China's nonfinancial outbound direct investment (ODI) in 137 countries and territories has amounted to 57.57 billion yuan (US$8.32 billion) in the first month this year, according to the country's Ministry of Commerce (MOC). This records a year-on-year drop of 7.7%.
This year, as of February 20, a total of 81 listed companies on the A-share market have implemented stock buyback plans. On top of optimizing capital and stabilizing the stock price, this move aims to shore up investors' confidence amid the COVID-19 epidemic.
China will take measures to stabilize foreign trade amid the country's efforts to mitigate the economic impact of the COVID-19, according to MOC. Although the epidemic is impacting the supply chains, foreign trade firms in China are resuming their operation. Some 70% of major foreign trade firms in provinces of Zhejiang and Shandong have resumed operations, according to MOC officials.
The Shenzhen Stock Exchange (SSE) and its subsidiary Shenzhen Securities Information have rolled out five new indices to reflect the performance of tech firms and provide more options for investment. All five indices will track stocks listed on the SSE. One of the indices, Shenzhen Innovation 100 Index will track the top 100 stocks, based on the five dimensions of enterprise attributes, innovation input, innovation output, growth and representativeness. The other four will track the 50 best-performing stocks in industries including big data, robots, artificial intelligence and the Internet of Things.
New home prices in Beijing, Shanghai, Shenzhen and Guangzhou increased 0.4% month on month in January, 0.2% points faster than the previous month, according to data from the National Bureau of Statistics (NBS). Among the 70 major cities in China, 47 of them reported month-on-month new home price gains, shrinking from 50 cities registered in December.
China's digital marketing industry is less affected by the COVID-19 outbreak as the online advertising demand has been increasing in sectors such as games, short videos and online education. Universities, schools and kindergartens in the country have postponed the start of the spring semester, which leads to the growth of online education. People are suggested to stay at home due to the epidemic which results in the booming of online games and short videos application users.
About 59.18 million elderly people aged 65 or above in China are covered with commercial health insurance, with the penetration rate standing at 36%, according to China Banking and Insurance Regulatory Commission (CBIRC). Covering almost all types of insurance, over 2,400 insurance products are available for this group of people.
ICBC, China's biggest lender, has issued over 43 billion yuan (US$6.14 billion U.S. dollars) of loans to fight the novel coronavirus outbreak and help companies restore production. Among the total, 13 billion yuan has been used to combat the epidemic. The remaining 30 billion yuan has been given to companies to resume production.
Three Chinese companies have completed the issuance registration of a total of 2.1 billion yuan (US$301 million U.S. dollars) of ultra-short-term financing bonds. Part of the money raised will be used to support the construction of the Huoshenshan Hospital and Leishenshan Hospital in Wuhan, the epicentre of the coronavirus outbreak.
China's listed insurers record growth in profits last year due to tax cuts and higher investment returns. Profits of China Life Insurance (Group) Co. will likely soar 400% to 420%y-o-y in 2019, while those of China Pacific Insurance (Group) Co. will jump from 50% to 60%. Analysts expect that the industry will continue the upward trend this year, due to supportive policies and robust demand for health insurance and endowment insurance products.
Major Chinese property developers saw sales growth in January. Sales of China Vanke, one of the country's biggest property developers, jumped 16.1% y-o-y to 56.73 billion yuan (US$8.1 billion), while those of Country Garden and Evergrande Group, two other property giants, amounted to 46.51 billion yuan and 41.01 billion yuan, respectively, almost flat from a year earlier. Sales of the country's top 100 developers fell 12% y-o-y.
China plans to issue more local government bond ETFs this year, according to the Ministry of Finance (MoF), with five new ETFs being approved by the authorities. By the end of 2019, three such products have been launched in the , totalling 21.5 billion yuan (US$3.13 billion). This action will boost the healthy development of local government bonds.
Companies listed on the Shanghai and Shenzhen stock exchanges have released their performance forecasts, and out of the 1,814 firms, 1,116 of them (62%) predict profit growth in 2019. The rising gross profit rate and the hiking operating revenues contribute to the robust performance of these companies in 2019. A total of 141 companies see their net profits attributable to shareholders in 2019 top 1 billion yuan (US$145.2 million).
A total of 249 companies debuted on China's National Equities Exchange and Quotations (NEEQ) in 2019. These firms report a 19.8% growth in net profits in 2019, according to the exchange. Companies listed on the NEEQ in 2019 had also seen improved cash flow, with more than 63% of them posting a positive net cash flow, higher than the percentages in the past three years.
China's Ministry of Finance reported total local government bond issuance in 2019. For the whole year of 2019, new issuance including refinancing from local governments amounted to 4.63 trillion yuan, the total outstanding local government bonds as of the end of 2019 was 24.1 trillion yuan.
Payment and Clearing Association of China issued a circular on facial payment in January 2020. The circular makes specific requirements on data privacy, cybersecurity and risk management. Currently, Alipay, Wechat and UnionPay supports facial payments in China.
China's Ministry of Finance released its latest report on SOEs' annual performance. In 2019, China's SOEs have seen 6.9% growth in revenue and 4.7% growth in net profits. The debt ratio decreased by 0.2% to 63.9%.
China's State-owned Assets Supervision and Administration Commission issued a regulation on derivative trading of China's central SOEs. Under the regulation, speculative derivative transactions are strictly banned and only hedging is allowed. In addition, only authorized persons such as risk managers in central SOEs are allowed to trade derivatives while SOE representatives such as CEOs are banned from derivatives trading.
China's GDP is estimated to expand over 6% y-o-y in 2019, according to Chinese Vice Premier Liu He. The latest data indicates a better-than-expected economic outlook, according to Liu, noting that the economy has been generally stable and is one of the fastest-growing economies in the world in 2019.
Guangdong becomes the first province in China to generate GDP of over 10 trillion yuan (US$1.45 trillion). In 2019, the province records an estimated 10.5 trillion, up 6.3% y-o-y. The province sees its imports and exports reached 7.14 trillion yuan, down 0.3% y-o-y.
China's social insurance system remains stable in 2019, with 967 million people covered by pension schemes as of end 2019. About 205 million are enrolled in unemployment insurance, and around 255 million people hold work-related injury insurance. The gross revenue of the three kinds of insurance totalled 5.82 trillion yuan (US$844 billion) in 2019.
China and Laos have signed an agreement on bilateral monetary cooperation to enhance the use of local currencies in trade and investment, according to the People's Bank of China (PBoC).
Chinese regulators will soon roll out rules to reduce the cost of small and medium-sized enterprises (SMEs) raising funds, according to the Financial Stability and Development Committee under the State Council. Differentiated regulation will be applied and the fundraising means will be further diversified.
China will further open up the banking industry by removing some restrictions of foreign banks operating in the country. New rules will be rolled out to enable foreign banks setting up both branches and foreign legal-person banks in China. For foreign banks looking to operate a business in China, the requirement on their total asset will be removed. For joint-venture banks, there will be more flexibility in selecting the controlling shareholders.
The China Banking and Insurance Regulatory Commission (CBIRC) is looking to further diversify commercial health insurance products through reforms and innovation to meet the growing demands. Health insurance premiums for the first 10 months of 2019 grew 30.7% y-o-y to 614.1 billion yuan (US$88.18 billion), and the regulator expects the market volume to reach over 2 trillion yuan by 2025. Reforms of insurance institutions and technological innovation in commercial health insurance will be supported to provide more diverse insurance products.
