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 equity markets' best performance since December 2012Aug 1, 2014The equity markets of China performed its best in July since the previous high in December of 2012. This raised the Shanghai Composite Index by 7.48% with a 0.93% boost on 31 July to close on top of the vital 2,200-point level. The Shenzhen Component Index likewise went up 1.32% to close at 7,956.91 points for an 8.36% rise. These robust performances by both stock markets in July have also raised hopes that the country's economy is on the road to genuine recovery.
China's 2013 credit-card transactions hit USD2.1trAug 1, 2014The credit-card transactions in China reached Rmb13.1tr (USD2.1tr) last year — a 30.9% rise year-on-year. According to a report that the China Banking Association released on 31 July, transactional value comprised 55.8% of all retail sales of consumer products. China issued 61 million new credit cards throughout 2013, warning that potential credit hazards come with it. Delayed credit-card repayments that reached over six months increased 71.9% year-on-year to Rmb25.19bn (USD4.08bn) last year.
Regions allowed to set up firms that will buy bad loansJul 30, 2014
The China Banking Regulatory Commission (CBRC) has allowed five regions in China to create asset management companies to buy bad loans. The trial program includes Shanghai, Guangdong, Zhejiang, Jiangsu and Anhui. The regulator picked the five local governments as they have been witnessing a significant surge of non-performing loans or have experience in asset management practices, in the cases of Shanghai, Guangdong and Zhejiang, analysts said. The program is part of CBRC's efforts to prevent the escalating local bad debts from crippling the economy.
China launches asset management trialJul 29, 2014
The China Banking Regulatory Commission (CBRC) has approved the first batch of asset management firms to buy non-performing financial assets, the local Anhui Daily reported. The firms are based in Shanghai and four provinces — Jiangsu, Zhejiang, Anhui and Guangdong. They have been allowed to conduct assets transfer business within the local area, the report said.
ICBC to issue USD12.9bn in new sharesJul 28, 2014
ICBC, China's largest state-owned bank by assets, said it would issue up to Rmb80bn (USD12.9bn) of preferred shares in domestic and foreign markets. Up to Rmb45 (USD7.27bn) in preferred shares will be issued in the domestic market and another Rmb35bn (USD5.65bn) in preferred shares are planned for the overseas market, ICBC said in a filing on the Shanghai Stock Exchange. ICBC becomes the latest Chinese lender to issue preferred shares in order to tap the capital markets. The bank said it will use the additional funds to deal with a slowing economy and rising bad debt.
Industrial profits up in H1Jul 28, 2014
The National Bureau of Statistics (NBS) said industrial businesses in China saw profit rise by 11.4% in the first six months of this year, year-on-year. Total profits of industrial companies with annual business revenue of more than Rmb20m (USD3.2m) reached Rmb2.86tr (USD462bn). The NBS said the faster-than-expected growth pace was due to strong growth in June, when industrial firms raked in Rmb588bn (USD95bn) in profits, up surprisingly by 17.9% from a year ago.
H1 micro, small firms loans in China up 15.7%Jul 28, 2014
Financial corporations in China gave out more loans to micro and small companies from January to June this year in line with its promise to serve these sectors better. According to the semiannual report of the People’s Bank of China, its outstanding loans to micro and small businesses has reached Rmb14.17tr (USD2.3tr) after the first half of 2014 — a 15.7% increase year-on-year. The small-businesses loan rise was bigger than that of the medium and large-sized firms so far this year. The increase in loans materialised after Beijing requested financial firms to help alleviate the demand for capital for small businesses in order to nurture their growth while the economic slowdown is being experienced.
China okays three private banksJul 28, 2014
The China Banking Regulatory Commission (CBRC) said it has approved the establishment of three private banks as part of its aim of providing efficient and diversified financial services to the real economy. The three banks are located in Shenzhen, Wenzhou and the northern municipality of Tianjin. Experts said the approval of the three private banks to operate in China will further promote healthy competition in the banking sector and improve financial services to the country's weak links such as the agriculture sector and small businesses.
