesday, May 27, 2020

BUSINESS AND TECHNOLOGY:

• Data shows signs of economic recovery, but weak global demand
  Getting a satellite’s-eye view of China’s economic recovery / Sixth Tone

By analyzing satellite images of key steel mills from September 2019 to now, we found China’s steel industry had recovered from a low of 29% of baseline SMI to nearly 80% in mid-February, and was back up to 90% of the baseline by early March. But production has since fallen as the COVID-19 pandemic has cut into global demand.

• China’s economy is inching out of virus slump, early data show / Bloomberg (porous paywall)

China’s economy continued its slow recovery from the coronavirus slump in May, with better sentiment among companies tempered by the grim global outlook.

That’s the assessment from the earliest available indicators, which continued the pickup seen in April. However, global demand is weak and financial markets fell last week partly on disappointment at the government’s modest stimulus plans.

• China Development bank pledges $50 billion for Greater Bay Area
  China Development Bank backs Greater Bay Area with $50 billion lending pledge / Caixin
  “Of the 360 billion yuan [$50.4 billion], 110 billion yuan [$15.3 billion] will comprise financing for technology innovation and strategic emerging industries, the Beijing-based state-owned bank said in a statement (link in Chinese) Monday.”
• TikTok’s April revenue surges
  TikTok’s in-app revenue skyrockets during lockdowns / Bloomberg via Caixin
  “Focusing narrowly on in-app purchases, TikTok and Douyin’s numbers for the month showed a tenfold increase to $78 million, propelling them ahead of more established names like YouTube, Tinder and Netflix, which rely more on existing subscriptions.”
• Tencent-backed DouYu’s net profits hit $35 million…  
  Stay-at-home blues during COVID-19 turbocharges livestreaming game streamer DouYu / Caixin
• …As Tencent announced big investments
  Tencent takes 20% stake in Japanese video game firm / Caixin
  “Tencent has reportedly agreed to invest 7 billion yen ($65 million) for a 20% stake in Japanese video game developer Marvelous, the latest sign that the Chinese tech giant is further expanding its video gaming empire overseas.”
  Tencent to plow $70 billion into cloud, AI over 5 years / TechNode
• Pork imports see 170% increase
  China’s pork imports in April jump 170% to record high / Reuters
  Chart of the day: China’s April pork imports nearly triple / Caixin
  “Pork imports surged 170.4% year-on-year to nearly 1.4 million tons during the January-to-April period, according to data (link in Chinese) released by China’s General Administration of Customs on Saturday.”
• Cathay Pacific merger may be denied
  Cathay Pacific’s brand merger hits roadblock from China’s aviation regulator / Reuters

China’s aviation regulator stepped up inspections of Cathay planes last fall after warning the airline that staff participating in anti-government protests in Hong Kong would no longer be allowed to fly to mainland destinations or even in Chinese airspace.

During that period, Cathay’s chief executive resigned and the brand received enough demerit points for minor infractions under the strict CAAC system that the regulator can deny an application to add mainland destinations and aircraft, including Dragon’s, three sources said.

• Supermarket giant Wumei weighs Hong Kong IPO
  Chinese retail tycoon’s Wumei considers Hong Kong IPO / Bloomberg (porous paywall)
• New nightclub norms
  Dancing with disinfectant: China’s nightclubs get back in the groove as coronavirus restrictions ease / Reuters via SCMP
  “Nightclubs in China have mostly come back to life as owners and customers feel increasingly comfortable the novel coronavirus epidemic is under control but disinfectant, disposable cups and masks have become part of the experience.”
• U.S.-China tensions spur on Hong Kong trade, investment
  China tensions spur $2 billion of bets on currency options / Bloomberg (porous paywall)

Foreign-exchange options traders anxious about worsening U.S.-China relations are using key currency proxies to hedge against the uncertainties.

Tuesday saw nearly $1.4 billion of options traded on the Hong Kong dollar and U.S. dollar that will be profitable if the Asian currency is below 7.61 per greenback in three months’ time, while another $640 million worth of similar derivatives was traded that are tied to the 7.64 level.

• China traders are buying Hong Kong stocks like never before / Bloomberg (porous paywall)

Eligible investors, which can range from brokers to insurers or individuals with at least 500,000 yuan ($70,000) in their trading accounts, had been net buyers of Hong Kong stocks in all but six sessions this year and pumped $35.4 billion so far across the border, the most for the period in data going back to 2017. Buying accelerated as Beijing’s plan to impose a security law on the city sparked an equity crash last week. The top targets of inflows were Chinese state-owned firms.

