United States Senator Marco Rubio announced a bill that would block blacklisted Chinese companies from access to U.S. capital markets. The bill would prevent U.S. investment firms, insurance companies and retirement funds from taking stakes in Chinese companies that have been blacklisted by the U.S. Commerce Department or are on the Pentagon’s list of firms backed by the Chinese military. Blacklisted Chinese firms would also eventually be banned from trading on U.S. exchanges.
The bill comes amidst heightened trade tensions between the U.S. and China. Prior to Rubio’s bill, Beijing had passed legislation that would ban exports of “strategic materials and advanced technology” to certain entities, set to go into effect on December 1. Chinese exporters would need to submit the name of the end user and proof of final application in order to receive permission from the government to ship.
The United States is ready to offer potentially billions of dollars in loans and other financing to developing countries to buy telecommunications technology from democratic countries instead of from China. The move is particularly targeting equipment from ZTE Corp. and Huawei Technologies, both of which are on the U.S. blacklist for national security concerns related to their tech. The move is seen as an escalation in the trade war between the two countries, as well as the United States’ attempt to curb China’s tech ambitions.
Thanks to its handling of COVID-19, China’s economy is recovering strongly and is the only major power to have avoided a pandemic-related recession. Its gross domestic product is expected to grow by 1.6% by year’s end, even though World Bank projections from June expected the global economy to contract by 5.2%.
China has officially surpassed North America as the world’s largest box office. In mid-October, the Chinese box office reached $1.988 billion, overtaking the North American total of $1.937 billion, but the gap is expected to widen further by year’s end.
Although analysts had expected China to eventually become the number one box office, the COVID-19 pandemic accelerated things. China was able to reopen theaters to 75% capacity thanks to its containment of the disease and economic recovery, and filmgoers have been flocking to see local films like “The Eight Hundred,” which is currently the world’s highest grossing film of 2020.
Many major Hollywood studios have also postponed the release dates of potential blockbusters, like Marvel’s “Black Widow,” until 2021, dimming the future of movie theaters in the United States. AMC Entertainment, the largest movie theater chain in the world, announced that it was running out of cash and would soon need to file for bankruptcy if the company didn’t find funding.
Less than two days before it was supposed to debut, Ant Group’s historic IPO was suspended by Chinese regulators from the Shanghai and Hong Kong stock exchanges. Ant Group, which owns China’s top online payments platform Alipay and was spun off from e-commerce giant Alibaba in 2011, was set to raise a record-breaking $37 billion. This marks the first time Chinese regulators have taken such drastic measures so close to such a highly publicized public offering.
After a meeting with founder Jack Ma, Chinese regulators thought there could be “major issues” that might make Ant Group unable to meet new listing conditions and disclosure requirements for online lenders that were announced on Monday. That same day, the People’s Bank of China and several other financial regulators called Ma and two other Ant Group executives in for questioning, following Ma’s public criticism of regulators limiting innovation by being too risk averse.
Ant Group said it is in close communications with regulators and “will wait for further notice with respect to further developments” on its IPO and listing.
Popular short-form video app TikTok announced a new global partnership with e-commerce platform Shopify. The partnership would make it easier for Shopify merchants to create, run and optimize their TikTok marketing campaigns from the Shopify dashboard, such as creating content that would show up on users’ TikTok feeds. Both companies said that the partnership would eventually expand to other in-app shopping features.
TikTok’s ability to drive traffic and sales was one of the key reasons why Walmart joined Oracle in its bid to purchase the company from its Chinese parent company, ByteDance. However, the fate of that deal is still up in the air, given TikTok’s lawsuit against the Trump administration and the upcoming presidential election, which could change the potential ban.
Tesla has shipped the first of 7,000 Model 3 electric vehicles made in its Shanghai gigafactory to Europe, set to arrive first in Belgium at the end of November. Originally, Tesla had planned to supply only the domestic Chinese market with the cars made at its Shanghai factory but has since changed course. The company now joins several other carmakers like BMW and Polestar in manufacturing electric vehicles in China and shipping them out to Europe.
Chinese regulators announced that Tesla is also recalling up to 48,442 of its U.S.-made Model S and Model X cars that were sold to Chinese customers, due to potentially faulty rear suspension systems.