Chinese firms face funding drought for IPOs amid heavy scrutiny; Chinese cities revise housing policy as families turn to larger homes
China decries U.S. ‘bullying.’ But, to many, China is the bully.
Welcome to this issue of The China Brief. Today is March 29, 2024. Here at The China Brief, we bring you the latest news on China's politics, economy, and society from global media sources, along with exclusive expert analysis. If you find our content helpful, please subscribe to our newsletter.
China’s mammoth 5G sector poised for further expansion as tech powers growth
South China Morning Post
China's 5G market is set to contribute nearly $260bn to its GDP by 2030, with 5G connections accounting for almost a third of the global total, according to a report by the Groupe Speciale Mobile Association (GSMA). The mobile industry contributed 5.5% of China's GDP last year, a figure set to rise to a quarter in each of the coming years through 2030. China's entire mobile sector has so far provided a total of almost 8 million jobs, and generated $110bn in tax revenue in 2023 alone, the GSMA said.
Chinese cities revise housing policy as families turn to larger homes
Nikkei Asia
Shenzhen, one of China's largest cities, has abolished a policy requiring developers to build small and medium-sized housing units, signifying a shift in the real estate market towards larger homes and increased space. The policy, which stipulated that 70% of units should have a floor area of fewer than 90 square metres, was introduced in 2006 to meet the demand of families for more affordable, smaller units. However, increasing demand for larger homes has led to the policy's abolition.
Chinese firms face funding drought for IPOs amid heavy scrutiny
Japan Times
Chinese companies are facing a shortage of new equity capital as stricter domestic IPO regulations and challenges in listing overseas hamper their ability to raise funds. China's securities watchdog has tightened scrutiny of IPOs this year, leading to a high number of companies cancelling their domestic listing plans. Some companies have turned to offshore markets such as Hong Kong and New York, but increased scrutiny and geopolitical tensions are making it difficult for them to list overseas. This lack of access to capital could hinder China's economic recovery.
China stocks gain in rally fuelled by banks following steady earnings reports
South China Morning Post
Chinese stocks have risen for the second consecutive month, driven by state-owned banks which posted steady earnings. The Shanghai Composite Index increased 0.5% to 3,025.56, with the CSI 300 Index of the nation's largest companies adding 0.1%. The market has been supported by Beijing's policy efforts to stimulate economic growth, resulting in its best winning streak in over a year. Investors are now expecting more quantitative easing measures after Chinese president Xi Jinping instructed the central bank to buy more treasury bonds.
China decries U.S. ‘bullying.’ But, to many, China is the bully.
Washington Post
At a recent security forum in China, a top Communist Party official, Zhao Leji, called for a regional order free of US involvement, in what many observers interpreted as an implicit rebuke of US actions in the region. Zhao stated that “hegemonic and bullying acts are deeply harmful” and called for opposition to trade protectionism and erecting barriers. Experts believe that China is building its own sphere of influence in Asia, with Zhao stating that Asian countries should be jointly responsible for security in the region, which excludes the US. China has also put forward the Global Security Initiative, which aims to reduce the US's role in global defence, particularly in Asia. The Philippines has lodged a protest with China following an escalation in the South China Sea, where China's maritime expansionism is coming up against the territorial claims of its weaker neighbours. The Philippines has to walk a careful line, avoiding open conflict while checking China's opportunism. President Ferdinand Marcos Jr is set to go to Washington next month for a trilateral summit with President Biden and Japanese Prime Minister Fumio Kishida.
Chinese social media users share fabricated CNN report about 'cargo ship attacking US bridge'
Yahoo US
CNN has denied reports circulating on Chinese social media that a ship loaded with Chinese goods attacked a bridge in the US. The image used to support the claim was a doctored screenshot taken from footage of a bridge collapse in Baltimore in March 2024. There has been an increase in anti-US sentiment on Chinese social media platforms due to rising tensions between China and the US.
Yahoo US
China's biggest banks are reporting an increase in non-performing loans due to the country's property crisis. Non-performing loans at China's big four banks jumped 10.4% in 2023. Despite this, Chinese lenders have stated that they have enough buffers to manage risks and will control lending risks to property developers. Beijing is urging banks to boost financing for property developers featured on a "white list" of companies.
