Finance

• Li Ruohong, a former Chairman of the Guangdong Development Bank – now China Guangfa Bank – and former Deputy Director of the Guangdong Financial Affairs Office, had his life sentence upheld. He was convicted of taking bribes totaling more than CNY50 million and illegal possession of firearms. His mistress and two brothers were also sentenced to between 6 and 11 years in prison for taking bribes.
• Fugitive tycoon Guo Wengui instructed his staff to produce fake business documents to apply for a CNY3.2 billion loan from the Agricultural Bank of China (ABC) in 2010, three former executives told a court in Dalian. Guo, who has close ties to disgraced former State Security Vice Minister Ma Jian, now lives in New York. He is wanted by Beijing for alleged corruption and is subject to an Interpol “red notice”.
• The China Insurance Regulatory Commission (CIRC) is set to tighten standards on the management of liability, investment, and liquidity risks, as it assesses solvency requirements for a second year, PricewaterhouseCoopers (PwC) said.
• China will expand the use of the renminbi in countries and regions involved in the Belt and Road Initiative by improving cross-border payment and settlement facilities for the currency, Yin Yong, Deputy Governor of the People’s Bank of China (PBOC), said at the CIC Forum 2017 in Beijing. The China Investment Corp (CIC), a sovereign wealth fund, manages part of China’s foreign exchange reserves.
• China’s foreign exchange reserves jumped to a seven-month high at the end of May on curbed capital outflows and a weakened U.S. dollar. The reserves hit USD3.05 trillion at the end of May, up USD24 billion from a month earlier, the People’s Bank of China (PBOC) said. It was the fourth straight month of increase, giving the central bank ammunition to defend the yuan.
• The People’s Bank of China (PBOC) set the yuan mid-point at 6.7858 against the U.S.dollar on June 7, its strongest level since November 9, 2016. The interest rate was only one element pushing up the yuan recently, especially in the offshore market, while the new factor added to the pricing model of the yuan by the central bank played a more significant role, Xie Yaxuan, Chief Economist with China Merchants Securities Co said.
• U.S. investment bank Goldman Sachs will continue to invest in its China business as it expects greater liberalization of the Chinese financial services industry, Lloyd Blankfein, Chief Executive of the bank, said. He added that the investment banking industry in China “should be given more freedom” as it is the basis for the success of other industries by providing financing, risk management and advice on business reorganization.
• China Rapid Finance (CRF), the Chinese financial technology business that recently listed in New York, expects to add up to three million users on its lending platform this year despite the government’s push to tighten restrictions on the online lending sector. One of China’s largest online consumer lending platforms in terms of number of loans transacted, CRF raised USD69 million on the New York Stock Exchange (NYSE) in late April, putting it on a fast track to tap China’s underdeveloped consumer finance businesses.

Foreign trade

• China and the U.S. should build on their initial consensus, and come up with a long-term plan to settle their trade disputes, U.S. Treasury Secretary Steven Mnuchin said. He added that instead of the 100 days originally agreed, the two sides had to enter a “one-year cycle of negotiations” to ensure the outcomes of talks were put into practice. The two nations announced some initial results of their trade talks on May 12, including China agreeing to let in U.S. beef, natural gas and financial services by mid-July, when the two sides are scheduled to wrap up a 100-day action plan to improve trade ties during high-level talks in Washington.
• China’s foreign trade grew 18.3% in May year-on-year to CNY2.35 trillion. China’s exports increased by 15.5% to CNY1.32 trillion and imports rose 22.1% year-on-year to CNY1.03 trillion, according to the General Administration of Customs. It produced a trade balance of CNY281.6 billion. The monthly trade surplus widened from April’s CNY281.6 billion but was 3.4% lower than in May last year. In dollar-dominated terms, exports rose almost 9% year-on-year, while imports jumped nearly 15%.
• China has condemned the European Commission (EC) for imposing new anti-dumping duties on its steel products. The Commission said it would levy duties of up to 35.9% on Chinese hot-rolled flat steel in a bid to create a level playing field with China. The EC said Chinese producers gain from preferential lending, tax rebates and other financial help that allow exports to the EU at artificially-low prices.

IPR protection

• The recently closed 2017 China Beijing International Fair for Trade in Services introduced auctions for the first time. Among the 107 auctioned items there were 35 intellectual properties, including the rights to cartoon characters, copyright of written works, and broadcast and adaptation rights to videos.
• The Liaoning provincial IP authority and the leadership office of the Liaoning pilot free trade area recently unveiled guidelines for IP work in the area. The guidelines suggested borrowing international common practices and experience of the existing domestic free trade zones in Shanghai and Fujian, and start reforms in the administration and enforcement of patents, trademarks, copyrights, integrated circuit designs and trade secrets.

Macro-economy

• China’s services industries grew at the fastest pace in four months in May. The Caixin General Services Purchasing Managers’ Index (PMI) rose to 52.8 in May from April’s 51.5. It was the highest reading since January’s 53.1 points. A reading above 50 indicates expansion.
• China National Building Material Group (CNBMG), the world’s largest construction material maker and the nation’s sixth largest glass maker, aims to turn Hong Kong-listed China Glass into a platform for overhauling China’s fragmented and troubled glass industry. China Glass also aims to pursue overseas expansion through acquisitions and building new plants in western developed markets and emerging markets along the new Silk Road initiative. China Glass wants to become one of the world’s top three glass makers by capacity in three year. China’s debt-laden glass industry’s low industry concentration – with the largest player commanding only around 10% of industry output – is a main reason for its poor profitability.

Mergers & acquisitions

• China National Chemical Corp (ChemChina) has completed the second settlement of its tender offer for Basel-based Syngenta, increasing its stake to 94.7%. ChemChina plans to delist Syngenta’s shares on the Zurich-based SIX Swiss Exchange and the New York Stock Exchange (NYSE) as soon as permitted by law and applicable regulations. Syngenta is the largest European producer of hybrid seeds and crop protection products.
• Chinese companies have less appetite for mergers and acquisitions this year as the government tightened scrutiny on cross-border investment flows, Ernst & Young said. The firm found 44% of Chinese companies said they have five or more M&A projects in the pipeline, down from 90% in last year’s survey, EY said in the China portion of its Global Capital Confidence Barometer report. The report surveyed over 2,300 executives globally, with 154 from China. In the first five months, exports increased by 14.8% from a year ago and imports jumped 26.5%. The gains reversed a 1.8% year-on-year decline in exports and 3% fall in imports during the same period last year.
• In a letter, 27 U.S. lawmakers have urged U.S. Treasury Secretary Steven Mnuchin to reject the proposed USD2.33 billion sale of U.S. aluminum products maker Aleris to China Zhongwang Holdings to protect U.S. security interests. The lawmakers said Aleris was involved in the production and testing of specialized alloys used by the defense industry, and the company’s research and technology were critical to U.S. economic and national security.