China started to implement the regulation on optimizing the business environment on Jan 1, 2020. The regulation stipulates that regulators will provide equal protection to all market entities, and protect their managerial autonomy, property rights and other legitimate rights and interests. It also clarifies rules regarding solid implementation of tax and fee reduction policies, and easing financing difficulties.
The People's Bank of China (PBoC) will raise the daily cross-border remittances limit on renminbi transfers by individuals from Macao to mainland Chinese accounts under the same name to 80,000 yuan (US$11,424) from 50,000 yuan. The move, approved by the State Council, is to meet the renminbi clearing demand of Macao residents and facilitating trade and economic.
Macau will be included as an investable overseas market for Chinese insurers, according to the China Banking and Insurance Regulatory Commission (CBIRC). This move will support financial market development in the Greater Bay Area (GBA). The investment activities should follow the regulation on insurers investing overseas.
The regulators have finished consulting public opinions on revised rules on China's National Equities Exchange and Quotations (NEEQ) and detailed measures are expected to be implemented in the first half of 2020. China Securities Regulatory Commission announced the major reform measures in late October to better orient the NEEQ to the needs and features of small and medium-sized enterprises (SMEs) and support high-quality growth of the real economy.
China's fiscal revenue increased 3.8% y-o-y to around 17.9 trillion yuan (US$2.6 trillion) in the first 11 months of 2019. The central government collected about 8.61 trillion yuan in revenue during the period, up 4.8% y-o-y, while local governments saw revenue up 3% to about 9.29 trillion yuan, according to the country's Ministry of Finance (MOF).
China suspended the planned additional tariffs on some US products to be implemented on Dec 15, the Customs Tariff Commission of the State Council says. The suspension covers the 10% and 5% additional tariffs, respectively, on the imported products, according to the commission. The country will continue to suspend its additional tariffs on American-made vehicles and auto parts.
China aims to enhance the level of digitization of the transport industry and expand the application of big data in all the domains of the transport industry by 2025, according to an outline released by the Ministry of Transport (MOT). The outline stressed the need to standardize the process of using the traffic data and promote the sharing of big data with other departments such as the Ministry of Public Security, the Ministry of Natural Resources and the Ministry of Ecology and Environment.
Chinese regulators penalized 100 mobile applications this month, with financial apps taking a major part. Chinese should roll out a registration mechanism to enhance supervision over the financial applications.
China's consumer price index (CPI) rose by an average of 2.8% y-o-y in the first 11 months. This is on track to meet the target of 3% set by the government. The CPI rose 4.5% y-on-y in November, expanding from 3.8% in October. The hike in CPI was mainly driven by food prices, according to the National Bureau of Statistics (NBS).
China Banking and Insurance Regulatory Commission (CBIRC) will enhance the communication with regulators in Hong Kong and Macau, improving the market admission mechanism of the insurance industry in the Greater Bay Area (GBA). This action will ensure Hong Kong insurance companies entering the GBA market more smoothly, according to CBIRC.
Iron ore options are listed today on the Dalian Commodity Exchange (DCE). This will help derivative products better serve the iron and steel industry and promote DCE as a global pricing center for iron ore. More than 170 overseas clients from 15 markets have participated in the trade since China opened the DCE iron ore futures to international investors in May 2018.
China will release a negative list for Hong Kong and Macau investors in the cross border trade in services, aiming to support the open-up of this sector in Guangdong. The province also plans to set up global centres for traceability, customs declaration, and logistics.
In order to improve the e-government services, China is now piloting the Blockchain-based Service Network (BSN) on the AI-powered City Brain platform in Hangzhou. Co-launched by the State Information Center, China Unionpay and China Mobile, the BSN is a nationwide infrastructure platform of blockchain-based service that crosses the public network, as well as multiple regions and organizations.
China will issue a draft regulation on the consumption tax by the under of this year, seeking public comments. The tax aims to reduce the consumption of certain goods such as luxury items, unsustainable energy, and high pollution and high energy consumption products.
China Securities Regulatory Commission (CSRC) says that the regulators have been accelerating the pace of revising the regulations on securities. Rules relating to enhancing the supervision over fraud and listing company information disclosure will also be improved.
More technological standards are in the pipeline to enhance data governance of the banking industry, according to the China Banking Association. As banking is a data-driven industry, stronger data governance gives a strong boost to lenders' efficiency and competitiveness, according to the China Banking Association (CBA). The CBA will work on tech standards to facilitate data analysis, security and quality management, forming an ecosystem of big data governance.
Chinese regulators have decided that the country should speed up the establishment of a national system to operate the Basic Retirement Security plan, which sustains Chinese retirees. Under the new mechanism, local authorities running the fund would hand over its management to central authorities so that Beijing can collect the money and plan its spending as a whole.
China's green finance market has maintained steady expansion last year with product and service innovations increasing, according to an annual report on China's green finance development released by the People's Bank of China (PBoC). Green bond issuance exceeded 280 billion yuan (US$40 billion) last year, while outstanding green loans reached 8.23 trillion yuan, up 16% year-on-year.
Foreign direct investment (FDI) into the Chinese mainland expanded 6.6% year-on-year to 752.41 billion yuan (US$107.07 billion) in the first 10 months of the year, according to the Ministry of Commerce (MOC). The FDI inflow stood at US$110.78 billion during the period, up 2.9% year-on-year.
China's economic planner is working with interested parties to accelerate the approval of the development projects of the Greater Bay Area (GBA). A comprehensive planning system will be gradually established to take care of the projects relating to the GBA, covering aspects such as infrastructural connectivity, ecological and environmental protection, industrial development and inter-city railway, according to the National Development and Reform Commission (NDRC).
The Beijing-Shanghai High-Speed Railway Co Ltd (BSHSR), one of China's busiest high-speed rail lines, will be listed on China's A-share market at the Shanghai Stock Exchange next week, according to the China Securities Regulatory Commission (CSRC). The IPO will offer no more than 7.557 billion stocks and raise 50 billion yuan (US$7.13 billion). Established in 2007, the BSHSR's net profit hit about 10.25 billion yuan in 2018, according to its prospectus.
China's fixed-asset investment grew 5.2% year-on-year in the first 10 months of this year, according to the National Bureau of Statistics. This records the slowest growth since the statistics became available since 1998. Fixed-asset investment includes capital spent on infrastructure, property, machinery and other physical assets. In the first 10 months of 2019, total investment amounted to 51.09 trillion yuan (US$7.3 trillion), and the growth is 0.2% down compared to that of the first nine months. The private sector's investment increased 4.4% to 29.15 trillion yuan, 0.3% slower than that for the first nine months. Investment in high-tech manufacturing and high-tech services rose 14.5% and 13.7% year-on-year, respectively.
A launching ceremony for developing 6G technology was jointly held by relevant departments in China recently, where a work team and an expert R&D team were established. At present, 5G has been applied to commercial use, and the next generation of telecommunication technology is expected to emerge around 2030.
Taobao, Chinese e-commerce channel owned by Alibaba, launched its 10th annual online shopping promotion on November 11, a day celebrated by many Chinese young people as Singles Day. The sales on Tmall, a section of Taobao, hit 268.4 billion yuan (about US$38.3 billion) as of November 11. More than 22,000 overseas brands from 200 countries and regions have participated this year, according to Alibaba. Singles Day sales on Tmall reached 213.5 billion yuan last year.
The second China International Import Expo (CIIE) concluded on November 10, with US$71.13 billion worth of tentative deals reached for one-year purchases of goods and services. The amount rose 23% year-on-year compared to last year. A total of 181 countries, regions and international organizations attended the expo, and more than 3,800 enterprises participated in the exhibitions.
