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☆ How China is helping to prop up the Russian economy through the war in Ukraine
▼ + stars: | 2023-02-22 | by ( Laura He | ) edition.cnn.com time to read: +8 min

China has been buying more energy from Russia since the Ukraine war started. Total trade between China and Russia hit a new record high in 2022, up 30% to $190 billion, according to Chinese customs figures. In particular, the energy trade has risen markedly since the onset of the war. Russian companies have been using more yuan to facilitate the increased trade with China. UnionPay, the Chinese payments system, has reportedly stopped accepting cards issued by Russian banks over fears of international sanctions, according to Russian paper Kommersant.

☆ Inflation in Beijing: Chinese capital gives cash handout to low-income households to offset rising food prices
▼ + stars: | 2023-02-20 | by ( Laura He | ) edition.cnn.com time to read: +3 min

Hong Kong CNN —Beijing will give out a $6 monthly cash subsidy to low-income residents to cushion the impact of rising food prices, a move that has unexpectedly angered many online who say the amount is far too low. The demonstrations were the latest outburst of public discontent since mass protests against Covid curbs gripped the country late last year. “In January, food prices in Beijing rose by 6.6%, meeting the conditions for starting the price-linked subsidy program,” the state-run Beijing Daily newspaper quoted an official from the commission as saying in a Friday report. Although the headline figure remains relatively low compared to other countries, food prices jumped 6.2%, with pork and fruit prices rising the most. In Beijing, food prices outpaced the national level.

☆ China’s property crash is prompting banks to offer mortgages to 70-year-olds
▼ + stars: | 2023-02-17 | by ( Laura He | ) edition.cnn.com time to read: +6 min

Some banks in the cities of Nanning, Hangzhou, Ningbo and Beijing have extended the upper age limit on mortgages to between 80 and 95, according to a number of state media reports. China’s property market is in the midst of a historic downturn. The mortgage borrower’s age plus mortgage length should not usually exceed 70 years, according to previous rules published by the banking regulator. Separately, a branch of Citic Bank has extended the upper age limit on its mortgages to 80, the paper said, citing a bank client manager. Other than Beijing, some banks in Nanning, the provincial capital of Guangxi province, have raised the upper age limit on mortgages to 80, according to the city’s official newspaper Nanguo Zaobao.

☆ Kazuo Ueda nominated to lead Japan's central bank in possible move away from ultra-easy policy
▼ + stars: | 2023-02-14 | by ( Laura He | ) edition.cnn.com time to read: +5 min

Hong Kong CNN —The Japanese government has nominated Kazuo Ueda to lead its central bank, in a surprise move that could pave the way for the country to wind down its ultra-loose monetary policy. Accommodative is a term used to describe monetary policy that adjusts to adverse market conditions and usually involves keeping interest rates low to spur growth and employment. As part of that program, the central bank targeted some short-term interest rates at an ultra-dovish minus 0.1% and aimed for 10-year government bond yields around 0%. But as prices rose and interest rates elsewhere went up, pressure has grown on the BOJ to wind down YCC. But Kuroda later dismissed a near-term exit from his ultra-loose monetary policy.

☆ Alibaba sells remaining stake at India's Paytm as it continues to exit market
▼ + stars: | 2023-02-13 | by ( Laura He | ) edition.cnn.com time to read: +3 min

In January, Alibaba sold about 3% of Paytm for $125 million, cutting its holdings from 6.26%, based on NSE data. ‘India’s Alipay’Founded in 2010, Paytm is India’s largest payment platform, with more than 300 million registered customers and over 20 million merchants. Paytm and Ant Group had been working on “synergies” since Ant made the initial investment, the company said. In early 2021, Alibaba sold a major stake in BigBasket, an online grocery retailer, to Indian conglomerate Tata Group. In May 2022, Alibaba and Ant Group offloaded their entire stake in Paytm Mall, the e-commerce platform of Paytm.

☆ Chinese savers stashed away $2.6 trillion last year but property crash will cool ‘revenge spending’
▼ + stars: | 2023-02-07 | by ( Laura He | ) edition.cnn.com time to read: +6 min

Burberry (BBRYF) said last month that it’s seeing “very promising” signs in China, according to Reuters. Since real estate accounts for 70% of household wealth in China, “revenge spending” will be limited, analysts said. They expect household consumption growth to rebound to 9.5% in 2023 from about 3% in 2022, fueling annual GDP growth of more than 5%. Morgan Stanley analysts expect to see some “revenge spending” mostly from household with stable incomes. They’re expecting household consumption growth to rebound to 8.5% in 2023, contributing to full-year economic growth of 5.7%.