Real estate

• China Vanke said its second-largest shareholder, Shenzhen Metro Group, is considering raising its stake in the property developer. Trading of its yuan-denominated A shares was halted on the Shenzhen exchange, after they fell 1% to CNY20.87. The company’s Hong Kong-listed stock jumped as much as 5.2% to a one-month high of HKD21.3. Analysts say the surge in the share price reflects investors’ high expectations that the state-owned subway operator, an ally of Vanke’s management, will replace raider Baoneng Group as the largest shareholder after the transaction.
• China Evergrande Group shares hit another all-time high as the developer vows to repay all of its perpetual bonds by the end of June. China’s most-indebted developer said it had already redeemed 70% of its outstanding perpetual bonds. By the end of 2016, the developer owed more than CNY100 billion in perpetual bonds at an interest cost of CNY10.6 billion last year. Its contracted property sales in the first five months reached CNY183 billion, a 66% year-on-year rise.
• As many as 25 Chinese property developers have engaged in fierce bidding for six plots of land in Zhengding, Hebei province, now a district of the provincial capital Shijiazhuang, in which Chinese President Xi Jinping had worked in the 1980s. Local land prices have risen more than 800% since last December. The most expensive plot is now priced at CNY20,900 per square meter. The six plots sold for a total CNY4.2 billion, all going to local developers.
• China was the top country of origin in both the buying and selling of U.S. commercial real estate last year, according to the 2017 Commercial Real Estate International Business Trends report by the U.S. National Association of Realtors (NAR).
• Many Hong Kong apartment investors are taking a wait-and-see attitude as Deutsche Bank forecast collapsing property prices and an interest rate increase in the United States is expected. A mere 80 units were transacted so far out of the 206 offered in the third batch of apartments at Victoria Skye, developed by K&K Properties at the old Kai Tak airport site in Kowloon, even though 2,300 buyers had registered their interest. The first lots to sell were the smallest units that involved the least upfront payment. Hong Kong’s residential property prices, already the world’s highest by square footage, will likely decline by nearly half over the next 10 years as a rapidly ageing population combines with a rising supply of new apartments to dent demand, according to Deutsche Bank.

Retail

• Chinese household confidence took a beating from China’s weak stock market and measures to curb the property market. The China Wealth Index, compiled every two months by the Bank of Communications (BoCom) and research firm Nielsen, fell to 135 in May from March’s 138, which was the second highest on record. A reading above 100 reflects optimism among over 1,800 households interviewed.

Science & technology

• China is making preliminary preparations to send an astronaut to the moon, according to Yang Liwei, Deputy Director General of the China Manned Space Agency and China’s first man in space. Official approval and funding are expected soon, but the trip itself could still be many years off, possibly by 2036. China’s space budget is still only about one-tenth of that of the United States at about USD2 billion a year. China is also making progress building a spaceplane that can take off and land the way airplanes do. It would make going to space cheaper and more environmentally friendly.

Stock markets

• At least 18 China-listed companies mobilized employees to buy their shares, and said any losses incurred will be covered by the Chairmen of the respective companies on condition that the purchased shares are held for at least 12 months. The companies said the stock market needed to be stabilized amid “irrational” declines in share prices. The Shanghai Composite Index is down 4.5% from this year’s high in April amid government-led deleveraging in the financial sector.

Travel

• HNA Group has denied corruption allegations made by fugitive tycoon Guo Wengui and says it may pursue legal action against him. The comments were the company’s first public statements on the claims. Guo is wanted on corruption charges in China and has made a series of graft allegations against the Chinese government and company officials.

VIP visits

• Chinese President Xi Jinping had a meeting with California Governor Jerry Brown, who was in Beijing to attend a Clean Energy Ministerial meeting. Xi encouraged California to make more contributions to promoting China-U.S. cooperation in fields like technology, innovation and green development, and welcomed California to participate in the Belt and Road Initiative. The California government and China’s Ministry of Science and Technology signed an agreement for greater collaboration on countering climate change.

Finance

• The China Development Bank (CDB) will invest CNY250 billion in projects linked to the Belt and Road Initiative during the next three years. Up to CNY100 billion will be earmarked for infrastructure projects while a further CNY100 billion will be invested in industrial cooperation. Another CNY50 billion will be used for financial cooperation projects. CDB has assets of more than CNY14 trillion and has more than 500 projects in the pipeline for Belt and Road regions worth over USD350 billion. The CDB also signed a memorandum with Deutsche Bank for an initial cooperation plan worth about USD3 billion during the next five years.
• Standard & Poor’s is likely to follow its regular ratings review schedule for China, and does not see any basis at this point for an out-of-schedule committee meeting, Kim Eng Tan, Asia-Pacific Senior Director of Sovereign Ratings said. His remarks came after Moody’s Investors Service cut its sovereign rating on China to a1, putting them on par with those of Fitch Ratings. S&P has an aa-rating on China with a negative outlook that it has maintained since March 2016. S&P last changed its rating on China in late 2010, when it upgraded it by one notch.
• The People’s Bank of China (PBOC) set the yuan’s daily fixing at 6.8090 to the U.S. dollar on June 1, its strongest level since November, while the overnight yuan interbank rate in Hong Kong (HIBOR), an indicator reflecting the cost for short selling of the yuan, spiked to the highest level in six months. The rise in the yuan exchange rate occurred after the central bank’s move to add a counter-cyclical factor to the pricing model for the currency. The adjustment aims to reduce the potential for “herd behavior” in the foreign exchange market.
• The State Administration of Foreign Exchange (SAFE) has issued a notice requiring banks to report every cash withdrawal made outside China’s borders, and every overseas card transaction valued over CNY1,000. Banks must submit a report of overseas transactions on a daily basis from September 2. Overseas withdrawals are capped at CNY10,000 per day, and CNY100,000 per year, for UnionPay cardholders.

Foreign investment

• Nokia has signed an agreement with state-owned investment company China Huaxin Post & Telecommunication Economy Development Center to set up a joint venture – Nokia Shanghai Bell – to integrate Alcatel-Lucent Shanghai Bell and Nokia’s China operations. Nokia will own 50% plus one share of the new joint venture, with China Huaxin owning the remainder. Mike Wang, Nokia’s President in China, said the upcoming 5G mobile communication technology will create big opportunities.

Macro-economy

• Average salaries in China’s information technology industry have exceeded those in the financial sector for the first time since 2008, according to China’s National Bureau of Statistics (NBS). Average annual income was CNY122,478 per person in the former, surpassing average annual income of CNY117,418 in the latter. It was the first time that the technology sector’s wage level was higher than finance’s since industry-specific wage data became available in 2008.