Hong Kong residents now can purchases homes in the nine Guangdong cities in the Greater Bay Area as Chinese regulators remove the additional requirements so that Hong Kong residents share the same policy with local residents. Chinese property developers say that there is a notable increase in the number of Hong Kong people purchasing properties in the mainland Chinese cities in the GBA, and sees the trend to be enhanced in cities with more convenient trasnportation.
Alibaba will seek a listing approval in Hong Kong next week, with CICC and Credit Suisse being sponsors, aiming to raise 10 to 15 billion US dollars with the listing. Alibaba previously was said to seek listing in Hong Kong in August this year.
Alibaba's mobile payment Alipay has been one of the major payment methods in China now. The platform which used to require linking to Chinese bank accounts now onboarded a new feauture called Tour Pass which allows adding funds from international credit cards or debit cards. Meanwhile, Ant Financial, operator of Alipay, is considering merging its mobile payment business in the South East Asia with Grab, the biggest taxi-hailing app. So far there are more than 150 mobile payment platforms in the SEA.
China will further ease market access for foreign investment and shorten the negative list, according to Chinese President Xi Jinping. The country will continue to improve the business environment to make it more market-oriented, law-based and internationalized, Xi says during a keynote speech at the the second China International Import Expo. The country will also further cut the tariffs.
The total revenue of China's internet and related services sectors reached 860.4 billion yuan (US$122.26 billion) during the first nine months this year, up 19.7% year-on-year, according to the Ministry of Industry and Information Technology (MIIT). Information services were the largest revenue contributor, generating an income of 566 billion yuan which accounts for 65.8% of the total revenue of these sectors. Meanwhile, the sectors' spending on research and development reached 34.6 billion yuan, up 18.3% year-on-year.
The State Council Taiwan Affairs Office and the National Development and Reform Commission (NDRC) have unveiled measures to further promote the economic and cultural exchanges and cooperation across the Taiwan Strait. There are 26 measures involved, about half of which are about ensuring Taiwan enterprises in mainland China receiving the same treatment as local enterprises, covering aspects including investing in or participating in projects of major technological equipment, 5G, circular economy, civil aviation, theme parks and new types of financial institutions. The same treatment for enterprises from Taiwan also applies to policies of financing, trade remedies, export credit insurance, and import and export facilitation.
Although the global economy is facing unprecedented challenges such as the slowed-down economic growth and the rising trade tensions, Foreign direct investment (FDI) inflows into China recorded a 4% growth year-on-year to US$73 billion during the first six months of this year, according to the country's Organization for Economic Cooperation and Development. Chinese regulators will continue to enhance policy transparency and create a fair market environment.
China's National Internet Finance Association (NIFA) and the World Bank have jointly launched the Global Center for Digital Finance in Hangzhou, China. The centre is expected to become an international knowledge-sharing platform for digital finance, providing technical support for developing countries and emerging markets.
China's first sustainable investment summit was launched in Beijing today. The country calls for advancing the implementation of the 2030 Agenda for Sustainable Development which was adopted by all United Nations Member States in 2015.
Financial institutions providing services to privately owned and small and medium-sized enterprises (SMEs) will be supported by regulators, and the financing costs will be reduced, according to a new regulation that will be implemented on January 1, 2020. Financial institutions such as commercial banks will be encouraged to lending money to the qualified enterprise.
Guangdong Province reports its GDP up by 6.4% on year to 7.72 trillion yuan (US$1.09 trillion U.S. dollars) in the first three quarters of 2019. Beijing’s GDP growth during the same period stands at 6.2%. Guangdong's economy has maintained overall stability, with the growth of main economic indicators kept within an appropriate range, according to the provincial bureau of statistics. A breakdown of the data showed the output of the service sector rose 7.9%, outpacing the 3.8% increase in the primary industry and the 4.6% rise in the secondary industry.
The local China Banking and Insurance Regulatory Commission (CBIRC) in Shenzhen is consulting the market regarding setting up an innovative cross-border insurance service centre in the Qianhai Area. Through the entities operated in this centre, Overseas insurers will be able to provide services including insurance consultancy, distribution and claim.
China's Ministry of Human Resources and Social Security has announced that 799 billion (US$113 billion) of pension funds have been put into investment by the end of September. This number has increased by 12% compared to June this year.
China's GDP increased by 6.2% on year during the first three quarters of 2019 to about 69.78 trillion yuan (US$9.87 trillion), according to the country's National Bureau of Statistics (NBS). The country's economy has maintained overall stability, the statistical authority says, while acknowledging that China faces downward pressure amid slower global economic growth and more external uncertainties.
Overseas assets of China's central state-owned enterprises (SOEs) reached 7.6 trillion yuan (US$1.1 trillion) by the end of last year, according to the country's State-owned Assets Supervision and Administration Commission (SASAC). China's central SOEs have more than 11,000 overseas units, which were located in 185 countries and territories. In 2018, overseas revenue of the central SOEs stood at 5.4 trillion yuan, while profits totalled 131.89 billion yuan.
The People’s Bank of China (PBoC) and State Administration of Foreign Exchange (SAFE) have revised the regulation to further facilitate foreign institutional investors to invest in the country's bond market. Non-transactional transfer of bonds under QFII/RQFII and China Interbank Bond Market Direct scheme (CIBM) will be allowed within one single foreign institutional investor. The definition of one single institutional investor is also further clarified: if a foreign institutional investor opens multiple accounts under the same managed product name, it should be treated as a single product.This move aims to attract more foreign capital to the onshore bond market.
The country's State Council has announced the revision of regulations on foreign banks and insurers this week.
China will support the companies in the internet security sector, aiming to generate a total market cap of 200 billion yuan (US$28 billion) by 2025, according to Ministry of Industry and Information Technology (MIIT).
China's investment in the high-tech manufacturing industry further expands by 12% in the first eight months of this year, according to the country's National Development and Reform Commission (NDRC). Investment in medical equipment and manufacturing of apparatus and instruments grows by 17.7%, and that in electronic and communication equipment goes up by 14.5% y-o-y during the period.
Shanghai Futures Exchange started trading yuan-denominated stainless steel futures yesterday, becoming the first of its kind globally. The launch of the stainless steel futures helps provide an open, continuous and transparent price signal and an effective risk management tool for companies in the industrial chain, according to the Shanghai Futures Exchange.
In the first seven months of this year, the tax and fee cuts have saved enterprises and individuals about 1.35 trillion yuan (US$189 billion), according to the Ministry of Finance (MOF). During the period, taxes were reduced by a total of 1.17 trillion yuan. The private sector accounts for 63% of the tax relief. Manufacturing enterprises account for 31% of the total tax reduction.
The total value of bond issuance in China last month totalled 4.4 trillion yuan (US$622.3 billion), up from 3.5 trillion yuan in July， according to the People's Bank of China (PBOC). Being the world's third-largest bond market, China issued 40.8 trillion yuan of bonds in 2018, up 12.9% from the previous year, according to PBoC.
The People's Bank of China (PBoC) has announced that the one-year loan prime rate (LPR), which are used by banks as the major lending rate reference when issuing loans is further cut by 5 bps to 4.2% today. This is the second month in a row that PBoC cuts the LPR. On August 20, the one-year LPR is cut to 4.25%.
Ministry of Finance will issue an additional 4.5 billion (US$634 million) sovereign bonds in Hong Kong next week, using the Central Moneymarkets Unit (CMU) under the Hong Kong Monetary Authority.
