11 Apr 2023

NDRC releases catalogue of encouraged industries for Hengqin Cooperation Zone

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11 Apr 2023

CBIRC announces trial program to convert life insurance policies into long-term care benefit plans

China’s aging population is increasingly putting strain not only on the country’s creaking pension system, but also on the generation of children born during China’s One-Child Policy era. The pressure on young adults to either care for their aging parents on their own or to find alternative solutions to ensure that they receive adequate care risks becoming both an economic liability and a thorny social problem…

11 Apr 2023

Yi Gang highlights PBoC’s monetary and financial policy successes, lays out goals

Yi’s message is straightforward enough: The PBoC is doing a solid job stewarding the economy, and there is little reason for any major course change…

31 Mar 2023

CSRC calls for comment on proposed derivatives trading supervision rules

As the CSRC points out, these measures are largely aimed at getting China’s over-the-counter derivatives market aligned with international standards, as agreed upon by G20 leaders in 2009. Just as was the case with the Futures and Derivatives Law, this piece of complementary regulation serves to ensure the development of a more sophisticated, robust, and secure Chinese derivatives market…

31 Mar 2023

CSRC issues draft of proposed rules to supervise futures firms

These measures, like the Measures for the Supervision of Derivatives Transactions, are complementary regulations that provide more detailed rules to implement the Futures and Derivatives Law, a key piece of legislation to build a more sophisticated capital markets system that aligns with international standards…

30 Mar 2023

CBIRC summons insurers over guaranteed returns

The problem facing China’s insurers is the opposite of the one recently confronted by Silicon Valley Bank (SVB). As US interest rates rose, the value of SVB’s stock of treasury holdings declined, making it increasingly difficult for the lender to manage its liquidity needs…

30 Mar 2023

CBIRC issues final rules on classification of trust companies’ trust business

These regulations are part of the CBIRC’s multi-year efforts to clean up the trust sector, which used to be at the heart of China’s shadow banking system. Following the implementation of new asset management rules in 2018, trust companies’ shadow banking activities – such as capital pooling and illicit channeling – were put under stricter scrutiny and reduced significantly in size…

30 Mar 2023

Shanghai and Shenzhen stock exchanges release guidelines encouraging insurance asset management firms to engage in ABS, REITs businesses

These Guidelines have two major objectives. First, to support the government’s broader efforts to develop the market for infrastructure REITs and guide more private capital into infrastructure investment…

23 Mar 2023

CBIRC abruptly suspends bond quote data feeds

The abruptness and opacity of the move won’t help engender trust in China’s financial regulatory apparatus – something that’s a key goal for policymakers – nor is it an encouraging sign for foreign financial firms operating on the mainland, either…

23 Mar 2023

Hong Kong Stock Connect expands by nearly 40%

This is financial opening with Chinese characteristics…

22 Mar 2023

China creates two new Party-led financial planning commissions

Xi Jinping was clearly unhappy with the ability of the existing institutional structure to deal with mounting financial risks – including property and local government debt on the domestic side, and sanctions on the international side – and wanted the Party more firmly in control. Xi himself is likely to head the CFC, as he does the other four Party commissions…

22 Mar 2023

PBoC cuts RRR by 0.25%

RRR cuts aren’t stimulus. The PBoC uses them to lower bank funding costs and ensure that there is sufficient liquidity in the financial system…

22 Mar 2023

State Council overhaul of financial regulatory system strengthens central oversight of local watchdogs

A key challenge facing regulators at all levels over the next few years will be managing the excessive debt accumulated by local authorities. The problem emerged partly because local financial supervision bureaus let local governments get away with too much…

21 Mar 2023

Yi Gang keeps his job as PBoC governor, Liu Kun stays on as finance minister

This is positive news for the economy. Liu and Yi are competent, professional, and respected. Both possess the political capital needed to drive policy amid a period of government transition, financial-sector restructuring, and economic uncertainty…

21 Mar 2023

PBoC emphasizes need to reduce financial sector risk

Policymakers and regulators have done an impressive job cleaning up a chaotic sector that was arguably once the most prominent risk to the economy. Beijing now views this campaign as largely successful – and largely complete…

21 Mar 2023

CBIRC calls for financial firms to “return to their roots”

Over the past five years, regulators have dismantled shadow banking, recapitalized problematic banks, and in general made the financial system far less risky. Recent developments have led us to believe that the next few years will be similarly tumultuous, however the focus on cleaning up the excesses of the system will diminish…

11 Mar 2023

Two Sessions reports highlight need to control financial risk

Policymakers and regulators have done a bang-up job cleaning up a chaotic sector that was arguably once the most prominent risk to the economy. The objectives in the Two Sessions reports are largely aimed at tying up that campaign…

10 Mar 2023

Financial regulators likely to see big pay cuts in overhaul of regulatory system

These salary cuts – if they happen – are more the consequence of the administrative overhaul than anything, but they also fit nicely into Xi Jinping’s narrative of Common Prosperity and an ongoing campaign to control oversized pay packets in the financial sector…

10 Mar 2023

Chicago Mercantile Exchange to launch USD/CNH options in April

This is a boost for RMB internationalization, no doubt. CME is the world’s largest regulated FX marketplace and gaining its blessing will boost the attractiveness of holding and trading CNH. But, RMB’s internationalization is a marathon, not a sprint…

10 Mar 2023

State Council to overhaul financial regulatory system

We expect the reforms will change the way Beijing approaches financial regulation, concentrating prudential supervision with the PBOC while building a new, robust agency focused on supervising the conduct of all financial institutions outside of the securities sector…

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