China’s Xi Seen Delaying Key Economic Meeting, Defying Norms; Hong Kong Reporter ‘Missing’ After China Trip Is Safe, SCMP Says
China lures hundreds of Taiwan politicians with cheap trips before election; Short Alibaba, Long PDD Stock Pair Trade Points to 95% Gain
Welcome to this issue of The China Brief. Today is December 01, 2023. 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 Xi Seen Delaying Key Economic Meeting, Defying Norms
Bloomberg
Chinese President Xi Jinping is expected to postpone the ruling Communist Party's Third Plenum meeting, which charts the nation's long-term economic reform agenda. Analysts predict the meeting will be moved to early 2024, marking the first time it will be held in an off-schedule year in over three decades. The delay would be another example of Xi Jinping disregarding long-standing norms. The Third Plenum is typically held in October or November, one year after China's new leadership team is set.
Hong Kong Reporter ‘Missing’ After China Trip Is Safe, SCMP Says
Bloomberg
Minnie Chan, a reporter for the South China Morning Post (SCMP), is "safe" in China after it was reported that she had been unreachable since traveling to Beijing in October, according to a statement from the publication. The SCMP said that Chan is on personal leave and that her family has informed them that she is in Beijing but needs time to handle a private matter. The Hong Kong Journalists Association expressed concern for Chan's safety, and Hong Kong's press freedom has been narrowing since the passage of a national security law in 2020. At least three pro-democracy outlets have shuttered, and Hong Kong dropped to 148th place in the global press freedom ranking.
UBS Sees More Senior Private Banker Departures in Hong Kong
Bloomberg
At least three senior ex-Credit Suisse private bankers in Hong Kong have resigned from UBS as the Swiss bank continues to integrate its rival. The departures add to other recent senior exits, including Credit Suisse wealth veteran Rickie Chan, who is set to join Bank of Singapore. UBS's takeover of Credit Suisse has led to a wave of staff departures as Switzerland's biggest bank looks to streamline operations.
‘Severely punish’: China bosses warned over holding up migrant workers’ wages
South China Morning Post
Chinese government bodies have been urged to ensure that migrant workers are paid on time as the Lunar New Year holiday approaches. State Councillor Shen Yiqin called for "severe" punishments for deliberate delays in salary payments and emphasised the need to protect workers' interests. The Lunar New Year is often the only time migrant workers can return home for family reunions, and many rely on extra cash at this time. Several local governments have already taken action to ensure salaries are paid this month, particularly in the real estate sector, which has struggled during the pandemic.
China’s Central Bank Holds Fire on Use of Policy Lending Tool
Bloomberg
The People's Bank of China (PBOC) did not inject low-cost funds into policy-oriented banks in November, despite expectations that it would do so in order to support the economy. The PBOC's Pledged Supplemental Lending (PSL) program to policy banks remained unchanged at the end of November from the previous month. The PSL program is seen as an important tool to support the property sector and stabilize growth, but it also risks adding to downward pressure on home prices. In the past, policy banks have used PSL money to help local authorities and developers demolish old homes and provide cash compensation for homeowners to purchase new apartments.
Chinese Stocks Stage Late Recovery After State Buying Report
Yahoo US
Chinese stocks rallied on Monday afternoon after a report suggested that a state institution had bought ETFs, which would suggest that the Chinese government is attempting to bolster stock markets. The CSI 300 Index finished the day down 0.4%, recovering from a 1% drop.
Marcos' courting of U.S. support is unsettling his ASEAN neighbors
Nikkei Asia
Philippine President Ferdinand Marcos Jr. visited US Indo-Pacific Command headquarters in Hawaii to fortify his country's alliance with the US. The move has raised alarms in the ASEAN region, as it is feared that the US expanding its military presence in the region could lead to a conflict with China. ASEAN members, including Singapore, Malaysia and Indonesia, should support the Philippines' resistance against China's aggression, rather than criticising its actions. If ASEAN does not stand up for itself, the region may become a battleground for the superpowers.
