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.
Q1 tax revenue hits USD422bnApr 23, 2014
China collected some Rmb2.6tr (USD422.1bn) in taxes in Q1 of this year, up 9.9% from a year earlier, according to the State Administration of Taxation (SAT). SAT Spokesman Wang Lujin has said tertiary industry taxes rose 13.6% in Q1, or 7.7% higher than the secondary industry taxes. Taxes collected on state-owned enterprises, joint-stock and private firms have also increased by 7.8%, 10.6% and 13%, respectively. Wang, however, have said that the Q1 tax revenue rise may be very difficult to sustain for the whole year considering that the Chinese economy continues to experience downward pressure.
Li Ka-shing is China's richest manApr 22, 2014
Hong Kong billionaire Li Ka-shing has been named by Forbes magazine as the richest man in China, having a net worth of USD31bn. Li, the chairman of the board of Hutchison Whampoa Ltd, was also named the richest person in Asia by the Bloomberg Billionaires Index released early this month. Four of the top 10 richest people on the Forbes list are from the Chinese mainland, including property developer Wanda Group's Chairman Wang Jianlin, Internet giant Tencent Holdings' Chairman Ma Huateng, search engine Baidu's CEO Li Yanhong and beverage maker Wahaha Group's Chairman Zong Qinghou.
Alipay and Rakuten form JVApr 22, 2014
China’s Alipay, a unit of the Alibaba Group, has revealed that it signed a joint venture with e-commerce firm Rakuten of Japan. The deal allowed some 250 shops of Rakuten Global Market, the Japanese firm’s worldwide shopping service, to begin taking payments by Alipay in the third week of April. An estimated 10,000 more of Rakuten’s shops will take Alipay payments.
China's potential IPO issuers now 46Apr 22, 2014
The total number of potential IPO issuers in China is now 46 after the China Securities Regulatory Commission (CSRC) have posted the prospectus of 18 more Chinese firms last Monday. None of the 46 firms have been approved to launch IPOs yet, but the regulator is expected to review the applications next month and allow the resumption of the IPOs within May, analysts have said. State media has estimated that the 46 IPOs could raise as much as Rmb22.6bn (USD3.6bn) from investors. All IPOs were suspended in March as companies were ordered to update application documents.
Alipay's Yu'e Bao attracts USD86.99bn in depositsApr 21, 2014
Alipay's online investment unit, Yu'e Bao, had attracted total deposits of about Rmb541.3bn (USD86.99bn) by the end of March, according to Yu’e Bao's fund manager Tianhong. The fund manager has added that investors to Yu’e Bao have enjoyed combined profits of about Rmb7.5bn (USD1.2bn) since its launching in June 2013. In Q1 alone, the wealth management product has registered a profit of Rmb5.7bn (USD915m). Yu'e Bao offers higher interest rates as compared to typical bank deposits.
China’s manufacturers: We don’t rely on cheaper yuan for profitsApr 21, 2014Manufacturers in China have declared that they do not depend on a depreciated yuan in order to gain profits, even though the US government has accused the Chinese government of manipulating exchange rates to expand exports. The Renminbi or yuan fell 2.7% in Q1 versus the US dollar – putting into reverse years of steady gains. Haier Group Senior Executive Sun Shubao has said that the yuan's depreciation does not exactly boost their exports and that of other Chinese companies as most presume.
China's middle class set to reach 14 million this yearApr 17, 2014
The number of Chinese people bracketed as middle class is expected to rise to 14.01 million by the end of this year from 11.97 million last year, according to Forbes China and Beijing-based wealth management firm CreditEase. The wealth management survey conducted by the two firms has shown that most middle-class Chinese own their own home, with 15.5% of the respondents saying they have more than three properties. The middle class were defined by personal investment capital, which ranged from Rmb600,000 (USD96,480) to Rmb6m (USD964,000). Those funds include cash, stock, funds, bond, insurance and other financing products and property for investment.
