SAFE eases regulations for special economic zonesMay 24, 2013China's State Administration of Foreign Exchange (SAFE) announced that it will ease regulations of foreign currency transactions for firms operating in special economic zones in the country. The simplified regulations now allow companies to take legal profits derived from exports out of the country, as long as they are located in special economic zones. The new rules, which will take effect in June, will also cut down paperwork requirements and reduce the frequency of regulatory checks.
More mainland firms set to list in Hong KongOct 22, 2014
The upcoming Shanghai-Hong Kong Stock Connect programme is expected to lure more mainland firms to list in Hong Kong, an official told the Global Times. Hong Kong Exchanges and Clearing (HKEx) Beijing Office Representative Judy Huang said the forthcoming Stock Connect programme will enable mainland investors to buy shares directly from the Hong Kong bourse. The Stock Connect programme was created after mainland and Hong Kong securities regulators agreed on it last April, enabling global investors to trade Shanghai A shares via the Hong Kong Stock Exchange. The programme also allows mainland investors to trade Hong Kong H shares through the Shanghai Stock Exchange.
Agricultural Bank of China names new leaderOct 22, 2014
One of China's big four banks, the Agricultural Bank of China (ABC), announced the appointment of Liu Shiyu as the bank's new secretary of the Party committee. Liu, who was previously deputy governor at the People's Bank of China, will replace Jiang Chaoliang, who left the bank on 31 August. Liu's appointment was announced by ABC on the website of the Shanghai Stock Exchange.
China's Q3 GDP growth slowest since Q1 2009Oct 21, 2014China's National Bureau of Statistics (NBS) announced that the country's gross domestic product rose 7.3% in the third quarter, the slowest increase in more than five years. The Q3 growth retreated from 7.5% in Q2 of this year and is the slowest since Q1 of 2009, when GDP growth was 6.6%. The slow growth was attributed to a slumping real estate market, weak industrial production and domestic demand. The property sector, which takes up about half of China's GDP, was a major drag as housing sales dropped 10.8% by value from January to September of this year, the NBS reported. The GDP figure, however, was faster than a median 7.2% growth forecast by 15 economists surveyed by the Wall Street Journal.
China Q3 cross-border yuan settlement hits USD781.31bnOct 21, 2014The People's Bank of China, the country's central bank, reported on 20 October that the nation's cross-border yuan settlement has surpassed Rmb4.8tr (USD781.31bn) by the end of September 2014. The PBOC made the announcement on its website that the huge yuan settlement has helped make the country's official currency the second-biggest cross-border payment currency of China. PBOC Vice-Governor Hu Xiaolian said that the yuan's internationalization is a huge contributory factor in the world's financial market.
Jin Liqun to head China's AIIBOct 20, 2014
Jin Liqun, former vice finance minister and development bank official, has reportedly been appointed as head of the proposed USD50bn Asian Infrastructure Investment Bank (AIIB). The Business Times reported that Jin, who recently resigned as chairman of China International Capital Corp, will be the head of AIIB this month. The appointment of Jin, although still has not been confirmed by Chinese authorities, further strengthen the chances that the AIIB will become a new Asian regional development bank. At least 20 countries have shown their interest in joining the bank as shareholders.
Chinese banks to phase out magnetic cardsOct 20, 2014
The People's Bank of China (PBOC) said Chinese banks will soon phase out magnetic cards and promote the use of chip cards for security reasons. The central bank said chip cards are more secure and convenient. Commercial banks are required to widen the use of the said cards. Chip cards, introduced in 2011, should be used for newly-issued bank cards with yuan-denominated clearing accounts.
USD6.5bn BOC deal for Basel III requirements beats HSBC'sOct 17, 2014
The Bank of China sold USD6.5bn worth of contingent capital as Chinese banks increase their balance sheets to comply with the new international bank-capital rules known as Basel III. This is the very first time that a China-based lender has issued what are known as additional Tier 1 preference shares, which have the nature of bonds but turn into common equity should the lender’s core capital dip under particular trigger ratios. BOC's contingent capital deal is the world’s biggest ever, even more than the USD5.6bn HSBC deal in September this year.
