Sector Report on China 26.07.2021

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Financial Authorities Declarations

  • Flash news

-The State Administration for Market Regulation (SAMR) talks with Tencent Holding and affiliated companies ordering them to renounce exclusive rights to music labels to restore market competition. The group was fined 500 000 Yuan.

-The National Development and Reform Commission (NDRC)  and the National Food and Strategic Reserves Administration will release another batch of national reserves of 30000 tonnes of copper, 90000 aluminum and 50000 zinc.

-The Shanghai Stock Exchange will establish new measures supporting th high-quality development of the STAR market while increasing supports for technological firms. The measures include a tighten requirements to enter the market and quickens information disclosure.

-The State Administration of Foreign Exchange (SAFE) indicated that chinese banks deposits in foreign currencies exceed 1 trillion USD increasing 129.7 Billion USD in H1. WANG Chunying, deputy director and spokesperson of the State Administration of Foreign Exchange, attributed this increase to the good performance of international trade generating a trade surplus.

  • The CSRC approved IPO !

The China Securities Regulatory Commission. (CSRC) approved IPO on STAR market of Kunshan GuoLi Electronic Technology Co., Ltd. and Wayz Intelligent Manufacturing Technology Co., Ltd.Moreover, CSRC give green light to IPO of Keystone Technology Co., Ltd., Beijing ZEHO Waterfront Ecological Environment Treatment Co., Ltd. and China Railway Special Cargo Services Co., Ltd. These stocks will be listed on the A-Share markets In addition, the CSRC approved IPO on ChiNext market in Shenzhen: Jinsanjiang (Zhaoqing) silicon materials Co., Ltd., Shenzhen Xinhao Photoelectricity Technology Co., Ltd., Zhang Xiaoquan Inc., Zhejiang Huilong New Materials Co., Ltd. and GUOMAI Culture & Media Co., Ltd.

Central Bank Operations and declarations

Date Operations Maturity Amount Interest rate
July 21 Reverse Repo 7-days 10 Billion Yuan 2.2%
July 22 Reverse Repo 7-days 10 Billion Yuan 2.2%
July 23 Reverse Repo 7-days 30 Billion Yuan 2.2%

The People Bank of China (PBOC) and the National Interbank Funding Center (NIFC) declared that the 1-year Loan Prime Rate (LPR) and the 5-years LPR still unchanged for 15 consecutive months respectively at 3.85% and 4.65%.

  • PBOC data on Bonds Markets !
  June 2021 Units
Bonds Issuance 4.9 Trillion Yuan
— Treasury Bond 476.41 Billion Yuan
— Local Gvt 794.87 Billion Yuan
— Financial Bonds 906.71 Billion Yuan
— Corportate Credit bond 1.15 Trillion Yuan
— Credit asset backed bonds 31.31 Billion Yuan
Outstanding Bonds in custody 123.6 Trillion Yuan

 

  • China Banking and Insurance Regulatory Commission data on Banking and Insurance Institutions
  June 2021 Units
Total Assets in Banking 328.8 Trillion Yuan
— growth +9.2% yoy
Non-Performing loans 3.5 Trillion Yuan
Bad-Loan ratio 1.86%
— growth -0.08 pp ytd
Total Assets in Insurance 24.8 Trillion Yuan
— growth +12.7% yoy

 

Government Declarations

  • Chinese authorities are focusing on Digital Economy development !

The Ministry of Commerce (MOC) and others government authorities released a guideline focusing on overseas investment and cooperation in the digital economy. The main goals are to integrate Chinese digital economy into world development and supply chain. International cooperation is supported through incitation to deploy overseas R&D centers and cooperation with foreign firms in key fields as 5G, Big Data, AI, blockchain etc.

 

  • Chinese Government will enhance buisness environment !

Chinese Government issued a guideline to streamline administrative procedures and services in order to enhance business environment. On demand from market entities, the guideline pledge a greater market-oriented business environment by controlling monopolistic behaviors or unfair practices, shorten negative list and ease approval to lift barriers to entry.

The document is also focused on improvements of intellectual and property rights protection by enhancing control and sanction of infringement. On international trade, the guideline indicated that negative lists for foreign investments will be shortened while supporting high-degree of international standards.

Data published

 

  H1 2021 Units
Fiscal Revenue 11.7 Trillion Yuan
— growth +21.8% yoy
— growth from 2019 +8.6% over 2 year
Fiscal Expenditute 12.17 Trillion Yuan
— growth +4.5% yoy
FDI 607.8 Billion Yuan
— growth +28.7% yoy
Non-Financial ODI 348.8 Billion Yuan
— growth -3.7% yoy

Sources : Ministry of Finance, People’s Bank of China and the State Administration of Foreign Exchange, National Bureau of Statistics, Ministry of Commerce, Ministry of Finance,

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