China News - 4 November 2020
International
Ant’s record IPO suspended in Shanghai and Hong Kong stock exchanges. In the biggest news other than the US election, Chinese regulators have suspended the $37bn listing of Ant Group, which had been set to become the world’s largest IPO. The unexpected news came just one day after regulators grilled founder Jack Ma, and is linked to new regulations on online lending, announced on Monday. Ant cited “recent changes in the fintech regulatory environment” as one of the reasons for the sudden pause. “I’ve never seen an IPO suspended at this stage,” said a director at one Shanghai-based brokerage, who suggested it was a “very last-minute thing”. That said, analysts and investors expect the dual Hong Kong and Shanghai listing to be delayed and not completely derailed. FT, BBC, WSJ, Reuters, 3 November
Analysis: Ant Group can no longer pretend it is just a tech company. Ant’s high valuation was driven by assumptions about its ability to avoid tighter financial regulation in China. But it has the equivalent of $321 billion in credit balance outstanding to consumers and small businesses. WSJ, 4 Novmeber
Due Diligence: Ma railed against regulatory requirements at a summit in Shanghai last month, openly criticising China’s big banks and suggesting they had a “pawnshop mentality”. Ant was doing them a favour by extending credit to companies and individuals with less collateral, he said. But that same conference saw Wang Qishan, China’s vice-president, emphasise that “safety always comes first”. FT, 4 November
US approves drone sale to help Taiwan detect China invasion. The latest deals means that Washington has sold $4.8bn of weapons to Taipei in the past fortnight. FT, 4 November
Canada makes plan to evacuate its citizens from Hong Kong. Canada has drawn up plans to evacuate its 300,000 citizens from Hong Kong if necessary, but officials have cautioned they can do little for pro-democracy activists seeking refuge from the Chinese authorities. The Guardian, 3 November
Yuen Long attack: Hong Kong journalist who investigated police over alleged involvement violent attack on protestors is arrested. Choy Yuk-ling's employer, broadcaster RTHK, said the arrest was linked to her reporting on alleged police misconduct. BBC, 4 November
Chinese ships spotted near Japan-controlled Senkakus in the East China Sea for record number of days in a year. Japan Times, 4 November
China watch
Xi set to give a speech at the China International Import Expo (CIIE) opening ceremony later.
Breadth of UK food, drink and innovation set to shine at the 2020 China International Import Expo after £100bn of bilateral trade. FCDO, 30 November
Islamic group in Xinjiang rebukes Western claims on religious restrictions. Global Times
Economy & tech
Battle at Arm China threatens $40bn Nvidia deal. Nvidia’s $40bn deal for the UK-based chip designer Arm is facing fresh problems in China, after it emerged that the disaffected head of Arm’s local joint venture controls almost 17 per cent of its shares. FT, The Times, 3 November
Chinese companies waiting twice as long for payments as in 2015. FT, 4 November
BMW’s profits jump as Chinese market rebounds. BMW’s third-quarter profits grew by almost 10 per cent as the German brand became the latest luxury carmaker to benefit from a strong recovery in China. FT, 2 November
Longer reads & opinion
UK Academics: Internet access deal allows Chinese government censorship in our UK university (virtual) classrooms. University Staff and Students Blog, 3 November
MERICS China Industries Briefing - October 2020 on five year plan, new legislation and Shenzhen autonomy. MERICS, 4 November
China raises the diplomatic stakes on climate change; the UK government must engage on this important point. Lord Howard in The Times, 4 November
We should close the revolving door between government service and our rivals’ companies. AEI, 3 November