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Policy:
China is set to approve new quotas for the qualified domestic limited partnership (QDLP) and qualified domestic investment enterprise (QDIE) schemes, Wang Chunying, a spokesperson at the State Administration of Foreign Exchange (Safe), told an April 19 press conference.
“With the permission of Safe, [local governments in] Shanghai and Shenzhen started working on [piloting] QDLP and QDIE in late 2017, and the market has responded positively,” said Wang. “Depending on the demand of the pilots in Shanghai and Shenzhen and the foreign exchange circumstances, we will prepare to increase the aggregate quotas in these two localities.”
QDLP and QDIE allow fund managers in Shanghai and Shenzhen, respectively, to launch onshore funds that invest in offshore securities. Wang’s remarks came after Safe said on April 11 that it will review another outbound programme, qualified domestic institutional investor, which has not had any new quotas granted since 2015.
The National Development and Reform Commission (NDRC) will revamp the two new negative investment lists for foreign investors — which will apply nationwide and in the free trade zones (FTZs) — respectively, in the first half of 2018, the economic planning department announced on Tuesday.
A negative list details which business sectors are restricted from foreign investment. Yan Pengcheng, spokesperson at the NDRC, gave reporters a flavour of the new lists at an April 18 press conference.
“We will not only decrease the number of restrictions, but more importantly, we will promote the opening up of key sectors with greater determination,” he said. “We will also outline the route map and timetable for the opening up of certain industries, and make clear what the transition period will be.”
Belt and Road:
Citi has agreed to work with BOC and CMB to jointly support their clients participating in Belt and Road projects, the bank said in an April 20 press release. The banks will back companies in a variety of sectors, from infrastructure and energy to telecom and agriculture, through co-financing, financial products and services in the capital markets.
China has made $25.5bn of direct overseas investment in the first quarter, up 24.1% year-on-year, the Ministry of Commerce said in an April 16 statement. About $3.6bn of the total went to Belt and Road countries, up 22.4% year-on-year.
Indices:
The gap between onshore and offshore RMB funding cost narrowed in March as onshore yields fell, according to Bank of China’s Credits Investment and Financing Environment Difference ( Cifed ) index. The index closed at 28.3 points, down 32.8 points month-on-month.
Meanwhile, BOC’s offshore RMB index finished the fourth quarter of 2017 at 1.25%, up 0.03 percentage points from the third quarter, according to an April 13 report published by the bank. The index could extend its gains in 2018 should more central banks add RMB to their FX reserves, but it may also face pressure if the dollar strengthens, said BOC. It expects the index to close at 1.26% in the first quarter.
Hubs:
RMB deposits in the UK stood at £7.2bn ($10.1bn) at the end of December 2017, down from £7.6bn at the end of last September, according to statistics released by the Bank of England. Average daily turnover of RMB spot trading was £23.3bn, down £2.3bn from last September.
Green:
Individuals and corporations can now buy green bonds issued by the Agricultural Development Bank of China at the Shanghai Clearing House (SHCH) through Bank of China, SHCH said in an April 16 announcement. The policy bank sold Rmb1.93m of green bonds to individual investors on April 9, the first day of trading after the change came into effect, according to SHCH’s statement.