Real estate

• China’s richest man Wang Jianlin has lost up to CNY200 million in a Spanish deal concluded three years ago because of a shift in exchange rates. Wanda Hotel Development Co has sold its stake in the Plaza de Espana 19 Development to Spanish property company Baraka Global Invest. The sales price was €272 million, higher than the €265 million Wanda had paid, but due to the depreciation of the euro and the strengthening of the yuan, Wanda lost on the deal. Wanda’s plans to redevelop the hotel, shopping mall and apartments never materialized.
• Norman Chan, Chief Executive of the Hong Kong Monetary Authority (HKMA), said the high demand for units in the Ocean Pride development was reminiscent of the property market’s 1997 peak, that eventually led to a market crash and a six-year slump. There are risks that the property bubble may burst in the city, he said. Nicholas Brooke, Chairman of Professional Property Services Group agreed, saying that there were similarities to 1997 in terms of price rises, the queuing, long upward cycle and the strong general buying momentum in the market. Hong Kong’s average April home prices increased 20% from a year ago, making the city the world’s most expensive residential market. The price surge surpassed the previous peaks in 2015 and in 1997.

Stock markets

• Hong Kong Exchanges and Clearing (HKEX) will launch the consultation for a third board that caters to start-ups and technology firms that do not qualify for listings on the main board and the Growth Enterprise Market as early as in two weeks’ time, said Chief Executive Charles Li. The new so called “Third Board” would cover companies that are pre-profit and even pre-revenue, such as some biotechnology companies that had just “one discovery or one patent”.
• The Hong Kong unit of Robeco is opening its first mainland China fund to outside money. Chief China Investment Officer Victoria Mio will target European clients who want to invest in Chinese equities. “There’s potential for valuation re-rating. It’s a market that offers a lot of good investment opportunities that you cannot find overseas,” she said. Rotterdam-based Robeco managed USD154 billion of assets as of the end of March, and the portfolio Mio manages was valued at about USD450 million.
• China’s securities market regulator has rejected more initial public offering applications from companies amid efforts to improve the quality of listed companies and protect the interests of individual investors. The China Securities Regulatory Commission (CSRC) in May reviewed iPO application documents from 64 companies, and nine of them, or 14% of the total, failed to get the approval to go public. The rate was higher than the 12% in April and the 11.6% for the first five months of this year.

Travel

• China Railway Rolling Stock Corp (CRRS) has sold its products to 102 countries and regions, and plans further expansion. The group’s assets abroad have surged from CNY3 billion in 2013 to CNY30.6 billion last year, and the number of overseas employees has jumped from 509 in 2013 to 4,808 last year. CRRS will deliver its first metro cars to Istanbul later this year, and plans to build a freight train factory in Canada. CRRC’s total orders from abroad in 2016 surged by 40% to USD8.1 billion.

Automotive

• Guangzhou Vanlead Group Co, one of China’s leading radial tire producers, is constructing a USD1 billion plant in the U.S. state of South Carolina. The group also plans to set up a research center in Europe and a joint research facility in Akron, Ohio, which is seen as the “Silicon Valley” of the rubber industry, said Fu Shoujie, Chairman of Vanlead. In 2016,Vanlead became the first Chinese tire company to pass the tests of German testing company TUV Rheinland.

Finance

• The Central Commission for Discipline Inspection (CCDI) is investigating Yang Jiacai, Assistant Chairman of the China Banking Regulatory Commission (CBRC). He was responsible for bank supervision at the CBRC. Yang is the latest high-ranking official of a Chinese financial regulatory body to be investigated in recent weeks. Xiang Junbo, Chairman of the China Insurance Regulatory Commission (CIRC) is also under investigation.
• China Life Insurance (Group) is buying 48 commercial properties in the United States with a total value of USD950 million from ElmTree Funds, a private-equity firm based in the city of St Louis. China Life said ElmTree would retain a 5% stake and continue to jointly manage the properties, which include logistics centers, office buildings and healthcare facilities. Tenants include GE, FedEx, Caterpillar and T-Mobile.
• The interbank funding cost of Chinese banks is quickly approaching, if not exceeding, the interest rate banks charge their clients, which could lead to a reduction in bank lending or a quick rise of interest rates. The one-year Shanghai Interbank Offered rate (Shibor) rose above the one-year prime loan rate. The Shibor’s 4.3024 reading was its highest in more than two years, and marked the first time the Shibor had exceeded the prime loan rate since the data series became available in 2013.
• Ant Financial, the finance arm of Alibaba, announced the launch of its mobile wallet for Hong Kong users. AlipayHK is similar to its Chinese counterpart Alipay. Registered users are able to top up their mobile wallets and make in-store payments that are settled in Hong Kong dollars at merchants. Cashiers need only scan a QR code generated by the user’s AlipayHK app and the amount will be deducted automatically from the wallet.
• China is stepping up efforts to establish a system to gather information about every individual’s income and property. The Central Leading Group for Comprehensively Deepening Reform approved an overall plan to create an individual income and property information gathering system. It will help the government make policies on matters including tax and housing property tax reforms in a more sensible way, Kuang Xianming, Director of the Research Center for Economy under the China Institute for Reform and Development, said.
• An additional 11 Chinese commercial banks have joined SWIFT’s global payments innovation (GPI) initiative to offer faster, more transparent and traceable cross-border payments for Chinese companies. A total of 13 Chinese banks have now joined GPI, representing an estimated 80% of Chinese cross-border payments. The Bank of China (BOC) and the Industrial and Commercial Bank of China (ICBC) had already joined the initiative.
• China is to implement a new data-driven national credit system, with automatically-generated ratings, worrying some foreign companies. The full effects of the new system may be felt by 2020, according to the Meractor Institute for China Studies (Merics). Under the system, companies can be given lower scores if they do not pay loans back in a timely manner, or fail to comply with work safety standards, emissions targets, guidelines for government investment, or punctual delivery of goods bought online.
• The State Administration of Foreign Exchange (SAFE) published a list of the 10 top cases of people and firms illegally moving money abroad. It named five companies, accusing them of forging contracts or invoices to remit a combined USD226 million offshore since 2015. Ningbo Big Fortune International Trade was fined CNY22.8 million for moving USD119 million abroad “seriously disturbing the foreign exchange market order”.
• Foreign banks are divided on whether to help finance China’s Silk Road initiative, with some seeing an opportunity in providing direct financing for the government-backed project while others opt for reduced exposure, citing concerns over poor returns from large infrastructure investments and other risks.

