Ex-Kweichow Moutai Managers Being Investigated For Graft
Two former deputy general managers of Kweichow Moutai have allegedly come under disciplinary review and supervisory investigation. Formed in 1999, Kweichow Moutai Group is currently the world's most valuable liquor company, after outpacing UK-based Diageo in 2017, with a market value of over RMB2 trillion (US$0.28 trillion) at RMB1681 (US$239.4) per share.
The Guizhou provincial government issued a notice on Tuesday indicating the investigation of Zhang Jiaqi, who served with Moutai for nine years, and Li Mingcan, who spent his entire career with Moutai.
The move came as part of the group's ongoing internal anti-corruption efforts headed by the company's 48-year-old chairman, Gao Weidong, the former head of Guizhou province's transport department.
Kweichow Moutai's deputy general manager team has already been reduced to four people from 10 back in 2015, while Moutai's Q1 revenue reached RMB24.4 billion, an increase of 12.8% year-on-year.
Since Gao started his tenure in March, he has made aggressive moves to not only forge partnerships with China tech giant Huawei and e-commerce platform Pingduoduo, but has also promised to completely reform the company's dealership system.
During a June shareholders' meeting, Gao announced the goal of increasing Moutai's 2020 annual revenue by 10% and the setting up of a higher bonus quota for shareholders to a total of RMB21.387 billion (US$3.04 billion).
According to Moutai's 2019 annual report, revenues topped RMB88.854 billion (US$12.65 billion) with net growth of RMB41.206 billion (US$5.87 billion), both marking record highs.
German Telecom Giant Downplays Huawei Collaboration
Following the recent cooling of relations of Hauwei with both France and the U.K. regarding the integration of the Chinese telecom's 5G Network, German telecom giant Deutsche Telekom has also encountered an impasse on collaboration with Huawei.
German business paper Handelsblatt reported on Tuesday that Deutsche Telekom announced in internal documents that it would strengthen its strategic partnership with Huawei, and asked Huawei to give it a technological edge in Germany over its competitors to secure a leading role among the country's 5G network providers.
But a spokesman for Deutsche Telekom denied the report and said that the Bonn-based firm had scaled back its business with Huawei during the past three years, Reuters reported.
The two firms agreed last year on a deal which laid the groundwork for the partnership for early rollout of 5G networks in Europe. That was suspended weeks ago when Washington imposed restrictions on businesses dealing with Huawei.
According to a Handelsblatt report in early June, Deutsche Telekom estimated EUR3 billion in costs in an "armageddon" scenario where the government bans Huawei from its German 5G network.
The German government said it would not reach an agreement on rules for installing components in the future 5G mobile communications network until at least September.
Forex Reserves Rise To $3.112 trillion
China's foreign exchange reserves rose US$10.64 billion in June to US$3.112 trillion, according to the State Administration of Foreign Exchange (SAFE), the third month in a row forex reserves have expanded.
Economic analysts credit the rise to valuation changes and cross-border capital flow in June, as the yuan rose 0.99 % against the U.S. dollar, while the U.S. dollar fell about 0.97% against a basket of other major currencies.
China's economic recovery has also attracted cross-border investment flows into Chinese stocks and bonds.
SAFE statistics show that by the end of June, foreign institutional investors held a total of RMB2.51 trillion (US$0.36 trillion) Chinese bonds, an increase of RMB81.4 billion (US$11.6 billion) in May.
Offshore Yuan Strengthens Past 7 To U.S. Dollar
China's offshore yuan punched through the key level of 7 yuan to the U.S. dollar on Tuesday to reach 6.9918, marking its strongest finish since March, the Securities Daily reported. Meanwhile, the onshore exchange rate appreciated to as much as 7.0034.
Financial experts said that a weaker greenback and rising expectations for China's economic recovery have buoyed the yuan. China's manufacturing activity expanded, with the Purchasing Manager's Index (PMI) indicating that supply and demand have started to pick up in the last two months.
According to the National Bureau of Statistics, the official manufacturing PMI came in at 50.9 in June, and official manufacturing PMI came in at 50.6 in May. However, the reading for new export orders was 35.3 in May and 42.6 in June, with both numbers signalling contraction.
Unprecedented Flooding Damages Cultural Relics
As floods continue to ravage southern regions of China, more than 130 immovable cultural relics face destruction, with Zhenhai Bridge and Lecheng Bridge, significant stone bridges constructed during the Ming Dynasty, among those that have already been severely damaged.
The State Cultural Relics Bureau reported on Tuesday that across 11 southern provinces of China, cultural relics including major historical sites protected at the national and provincial level in Anhui, Sichuan, Hubei and Hunan provinces have been under severe danger since June due to ongoing flooding.
The State Cultural Relics Bureau demanded that provincial cultural relics departments launch emergency protection measures to reduce the damage sustained.