9/3/2021 Financial News In China: CCP Released Guidelines On Regulating Culture And Entertainment; Alibaba To Invest $15.5 Bln For “Common Prosperity”

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1.CCP Released Guidelines on Regulating Culture and Entertainment

The Central Propaganda Department released a notice on deploying comprehensive governance in the field of culture and entertainment on Sep 2. Guidelines released on Thursday with the CCP’s publicity department blasting some in the entertainment industry for their alleged bad influence on the young and for “severely polluting the social atmosphere”. Penalties should be increased for actors who have engaged in illegal or unethical behavior, and agencies which condone such behaviors promptly punished, stated by the Notice. The ideological and moral education of children should be beefed up and they should be forbidden from joining activities of “idol” group.

2.Average Online Price of New Homes in Core Cities Down Slightly

The “August National Anju Index Report”  released by 58 Tongcheng and Anjuke shows that the online average deal price of new houses in 65 core cities nationwide in August 2021 was RMB 17,362/㎡, down by 0.32% YoY, of which only 27 cities had a YoY increase on the online average price of new houses. The average online listing price of second-hand houses was RMB 17,020/㎡, down by 0.03% YoY. At present 10 cities have implemented the reference price system for second-hand houses so far, of which 6 cities have seen a downward trend on the listing price.

The online average price on new housing sales market fell slightly while the first-tier cities rose by 2.5% YoY. In terms of second-hand housing market, 6 cities are implementing reference prices for resale of second-hand housing and their listing prices drop. The Report shows that the average listing price of second-hand houses in 65 major cities nationwide in August was 17,020 yuan/㎡, down by 0.03% YoY, with only 27 of the 65 cities experiencing an increase in the listing price of second-hand houses.

3. Alibaba to invest $15.5 bln for “Common Prosperity”

Alibaba Group will invest 100 billion yuan ($15.5 billion) by 2025 in support of “common prosperity”, it said, becoming the latest corporate giant to pledge support for the initiative driven by President Xi Jinping. Beijing has been encouraging companies to share wealth as part of the effort to ease inequality in the world’s second-largest economy. Other companies that have made similar announcements include Tencent Holdings (0700.HK), which also pledged 100 billion yuan, and Geely Automobile. Alibaba will also set up a 20 billion yuan “common prosperity development fund”, the newspaper said, with Alibaba confirming the report.

4. BNP in wealth management JV talks with Agricultural Bank

BNP Paribas’ asset management arm is in talks to form a wealth management venture with a unit of Agricultural Bank of China, sources said, as the French firm pursues a bigger slice of China’s $19 trillion market. Two sources with direct knowledge of the talks told Reuters that the investment management arm of BNP Paribas will hold a majority stake in the planned venture with Agricultural Bank’s wealth management subsidiary. BNP Paribas declined to comment. Agricultural Bank (601288.SS), China’s third biggest lender by assets, did not immediately return an emailed request for comment.

5. SMIC: Plans to Establish a Joint Venture in Shanghai

SMIC announced its plan to establish a joint venture with the Lingang New Area Management Committee to plan and construct a 12-inch wafer foundry production line. According to the cooperation framework agreement, the company and Lingang New Area Management Committee intend to jointly establish a joint venture company in the Lingang Free Trade Zone.

The joint venture company will plan to build a 12-inch wafer with a production capacity of 100,000 wafers per month. The foundry production line project focuses on providing integrated circuit wafer foundry and technical services at 28nm and above technology nodes. The project plans to invest approximately US$8.87 billion. The registered capital of the joint venture company is planned to be US$5.5 billion, of which the company intends to contribute no less than 51%, and the investment entity designated by the Shanghai Municipal People’s Government intends to contribute no more than 25%.

6. Evergrande Bond Trading Halted on Growing Fears of Cash Crunch

Trading in some debt issued by China Evergrande was temporarily halted on Friday, as the under-pressure property developer’s bonds tumbled to new lows on fears of a deepening liquidity crisis. Investors were briefly unable to buy and sell the company’s debt in Shenzhen in morning trading after prices fell more than a daily limit of 20 per cent, according to the southern Chinese city’s stock exchange. The yield on a renminbi-denominated bond maturing in 2023 was about 49 per cent prior to the trading suspension, data provider Wind showed.

7. DTC Brand “Cider” Completed $130 million Financing in Series B  

According to 36Kr, the DTC brand “Cider” has recently completed $130 million in Series B financing, led by DST Global and co-invested by Greenoaks Capital, A16Z and others. The money raised will be used for brand building, system development and business expansion in various overseas channels. This is Cider’s fourth round of financing within one year from its establishment. Cider’s valuation currently has exceeded $1 billion, making it one of the fastest growing unicorn companies in the world.

According to Euromonitor, the global e-commerce market will expand to $1 trillion by 2025. In terms of the strategic layout after the new round of financing, Cider will continue to invest more in both brand and technology, upgrade traditional manufacturing through artificial intelligence, big data and algorithms, and build intelligent factories to upgrade the traditional cross-border garment e-commerce model.

8. JD and CCBI Buy Stake in Lagardere Travel Retail Asia Business

According to a public announcement on September 2, Jingdong Group and China Construction Bank Investment Co. are acquiring 22.36% of stake in Lagardere Travel Retail Asia for about 94 million euros ($111 million). The deal is said to be part of a strategic partnership.  According to the information, Lagardere Travel Retail Asia has 480 stores in China, Hong Kong and Japan and will achieve sales of 148 million euros in 2020. Publicly available information shows that Ragdale Travel Retail operates more than 4,850 stores in 39 countries and territories in airports, train stations and other concession areas, covering luxury goods, duty-free, travel goods, fashion and food and beverage services.

By【G Translators- Financial Team】
Author: Apple