Foreign investment

• China’s plan to boost its domestic manufacturing industry has been somewhat misunderstood by foreign organizations as a move to favor local companies over foreign competition, Xin Guobin, Vice Minister of Industry and Information Technology said. He reaffirmed foreign participation in the “Made in China 2025” plan at a press briefing in Beijing. He said all companies in China, whether Chinese or foreign-funded, would receive the same treatment under the “China 2025” policies.
• Qualcomm, state-owned telecom company Datang Telecom Technology Co and two local investment groups are setting up a new joint venture in China to build chips for entry-level smartphones. JLQ Technology will have a registered capital of CNY2.98 billion. Qualcomm will pour CNY720 million into the venture for a 24% stake, as well as transfer and license technology. Datang will hold a 24% stake, with investment company JAC Capital accounting for 34.6%. Local private equity firm Wise Road Capital will have a 17.4% stake.

Foreign trade

• Asian trade ministers met in Hanoi, Vietnam, to hammer out the terms of he 16-nation Regional Comprehensive Economic Partnership (RCEP). It excludes the United States, which had been leading another regional trade pact – the Trans-Pacific Partnership (TPP) – until U.S. President Donald Trump abruptly abandoned it in January, but the 11 remaining TPP nations vowed to resuscitate the deal without the U.S.
• China’s Ministry of Commerce (MOFCOM) has restricted the export of big dredgers which it has used to build artificial islands in the South China Sea, citing national security concerns. From June 1, all export deals for dredgers that might affect national security would require State Council approval. The notice listed five types of dredgers that could dig more than 15 meters deep, had a large carrying capacity, and could dredge at high speed. Building artificial islands in the South China Sea, China has developed advanced dredging technology that it doesn’t want other countries to obtain, especially those in Southeast Asia with competing maritime claims.

Real estate

• Shanghai will expand a trial program to tear down old buildings that cannot be saved by repairing and renovating. The buildings involved had become so outdated that residents had to share kitchens, bathrooms and other facilities, and renovations to improve living conditions were not feasible. About 500,000 square meters of such residential buildings – deemed to be beyond saving – were planned to be torn down and replaced from 2016 to 2020.
• By the end of 2017, China will have made available 18 million new homes in rundown urban areas as part of a three-year program, the government said. It invested CNY1.48 trillion in 2016 to build 6.06 million new homes for shanty redevelopment, according to the Ministry of Housing and Urban-Rural Development.
• Thousands of homebuyers shrugged off rising mortgage rates and joined long queues at the offices of some of Hong Kong’s biggest developers hoping to snap up newly released flats last week. As many as 4,800 buyers registered to bid for 307 flats at K & K Property’s Victoria Skye project, which is located at the former airport site of Kai Tak. “Sales had been impressive,” said Midland Realty’s Chief Residential Executive Sammy Po.

Retail

• Cainiao Network, the logistics arm of Alibaba, said it will strengthen the deployment of artificial intelligent (AI) technology in its courier network by putting one million smart logistics vehicles into the market to cope with exploding delivery volumes in the future – expected to reach one billion a day within a decade. The smart logistics vehicles, co-manufactured with other automobile companies including SAIC Motor and Dongfeng Motor, will optimize the delivery route for the couriers based on Cainiao’s advanced big data and algorithms.
• China’s consumer confidence climbed to the highest level in two years, edging up 2 points from a quarter earlier to 110 points at the end of the first quarter, Nielsen said in a report.
• Walmart has opened of its flagship online store on JD.com, nearly a year after both companies formed a strategic alliance. Walmart had 433 bricks-and-mortar retail sites in China as of October last year. It picked more than 1,700 of the most-purchased items to offer on Walmart’s flagship online store. Walmart made a USD50 million investment last October in New Dada, the joint venture between JD.com and delivery specialist Dada that operates China’s largest on-demand logistics and online-to-offline grocery platform. JD.com had 236.5 million active customer accounts at the end of March. The average online shopper in the country is forecast to spend CNY12,198 online this year, a 7% increase over last year.

Stock markets

• Yanzhou Coal Mining has seen its Hong Kong share price tumble 21% from this year’s high, on the back of profit-taking and a slumping coal price. But the drop in the share price could offer investors an ideal entry point, according to some analysts. They cite the company’s strong production growth outlook, powered both by domestic and overseas mine development, as well as an impending acquisition of a major producer in Australia. Shandong-based Yanzhou’s management said in March it aimed to raise coal output by 29.2% to CNY78.6 million tons this year.
• The China Securities Regulatory Commission (CSRC) has fined Citic Securities, Haitong Securities, and Guosen Securities, blaming them for their role in the 2015 stock market crash. Citic Securities had broken rules on margin financing and its securities lending business by “failing to execute business contracts with its customers in accordance with the relevant provisions”, the investigation by the CSRC found. It was fined CNY308.3 million and had a further CNY61.7 million of “illegal proceeds” confiscated. Haitong was fined CNY2.5 million, while Guosen was fined CNY105 million.
• China is considering allowing foreign investors to trade domestic crude oil and iron ore futures as part of financial reforms, Fang Xinghai, Vice Chairman of the China Securities Regulatory Commission (CSRC) said. The regulators are also studying new futures such as pulp, hog, jujube and apple, and will allow commercial banks to participate in the treasury futures market.
• China’s securities regulator has ordered substantial shareholders to spread the disposals of their stakes in publicly traded companies, anxious to manage any sharp jumps or plunges in stock prices. Substantial shareholders are barred from selling their holdings through so-called block trades, in a manner that may “maliciously” cause prices to plunge and hurt public confidence, the China Securities Regulatory Commission (CSRC) announced.

Travel

• The Chinese government has issued a first set of draft rules for the country’s bicycle-sharing industry, with more than 30 companies emerging in major cities in less than a year. Customers who use smartphone applications to rent bicycles must register their true identities, and can no longer be anonymous. Users must be older than 12 years, and be insured for personal accidents and third-party liability. Any illegal acts committed, or “uncivilized behavior”, will be marked on the user’s credit record. Customers can pick up a bicycle and leave it anywhere after use.
• By year’s end, mobile payment will be accepted on all public buses in Hangzhou, the first city in China to do so. Mobile payment terminals will be installed in all buses. Passengers can use Alipay and UnionPay flash payment cards, as well as ApplePay, SamsungPay, HuaweiPay, MiPay and AndroidPay with smartphones or smart watches.
• Sales of DJI, the world’s largest maker of recreational drones, declined in the domestic market in recent days after the Civil Aviation Administration of China (CAAC) issued a ruling that all civil-use drones weighing more than 250 gram have to be registered online starting June 1. More than 240 airline flights were disrupted by drones flying near Chongqing Jiangbei International Airport in April. The real-name rule covers nearly all DJI products, including its popular Phantom and Mavic models. DJI has installed “no-fly zone” software on all its drones to better ensure aviation safety, preventing the drones from flying too close to airports. DJI currently dominates 70% of the world’s market for drones, with sales surging 60% to top CNY10 billion in 2016.
• Chinese regulators will submit proposals to reform the management of the country’s airspace by the end of this month in a bid to ease flight delays and boost aviation growth, Cai Jun, Deputy Director of the Air Traffic Control Commission, said at a forum in Beijing. The plan aimed to eventually integrate civilian and military management of China’s airspace and improve the country’s flight route network.
• The number of passengers on domestic flights in China rose 15% last year, while the number of air travelers on international flights arriving or departing the country increased by 26%. The number of people flying to, from and within China will almost double to 927 million annually by 2025, from 487 million in 2015. By comparison, passenger numbers in the U.S. will increase to 904 million by 2025 from 657 million in 2015, according to forecasts.
• CRRC Zhuzhou Locomotive Co, China’s top train manufacturer, received the country’s first certificate to export rolling stock to Europe from Germany’s safety standards firm TUV Rheinland. With the certificate, CRRC’s bullet trains will firstly be exported to Macedonia, followed by Turkey and other nations along the Belt and Road. TUV Rheinland has spent three years in testing and supporting CRRC to meet the technical standards.