SenseTime Mulls Raising Fund for Auto, Health Care Units, Sources Say
Bloomberg
Chinese AI company SenseTime Group is reportedly considering separating its autonomous driving and healthcare units for separate fundraising. The Hong Kong-listed firm is said to have approached potential investors for funding plans and is looking to sell partial stakes in the units to other companies in the industry, followed by financial investors at a later stage. SenseTime has not made final decisions regarding valuation targets for the units and may decide against pursuing any deals. The company's growth has been hampered by US sanctions and restrictions on access to capital and US tech components.
Xi’s Shanghai visit sells city’s ‘innovation’ image
Japan Times
Chinese President Xi Jinping visited Shanghai this week to highlight the city's importance in reinvigorating the nation's economy. State media portrayed Xi's visit as a sign that Shanghai will play a key role in China's economic recovery. The city, home to major international companies such as Tesla and Disney, has faced economic challenges due to COVID-19 restrictions. However, officials are now working to position Shanghai as a growth engine, particularly in the science, finance, and technology sectors.
Exclusive: China lures hundreds of Taiwan politicians with cheap trips before election
Reuters
China has offered reduced-rate trips to Taiwan for hundreds of Taiwanese politicians in the lead up to key elections on the island, according to Taiwanese sources and documents. The planned trips have unnerved officials, with many claiming it is a form of “election interference”. Concerns have risen over China’s influence on the upcoming elections, which will dictate Taiwan’s relationship with China. Taiwanese law forbids election campaigns from receiving funds from any “external hostile forces”, such as China. Prosecutors in southern Taiwan are currently investigating 22 individuals for potential violations of election and security laws.
China’s AI Chipmaker Biren Wins $280 Million In Funding Pledge After US Sanction
Bloomberg
Shanghai Biren Intelligent Technology, a Chinese artificial intelligence (AI) chip firm that was blacklisted by the US in October, has secured a pledge of CNY2bn ($280m) from Guangzhou government-backed investors. The company is also in talks with officials in Hong Kong for additional funding and is considering establishing operations in the territory. Biren's success in raising funds comes as major Chinese tech firms seek domestic alternatives to Nvidia's AI chips amid growing US curbs on China's access to cutting-edge semiconductors. Another Chinese AI chip startup, Moore Threads Intelligent Technology Beijing, also raised "hundreds of millions" of yuan from a series B-plus financing round.
China Stocks Trim Losses on Report State-Owned Firm Bought ETFs
Bloomberg
Chinese stocks initially fell but then pared losses after it was reported that an unidentified state institution had bought exchange-traded funds (ETFs) to support the market. The CSI 300 Index was down 0.3% before the report, but then recovered to close slightly higher. This follows a similar move in October when China's sovereign wealth fund bought ETFs and bank stocks to bolster the market.
China new home prices inch up for third month in November - survey
Reuters
New home prices in China increased slightly for the third month in a row in November, according to a private survey by real estate research firm China Index Academy. The survey showed that prices rose by 0.05% on average from the previous month. However, the survey also revealed that only 38 of the 100 cities surveyed reported increases in new home prices. The property sector in China, which makes up around one-quarter of the country's economy, has been struggling to stabilise despite government support measures. The government has eased curbs on home purchases and cut mortgage costs in an effort to boost the sector.
China mints billionaires as ‘great wealth transfer’ sees more riches inherited
South China Morning Post
The number of billionaires in Hong Kong and mainland China increased in the year to April, with the Asia-Pacific region producing more new billionaires than any other part of the world, according to a survey by Swiss bank UBS. The region now boasts the highest number of billionaires globally and the highest proportion of self-made billionaires. The report also highlighted a trend of billionaires inheriting wealth rather than generating it through entrepreneurship. The number of billionaires in the Asia-Pacific region rose from 922 to 1,019, with their combined wealth increasing by 8.1% to $3.7tn.
