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.
China banks’ 2014 custodial assets up 54.7% to USD8.7trMay 29, 2015
Overall custodial assets of mainland China’s banking industry increased 54.7% year-on-year at the end of 2014 to reach Rmb54.12tr (USD8.7tr), according to figures that the China Banking Association released on 27 May. Chinese banks’ custodial assets have gone up more than 50% for three consecutive years, the CBA report adds. The country's lenders are enhancing intermediary enterprises like asset custody services to earn profits instead of relying heavily on net interest margins.
Alibaba-backed MYbank gets state approvalMay 28, 2015
The Chinese government gave its approval for the Alibaba-backed Internet bank MYbank to start operating. This pilot programme is designed to draw private players into the state-dominated industry. MYbank gets most of its funds from Zhejiang Ant Small and Micro Financial Services Co, which is owned by Alibaba chairman Jack Ma and his colleagues. It has a registered capital of Rmb4bn (USD655m), according to the approval document that the Zhejiang Banking Regulatory Commission released.
Chinese publisher seeks USD81m in Shanghai IPOMay 28, 2015
Chinese publisher Duzhe Publishing & Media Co Ltd seeks to raise Rmb504m (USD81m) in a listing on the Shanghai Stock Exchange. Duzhe, the publisher of the country's most popular magazine, The Duzhe, will use the proceeds of the IPO to develop its magazine titles, digital publishing projects and finance its book publishing operations. Duzhe has been actively exploring new directions such as TV and digital products as its sales revenue declined between 2012 and 2014.
Deutsche Boerse and China's SSE and CFFE create JVMay 28, 2015
Germany's Deutsche Boerse (DB), a top service provider for securities and derivatives markets, announced the creation of a joint venture with the Shanghai Stock Exchange (SSE) and China Financial Futures Exchange (CFFE). The JV will develop and market Chinese financial instruments to investors abroad and is also meant to back up the internationalisation of the official Chinese currency, the yuan. The Frankfurt-based JV will be called China Europe International Exchange. SSE and DB will control 40% each of the JV, while CFFE will control the remaining 20%.
China to launch second round of QDII2 in 6 citiesMay 27, 2015
Individuals in the cities of Shanghai, Tianjin, Chongqing, Wuhan, Shenzhen and Wenzhou will soon be allowed to directly invest overseas with the launch of the Qualified Domestic Individual Investor programme, commonly called QDII2. Reuters has reported that the second iteration of the scheme will be piloted in the six cities mentioned. The first version was limited to institutions. Under the QDII2, individuals with at least Rmb1m (USD160,000) of financial assets can apply to join the programme, which allows Chinese investors to buy shares in New York, London or Paris. The timeframe for the launch of the QDII2 has not been announced yet.
Bank of China set to open first branch in IndiaMay 27, 2015
Bank of China, one of the biggest state-owned commercial banks, is opening its first Indian branch in Mumbai soon after getting clearance from India's National Security Advisor Ajit Doval. With the clearance, Bank of China will now have to seek the permission of the Reserve Bank of India, the country's central bank, to establish the branch in Mumbai. The Indian Press reported that Maharashtra Chief Minister Devendra Fadnavis has confirmed that Bank of China will open its office in Mumbai soon but will have to adhere to the requirements and regulations of India's central bank.
China's 'super rich' list passes 1 millionMay 27, 2015
Mainland China's highnetworth individuals (HNWI) now number over a million along with a rise in the so-called innovative industries sector, according to the latest the China Private Wealth Report released on 26 May. The CPWP defines HNWI as having over Rmb10m (USD1.6m) of investable assets. China had 1.04 million HNWI at the close of 2014, double the number in 2010. Consulting company Bain & Co and China Merchants Bank compile the annual study.
FTSE Russell to launch transitional indexes including China A sharesMay 27, 2015
London's FTSE Russell, one of the world’s biggest index providers, announced the launch of two transitional indexes that will include China A shares. This gradual approach will take domestic Chinese shares into its global emerging markets benchmark in 2-3 years. China has campaigned hard to be included in international benchmark indexes, which may encourage billions of dollars of investments into China's stock market.