Belt and Road Forum

• U.S. construction and engineering companies have been largely silent on the One Belt, One Road initiative, according to the South China Morning Post. Part of the reluctance might be a result of conflicting technical standards.“In addition to increasing economic interdependence between China and the region, the initiative could create new barriers to U.S. exports and investment by exporting Chinese standards,” the Brookings Institution said in a report. “For instance, OBOR’s development of high-speed rail connections across South-east Asia comes with a willingness to accept Chinese high-speed rail standards, creating barriers to competing U.S. technologies.”
• Wang Jianlin, China’s richest man and Chairman of Dalian Wanda Group, has revealed plans to build gigantic theme parks whose scale could rival Disneyland, in countries along the Belt and Road route. The company has already signed contracts to open two Wanda City theme parks in Paris and New Delhi, but Wang did not specify in which two “major countries” along the Belt and Road route the remaining Wanda City parks would be constructed.
• The European Union is actively pushing China to speed up talks over an investment agreement, and to take concrete action to cut its huge overcapacity in steel, according to European Commission Vice President Jyrki Katainen. He took up the issues when meeting Vice Premier Ma Kai on the margins of the Belt and Road Forum.
• President Xi Jinping told Myanmar State Counselor Aung San Suu Kyi that China would continue to help the country achieve peace and called for both sides to maintain stability on their shared border. The two leaders met following China’s Belt and Road Forum. Premier Li Keqiang called for steady progress in the development of oil pipelines, ports, and economic zones.
• China is likely to incorporate the Arctic Circle into its Belt and Road Initiative, and change it to ‘One Belt, One Road, One Circle’. The Arctic holds an estimated 30% of the world’s undiscovered natural gas and 13% of its undiscovered oil, according to the United States Geological Survey. During his visit to Finland in April, Chinese President Xi Jinping said that China and Finland would “seize the opportunity of Finland’s rotating chairmanship of the Arctic Council to enhance cooperation in Arctic affairs and promote environmental protection and sustainable development of the Arctic”.

Automotive

• Audi, a unit of Volkswagen, has resolved a dispute with its dealers that could have disrupted the carmaker’s business in China. The dealers objected to Audi’s plans to cooperate with SAiC Motor Corp, China’s largest automaker, as the dealers currently sell Audi cars imported from Germany as well as Chinese-made vehicles from Audi’s existing joint venture with FAW.They said the partnership would cause current dealers to lose out to SAiC on access to key future products, affecting their sales and profitability. Audi decided to distribute its models from a potential partnership with SaiC via its existing sales network in China.

Finance

• China increased its holdings of U.S. Treasuries by the most in two years by USD27.9 billion to USD1.09 trillion in March. China remains the second-largest foreign holder of American debt. Adding the USD3.7 billion surge in Belgium’s ownership, which is often seen as a home to China’s custodial accounts, the total increase was the biggest since 2014. Japan, the largest non-U.S. holder of government debt, increased its total to USD1.12 trillion, up USD3.4 billion from a month earlier.
• Toshihiro Nikai, Secretary General of Japan’s Liberal Democratic Party (LDP), has told Chinese President Xi Jinping that Japan was interested in joining the Asian Infrastructure Investment Bank (AIIB), providing that outstanding questions over the governance of the bank were resolved. Japanese Chief Cabinet Secretary Yoshihide Suga said the Japanese government was still carefully monitoring the AIIB’s operations.
• The People’s Bank of China (PBOC) has set up a fintech committee to enhance research, planning and coordination of work on financial technology. Its impact on monetary policy, financial markets, financial stability, payment and clearing will be studied. “Fintech, or technology-driven financial innovation, has both injected vitality into financial development and brought new challenges to financial security,” the PBOC said on its website.
• The China Insurance Regulatory Commission (CIRC) plans to conduct inspections to rectify market irregularities and protect consumer interests. From June to mid-October, local insurance authorities will conduct on-site investigations in 46 branches of 16 insurance entities. The inspections will focus on violations including fraudulent sales practices, fake or absent customer information, and failure to pay small insurance claims efficiently.
• Ant Financial has postponed its planned IPO to the end of next year to focus on defending and regaining marketshare from Tencent’s WeChat. Ant Financial’s Alipay held 55% of China’s mobile payments market in 2016, down from 68% just a year earlier, according to iResearch Consulting Group. Tencent’s marketshare climbed from 21% to 37% from 2015 to 2016.
• Alastair Wilson, Moody’s Investor Services’ Director of Global Sovereign Rating, said the Agency was confident that China’s economy is well geared to withstand financial shocks, despite the nation’s high debt levels. Speaking at Moody’s annual Emerging Markets Forum in London, Wilson said China’s fiscal strength, its partially closed capital account, and high foreign exchange reserves are all helping it absorb shocks, if necessary, and dissipate them over time. Moody’s current sovereign rating for China is Aa3, which is classified as investment grade.
• Shanghai will further regulate illegal fundraising operations and cross-border transactions through leasing companies amid the national crackdown on financial risks, the city government said. All domestic and foreign leasing companies registered in Shanghai will be targeted. Shanghai had 1,216 leasing firms at the end of 2015, nearly a third of the national number. The campaign will last till June 24.

Foreign investment

• Foreign direct investment (FDI) between the U.S. and China surpassed USD60 billion in 2016, a historic high, according to a report by the Rhodium Group and the National Committee on U.S.-China Relations. “What used to be a one-way street – with money flowing predominantly from the United States to China – is now a two-way highway with tens of billions of dollars in annual FDI flowing in each direction,” the report said. The cumulative value of U.S. FDI transactions in China was over USD240 billion, and the cumulative Chinese FDI in the U.S. totaled USD110 billion by the end of 2016.
• Shanghai was second only to London in 2015 as a preferred investment site for foreign money, according to a KPMG report, and the city aims to keep its high profile after attracting 15% of foreign funds invested in China last year. But foreign direct investment (FDI) in Shanghai in the first quarter of this year declined for the first time in 17 years.