First Bitcoin ATM launched in ChinaApr 17, 2014
China's leading digital currency exchanges, BTC China, has announced the installation of the country's first Bitcoin ATM despite stiff regulations against the digital currency. The ATM, which is located in a cafe at a mall in Shanghai's Zhangjiang technology park area, allows people to buy Bitcoin directly in exchange for yuan. Users cannot withdraw cash. Earlier, the central bank has banned financial institutions from trading in Bitcoin, saying the government would act to prevent money laundering risks from the digital currency. It did not ban trading by individuals.
Weibo sells 16% fewer shares than projected in US IPOApr 17, 2014Weibo Corp of China, a Twitter Inc-style business, was able to come up with USD286m during an initial public offering in New York. It was less than expected due to a lessened offering size. Weibo was valued at the IPO price of around USD3.4bn. The share price was at USD17. The projected range was as high as USD19 but Weibo has sold only 16.8 million shares, far less than the expected 20 million.
China’s latest economic package revealedApr 17, 2014The Chinese government has announced its newest financial and tax strategies that include reducing the reserve requirement ratio (RRR) for a number of rural fiscal institutions, in order to make available more backup for countryside economy and boost the employment. Rural commercial lenders and credit cooperative unions will have their RRR cut down to make the standards while at the same time enhancing bank loans and economic development.
US Treasury raps China on yuanApr 16, 2014The United States Treasury department has criticised the Chinese government for its decision regarding its official currency, saying the fall of the yuan is unprecedented. The US Treasury has also demanded that China reveal its market-intervention actions on a regular basis. According to the US Treasury in its latest currencies report made public on 15 April, the yuan’s weakening means China has gone back on its word to reduce intervention to allow market forces to have a larger role in the economy.
Incomes in China kept rising in Q1Apr 16, 2014
The average incomes of both urban and rural residents in China kept increasing in Q1 of this year, according to the National Bureau of Statistics (NBS). Average urban resident per-capita disposable income was at Rmb8,155 (USD1,332.52) in Q1. The NBS has explained that the actual growth was at 7.2% yearonyear if inflation is taken out. The average rural resident per-capita disposable income was at Rmb3,224 (USD500).
New bank loans rise in MarchApr 15, 2014
Data from the People's Bank of China has shown that new loans made by Chinese banks rose to Rmb1.05tr (USD168bn) in March from Rmb644.5bn (USD103bn) in February. The loans figure is within the forecasted Rmb1tr made by economists early last month. The report released by China's central bank has also shown that outstanding yuan loans rose 13.9% year on year. Further, the PBOC has said the annual growth in the broad money supply M2 eased to 12.1% from 13.3% in February. Economists had expected a 13% increase.
China banks suspend extending home loansApr 15, 2014Small and medium-sized banks in 25 out of 35 cities surveyed have reportedly stopped offering home loans due to risk concerns and tense capital flows. According to a news report by the Economic Information Daily, most of the banks that have stopped offering home loans are either small or medium-sized; while the cities reporting the highest number of banks halting lending for housing units included Changsha in south-central China's Hunan province, Wuxi in eastern China's Jiangsu province and Fuzhou in southern Fujian province. Some banks have also adopted harsher scrutiny measures for screening home loan applications while adjusting their interest rates higher for home loans.
Czech firm Home Credit eyes China expansionApr 15, 2014Home Credit China, a Czech provider of consumer finance, has announced plans to double its business in the country this year in tune with the Chinese government's financial reforms. According to Home Credit China CEO Michal Skocil, its expansion plans has shown that there is a very strong demand for consumer finance in China and that the industry is very well developing in the country. Consumer finance generally refers to short-term loans for personal purchases of durable goods or services such as home decoration, health services and education. Home Credit China now has 12,000 employees and 17,000 retailers in the country.
Beijing expected to limit cross-selling fund dealApr 14, 2014The Chinese government is expected to set restrictions on the amount of HK-domiciled funds that will be allowed to be sold on the mainland as part of a mutual cross-selling fund agreement, the South China Morning Post has reported. Unnamed sources has also said Beijing will set the limits in order to protect mainland China's domestic funds industry from a flood of overseas competitors. Although the capital has not announced any ratio, it is likely that the ratio could be set as low as 10%, which means a HKD100m-fund in Hong Kong would only be allowed to sell about HKD10m on the mainland.