China's non-financial outbound direct investment (ODI) in 159 countries and regions amounted to 493.09 billion yuan (US$70 billion) in the first eight months of this year, up 2.7% y-o-y, according to the Ministry of Commerce (MOC).
The State Administration of Foreign Exchange (SAFE) is working on rolling out new regulations servicing their decision of removing the quota limits of QFII and RQFII. Offshore money accounts for a low portion in both China's equity and bond markets, according to SAFE, noting that this move will attract long term investment from overseas investors.
The investment in developing property in China reached 8.46 trillion yuan (US$1.2 trillion) during the first eight months, recording an increase of 10.5% y-o-y in 2018 of this year, down from the 10.6% registered in the first seven months, according to China's National Bureau of Statistics. Chinese regulators have been tightening the regulation on the real estate market and it has become harder for property developers to borrow money from the banks.
Chinese regulators will issue a series of rules to enhance the supervision on small-to-medium-sized banks, as well as financial institutions such as local asset management companies and small lending platforms. In the meantime, the national platform of risk control is under construction, aiming to further regulate the financial market.
The guideline for stock exchanges supervising venture capital funds is rolled out by the China Securities Regulatory Commission (CSRC), saying that the bourses should form specialized rules for venture capital funds. The specialised rules should publicise the supervisor of such funds and the detailed duties and supervision process.
A new index tracking the performance of the Greater Bay Area (GBA) healthcare industry is launched this week. The index covers 30 stocks in the GBA healthcare industry.
China Securities Regulatory Commission (CSRC) has listed 12 priorities of deepening reform China's capital market, China will support the new science and technology innovation board (STAR) and encourage listed companies to enhance their quality, according to the plan. The country will further reform ChiNext, China's NASDAQ-style board of growth enterprises, and see faster reform in China's National Equities Exchange and Quotations (NEEQ).
The State Administration of Foreign Exchange (SAFE) announces that the quota limit for QFII and RQFII are removed. The regulator has been working on opening up the capital market and enhancing the reform of schemes such as QFII and RQFII. This move will provide more convenience to foreign investors and boost Chinese bond and equity markets.
Shanghai plans to further open up the market to attract foreign investors by issuing 26 new rules. Shanghai aims to become the top choices for foreign investors when it comes to overseas investment.
China's National Equities Exchange and Quotations (NEEQ) saw its revenue increase by 6.82% in the first half of this year. The total revenue of 9,024 firms listed on NEEQ as of August 30 stood at 851.78 billion yuan (US$119.8 billion), up 6.82% compared to the same period last year.
State-owned Assets Supervision and Administration Commission (SASAC) has signed a cooperative agreement with the Shanghai government. At least 10 central state-owned enterprises (SOEs) will roll out projects and setting up innovative institutions in Shanghai, boosting sectors such as integrated circuit, AI, biopharmaceutics and new energy.
China's central bank will include P2P online lending firms in its credit reference system in a move to crack down on irregular practices. P2P lending platforms in operation shall provide certain information such as online lending interest rates. Certain data of those platforms out of operation will still be collected.
Premier Li Keqiang held a State Council meeting on September 4 2019, pointing out several upcoming key policy measures. The State Council noted that local government bond issuance should be sped up and it will timely apply general rates cut and rate cut towards specific sectors as well for financial inclusion. It is expected that the rate cut may take place in September 2019.
As China tightened the financing rules for property developers in August 2019, the offshore financing amount has dropped significantly compared to July 2019. Since July 2019, multiple restrictions on USD bond and REITs have been imposed by the regulators. In early August 2019, 32 cities were named to be examined on financing towards property developers.
70 major listed Chinese real estate developers have generally seen a drop in their house sales in the first half of 2019, according to a research entity under Sina.com. Top five real estate developers accounted for 43.7% of total revenue of the 70 companies. China Overseas, Country Garden and China Evergrande ranked top three in terms of net profit attributable to shareholders in the first half.
A total of 292 overseas institutions have received quotas amounting to about US$111.38 billion under China's Qualified Foreign Institutional Investors (QFII) program to move money into China, according to the State Administration of Foreign Exchange (SAFE). As of Aug 30, the quota in the RMB Qualified Foreign Institutional Investors (RQFII) program came in at 693.3 billion yuan (US$97.8 billion).
Chinese regulators have been tightening the real estate market by raising the mortgage loan interest rate and restricting the bank lending to real estate developers. However, some of the small-to-medium local banks have been raising funds for illegal property developers and lending money to unqualified property developing projects, according to the China Banking and Insurance Regulatory Commission (CBIRC), noticing that the banks should manage the credit risks.
More supportive regulations and measures will be rolled out to support the development of the Shanghai free trade zone (FTZ). Qualified enterprises will be supported to raise funds; certain enterprises in sectors such as integrated circuit, AI, bio-pharmaceutics, aerospace and new energy automobiles will be supported to do IPOs and might enjoy favourable taxation policies.
Amid Chinese regulators' actions of tightening the supervision on the real estate market, many banks have received notices from the regulators, saying that the property development loan issuance shall not exceed that of March this year. The property development loan balance will be reduced from 11.04 trillion yuan (US$1.54 trillion) to at most 10.85 trillion yuan, and might be further reduced.
Foreign capital daily inflows into China's A-share market via the Stock Connect programs hit a nine-month record high this week. On August 72, 1.3 billion yuan (US$1.6 billion) flowed into the A-share market through the northbound trading of the Stock Connects between mainland China and Hong Kong bourses. Analysts attributed the jump in foreign inflow mainly to the weighting increase of A-share constituents in MSCI indexes.
To boost consumption in China and energize the economy, China's State Council has rolled out 20 new measures. The automobile market is among the markets that will benefit more from the new measures. The purchase restriction of the automobiles in certain cities might be removed. The "nighttime economy" (business activities between 18:00 and 6:00 in the service industry) will also be boosted.
The overarching plan for setting up new free trade zones (FTZs) in Shandong, Jiangsu, Guangxi, Hebei, Yunan, and Heilongjiang has recently been rolled out by China's State Council. The FTZ in Shandong will explore new practices of economic cooperation among China, Japan and Korea.
After releasing a plan to reform the country's loan prime rate (LPR) mechanism, the People's Bank of China (PBoC) told 24 major financial institutions to adopt the new the LPR mechanism as soon as possible amid a reform to reduce financing costs for enterprises. Introduced in 2013, the LPR functions as a market-based reference for lenders to set their loan interest rates. Banks are expected to take the LPR as the major lending rate reference when issuing loans.
China's Ministry of Commerce, the General Administration of Customs and China National Intellectual Property Administration will hold three closed-door meetings regarding the implementation of the Foreign Investment Law, customs clearance facilitation and the protection of intellectual property soon. China will continue to facilitate foreign investment and trade while stimulating consumption amid a complicated and slowing global economy.
The China Securities Regulatory Commission (CSRC) has drafted a guideline for a side pocket mechanism in mutual funds and started to seek public opinions. A side pocket is a mechanism often used by a fund to keep illiquid, hard-to-value, and often highly risky assets separate from its other assets. The mechanism will enhance liquidity risk management and protect investors.
Net profits of China's 131 listed securities companies during the first half of 2019 doubled from the same period a year earlier, amounting to 66.7 billion yuan (US$9.52 billion U.S. dollars), according to the Securities Association of China. These securities firms generated 178.94 billion yuan in operating revenue during the same period, up 41% y-o-y.
