Sector Report on China 22.11.2021

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Financial Authorities Declarations

  • Flash News!

– The State Administration for Market Regulation will fine 500 000 Yuan each firms involved in 43 cases of illegal concentration of undertatakings violating the Anti-Monopoly Law. The cases mainly include undeclared mergers and acquisitions of internet companies.

The penalty will help create a transparent and predictable competitive environment for market entities and urge enterprises to enhance their compliance awareness and abilities” the Administration said.

-For the first week of trading at the  Beijing Stock Exchange (BSI), a total of 340 000 new qualified accounts was registered bringing the total to 4.37 Million accounts. The 81 stocks  saw a total turnover of 21.2 Billion Yuan.

  • The CSRC approved IPO !

The China Securities Regulatory Commission. (CSRC) approved IPO of Jiujiang Shanshui Technology Co., Ltd., Shanghai Universal Biotech Co., Ltd. and Hubei Biocause Heilen Pharmaceutical Co., Ltd. will on the Shenzhen Stock Exchange’s ChiNext            nd the IPO of Triductor Technology (Suzhou) Inc., BeiGene, Ltd., and Hoymiles Power Electronics Inc. on the Shanghai STAR market.

 

Central Bank Operations and declarations

Date Operations Maturity Amount Interest rate
November 15 MLF 1-year 1 Trillion Yuan 2.95%
  Reverse Repo 7-days 10 Billion Yuan 2.2%
November 16 Reverse Repo 7-days 50 Billion Yuan 2.2%
November 17 Reverse Repo 7-days 50 Billion Yuan 2.2%
November 18 Reverse Repo 7-days 50 Billion Yuan 2.2%
November 19 Reverse Repo 7-days 50 Billion Yuan 2.2%
November 22 Reverse Repo 7-days 50 Billion Yuan 2.2%

 

The 1-year Loan Prime Rate (LPR) stay unchanged at 3.85% like the 5-years LPR at 4.65%.

 

  • PBOC and BoE extended bilateral currency swap agreement !

Premier LI Keqiang and the State Council released a new financial tool targeted a re-lending program with a quota of 200 Billion Yuan to support “clean and efficient use of coal” and improve the green and low-carbon development.

« At present, coal is the energy source that we can truly rely on ourselves for supply. It will remain so for quite a long time to come, and this bears on China’s development […] That said, we need to pursue a transformation in the path of development. We cannot stay on the path of energy-intensive development. » Premier LI said.

He also indicated the willingness to accelerate the pace of energy structure optimization to support green transition to address pollution and climate change issues related to fossil-fuel energy. However, coal is still the main source of energy for China and brutal change in energy mix are not required as mainy social and economic sphere will be strongly affected (in term of production and people well-being. In this context a financial program will be established by the People’s Bank of China to support project related in proper coal use and mining. The loan interest rates (of commercial banks) should follow the PBOC ‘s benchmark lending rates.

  • The China Banking and Insurance Regulatory Commission data
  Jan-Sept 2021 Units
Commercial Banks net profits 1.7 Trillion Yuan
–Growth +11.5% yoy
Outstanding performing loans 159.4 Trillion Yuan
Balance of non-performing loans 2.8 Trillion Yuan
–Growth +42.7 Bln Yuan from June
NonPerforming Loans  ratio 1.75%  
— Growth -0.01 pp from June

 

  Jan-Oct 2021 Units
New bank loans 17.9 Trillion Yuans
–Growth +78.3 Bln yoy

 

Government Declarations

  • Hainan 2021-2025 Development Plan !

The Hainan Province development plan 2021-2025 will focus on 3 sectors to become an international tourism and consumption destinations : Duty-Free Shopping, international Medical Care and International Education

The Island is already a Free-Port (Haikon city) and expected that Tourism Industry contribute to 17.8% of the Economic growth by 2025.

The Hainan Boao Lecheng International Medical Tourism Pilot Zone will be introduce to support research on stem cell, immune cell and gene therapy and others advanced biomedical techniques. By 2025, the Zone is expected to welcome 500 000 people to receive medical service.

On Education expectations, Oversears colleges and institutional are encouraged to settle on the Hainan Island, expecting to attract 10 000 students by 2025. In addition, 15 international high schools and 3 overseas high-level universities in Science, Agricultura and Medicine will be establish.

  • Data published !
  October 2021 Units
Crude Steel Output 71.58 Millions tonnes
–Growth -23.3% yoy
Natural Gas output 16.5 Billion cubic meter
–Growth +0.5 % mom
Natural gas Imports +24.5% mom
Crude Oil output 16.83 Millions tonnes
–Growth +3% yoy
–Growth from 2019 +4.6% over 2 years
Oil Imports 37.8 Millions tonnes
–Growth -11.2% yoy

 

  Jan-Oct 2021 Units
Fiscal Revenue 18.15 Trillions Yuan
–Growth +14.5 % yoy
Tax revenue 15.65 Trillions Yuan
–Growth +15.9 % yoy
VAT revenue 5.54 Trillions Yuan
–Growth +15.1 % yoy
For Central Gvt 8.47 Trillions Yuan
–Growth +15 % yoy
For Local Gvt 9.69 Trillions Yuan
–Growth +14.1% yoy
Fiscal Spendings 19.4 Trillions Yuan
–Growth +2.4% yoy
for Educations +4.8% yoy
for Health and Medical Care +2.3% 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, State-owned Assets Supervision and Administration Commission

 

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