China

China’s finance ministry is considering transferring its stake in China Huarong Asset Management Co. to a unit of the nation’s sovereign wealth fund that invests in financial companies, Bloomberg News reported. One motivation for the proposed transfer to Central Huijin Investment Ltd. is that the unit has more experience resolving debt risks, the person said, asking not to be identified discussing private information. Deliberations over a transfer have continued as investor concern over China Huarong’s financial health sent the company’s dollar bonds tumbling to record lows this month.

China’s fast-moving campaign to curb the power of internet giants has hit its latest mark: Ant Group, the fintech sister company of the e-commerce behemoth Alibaba, the New York Times reported. Ant announced on Monday that it would undertake a sweeping, government-ordered overhaul of its business to allay regulators’ concerns about the way it competes with rivals, its large-scale collection of user data and the risks its business may pose to the wider financial system.

Alibaba Group, the world’s biggest e-commerce company, was fined 18.3 billion yuan ($2.8 billion) by Chinese regulators on Saturday for anti-competitive tactics, as the ruling Communist Party tightens control over fast-growing tech industries, the Associated Press reported. Party leaders worry about the dominance of China’s biggest internet companies, which are expanding into finance, health services and other sensitive areas. The party says anti-monopoly enforcement, especially in tech, is a priority this year.

China Huarong Asset Management Co. is preparing to offload non-core and loss-making units as part of a broad plan to revive profitability that would avoid the need for a debt restructuring or government recapitalization, Bloomberg News reported. The state-owned manager of non-performing loans, which spooked investors this month after delaying its earnings report, has submitted the plan to regulators and received positive initial feedback, the people said, asking not to be identified discussing private information.

China’s 36 million university students are starting to learn what it’s like to live without easy credit, Bloomberg News reported. Last month authorities effectively shuttered student access to the once ubiquitous online loan industry, a sprawling collection of apps, fintechs and other unregulated lenders. Internet platforms were told to stop offering online loans to students and unwind existing credit. Banks will need to seek regulatory approval before promoting such loans on campus.

China’s efforts to get its people spending got a boost over the three-day traditional tomb-sweeping holiday, with official and private data showing travel back up to pre-coronavirus levels by some metrics, the Wall Street Journal reported. Swaths of China’s economy, in particular manufacturing and exports, long ago regained their pre-virus levels. But consumer spending, held back by travel restrictions and caution over the possibility of a resurgence, has been a persistent laggard for the past year.

To defend against accusations by Washington, D.C., and others that it doesn’t play fair on trade, Beijing could point to the banks. Chinese leaders have been steadily lowering the barriers they had erected around the country’s vast financial system, giving Wall Street and European lenders a greater shot at winning business in the world’s second-largest economy. Now the walls are going up again, the New York Times reported. New Chinese rules have sharply limited the ability of foreign banks to do business in the country, making them less competitive against local rivals.

China will deliver 550 billion yuan ($84 billion) in tax cuts to help support the economy’s recovery, a move that could also damage local governments’ finances further, Bloomberg News reported. The government will lower taxes for small and micro-sized businesses and offer tax breaks for companies in advanced manufacturing, state media reported Wednesday, citing a State Council meeting chaired by Premier Li Keqiang. That’s on top of record tax and fee cuts last year.

China’s economic recovery picked up a surprising amount of steam in March, boosted by strong domestic consumption and unquenchable foreign demand for Chinese-made goods, the Wall Street Journal reported. The country’s official manufacturing purchasing managers index, a gauge of factory activity, hit a three-month high of 51.9 in March, topping February’s reading of 50.6 with the 50 mark separating expansion from contraction, according to data released Wednesday by the National Bureau of Statistics.

Chinese lending to African governments dropped by nearly a third in 2019 -- and probably continued to fall last year -- as a rising threat of defaults stemmed a deluge of credit from the country in the past decade, Bloomberg News reported. A study by Johns Hopkins University’s China-Africa Research Initiative showed that Chinese financing to Africa fell below $9 billion for the first time in nearly a decade in 2019, with Beijing refraining or reducing the size of loans to major borrowers such as Angola and Ethiopia.