CX Daily Jan. 3: Venture Capital in China Flounders as State Takes Over (Part 1)
TOP STORIES
Funds /
“Recently I feel like I've turned into the Minister of Investment Promotion,” lamented Jin Yuhang, founding partner and chairman of Dingxing Quantum, a venture capital (VC) investment firm based in Southwest China’s Sichuan province.
The firm, which was set up in 2013, invests in high-tech fields such as artificial intelligence, intelligent manufacturing and semiconductors, and traditionally its investors, known as limited partners (LPs), came mostly from the private sector. But in recent years, the number of government guidance funds (GGFs) has exploded “and now 90% of our limited partners represent state-owned capital,” he said. “Now we are facing these problems.”
Flights /
Some Chinese airlines are rerouting flights to avoid Russia’s southern airspace after an Azerbaijani passenger plane was shot down, reportedly by the Russian military, in the region on Christmas Day.
Azerbaijan Airlines flight J2-8243, en route from Baku to Grozny, the capital of the southern Russian republic of Chechnya, crash-landed near Aktau in Kazakhstan after diverting from southern Russia, where Moscow has repeatedly used air defense systems against Ukrainian drone strikes. Thirty-eight of the 67 people on board died in the crash.
FINANCE & ECONOMY
PMI /
Activity in China’s manufacturing sector expanded at a slower pace in December, with falling exports dragging on overall demand and employment remaining in contraction, a Caixin-sponsored survey showed Thursday.
The Caixin China General Manufacturing Purchasing Managers’ Index (PMI), which gives an independent snapshot of the country’s manufacturing sector, came in at 50.5, compared with 51.5 in November. A reading above 50 indicates an expansion in activity, while a number below that signals a contraction.
Quick hit /
Finance Movers and Shakers /
BUSINESS & TECH
Drugmakers /
Sighs echoed around the room when the assembled pharmaceutical industry representatives heard some of the bidding prices for their drugs, Wang Yu told Caixin.
The round of bulk drug procurement, the 10th since the scheme was launched nationwide in 2019, saw some of the steepest price cuts yet, with over 50 out of 385 products purchased reportedly seeing an over 90% price cut, sparking concerns about product quality and the industry’s long-term development.
BRIEFING
Retail retreat: Alibaba Group Holding Ltd. has agreed to sell its stake in Chinese supermarket chain RT-Mart to buyout firm DCP Capital for as much as HK$13.1 billion ($1.7 billion). Under the deal, which still needs regulatory approval, DCP Capital will acquire Alibaba’s entire interest in the chain’s operator, Sun Art Retail Group, for a maximum price of HK$1.75 per share. Alibaba controls 78.7% of Sun Art shares. Alibaba has been dialing back its foray into “new retail” to refocus on e-commerce and cloud computing, sparking speculation that its brick-and-mortar retail businesses might be put up for sale.
Mixue IPO: China’s largest tea drinks chain, Mixue Bingcheng Co. Ltd., has reapplied for a Hong Kong IPO. On Jan. 1, Mixue submitted its listing application to Hong Kong’s stock exchange for the second time to bankroll its expansion. Mixue has surpassed Starbucks to become the largest made-to-order beverage purveyor in the world. The company had applied for a Hong Kong IPO in January 2024, but let the application expire. That followed a shelved plan for a 6.5 billion yuan IPO on Shenzhen’s main board in 2022.
Long Read /