The People's Bank of China is almost ready to launch an official digital currency after five years of research, according to an official from the central bank. Private institutions are expected to participate more in creating the government-backed digital currency. Experts predicted that if things go well, the Chinese government-backed digital currency may come out earlier than the official launch of Facebook's digital currency "Libra".
Borrowing costs will become lower for small and privately-owned companies in China starting today through a key loan prime rate (LPR) mechanism reform carried out by the People's Bank of China. The new one-year LPR is 6 bps lower than the one-year LPR before the PBOC’s announcements.
The State Council of China says that Shenzhen will be supported to form a model zone and a series of supportive measures are expected to roll out. One of the key missions of the zone will be deploying the Greater Bay Area and develop new practices for "one country, two systems". Shenzhen will promote the mutual recognition of funds (MRF) between mainland China and Hong Kong and enhance the connectivity between mainland Chinese and Hong Kong/Macau financial markets.
Regulators are developing policies to facilitate privately-owned banks' healthy growth in China. Amid this policy push, more local privately-owned banks are expected to be launched in China. A number of such banks are waiting for approval from the regulators.
China generated 4.82 trillion yuan (US$683 billion) in online retail sales during the first half of this year. Online retail sales surged 17.8% y-o-y in the first half, accounting for nearly 20% of the overall retail sales of consumer goods.
Non-financial outbound direct investment (ODI) in 153 countries and regions amounted to 432.92 billion yuan (US$61.6 billion) in the first seven months, up 3.3% y-o-y, according to the Ministry of Commerce.
Being the home to more than 700 regional headquarters of multinational corporations, Shanghai will issue new policies to attract more regional headquarters to settle in the city and to expand their functions. The requirement for the total assets of parent companies of regional headquarters has been adjusted to US$200 million, according to the policies.
China will roll out a new negative list for foreign investors by September. The Chinese regulators have been further opening up the market and the new list will generate more convenience for foreign investors coming to China and simpler administration process.
China will launch a platform for supply chain finance to facilitate information disclosure of medium-sized, small and micro enterprises, data from an industry association showed. The platform will collect, organize and process information of these companies from related supply chains and industry chains, according to the National Internet Finance Association of China (NIFA). The platform will provide certain companies with low-cost and sustainable financial services while enabling financial institutions to identify clients and control the risks of lending, according to NIFA.
The Belgium-based financial messaging services provider SWIFT set up a wholly-owned enterprise in Beijing this week amid China's further opening of its financial market. The move makes RMB the third international currency accepted by SWIFT after the dollar and the euro. The company will promote wider international use of RMB, and increase connectivity between the Chinese financial industry and the international market.
The People's Bank of China (PBoC) has announced that it will issue 30 billion yuan (US$4.3 billion) of central bank bills in Hong Kong on August 14. Among the total, 20 billion yuan will mature in three months and 10 billion yuan will mature in a year. This happens after renminbi weakened 458 pips to 6.9683 against the US dollar.
People's Bank of China (PBoC) has lifted its re-lending quota by 50 billion yuan (US$7.25 billion) to support the fundraising of small-to-medium enterprises and private-owned businesses. The re-lending quota will be granted to five types of local financial institutions－city commercial banks, rural commercial banks, rural cooperative banks, village banks and private banks.
In order to enhance the function of the Pudong New Area, the Shanghai Government has rolled out a new developing plan to further open up the area. The supporting initiatives will bring breakthrough and make a difference in the area, according to the government.
China's asset-backed securities (ABS) hit an annual record in June in terms of total asset under management (AUM), according to the Asset Management Association of China (AMAC), noting that 100 batches of ABS products worth 107.5 billion yuan (US$15.6 billion) were registered in June. By the end of June, 132 institutions have registered for 2,244 batches of ABS products, accounting for 3.04 trillion yuan.
The annuity from provinces including Shandong, Hubei, Hunan, as well as Beijing and central government and state-owned enterprises, has been put into investment, according to a source talking to cnstock.com. This generates new markets in the asset management space, with more provinces putting annuity into operation.
Despite a strong momentum, Chinese small-to-medium-sized enterprises (SMEs) are still facing challenges from the economic pressures. Chinese regulators will roll out more supportive measures such as tax cuts and fee reductions. The measures will help to vitalize the SME industry.
More state-owned enterprises (SOEs) reforming projects will be rolled our during the second half of this year. The fourth batch of SOEs will soon roll out plans for mixed-ownership reforms.
China's sci-tech innovation board (STAR) will not drain large amounts of funds from other domestic boards as the turnover on the new board accounted for a small proportion in combined trading volume of the A-share market. The 48.5-billion-yuan (US$7.06 billion U.S. dollars) trading volume, reported by the first batch of 25 firms that debuted at the new board on the first trading day, is less than 10% of the total turnover of China's A-share market.
Shenzhen Futian District has rolled out detailed action plans under the Greater Bay Area (GBA) program. The city will implement 48 assignments and forming a hub for innovation and intelligence.
There are at least nine Chinese corporate bonds defaults happened in July. So far this year, there are 91 bond defaults in all, accounting for 49.29 billion yuan (US$7.16).
The sci-tech innovation board (STAR), China's latest Nasdaq-style high-tech board, started trading on the Shanghai Stock Exchange (SSE) today. The first batch of 25 listed firms on STAR had strong performance today. As of Monday's closing, they gained about 140% on average, with one of them surging more than 400%.
A financing platform for small-and-medium-sized enterprises in Guangdong province will be officially launched in September, aiming to efficiently provide fundraising solutions for SMEs, according to Chinese officials. The platform will be an open financing ecological system, based on the integration of big data of company credits and financing solutions, says the official.
Shenzhen is planning to roll out the standards for green funds next year, according to local officials. A green finance lab will be set up this year in October with the support from the United Nations Environment Programme.
The State Administration of Foreign Exchange (SAFE) has announced that the regulators will continue to open up the capital market and enhance the reform of schemes such as QFII and RQFII. The quota for QFII might be increased or the limit might be removed, says officials from SAFE.
Chinese regulator is planning to launch pilot programs of the personal bankruptcy system during the second half of this year, according to a source talking to the China Securities Journal.
China's GDP growth has slowed during the first half of this year, up 6.3% y-o-y. Chinese regulators will continue to The negative list of foreign investment will be further shortened to encourage foreign investors entering the Chinese market. On the other hand, regulators plan to further cut import taxes.
Chinese state-owned enterprises (SOEs) are encouraged to list on the new high science and technology trading platform (科创板). The regulator has accepted listing applications from 14 central SOEs so far.
China’s National Equities Exchange and Quotations (NEEQ), also known as the “new third board”, has raised 17.415 billion yuan (US$2.53 billion) in the first half (H1) of this year. A total of 364 firms made 369 issuances of stocks during this period, according to NEEQ, noting that 184 issuances were made by small and micro firms, raising a total of 3.898 billion yuan.
The investment in China's real estate market has been increasing rapidly since last year. The growth during the first half of this year is maintained at 10%, according to the National Bureau of Statistics of China. The Bureau predicts steady growth for this market, noting that there will not be too much fluctuation during the second half of this year.
The number of train stations in mainland China with direct connections to Hong Kong has grown to 58 after a new railway operating plan taking effect this week. The new plan links 13 more high-speed train stations to Hong Kong, including stations in provinces such as Hebei, Hunan, Guizhou and Guangxi.
Chinese banks may face slower profit growth and rising pressure on their asset quality due to uncertainties in global economic growth, rising trade friction, and tightened regulation, according to a report released by the China Banking Association. Chinese banks will have to deal with risks relating to the cleaning up of the unprofitable enterprises, potential credit default by some real estate companies, and risks from local government debt.
