China has pledged an additional $3bn in aid over the next three years to help developing countries get through Covid-19 and recover from the economic and social impact of the pandemic, president Xi Jinping said last Friday during a speech at the Group of 20 Global Health Summit.
China has contributed $1.3bn to the G20’s debt relief initiative, the largest amount among all membership countries, according to Xi. China has supplied over 300m Covid-19 vaccines globally and plans to provide as many more as it can, he said. Xi also said that Beijing supports the intellectual property right waivers on Covid-19 vaccines, and that Chinese companies are being encouraged to share their vaccine technologies with developing nations and start co-production.
*
China’s fiscal revenue jumped 25.5% year-on-year to Rmb7.8tr ($1.2tr) for the first four months of 2021, according to the Ministry of Finance. Fiscal spending totalled Rmb7.64tr during the same period, marking a 3.8% increase from a year ago.
*
Chinese banks recorded a foreign exchange settlement surplus of Rmb14.4bn in April, latest data from the State Administration of Foreign Exchange showed.
*
The State Council’s Financial Stability and Development Committee held a meeting last Friday.
The meeting, chaired by Chinese premier Liu He, said that financial risks must be “resolutely prevented and controlled”, and that reforms at medium and small sized financial institutions should be promoted. It also put focus on reducing credit risks, with strengthened regulatory oversight on the financial activities of internet platforms. It called for stability in the equity, bond and forex markets.
In addition, the meeting said Bitcoin mining and trading will be forbidden as part of an effort to maintain financial stability.
The State Council announcement came just a few days after Beijing announced fresh bans on financial institutions and payment firms from providing cryptocurrency-related services. Similar to an existing ban from 2017, institutions are forbidden to provide services such as account openings, registration, trading, clearing, settlement and insurance.
But the new regulations, jointly issued by the China Banking Association, the National Internet Finance Association of China and the Payment and Clearing Association of China, also asked institutions not to accept virtual currencies or use them for payment or settlement, or provide exchange services between cryptocurrencies and renminbi or other currencies. Issuance of crypto-related financial products are also prohibited.
*
At a Saturday meeting by the Securities Association of China, chairman of the China Securities Regulatory Commission Yi Huiman said securities firms should put more weight on compliance and risk controls, and that the securities industry needs to be doubly cautious when it comes to innovation.
Yi said that over the last four years, the securities industry has facilitated Rmb5tr of equity fundraising, Rmb15tr of debt financing and Rmb3tr worth of M&As. The industry’s total assets stood at Rmb8.9tr at the end of 2020, with a net capital of Rmb1.8tr.
*
A total of 105 applications were named and shamed by the Cyberspace Administration of China for the alleged illegal collection and use of personal data, according to a Friday update on the regulator’s website. Baidu, LinkedIn, Kuaishou and ByteDance’s Douyin are on the list.
*
The China Banking and Insurance Regulatory Commission revealed last Friday that it has recently handed out Rmb366m of penalties to five commercial banks: Bank of China, Bank of East Asia (China), China Bohai Bank, China Merchants Bank and Huaxia Bank. The lenders were mostly punished for alleged violations in their loan and wealth management businesses.
*
The CBIRC has approved the establishment of Bank of Liaoshen, a city commercial bank, in the north-eastern province of Liaoning, according to a Friday announcement on its website. The new bank needs to be set up in six months.
Liaoning is home to beleaguered lender Bank of Jinzhou. Earlier this year, the local government announced a plan to consolidate 12 local banks and form a provincial-level city commercial bank.
The CBIRC announcement came as the Liaoning government raised Rmb10bn via special purpose bonds to capitalise an unspecified new commercial bank as the result of a merger of two local banks. Onshore media reports suggest that the first two lenders to be folded into Bank of Liaoshen are Bank of Liaoyang and Yingkou Coastal Bank.
*
The People’s Bank of China issued two renminbi bills in Hong Kong at the end of last week. The Rmb10bn three month central bank bills were issued at 2.48%, and the Rmb15bn one year bills at 2.63%. The order book totalled Rmb68.2bn.
*
The National Development and Reform Commission (NDRC) plans to evaluate underwriters and rating agencies of ‘enterprise bonds’ for 2020. These are corporate bonds regulated by the NDRC. The relevant institutions have been told to submit their materials for the evaluation before Friday.