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China News Digest June 30 – Good people, markets on a high, ‘sleeping’ bank cards

Party faithful celebrate their centenary in China 30-6-21. Photo: www.wenming.cn

China picks its good people

Amid the celebrations linked to the Communist Party’s centenary, the China Central Civilization Office announced 105 “good people”. They were selected from 251 candidates recommended by a large number of netizens (Internet users) and reviewed and recommended by local civilization offices through online presentations, netizens’ comments and expert reviews.

For example, An Fengying, an old man in Ningxia in his seventies, has hand-stitched insoles for shoes for more than 20 years. “I make insoles for nothing, just to give them to the cutest people’s and soldiers,” An said.


Customs seize ‘infected’ goods

Emergency preventive measures were taken on Wednesday June 30 against eight companies in India, three companies in Ecuador, and one company in Pakistan, according to the General Administration of Customs.

Their offence? Covid-19 was allegedly detected on seven outer packaging samples of a batch of frozen noodles fish imported from India, two outer packaging samples of two batches of frozen fish, and eight batches of 11 outer packaging samples of frozen shrimp.

However, no other countries have agreed that the virus can travel via cold-chain logistics.


Ant Group in talks to set up consumer credit rating firm

Ant Group and state officials plan to set up a consumer credit rating agency based on the data held by Alipay, the giant fintech group created by the Alibaba conglomerate. The state will own half the venture, which is expected to be launched in the third quarter of this year, which starts tomorrow.


Vanke chairman speaks out

On June 30, Vanke Enterprise Co Ltd (000002.SZ, 02202.HK) held its 2020 shareholders’ meeting in Shenzhen. Chairman Yu Liang, President and CEO Zhu Jiusheng, Executive Vice President and Chief Financial Officer Han Huihua, and Secretary of the Board Zhu Xu and others attended. At the meeting, Vanke management responded to issues such as the decline in stock prices that investors were concerned about, whether property will be listed, whether dividends will be increased in the future, and how to treat the decline in real estate talent.

In regard to a question from investors about whether the dividend ratio will be increased in the future, Yu Liang responded: “If one day there is really no business in the real estate industry, all the profits we have realized by then should be divided up, and should not be retained. The pressure on the management team is also less.”

Yu Liang said that there have been many changes in the real estate industry this year, such as the ‘three red lines’ policy, which all show the truth that money is more expensive and more important than in the past. At present, the real estate industry is returning to being an ‘ordinary industry.’ And when that happens, he said, “especially companies with businesses like ours may have relatively heavy assets, which means they need more money. So in terms of dividends, we hope to provide you with a stable and predictable dividend, which is basically based on a dividend payout rate, which is between 4% and 5%.”

Meanwhile, the country’s most indebted property developer, China Evergrande Group said on Tuesday that its debts had dropped to around 570 billion yuan (just over $88.2 billion), down from 716 billion yuan at the end of last year, Reuters reported.


Markets end June on a high

On the last trading day in June, the major A-share stock indexes closed up across the board. The Shenzhen Component Index and the Science and Technology 50 Index rose more than 1%, and the ChiNext Index performed relatively well, with an increase of more than 2%.

The Shanghai Composite Index opened slightly lower at 3,572.62 points on the day, fluctuating within a narrow range in the morning, and then zoomed higher and fell back in the afternoon. In late trading, the Shanghai Composite Index closed at 3,591.20 points, an increase of 18 points or 0.50% from the previous trading day.

The Shenzhen Component Index closed at 15,161.70 points, up 161.90 points, or 1.08%. The ChiNext Index performed relatively well, rising 2.08% to 3,477.18 points. The Kechuang 50 Index closed at 1,588.22 points, an increase of 1.67%.

Most individual stocks in Shanghai and Shenzhen stocks rose. Five new stocks were listed collectively in the two cities, among which the new stock N Baiyang on the Growth Enterprise Market, which rose 635% on its first day.

Industry sectors also rose more and fell less. The semiconductor and pharmaceutical sectors performed strongly, while the shipping and traditional Chinese medicine sectors showed strong gains. But the wine and printing sectors were relatively weak.

The Shanghai and Shenzhen markets continued to shrink, with transactions of 414.7 billion yuan and 527.8 billion yuan respectively, and the total amount was less than 950 billion yuan.

In the just-concluded June trading, the A-shares generally showed a pattern of rebounding after reaching the top and bottoming out. The Shanghai Composite Index fell slightly by 0.67% throughout the month, and the Shenzhen Component Index rose by 1.10%. The ChiNext Index and the Science and Technology Innovation 50 Index performed significantly better than the two markets, with cumulative gains exceeding 5% and 10% respectively.


Major flooding across China

Over the past two days, 15 rivers in Heilongjiang, Fujian, Jiangxi, Guizhou, Yunnan, Guangxi and other provinces had floods that exceeded warning levels, according to the Ministry of Water Resources.

At present, the Ministry says flood alerts are at Defense level III emergency response, and it sent two working groups to Zhejiang and Jiangxi on the Monday June 28. Two additional working groups were sent to Guizhou and Guangxi on Tuesday the 29th to guide the the response to heavy rainfall in the south.


China media say US house prices at 30-year peak

Zu Ran is a data analyst who lives in the Bay Area of California, and owns a well-known American data agency. She told China Business News: “(The current rise in housing prices), no one who studies this can understand it. No one can really estimate the trend. Everyone thinks that the stock market, and the housing market is already very high, but there is no better place for money.”

Explaining why US housing prices had soared, Zu Ran came up with three reasons: First, the US government gave out money during the pandemic, and Americans wanted to keep their cash in hand; second, a large number of technology companies went public during the epidemic; and thirdly, institutions entered the market. She believed these reasons had pushed up US housing prices.

“You can’t buy a house without a price increase. Many of the $1.6 million houses on the edge of the Bay Area can only be bought with an increase of $200,000.” Zu Ran told a reporter from CBN: “Talk to colleagues in the east, for example, places near Washington DC are also seeing increasing housing prices. If you don’t increase the price (above the stated selling price), you can’t buy a house.”

On June 29, the S&P/Case-Shiller House Price Index, which is an important data source to measure the fluctuation of house prices in the United States, was released. It had the highest figure for the house price index in nearly 30 years after a 13.3% year-on-year increase in March.


China to cancel ‘sleeping’ bank cards

China will clean up “sleeping cards” – bank cards that have been idle for a long time. Officials say this move is in the interest of preventing theft, information “leakage”, and anti-telecom fraud.

According to a recent announcement by ICBC, the bank will begin “cleaning up” personal bank accounts (debit cards and current passbooks) that users have not used for a long time from July 2021, and restrict certain financial service functions to accounts that are deemed worthy of a clean-up.

Baixin Bank also issued a recent announcement stating that the bank will implement the clean-up of personal long-term immobile accounts from July 2021.


Chris Gill

With over 30 years reporting on China, Gill offers a daily digest of what is happening in the PRC.


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