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The day's top China business headlines
August 17, 2018
China and US to reignite trade talks with Washington visit China will send a delegation to Washington towards the end of August for continued trade negotiations, the country’s commerce ministry said in a statement on Thursday. The statement read that Vice Commerce Minister Wang Shouwen would head the team and meet members of the US Treasury regarding “economic and trade issues between China and the US.” As Bloomberg reports, US President Donald Trump acknowledged the plans at a White House cabinet meeting on Thursday but pushed China to offer him a better deal. “We’re talking to China, they very much want to talk,” Trump said Thursday at a cabinet meeting at the White House. “They just are not able to give us an agreement that is acceptable, so we’re not going to do any deal until we get one that’s fair to our country.” Trade talks between the two countries have stalled since a series of reciprocal visits in July, but several news outlets reported late last month that the two governments had been in unofficial contact on the issue. “It’s a good thing that they’re sending a delegation here – we haven’t had that in quite some time,” said White House chief economist Larry Kudlow in an interview with CNBC. “The Chinese government it its totality must not underestimate President Trump’s toughness and willingness to continue this battle to eliminate tariffs and non-tariff barriers and quotas to stop the theft of intellectual property and to stop the forced transfer of technology.”
Beijing calls on state asset managers for help on P2P China’s state-owned asset managers are being drafted in to help clean up some of the financial risks in the peer-to-peer (P2P) lending industry, following a wave of liquidity crises and anger among investors. The China Banking and Insurance Regulatory Commission met with executives from the asset managers earlier in the week to discuss ways to tackle the P2P issue, Caixin confirms. The four institutions – Huarong, Cinda, Orient and Great Wall – have traditionally been tasked with managing bad loans from state banks. This is the first time they will turn their attention to P2P. Sources told Caixin that the role of the AMCs will focus on the “custody, liquidation and restructuring of P2P assets,” but that they may also directly buy out certain P2P assets, particularly large-sum loans that exceeded regulatory caps.
JD falls just short of expectations with earnings report E-commerce giant disappointed with its quarterly earnings release on Thursday, where it dipped back into loss-making territory from April to June. Despite taking Rmb 122.3 billion ($17.73 billion) in sales during the period – a 31% jump from the same time last year – the market consensus according to a Reuters poll expected sales of Rmb 122.7 billion. JD posted a Q2 net loss of $334.4 million, twice the forecast of the Reuters poll, reflecting both slower sales and new investment plans, including a warehouse management service that is being rolled out. “(These) initiatives are yet to provide meaningful financial results but we believe we’ve made good traction since doubling down on technology last year,” CFO Sidney Huang told investors. The company’s stocks fell around 5% on the Nasdaq following the announcement.
Malaysian PM to begin state visit to Beijing this week Malaysia’s recently elected Prime Minister Mahatir Mohamad is looking to rebuild bridges with Beijing as he flies to the Chinese capital on Friday for a five-day visit that will include meetings with President Xi Jinping and Premier Li Keqiang, the South China Morning Post reports. The 93-year old has previously said that “unfairness” regarding China’s roles in investment projects in Malaysia would be a key talking-point during his visit. Since taking office in a surprise electoral victory over his more China-friendly predecessor Najib Razak, Mahatir has opened reviews into some Beijing-backed projects and says he will take them back to the negotiating table. Mahatir’s administration has already begun an investigation into the so-called 1MDB scandal, which has alleged links with the Chinese government, and has put the brakes on a $14 billion China-led rail project along Malaysia’s east coast.
China has already invested $144 billion in shantytown redevelopment this year

China invested Rmb 990 billion ($143.6 billion) in its huge project to redevelop the country’s urban shantytowns during the first seven months of 2018, Reuters reports.

The huge investment program is designed to demolish poor-quality, run-down housing, particularly in China’s smaller cities, and move the displaced residents into more modern properties. The scheme also has the added benefit, in theory, of filling up the vast numbers of empty apartments that often ring China’s lower-tier cities—the result of rampant overbuilding that threatens to crash the country’s housing market.

The policy has helped boost home sales and prices in smaller cities in recent years, which has helped the Chinese economy recover from the slump of 2015, according to Reuters.

China invested $278.2 billion in the shantytown redevelopment project last year and started construction on 6 million new homes, according to official data. Work has already begun on over 4 million homes during the first seven months of this year.

But the redevelopment efforts may also be creating hidden debt risks due to the credit stimulus it is providing. China’s housing ministry moved to restrict subsidies for new shantytown redevelopment projects to cities with an overheated property market in July.

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