9/17/2021 Financial News In China: Communist China Officially Applies To Join CPTPP As US-China Decoupling; Evergrande Scenario Is An Uncontrolled Crash

Image source: REUTERS/Rodrigo Garrido

1.Communist China Officially Applies to Join CPTPP as US-China Decoupling

Commerce Minister Wang Wentao submitted Communist China’s application to join the free trade agreement in a letter to New Zealand’s trade minister, Damien O’Connor. The CPTPP was signed by 11 member countries including Australia, Japan, Canada, New Zealand, Singapore, Vietnam and Mexico, covering a total of 500 million people. The total GDP of these countries amounts to $11 trillion, or about 13% of global GDP.

The agreement was formerly known as the Trans-Pacific Partnership (TPP), initiated by some APEC members in 2002, which former U.S. President Donald Trump withdrew from in 2017.The other 11 negotiating countries then started a separate agreement the following year, resulting in a CPTPP without U.S. participation.

2.Communist China’s Nightmare Evergrande Scenario Is an Uncontrolled Crash

Protests intensify at China Evergrande Group offices across the country as the developer falls further behind on promises to more than 70,000 investors. Construction of unfinished properties with enough floor space to cover three-fourths of Manhattan grinds to a halt, leaving more than a million homebuyers in limbo. Fire sales pummel an already shaky real estate market, squeezing other developers and rippling through a supply chain that accounts for more than a quarter of Communist Chinese economic output.

Credit-market stress spreads from lower-rated property companies to stronger peers and banks. Global investors who bought $527 billion of Chinese stocks and bonds in the 15 months through June begin to sell. Contagion risk was on full display Thursday. Chinese junk-bond yields jumped to an 18-month high and shares of real estate companies plunged after Evergrande had its credit rating downgraded and requested a trading halt in its onshore bonds.

3.Xi Jinping Urges Protection of Space Assets and Improvement of Space Management

Communist China President Xi Jinping inspected a military base in Northwest China’s Shaanxi Province on Wednesday, when he stressed the development of space monitoring and control capabilities. Xi highlighted the importance of space assets, calling them national strategic assets that need to be properly managed and protected. “A country’s strategic space assets must be well managed, well used, and well protected,” Xi stressed, adding that more efforts should be put in safeguarding space assets by enhancing the abilities in emergency backup and survival systems and information protection.

4.CCP Lifts Additional Tariffs on 81 US Goods for 7 Months

Communist China’s Customs Tariff Commission of the State Council unveiled on Thursday the fifth list of 81 tax-exempted goods from the US imports that had been hit with additional tariffs as countermeasures in response to the US 301 investigation against Communist China, starting on September 17 until April 16, 2022. The 81 goods on the list come in wide categories, including food, lubricating oil, timber, publications, mechanic devices for agriculture and medicines. Additional tariffs have been lifted on several lists of US imported goods, with the previous tax-exemption list containing 79 goods unveiled in May, and 65 goods in February.

5.Jinkosolar Says Some Solar Panels Detained at U.S. Border

China’s JinkoSolar Holding Co. said some of the company’s solar panels were detained at the U.S. border amid U.S. concerns that the solar products may contain materials produced by forced labor of Communist China’s Muslim minority in Xinjiang. JinkoSolar executives told Wall Street analysts on a quarterly conference call Wednesday that the company’s margins and profitability have suffered because of the product hold-ups, but would not say how many products were detained by U.S. Customs and Border Protection (CBP).

Jinkosolar is one of the world’s largest makers of photovoltaic panels, deploying more than 14 gigawatts of panels in the United States alone, enough to power about 2.6 million homes, according to its website. CBP spokesman on Thursday had no comment on JinkoSolar’s shipment.

6.Zhuhai Lowered Tax Rate for Second-Hand Housing Sales

Zhuhai Municipal Taxation Bureau of the State Administration of Taxation stated on a notice that the rate of personal income tax for the sale of real estate will be adjusted. The rate of personal income tax for individual sale of second-hand residential properties will be adjusted to 1% and the rate of personal income tax for individual sale of second-hand for non-residential properties will be adjusted to 1.5%.The consultation draft published also proposed that the approved rate of 2% for personal income tax on the sale of real estate should be abolished at the same time, while the rate of land value-added tax for individual sale of second-hand non-residential properties should be combined at 5%.

7.Macau Casino Shares Plummeted on Gaming Law Amendments

The Macau government plans to amend the Gaming Law, including a review of the number of licenses and the proposed appointment of government representatives as directors of gaming enterprises. The Macau government is planning to conduct a consultation on changes to the Gaming Law, with proposals including a review of the number of licenses and a ban on “side-licensing” of gambling cards. The consultation also suggests sending government representatives to the board of directors of gaming companies, requiring government approval for dividend payments, and increasing the percentage of shares held by Macau residents. After the news reported, the share prices of U.S. gaming companies plummeted.

The licenses of six casinos in Macau, including Wynn, MGM and Sands, based in Las Vegas, expire in June next year. Currently, only three casino licenses are issued to companies under Galaxy Entertainment, Wynn and SJM, but these three companies can sublicense Sands, Melco International and MGM, with permission in accordance with the law. In other words, if the sublicense is cancelled and the official licensee remains unchanged, only one U.S. company, Wynn, will remain and the rest of the U.S. companies will be out.

8.Common Prosperity” Inside Communist China

Colin Huang, the founder of Chinese e-commerce platform Pinduoduo Inc., has lost more wealth this year than anyone else in the world. That’s the biggest decline among the 500 members of the index, much larger even than the roughly $16 billion lost by China Evergrande Group Chairman Hui Ka Yan, whose real estate empire is struggling under a pile of debt. It’s the starkest example of how the tide has turned for Communist China’s billionaire class as President Xi Jinping calls for “common prosperity” and reins in the country’s private-sector companies. Shares of Pinduoduo, have fallen more this year than either Alibaba Group Holding Ltd. or Tencent Holdings Ltd.

【G Translators- Financial Team】
Author: Apple

Disclaimer: This article only represents the author’s view. Gnews is not responsible for any legal risks.

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