☆ China set to launch long-awaited IPO reforms to reset the economy
▼ + stars: | 2023-02-02 | by ( Laura He | ) edition.cnn.com time to read: +3 min

A surveillance camera outside the China Securities Regulatory Commission (CSRC) building in Beijing on July 9, 2021. Tingshu Wang/ReutersUnder the new system, regulators will stop vetting planned share sales by companies. Currently, listings on the main boards of the Shanghai and Shenzhen stock exchanges must be reviewed and approved by regulators before they can be launched. Financial stress has surged, even as the economy has started to recover after three years of strict pandemic controls. Following a chaotic exit from its zero-Covid policy, Beijing is trying to reset the economy and rebuild the trust of investors and businesses.

☆ China PMI: economic activity expands for the first time in months as Covid 'exit wave' ends
▼ + stars: | 2023-01-31 | by ( Laura He | ) edition.cnn.com time to read: +3 min

Hong Kong CNN —Economic activity in China has expanded for the first time in four months as disruptions caused by the abrupt end of its zero-Covid policy appears to be fading. The official non-manufacturing PMI, which tracks activity in the services and construction sectors, surged to 54.4 in January from 41.6 in December, also marking its first expansion in four months. This is a sign that China’s Covid “exit wave” is coming to an end, said analysts from Nomura in a research report. The official PMI survey mainly covers larger businesses and state-owned companies. Zhu Wanchang/VCG/Getty ImagesChina scrapped most of its pandemic restrictions in early December, effectively ending its three-year-long zero-Covid policy.

☆ China's cities are struggling to pay their bills from three years of Covid and a real estate crash
▼ + stars: | 2023-01-31 | by ( Laura He | ) edition.cnn.com time to read: +9 min

Rolling lockdowns seriously dented household incomes, leading many to reduce spending, which in turn resulted in less tax revenue for local governments. “China’s runaway local debt poses a serious threat to the country’s overall economic health and will weigh heavily on China’s still-nascent recovery,” said Singleton. Debt that is backed by local governments but which doesn’t show up on their balance sheets could be much bigger. That’s more than 20% higher than the estimate of 53 trillion yuan made by Goldman Sachs in 2021. Their debt squeeze could pose a serious threat to China’s financial system, particularly to small regional banks.

☆ Alibaba, Tencent 'golden shares': China is pulling different strings to control Big Tech
▼ + stars: | 2023-01-27 | by ( Laura He | ) edition.cnn.com time to read: +6 min

According to a person familiar with the matter, the Chinese government is also discussing taking a similar stake in a mainland Chinese subsidiary of Tencent (TCEHY), the group that includes WeChat and a vast gaming business. The headquarters of the Cyberspace Administration of China in Beijing, China on July 16, 2021. “Golden shares” give their owners, usually governments, some level of control over companies, often those that were previously state-owned. In April 2021, a government entity acquired a 1% stake in a Beijing subsidiary of TikTok’s parent company Bytedance, according to Qichacha. The Communist Party may be easing off on fines and penalties, but the “golden shares” approach seeks the same end, which is “control and tight oversight,” said Capri.

The net worth of Hui Ka Yan, chairman of real estate developer China Evergrande, has plunged nearly 93%, according to the Bloomberg Billionaires Index. Once the second-richest person in Asia, Hui’s wealth has fallen from $42 billion at its peak in 2017 to about $3 billion, Bloomberg said. Evergrande is China’s most indebted developer with $300 billion in liabilities, and has been at the heart of the country’s real estate troubles since 2021. Real estate and related industries account for as much as 30% of GDP. The bulk of Musk’s wealth is tied up in Tesla, which saw its stock plunge 65% in 2022.

☆ Premarket stocks: The world has a major debt problem. Is a reset coming?
▼ + stars: | 2023-01-17 | by ( Nicole Goodkind | ) edition.cnn.com time to read: +7 min

That number is about 349% of global gross domestic product, and the equivalent of $37,500 of debt for every single person in the world. “Rising interest rates and slowing economies are making the debt burden heavier,” they write. What it means: Higher interest rates are already hurting governments and corporations with low-credit ratings. Rising interest rates also impact stock prices — the Federal Reserve’s hikes in 2022 contributed to a nearly 20% decline in the S&P 500. What comes next: There is no easy way out of a global debt crisis, write Chan and Dimitrijevic.