• Meituan stock jumps 10%, owner Wáng Xīng’s 王兴 wealth soars
  Chinese delivery mogul’s wealth doubles to $10 billion in months / Bloomberg (porous paywall)
• Electric vehicle maker’s shares plunge, and other updates  
  China battery maker suspended as short seller questions profits / Bloomberg (porous paywall)

A Chinese maker of electric vehicles plunged in Hong Kong after a critical report questioned the firm’s accounting.

Tianneng Power International Ltd. fell as much as 8.7% on Wednesday before trading was suspended. CloudyThunder Research, which calls itself a group of unidentified “activist investors,” said the company’s shares were “worth close to zero” in a report published on its website.

“The report is totally irresponsible and purely speculative,” a spokesman for Tianneng told Bloomberg News by phone.

• Tesla to cut car prices in North America and China / CNBC
  Volkswagen is in final talks to pay U.S.$491 million for an electric carmaker in Anhui, sealing its biggest acquisition in China / Reuters via SCMP
  EV safety concerns ratchet up after fiery crash in Shenzhen / TechNode
  “A driver was killed during a fiery crash after rear-ending a school bus with his electric van in the southern Chinese city of Shenzhen on Tuesday, ushering in a new wave of EV safety concerns among Chinese consumers.”
• Shanghai planning stock exchange overhaul
  Shanghai stock exchange mulls first revamp of benchmark in 30 years / Bloomberg (porous paywall)
  “The exchange is planning to adjust the timing for newly listed stocks to be included in the index and remove some chronically loss-making shares, said two of the people, who asked not to be identified as the matter is private.”
• China expected to restrict Australian coal imports
  China expected to impose coal import restrictions / FT (paywall)

China is expected to promote the use of domestic coal by tightening import rules, starting with shipments from Australia, according to analysts and traders.

After imports to the world’s second-biggest economy jumped in the first four months of the year, market participants said it was likely Beijing would impose restrictions that made it more difficult or expensive for coastal utilities to bring in thermal coal from overseas.

• Semiconductor manufacturing
  China’s Oppo steps up chip ambition as U.S. ban hits Huawei / Nikkei Asian Review via Caixin (paywall)
  BYD Semiconductor unit gets charged with major new investment / Caixin
• Progress on development of Boeing rival
  China making headway on its first long-haul jetliner: reports / Caixin
  “China has reportedly crafted a general technical plan for the country’s first long-haul, wide-body jetliner, a key aircraft designer said Tuesday [in Chinese], as Beijing steps up its efforts to challenge the duopoly of Airbus and Boeing.”

SCIENCE, HEALTH, AND THE ENVIRONMENT:

• COVID-19 virus uses same strategy as HIV to evade the immune system — study
  Coronavirus uses same strategy as HIV to dodge immune response, Chinese study finds / SCMP

Both viruses remove marker molecules on the surface of an infected cell that are used by the immune system to identify invaders, the researchers said in a non-peer reviewed paper posted on preprint website bioRxiv.org on Sunday. They warned that this commonality could mean SARS-CoV-2, the clinical name for the virus, could be around for some time, like HIV.

• Scientists push back on Wuhan market and lab origin theories
  China rules out animal market and lab as coronavirus origin / WSJ (paywall)
  “Chinese scientists in recent days said they had ruled out both a laboratory and an animal market in the city of Wuhan as possible origins of the coronavirus pandemic, in their most detailed pushback to date against allegations from U.S. officials and others over what might have sparked it.”
• Research team reaches Everest summit
  Chinese team summits Everest amid bid to remeasure peak / AP via Washington Post (porous paywall)
  “A Chinese survey team on Wednesday became the first and perhaps only group to climb Mt. Everest this year, part of a project to remeasure the exact height of the world’s tallest mountain.”
• Herbal capsules may help COVID-19 symptoms — research
  No COVID-19 cure but Chinese herb capsule shortens fever, fatigue and coughing: research / SCMP
  “According to a previous diagnosis and treatment protocol by the National Health Commission, Lianhuaqingwen (LH) capsules are recognised for treating symptoms of COVID-19, such as fatigue and fever, but not COVID-19 itself.”

