CX Daily: China’s ATMs for Infrastructure Spending Get Squeezed, Again
Even as local authorities face growing pressure to spend more on infrastructure, LGFVs are facing another crackdown
LGFVs /
In Depth: China’s ATMs for infrastructure spending get squeezed, again
The screws are tightening once again on China’s local government financing vehicles (LGFVs) even as pressure on them grows to help fund the country’s infrastructure stimulus, adding to concerns that debt defaults will increase and further strain cash-strapped local authorities.
A crackdown on illegal fundraising via local financial asset exchanges (FAEs) and an anti-corruption campaign targeting LGFVs and the intermediaries that broker debt sales are threatening one of the few funding channels still widely open to the vehicles after regulators restricted their access to bank loans and made it more difficult to issue bonds. Trust companies have also reined in credit as they become increasingly concerned about whether they’ll get their money back.
Trade /
Rail freight from China to Russia spikes, while fewer trains head to EU
The number of freight trains traveling from China to Russia increased dramatically in the first half of 2022, industry data show, as Western sanctions prompted Russia to trade more with its Asian neighbor.
Trains to Russia may have accounted for over 60% of the total Chinese freight trains heading to European countries in the first half, up from 45% last year, said Yang Jie, an official with state-backed industry group China Communications and Transportation of Association.
Corruption /
Senior Tibet official expelled from party and dismissed for bribery
Zhang Yongze, deputy chairman of the Tibet autonomous region, was expelled from the Communist Party and dismissed from public office for serious duty violations and suspected corruption, according to the country’s top discipline bodies.
The Central Commission for Discipline Inspection and the National Supervisory Commission said Zhang, 53, interfered with environmental assessments of construction projects, appointed cadres illegally, traded power for money and sex while living a luxurious lifestyle and getting involved in superstitious activities.
FINANCE & ECONOMY
Forex /
China’s forex reserves shrink as U.S. dollar gains and markets slide
China’s foreign exchange reserves fell by $56.5 billion to $3.071 trillion in June, the lowest since March 2020, official data showed Thursday.
In the first half of the year, the country’s forex holdings shrank by $178.9 billion, according to the State Administration of Foreign Exchange (SAFE).
SAFE attributed the June drop to the increasing strength of the dollar and drops in major financial markets.
Village banks /
Two banks in Hebei dissolve in regulatory consolidation push
Two village banks in northern China’s Hebei province will be dissolved after their businesses are acquired by their controlling shareholder as part of a regulatory push to consolidate small rural lenders through mergers and restructuring.
Fucheng Jiayin Village Bank and Wuqiang Jiayin Village Bank received approval from the Hebei bureau of the China Banking and Insurance Regulatory Commission (CBIRC) to dissolve and transfer all of their businesses, properties, creditors’ rights, debt and obligations to Zhangjiakou Bank, the regulator said Wednesday in a statement.
Quick hits /
Former Japanese leader Shinzo Abe dies after shooting
Huarong perpetual dollar bond tumbles most since debt scare
BUSINESS & TECH
Vouchers /
Beijing launches consumption vouchers scheme to stimulate waning spending
Beijing plans to offer residents consumption vouchers to stimulate sluggish spending, joining a chorus of local governments facing plummeting consumer confidence in the fallout of Covid-19 lockdowns.
The municipal government will hand out 100 million ($14.9 million) in vouchers exclusively for eating out as well as an unspecified number of suburb touring vouchers, according to its latest stimulus policies, published this week.
Display screens /
China’s BOE set to supply display panels for iPhone 14
Chinese display panel behemoth BOE Technology Group is ready to supply display screens for Apple Inc.’s new iPhone 14, several people familiar with the matter told Caixin.
BOE’s organic light-emitting diodes (OLED) display products have been certified by Apple to enter the iPhone 14 supply chain, the people said. BOE didn’t respond to a Caixin request for comment.
Covid-19 /
Blog: Repurposed cancer drug shows potential for treating Covid-19
On May 13, the state-owned Science and Technology Daily published an article titled “Chinese Scientist Discovers a New Drug for the Treatment of SARS-CoV-2 Virus and Obtained Invention Patent Authorization,” which excited readers in the science community and the general public.
According to this report, the applicants are professor Tong Yigang, dean of the School of Life Science and Technology at Beijing University of Chemical Technology, and his team. In Tong’s 2020 paper, he used in vitro cell models to screen 2,406 drugs that have been approved for treating other diseases in an effort to find components that can inhibit virus activity, with the goal of discovering drug candidates that can be used to treat Covid-19.
Quick hits /
Hong Kong drops flight suspensions for managing imported Covid
Tianqi Lithium raises $1.7 billion in year’s biggest Hong Kong share sale
Tech Insider /
BYD muscles up to Tesla, Jack Ma explores farming
GALLERY
The Chaos after Abe’s shooting
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