Macro-economy

• More than 30,000 Chinese companies and institutions – including several major firms in Hong Kong – were affected by the WannaCry ransomware cyber-attack. More than 4,300 educational institutions were infected by the malware, according to Qihoo 360’s Threat Intelligence Center. Over 20,000 petrol stations went offline, suspending on-line payments. More than 20% of all personal computers in China are still running the Windows XP operating system, which is the most vulnerable to the attack.
• The Chinese government plans to cut annual corporate costs by CNY120 billion through measures such as lowering logistics costs and cutting business fees. Railway freight rates will also be lowered, as well as electricity transmission and distribution rates. A government meeting chaired by Premier Li Keqiang also called for more efforts to implement the “Made in China 2025” plan.
• The National Development and Reform Commission (NDRC) has approved 12 fixed-asset investment projects worth a total of CNY141.6 billion in April, mainly in energy, water conservation and transport. China’s investment in fixed assets increased 8.9% year-on-year in the first four months of 2017.
• Chinese authorities have unveiled a reform plan for the country’s oil and gas industry to improve efficiency, giving more play to the market. China’s oil and gas sector is dominated by three state-owned heavyweights: China National Petroleum Corp (CNPC), China Petrochemical Corp (Sinopec) and China National Offshore Oil Corp (CNOOC). The reform calls for the participation of eligible enterprises in prospecting and developing oil and gas resources which used to be dominated by state-owned companies.

Mergers & acquisitions

• Two of China’s biggest foam and mattress makers Mlily and King Koil are competing to acquire the United Kingdom’s biggest bed retailer Dreams with bids expected in the range of GBP400 million. They are also up against UK bed maker Silentnight, owned by HIG Capital. Dreams was founded in 1986 under the name Sofa Bed Center in Uxbridge, West London, by Mike and Carol Clare. Mike Clare joined the ranks of the UK’s wealthiest people when he sold the company for GBP200 million to UK-based private equity firm Exponent in 2008. In 2016, Dreams posted pretax profits of GBP32 million, up 136%.
• The Shanghai municipal government announced a fresh round of reform and restructuring of local state-owned enterprises (SOEs). As part of the reform, Bright Food (Group) Co will absorb Shanghai Fisheries Group Co, which will become a wholly-owned subsidiary of Bright Food.

Real estate

• Henderson Land Development has bought the world’s most expensive commercial land plot in Hong Kong’s Central district, beating eight rival bids. Henderson Land will pay a record HKD23.28 billion for the government’s Murray Road commercial plot. The plot, which can be developed into a commercial building with 465,005 square feet of total gross floor area, translates to HKD50,064 per square foot, way above market expectations and professional valuations.
• Growth in new home sales continued to slow across China in the first four months of this year as restraint measures were strictly enforced. More than CNY2.79 trillion of new homes, excluding government-funded affordable housing, were sold between January and April, a year-on-year rise of 16.1%, the National Bureau of Statistics (NBS) said. The area of new homes sold during the four-month period climbed 13% from a year earlier to 365.25 million square meters.
• An auction of nine plots of land to be held on May 22 in Jiaxing, a city about an hour’s drive from Shanghai, attracted at least 425 bidders. The authorities had to change the venue of the auction from a conference room to the city’s 1,400-seat “grand theatre” to accommodate the representatives from property developers. The starting prices of the land on sale range from CNY2,790 to CNY12,100 per square meter, just a fraction of that in the larger neighboring cities of Shanghai and Hangzhou. The city also announced a lock-up period to curb speculation. Homebuyers must hold on to properties for at least two years before putting them up for sale.

Retail

• China’s 100 leading catering businesses last year saw a quicker growth pace in business revenue and robust profit expansion. Combined business revenues of top restaurant chains rose 7.4% year-on-year in 2016 to CNY218 billion, up 5 percentage points from that in 2015, according to the China Cuisine Association. Combined net profits surged 28.8% in 2016 from 2015. Most top restaurant chains were located in Shanghai, Beijing and Chongqing, with the business revenues in these three cities accounting for 67% of the total from the 100 industry leaders last year. The operating income of the Chinese catering industry nationwide was CNY919.6 billion in the first quarter of 2017, up 10.8% year-on-year.

Science & technology

• A survey of 6,217 students who plan to study abroad, or their parents, found that the United States remains the top choice, with 50% preferring the U.S., up from 46% last year. It is the third consecutive year the country ranked No 1 in the annual Report on Chinese Students’ Overseas Study. The UK was the second-most popular destination, as it has been for three years. The survey, by Vision Overseas Consulting Co and Kantar Millward Brown, was conducted in over 40 cities in February and March.
• China is stepping up research and development (R&D) of the Tianhe-3 supercomputer, which aims to be 10 times faster than the current world leader. The Tianhe-3 is designed as the world’s first prototype exascale supercomputer, which means it can make a quintillion calculations per second. The supercomputer will be used in such fields as the analysis of smog distribution, airplane design, oil surveying, and the development of artificial intelligence.

Stock markets

• The China Securities Regulatory Commission (CSRC) announced it is enforcing penalties on Sealand Securities Co, a mid-sized securities firm, over the bond trading scandal involving up to CNY16.5 billion that emerged last December. The regulator will suspend Sealand Securities’ registration of asset management products and will ban the firm from opening new securities accounts for its clients. The penalties also included suspension of its bond underwriting business. The penalties are to last for one year.

Travel

• Visitor numbers to Taiwan fell by 10% to 2.54 million in the first quarter of this year, dragged down by a 42% drop in arrivals from the Chinese mainland to 659,575 from 1.14 million. Mainland visitors accounted for about 33% of the total in 2016, the biggest group.

VIP visits

• China will for the first time host a meeting of the group overseeing management of the Antarctic as the country is seeking to bolster its presence in both polar regions. Some 400 delegates, from more than 40 countries and international organizations, will attend the annual meeting of the Antarctic Treaty, which begins on May 22 and ends on June 1. China’s top diplomat, Yang Jiechi, and Vice Premier Zhang Gaoli are representing China. The meeting will cover administration of the treaty, climate change, tourism and other management issues. The treaty has 53 members, 29 of which are consultative parties with voting rights, including China, which joined in 1983.