NDRC stops SOEs from selling bondsOct 17, 2014
The National Development and Reform Commission has temporarily stopped state-owned companies from selling bonds, the Wall Street Journal reported. The agency stopped reviewing applications from state-owned enterprises to issue debts, sources told WSJ, cutting off a very important fundraising venue for companies that are already struggling with high debt loads. The agency did not give a clear reason for the abrupt suspension although analysts said the decision was likely due to a widening anti-corruption campaign by the central government.
US says China not manipulating currencyOct 16, 2014
The United States Treasury Department said that mainland China is not a currency manipulator, although it added that there is a need to maintain progressive steps to create an exchange rate basically dependent on the market. According to the US Treasury in its Semi-Annual Report to Congress on International Economic and Exchange Rate Policies, the steady rise of the yuan this summer period and minimal intervention show a willingness by Chinese authorities to let a more robust local currency run its natural course. The report noted that China's current account surplus in 2013 dropped to below 2% of GDP from its peak of 10.1% in 2007.
SOEs report USD179bn in profitOct 16, 2014
State-owned enterprises reported profits of Rmb1.1tr (USD179.17bn) from January to September this year, 6.6% higher from a year ago. According to the State-owned Assets Supervision and Administration Commission, the revenue of SOEs reached Rmb18.3tr in the first nine months, or 4.2% higher from a year ago. There are about 155,000 SOEs in China at the end of 2013.
Alipay to launch ePass for US marketOct 16, 2014
Alipay, Alibaba's payments subsidiary, will launch a service called ePass for retailers in the United States. The company is already using a beta mode with retailers like The Gap, Gilt.com, and H&M. EPass will allow better access for some half a billion online shoppers in the Chinese mainland to US-based businesses. Alipay President Jingming Li said that they want to demystify China's consumers for US retailers.
New yuan loans grow in SeptemberOct 16, 2014
New yuan-denominated loans issued by Chinese banks in September reached Rmb857 (USD139.6bn), the highest monthly reading in three months, the People's Bank of China said. The amount of new yuan loans exceeded the Rmb750bn expectation of economists and analysts. From January to September of this year, Chinese banks lent a total of Rmb7.68tr in renminbi and USD61.5 in foreign currencies.
UBS eyes China's wealth management market, opens sub-branch in BeijingOct 16, 2014
UBS AG, the largest bank in Switzerland, is tapping China's wealth management market by opening a ground-floor sub-branch in Beijing. It is the first sub-branch of the Swiss bank in the mainland. UBS China President Karen Chen said the sub-branch in Beijing shows UBS's vision to become a leading global wealth manager in the country. The sub-branch is located in China Central Place, a commercial hub in eastern Beijing's Central Business District.
Yuan to become world’s third biggest in the middle termOct 15, 2014
The International Monetary Institute by way of the Renmin University of China said on 14 October that mainland China's official currency, the yuan or renminbi, is expected to become the third biggest currency in the middle term worldwide. By 2017, the yuan is seen to be second only to the United States dollar and the euro. That is if China's economic growth and the yuan's strong performance are maintained, said IMI Deputy Director Tu Yonghong.
S Korea, China extend swap facility dealOct 13, 2014The Bank of Korea announced in a statement that China and South Korea have agreed to extend up to 10 October 2017 an existing swap agreement worth Rmb360bn or KRW64tr (USD58.98bn). Initially signed in 2011 by the two countries, the swap facility had been doubled from an original swap line of Rmb180bn launched in 2008. When the agreement expires in 2017, both parties can still extend the swap facility again. The South Korean central bank said the bilateral swap agreement was extended to boost the trade between China and South Korea and is expected to contribute to the financial stability of the two countries. The extension was signed by Bank of Korea Governor Lee Ju-yeol and People's Bank of China Governor Zhou Xiaochuan.
Royal Mint launches lunar coins for Chinese collectorsOct 13, 2014The Royal Mint, the official coin producer of the United Kingdom, launched its second legal-tender lunar coin especially intended for rich collectors in China. Next year will be the Year of the Sheep so the coins feature the animal to coincide with this. Royal Mint Program Director Fergus Feeney said that they will keep making the coins each year to produce all the 12 animals in the Chinese zodiac.
