| 1. China coronavirus: World Health Organization delays declaring virus’ spread an international emergency The World Health Organization said on Wednesday that it will delay deciding whether to label the spread of the Wuhan coronavirus an international emergency, as the United Nations agency seeks more information from China, reported the South China Morning Post. An emergency committee of 21 members and advisers formulated by WHO will reconvene in Geneva, Switzerland, on Thursday to decide whether a “public health emergency of international concern” will be necessary to fight the deadly illness. The decision about whether or not to declare a public health emergency of international concern is one I take extremely seriously and one I am only prepared to make with appropriate consideration of all of the evidence, WHO Director General Tedros Adhanom Ghebreyesus told reporters in Geneva. Our team is on the ground in China as we speak, working with local experts and officials to investigate the outbreak and get more information. |
2. US links China tariff rollback with Phase Two deal progress
US Treasury Secretary Steven Mnuchin suggested that Washington would gradually roll back its China tariffs during a staged negotiation of a phase two deal that may last beyond the 2020 US presidential election in November, reported Caixin.
Mnuchin said at a World Economic Forum event in Davos, Switzerland, on Wednesday that the US will start the phase two trade talks with China without mentioning a deadline.
If we get that done before the election, great; if it takes longer, that’s fine. The phase two talks could be divided into several stages, he said. “We could easily have phase two (a), two (b), and two (c),” the Treasury secretary said. “It doesn’t need to be a Big Bang. And we take tariffs off along the way.
3. Chinese group swoops for UK steel trader Stemcor
Guangzhou-based Cedar Holdings has bought UK-based Stemcor, one of the world’s largest independent steel trading groups, in the latest foray by a Chinese company into Britain’s steel sector, reported the Financial Times.
The Chinese group paid about $150 million for privately owned Stemcor, according to one person familiar with the matter.
Steve Graf, chief executive of Stemcor, told the Financial Times: “I’m very happy, they will be a good shareholder and have a lot of experience.” The move follows Chinese industrial conglomerate Jingye’s rescue of British Steel for $50 million last year. Questions have been raised about the interest of Chinese companies in the industry, given past cases of Beijing steelmakers dumping underpriced products into the EU market. Graf said he had no concerns about being bought by a Chinese company in the light of mounting imports of cheap metal, coupled with the US-China trade war, that have contributed to falling profits for some UK steelmakers.
4. Top Chinese battery maker CATL expects to post strong profit growth
Shares of Chinese battery giant Contemporary Amperex Technology (CATL) surged to a record high after the world’s largest electric-vehicle battery maker posted a strong profit estimate for 2019, reported Caixin.
The Shenzhen-listed company it expects to report a 20% to 45% increase in profit for 2019, it said Tuesday. Earnings will be RMB 4.06 billion to RMB 4.9 billion ($588 million to $709 million), CATL said.
The stock jumped by the 10% daily limit Wednesday to RMB 133.82. Over the past three months, the stock has surged 66%, boosting the battery maker’s market cap to RMB 296.5 billion, the highest on the Shenzhen Stock Exchange’s Nasdaq-style ChiNext board.
Based in the eastern Chinese city of Ningde, CATL supplies more than half of China’s electric-vehicle battery market. Its share in 2019 was 50.6%, up 9.3 percentage points from 2018, further distancing itself from rival BYD Co. Ltd. BYD took a 17.3% market share last year, down 2.7 percentage points.
5. Roche wins approval for cancer drug Kadcyla in fast-growing China market
Roche said on Wednesday China had approved the import of its Kadcyla drug for breast cancer, another win for the Swiss drugmaker in its second-biggest market where rising demand has helped drive its increased sales and profit, reported Reuters.
Kadcyla, which also recently won expanded approval in the United States, Canada and Europe for more breast-cancer patients, is an antibody-drug conjugate (ADC), a class of therapies that combine monoclonal antibodies with cytotoxic chemical that in 2019 picked up momentum with a record number of US approvals.
Over a decade, China has gone from Roche’s 10th biggest market to its second-largest behind the United States, with 4.5 billion Swiss francs ($4.5 billion) in 2018 sales as more of its advanced medicines won Chinese regulators’ favor. The pace has accelerated, with growth in China topping 50% over the first nine months of 2019, about double 2018’s rate.
Roche reports 2019 results next week, and analysts are watching to see whether the pace of Chinese sales growth can be maintained.
6. China virus spreads to US, curbing travel plans and spooking markets
The toll from the Wuhan coronavirus in China has risen to six deaths, with the first case being reported in the United States on Tuesday, sending markets tumbling on fears of economic damage as tourists canceled travel plans and airports stepped up screening, reported Reuters.