Chinese regulators will tighten the supervision on the fundraising through real estate investment trusts (REITs), according to sources talking to the China Securities Journal. Trust companies are required to report their REITs fundraising activities in advance and the reports will be reviewed by regulators case by case. The institutions involved in any rejected report will be further investigated.
China has released a guideline to underline information disclosure and strengthen supervision on credit defaulters on the new high science and technology trading platform (科创板). Regualtors will strictly examine the companies applying to be listed on the new board and expose credit defaulters, according to the guideline by the China Securities Regulatory Commission (CSRC). Companies that have been blacklisted by other government departments or in other spheres will be singled out in the examination procedures.
China has rolled out a credit rating system for mainland residents. This system is expected to be deployed in the Greater Bay Area as well, according to a proposal by the Guangdong government.
People's Bank of China (PBoC) will enhance the research and development of its own digital currency. As fintech develops, the role of commercial banks being the mediator in transactions has been weakened, which generates more risks in terms of supervision, according to PBoC, noting that the central bank issuing digital currency will enhance the efficiency of the monetary policy and the enhance the supervision on the financial market.
DouYu International Holdings, an esports live streaming platform in China, announced terms for its initial public offering (IPO) on the US stock market this week. The company plans to offer 67,387,110 American Depositary Shares (ADSs) at a price range of 11.50 U.S. dollars to 14.00 dollars apiece, according to its latest prospectus.
The first batch of market open ceremonies for the companies to be list on the new high science and technology trading platform (科创板) is expected to launch on July 22nd. Twenty-five companies from sectors such as IT and telecom will go public on the new board, aiming to raise a total of 31.09 billion yuan (US$4.51 billion). By the end of July 5th, SSE has received 142 companies' application for listing.
China continued to be the second largest insurance market in 2018 and is expected to surpass the US in the mid-2030s to become the world's largest insurance market. China's total premiums have reached US$575 billion last year. Its share of the global premiums went from zero in 1980 to 11% in 2018 and is forecast to reach 20% over the next decade.
As of June 21, China's monthly local government bond issuance has exceeded 594 billion yuan (US$86.3 billion). The country is accelerating local government bond issuance and has planned to issue over 200 billion yuan during the last week of June, hitting a record high of this year. This is said to stabilize economic growth and market expectations.
China’s mutual funds reached 13.91 trillion yuan (US$2 trillion) by the end of April this year, according to the Asset Management Association of China. This number dropped slightly compared to March's 13.94 trillion yuan. The mutual funds are managed by 124 fund management companies, and 80 of them are domestic firms while the rest are joint ventures.
China’s online retail sales reached 3.86 trillion yuan (US$562 billion) in the first five months of this year, accounting for over 20% of the country’s total retail sales of consumer goods, according to the 2019 China E-Commerce H1 Report released by the Chinese Academy of Social Sciences. The total imports and exports of the cross-border e-commerce increased by 50% last year.
Cross-border transactions of insurance products within the Greater Bay Area (GBA) are in the pipeline. The Connect is a special channel for the marketing, sales and transaction of insurance products between mainland China and Hong Kong. The Insurance Connect will follow the framework of the Stock Connect and Bond Connect.
Shanghai Stock Exchange (SSE) will run the final test on the new high science and technology trading platform (科创板) this Saturday (June 15). The system will be open to market participants if it passes the test.
The Bond Connect program connecting mainland China and Hong Kong has seen a trading volume of 158.6 billion yuan (US$23 billion) with an average daily turnover reaching 7.6 billion yuan last month, according to China Foreign Exchange Trade System (CFETS). The Bond Connect attracted 108 new clients globally last month with the debut of investors from Thailand, expanding its coverage to 28 countries and regions.
State Administration of Foreign Exchange (SAFE) has announced to simplify insurance companies' settlement of foreign exchange capital. Insurers will no longer need to get approvals for such settlements and willingness settlement of foreign exchange capital will be in place for insurers, meaning that insurance companies can conduct such settlements via financial institutions. This move will increase the capital efficiency of insurance companies.
China's online retailer giant JD has launched a smart logistics centre after trial runs in northwest China's Shaanxi Province. With floor space of nearly 300,000 square metres, the warehouse facility applies smart technologies such as automated sorting. NetEase Kaola, a cross-border e-commerce company, has also opened a new cross-border intelligent bonded warehouse in east China's Zhejiang Province. Intelligent and automatic warehousing and logistics equipment such as shuttle vehicles, automatic package sorters and conveyors for boxes have been deployed.
Futu Holdings, a Hong Kong-based online brokerage backed by Tencent, announced this week that the US Securities and Exchange Commission and the Financial Industry Regulatory Authority have granted a clearing license to its wholly-owned US subsidiary, Futu Clearing Inc., enabling the entity to provide clearing, settlement and asset custody services to customers and other introducing brokers in the US. Founded in 2011, the company went public by listing its Initial Public Offering (IPO) on Nasdaq on March 8.
Chinese mobile phone users can expect to use 5G network soon in August. Licenses for Chinese mobile telecom operator running 5G business will be issued this week.
Liu Shiyu, the former chairman of the China Securities Regulatory Commission (CSRC), is under investigation. During Liu's tenure of two years and 11 months, CSRC approved 710 IPOs and seven companies exited the A-share market. The Chinese stock market has increased by about 3.9 trillion yuan (US$563 billion) during his tenure, with the number of retail investors increased by 46 million.
In order to improve the convenience of foreign investors investing in the China interbank bond market (CIBM), the People's Bank of China and the country's State Administration of Foreign Exchange (SAFE) are consulting the market. The proposed rules say that foreign institutional investors are allowed to conduct two-way transfers the interbank bonds held be the accounts under QFII/RQFII and CIMB Direct.
China announced that it will raise the rate of additional tariffs imposed on some of the imported US products from June 1. China had earlier imposed additional tariffs on the US$60 billion of US imports, rising the tariff rates on certain products to 25%, 20% and 10%. The decision came after the US announcement of increasing tariffs on the US$200 billion of Chinese goods from 10% to 25%.
China’s National Social Security Fund (NSSF) saw its managed assets rise to 2.96 trillion yuan (US$437.9 billion) as of the end of 2018, according to the National Council for Social Security Fund. Official data showed the fund gained 184.6 billion yuan in 2017, recording a return of 9.68%. The fund's annualized return is around 8.44% since inception.
Hong Kong Monetary Authority (HKMA) will soon issue virtual bank licenses to four institutions, namely Tenpay of Tencent, OneConnect of Ping An Insurance, a joint venture by Xiaomi, and Ant Financial of Alibaba. The licensed virtual banks will be officially launched around June to September, according to HKMA.
China's digital economy reached 31.3 trillion yuan (US$4.6 trillion) in 2018, accounting for 34.8% of the country's total GDP, according to a recent report released by the Cyberspace Administration of China. The outstanding loans of China's enterprises on science and technology stood at 3.53 trillion yuan as of the end of last year. With more than 600 million users of online payment, the country's online retail sales surpassed 9 trillion yuan last year.
In order to reduce the cost of the fundraising of small-to-micro enterprises, the People's Bank of China (PBoC) will lower the cash reserve ratio requirements for certain banks. The new rules will take effect on May 15th.
The cross-border revenue and expenditure of China's southwestern Yunnan Province hit US$6.87 billion from January to March, up 6.86% y-o-y. In Q1 2019, the total amount of foreign exchange settlements by banks in Yunnan reached US$3.167 billion, up 18.66% y-o-y. Bordering Vietnam, Laos and Myanmar, Yunnan has accelerated economic and trade cooperation with southeast Asian countries in recent years.
