AmEx begins bank card clearing operations in China
It’s been a lengthy wait, but the start of AmEx’s bank card clearing operations is another indication of China’s commitment to opening its financial sector to foreign participation, as it promised in November 2017. Previously, China had resisted opening its payments market to foreign players, despite …
State Council approves rules to step up oversight of financial holding companies
There have been multiple scandals in recent years related to misconduct and shady dealings by shareholders in financial institutions. Many built up stakes in companies in different parts of the financial sector, such as insurance, wealth management, and banking, and used those shareholdings to …
PBoC reiterates ‘normal’ monetary policy stance
China’s financial sector officials are making the same point at every opportunity – don’t expect a monetary policy stimulus of the kind that other major central banks have taken to support their economies. At the same time, they are keen to emphasize that …
Financial regulators to ease foreign access to domestic bond markets
International investors have been showing increasing interest in China’s bond markets, especially since global bond index providers started including Chinese government and policy bank bonds in their benchmark indices in 2019. China’s early economic recovery from the COVID-19 pandemic and its higher interest rate environment have …
Shenzhen issues regulations for new special economic zone to further improve access for foreign investors
Shenzhen is one of the nine mainland cities included in the GBA integration plan, and is an important connection between the mainland and Hong Kong thanks to its location and economic prosperity. These regulations flesh out the details of the government’s 2019 plan to …
PBoC’s digital currency project gathers momentum
The PSBC works especially closely with small and medium-sized enterprises and small depositors, so its inclusion in the pilot is particularly important in order to …
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 …
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 …
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 …
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 …
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 …
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 …
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 …
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 …
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 …
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 …
Hong Kong insurance chief announces establishment of GBA service center
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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 …
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 …
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 …