POLITICS AND CURRENT AFFAIRS:

• Hongkongers protest new laws
  Explainer: How a new law may see Hongkongers jailed for 3 years for parodying the national anthem / Hong Kong Free Press
  “Despite widespread criticism that the proposed law would be an assault on freedom of expression, the Legislative Council is set to resume the Second Reading debate of the bill on Wednesday, with protesters vowing to surround the complex.”
  Hong Kong police round up hundreds of youngsters in protest crackdown / Hong Kong Free Press
  “Hong Kong police fired pepper pellets in the central business district and arrested almost 300 people in Causeway Bay, Central and Mong Kok on Wednesday after protesters gathered in opposition to the national anthem law and national security law.”
  Hong Kong crisis: riot police flood city as China protests build / Guardian
  Hong Kong police arrest hundreds and fire pepper balls at protesters / FT (paywall)
• The EU and Taiwan respond to Beijing’s Hong Kong security law…  
  China’s leaders ‘arrogant and aggressive’ over Hong Kong security law, EU politician says / SCMP
  “Beijing has moved ‘beyond being assertive’, says Reinhard Butikofer, chairman of European Parliament’s Delegation for Relations with China.”
  Taiwan will help fleeing Hongkongers move to island, Tsai Ing-wen says / SCMP
  “Taiwanese President Tsai Ing-wen 蔡英文 [Cài Yīngwén] has assured Hongkongers that her government would come up with special measures to help them relocate to the island, in an apparent effort to counter claims that she is giving up on Hong Kong.”
• …As Hong Kong and Beijing react
  ‘Double standards and hypocrisy’: Hong Kong government rebukes foreign criticism over national security law plan / Hong Kong Free Press
  Hong Kong police embrace China’s security law plan / Hong Kong Free Press
  Security bill expected to target groups also / RTHK
  Hong Kong’s richest man Li Ka-shing defends China’s plans for security law / CNN
  “Billionaire tycoon Li Ka-shing 李嘉誠 [Lǐ Jiāchéng] said in a statement Wednesday that ‘it is within each and every nation’s [sovereign] right to address its national security concerns.’”
  Hong Kong demand for VPNs surges on heels of China’s plan for national security laws / CNBC
  Matt Knight on Twitter: “Cartoon from PRC state media People’s Daily depicts Tsai Ing-wen and Jimmy Lai(?) being ‘exterminated’ by a spray can labelled ‘Hong Kong national security law.’”
• Hong Kong controversy at the University of Warwick
  Pro-Hong Kong resolution at British university fails after Chinese student opposition / Axios
  “The charged politics of China’s actions in Hong Kong are spilling over to university campuses thousands of miles away, raising questions for students and university administrators about how to protect democratic values.”
  Zishi Zhang 張子實 on Twitter: “I’m the elected International Students Officer at Warwick who spoke against this motion. And report by @BethanyAllenEbr demonstrates the classic bias: when Chinese students didn’t voice their opinions, they don’t understand democracy; when they did, they are advocates of Beijing.”
  Tianyu M. Fang on Twitter: “@hyipttwh @Zishi_Zhang @BethanyAllenEbr Let’s face it—there is inevitably some assumption that Chinese students participate in democratic institutions on Western campuses as agents of the Chinese state. I don’t think that’s the case, and we are sometimes too fast to jump to conclusions.”
• China’s defense minister warns that U.S. and China in “high-risk period”
  China-U.S. rivalry in ‘high-risk period,’ Chinese defense minister says / SCMP

The strategic confrontation between China and the United States has entered a high-risk period, China’s top defense official said in a rare statement directly naming an adversary.

Speaking during a panel discussion on the sidelines of the National People’s Congress (NPC) on Saturday, Defence Minister Wèi Fènghé 魏凤和 said that China needed to bolster its fighting spirit, while other military leaders said the country had to catch up with Western nations in its development of core technologies.

• U.S. governor appealed to Xi for PPE
  Washington Governor Jay Inslee personally appealed to Xi Jinping for PPE, on advice of Chinese-American entrepreneur / SCMP

A U.S. state with close ties to Chinese President Xí Jìnpíng’s 习近平 alma mater directly petitioned the Chinese leader for protective clothing for its medical workers battling the coronavirus last month, leading to it receiving supplies from Sichuan province, Tsinghua University and other Chinese sources.