Huawei Profit Surges as It Takes Share From Apple and Alibaba
Bloomberg
Huawei has reported strong quarterly profit growth, propelled by its consumer business and cloud division. The Chinese networking and electronics giant recorded a net profit of CNY13.9bn ($1.9bn) in Q4 2023, a rise of over 65% compared to the same period the previous year. The results highlight Huawei's success in navigating US sanctions and export controls, and the company's resilience in the face of challenges. Huawei's consumer electronics division saw sales increase by 17.3% in 2023, reaching CNY251.5bn. Its cloud computing arm also grew by nearly 22%, as it continued to compete with Alibaba and Tencent.
Migrant workers who helped build modern China have scant or no pensions, and can’t retire
Associated Press
China's first generation of migrant workers are struggling to find work in a slowing economy. Jobs have dried up in construction due to a downturn in the real estate market and in factories because of automation and the slowing economy. Age discrimination is common, so jobs tend to go to younger people. Many are turning to temporary work, however, older migrant workers are finding it increasingly difficult to find jobs. The first generation of migrant workers is growing older. About 85 million were over 50 in 2022, the latest year for which data is available, accounting for 29% of all migrant workers and up from 15% a decade earlier. With limited or no pensions and health insurance, they need to keep working. Some job recruiters have said older workers don’t work well or have underlying illnesses. Others have declined to answer and hung up.
China’s smartphone maker Xiaomi bets on EVs even as Apple pivots
Financial Times
Chinese smartphone maker Xiaomi has launched its first electric vehicle (EV), the Speed Ultra 7 sports sedan, with a starting price of CNY215,900 ($29,867) and availability across the country. Xiaomi founder and CEO Lei Jun said the company would invest $10bn in its EV project over a decade, with the goal of becoming one of the world’s top five carmakers. Xiaomi’s EV faces competition from other traditional carmakers, including Tesla, BMW, BYD and Geely’s Zeekr, which have been making price cuts. The SU7 boasts an operating system that works with Xiaomi smartphones and home appliances.
‘We can get through,’ says China Vanke boss as 2023 profits slump
South China Morning Post
China Vanke, the second-largest property developer in China, reported a 46.4% drop in net profit for 2023, causing concern among investors. The company's net profit came in at CNY 12.16bn ($1.7bn) versus CNY 22.68bn in the previous year, while core profit plunged by over 50%. Revenue fell by 7.6% to CNY 465.7bn, and the company's net debt ratio rose by 11 percentage points to 54.7%. Moody's and Fitch Ratings have both downgraded the firm to "junk" this month, citing a weakened sales performance and limited access to funding.
Former China coach pleads guilty to taking millions in bribes
Japan Times
Former China soccer coach and ex-Everton midfielder, Li Tie, has pleaded guilty to accepting over $10 million in bribes. This is part of a broader crackdown on corruption in Chinese soccer. Li's former boss, Chen Xuyuan, was also jailed for life this week for taking bribes worth $11 million. China's legal system is tightly controlled by the ruling Communist Party and has a near-100% conviction rate in criminal cases.
Chinese national jailed in Singapore for selling fake Taylor Swift tickets
South China Morning Post
A man who sold fake Taylor Swift concert tickets and then helped the buyers gatecrash the concert has been sentenced to three months' jail in Singapore. Yang Chenguang, a Chinese national, pleaded guilty to cheating and criminal trespass. He sold the tickets to three people who were visiting Singapore from China and promised to provide them with additional tickets if they couldn't enter the venue with the ones he sold them. When the fake tickets failed to gain entry, Yang helped the group to tailgate a genuine concertgoer into the venue. He was later arrested along with his accomplice, Li Xiaowei. Yang's sentence comes a week after Li was sentenced to six weeks' jail over the same incident.
Stay informed about the latest news, analysis, and policy briefs from across the globe related to China with the China brief. Our team aggregates, synthesizes, and summarizes the most important information from various sources, including media outlets, think tanks, government agencies, and industry experts.
Our mission is to provide you with easily accessible and critically valuable information tailored to your specific field of interest. We understand the significance of staying up-to-date on developments related to China and aim to make this information comprehensible for our readers.
Join the conversation and stay informed about the latest news and developments related to China by visiting our website at www.6dobrief.com