Out of the 1,468 listed companies on the Shanghai Stock ExchangE, 1,466 had disclosed their 2018 financial information by the end of April. These companies have raised a total fund of 33.5 trillion yuan (US$4.97 trillion) last year, up 11% y-o-y. A report from the Shenzhen Stock Exchange revealed that 2,156 of the 2,159 companies listed on the exchange had disclosed their annual financial information, raking in 11.95 trillion yuan in revenue, up 13.33% y-o-y.
The regulations on foreign banks and insurance companies operating in China will be rolled out soon. So far six foreign insurers have launched their business in China. The new regulations will further reduce the restrictions on foreign insurers operating in China, which will attract more players to tap this market, according to Chinese officials.
Revenue of China's IT services increases by 16.7% y-o-y, reaching 858.3 billion yuan (US$127.56 billion) in the first three months of this year, according to a report by the Ministry of Industry and Information Technology. The revenue of cloud services rises by 15.4% compared to the previous year, with big data services up 20.7%. The revenue of information safety products and services reached 20.7 billion yuan in the first three months, up 13.4% y-o-y.
The State Administration of Foreign Exchange (SAFE) of China issued a guideline yesterday to facilitate the settlement for cross-border e-commerce. According to the guideline, payment institutions are allowed to offer market entities certain electronic payment services via banks. They can also provide Chinese residents with foreign exchange services for cross-border shopping, overseas education and tourism, the guideline says.
Loans issued to China's real estate sector grew at a slower pace in Q1 2019 as government purchase restrictions remain in place in major cities. By the end of last month, 40.52 trillion yuan (US$6.02 trillion) of loans are issued to the property sector, up 18.7% on year, according to a report from the People's Bank of China (PBoC). This growth is 1.3% lower than that of the end of last year. Outstanding loans for individual purchases went up by 17.6%, reaching 26.87 trillion yuan, retreating 0.2% from the end of last year.
In order to maintain high-quality growth of the Belt and Road Initiative (BRI) projects, China will promote the use of sustainable finance to stress some of the debt issues, according to the Ministry of Finance (MOF) of China. A fundraising guide will also be issued jointly by the financial regulators of the 28 countries involved in the BRI.
Media has been reporting that the China Securities Regulatory Commission (CSRC) plans to relax the restrictions on IPO applications and simplify the application process. CSRC says there is no change in the application process and the strict supervision on IPOs will remain.
China’s reform on individual income tax will increase consumer spending by 717.6 billion yuan (US$107.2 billion), according to a recent report. Middle-to-low-income groups, in particular, benefit from the reform. Urban residents with monthly income below 10,000 yuan enjoying tax cuts of more than 60%.
The Chinese online gaming sector is seeing some signs od rebound after the regulators started to issue licenses for new games. DouYu International Holdings Limited, a game-centric live streaming platform in China, filed for an initial public offering (IPO) on the New York Stock Exchange this week. With an expectation to raise up to US$500 million, this offering will be mainly used to invest in content, for research and development, for marketing to promote the brand and for general corporate purposes, which may include acquisitions.
China will intensively crack down on the illegal fundraising cases from April to June, according to the China Banking and Insurance Regulatory Commission (CBIRC). Regulators will also roll out rules on dealing with the illegal fundraising cases within the first half of this year.
The Monetary Authority of Macao is researching the possibility of using renminbi for quoting prices and settling accounts, according to Chinese media. This move will support the renminbi internationalization and energize the financial market of Macau.
An incubator for cultivating talents in cross-border e-commerce was launched this week in the Liaoning free trade zone (FTZ), the only FTZ in Northeast China. Being the home to more than 600 “hatching studios” and multiple training classrooms, conference halls and company service centres, the hub will invite experts in foreign trade and professional cross-border e-commerce companies to train start-ups regarding international trade and cross-border e-commerce issues.
Taiwan enterprises are supported to be listed in mainland China, according to the Taiwan Affairs Office of the State Council of China. The regulator says that there is no regulatory obstacles for Taiwan enterprises to apply for listing on the new high science and technology trading platform (科创板). So far there are more than 30 Taiwan enterprises already listed on Chinese A-share market.
In March this year, 40 listed real estate enterprises in China have raised a total of 102.42 billion yuan, hitting a record high since November 2017. Debt financing is the major financing tool for these enterprises, taking 96.19% of the total funds raised in March.
People's Bank of China has rolled out a more convenient mechanism for retail investors to buy Chinese treasury bonds. Retail investors can buy these bonds through online channels and branches of the underwriters during the whole month of April. The treasury bonds used to be open to retail investors only for 10 days in April.
Chinese has relaxed the restrictions of the household registration, or the hukou system. Cities in the Greater Bay Area (GBA) including Zhuhai, Huizhou, Jiangmen and Zhaoqing will remove the restrictions of immigrants applying for registrating the hukou under these cities. Guangzhou, Shenzhen, Foshan and Dongguang will improve the points-based household registration system. As the household registration system is closely related to purchasing houses, the moves of the regulators will boost the real estate market in the region.
The regulations on refinancing will be revised and relaxed. The ceiling of refinancing equity issuance will be relaxed to 50% from the previous 20% of a company's total shares.
In order to solve the difficulties of smaller enterprises in raising fund, Chinese regulators will roll out supportive rules for such enterprises. Smaller enterprises are encouraged to go public. The process of listing application can be simplified.
The civil aviation development fund will be reduced by about 50%, according to Chinese Premier Li Keqiang. This move will significantly reduce the cost of aviation companies and energize the performance of the stocks in this sector, according to Chinese analysts.
In order to further control the risk of the online lending industry, Chinese regulators have agreed to tighten the supervision on this sector this year. Key focuses include monitoring data and information disclosure. The regulators will crack down on the illegal lending platforms.
The Shanghai Stock Exchange (SSE) has recently announced that it had accepted 37 companies’ applications to be listed on China’s new high science and technology trading platform (科创板). The companies have to go through the second stage of audit and inquiry before they can successfully be listed on the board. The board was launched to boost the development of high-tech sectors and advance economic transition leveraging financial reforms.
Chinese regulators are revising the rules on reinsurance, according to a source talking to 21jingji.com. The move aims to provide a more relaxed policy environment for the industry regarding requirements on under-weighting and lock-in.
China will issue the first batch of public REITs soon. Beijing, Shanghai, Guangzhou, Shenzhen and Hainan are on the list of pilot cities for these private REITs.
Foreign institutional investors have paced up to enter the Chinese bond market since 2019, according to the China Foreign Exchange Trade System (CFETS). Products offered by global asset managers such as BlackRock and Vanguard Group have appeared in the Chinese market. The number of new accounts opened during the first quarter of this year by foreign institutional investors is close to 300, accounting for 70% of the total number of new accounts opened in 2018.
China should consider rolling out credit default swap (CDS) products in the future, according to Xie Zhong, chairman of Shanghai Clearing House. China's market has already shown great potential in the rate derivatives and forex derivatives, according to Xie. In order to mitigate the risk in the credit market, more sophisticated financial tools including CDS should be rolled out, Xie says.
The foreign debt of China continued to grow in 2018, according to the State Administration of Foreign Exchange (SAFE), noting that the overall growth rate slowed down. The foreign debt risk was generally controllable.