Belt and Road Forum

• China is urgently seeking support from international lenders to close a yawning financing gap for projects under its “Belt and Road Initiative”, Yi Gang, Vice Governor of the People’s Bank of China (PBOC) said. Support from the global market was “desperately needed”, Yi added. The Asian Development Bank (ADB) says there is a USD26 trillion funding gap in the infrastructure projects that will be required in Asia by 2030. “Most projects are financed by Chinese financial institutions, while participation of international institutions is relatively limited,” Pan Guangwei, Vice Chairman of the China Banking Association, said.
• To increase the appeal of the Belt and Road Initiative, Beijing should explain its intentions, publish a list of projects and introduce some profitable pilot schemes to lure initial investors to get onboard, Zhao Xijun, Finance Professor at Renmin University in Beijing, said.
• China plans to import USD2 trillion of products from countries participating in the Belt and Road Initiative over the next five years, Commerce Minister Zhong Shan said.
• The presence of Chinese banks in the 64 countries along the route is still limited: nine Chinese banks had set up 62 branches in 26 countries by the end of 2016.
• Matt Pottinger, U.S. National Security Council Senior Director for East Asia, said the U.S. Embassy in Beijing and U.S. companies had teamed up to form the American Belt and Road Working Group. “U.S. firms have a long and successful track record in global infrastructure development, and are ready to participate in Belt and Road projects,” Pottinger said, adding that the project’s success would rest on several factors, including transparency in procurement and broad participation from the private sector.

Finance

• China’s foreign exchange reserves rose for the third month in a row in April, staying above the psychologically important USD3 trillion mark and giving the leadership more room to pursue structural reform. The reserves grew by USD20 billion in April to USD3.03 trillion. Bank of Communications (BoCom) Analyst Liu Jian said a fall in the U.S. dollar and a more stable economy eased expectations of further falls in the yuan and slowed capital outflows.
• The China Insurance Regulatory Commission (CIRC) has decided to toughen supervision of the industry to guard against financial risks. Chinese insurers used leveraged money to buy shares in listed companies, triggering sharp volatility in the market at the end of last year. Insurance funds should not invest in risky products, and there will be tougher supervision over equity changes of insurers, the CIRC said.
• Danish bank Saxo said Chinese carmaker Geely, the owner of Volvo, would become its largest shareholder by buying around 30% of its capital.“Saxo Bank is a trusted trading platform with a strong reputation. We expect to deliver group synergies from the development of financial services both within Geely Group and the wider Chinese market,” said Daniel Li, Geely’s Chief Financial Officer (CFO). Saxo was founded as a brokerage called Midas in 1992 before getting a banking permit in 2001.
• Net profits of Chinese banks stood at CNY493.3 billion in the first three months, up 4.61% year-on-year, said the China Banking Regulatory Commission (CBRC). Their total assets grew 14.3% year-on-year to CNY238.5 trillion, indicating that the profitability of commercial lenders was waning. Chinese lenders’ bad-loan ratio was almost flat at 1.74% at the end of March, said the CBRC. The banks’ loan loss provisions reached CNY2.82 trillion, up CNY156 billion from the end of 2016.
• Many Chinese financial institutions should have been closed because their existence is only adding risks to the country’s overall financial system, Xu Zhong, Research Director at the People’s Bank of China (PBOC) said. Some problematic financial institutions, including regional ones, need to go bust, but vested interests from local governments prevented it, he added. “Not a single Chinese financial institution has gone bankrupt. Are China’s financial institutions really so good that not even a single one has gone bust?”, Xu asked in a speech at Peking University.
• The Asian Infrastructure Investment Bank (AIIB) has approved seven new members of the bank: Bahrain, Bolivia, Chile, Cyprus, Greece, Romania and Samoa, bringing the bank’s total membership to 77 countries.

Foreign investment

• Efforts are being made to resolve a stalled copper mining deal between China and Afghanistan, a decade after the USD3 billion contract was signed, according to Janan Mosazai, Afghanistan’s Ambassador to China. Under the deal, MCC agreed to pay Afghanistan USD3 billion to lease the Mes Aynak mine, 40 km southeast of Kabul, which has Afghanistan’s largest copper deposit, for 30 years.
• Foreign companies could get more involved into the Made in China 2025 strategy by setting up research and development (R&D) centers, talent training organizations and smart plants in the country, Li Dong, Director of the Industrial Equipment Department at the Ministry of Industry and Information Technology (MIIT) said. The Ministry has selected a group of foreign enterprises as model players to help build smart plants in China. German companies SAP and Siemens, and Japanese shipbuilder Kawasaki Heavy Industries are among them.

Foreign trade

• China will extend anti-dumping duties on chloroprene rubber imported from Japan, the United States and the European Union for another five years. The Ministry of Commerce (MOFCOM) said anti-dumping duty rates for Japanese imports range from 10.2% to 43.9%, while those for U.S. producers are 151% and EU companies are subject to rates ranging from 11% to 151%. Chloroprene rubber is mostly used to make electrical cables and waterproof products.
• The U.S. Senate has voted to confirm Robert Lighthizer to be the next U.S. Trade Representative. He was a partner at the law firm of Skadden, Arps, Slate, Meagher & Flom and served as deputy USTR under President Ronald Reagan. He is widely seen as a strong supporter of the U.S. steel industry which has often accused China of unfair trade practices.
• U.S. Commerce Secretary Wilbur Ross sees the U.S. semiconductor industry as still dominant globally but said he is worried that it will be threatened by China’s planned investment to build up its own chip making industry. The Commerce Department is considering a national security review of semiconductors because of their “huge defense implications”. China is planning massive state-directed investments in semiconductor manufacturing capacity under its “Made in China 2025” program, which aims to replace mostly imported semiconductors with domestic products.
• China’s Ministry of Commerce questioned U.S. trade investigations into imports of steel products from six countries including China, describing the measures as “excessive.” The U.S. Department of Commerce has decided to initiate anti-dumping investigations against cold-drawn steel mechanical tubing from China, Germany, India, Italy, South Korea and Switzerland. Products from China and India will also be subject to anti-subsidy investigations.
• The 1,000th freight train linking China and Europe this year left Yiwu station for Madrid on May 13. From January 1 to May 13, the number of Sino-European freight trains increased by 612, or 158%, from a year earlier, according to China Railway Corp.

