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Tencent must get approval from regulators before publishing new apps

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People walk past a Tencent sign at the company headquarters in Shenzhen, Guangdong province, China August 7, 2020.

David Kirton | Reuters

GUANGZHOU, China — Tencent must get approval from Chinese regulators to send out updates for its apps, state broadcaster CCTV reported Wednesday.

The move comes after regulators found several apps made by China’s most valuable technology company violated data protection rules on a number of occasions this year.

Tencent’s app approvals are currently suspended. China’s Ministry of Industry and Information Technology must review any new apps and updates before they can be launched. This could take seven days, CCTV reported, without citing any sources.

“We are continuously working to enhance user protection features within our apps, and also have regular cooperation with relevant government agencies to ensure regulatory compliance. Our apps remain functional and available for download,” a Tencent spokesperson told CNBC in a statement.

Tencent shares in Hong Kong were up more than 1% in morning trade.

Over the past year, China has been tightening rules on the domestic tech sector which for years has grown largely unencumbered by regulation. Beijing has introduced regulation in areas from antitrust to the way in which algorithms can be used.

One of the biggest regulations passed this year was a landmark personal data protection law. Regulators are focusing heavily on how companies are collecting and processing data. The latest actions against Tencent are part of that process.

The latest move is another blow for Tencent which has felt the impact of China’s regulatory crackdown. In August, regulators introduced rules that limited children under 18 years old to just three hours of online video games a week and during designated windows. At the time, Tencent said only a small part of its revenue comes from such players.

Clampdown on other areas liked the education sector have also weakened advertising appetite which weighed on the company’s third-quarter earnings. Tencent’s third-quarter revenue came in at 142.4 billion yuan, up 13% from a year ago. That was its slowest quarterly revenue growth since going public in 2004, according to Reuters.

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Chinese real estate developer Kaisa announces debt restructuring plan

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Kaisa Group Holdings Ltd.’s City Plaza development under construction in Shanghai, China, on Tuesday, Nov. 16, 2021.

Qilai Shen | Bloomberg | Getty Images

BEIJING — Chinese real estate developer Kaisa announced Thursday plans for paying back investors, temporarily alleviating concerns about a default as China’s property sector continues to face pressure.

Kaisa’s Hong Kong-listed shares popped 20% in the market open, before paring some gains. It was the first day of trading after a nearly three-week halt. The developer had suspended trading after missing a payment on a wealth management product earlier this month.

“Repayment measures have been implemented” for about 1.1 billion yuan ($171.9 million) of the wealth management products, Kaisa said in a filing with the Hong Kong stock exchange. The developer said it’s in negotiations about repayment of the remaining 396.6 million yuan in wealth management products.

Separately, Kaisa said it would restructure offshore debt payments due in December by offering investors new bonds worth $380 million that are now due in 2023. The original U.S. dollar-denominated bonds were worth $400 million.

Among Chinese developers, Kaisa is the second-largest issuer of U.S. dollar-denominated offshore high-yield bonds, according to French investment bank Natixis. Evergrande, the world’s most indebted real estate developer, ranks first.

As of the first half of this year, Kaisa had crossed two of China’s three “red lines” for real estate developers that the government outlined, according to Natixis.

“Persistent tightening governmental policy, multiple credit events and deteriorating consumer sentiment have resulted in temporary shut-down of various refinancing venues for the sector and put enormous pressure on our short-term liquidity,” Kaisa said in a filing Thursday.

“Despite our efforts to reduce our interest-bearing debt in response to government regulations, the current sharp downturn in the financing environment has limited our funding sources to address the upcoming maturities,” the company said.

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Weekly jobless claims post stunning decline to 199,000, lowest level since 1969

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The ranks of those submitting jobless claims tumbled to their lowest level in more than 52 years last week, the Labor Department reported Wednesday.

New filings totaled 199,000, a number not seen since Nov. 15, 1969, when claims totaled 197,000. The report easily beat Dow Jones estimates of 260,000 and was well below the previous week’s 270,000.

The Labor Department did not indicate any special factors that caused the stunning fall, which could provide an important signal about a jobs market that has been struggling to come back since the Covid-19 shock in March 2020.

The decline appeared at least in part to be due to seasonal adjustments. Unadjusted claims totaled 258,622, which actually was an increase of 7.6% from the previous week.

