8/3/2021 Financial News: CCP Quietly Sets New ‘Buy Chinese’ Targets For State Companies; Tencent Tumbles After CCP Media Calls Online Gaming ‘Spiritual Opium’

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1.CCP quietly sets new ‘buy Chinese’ targets for state companies

CCP quietly issued new procurement guidelines in May that require up to 100% local content on hundreds of items including X-ray machines and magnetic resonance imaging equipment, erecting fresh barriers for foreign suppliers, three U.S.-based sources told Reuters. Document 551 was issued on May 14 by the Chinese Ministry of Finance and the Ministry of Industry and Information Technology (MIIT), with the title, “Auditing guidelines for government procurement of imported products,” said one former U.S. government official, who obtained a copy of the previously unreported 70-page catalog and read portions to Reuters, but requested anonymity.

The former official said that when CCP joined the World Trade Organization, it agreed not to issue such internal documents. The document also violated the spirit of the January 2020 Phase One trade deal with the United States, the former official said. “They need to reduce barriers, not create new ones.”

2.Tencent tumbles after CCP media calls online gaming ‘spiritual opium’

Tencent Holdings Ltd. shares were on track to fall by their most in a decade on Tuesday after a Chinese state media outlet branded online video games “spiritual opium,” stoking concern that the sector may be next in regulators’ crosshairs. Communist China’s biggest social media and video game firm saw its stock tumble more than 10% in morning trade, wiping almost $60 billion from its market capitalization. Shares of rival NetEase Inc. slumped as much as 15.7%, while those of game developer XD Inc. and mobile gaming company GMGE Technology Group Ltd. also plunged.

State-run Economic Information Daily in an article on Tuesday said many teenagers were addicted to online video games and called for more curbs on the industry. The outlet is affiliated with Communist China’s biggest state-run news agency, Xinhua. “No industry, no sport, can be allowed to develop in a way that will destroy a generation,” the newspaper said, likening online video games to “electronic drugs.”

3.University District “Shenzhen Sample” Breaks the Bureau, School District Housing Faith Trends to Disintegrate In Communist China 

Since the beginning of this year, cracking down on school district housing speculation has become one of the important tasks of regulatory agencies in many places, especially in first-tier cities where high-quality educational resources are in short supply. Recently, the Social Construction Work Committee of the Standing Committee of the Shenzhen Municipal People’s Congress organized the drafting of the “Regulations on Social Construction of the Shenzhen Special Economic Zone (Draft for Solicitation of Comments).” The draft for consultation has improved the admission policy and balanced educational resources, and proposed that the education departments of Shenzhen and districts should implement the management model of enrollment and school running in the university district.

After escalating property market regulation and educational policy changes, whether it is a buyer or a seller, the “faith in school district housing” has begun to disintegrate. Second-hand housing in Shenzhen in the first half of this year The market has drastically cooled down due to the introduction of reference prices, and school district housing has also been affected. In addition to the recent frequent introduction of school district and education policies, the mentality of school district housing owners has changed, and more and more houses are actively reducing prices. “In the Sunshine Tiandi community with dual degrees from Shenzhen Middle School and Cuibei Elementary School, a 74-square-meter house was quoted at a maximum price of 9 million yuan last year. Now the owner is quoting 7.8 million yuan, which is urgently sold, which is a little higher than the reference price. ” Property Manager said, “Nevertheless, many customers didn’t start after seeing the house, and the buyer’s view of the school district housing has changed.”

4.Chinese EV manufacturer Li Auto plans $1.9 bln Hong Kong listing

Chinese electric vehicle manufacturer Li Auto Inc, said on Tuesday it was looking to raise as much as HK$15.0 billion ($1.93 billion) in an initial public offering (IPO) in Hong Kong. Li Auto, a six-year old Chinese startup which raised $1.09 billion through its Nasdaq listing in July last year, said it would issue 100 million shares in its Hong Kong IPO at a maximum offer price of HK$150 per share. The offer also includes a greenshoe, or over-allotment option, to sell a further 15 million shares within 30 days after listing, likely taking the total amount raised to up to HK$17.25 billion.

