Loan prime rates decline 10bps
The LPR reductions were a surprise, but they shouldn’t have been, as we’ve long argued that the PBoC is reluctant to cut lending rates without reducing bank funding costs first. The PBoC did exactly that in April when it…
PBoC reviews small banks’ bond holdings
The likelihood of an SVB-type event occuring in China is exceedingly low – given local governments’ and developers’ debt problems, interest rates are unlikely to rise for years. However, the PBoC still wants to identify…
PBoC clears onshore CGBs as Swap Connect collateral
Promoting RMB bonds as collateral for cross-border financial transactions is the most meaningful step Chinese authorities can make toward internationalizing the RMB. The move is likely tied to…
Premier Li underscores economic challenges at econ-focused symposium
On July 9, Premier Li held a symposium on the economy with a group of experts and entrepreneurs to solicit policy advice ahead of the Politburo’s econ-focused meeting later this month…
Vice President of Taiping Life Insurance under investigation for corruption
The financial sector has faced increased scrutiny from the CCDI in recent years, with numerous executives from financial firms being investigated and charged for corruption. The Party seeks to tighten control over the sector to better allocate resources to national priorities and prevent corrupt or disloyal executives from misusing state assets…
China’s central bank moves swiftly to remake monetary transactions
On July 8, The People’s Bank of China (PBoC) announced plans to swiftly implement its new interest rate regime, including the initiation of new overnight bond repo and reverse repo transactions…
The State Council looks to pave way for sustainable health insurance
Ensuring the sustainability of the public health insurance fund, which is already financially strained, is key to providing better coverage for the average citizen. However, implementing the outlined measures pose significant challenges, particularly in terms of regulatory complexities and funding constraints…
China Construction Bank rumored to cut staff salary
China’s investment banks and security firms have already gone through a round of salary cuts amid diminishing IPO deals and underperforming secondary markets. Now, commercial banks are also joining in, driven by weak credit demand and declining lending rates, which have significantly squeezed their profits…
PBoC signs agreements to borrow CGBs
On July 5, the People’s Bank of China (PBoC) announced agreements with several major banks to borrow hundreds of billions of yuan worth of medium- and long-term Chinese government bonds (CGBs), marking the first step towards their sale…
MoF unveils plan to support industrial upgrading
On July 3, the Ministry of Finance (MoF) announced it will subsidize interest payments on loans supported by the relending facility, aimed at funding industrial upgrading…
The central bank to borrow Chinese government bonds
While the PBoC did not specify its plans for the bonds, we anticipate they will be sold during OMOs. This move aligns with the central bank’s repeated signaling of its intention to overhaul monetary policy to focus more on market rates, marking the initial step in that strategic shift…
Cheng Zhong named CIC deputy head; Zhang Yi appointed CCB chief
There were two notable personnel developments in June. First, on June 3, China’s sovereign wealth fund, China Investment Corporation Ltd. (CIC) appointed Chen Zhong as vice president and chief financial officer. Chen, 51, replaced Liu Haoling, who was promoted to CIC president in February…
June foreign financial institution approvals and developments
Mizuho; BNP Paribas; AllianzGI
Investment via Wealth Connect scheme quadruples following February reforms
According to a disclosure from the People’s Bank of China (PBoC) on June 28, cross-boundary investment via the Wealth Management Connect (WMC) scheme has nearly quadrupled from February to May…
State-owned asset manager BSAM to take over majority stake in Credit Suisse’s China JV
UBS’s choice of BSAM, despite Citadel’s higher offer, suggests strategic motives behind the transaction. Sources indicate that UBS intends to acquire full ownership of UBS Securities – the firm’s other China JV in which BSAM holds a 33% stake – by offering the Credit Suisse unit in exchange…
AllianzGI buys stake in state-owned Guomin Pension
Building a robust private retirement savings ecosystem is key to bolstering financial support for China’s aging population and unlocking consumption potential. Equally significant is its role in steering savings away from real estate and towards capital markets, thereby funneling trillions of RMB into supporting Beijing’s technological ambitions…
Mainland exchanges resume IPO reviews
With recent stabilization in the stock markets, China’s regulators are now comfortable resuming normal IPO activities. The timing of the restart is likely linked to…
China’s central bank pushes to bolster foreign investment in bonds
This move to strengthen the RMB’s global standing aligns with…
The PBoC signals potential monetary tightening
The PBoC is worried that overly loose liquidity conditions have driven yields on government bonds too low. Tightening will likely involve…
Pan Gongsheng seeks to reshape the central bank’s monetary policy
These actions indicate a clear shift in China’s monetary policy strategy, focusing on…