Sector Report on China 09.08.2021

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Financial Authorities Declarations

  • Flash news

– On August 5, the thousandth firm was listed on the Shenzhen ChiNext board. The ChiNext board represents 22.55% of the total listed firms on the chinese A-shares market while representing 15.86% of the Total Chinese firm’s market value with a valuation standing 13.55 trillion Yuan.

– The State Administration for Market Regulation announced a series of investigations against fertilizer producers and distributors as suspicions of price gouging was registered.

-The State Administration for Market Regulation also expanded the list of illegal and dishonest market behaviors in Food, Medecine and Special Equipment sectors. As these domains are related to people’s health and safety, expansion of the list will improve quality of products by tightening supervision and sanctions.

  • The CSRC approved IPO and establishment of foreign wholly owned firm !

The China Securities Regulatory Commission. (CSRC) approved IPO on STAR market of Sichuan Huiyu Pharmaceutical Co., Ltd., Shanghai Yizhong Pharmaceutical Co., Ltd., Neway CNC Equipment (Suzhou) Co., Ltd. and Guizhou Zhenhua E-chem Inc. In addition, the CSRC approved IPO on ChiNext market in Shenzhen: HHC Changzhou Corp., Zhangjiagang Haiguo New Energy Equipment Manufacturing Co., Ltd., Rumere Co., Ltd. and Hangzhou Wensli Silk Culture Co., Ltd.

The CSRC also approved the establishment of a new fund management firm wholly owned by foreign investors. FIL Asia Holdings Pte Ltd invests in this new firm registered in Shanghai with a capital of 30 million USD. The firm is allowed to conduct management of publicly offered funds, fund sales and private equity asset management. Its activities should be in compliance with Chinese laws and regulations in financial and cybersecurity domain while improvement of compliance management of cross-border flow and investors personal data are required.

Central Bank Operations and declarations

Date Operations Maturity Amount Interest rate
August 2 Reverse Repo 7-days 10 Billion Yuan 2.2%
August 3 Reverse Repo 7-days 10 Billion Yuan 2.2%
August 4 Reverse Repo 7-days 10 Billion Yuan 2.2%
August 5 Reverse Repo 7-days 10 Billion Yuan 2.2%
August 6 Reverse Repo 7-days 10 Billion Yuan 2.2%

JULY PBOC Operations Synthesis

July 2021 MLF 1-year 100 Billion Yuan 2.95%
MLF outstanding 5.1 Trillion Yuan
Standard lending facility 232 Million

 

Government Declarations

  • Chinese Government support credit ratings !

The People’s Bank of China, the National Development and Reform Commission, the Ministry of Finance, the China Banking and Insurance Regulatory Commission, and the China Securities Regulatory Commission jointly released a circular promoting development of credit rating businesses in bond market in a move to improve the quality of market. The document requires the financial institutions to establish and employ a rating methodology systems y end of 2022. The circular also focusses on information disclosure, internal control mechanisms and independence of the ratings system.

China will optimize the rating ecology and create a fair and just market environment while strengthening supervision on credit rating agencies” said the circular.

Data published

H1 2021

 

Units

Service Trade 2.38 Trillion Yuan
— growth +6.7% yoy
— growth from 2019 -9% over 2 years
Exports 1.13 Trillion Yuan
— growth +23.6% yoy
— growth from 2019 +20.9% over 2 years
Imports 1.25 Trillion Yuan
— growth -5% yoy
— growth from 2019 -25.6% over 2 years
Deficit in Service Trade 125.46 Billion Yuan
— growth -281.25 Trln yoy
Total Trade 21.34 Trillion Yuan
— growth +24.5% yoy
— growth from 2019 +22.3% over 2 years
Exports +24.5% yoy
Imports +24.8% yoy
Trade Surplus 1.98 Trillion Yuan
— growth +24.8% yoy

July 2021

 

Units

Foreign Exchange Reserves 3.2359 Trillion USD
— growth in % +21.9 Bln $ mom
— growth in volume +0.68% mom
CPI +1% yoy
PPI +9% 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, General Administration of Customs

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