ICBC to sell renminbi bonds first in non-resident capacityin S KoreaOct 13, 2014The Industrial and Commercial Bank of China, the country’s biggest bank, revealed a plan to sell yuan-denominated bonds in South Korea for the very first time in a non-resident capacity. According to ICBC's Seoul branch, ICBC Asia, its Hong Kong branch, will be the one to issue the two-year yuan bonds worth Rmb180m (USD29.2m) in South Korea on 14 October at a coupon rate of 3.7%.
Economist says China does not need large-scale stimulusOct 13, 2014Ma Jun, chief economist of the Research Bureau of the People's Bank of China (PBOC), said that despite the slowdown in the economy, China does not need a big stimulus in the foreseeable future. Ma said China's job market remains pretty stable, even as the country's economic growth has slowed a bit, because the economy is moving from a manufacturing-dominated structure to a more services-based one. Xinhua News Agency reported that China’s services sector, which is generally labour-intensive than manufacturing, became bigger than the industrial sector last year. Ma was in Washington for the Annual Meetings of the International Monetary Fund and the World Bank.
Chinese banks hold USD77.7bn precious metals assetsOct 13, 2014A report published by China's Minsheng Bank revealed that as of the end of June, publicly-listed banks in the country have held a combined precious metals asset of Rmb477bn (USD77.7bn). The Bank of China holds the biggest precious metal asset base with around Rmb215.4bn (USD7.1bn). The Industrial and Commercial Bank of China follows with Rmb90.9bn (USD3bn). Chinese banks deal mostly with gold.
CICC names new chief economistOct 10, 2014
China's first JV investment bank, China International Capital Corporation (CICC), has named Liang Hong, former head of the bank's Research Department, as its chief economist. Liang replaces Peng Wensheng, the company said. No reason was given about Peng's replacement. A CICC statement said that Liang has accumulated an extensive knowledge on Chinese and global capital markets through many years of experience in macroeconomic research. Liang joined CICC from Goldman Sachs.
More asset managers to seek China RQFII licensesOct 9, 2014
More fund managers are set to apply for Renminbi Qualified Foreign Institutional Investor (RQFII) licenses in China as the demand for exposure to Chinese assets continues to grow, consulting firm Cerulli Associates said. Cerulli stressed that more quotas will be awarded and more managers will apply for RQFII especially now that China is pushing for the internationalisation of its local currency. The State Administration of Foreign Exchange had distributed RQFII quotas of Rmb283.3bn (USD46.16bn) in total as of the end of September, Asia Asset Management reported.
Yuan internationalisation to increase trade and investment, Vice FM minister saysOct 9, 2014
China's Vice Foreign-Minister Wang Chao was quoted as saying on 8 October that the internationalisation of the yuan serves to increase the nation's trade and investment overseas. Wang added that the yuan's internationalisation has sped up in the last few years. He also said that China has reached agreements with several European countries on yuan settlements, including Germany and the United Kingdom, which offer more means for a bilateral trade.
Bank of China expands in CambodiaOct 9, 2014
The Bank of China has opened another sub-branch in Cambodia's capital city Phnom Penh after three years of operating in the said country. The opening of the sub-branch of the Bank of China Phnom Penh reflects the confidence of Chinese investors in Cambodia's economy, said Li Zhigong of the Chinese Embassy of Cambodia. National Bank of Cambodia Deputy Governor Ouk Maly said the expansion only showed Bank of China's commitment to Cambodia.
Bigger fines sought for FTZ crimesOct 9, 2014
A Chinese financial expert suggested stiffer penalties for financial crimes committed inside the Shanghai Free Trade Zone (FTZ). Hefty fines will prevent companies from breaking financial rules in the FTZ, said Wang Zhuohuai, director of the Shanghai Banking Regulator Bureau's FTZ banking service supervision department. At a forum in Shanghai regarding the city's experimental FTZ, Wang suggested passing laws that will allow FTZ supervisors to impose bigger fines on financial crimes.