☆ BOJ policy meeting: Japan decides to maintain ultra-easy policy, leaves yield curve control targets unchanged
▼ + stars: | 2023-01-17 | by ( Laura He | ) edition.cnn.com time to read: +1 min

Hong Kong CNN —The yen plunged on Wednesday after the Bank of Japan decided to maintain its ultra-easy monetary policy, defying market expectations that rising inflation could force the central bank to move away from low interest rates. The BOJ kept its yield curve control (YCC) targets unchanged as it concluded a two-day policy meeting on Wednesday. It left the short-term interest rate at an ultra-dovish minus 0.1% and the 10-year Japanese Government Bonds (JGB) yield around 0%. The YCC policy is a pillar of the central bank’s effort to keep interest rates low and stimulate the economy. The unexpectedly hawkish decision caused stocks to tumble, while sending the yen and bond yields soaring.

☆ China zero-Covid: Local governments reveal billions spent on fighting the pandemic
▼ + stars: | 2023-01-16 | by ( Laura He | ) edition.cnn.com time to read: +4 min

Last week, local governments across China began to convene for annual legislative sessions laying out their respective policy goals for the year. Economists estimated the entire year’s deficit could hit a record 10 trillion yuan ($1.4 trillion) in 2022. Beijing, the nation’s capital, said Sunday that it had spent nearly 30 billion yuan ($4.5 billion) last year on preventing and controlling Covid. The city didn’t reveal its 2021 Covid spending. During the past three years, the bills amounted to 30.5 billion yuan ($4.6 billion.)

☆ China allows Didi to resume signing up new users as tech crackdown eases
▼ + stars: | 2023-01-16 | by ( Laura He | ) edition.cnn.com time to read: +2 min

Hong Kong CNN —Ride-hailing giant Didi received approval to resume new user registration in China, it said Monday, providing more evidence that Beijing’s regulatory crackdown on tech giants might be coming to an end. The move is the latest sign that regulators are loosening the reins on the country’s beleaguered tech companies in a bid to spur economic growth. With the approval of the Cybersecurity Review Office, Didi will be able to resume adding new users “immediately,” it added. Didi is a poster child for Beijing’s years-long crackdown on its tech companies. Regulators then targeted a number of other tech giants, including Tencent, Meituan and Didi.

☆ China’s economy expanded by 3% in 2022
▼ + stars: | 2023-01-16 | by ( Laura He | ) edition.cnn.com time to read: 1 min

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☆ Sweden finds the largest rare earth deposit in Europe. It could help cut dependence on China
▼ + stars: | 2023-01-13 | by ( Laura He | ) edition.cnn.com time to read: +2 min

Hong Kong CNN —Swedish mining company LKAB says it has found Europe’s largest deposit of rare earth oxides in the country’s north, a discovery that could reduce the continent’s reliance on China for the critical resource. Rare earth minerals play a key role in generating clean energy and producing electric vehicles and consumer electronics. No rare earth elements are currently being mined in Europe, leaving it dependent on imports. The company added that the region’s dependence on China for rare earth minerals increases the vulnerability of European industry. Given its importance in the tech industry, rare earths have become one of the main fronts in the US-China competition as well.

☆ China’s exports plunge as global demand weakens, but trade with Russia hits record high
▼ + stars: | 2023-01-13 | by ( Laura He | ) edition.cnn.com time to read: +3 min

But plunging shipments in December suggest exports are likely to struggle in early 2023 as the global economy weakens. That translates into a trade surplus of $877.6 billion, surpassing 2021’s record of $676 billion. However, “with growth outside of China still slowing, exports may continue to contract until the middle of the year,” they said. Russia tiesChina also announced Friday its trade with Russia hit a new record high in 2022. In November, Russia surpassed Saudi Arabia to become China’s top crude oil supplier, according to customs data released last month.

☆ China’s local governments set 2023 growth targets, offering clues on economic recovery
▼ + stars: | 2023-01-12 | by ( Laura He | ) edition.cnn.com time to read: +4 min

The meetings will culminate in the national parliamentary session to be held in March, in which the premier is expected to disclose the nation’s GDP growth target. So far, a group of government economists and international analysts have said they expect Beijing to set a growth target of above 5% in 2023. On Thursday, Zhejiang province, another major economic powerhouse, announced it’s targeting an expansion of more than 5% in 2023. On Wednesday, Shanghai, the most affluent city in mainland China, announced it would aim for 5.5% growth this year. On the same day, Fujian, Sichuan and Hebei provinces all disclosed growth targets of 6% for 2023.