China Evergrande creditors seek controlling stakes in new proposal
Reuters
A group of offshore creditors of China Evergrande Group is requesting a controlling equity stake in the property developer and two of its Hong Kong subsidiaries as part of its revised debt restructuring proposal, according to a source familiar with the matter. The request comes after Evergrande made a new offer to repay offshore debts earlier this week. The company has until a Hong Kong court hearing on Monday to present a revised debt restructuring proposal.
Short Alibaba, Long PDD Stock Pair Trade Points to 95% Gain
Bloomberg
Traders who implemented a pair-trade strategy of going long on PDD Holdings Inc. and shorting Alibaba Group Holding Ltd. would have gained a 95% return so far this year. This strategy has been profitable as PDD has overtaken Alibaba to become China's most valuable e-commerce firm. PDD's stock has surged more than 80% this year, while Alibaba's stock has dropped 15%. Some Wall Street banks are also favoring PDD over Alibaba, with Morgan Stanley naming PDD its top pick in China's online-shopping sector.
Malaysia invites China's Xi to visit, ramps up tourism target
Reuters
Malaysia has invited China's President Xi Jinping to visit the country as it seeks to boost the number of Chinese tourists to five million a year. Malaysia recently announced that Chinese tourists would be able to travel visa-free for 30 days, and the government hopes that this move will help attract more Chinese visitors and boost economic growth. In the first half of this year, Malaysia welcomed 498,540 Chinese tourists, a figure that is almost a third of pre-pandemic levels. The country's Prime Minister, Anwar Ibrahim, has also invited President Xi Jinping to visit Malaysia.
Reclusive Shein founder Sky Xu prepares to enter the spotlight with IPO
Financial Times
Chinese fast-fashion company Shein is set to launch its planned IPO next year, and its secretive billionaire founder, Sky Xu, will be thrust into the spotlight. Xu is an intensely private individual who has never given a media interview, posted online, or appeared in a photograph on the company's website. Employees reportedly joke that they do not recognise him in the office. Xu changed his English name from Chris to Sky in recent years, causing confusion among staff and investors. The strategy of remaining silent has been vindicated by the recent scrutiny of Chinese tycoons from Beijing and Washington. Shein's revenue has soared in recent years, reaching $22.7bn in 2022, surpassing Zara, and generating $14.7bn in revenue in H1 2022. The company has filed confidential paperwork with the US Securities and Exchange Commission, and its IPO is expected to be one of the biggest US listings of the past decade.
Nasa urges researchers to reach out for China moon samples, sidestepping US ban
South China Morning Post
NASA has been given permission to study China's moon samples, marking the first collaboration between the two countries' space agencies. Although US law has previously prevented NASA from working with the China National Space Administration (CNSA), an internal email from NASA on Wednesday stated that it had "certified its intent to Congress" to allow Nasa-funded researchers to apply to the CNSA for access to the lunar samples collected by China's Chang'e 5 mission in 2020. The law prohibiting cooperation between the two space agencies, known as the Wolf Amendment, was passed by the US Congress in 2011. However, the email clarified that the green light for applications was an exceptional case, and the normal prohibition on bilateral activity with China on NASA-funded projects remained in place. The Chinese samples are from a lunar region that has not yet been sampled by NASA, and are expected to provide valuable insights into the geological history of the moon and the Earth-Moon system, as well as helping NASA plan future lunar exploration.
Contrasting China November factory surveys highlight need for stronger stimulus
Reuters
Mixed factory activity data in China for November suggests that more stimulus will be needed to support economic growth. The Caixin/S&P Global manufacturing purchasing managers' index (PMI) unexpectedly rose to 50.7 in November from 49.5 in October, indicating expansion. However, the official PMI fell to 49.4, indicating contraction. The official survey has contracted for seven out of the past eight months, while the Caixin survey has been more volatile. Analysts believe that the data highlights the need for further stimulus measures to support the struggling Chinese economy.
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