IMF: yuan is not undervalued anymoreMay 27, 2015
The International Monetary Fund announced on 26 May that the official Chinese currency, the yuan or renminbi, is not undervalued anymore. The IMF had previously stated for an extended period that the yuan was modestly undervalued. The IMF added that the yuan's undervaluation was a significant reason for huge imbalances, but the agency has assessed that major appreciation in 2014 brought the exchange rate to a level that is not undervalued any longer.
Industrial profits hit USD78.3bn in AprilMay 27, 2015
Official data released by the National Bureau of Statistics (NBS) showed that profits of Chinese industrial firms reached Rmb479.5bn (USD78.3bn) in April, an increase of 2.6% year-on-year. The April growth reversed the 0.4% decline posted in March. The improvement was attributed to the growth of industrial production and sales, higher investment returns and a drop in operating costs. However, industrial profits in the first four months of this year, shrank by 1.3%, but the fall was less than the 2.7% decline posted in Q1.
China and Chile sign currency swap deal worth billionsMay 26, 2015
China and Chile are moving to enhance their trade and financial relationship, this time signing cooperation deals that include a multi-billion dollar currency swap agreement. The agreement was signed in front of Chilean President Michelle Bachelet and Chinese Premier Li Keqiang, who was in Chile for a state visit. The currency swap deal, which is worth Rmb22bn (USD3.5bn), is aimed at promoting bilateral trade and investment. Aside from the currency swap deal, China also granted a quota of Rmb50bn (USD8.1bn) to RMB qualified foreign institutional investors in Chile, the official Xinhua news agency has reported.
SOE profits drop 5.7%May 26, 2015
The Ministry of Finance said in a statement that combined profits at China's state-owned enterprises (SOEs) fell again during the January-April period. Data released by the ministry showed that combined profits at SOEs dropped 5.7% to Rmb704.1bn (USD115bn) during the same period. The drop, however, was less than the 8% and 21.5% decline posted in the first three months and the first two months of the year, respectively. China's three major oil players–CNPC, Sinopec and CNOOC—and those in coal mining, steel and non ferrous metal sectors, however, went up by 11.6% during the period, the ministry said.
China's CPCG prefers to list in the US for USD485bnMay 26, 2015
China Pacific Construction Group, the country’s biggest privately-owned construction firm, does not expect to list until 2020, preferring to do it in the United States because of its better-regulated markets. CPCG founder Yan Jiehe said that if a company is stable enough, it should conduct its listing in the US, believing his company's market value will be worth about Rmb3tr (USD485bn) when it lists. By comparison, Chinese e-commerce goliath Alibaba is currently worth an estimated USD233bn and US-based Apple Inc USD764bn. CPCG has annual revenue of USD59.6bn, ranking 166 in the 2014 Fortune 500.
China's banks assets and liabilities hit USD28.79trMay 26, 2015
Overall assets and liabilities of mainland China's banking institutions went up in April, according to data that the China Banking Regulatory Commission released. As of the end of April, onshore assets of China’s banking institutions, including commercial banks, policy banks and rural credit cooperatives, rose 11.9% year-on-year to Rmb176.16tr (USD28.79tr). Total liabilities reached Rmb163.06tr (USD26.27tr) -- an 11.3% rise year-on-year. The CBRC added that total assets of commercial banks increased 13.2% in the same period, while their liabilities rose 12.6% year-on-year.
Shenzhen's shares hit 7-year highMay 25, 2015
Stocks in China revived in the third week of May, with the Shenzhen index enjoying its best weekly performance since 2008. The Shanghai Composite index likewise went up for four consecutive days to reach its own seven-year high. The Shenzhen A-Share index increased 1% on 22 May and 12% for the whole week for its best weekly performance since 14 November 2008. The Shanghai Composite Index also rose by 8.1% during the same week, after increasing by 2.8% on 22 May.
Number of offshore yuan centres increasesMay 25, 2015
In less than 24 months, the number of offshore yuan centres has risen. This has enabled investors all over the world to skip step in currency transactions when they conduct business with mainland China. The overseas yuan centres in Bangkok, Kuala Lumpur, Singapore and planned centres in Qatar and Seoul supplement centres in London, Nairobi, and Zurich. Currently, 14 offshore yuan centres operate worldwide with six of these in Asia alone.
