06 Jul 2022

Xi, Lee tie Hong Kong’s future to mainland’s development

While primarily rhetorical rather than policy oriented, the speeches of Xi and Lee suggest that both the central government and local Hong Kong leaders will look to enhance economic synergies between the mainland and Hong Kong…

28 Jun 2022

Goldman Sachs-ICBC wealth management JV gets go-ahead to start operations

There’s no denying that Chinese policymakers want more savings flowing away from property investments and vanilla bank deposits and into capital markets. There’s also no denying that the world’s preeminent wealth management know-how is located outside of China…

28 Jun 2022

PBoC issues measures to support cross-border ecommerce settlement in RMB

China has been pushing hard to develop cross-border ecommerce and settlement services will be a key part in determining its success. These changes will be welcomed particularly by online merchants hit by the recent supply chain disruptions, but what these traders really need is a return to normal business operations and an end to the uncertainty caused by Beijing’s zero-Covid policy…

24 Jun 2022

Xi chairs Politburo meeting on financial sector discipline inspection

Xi wants anti-corruption to become less “course corrections through periodic crackdowns,” and more threaded into the very fabric of financial sector operations. Even with the economy faltering

24 Jun 2022

State Council unveils plan for GBA integration through Nansha

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24 Jun 2022

Banks bullish on GBA prospects

While the development of the GBA has been slowed substantially, first by civil unrest in Hong Kong and then by COVID-19-related restrictions on the movement of people and goods, financial institutions remain optimistic about their prospects in the region. It’s worth remembering that the GBA initiative bears the personal imprimatur of Xi Jinping and that it’s likely to remain a major policy priority for the foreseeable future…

22 Jun 2022

CSRC denies warning foreign banks on executive pay

Our guess is that the CSRC did meet foreign bank executives to brief them on the new guidelines and the executives then interpreted this as the CSRC intervening in internal decisions on pay, fearing they may be targeted to make some kind of contribution to support Common Prosperity. This turn of events illustrates just how jittery foreign companies have become about China’s unpredictable regulatory and business environment…

16 Jun 2022

Shanghai Stock Exchange releases development plan for 2021-2025

The SSE’s plans for the coming years are, not surprisingly, aligned with the development central policymakers want to see in China’s capital markets. Beijing’s overarching goal is to drive more of Chinese citizens’ savings into stocks and bonds and away from simple bank deposits and real estate…

16 Jun 2022

Mainland, Hong Kong regulators agree to allow ETF trading via Stock Connect

Recent months have seen a spate of activity related to the two-way opening of China’s capital markets. On December 17, the CSRC also proposed expanding the Shanghai-London Stock Connect to include markets in Switzerland, Germany, and Shenzhen…

13 Jun 2022

CBIRC issues green finance/ESG guidelines for banks and insurers

These guidelines are a big step forward for green finance and ESG disclosure in China…

13 Jun 2022

PBoC to expand industries covered in banks’ climate risk stress tests

The climate risk stress test aims to get banks accustomed to integrating climate considerations into all their operations, including lending. It is not intended to limit banks’ exposure to these sectors – at least not for now – especially when regulators want banks to ramp up lending to drive China’s economic recovery…

13 Jun 2022

CBIRC releases five-year plan for development of insurance standards

As is often the case with long-range plans, the CBIRC’s FYP on insurance standardization provides more of a big picture overview and broad objectives and contains few details. However, it does shed light on policymakers’ intent to improve the level of sophistication in the insurance industry partly in order to bolster other major policy objectives such as rural revitalization, sci-tech development, supply-side structural reform, and the development of a third-pillar pension industry…

10 Jun 2022

CBIRC issues guidelines to boost AMC’s role in cleaning up small banks

But small banks are where the problems lie

08 Jun 2022

PBoC holds video conference on implementation of economic support measures

The government, and the PBoC, are under pressure to show they are taking action to support an economy that likely contracted in the second quarter of 2022, mainly as a result of the zero-COVID policy. The PBoC needs to get the message out to banks that monetary policy decisions and measures set by the State Council must be implemented, although the most recent ones are mainly an expansion, extension, and doubling-down on actions that are already being taken…

08 Jun 2022

SAFE, PBoC expect RMB stabilization

This isn’t bravado. Regulators are genuinely more comfortable with financial outflows and RMB volatility than they once were. That’s largely due to the fact that, if the RMB is ever to become an international currency, financial investors need to be able to trust that they can move their money in and out of China freely…

08 Jun 2022

CBIRC releases support measures for pandemic-hit sectors

Implementation of these measures will provide some support for pandemic-hit businesses to survive, although it might also be storing up problems for banks further down the road. That said, for businesses to genuinely prosper this year and beyond, they will need larger stimulus measures in the short term and ultimately, an environment free of pandemic disruption…

30 May 2022

Politburo meeting pledges economic support measures

As China continues to deploy stringent lockdown measures to contain the Omicron variant of COVID-19, hopes for achieving the 5.5% growth target put forward in March have all but vanished. Even so, policymakers remain reluctant to resort to broad-based stimulus and are instead looking for ways to support beleaguered industries and businesses at the margins…

30 May 2022

John Lee appointed as the next Chief Executive of Hong Kong

We can expect that under John Lee, the Hong Kong government will continue to push for further economic integration with mainland China. However, the change in administration in Hong Kong will probably not have a major impact on the broader development of the GBA, since much of the driving force behind GBA integration is coming from the central government and Guangdong provincial government rather than from the Hong Kong special administrative region…

30 May 2022

CBIRC issues revised rules on entrusted investment of insurance funds

These measures are part of the CBIRC’s long, slow slog to overhaul its regulatory regime, improve oversight and risk management, and for the insurance sector specifically, take measures that will help companies increase the return on the assets they invest and consequently the return they offer policyholders. As the government increasingly looks to the industry as a vehicle to invest the savings of individuals for the long-term, it has been gradually relaxing controls on the types of assets insurers can invest in and opening investment to specialized asset managers…  

30 May 2022

CBIRC allows insurance funds to invest in broader range of financial products

The CBIRC has been gradually relaxing the type of assets insurance funds are allowed to invest in. Previously restricted to investments directly related to the insurance industry, long-standing constraints on investment have hampered the efficient utilization of funds and the industry’s growth…

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