Home Asie Sector Report on China 20.09.2021

Sector Report on China 20.09.2021

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Financial Authorities Declarations

  • Flash News !

-The National Development and Reform Commission (NDRC) approved 11 Fixed Asset Investment (FAI) projects in August mainly in Transportation and power generation sectors amounting 100.6 Billion Yuan.

-The BRICS New Development Bank (NDB) issued 2 Billion Yuan of Bonds (denominated in Yuan) in the Chinese Interbank Market maturing in 5 years. The outstanding of RMB-deno Bonds of the NDB stood at 17 Billion Yuan. The funds will be used to finance Infrastructure and Sustainable projects in all members states (Brazil, Russia, India, China, and South Africa)

-Exim Bank (Export-Import Bank of China) issued 3 Billion Yuan of bonds to international investors. Bonds will mature in 3-years at 2.7455%. The funds will support the Guangdong-HongKong-Macao Greater Bay Area.

-The National Development and Reform Commission declared that the prices of main raw material (Copper, Aluminum and Zinc) are still high requiring close supervision and metal released from National Reserves to stabilize supply and demand ensuring prices stability.

  • The CSRC approved IPO !

The China Securities Regulatory Commission. (CSRC) approved IPO on the Shanghai STAR market of Liaoning Chengda Biotechnology Co., Ltd. and JEE Technology Co., Ltd.  In addition, the CSRC approved IPO of   Jiangsu Hualan New Pharmaceutical Material Co., Ltd., Shandong Linuo Group Holdings Co., Ltd., Runa Smart Equipment Co., Ltd. and Xinxiang Tuoxin Pharmaceutical Co., Ltd.  on the Shenzhen ChiNext market.

In addition, about 126.6 Billion Yuan of Lock-up shares will be tradable in the next week.

 

  • The Beijing Stock Exchange solicit opinions on trading rules!

The Beijing Stock Exchange (BSI) released investors capital requirements rules. To enter the market, individual investor should hold worth of 500000 Yuan of securities assets whereas there is no threshold (no capital requirements) for institutional investors.

Individual investors eligible for the new bourse should have at least two years of experience in securities investment. Their average daily securities assets should be no less than 500,000 yuan in the 20 trading days before they are allowed to trade on the bourse” according to the CSRC.

Central Bank Operations and declarations

Date

Operations Maturity Amount

Interest rate

September 13 Reverse Repo 7-days 10 Billion Yuan 2.2%
September 17 Reverse Repo 7-days 50 Billion Yuan 2.2%
Reverse Repo 14-days 50 Billion Yuan 2.35%

 

  • A new southbound channel between China and Hong Kong

The People’s Bank of China (PBOC) announced the establishment of a “southbound channel of Bond Connect Program” allowing mainland investors to trade bonds in Hong Kong !

The southbound channel will start on September 24 as the PBOC and the Hong Kong Monetary Authority (HKMA) jointly announced.

The southbound channel will enable mainland institutional investors to invest in the Hong Kong bond market through connection between the mainland and Hong Kong financial infrastructure services institutions” the announcement said.

Note that the Northbound channel allows overseas investor to hold mainland Chinese bonds since 2017. Currently, 1.1 trillion yuan of Chinese bonds was held by overseas investors through northbound channel.

  • Yuan internationalization

The PBOC will expand the used of Renminbi in cross-border transaction to support advance of internationalization of Yuan.

The signing of the Regional Comprehensive Economic Partnership agreement will further boost trade in the Asia-Pacific region, thereby offering more opportunities for using the RMB in trade and investment activities” as  PBOC said.

 

  • PBOC DATA on Real Estate

Real Estate

July 2021

Units

 

New home prices in Tier 1 Cities* +0.3% mom +5.7% yoy
New home prices in Tier 2 Cities +0.2% mom +4.4% yoy
New home prices in Tier 3 Cities +0.3% mom +2.8% yoy
*Beijing. Shanghai. Shenzhen and Guangzhou
 

As end of June 2021

Units

Outstanding of Property Loans 50.78 Trillion Yuan
— Growth +9.5% yoy
Investment in Property Dev +10.9% yoy
— Growth from 2019 +15.9% over 2 years

 

Government Declarations

  • MOC focus on the Europe and China Trade

The Ministry of Commerce (MOC) indicated that since the beginnings of the year, the  Trade volume between China and European Union up 32.4% year-on-year at 700 Billion USD.

ZHAI Qian, an official with the MOC, pointed out that Train freight (about 10000 trips) increased 32% and the strong increase of Investment contributed to this performance (China investment in EU up 86.1% and EU investment in China up 10.9%).

« The economies of China and the EU are highly complementary. In recent years, bilateral economic and trade exchanges have expanded in breadth and depth, and the stability and resilience of industrial and supply chains have increased, » Zhai said.

 

Data Published

 

August 2021

Units

Urban Unemployment Rate 5.1%
— UR 16-24 yrs 15.3%
— UR 25-59 yrs 4.3%
Industrial Value-Added +5.3% yoy
— Growth from 2019 +11.2% over 2 years
Retail Sales of Consumer Goods 3.44 Trillion Yuan
— Growth +2.5% yoy
— Growth from 2019 +3% over 2 years
Net Forex Settlement of Banks 88.44 Billion Yuan
— Purchases by Banks 1.35 Trillion Yuan
— Sales by Banks 1.27 Trillion Yuan

 

Jan-Aug 2021

Units

Fixed-Asset Investment 34.69 Trillion Yuan
— Growth +8.9% yoy
— Growth from 2019 +8.2% over 2 years
Retail Sales of Consumer Goods +18.1% yoy
— Growth from 2019 +8% over 2 years
Net Forex Settlement of Banks 1.03 Trillion Yuan
Non-Financial ODI 459.71 Billion Yuan
— Growth -4.3% yoy
Non-Financial ODI 71.02 Billion USD
— Growth +3.7% yoy
FDI in actual use 758.05 Billion Yuan
— Growth +22.3% yoy
FDI in actual use 113.78 Billion USD

 

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, State-owned Assets Supervision and Administration Commission

 

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