China wants its finance industry to give up Rmb1.5tr ($211.8bn) in profits this year to support the real economy by offering lower lending rates, loan payments deferrals and cheaper fees for corporate borrowers, according to minutes from a State Council meeting chaired by premier Li Keqiang.
The meeting also reiterated the use of monetary policy tools, including cuts to the reserve requirement ratio (RRR) cut and re-lending, to ensure “reasonably ample” liquidity in the system.
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China reported a 13.6% year-on-year slump in fiscal revenue for the first five months of the year, according to data published by the Ministry of Finance (MoF) on Thursday.
Fiscal revenue reached Rmb7.77tr by the end of May. Tax revenue accounted for Rmb6.68tr, a 14.9% decrease from a year ago. Meanwhile, fiscal expenditure also dropped by a smaller margin of 2.9%.
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The People’s Bank of China (PBoC) injected Rmb120bn into the market through reverse repurchase agreements on Thursday morning.
The rate for the Rmb70bn 14-day reverse repo was lowered to 2.35% compared to 2.55% from the most recent February operation. The central bank left the rate for the Rmb50bn seven-day repo unchanged at 2.2%.
The central bank followed up with a Rmb110bn 14-day repo at 2.35% on Friday, together with Rmb70bn seven-day operation at 2.2%.
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The PBoC plans to issue Rmb10bn of six-month offshore renminbi bills in Hong Kong on Tuesday, June 23.
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The Ministry of Commerce (Mofcom) published draft rules governing foreign investors making strategic investments in A-share companies.
The ministry lowered the minimum assets a company must control before they invest in China from $100m to $50m, reduced the lock-up period on investments from three to one year, and also said it could allow foreign individuals to make strategic investments in A-share companies.
The draft rules will be open to public consultation until July 19.
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Foreign investment in industries excluding banking, securities and insurance has dropped by 3.8% year-on-year to Rmb355.2bn in the first five months of 2020, according to the Mofcom. The figures refer to the amount actually invested, rather than previously agreed.
The decline narrowed by seven percentage points compared to that seen during the first quarter. In dollar terms, the amount was $51.2bn for the January to May period, after a 6.2% yearly decrease.
Non-financial outbound direct investment fell by 1.6% to Rmb296.3bn in January-May compared to a year ago.
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JP Morgan has got approval from the China Securities Regulatory Commission (CSRC) to increase its 49% stake in its futures joint venture to 100%, making the JV the first wholly foreign-owned futures company in the country.
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MUFG Bank (China) was granted a bond settlement agent licence in the interbank market by the PBoC, a first for a Japanese bank.
MUFG will be able to act as a bond settlement agent and provide custody services. It also holds a bond underwriting licence and a Bond Connect market maker licence.
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The China Banking and Insurance Regulatory Commission (CBIRC) has given approval for China Citic Bank’s wholly-owned asset management subsidiary to start operations. The subsidiary, only the fourth by a joint stock bank to officially open, is based in Shanghai and has registered capital of Rmb5bn.
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Ant Financial Services, an affiliate of Alibaba, has completed the registration process for its credit rating arm with the Hangzhou branch of the PBoC, according to a central bank notice on Monday afternoon.
The completion of registration does not count as an endorsement of the company’s rating quality or risk management capabilities, the central bank said in the statement.
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Geely Automobile Holdings, a Hong Kong-listed Chinese company, is mulling a secondary listing on Shanghai Stock Exchange’s Star market, according to a Wednesday filing.
The issuance size has not been determined but the shares will not exceed 15% of the company’s enlarged share capital.
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China’s domestic bond market hosted Rmb4.8tr of new bond issuance in May, the same level as in April, the PBoC said in a Friday statement.
Central government bonds took up Rmb677.3bn, an increase from April’s Rmb436.6bn. Local government bonds were worth Rmb1.3tr of new issuance in May, a huge jump from only Rmb287.7bn in April. Credit bonds new issuance was reduced significantly from Rmb1.6tr in April to Rmb829.8bn.
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By June 12, the issuance volume of so-called ‘enterprise bonds’ — corporate bonds regulated by the National Development and Reform Commission and issued in the China interbank market — has increased by nearly 39% compared to the same period last year, the regulator said in a Tuesday press conference.
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The MoF issued a notice on improving the budget management of local governments’ foreign debt.
Foreign debt which local governments have the responsibility to repay should be counted as part of their fiscal budgets, the MoF said. As such, this debt should be counted as part of local governments’ annual outstanding bond quotas.
However, if the local governments do not have the responsibility to repay these deals but only act as the guarantors, they will not count toward local governments’ budgets and will not take up their bond quotas.
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Xiang Junbo, former head of the now-defunct China Insurance Regulatory Commission, will be put behind bars for 11 years for taking bribes between 2005 and 2017 during his tenure at state-owned Agricultural Bank of China and the CIRC, which has since been merged with the banking regulator to form CBIRC. He was also fined Rmb1.5m.
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Wang Zhenhua, founder and former chairman of Chinese property developer Seazen Holdings (previously known as Future Land Holdings), was sentenced to five year in prison by a local court in Shanghai. Wang was arrested for child molestation in July 2019.
Chinese media reported that Wang has appealed and insists on his innocence, citing a social media post from his lawyer.
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The Beijing Local Financial Supervision and Administration on Tuesday published a guide for foreign asset managers interested in setting up businesses in Beijing, including details of tax benefits should they choose to lay down roots in the city.
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The Shenzhen Stock Exchange (SZSE) signed a strategic agreement with the Hainan provincial government to help the province achieve high-quality economic developments, the bourse announced on Tuesday.
Among others, SZSE promised to support Hainan-based companies to list on the bourse. It will also support companies in industries including tourism and technology to get listed on SZSE.