American Express Debuts In Yuan Market
U.S. credit card issuer American Express officially entered China's payment market through a Chinese joint venture, a move reflecting the trend of China decreasing its reliance on the U.S. dollar payment system, China Securities Journal reported.
The joint venture is called Express (Hangzhou) Technology Services. It announced last Friday that it was the first JV financial firm to receive a network clearing license from China's central bank. That approval was received in June and the company has begun operations.
The JV firm's network will allow yuan-denominated credit card transactions to be cleared in mainland China by using American Express-branded cards, processing both online and offline payment transactions.
The new payment company also supports transactions on Chinese major mobile payment platforms including Alipay, WeChat and UnionPay Mobile QuickPass.
Beijing's decision to let an American company participate in its clearing network will help channel more yuan funds abroad, boosting the yuan's circulation and its role in global finance, analysts told the South China Morning Post.
Hangzhou-based LianLian DigiTech holds a 50% stake of the Chinese JV, which has 1 billion yuan ($145.87 million) in registered capital, while the other 49% is owned by American Express Travel Related Services Company and the additional 1% is held by American Express Marketing & Development Corp.
Nestlé Sells Water Business To Tsingtao Beer Group
Multinational food and drink processing conglomerate Nestlé SA plans to sell its mainland drinking water business to local beer giant Tsingtao Brewery Group. All the stakes Nestlé holds in the three local factories in Tianjin, Shanghai and Yunnan will go to Tsingtao, The Beijing News reported.
Though Nestlé will no longer own its local Dashan and Yunnan Shan Quan water brands, it will continue to market to Chinese consumers its premier international water brands including Perrier, San Pellegrino and Acqua Panna, Nestlé said.
The move came as part of an ongoing effort of Nestlé to offload underperforming brands. Nestlé owns over 2,000 brands in more than 150 countries. Nestlé's global water business has reportedly underperformed in recent years, with revenues growing just 0.2% last year to $8.3 billion.
Tsingtao Brewery will also be in charge of marketing the Nestlé brand Pure Life in the China market, as part of a licensing agreement between the two companies.
Brands like Pure Life water are among those the company said it was "strategically reviewing," according to Reuters.
China Opens Second Probe Into Australian Wine
China's Commerce Ministry announced Monday a new anti-subsidy probe into Australian wine containers of two liters or fewer – China's second probe into Australian wine in two weeks.
China's government had launched a separate anti-dumping investigation on August 18, based on a request by the China Wine Industry Association (CWIA). The first probe caused the share price of Australia's largest wine exporter, Treasury Wine Estates, to plunge by 14 percent in a single trading day.
The CWIA said the Australian wine imports had received subsidies from the Australian government. The second investigation is expected to last through the end of August 2021 but may be extended to the end of February 2022 under special circumstances, the ministry said.
The countervailing-duties investigation into Australian wine was broadly foreshadowed at the time that the initial anti-dumping investigation was initiated, said Australian Trade Minister Simon Birmingham.
The investigations come against a backdrop of increasing tensions between the two countries after Canberra called for an international inquiry into the origins of the novel coronavirus, which was first detected in Wuhan, China, Reuters reported.
China is the most lucrative export market for Australian wine and is also Australia's largest trading partner. The two-way Sino-Australian trade was worth $170 billion last year.
Japanese Firms Increase Chengdu Investment
Japanese firms have recently invested in 10 of the 50 new projects being developed in Chengdu High-Tech Zone's Jiaozi Park. The new businesses represent a total investment of 87.7 billion yuan ($12.87 billion) and nine projects are finance related, National Business Daily reported.
Additionally, in Chengdu's other business zone, Tianfu New District, Tokyo-based financial service group SBI Holdings will invest 1 billion yuan to set up its headquarters for the southwestern China region as well as creating an incubator platform that can bring innovative financial-technology enterprises to the city.
As of this May, 326 companies in Chengdu have absorbed Japanese investment, and 38 of them are Fortune 500 companies. In 2019, total import and export volume of Chengdu via Japanese trading was 31.48 billion yuan. Japan is Chengdu's fifth-largest trading partner, according to public statistics.
Chengdu has reportedly progressed rapidly in terms of attracting investments this year. As of July, the city had signed a total of 229 projects related to service sector development, representing 436.5 billion yuan in agreed investments.
Internet giants including ByteDance Technology, Baidu and Tencent Holdings announced investments of 10 billion yuan, $20 million and 5 billion yuan, respectively, in the Chengdu Hi-Tech Industrial Development Zone.
Hot Stock Firm Blasts Ping An Asset Management
Ping An Asset Management Co., one of China's most influential investment companies, has come under the spotlight for the strident criticism it received over the weekend.
The chairman of Loctek Ergonomic Technology Corp., one of the nation's best-performing stocks this year, said the company won't welcome Ping An Asset's investment because the fund managers were "condescending and didn't do their homework."
The lengthy Weibo letter posted by Loctek's chairman, Xiang Lehong, detailed an online investment research conference conducted by Ping An Asset fund managers last Saturday. Aside from criticizing the younger managers' impolite attitude, Xiang was also deeply bothered that the research work involved neither on-site visits nor face-to-face interviews with Loctek's staff.
Xiang questioned the professional investors' behavior in general. In his post, Xiang said that most fund companies in China were only aiming to make quick money. He claimed that it's rare to see a fund company volunteer to visit the manufacturing pipeline and conduct thorough, early-stage research. Instead, he said, the fund companies are likely chasing easy money on hot stocks.
In response to the criticism, a Ping An Asset stock investment manager said that some research questions might have offended the chairman, including asking if Loctek can still maintain its rapid growth as the global pandemic winds down.
Shares of Shenzhen-listed Loctek, which makes standing desks and monitor stands mostly for export to Europe and the U.S., have nearly quadrupled this year to beat all but 29 of the 2,300-odd companies on the Shenzhen Composite Index. Profits rose 190 percent in the first half, assisted by a shift to cross border e-commerce channels, Bloomberg reported.