Macro-economy

• Chinese Vice Premier Zhang Gaoli visited the Xiongan New Area and said the government should “plan well before taking action and make steady efforts in planning construction”. The government announced the plan to set up the area on April 1. Zhang “stressed tight control of land, property development and neighboring regions as well as protecting historical and cultural heritage and the ecological environment”. Covering three counties in Hebei province, the new area is to take over some functions from Beijing and integrate the economies of Hebei, Beijing and Tianjin.
• China’s courier sector posted strong growth in 2016. The sector generated CNY397.4 billion in revenue last year, up 43.5% annually. A total of 31.28 billion deliveries were made last year, up 51.4% year-on-year, the China Postal Bureau said. Guangzhou was the city with the most express deliveries, followed by Shanghai, Shenzhen, Beijing and Hangzhou. The sector’s revenue target for 2020 is set at CNY800 billion.
• China’s factory gate prices eased more than expected in April, lowered by falling commodities prices, the National Bureau of Statistics (NBS) said. The producer price index (PPI) rose 6.4% in April compared with the same month a year earlier, lower than the market consensus of 6.7%. The index hit a peak of 7.8% growth in February, fueling concerns about reflation. The consumer price index (CPI) rose 1.2% in April, slightly higher than analysts’ predictions of a 1.1% gain. The index rose 0.9% in March.
• A drastic consolidation of major power generating companies is a “must-do” that is in line with massive efforts to cut overcapacity and lower greenhouse gas emissions, according to UBS. The Chinese authorities are attempting to create three energy giants through merging eight large-size companies. China Huadian Corp and China Guodian Corp could merge with China National Nuclear Corp; China Datang Corp is likely to be combined with China General Nuclear Power Corp; and China Huaneng Group may merge with State Power Investment Corp. Beijing has set a goal of limiting its coal-fired power generation capacity to 1,100 gigawatt (GW) by 2020, or 55% of the country’s total power generating capacity.
• Hong Kong’s economy grew at its fastest pace in six years in the first quarter. Gross domestic product (GDP) grew 4.3%. The expansion in the economy was boosted by the buoyant stock market, increased trade, a hot property sector, robust employment, and an encouraging global economic outlook, the government and experts said. The overall performance was well above the 3.7% average forecast by analysts. The growth is expected to continue into the second quarter.

Mergers & acquisitions

• Inner Mongolia Yili Industrial Group, China’s biggest dairy company, is competing with Dean Foods Co of Texas to buy Stonyfield, the largest American producer of organic yoghurt, in its first overseas acquisition. The deal is estimated to be worth USD850 million. Yili said in a stock exchange filing that the bidding process is in its preliminary stages. Stonyfield, based in New Hampshire, said on its website that it “makes everything certified organic”.

Retail

• May 10 was celebrated as the first Chinese Brands Day, which aims to publicize brands owned independently by Chinese companies and attach greater importance to brand building in the country. Yili Dairy is the most selected brand in China with over 1.1 billion purchases in a year, according to the 2016 Brand Footprint report by consumer research firm Kantar Worldpanel. In 2017, the total value of the list of BrandZ Top 100 Chinese Brands hit record levels, growing 6% to reach USD557.1 billion in brand value.
• Portable power bank rental is becoming a hot sector for investment by start-ups as China’s 1 billion smartphone users are eager to keep batteries from losing power. A dozen players have jumped onto the power bank rental market in the past several weeks, driven by the influx of venture capital. Rental outlets have started to flood major cities in China with all kinds of designated power bank distribution machines, which can be as big as a vending machine or as small as a mini fridge. Through apps, users can find the nearest available machines, which are usually located at cinemas, shopping malls and restaurants, and rent a power bank out by scanning a QR code. Tencent-backed Xiaodian is currently the market leader.
• China’s convenience stores posted a 13% rise in sales from a year ago to CNY130 billion in 2016. The average daily transaction of a single domestic convenience store gained 4% to CNY3,714, according to a joint report by the China Chain Store & Franchise Association and the Boston Consulting Group. The total number of convenience stores in China rose 9% to 98,000 at the end of 2016.

Stock markets

• The latest proposals for a listing reform on the Hong Kong Stock Exchange (HKSE) were overwhelmingly rejected by 94% of the 8,500 respondents to a consultation paper, as many were worried that giving the Securities and Futures Commission (SFC) a bigger role in the early stages of the listing process could endanger the initial public offering (IPO) market. Central to the reforms is the establishment of a listing regulatory committee and a listing policy committee with equal representation from the SFC and HKEX. The regulatory committee would handle applications deemed complicated by the exchange’s listing division, while the second panel would decide on policies.
• In a rare move, Hong Kong’s Securities and Futures Commission (SFC) ordered the suspension of trading in the shares of China Huishan Dairy Holding. The company, which saw all but two of its board members quit weeks after its stock price mysteriously plunged 85% in just 90 minutes on March 24, said the Hong Kong Stock Exchange (HKSE) had halted trading based on instructions from the SFC. There have been only six suspension of trading orders issued by the SFC since 2011. The company’s board has only one acting Director – Chairman Yang Kai – making it ineligible to act on behalf of the company under Hong Kong law.
• Hong Kong Exchanges and Clearing (HKEX), which runs the city’s stock and futures markets and owns the London Metal Exchange (LME), has reported better-than-expected net profit growth of 20% for the first quarter of the year to HKD1.72 billion. The rise in profit was party due to a one-off gain of a HKD55 million interest payment from the liquidation of Lehman Brothers. The exchange plans to introduce more new products and connect schemes to attract more turnover this year.
• China Tower Corp, the state-backed telecommunications infrastructure-sharing joint venture, looks on track for its initial public offering (IPO) between the last quarter of this year and the first half of 2018. China Unicom Chairman and Chief Executive Wang Xiaochu said the Tower Corp listing will not be affected by Unicom’s participation in the central government’s mixed-ownership reform program. The joint venture was established by China Mobile, China Unicom and China Telecom in July 2014 to be responsible for all the construction, maintenance and operations of their telecommunications network towers and auxiliary infrastructure.

Travel

• The Palace Museum in Beijing, also known as the Forbidden City, plans to stop selling paper tickets from its box office in October. An internet-based system will be set up to better coordinate the number of visitors for different hours of the day. Starting in July, the museum will gradually decrease the percentage of paper tickets available at the gate. The Forbidden City received more than 16 million visitors in 2016.

VIP visits

• Chinese President Xi Jinping pledged to protect the Paris Agreement on curbing climate change during a phone call with French President Emmanuel Macron. China and France “should protect the achievements of global governance, including the Paris Agreement”, Xi told Macron. The two leaders agreed to meet “as soon as possible”.
• Chinese and Uzbekistan enterprises signed agreements and deals of more than USD10 billion, during Uzbekistan President Shavkat Mirziyoyev’s first state visit to China. Chinese President Xi Jinping said China is willing to expand cooperation with Uzbekistan in production capacity, investment, industrial parks, and infrastructure construction.
• Chinese Premier Li Keqiang said that the country is capable of maintaining financial market stability and warding off regional and systemic financial risks during his meeting with Managing Director of the International Monetary Fund Christine Lagarde. In a separate meeting with World Bank President Jim Yong Kim, Li said China’s economy is in the process of transformation and upgrading, which requires traditional industrial capacity to be overhauled and new growth momentum to be fostered.