Law firm Dentons hives off China business as Beijing tightens regulation
Dentons, the largest western law firm in China by staff, is hiving off its operation in the country in response to Beijing’s intensifying regulation, which has hit foreign companies.
The firm informed clients on Monday it was making the move due to the “evolving regulatory environment for Chinese law firms”, including new requirements “relating to data privacy, cyber security, capital control and governance”.
The decision by Dentons comes amid worsening prospects for foreign companies in the country as the Chinese government expands cyber security and data protection laws on national security grounds. China broadened its anti-espionage laws in April to cover any “documents, data, materials or items related to national security and interests”.
Read more about Denton’s China operations here.
What to watch in Europe today
Events: Scottish students receive results for their National 5, Higher and Advanced Higher exams, broadly equivalent to the GCSEs and A-levels taken across the rest of the UK. Mozambique President Filip Nyusi concludes an official visit to the Czech Republic.
Indicators: Germany issues final July consumer price index and harmonised index of consumer prices inflation rate data. France presents trade figures for June. In the UK, the BRC-KPMG retail sales monitor comes out.
Results: Abrdn, Glencore, InterContinental Hotels Group and IWG report half-year earnings, while Bayer provides figures for the latest quarter.
Chinese trade tumbles as economic woes deepen
China’s exports fell by the most since the beginning of the Covid-19 pandemic, official data showed on Tuesday, deepening concerns over the country’s economic growth.
Exports fell by 14.5 per cent year-on-year, the most since February 2020. Imports fell by 12.4 per cent. Economists polled by Reuters had forecast declines of 12.5 and 5 per cent respectively.
A weaker climate for global trade is one of the main sources of pressure on policymakers in Beijing, who are also grappling with a weak property sector and a limp recovery since anti-pandemic measures were lifted at the end of last year.
China stocks fall and renminbi weakens ahead of trade data release
Chinese stocks fell and the renminbi weakened ahead of the release of the country’s official trade figures on Tuesday, as concerns over consistently weak exports this year weighed on sentiment.
Hong Kong’s Hang Seng index fell 1.7 per cent, led by falls in the healthcare and real estate sectors, while China’s CSI 300 dropped 0.5 per cent. The renminbi weakened by as much as 0.4 per cent to a low of Rmb7.2193 per dollar, its weakest level since mid-July.
Investors are looking to China’s July trade figures. Exports had provided the economy with a lifeline during the pandemic but have repeatedly underperformed this year.
Hybe boosted by girl band NewJeans and solo acts while BTS is on hiatus
Hybe, the South Korean music label behind global K-pop sensation BTS, reported an 18.7 per cent jump in second-quarter net profit on surging album sales and a post-pandemic revival in demand for concerts.
Net profit rose to Won117.4bn ($89.4mn) in the April-June period from Won98.9bn a year earlier. Sales increased 21 per cent to Won621bn.
While BTS is on hiatus as some of its members complete mandatory military service, other members are continuing their solo activities.
Hybe’s new girl group NewJeans is also gaining global popularity, helping the company reduce its dependence on BTS.
Elon Musk’s X Corp accuses anti-hate group of illegally receiving data
Elon Musk’s X Corp has accused the Center for Countering Digital Hate of illegally receiving data from the European Climate Foundation in its lawsuit against the nonprofit.
In an amended complaint, the social media platform accused the US group of “conspiring” with the climate group, which it claims “improperly shared login credentials” with the non-profit.
Data was then used to suggest “X is overwhelmed by harmful content, and then used that contrived narrative to call for companies to stop advertising on X”, the lawsuit said.
European Climate Foundation did not immediately respond to a request for comment.
X is battling against claims of unhealthy content on its platform as it tries to win back advertisers concerned by such allegations.
Korea’s LG Energy Solution to build battery recycling plants in China
LG Energy Solution on Monday signed a preliminary agreement to build its first battery recycling joint venture with China’s Zhejiang Huayou Recycling Technology to ensure supply of key raw materials.