5.Communist China’s first-half gold output drops 10%

Communist China’s first-half gold output fell 10.18% to 152.75 tonnes, as production was affected by safety inspections following some coal mine accidents, the China Gold Association said on Tuesday. “All non-coal mines in the Shandong province had halted production since February and conducted safety production checks,” said the gold association, referring to the major reason for output declines. Gold consumption in the January-June period, meanwhile, picked up from a relatively low base a year earlier, up 69.21% to 547.05 tonnes, according to the association.

6.What happened to Minsheng Bank after it was reduced twice in half a month?

On 28 July 2021, China Minsheng Banking Corp., Ltd. (the “Company”) received a notice from its shareholder, China Oceanwide Holdings Group Co., Ltd. (“China Oceanwide”), that a passive reduction agreed under the loan agreement has been triggered with respect to partial H Shares of the Company held and pledged by Long Prosper Capital Limited, a company controlled by China Oceanwide.

So far, between July 15 and July 30,  Long Prosper Capital has passively reduced its holdings of Minsheng Bank’s H shares by about 261 million shares. Meanwhile, among the shares of Minsheng Bank held by China Oceanwide, 388.8 million A shares are being listed on Ali’s auction platform and will be put up for public auction on Aug. 13. According to this projection, if all the auctions are completed, the shareholding ratio of the “Oceanwide system” in Minsheng Bank will drop to about 5.46%. In fact, China Oceanwide is facing a serious debt crisis, which has directly led to frequent changes in its holdings of Minsheng Bank equity recently.

Judging from the book data, the pressure on the liquidity of Oceanwide is huge. The annual report shows that China Oceanwide had a net loss of 6.748 billion yuan last year, and Oceanwide Holdings’ net loss attributable to its parent also reached 4.622 billion yuan. As of the end of 2020, Oceanwide Holdings has a debt balance of approximately 146 billion yuan, of which nearly 80% are current liabilities, about 113.6 billion yuan, but after excluding the inventory with weak liquidity, the company’s current assets are less than 77.2 billion yuan.

7.China Evergrande Group’s July Contracted Sales Down Nearly 13% YOY, Down Nearly 40% Month-on-Month

Evergrande Group 3333.HK, a major Chinese property company, announced on Tuesday that the group achieved contracted sales of RMB43.78 billion in July, down nearly 13% year-on-year and down nearly 39% month-on-month. The contracted sales area in July was 5.435 million square meters, compared with 9.181 million square meters in June and 5.387 million square meters in the same month last year. Evergrande’s contracted sales in June and July last year were 71.63 billion yuan and 50.3 billion yuan respectively. In the first seven months of this year, Evergrande achieved contracted sales of RMB400.56 billion and contracted sales of 48.449 million square meters, representing a year-on-year increase of 0.35% and 10% respectively. Evergrande held a special promotion for the Home Purchase Festival from May 27 to June 30 this year, achieving contracted sales of 93.83 billion yuan and sales return of 87.49 billion yuan during the period. The company set a contract sales target of 750 billion yuan for 2021 at the beginning of the year.

8.CCP accused of infiltrating Taiwan through Tencent and Shopee to get ahold of local capital flows and consumer data

Taiwan’s largest e-commerce platform “Shopee” is applying to expand its electronic payment business. However, one of the major shareholders behind this Singaporean foreign company is CCP’s Tencent, which has caused some people in Taiwan to question the CCP through Chinese-funded companies. Influencing foreign businessmen operating in Taiwan to penetrate the Taiwan market. Since its entry into Taiwan in 2017, the Singaporean e-commerce company “Shopee” has swept the Taiwan market with a price-killing subsidy strategy, leaping to become Taiwan’s top foreign e-commerce platform in terms of traffic.

By【G Translators- Financial Team】
Author: Tracy

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