31 Aug 2020

PBoC won’t lower capital adequacy requirements for banks

The PBoC’s reticence to lower bank capital requirements reflects, in part, the fact that China’s banks are well-capitalized. At the end of June, the capital adequacy ratio of China’s banking sector was …

31 Aug 2020

Financial regulators set out recapitalization strategy for smaller banks

The issue of capital replenishment is not a new one – it’s been clear for some time that banks need to beef up their balance sheets to cope with rising nonperforming loans and other bad assets as economic growth slows. In April, 605 of the country’s 4,005 small and medium-sized banks did not …

28 Aug 2020

PBoC won’t expand scope of special purpose vehicle for SME lending

By declining to extend the SPV, the PBoC is sending a signal that business activity has returned to an acceptable level and so it doesn’t think more financial stimulus is warranted to support the economy. That stance is in keeping with Beijing’s broader view that …

28 Aug 2020

JPMorgan faces price tag of RMB 7 billion to buy out Chinese fund management joint venture partner

China has significantly eased restrictions on foreign financial intuitions in the past year, so expect to see more banks follow JPMorgan’s lead in seeking greater control over their China operations. However, as CIFM’s hefty asking …

24 Aug 2020

CBIRC may relax proposed rules tightening classification of banks’ NPLs

In the face of a pandemic, reform can only be pushed so far. With small banks already under pressure to raise fresh capital, loosening the rules will give …

24 Aug 2020

NPC allows Hong Kong and Macau lawyers to practice in nine cities in GBA

This decision is part of the overall development for the GBA and is also part of the service trade agreements between the mainland and Hong Kong and Macau that were revised in 2019. Greater regional integration will mean an increase in cross-border trade and investment, which will …

24 Aug 2020

CBIRC tells 12 life insurers to rectify problems in universal insurance business

The low-interest rate environment in China is causing big problems for insurance companies, as the rate of return on their investments is in many cases lagging the guaranteed interest rates they have offered on their universal insurance policies.  Many insurers have been lowering their settlement rates, but …

24 Aug 2020

Banks tighten rules governing customer use of credit cards

A looser monetary and financial environment in the wake of the COVID-19 pandemic has helped to fuel household debt and asset prices – as individuals have often borrowed to speculate in the stock or real estate markets. What’s more, this most recent rise in consumer debt is coming after the …

24 Aug 2020

CBIRC chairman Guo Shuqing warns of rising bad debts

Guo’s warning about a potential wave of NPLs is no surprise given the slowdown in economic growth, the impact of the COVID-19 pandemic on business activity, and government policies that are forcing banks to …

24 Aug 2020

Government tightens supervision of state-backed finance guarantee companies

Improving access to financing for SMEs and freeing up additional financing for the Three Rural Issues has been a long-standing policy goal of the Chinese leadership – the State Council released its Opinions on the finance guarantee industry back in 2015 – but it has been …

22 Aug 2020

Hong Kong insurance chief announces establishment of GBA service center

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22 Aug 2020

China’s banks boost NPL disposals in first half of 2020, and there’s more to come

China’s banks were already bracing themselves for an increase in NPLs this year, resulting from the medium-term slowdown in economic growth. But the COVID-19 pandemic has severely …

21 Aug 2020

PBoC recapitalizes Huishang Bank

The state has, once again, been forced to step in to recapitalize a regional lender – a development that underscores how unattractive small local banks, even listed ones, are to private investors. Although the recapitalization and the PBoC’s backing should help to shore up market confidence in the bank …

21 Aug 2020

CSRC issues draft rules for forced stock buybacks for IPO fraud

China’s financial regulators are being forced to create a series of regulations and measures to comply with the revised Securities Law, which went into effect on March 1, 2020. The implementation measures for forced stock repurchases is …

11 Aug 2020

CSRC revises bond issuance regulations to implement switch to registration-based system

The old approvals-based system for selling stocks and bonds was outdated and cumbersome, prone to corruption, and badly in need of changing. The equity market has already made the switch to registration-based IPOs and the bond market is now …

10 Aug 2020

CBIRC releases development plan for property insurers

This is the first time the CBIRC has rolled out a blueprint for the development of the property insurance sector, and as such, it is an acknowledgment of the changing nature of the industry. The goal for overall economic growth has switched from …

10 Aug 2020

PBoC steps up reporting requirements for non-bank payment processing companies

As the fintech sector has exploded in China, oversight of these non-bank payment processing companies has been too lax. As in many areas, the central bank is now playing regulatory catchup and wants to …

10 Aug 2020

Publicly traded REITs move a step closer to launch

The CSRC’s release of the guidelines for setting up publicly traded REITs, combined with the earlier NDRC screening rules for REITs, mean that the long march toward the launch of publicly traded REITs is almost at an end. Applications for pilot projects are expected to…

10 Aug 2020

CSRC widens use of administrative reconciliation system to settle more complex investigations

China’s financial regulators are having to update a string of regulations and measures to comply with the new Securities Law which went into effect on March 1, 2020. The revised administrative reconciliation system is one such example. The complexity of securities and futures regulations paired with the limited investigative resources of the CSRC mean that…

05 Aug 2020

PBoC sets up fourth fintech subsidiary

China’s financial regulators have embraced fintech enthusiastically and are promoting its development aggressively, as they see it as a way to increase competition, lower costs, and bring financing to the underserved population – as part of an inclusive finance strategy. The PBoC’s fintech initiatives do not appear to be directly competing with commercial entities, but rather are part of the central bank’s strategy to…

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