Growth in China’s private equity deals seenApr 11, 2014
A survey conducted by American global management consulting firm Bain & Co has shown that investors are confident that China's private equity deal value will grow up to 25% this year from last year. About 80%, or 160, of the 200 private equity investors across the Asia Pacific who responded to the survey said the private equity market in China was poised for growth this year due to a foreseen stable economic growth and the condition allowing them to withdraw their funds. Last year, the deal value of private equity investment in the country dropped 30% year on year to USD14bn.
ANZ launches Shanghai FTZ branchApr 11, 2014The Australia and New Zealand Bank (ANZ) has opened a new branch at the Shanghai free-trade zone (FTZ) on 10 April in time for "Australia Week in China." ANZ follows other foreign lenders opening branches at the FTZ, including Citi, HSBC, DBS and Standard Chartered. According to the FTZ's existing regulations, ANZ’s branch can offer banking products and services such as foreign exchange, trade finance, and commodity finance and cash management.
Shanghai-HK stock exchanges connectivity to be createdApr 10, 2014
Premier Li Keqiang has announced that Beijing will initiate moves to make possible the establishment of a connectivity mechanism for the Shanghai and HK stock exchanges. This is meant to produce a viable two-way opening of the capital market in mainland China and the special administrative region of Hong Kong, according to Li during the launching of the 2014 Boao Forum for Asia.
Chinese insurers set to make first overseas investment in H1Apr 10, 2014
Following the lifting of restriction that limits Chinese insurers to invest only in the mainland or in Hong Kong, experts have said the country's insurers are expected to make their first overseas stock market investment in H1 of this year. Chinese insurers have around Rmb8.3tr (USD1.3tr) of assets under management at the end of 2013. Li Xiaoxi of Principal Global Equities said Chinese insurers, which are new comers in overseas stock markets, are particularly interested in developed stocks and are set to increase their overseas allocation in the next three years.
USD8.06bn worth of six-month deposit up for auctionApr 10, 2014
The Ministry of Finance announced on 10 April that it will auction a total of Rmb50bn (USD8.06bn) of six-month deposits to commercial banks on 15 April. The auction will be conducted by the People's Bank of China on behalf of the finance ministry. In a statement on its website, the ministry has said commercial banks in China will bid for the right to take the deposits. The auction is part of the ministry's cash management programme.
Small firms to get tax reduction in ChinaApr 9, 2014To boost economic growth and development, Chinese authorities has announced that it will lower tax burdens for small firms, which are key economic players. According to the Ministry of Finance, small firms with an annual taxable income of less than Rmb100,000 (USD16,100) can now enjoy a 50% reduction of their annual taxable incomes and a tax rate of 20%. Currently, the corporate income tax rate for other firms on the Chinese mainland is 25%. The new policy will last from 1 January 2014 to 31 December 2016. The new policy will not only lower their tax burdens, but also help bolster economic growth and boost employment, the ministry said.
WH Group plans 21 times share sale in HK IPOApr 9, 2014WH Group (Shuanghui International Holdings), the China-based pork producer that acquired US-based Smithfield Foods Inc, announced plans to unload its shares 15 to 20.8 times the value of their forecast earnings for the firm’s multibillion-dollar Hong Kong initial public offering. Sources, however, have said the offering’s price range and fundraising scope have not been decided yet. WH Group is expected to raise some USD6bn from the IPO.
Sina to launch online financial productApr 9, 2014Despite the government's strict rules on online financial products, online media firm Sina Corp has announced that it will soon be launching its financial service in the middle of the month. The move is part of Sina's plan to tap into the emerging Internet finance sector in the country. The plan is to start a small test run of the new service, allowing 1,900 applicants to buy the wealth management products that will be offered by Sina before midnight of 10 April. The financial service will be officially launched by Sina on 16 April.