China will further open up the financial market, according to Chinese Premier Li Keqiang, noting that the regulators will once again roll out a revised negative list for foreign investment in June. Sectors such as telecommunication, healthcare, education, transportation, infrastructure, and energy will be further opened up to foreign investment.
The number of gaming companies IPO applying for IPO in March has declined to six from the ten of same time last year. This is due to the tightened regulation on the industry, according to Chinese analysts.
Shanghai government has issued 25 new rules to support innovation and vitalize the tech sector. The recent official launch of new high tech trade platform (科创板) has offered the opportunity, according to Shanghai officials, noting that the city aims to take the chance, building its innovation capability and connecting to the global innovation network.
China will continue to control the risk of the financial market, with a focus on stock pledge risk and bond default risk, according to the China Banking and Insurance Regulatory Commission (CBIRC). Meanwhile, the regulator will improve the fundraising environment and support direct finance.
The Shanghai Stock Exchange began accepting IPO applications for the new high tech trade platform (科创板) yesterday. The bourse disclosed the progress of reviewing these applications on its official website. The market might see the first group of offerings in June, according to analysts.
China has reduced 1.3 trillion yuan (US$193.6 billion) of taxation in 2018. This year, the country's regulators will further strengthen their efforts in this to vitalize the economy. As the burden of Chinese enterprises will be further reduced, the market is expected to see more innovation coming up, according to the regulators.
Last year, there were 10,531 complaints about online insurance companies in China, according to China Banking and Insurance Regulatory Commission (CBIRC). The number records 121.01% growth on year. The number of complaints about non-life insurance companies increased by 128.25% y-o-y in 2018, reaching 8,484, according to the regulator.
The stock value of Kweichow Moutai, a Chinese liquor (白酒) brand has hit a new record high today. Its stock price increased by 4.22% today, with the market value of the company exceeding 10.176 trillion yuan (US$1.52 trillion).
The investment from Hong Kong and Macau accounts for 70% of the total foreign investment into mainland China, according to Chinese Premier Li Keqiang, highlighting that the country has been attaching great importance to the sector. Investors from Hong Kong and Macau can refer to the newly enacted foreign investment law, says Li, noting that a more complete and unified policy environment will attract more investment from the two markets.
China’s national legislature today passed the foreign investment law at the closing meeting of its annual session. With a more complete regulation on the entry, promotion, protection and management of foreign investment, the law aims to improve the transparency of foreign investment policies. This new fundamental law ensures domestic and foreign enterprises are subject to a unified set of rules.
Hong Kong government will set up an office with more than 30 staff to manage projects relating to the Greater Bay Area.
The growth of bond issuance in China has paced up this year. A number of Chinese central state-owned enterprises (SOEs) have recently submitted their plans of raising funds through bonds. In March, more than five SOEs has announced their plans of bond issuance, ranging from 10 billion yuan (US$1.49 billion) to 30 billion yuan.
The financial tools serving small-to-micro enterprises will be improved, according to a new notice by China Banking and Insurance Regulatory Commission (CBIRC). The loans issued to these enterprises should maintain a rational growth in 2019, the notice requires. Major banks in China should lead and contribute to the growth.
China has cut 200 billion yuan (US$29.8 billion) of tax from October last year and January this year. The first nine months of last year have seen an increase of 20% y-o-y in the taxation and in October, the country launched the taxation reform last year. The taxation in January 2019 was reduced by 23.5% on year.
China will further crack down on the non-performing loans (NPLs) in 2019, according to the China Banking and Insurance Regulatory Commission (CBIRC).
Chinese regulator will further tighten the supervision on the financial system to prevent the risks. Four areas, namely non-performing loans, liquidity risk of small-to-medium-size banks, shadow banking and real estate loan, will be the key focuses of the regulators.
China will enact new laws on property taxation in 2019, according to the country's top officials.
Chinese regulators say that insurance companies are encouraged to do long term investment in the capital market. Financial institutions are supported to diversify and expand the capital inflow. In addition, China will support the development of venture capital (VC) as part of the efforts to boost innovation, according to Chinese Premier Li Keqiang. The trend of venture capital and private equity (PE) firms powering China’s innovation will be intensified in the years ahead, Chinese analysts predict.
Chinese officials of the National Committee of the Chinese People’s Political Consultative Conference (CPPCC) suggest that more reforms should be rolled out to support the private enterprises. Compared with State-owned enterprises, private enterprises have seen more difficulties partly due to insufficient credit support. These companies should be given tangible benefits in terms of steady development and fair competition.
Bank of China (BOC) Malaysia Branch launched its Wealth Management Banking Center this week. Being the first among BOC's Southeast Asian entities to do so, the service is geared towards high net-worth individual customers through personalized wealth management advice. The bank is also redefining the digital agenda to enhance customers experience in the region.
AlipayHK users will soon be able to use the mobile payment app in mainland Chinese cities in the Greater Bay Area (GBA). So far, the mainland Chinese version of Alipay can be used in Hong Kong while the Hong Kong version is only applicable to the local market. In the long run, AlipayHK's users will be able to pay in most of the cities in mainland China, the company says.
China will do more to attract foreign investment in 2019, according to a government work report released today. The country will further relax controls over market access, simplify the negative list for foreign investment, and permit wholly foreign-funded enterprises to operate in more sectors, according to the report. Foreign investors' legitimate rights and interests will be further protected, the report says.
China will reduce the tax burdens and social insurance contributions of enterprises by about 2 trillion yuan (US$298 billion) this year, according to a government work report issued today. Regulators will mainly focus on reducing tax burdens on the manufacturing sector and small and micro business, according to the report.
China will improve the law system serving to the opening up of the financial market, according to Chinese officials. In addition to the regulations on foreign investment, laws relating to securities and resource tax will be revised or enacted this year.
Pan Gongsheng, administrator of the State Administration of Foreign Exchange (SAFE) and deputy governor of the People's Bank of China (PBoC) will come to Hong Kong this month to discuss with local regulators on implementing the newly issued Greater Bay Area Plan.
In order to promote the development and application of AI, Chinese officials are discussing to improve the relevant regulations on this industry. Major topics include data security and personal information protection.
Shanghai Stock Exchange has opened a centre in Guangzhou today. The centre will serve the Greater Bay Area, providing convenience to the capital market in Guangdong, Fujian and Hainan. Services relating to the new high tech trade platform (科创板) will be a major focus of this centre.
In order to attract more long term investment, the China Securities Regulatory Commission (CSRC) is considering to crack down on the illegal practice in the capital market. The cost of violating regulations and rules will be raised, according to the regulator. The investor education will be introduced to the general public, promoting rational investment and long term investment.
China issued a total of US$31.2 billion (208.63 billion yuan) green bonds last year, according to a report issued by China Central Depository & Clearing and Climate Bonds Initiative. With a 33% of year-on-year growth in issuance in 2018, the country continues to be the world’s second-largest green bond market. Industrial Bank of China takes up 23% of last year’s total issuance, becoming the largest issuer in China and the second largest worldwide.
Chinese regulators are supporting qualified private enterprises to issue bonds for fundraising in a bid to help them ease financing difficulties. In November and December last year, private companies issued a total of 155 billion yuan of bonds up 70% y-o-y, according to a report from the People’s Bank of China.
Guangdong province’s high import and export volume has been attributed in part to the restructuring and upgrading of foreign trade companies and innovation in science and technology. With the release of the development plan for the Guangdong-Hong Kong-Macao Greater Bay Area and the development of the Belt and Road Initiative, Guangdong’s foreign trade will maintain its strong growth momentum throughout the year, say Chinese experts.