In other economic reports Wednesday morning, second-quarter GDP growth was revised up slightly to 2.1%, though that was below estimates for 2.2%. Also, durable goods orders declined 0.5%, worse than expectations of a 0.2% gain.

Along with the drop in weekly claims, continuing claims, which run a week behind, fell by 60,000 to 2.05 million, a fresh pandemic-era low and a strong sign that the labor market is getting notably tighter.

The total of those receiving benefits under all programs fell sharply, down by 752,390 to 2.43 million, according to data through Nov. 6.

The data comes amid surging inflation in the U.S. that is running at its fastest pace in 30 years. Clogged ports and supply chains have been major contributors to higher prices as manufacturers and service providers meet escalating demand.

The tumble in weekly claims could get the attention of policymakers at the Federal Reserve who have kept crisis-level policies in place despite the steady improvement in the jobs market.

While the Fed already has said it will begin gradually reducing its monthly bond purchases, markets are watching closely to see when the central bank might start raising interest rates. Though officials have indicated a possibility of perhaps one rate hike in 2022, traders are now indicating about a 61% probability of three increases next year, according to the CME’s FedWatch tracker.

Government bond yields were higher after the report, and Wall Street braced for a negative open in stocks.

The drop in claims came alongside indications that the economy grew a bit faster than originally thought over the summer, though not quite as quickly as Wall Street had expected.

GDP, a total of all goods and services produced, increased one-tenth of a percentage point from the initial estimate of 2%, mostly on the backs of upward revisions in consumer purchases and private inventory investment, according to the Commerce Department.

The report also saw a massive revision to the increase in wages and salaries, which rose $301.1 billion, an upward revision of more than 50% from the original estimate.

Finally, a separate report showed that orders for longer-lasting goods fell for the second consecutive month.

However, excluding transportation, durable goods orders increased 0.5%, and excluding defense, they were up 0.8%.

Nondefense new orders for capital goods, a proxy for business investment, fell 1.2% for the month. However, shipments, unfilled orders and inventories all rose.

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5 big issues from regulation and EVs to semiconductors

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A technologist inspects a computer chip.

Sefa Ozel | E+ | Getty Images

GUANGZHOU, China — China’s technology sector has taken a wild ride over the past year, with regulations tightened, billions of dollars wiped off companies’ market value, and a continuing push from Beijing for technological self-sufficiency.

Those are among the important themes that will be addressed at CNBC’s annual East Tech West event in the Nansha district of Guangzhou in southern China.

Here’s a look at the top concerns and focuses of China’s technology sector right now.

China’s tech crackdown

That has weighed heavily on China’s internet names. For example, Alibaba’s shares are down 41% year-to-date.

Several questions are swirling:

  • Will China introduce more new regulation and in what areas?
  • What companies could be targeted next?
  • What does it mean for growth of the tech sector in China?

CNBC tackled some of this in a recent episode of the “Beyond the Valley” podcast below. Those conversations will continue at East Tech West.

Semiconductors

The continuing technology rivalry between the U.S. and China has added urgency to Beijing’s push for increased self-sufficiency across a variety of sectors. One of those is semiconductors, which are critical for everything from cars to mobile phones.

But China is struggling to catch up with the U.S. and other countries, and that’s because of the complexity of the semiconductor supply chain, which is dominated by foreign companies.

A good example is the field of chip manufacturing. SMIC, which is China’s largest contract chip manufacturer, is several years behind Taiwan’s TSMC and South Korea’s Samsung. SMIC is actually unable to manufacture the latest cutting-edge chips required for leading smartphones.

Foreign companies dominate the most advanced tools and equipment required for the manufacture of high-end chips. U.S. sanctions have denied China access to some of those tools. Chinese companies can’t compete.

How China will boost its domestic chip industry in the face of those hurdles is a major, ongoing debate.

‘Frontier’ tech

The semiconductor industry is just one of many industries where China is trying to boost its credentials.

In its five-year development plan, the 14th of its kind, released earlier this year, Beijing said it would make “science and technology self-reliance and self-improvement a strategic pillar for national development.”

The plan identifies areas which Beijing sees as “frontier technology” — artificial intelligence (AI) and space travel.

China has made notable progress in space, including launching its own space station. It has ambitions to send its first crewed mission to Mars in 2033.

When it comes to artificial intelligence, Chinese technology giants from Baidu to Tencent are investing heavily.

Electric vehicles

China’s economic slowdown

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