Record US firms cut China investment plans...China record graduate wave threatens to inundate job market...HK stablecoin license race heats up

Record US firms cut China investment plans

A record share of American firms froze investments in China as trade ties worsened earlier this year, a recent survey suggests, reports Bloomberg. Fewer than half of the companies surveyed by the US-China Business Council between March and May said they planned to invest in China in 2025, a drop from 80% last year and a record low since the group began asking a similar question in 2006, according to the Wednesday report.

While the annual survey was conducted before the easing of tensions following the countries’ talks in London last month, the sharp fall in sentiment underscores the damaging effect of the trade war on investment in the world’s second-largest economy.

Companies are in a “wait-and-see mode,” Kyle Sullivan, vice president of business advisory services at the USCBC, said in a briefing. “They are riding out the uncertainty in trade policy.”

China record graduate wave threatens to inundate job market

Despite an easing of China’s youth unemployment rate in June, the country is steeling itself for a challenging job-hunting season as a record number of fresh graduates prepares to enter the labour market, reports the South China Morning Post. The urban jobless rate for those aged 16 to 24, excluding students, dipped to 14.5% last month—more than one in seven people—from 14.9% in May, according to data released by the National Bureau of Statistics (NBS) on Thursday.

While this marked the fourth consecutive month that China’s youth unemployment has fallen, it remained over one percentage point higher than the figure recorded at the same time last year, suggesting significant strain on the job market as the graduation season approaches.

A sharp rise in unemployment is expected over the next two months, when a record 12.2 million university students are set to graduate and a majority likely to join the workforce.

HK stablecoin license race heats up

A high-stakes contest for a handful of coveted licenses to issue stablecoins in Hong Kong has rocked China’s stock market, as investors place bets on which firms will lead the city’s digital currency charge, reports Caixin. With only two to four licenses expected in the first wave, the fierce competition has injected uncertainty into the market, unnerving investors and opening a new front in the competition between private firms and state-owned enterprises.

The frenzy comes as Hong Kong prepares to accept applications for its new stablecoin regulatory regime starting Aug. 1. Even before the process opens, anticipation of limited issuance has rattled share prices. On Monday, shares of mainland-listed companies seen as stablecoin concept stocks plummeted, with Sinodata Co. Ltd. and Shenzhen Kingdom Sci-Tech Co. Ltd. each hitting the 10% daily limit down. Both were previously considered front-runners.

“Companies that were previously expected to be among the first to be licensed may now see changes,” a technology analyst told Caixin. “It is reasonable for the prices of some concept stocks to fall.”

US sets 93.5% anti-dumping tariff on Chinese anode graphite

The US Commerce Department said on Thursday it will impose preliminary anti-dumping duties of 93.5% on anode-grade graphite imported from China after concluding that the materials, which are a key component for electric vehicle batteries, are being sold in the US at less than fair market value, reports Reuters. A Commerce Department fact sheet seen by Reuters shows a single anti-dumping margin and cash deposit rate of 93.5% for all Chinese producers.

The order affects imports valued at $347.1 million in 2023, Commerce said. The duties apply to anode-grade graphite material with a graphite minimum purity content of 90% carbon by weight, and can be synthetic graphite, natural graphite or a blend of the two.

A separate but parallel anti-subsidy investigation into Chinese anode grade graphite materials by the Commerce Department on May 20 resulted in a preliminary countervailing duty of 6.55% for most producers but 712.03% for Huzhou Kaijin New Energy Technology Corp and 721.03% for Shanghai Shaosheng Knitted Sweat (sic).

Wells Fargo suspends China travel after exit ban

Wells Fargo & Co. suspended travel to China after one of its top trade financing bankers was blocked from leaving the country, the latest case of authorities imposing exit bans on staff of foreign firms, reports Bloomberg. Chenyue Mao, an Atlanta-based managing director who was born in Shanghai, was banned from departing China after entering the country in recent weeks, according to a person with knowledge of the situation. That led the San Francisco-based bank to restrict its other employees from visiting China, said the person, who asked not to be identified discussing information that isn’t public.

“We’re closely tracking this situation and working through the appropriate channels so our employee can return to the United States as soon as possible,” a Wells Fargo spokesperson said in an emailed statement.

China’s use of exit bans has been a point of contention between Beijing and Washington. The US State Department has repeatedly advised citizens to reconsider travel to China based on what it called the “arbitrary enforcement of local laws, including in relation to exit bans.”