☆ Galactic Energy sends five satellites to space
▼ + stars: | 2023-01-10 | by ( Laura He | ) edition.cnn.com time to read: +2 min

The mission marks the fifth launch of the Ceres-1 rocket — a small solid fuel orbital rocket designed by the company, Galactic Energy said. So far, it has successfully put 19 commercial satellites into space, setting a record for a private Chinese firm. Galactic Energy conducted the first Ceres-1 launch on November 7, 2020, which makes it the second Chinese private company to launch a satellite into low Earth orbit. Last year, Galactic Energy successfully tested its liquid-propellant Welkin engine for its next-generation rockets. Over the past few years, more than 170 private companies have entered the space industry, according to a 2020 research report by Future Space Research, a research institute based in Beijing.

☆ Asian stocks enter bull market as investors bet on China
▼ + stars: | 2023-01-10 | by ( Anna Cooban | ) edition.cnn.com time to read: +2 min

London CNN —Stocks in Asia are starting 2023 in a bull market. The rally has been driven by a rebound in investor sentiment towards Chinese stocks. The MSCI China index rose 2.4% on Tuesday to stand 50% above its low on October 31. Nasdaq’s Golden Dragon China index — which tracks Chinese companies listed in the United States — rose 0.72% on Monday, putting it 71.3% above where it was trading in late October. Investors have snapped up Chinese stocks as the country rapidly unwound its strict zero-Covid policy.

☆ Premarket stocks: Bonds are back, but for how long?
▼ + stars: | 2023-01-09 | by ( Nicole Goodkind | ) edition.cnn.com time to read: +6 min

New York CNN —Stocks soared on Friday to their best day in more than a month. But the big turnaround story during the short first week of the year isn’t just about equities, it’s also about bonds. Bonds are particularly sensitive to those increases — as rates are hiked, the price of existing bonds falls as investors prefer the new debt that will soon be issued with those higher interest payouts. This time around, investors are scooping up bonds as they anticipate the pace of Fed interest rate hikes will soon ease. Core bonds, or US investment grade debt, tend to perform well during Fed rate hike pauses.

☆ China's crackdown on Ant and other tech giants is 'basically' over, top official says
▼ + stars: | 2023-01-09 | by ( Laura He | ) edition.cnn.com time to read: +4 min

Hong Kong CNN —China’s heavy-handed crackdown on tech giants is coming to an end and the country’s economic growth is expected to be back on track soon, according to a top central bank official. “Next, we’ll promote healthy development of internet platforms,” said Guo, who is also chairman of China’s Banking and Insurance Regulatory Commission. Mark Schiefelbein/APChina’s crackdown on its biggest tech companies began in 2020 with new regulations on fintech, which forced Ma’s Ant Group to suspend its $37 billion IPO days before its launch. Regulators then targeted the online financial service units of 13 other tech giants, including Tencent, Baidu, JD.com, Bytedance, Meituan, and Didi. Ant Group’s restructuringMajor tech companies in China have struggled under a sweeping regulatory crackdown for months now.

CNN —Chinese billionaire Jack Ma will no longer control Ant Group after the fintech giant’s shareholders agreed to reshape its shareholding structure, according to a statement released by the company on Saturday. After the adjustment, Ma’s voting rights will fall to 6.2%, according to the statement and CNN calculations. Before the restructure, Ma held 50.52% of voting rights at Ant via Hangzhou Yunbo and two other entities, according to its IPO prospectus filed with stock exchanges in 2020. As part of the company’s restructuring, Ant applied for an expansion of its registered capital from $1.2 billion to $2.7 billion. Ant Group is a fintech affiliate of Alibaba, both of which were founded by Ma.

☆ Tesla cuts prices in China for second time in three months as demand slows
▼ + stars: | 2023-01-06 | by ( Laura He | ) edition.cnn.com time to read: +2 min

Hong Kong CNN —Tesla has slashed car prices in China for the second time in less than three months, in an effort to boost sales amidst slowing demand in the world’s largest car market. The electric vehicle maker cut prices for all versions of its China-made Model 3 and Model Y on Friday, according to its website. This is the second price cut since October 24, when Tesla (TSLA) reduced the prices of Model 3 and Model Y by as much as 9.4%. “Tesla’s price cuts are backed by innumerable engineering innovations,” said Grace Tao, Tesla’s vice president for external relations in China, on her Weibo account on Friday. Tesla’s price cuts come days after Beijing ended a 13-year-long subsidy for electric vehicle purchases on December 31, a move that is expected to put further pressure on car demand.

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