China issued a sweeping warning to its biggest companies, vowing to tighten oversight of data security and overseas listings just days after Didi Global Inc.’s contentious decision to go public in the U.S., Bloomberg News reported. While the statement from China’s State Council on Tuesday was thin on details, it suggests Beijing is preparing to intensify a crackdown on its corporate sector that has spanned everything from property debt and fintech to antitrust issues and now cybersecurity.
Read more
Didi Global Inc. shares fell as much as 25% in early U.S. trading on Tuesday in the first session since Chinese regulators ordered the company's app to be taken down days after its $4.4 billion listing on the New York Stock Exchange, Reuters reported. The ride-hailing giant's app was ordered to be removed from mobile app stores in China on Sunday by the Cyberspace Administration of China (CAC), which had said it was investigating Didi's handling of customer data.
Read more
Chinese billionaire Zhang Jindong has received a $1.36 billion state-backed bailout of the troubled retail arm of his Suning empire, marking another step in Beijing’s efforts to clean up its heavily indebted conglomerates, Bloomberg News reported. A group of investors, led by the Nanjing state asset management committee and the Jiangsu provincial government, will take a 16.96% stake in Suning.com Co., according to a statement Monday. The deal was struck at 5.59 yuan a share, the near eight-year low the stock was trading at before it was halted June 16.
Read more
China’s corporate credit market is the world’s biggest, after the U.S. The government has backstopped even the most reckless companies, fending off defaults where they were arguably long overdue. But those days are now drawing to a close as Beijing forces more accountability on its weakest companies to reduce moral hazard, according to a Bloomberg News commentary. In China, the current default rate is around 1%; in more developed markets, it’s closer to 2% to 3%. Removing government support in order to close that gap is a delicate process.
Read more
Suppliers to Walmart, Target, Amazon.com and other major retailers told Reuters they are placing holiday orders for Chinese-made merchandise weeks earlier this year, as a global shipping backlog threatens to leave many gift buyers empty-handed this Christmas shopping season. Reuters surveyed nearly a dozen suppliers and retailers of everything from toys to computer equipment in the United States and Europe.
Read more
Moody’s Investors Service downgraded China Evergrande Group’s credit rating by one notch to B2, the second downgrade by a global ratings agency in less than two weeks, Bloomberg News reported. Concern has been building over the troubled Shenzhen-based developer, which on Wednesday tried to reassure investors about its financial health, saying it has reduced its net debt-to-equity ratio to below 100%, as required by Chinese regulators. Evergrande has also said it pared total borrowings to about 570 billion yuan ($88 billion) from 717 billion yuan in December.
Read more
A consortium led by Alibaba Group Holding Ltd. and the Jiangsu provincial government are nearing a deal to buy a stake in the retail arm of Chinese billionaire Zhang Jindong’s Suning empire, according to people familiar with the matter, the latest domino to fall in Beijing’s effort to clean up its heavily indebted conglomerates, Bloomberg News reported. The unit, Suning.com Co., could make an announcement as soon as this week.
Read more
Shen Tiedong has been named as chairman of Huachen Group, parent of BMW’s China partner Brilliance Auto, according to a Brilliance Auto wechat post on Monday, Reuters reported. Huachen is standing on the brink of bankruptcy, defaulting on billions of yuan in debt obligations. Chinese regulators have launched an investigation into possible violations of disclosure laws by the company. Brilliance makes vehicles with BMW in the northeastern Chinese city of Shenyang. It also has a joint venture with Renault SA. Yan Bingzhe, Huachen’s former chairman, will step down, the post said.
Read more
China has asked one of its biggest state-owned conglomerates to examine the finances of China Huarong Asset Management Co., adding a new twist to the drama that has roiled the world’s second-largest credit market for months, Bloomberg News reported. Citic Group, whose businesses span everything from banking to securities and mining, recently dispatched a team to Huarong to pore over the embattled distressed-debt manager’s books. It couldn’t immediately be determined what, if anything, might result from Citic Group’s involvement.
China’s central bank increased its short-term cash injection for the first time since March as it moved to soothe market concerns about liquidity conditions ahead of the quarter-end, Reuters reported. The injection of 30 billion yuan ($4.6 billion) marked an end to the People’s Bank of China’s practice of adding 10 billion yuan each trading day for the past three months. The move bodes well for liquidity prospects in the second half, as some 4.15 trillion yuan of medium-term policy loans will mature by December.