09 May 2022

NPCSC passes Futures and Derivatives Law

Given the scale and speed at which China’s financial system has grown over the past decade, oversight has often struggled to keep up with developments on the ground. We read Futures and Derivatives Law as Beijing’s blessing of the accelerated expansion of the futures and derivatives market.

04 May 2022

CSRC releases opinions on developing publicly offered funds industry

2022 has seen drastic daily swings in China’s equity markets, with the biggest mainland exchanges – Shanghai and Shenzhen – both down over 20% on the year. These reforms certainly won’t stop the current dip, but policymakers hope they’ll stem this type of destabilizing volatility down the road…

03 May 2022

PBoC cuts banks’ forex reserve requirement ratio

This is a pretty moderate opening salvo to slow the RMB’s decline. The PBoC will likely cut the reserve ratio further if it’s not happy with the results…

27 Apr 2022

State Council unveils plan for national private pension program

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26 Apr 2022

April foreign financial institution approvals and specific financial opening developments

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25 Apr 2022

Guangdong-Macau cross-border data verification platform trial begins

As we have previously pointed out, interoperability issues – be they legal, economic, or technological – have been one of the primary barriers to the integration of the GBA. The launch of the Guangdong-Macau cross-border verification platform represents a step toward resolving financial system compatibility issues and may develop into an important piece of infrastructure supporting the region’s financial connectivity…

25 Apr 2022

CBIRC issues measures to support micro and small enterprises

MSEs have disproportionately borne the brunt of COVID-19 and its associated lockdowns in China, and their recovery has been much slower than that of large companies. This worries policymakers as China’s micro, small, and medium-sized enterprises provide most of the country’s jobs…

25 Apr 2022

CBIRC issues document on rural revitalization work

Rural revitalization is a key policy aimed at keeping the economy growing, supporting employment, addressing inequality, and unleashing what the Party sees as a vast untapped consumer market, namely the rural population. Finance plays a crucial role here both in providing a vast financially-starved part of the economy with access to credit and beefing up insurance to help cushion farmers and rural businesses in the event of disasters…

25 Apr 2022

PBoC calls for more research to help policymaking on transition and green finance

While decarbonization isn’t top of the agenda for 2022 as Beijing prioritizes stability above all, it doesn’t mean that regulators are just sitting around twiddling their thumbs. The PBoC is ensuring that it is laying the groundwork to enable the investment necessary to help China achieve its climate goals…

22 Apr 2022

CSRC calls for increased focus on long-term investing

Traditionally, banks have been the main source of funding for China’s economy, with capital markets playing little more than a supporting role. But that’s beginning to change…

22 Apr 2022

NAFMII launches dispute mediation center in Beijing

Beijing is in the midst of overhauling China’s capital markets so that they better serve the real economy. These dispute resolution mechanisms are one key piece of the puzzle…

19 Apr 2022

PBoC cuts RRR by 0.25%

Take the PBoC at its word – this is targeted support for small firms, not broad-based stimulus. The PBoC is reluctant to guide lending rates lower unless bank funding costs drop first…

18 Apr 2022

PBoC approves first two financial holding companies under new regulatory framework

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18 Apr 2022

CBIRC tweaks market entry rules for domestic, foreign financial institutions

The CBIRC’s notice is the latest in a long line of changes responding to the State Council’s requirement to cut red tape, streamline administrative procedures, and delegate power to lower-level or provincial branches of the relevant regulatory body. The key takeaway from this notice is that regulators are making the process of getting a license to do business on the mainland somewhat easier…

18 Apr 2022

CSRC releases notice to stabilize equity markets, bolster sentiment

China’s financial regulators are going all out to stabilize sentiment and expectations among companies and investors amid a worrying economic slowdown fueled by stringent COVID-19 lockdowns and a string of ongoing regulatory crackdowns – most notably in the tech space. Every financial regulator has been told to get behind the FSDC’s campaign to boost the economy and markets, and as the agency responsible for supervising the equity market, the CSRC’s focus is to reassure investors and companies that they hear their concerns and want to help…

18 Apr 2022

Hong Kong moves a step closer to allowing mainland investors to trade stocks in RMB

Mainland money flowing into the Hong Kong stock market under the stock connect program does not escape China’s capital controls. So this plan won’t do much for RMB internationalization, but it will further integrate Hong Kong and mainland markets and eliminate exchange rate risk for mainlanders trading Hong Kong stocks…

18 Apr 2022

PBoC expands digital yuan trial to 11 more cities

The expansion of the pilot program indicates the PBoC’s confidence that testing of the e-CNY has gone well so far. But while the systems and technology underpinning the e-CNY may be ready, it remains to be seen whether consumers are – there’s plenty of evidence that inertia and habit are holding back uptake of the central bank’s digital wallet, even at the pilot stage…

18 Apr 2022

State-owned steelmakers look to settle more iron ore imports in RMB

There’s no mystery behind the desire of both the Chinese government and companies to increase RMB settlement in international trade. Doing business in RMB reduces foreign exchange risk and, more importantly, it helps lower geopolitical risks stemming from financial sanctions that could lock Chinese companies out of key raw material and resource markets…

12 Apr 2022

PBoC lays groundwork for financial stability rainy-day fund

Policymakers are sick of bailing out mismanaged financial institutions with government money – so they’re putting the financial sector on the hook to contribute to the national rainy-day fund…

12 Apr 2022

PBoC convenes Q1 monetary policy meeting

The problem is, however, simply telling businesses, consumers, and investors to “have confidence” might work in the very short term, but the realities of China’s economic challenges will soon come home to roost – especially if officials don’t up their policy support game…

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