• Lawmaker proposes banning translation at government press conferences 
  Chinese legislator proposes banning foreign translation at government press conferences / SCMP
  “A Chinese legislator has raised a proposal at the annual National People’s Congress (NPC) meetings to end foreign translations at press conferences and major events to ‘safeguard the dignity of the Chinese language,’ at a time of surging nationalist rhetoric openly stoked by Beijing.”
• Canadian minister distances herself from fundraising group  
  Digital Government Minister distances herself from online account that promoted fundraiser to sue journalist / The Globe and Mail

The Trudeau minister responsible for digital government [Vancouver Quadra MP Joyce Murray] is distancing herself from a fundraising pitch on one of her internet communication channels that was soliciting money to sue a Canadian journalist…

As Vancouver news website theBreaker.news first reported, a May 22 post on the Joyce Murray WeChat group has been soliciting donations for a lawsuit against a Global News reporter who broke a story about the China government’s overseas efforts to purchase and amass personal protective equipment from Canada and other countries during the early days of the COVID-19 outbreak.

• Israel awards infrastructure contract to local firm
  Amid U.S. pressure, Israel rejects Chinese bid for major infrastructure project / WSJ (paywall)
  “Several companies, including one from China, had bid to build what is slated to be the world’s largest desalination plant near an Israeli military base that is also used by the U.S.”
• China to relax border restrictions for several countries
  China to allow Singapore and other countries to apply for ‘green channel’ for flights: Chinese state media / Straits Times
  “The countries given the green light are Singapore, Japan, Britain, Germany, France, Italy and Switzerland, said the media reports.”
• Chinese state TV network could be fined in the U.K.
  Chinese state TV broke Ofcom rules with biased Hong Kong coverage / Guardian

CGTN could face fine in U.K. for failing to represent anti-Beijing viewpoints during protests China’s state television channel repeatedly breached British broadcasting rules with biased coverage of pro-democracy protests in Hong Kong, according to a decision by the media regulator that could set up a diplomatic clash between the two countries.

• U.K. watchdog finds China’s state TV CGTN violated impartiality rules / Safeguard Defenders
• Anti-U.S. WeChat account shut down
  China shuts down WeChat social media account claiming ‘U.S. making dead bodies into hamburgers’ / SCMP
  “China has shut down a popular social media account for spreading fake news and conspiracy theories, as Beijing moves to curb misinformation and online hate speech in an attempt to tone down an ongoing war of words with the United States.”
• Beijing launches campaign against “problematic” maps
  Beijing to launch campaign on maps that threaten national unity / Global Times
  “Beijing will launch campaigns cracking down on ‘problematic’ maps that threaten national unity, sovereignty and territorial integrity amid the two sessions.”

SOCIETY AND CULTURE:

• Is China already forgetting COVID-19?
  Amnesia nation: Why China has forgotten its coronavirus outbreak / NYT (porous paywall)
  A closer look at The Fat Years, a 2009 novel by Hong Kong–based writer Chan Koonchung 陳冠中 (Chén Guànzhōng), which centers on a Chinese society that has forgotten a huge fictional crisis in the years immediately following it. Li Yuan examines why the novel is resonating with many in the wake of COVID-19.
• Life under Beijing quarantine
  Beijing’s coronavirus quarantine: One couple’s 14-day stay in a hotel / Washington Post
  Yan Cong and occasional The China Project contributor Krish Raghav document their experience in quarantine in Beijing after returning from New York.
• Killings of Chinese in Zambia lead to online debate
  Zambia killings prompt online debate over compassion and discrimination / China-Africa Project (porous paywall)
  “Frustration emerged among some Chinese netizens about the apparent lack of any African response to the murder of three Chinese nationals in Zambia that happened on Sunday. Twitter user @CaliCali2000 started the discussion that then generated considerable discussion.”
• Matriarchal TV drama wins a massive following
  Women rule, men drool in China’s hottest new show / Sixth Tone

This scene from the wildly popular period drama “The Romance of Tiger and Rose” is set in the fictional city of Huayuan, where women rule. The show has blown up on Chinese social media thanks to its convention-defying world in which men’s and women’s roles are reversed — at least partially. Its 14 episodes released so far have a combined 580 million views, and a related hashtag [in Chinese] on microblogging platform Weibo has been viewed more than 3 billion times.

• Milan’s Chinatown remains cautious
  Italy reopens but Milan’s Chinese tread a more cautious path / WSJ (paywall)
  “While Italy has been opening in stages after one of the longest and strictest lockdowns among Western countries, its sizable Chinese community is moving more cautiously, concerned the pandemic isn’t yet under control.”