Sector report on China 16.08.2021

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Financial Authorities Declarations

  • The CSRC approved IPO !

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 A-shares market:

Beijing Caishikou Department Store Co., Ltd and Zhengzhou Qianweiyangchu Food Co., Ltd

  • The CSRC approved more foreign firm purchasing of Chinese Joint-Venture firm !

More and more Foreign-invested financial institutions enter in the Chinese securities sectors as new rules supporting greater opening up of the sector.

J.P. Morgan announced that the China Securities Regulatory Commission (CSRC) approved the purchasing of J.P. Morgan Securities (China) Company Limited making it the first foreign firm owning a securities JV firm.

« China represents one of the largest opportunities in the world for many of our clients and for JPMorgan […] Our scale and global capabilities give us a unique ability to help Chinese companies grow internationally and also support global investors as they expand into China’s maturing capital markets. » said Jamie DIMON, Chairman and CEO of JPMorgan Chase.

The CSRC also accepted the license application of Standard Chartered Hong Kong to establish a brokerage in the Chinese mainland.

 

Central Bank Operations and declarations

Date

Operations Maturity Amount

Interest rate

August 9 Reverse Repo 7-days 10 Billion Yuan 2.2%
August 10 Reverse Repo 7-days 10 Billion Yuan 2.2%
August 11 Reverse Repo 7-days 10 Billion Yuan 2.2%
August 12 Reverse Repo 7-days 10 Billion Yuan 2.2%
August 16 Reverse Repo 7-days 10 Billion Yuan 2.2%
MLF 1-year 600 Billion Yuan 2.95%

 

  • No changes in the PBOC monetary policy report: “Prudent and stable policy”

The PBOC declared maintain its current monetary policy focus on stability and support for real economy. Consequently, the PBOC clearly reaffirms that its will avoids a flood-like monetary policy.

“The bank will coordinate macroeconomic policies for 2021 and 2022, boost high-quality development with moderate monetary growth, and support the continuous recovery of small and medium-sized firms as well as industries in difficulties,” according to the quarterly report on monetary policy.

The report also called to strengthen RMB flexibility, stabilize market expectations and improve macro-prudential management.

  • PBOC tests new rules for non-financial corporate debt issuance.

The People’s Bank of China (PBOC) decided as a pilot test, to remove the credit rating requirements for the issuance of non-financial corporate debt instruments (Article 9 of the Administrative Measures for Debt Financing Instruments of Non-Financial Enterprises in the Interbank Bond Market) in order to motivate markets entities to use external ratings to support the current market-oriented reform.

However, the issuance of others corporate debt instruments are still subjected to the Article 9 !

  • PBOC Data on Real Estate Market
Real Estate Market July 2021 Units  
New home prices in Tier 1 Cities* +0.4% mom +6% yoy
Resold Houses prices in Tier 1 Cities* +0.4%
New home prices in Tier 2 Cities +0.4% mom +4.7% yoy
New home prices in Tier 3 Cities +0.4% mom +3.3% yoy
Outstanding of Property loans 50.78 Trillion Yuan +9.5% yoy
property development climate index 100.98 points
*Beijing. Shanghai. Shenzhen and Guangzhou

 

  • PBOC and China Banking and Insurance Regulatory Commission on Banking and Insurance sector
Insurance Sector H1 2021 Units
 Premium Income 2.7 Trillion Yuan
— growth +4.2% yoy
Combined Assets 24 Trillion Yuan
— growth +7.4% yoy
Banking Sector H1 2021 Units
Local and Foreign Currency assets 336 Trillion Yuan
— growth +8.6% yoy
Commercial Bank Cmb Profit 1.1 Trillion Yuan
— growth +11.1% yoy
Non-Performing Loan ratio 1.76%
— growth -0.05 pp yoy

 

Government Declarations

  • Chinese Government will builf carbon-pools areas in Shaanxi.

The Chinese Government and the Shaanxi Province Government are aiming to establish a carbon-pool pilot zones of 74 7000 hectares by 2023. The Shaanxi Province aims to build 70 carbon-pool areas in different landscapes such as forests, grasslands, wetlands etc … the main goal of these carbon-pools is to naturally absorb 7.63 Million tonnes of CO2.

 

Data published

  July 2021 Units
New Yuan denominated loans 1.08 Trillion Yuan
— growth +90.5 Bln yoy
M2 230.22 Trillion Yuan
— growth +8.3% yoy
M1 62.04 Trillion Yuan
— growth +4.9% yoy
M0 8.47 Trillion Yuan
— growth +6.1% yoy
Retail Sales 3.49 Trillion Yuan
— growth +8.5% yoy
— growth from 2019 +7.2% over two years
New urban jobs created 8.22 Million jobs
% of the Year Target 74.7%
Unemployment rate in urban area 5.1%
— growth +0.1 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, General Administration of Customs

 

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