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…
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…
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…
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…
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…
CBIRC issues guidelines to boost AMC’s role in cleaning up small banks
But small banks are where the problems lie
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…
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…
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…
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…
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…
CBIRC issues revisd 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…
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…
Wang Liang appointed president of China Merchants Bank
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CSRC revises rules on supervision of mutual fund managers
China’s mutual fund market has seen tremendous growth over the past few years — assets under management amounted to RMB 26 trillion in the first quarter of 2022, nearly double the figure at the end of 2018. With new mutual fund managers and investors entering the market as regulators encourage competition, supervision needs to keep pace to ensure investors’ interests are protected and that the industry develops in an orderly manner that minimizes risks and the opportunity for malfeasance…
CSRC pledges more support for companies hit by pandemic to tap capital markets
The ongoing, draconian lockdown measures in China’s primary financial hub have central authorities concerned about the health of the nation’s listed companies. The CSRC’s measures to ease administrative and regulatory burdens on virus-hit industries are yet another effort by central authorities to prop up the economy amid a punishing epidemic prevention and control regime…
CCDI investigates head of PBoC monetary policy department for corruption
Sun is one of the biggest heads to roll since the CCDI launched an inspection of 25 financial regulatory agencies, state-owned banks, insurers, and state-owned asset management companies (“bad banks”) in September. The campaign took a while to get rolling, but more than 40 officials have since been probed or penalized – including 17 in April alone…
May foreign financial institution approvals and specific financial opening developments
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NDRC and MofCOM expand the Catalogue of Industries Encouraging Foreign Investment
As China continues to move its economy up the value chain, high-end manufacturing and production-oriented services will continue to be a priority for foreign investment, as will China’s generally less developed western and northeast regions. The 2022 catalogue expansion shows that China still has an appetite for FDI especially when it dovetails with major national development strategies…
SAFE to launch more derivative instruments for forex market
Policymakers need to make China’s forex market a lot more sophisticated if they want to internationalize the RMB. Offering a greater number of derivative instruments is a move in the right direction and brings China more into line with other major forex markets…