CX Daily: U.S. Watchdog Fines Three KPMG China Partners for Audit Violations
TOP STORIES
Audit?/
The U.S. audit watchdog said it fined three partners of the Chinese affiliate of KPMG, one of the “Big Four” global accounting firms, after an investigation found they had violated its standards in their audit of a Nasdaq-listed Chinese company that was subsequently found to have intentionally inflated its revenue.
The Public Company Accounting Oversight Board (PCAOB) imposed financial penalties of $75,000 on Choi Chung Chuen and $50,000 on Ma Hongchao, partners of Chinese mainland-based KPMG Huazhen LLP, who had primary responsibility for the 2017 audit of Tarena International Inc., a Chinese education service provider that changed its name to TCTM Kids IT Education Inc. in February this year. ?
Law enforcement?/
Some cash-strapped local governments in China are taking advantage of expanding jurisdictional reach to target lucrative cases involving private businesses from other regions, in an effort to find alternative ways to replenish government coffers.
This emerging trend in the last several years is known as “distant-water fishing” among China’s legal circle, though the term is originally used to describe activities conducted by fishing vessels far from their home country’s territorial waters. It represents a significant threat to the private sector and could lead to “irrational competition” among localities, warned legal experts. ?
China-Ukraine?/
China has “very big potential” to help to put an end to the Russia-Ukraine war, according to Ukraine’s top diplomat, noting Beijing’s “special relationship” with Moscow as well as the trust present between Beijing and Kyiv.
“Ukraine and China never had any major issues in our bilateral relations. The trust is there,” Ukrainian Foreign Minister Dmytro Kuleba said during an online press conference open to international media on March 19. ?
FINANCE & ECONOMY
Job?/
China’s Ministry of Finance has earmarked 66.7 billion yuan ($9.3 billion) and pledged a slew of measures, including tax and fee cuts, to bolster employment this year.
Stabilizing and expanding employment is a priority for socioeconomic development, and policymakers have placed greater emphasis on this in the drafting of fiscal and tax policies, Liao Min, a vice finance minister, said at a Thursday press briefing. ?
RRR?/
There is still scope for China to lower its reserve requirement ratio (RRR), a measure that would channel more money into the financial system to fuel economic growth, a central bank deputy governor said at a press briefing Thursday.
In contrast to the near-zero RRR maintained by many foreign central banks, China’s average ratio stands at 7%, remaining a key instrument for the country’s central bank, said Xuan Changneng, a deputy governor of the People’s Bank of China (PBOC). ?
Hong Kong?/
Hong Kong has welcomed 19 more companies from the Chinese mainland and the United States that are setting up offices or expanding operations in the city as part of the government’s latest bid to promote the development of the innovation and technology sectors.
John Lee Ka-chiu, Hong Kong’s Chief Executive, said at a partnership signing ceremony Wednesday that these companies, along with 30 companies announced last October, are expected to bring HK$40 billion ($5 billion) of investment and 13,000 jobs to the city in the next few years. ?
领英推荐
Quick hits?/
BUSINESS & TECH
Tesla?/
Tesla Inc. will increase the price of its popular Model Y crossover by 5,000 yuan ($694) in China, a move that offers rivals a temporary reprieve as a raging price war engulfs the world's largest auto market.
The price rise on China-made Model Y vehicles will start on April 1, Tesla confirmed with Caixin Wednesday. Meanwhile, some of the extras offered by Tesla to its Chinese customers, including an 8,000-yuan insurance subsidy, will expire on March 31. ?
Tencent?/
Tencent Holdings Ltd. (腾讯) reported weaker-than-expected results in the fourth quarter of 2023, as the Chinese internet behemoth faced challenges growing its gaming business, particularly in China’s domestic market.
During the three-month period, Hong Kong-listed Tencent generated 155.2 billion yuan ($21.9 billion) in revenue, up 7% from 2022, according to its earnings report released Wednesday. That missed the average estimate of 157.4 billion yuan by analysts surveyed by Bloomberg. ?
Crash?/
China’s aviation regulator has provided an update on the investigation into the crash of a Boeing passenger jet operated by China Eastern Airlines Corp. Ltd., which resulted in the loss of 132 lives two years ago. The cause of the incident has not yet been identified.
The crashed jet, Flight MU5735, which nosedived into a hillside, met all key requirements, including flight crew qualifications, flight maintenance, aircraft operation and aircraft airworthiness, the Civil Aviation Administration of China (CAAC) said Wednesday on the eve of the crash’s second anniversary. ?
Quick hits?/
Daily Tech Roundup?/
Long Read?/
GALLERY
The game of Guandan has exploded in popularity in recent years, with the number of players growing to an estimated 140 million in 2023. Factories are pumping out decks of specialized playing cards for the game, which is native to the area around the eastern provinces of Jiangsu and Anhui. Organized competitions have sprung up around the country, with one drawing 10,000 players. The game has even become a fad among traders and investors, who like to play while they talk business.