China's tax revenues up in H1Jul 25, 2014
China collected about Rmb5.6tr (USD903bn) in taxes in the first six months of this year, with taxes from service industries growing faster, the State Administration of Taxation said. The tax revenues in the first half of this year represent a 7.9% year-on-year rise. Tax collected from the service industry rose 11.6% from January to June, 7.4% higher than the manufacturing industry, the taxation office said.
Shanghai home buyers to get loan discounts starting AugustJul 25, 2014
The Agricultural Bank of China, one of the country's big four lenders, is offering 5% discount on interest rates beginning in August to clients in Shanghai who will loan at least Rmb2m (USD161m) in acquiring their first homes. Other banks have not followed ABC's lead yet. The Chinese government has not indicated whether there is a shift in the nation's loan policy, although reforms, credit and infrastructure have been relaxed to help overturn the negative effects of a slowdown in the property market.
China forex chief warns potential money flow-problems in H2Jul 24, 2014
State Administration of Foreign Exchange Chief Guan Tao said that China might have to contend with capital flight in the remaining months of 2014. He added that financial-flow problems will be influenced strongly by stricter monetary policies of the United States government. Guan said that China is still very attractive to foreign capital and that the country's economic recovery is better than that of other nations. However, that may be neutralised by the financial policies of other major economies in the world, who are adjusting their monetary policies thereby causing a measure of instability.
China has now 8,394 microcredit firmsJul 24, 2014
A total of 8,394 microcredit companies are now operating in China as the central government encourages their development in order to boost financing to small businesses. According to a Xinhua News Agency report, these microcredit companies have issued a total of about Rmb62bn (USD10bn) of new loans in the first six months of the year. Micro-lenders provide loans to small companies and low-income groups in China. Micro-lending companies have become an important component of, and a supplementary power in China's credit market. They have also been important routes for private capital to enter the financial market.
China's RMB to become world's third largest currency by 2020Jul 23, 2014A report published by the International Monetary Institute of Renmin University of China and the Bank of Communications showed that the renminbi could become the world's third largest currency six years from now. The Chinese renminbi will only be trailing the US dollar and the euro by 2020 after the currency's internationalisation index went up to 1.69 by the end of last year from 0.92 in 2012. The Chinese currency’s popularity has also risen over the years as more countries in Asia and Europe have established renminbi exchange centres. Recently, Australia announced that it is close to signing a deal with China that would allow the establishment of an official clearing bank for the renminbi, a step towards a more open flow of money and investment into and out of the Asian giant.
Luxury property tops spending for China’s wealthyJul 23, 2014The Shanghai-based Hurun Research Institute has issued a report that showed China's wealthy were spending more on luxury property this year based on the Luxury Consumer Price Index (LCPI) that rose by 4% this year from last year. The report showed that the LCPI rose this year as wealthy Chinese spent more on luxury property, yachts and jets, as well as education. Last year, spending was more on luxury travel, accessories and skin care products, and cars. Among all categories, luxury property has increased the most, with its growth rate reaching 12.6% this year, the Hurun report stated.
Huarong gets USD2bn investment offerJul 22, 2014
China Huarong Asset Management, a bad loan manager in China, is reportedly nearing a deal to accept a USD2bn stake purchase by investors, which include Goldman Sachs and Warburg Pincus. The investors are offering to buy up to 20% stake in China Huarong as part of their efforts to enter into the country's profitable business of bad loan management. According to Reuters, sources said that Huarong is planning to sell the stake to strategic investors ahead of an eventual IPO and seven investors are likely to sign an agreement over the next month.
Alibaba, banks provide loan access to SMEsJul 23, 2014
Alibaba has teamed up with seven of China's major banks to launch an online financial product that will provide loan access to small and medium-sized trade firms. Alibaba said the financial service will provide fundraising for small companies, thereby easing funding costs of these firms. The financial product will offer low-interest loans, with the loan size dependent on the company's performance. The banks in the partnership, including Bank of China, China Merchants Bank and China Construction Bank, will decide on their own whether to make the loans, solely based on the companies' business performance data provided by Alibaba.
