Also in this week’s issue

News roundup

  • The US Department of Justice has sued Steve Wynn, the major shareholder of Wynn Resorts and a senior Republican fundraiser, requiring that he submit to the Foreign Agents Registration Act for working as an agent on behalf of the Chinese government. The DOJ said the 80 year-old had lobbied then-president Donald Trump in 2017 to convey China’s request to cancel the visa or otherwise expel a Chinese businessperson who had sought political asylum in the US. The Wall Street Journal reported earlier that the person in question was the fugitive tycoon Guo Wengui, who has been an outspoken critic of several of China’s senior leaders in recent years.
  • Shares in carmakers jumped on Wednesday on news that the Chinese government may introduce new policies next month to boost car sales in rural areas. The plan would offer subsidies of at least Rmb5,000 for purchases of vehicles priced below Rmb150,000, China Securities Journal reported. It is not clear if the subsidies would only apply to new energy vehicles. Car sales in China slumped 48% in April on the year earlier to less than 1.2 million vehicles.
  • The People’s Bank of China on Friday lowered the key lending rate for long terms loan in another effort to bolster Chinese economic growth. The central bank said the five-year loan prime rate (LPR), an important reference for home mortgages, will be cut to 4.45% from 4.6%. The one-year LPR will be kept unchanged at 3.7%. The one-year and five-year LPR have been lowered two times each since December last year. The Wall Street Journal said the cut was unexpected after the PBoC kept its main policy rate, the medium-term lending facility to price LPR by commercial banks, unchanged earlier this month. Meanwhile, Xinhua said the central government will continue rolling out policies to support “rational homebuying demand”.
  • Shanghai may be poised for a reopening following nearly two months of lockdown. Local authorities said the city has now reached a state of “zero Covid” in most of its districts after breaking the chain of community transmission. Shanghai’s mayor said life would return to normal by early June as businesses such as malls and restaurants in the city are reopened in phases.
  • The first C919 passenger aircraft set to be delivered to a Chinese airline customer completed its pre-delivery test flight at Shanghai’s Pudong International Airport on Saturday, according to its manufacturer Commercial Aircraft Corp of China (COMAC). In March last year China Eastern Airlines and COMAC signed an initial deal for five C919 planes and the carrier said earlier this month that it is planning to raise capital to buy them. Each jet is listed at a price of Rmb653 million ($100 million). Analysts had initially expected the homegrown C919 to cost much less, perhaps as little as $50 million.
  • 500 Number of freight trains that departed Dalang in Guangdong province for Europe, between the service’s launch in August 2016 and early May this year. According to a China Daily report this week 230 of these international freight trains left Dalang in the first four months of this year, perhaps indicative of the Covid-related problems disrupting ports and shipping.
  • 11.1% The year-on-year plunge in retail sales in April. Sales were Rmb2.9 trillion last month and were hurt by lockdowns around the country, especially in Shanghai.
  • 99.1 deadweight tonnes Order book at Chinese shipyards in the first quarter, up 26.3% year-on-year and accounting for 47.3% of the world total, according to the China Association of the National Shipbuilding Industry. The China Daily says 90% of the orders were placed by foreign clients, with soaring demand for ships with more efficient engines that produce fewer carbon emissions.
  • 12.28% New percentage weight of the renminbi in the IMF’s Special Drawing Rights reserve, up from 10.92% (the level set when the yuan was first included in 2016). The yuan now ranks only behind the US dollar and the euro in the basket.

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