The virus struck as millions of Chinese prepared to travel for the Lunar New Year, heightening contagion risks. Many in China scrambled to buy face masks to protect themselves from the previously unknown, flu-like infection.
The outbreak, which began in the central Chinese city of Wuhan, also worried financial markets as investors recalled China’s Severe Acute Respiratory Syndrome (SARS) epidemic in 2002-2003, a coronavirus outbreak that killed nearly 800 people.
“We’ll stay at home during the holiday. I’m scared as I remember SARS very well,” said Zhang Xinyuan, who had been bound from Beijing for the Thai resort of Phuket before she and her husband decided to cancel their air tickets.
7. China sentences former Interpol President to 13.5 years for bribery
A Chinese court sentenced a senior police official who had headed Interpol to 13.5 years in prison for bribery, more than a year after he disappeared while still holding the international position, reported the Wall Street Journal.
Meng Hongwei told the No. 1 Intermediate People’s Court in the port city of Tianjin that he wouldn’t appeal the prison sentence or a RMB 2 million ($290,000) fine, according to a statement posted Tuesday on the court’s website.
Meng’s appointment as the first Chinese president of Interpol in 2016 had reflected his nation’s growing global stature.
During a half-day trial in Tianjin in June, Meng confessed to taking advantage of his long career in Chinese law enforcement to receive money and goods totaling $2.1 million between 2005 and 2017 in return for favors. During that period, he had held a series of official titles, including vice minister of public security and director of the maritime police.
8. China issues first industry guidelines for facial recognition payments
As Chinese embrace the use of facial recognition for mobile and offline payments, an industry group issued self-discipline guidelines to prevent related risks, reported Caixin.
The guidelines, released Monday by the Payment & Clearing Association of China, outline several principles that payment process providers should follow in the use of facial recognition, including user consent and collection of minimal information.
The guidelines stress that users’ facial image information should be stored in an encrypted way and separated from users’ other information such as bank account numbers and identification numbers. Merchants and other payment-receiving parties must not keep users’ facial image information.
Disputes often arise over data retention in the use of facial recognition, said Wang Xinyue, a senior partner at Beijing law firm Anli Partners. Based on the guidelines, licensed financial institutions should sign agreements with merchants and other payment recipients to restrict keeping of users’ facial image information by intermediary parties, Wang said.
9. China’s Baoshang Bank to be taken over by local governments, state firms
China’s troubled Baoshang Bank will be taken over by local governments and a group of state firms as Beijing looks to shore up some of the country’s weakest lenders, reported Reuters.
Financial regulators took control of Inner Mongolia-based Baoshang Bank last May, citing serious credit risks. That takeover rattled domestic markets, pushing up interbank funding costs for some smaller lenders and prompting the central bank to inject cash into the banking system to prevent contagion risks.
The governments of China’s Inner Mongolia Autonomous Region and Baotou, a major city in the region, will lead the acquisition of at least a 50% stake in a reorganized Baoshang Bank, according to the official, who declined to be identified given the sensitivity of the matter. State firms in Inner Mongolia will also participate in the takeover, said a Reuters source at the People’s Bank of China.
Other strategic investors in the revamped Baoshang Bank include Huishang Bank, China Construction Bank and a national deposit insurance fund managed by the central bank.
10. Judge grills Meng Wanzhou’s lawyer over ‘fraud’ on day 2 of Huawei CFO’s Canada extradition hearing
The second day of Huawei executive Meng Wanzhou’s high-stakes extradition hearing got under way in Vancouver on Tuesday, with her lawyer coming under intense questioning from the judge over his claim that Meng’s alleged conduct would not have constituted fraud in Canada, failing the extradition test of “double criminality,” reported the South China Morning Post.
Meng’s lawyer Eric Gottardi started the day by responding to Justice Heather Holmes’ question, issued on Monday: if Meng’s alleged actions had occurred in Canada, would a domestic prosecution be viable?
That is crucial. This week’s hearings are devoted to “double criminality”, the rule that an extraditable person must be accused of something that would have constituted an offence in Canada, as well as the requesting state. “We say the answer is no, because the bank would face no liability [for the alleged fraud],” Gottardi said.
Meng, Huawei’s chief financial officer and a daughter of company founder Ren Zhengfei, is accused of defrauding HSBC by lying about its relationship with an affiliate doing business in Iran, potentially leaving the bank exposed to the financial risk of prosecution for breaching US sanctions on Iran.