JPMorgan names China bank headJul 23, 2014
JPMorgan Chase & Co, the largest bank in the United States, has named Brett Krause, a former senior Citigroup executive, to lead its bank in China. The appointment came a few weeks after JPMorgan named UBS AG banker David Li as the new head of its overall China business. Krause, whose official designation is president of JPMorgan Chase Bank (China) Co Ltd, has more than 20 years of banking experience. JPMorgan has been hiring bankers in China to rebuild its leadership team in the country, following the investigation on its hiring practices in the region.
PBOC minimises interference in currency marketJul 21, 2014
The People's Bank of China, the country's central bank, announced that it has cut down its heavy intrusion into China’s currency market. Chinese companies, including banks, have been holding on to their dollar reserves because capital inflows into the country slowed down. This is seen as the result of the PBOC allowing China’s official currency, the renminbi, fall from January to April this year.
China, Argentina ink multi-billion financing, currency-swap dealsJul 21, 2014
China and Argentina signed multibillion-dollar infrastructure-financing and currency-swap contracts when Chinese President Xi Jinping visited Buenos Aires on the third week of July. The two countries signed 20 deals, including a Rmb70bn (USD11bn) currency swap between their central banks. Analysts said that the agreements are putting President Cristina Kirchner's administration in a good light amidst problems with recession and inflation, but they cautioned that these won’t give much relief to the depleted foreign-currency reserves of Argentina.
IMF lauds creation of BRICS bankJul 17, 2014
International Monetary Fund (IMF) Chief Christine Lagarde said the fund will be delighted to work with the new BRICS investment bank as she congratulated leaders of Brazil, Russia, India, China and South Africa for establishing a new reserve arrangement. She added that the IMF has a very strong relationship with all of the BRICS nations and the fund looks forward to further strengthening its collaboration with them.
Bank of China on a hiring spree in Hong KongJul 17, 2014
Bank of China, one of the country's ‘big four’ banks, is hiring more people in Hong Kong as sales of Chinese corporate dollar debt and Dim Sum bonds continue to surge. The bank's deputy general manager for global markets, Tony Wang, said Bank of China is particularly hiring traders and sales people in the city as it aims to cement its position as one of Asia's top ten debt underwriters. Wang added that Bank of China is not only expanding in the debt-capital markets business but also in syndicate, sales and trading.
BRICS bank to aid global recoveryJul 17, 2014
According to China’s Ministry of Finance on 16 July, the development bank that the BRICS (Brazil, Russia, India, China, South Africa) nations put up, will help invigorate the world’s economy plus stimulate long-term growth. The bank, which will have its headquarters in Shanghai, seeks to enhance existing regional development banks in the fields of infrastructure investment and sustainable development.
Chinese incomes rise steadily in H1Jul 16, 2014
Average incomes of China's urban and rural residents rose 10.8% year-on-year to Rmb10,012 (USD1,629) in the first half of this year, the National Bureau of Statistics (NBS) said in a statement. The income gap between urban and rural residents narrowed, with the actual income growth in rural China 2.7% higher than that in urban areas in the January-June period. Data released by NBS showed that urban residents earned an average disposable income of Rmb14,959 (USD2,410) in H1 while rural residents pocketed cash income of Rmb5,396 (USD869.37).
New bank loans hit USD174bn in ChinaJul 15, 2014
New bank loans in China for the month of June reached Rmb1.08tr (USD174bn), the Chinese central bank said in a statement on Tuesday. The People's Bank of China, the country's central bank, said in a statement on its website that the country's broad M2 money supply also increased 14.7% in June from a year earlier, as the central government stepped up its efforts to stimulate the economy. Outstanding yuan loans grew 14% from a year ago, better than the predicted 13.8% rise.