Also in this week’s issue

News roundup

  • Trade between China and the EU reached $709 billion last year, going past $671 billion worth of imports and exports between Europe and the US. China was the only major global economy to see growth in 2020, the BBC reported, stoking demand for European cars and luxury goods. China's exports to Europe also benefited from strong demand for medical equipment and electronics.
  • Chinese stocks started the Year of Ox on Thursday in bullish mood. The CSI300 Index opened nearly 2% higher, reaching 5,922, a historical high. Traders had bid the index up to 13-year highs in January, Bloomberg reports, but some of the momentum cooled as investors shifted record amounts of money into Hong Kong stocks as domestic share prices surged.
  • GOME has confirmed that its founder and former chairman Huang Guangyu (also known as Wong Kwong-yu) has been released from jail. Formerly China’s richest man, Huang was given a 14-year sentence in 2008 for crimes including insider trading and bribery. In a brief stock exchange circular, the Hong Kong-listed retailer said Huang, who is still its controlling shareholder, completed a “parole probation period” on February 16.
  • JD.com said it has applied to spin-off its logistics unit on the Hong Kong bourse. According to its prospectus, JD Logistics is one of the biggest courier firms in terms of revenue, which climbed 43% in the first three quarters of 2020 to Rmb49.5 billion ($7.6 billion). Hong Kong media said the company is targeting a valuation of $40 billion. The IPO followed the spin-off of JD Health as well as JD.com’s own secondary listing last year.
  • Oracle and Walmart’s hopes of buying the US operations of TikTok seem set to be dashed. In a court filing, the US Department of Justice said that Joe Biden’s new administration had begun a review of whether the Chinese video app was a threat to national security as former president Donald Trump had claimed. Analysts took the announcement as a signal that Washington would no longer require the sale of TikTok’s American operations to new shareholders. The Biden administration is taking a slightly different approach to Chinese firms it deems a risk in a tech sense – a policy being termed “a small yard, high fence” (see this week's "China and the World").
  • Rebuffing a report in the Financial Times, the Global Times insisted that Beijing has not imposed restrictions on rare earth exports to the US, though state-owned miners have indicated that a ban remains an option. China produces more than 90% of the world’s rare earths. Concerns on export restrictions on the minerals grew after authorities published draft regulations for the sector last month. The proposed rules include the introduction of new supervisory arrangements for a production quota system.
  • 4 times How much bigger trading volumes on the Hong Kong Stock Exchange are compared to its London counterpart, the Financial Times reports. Average daily turnover on the bourse hit $25 billion in the 30 days to February 16, versus $10 billion the same period a year ago, thanks to a huge influx of liquidity from mainland China.
  • $2.3 billion Gross revenue of China’s 30 largest mobile game publishers including Tencent, NetEase and miHoYo on app stores run by Apple and Google in January. That’s a 47% surge year-on-year, accounting for nearly 29% of global sales, SensorTower, a mobile app market researcher, estimated.
  • Rmb821 billion ($127 billion) Sales of leading retail and catering companies in China during the first week of the Lunar New Year, up 29% from a year ago when Covid-19 was spreading around the country.
  • 5.01 million The number of Chinese families classed as ‘wealthy’ at the end of 2019, according to the latest Hurun Wealth Report. The categorisation refers to households with assets of at least Rmb6 million ($929,400). Beijing is home to the largest number, with 715,000 families, followed by Shanghai’s 611,000 and Hong Kong’s 549,000.

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