First private bank in Shanghai launched in FTZMay 25, 2015
The very first private bank in Shanghai, the Shanghai Huarui Bank, was launched in the free-trade zone of the megacity, intended to serve small companies and to be utilised to enhance financial reforms. Shanghai Huarui got Rmb10bn (USD1.6bn) of interbanking loan quota from 12 policy and commercial lenders that include Shanghai Pudong Development Bank, China Merchants Bank and China Development Bank.
Private investors invited to fund USD318bn of projectsMay 25, 2015
The National Development and Reform Commission (NDRC) has invited private investors to participate in over 1,000 proposed projects that the Chinese government will carry out with a total funding of Rmb1.97tr (USD317bn). Reuters has reported private investors are welcome to help fund, build and operate the 1,043 projects in various sectors, including transport, water conservancy and public services, to be done as public-private partnerships (PPP). The projects include the construction of two subway lines in Hangzhou worth Rmb51.9bn (USD8.37bn) and a Rmb6.4bn (USD1.03bn) hospital in Urumqi. The NDRC did not specify on its website if foreign firms are included in the invitation.
China's P2P lending rose 269% to USD52bn in 2014May 22, 2015
Turnover of China's peer-to-peer lending platforms last year was at Rmb321.19bn (USD51.8bn) -- a 268.83% increase year-on-year, according to a report that the Payment & Clearing Association of China made public. At the close of 2014, the country had 2,358 P2P platforms with an average yearly interest rate of 17.52%. P2P lending allows unrelated parties get loans without having to go through a bank. The practice was first started in China in 2006, giving service to ordinary Chinese citizens with inadequate investment capabilities.
China Exim, 4 Brazilian firms sign deals worth USD6.65bnMay 22, 2015
The Export-Import Bank of China, also known as the China Exim Bank, signed contracts worth USD6.65bn with four Brazilian firms in connection with the Chinese bank's support for bringing in technology from China to the South American nation. The agreements will enable Brazilian mining company Vale and energy firm Petrobras import advanced shipping vessels and oceaneering equipment, and give financial support to Chinese business groups to acquire 40 E-190 aircraft from Brazil's aerospace-giant Embraer.
New firm created to boost overseas investmentMay 21, 2015
Beijing has put up a new investment firm intended to assist China's local businesses make investments in foreign countries while encouraging the export of China's advanced industrial products. According to the country's National Development and Reform Commission, the new firm is a unit of state-owned China Investment Corp -- one of the biggest sovereign-wealth funds in the world. It was started with a capital of USD5bn and could eventually be more valuable than the infrastructure-oriented fund Silk Road Fund, said NDRC official Gu Dawei.
Jiangsu sells first provincial bonds worth USD8.4bnMay 19, 2015The province of Jiangsu auctioned bonds worth Rmb52.2bn (USD8.4bn) on 18 May -- the first by any Chinese province under the government's debt-replacement programme. The Chinese government is trying to restructure an estimated Rmb1tr (USD161bn) in local-government debt after launching a program in which local government units can issue new bonds to replace parts of older and more expensive debts that will mature this year. The country's local governments had around Rmb17.9tr (USD2.89tr) in debt in H1 of 2013.
GM execs says their China profits will stay stableMay 19, 2015
Matthew Tsien, General Motors China's operations chief, said that the US-based carmaker believes their profitability levels will remain stable in China despite the drop in prices and expected moderate growth rate. Tsien added that GM can reach a 9-10% profit margin in China and remain at that level for the rest of the year, by selling a varied offerings like Cadillacs and sports-utility vehicles while applying cost controls. According to the China Association of Automobile Manufacturers, foreign-based car manufacturers sold an estimated four-million units in Q1 of this year -- about the same as during the same period in 2014.
China Banking Association to lead creation of Asian financial groupMay 19, 2015
A new Asian financial cooperation association is set to be formed, with the China Banking Association (CBA) taking the lead in organising it Xinhua reported. The new association is expected to boost the safe and healthy growth of Asian finance, said CBA vice head Yang Zaiping during the Asia Cooperation Dialogue (ACD) in Fuzhou, capital of southeastern China's Fujian Province. Once organised, the association will help Asia gain more say in the international financial system, he added. Details of the association have not been disclosed yet.