The joint venture will build two battery recycling plants in China – a pretreatment plant in Nanjing, where LGES already has battery production, and a post-processing plant in Quzhou to utilise Huayou Cobalt’s existing infrastructure.
The new plants will start operations in late 2024 to produce recycled metals, using battery scrap generated from LGES’s Nanjing plant and waste batteries collected by Huayou. The recycled metals, including nickel, cobalt and lithium, will be processed and supplied back to the Nanjing plant.
What to watch in Asia today
Events: The Lok Sabha, India’s lower house of parliament, begins debate on a no-confidence motion moved by the opposition. Prime Minister Narendra Modi is expected to reply on Thursday. The Reserve Bank of India’s monetary policy committee begins a three-day meeting. The 31st World University Games, or Universiade, concludes in Chengdu. About 10,000 students from 150 countries competed in the event, originally set for summer of 2021 but postponed by the Covid-19 pandemic.
Indicators: China releases July trade data, while Japan announces June household spending and July bank lending figures. The Bank of Korea issues June balance of payments figures. Malaysia releases an industrial production index and Taiwan provides July consumer price index data. New Zealand issues residential property values for July.
Earnings: Japanese conglomerate SoftBank Group releases quarterly earnings, as does Chinese electric-car maker Li Auto, Australian-founded building materials manufacturer James Hardie Industries and South Korea’s SK Telecom and entertainment group Hybe.
Online homework helper Chegg shrugs off AI threat concerns
Wall Street’s worries that generative artificial intelligence systems such as ChatGPT pose a threat to the online education sector appeared to ease on Monday, after US provider Chegg reported stronger-than expected results for its latest quarter.
Earlier this year Chegg was seen as the first public company to be hit by the AI-powered chatbot after it said some subscribers were turning to the free OpenAI service for answers, affecting its revenue.
Chegg’s shares rebounded in after-hours trading on Monday by 25 per cent following stronger than expected quarterly results. It said a “conversational” service launched in May, also powered by generative AI, appeared to be catching on with students.
Beyond Meat cuts positive cash flow goal and slashes full-year sales outlook
Beyond Meat abandoned its hopes of becoming cash flow positive this year and cut its sales outlook, sending its shares down more than 8 per cent in extended trading.
The artificial meat maker cited weak demand for its products multiple times in its latest earnings report, where it missed Wall Street’s expectations for revenues, but recorded a narrower loss than forecast.
The company downgraded its full-year revenue outlook to a range of $360mn and $380mn, down from $375mn to $415mn.
Beyond Meat said it no longer expected to be cash flow positive in the second half of 2023, “in light of greater than expected consumer and category headwinds and their anticipated impact on net revenues”.
Ukraine says Russian strike on Pokrovsk city centre kills 5 people
Russian forces launched a rocket attack on the town centre of Pokrovsk in Ukraine’s eastern Donetsk region, killing five people and wounding at least 31, Ukrainian officials said.
The Druzhba hotel, frequented almost entirely by journalists and military personnel, suffered a direct hit. It is not clear how many guests were staying at the hotel.
Ukraine’s interior ministry said that among the injured were 19 police officers and five rescue workers who were caught in a second barrage when they arrived at the scene. The deputy head of the service for the Donetsk region was among those killed, they said.
Journalists chose to stay at the hotel because it was deemed to be a relatively safe distance from the frontline.
KKR agrees $1.6bn deal for book publisher Simon & Schuster
Private equity firm KKR has agreed to buy US book publisher Simon & Schuster from Paramount Global for $1.62bn.
The agreement relieves Paramount of a top-five US book publisher as it seeks to focus on its video streaming business. Shares of the media group rose 4 per cent in after-market trading.
The new price tag is less than the $2.2bn that rival publisher Penguin Random House offered for Simon & Schuster in 2020. A US judge blocked the proposed deal on antitrust grounds, saying the merger would harm competition for publishing rights on major titles and cut into author pay.
