Sector Report on China 02.08.2021

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Financial Authorities Declarations

  • Flash news

-Shanghai city established the New Bund Global Economic Organization Cluster for the Pudong New Area ! The main objective is to develop the Pudong Area to attract more and more international entities to support high-development. YANG Chao, deputy head of the Pudong New Area, said “The New Bund Global Economic Organization Cluster will gather more corporate headquarters, international organizations and institutions with global influence, helping Pudong become the prime option for many international organizations and improving Shanghai’s global competitiveness.”

-The trading volume under the Bond Connect Program hit 587.6 Billion Yuan at the end of July. The average daily turnover stand at 26.7 Billion Yuan. Since the beginnings of 2021, the trading volume reached 3.72 Trillion Yuan, 2673 approved investors from 34 countries.

  • 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 China Telecom that 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 26 Reverse Repo 7-days 10 Billion Yuan 2.2%
July 27 Reverse Repo 7-days 10 Billion Yuan 2.2%
July 30 Reverse Repo 7-days 30 Billion Yuan 2.2%

 The People’s Bank of China (PBOC) conducted a 5 Billion Yuan Central Banks Bills Swap (CBS) operation on July 29. The interest rate is fixed at 0.01% due on October 29.

  • PBOC data on Real Estate Market
  H1 2021 Units
Loan to Property Sector 50.78 Trillion Yuan
— growth + 9.5% yoy
Loans for Individual home purchase 36.58 Trillion Yuan
— growth + 13% yoy
— growth -1.6% ytd

The Ministry of Housing and urban-rural development conducted regulatory talk with officials of five cities (Yinchuan, Xuzhou, Jinhua, Quanzhou, and Huizhou) urging to stabilize property markets as local home prices rapidly increase.

Government Declarations

  • Chinese Government regulate Food Delivery sector to better protect workers.

Chinese authorities, including the State Administration for Market Regulation, the Cyberspace Administration of China, and the National Development and Reform Commission, issued a guideline specifying and protecting to rights and interests of food delivery workers. The document specifies the minimum wages, the deadlines and the social insurance among others rule.

In addition, questions relative to traffic safety and circulation of food couriers are discussed supporting innovation in the domain.

  • Chinese Government adjusts exports tariffs on steel products.

The Customs Tariff Commission of the State Council plans to adjust exports tariffs on some steel products in a move to support improvements and transformation of Steel Industry.

Starting August 1, export tariffs on high-purity pig iron will increase from 15% to 20% and tariffs on ferrochrome will up from 20% to 40%.

In addition, the Ministry of Finance (MOF) and the State Taxation Administration (STA) declared remove export tax rebates on 23 types of steel products from August 1.

The General Administration of Customs (GAC) indicates measures to reduct customs clearance time in a move to optimize business environment of ports to support cross-border trade.

  • Beginnings of a New phase in China opening up process : the Services sector Liberalization !

The Ministry of Commerce (MOC) released the first negative list for cross-border trade in services sector in the Hainan Province. The list will be effective on August 26. The list specifies to overseas investors 70 special management measures in 11 categories providing a wide access to foreign investors in the services sectors such as transport, financial services etc … The main objective is to ensure an « equal market access » for domestic and overseas players

For areas not included in the list, domestic and overseas services providers shall have a level playing field and enjoy equal market access in Hainan free trade port”, the statement said.

The move represents a new step the process of opening as its is a new phase of Liberalization more focused on services sectors while promoting international standards. In the financial sector, the list allows foreign individuals investors to apply for securities and futures trading accounts and qualifications to provide consulting services on securities and futures investments!

The Hainan Free Port is here a pilot test and implementation of similar services negative lists in all Free Trade Zone across the country, is currently discussed by authorities.

Data published

 

  H1 2021 Units
Industrial Profits 4.22 Trillion Yuan
— growth + 66.9% yoy
— growth + 45.5% over 2 years
SOE Profits 2.39 Trillion Yuan
— growth + 110% yoy
Local Gvt new bonds Issuance 3.34 Trillion Yuan
— special bonds 1.73 Trillion Yuan
— general bonds 1.61 Trillion Yuan
Outstanding of local Gvt debt 27.58 Trillion Yuan
  July 2021 Units
Manufacturing PMI 50.5 50 point basis
— growth -0.5 pp mom
Non Manufacturing PMI 53.3 50 point basis
— growth -0.2 pp mom
Services Sector 52.5 50 point basis
— growth +0.2 pp mom

 

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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