Local government debt gets grading into four risk categories
The most important and market-moving stories from the Chinese-language media
China will categorise local government debt risk into four to allow faster response to provinces falling behind in payment of principal and interest, reported the Shanghai Securities Journal. Debt rated I or II will allow for provincial governments to step in and bail out city or county governments, under central government guidance. As of 2015, local government debt totalled US $2.33 trillion.
Funds outstanding for foreign exchange decreased for the 12th month
October funds outstanding for foreign exchange decreased by 267.9 billion yuan (US$39.12 billion), marking the 12th consecutive monthly fall, although the size of the decline narrowed by 69.7 billion yuan compared to the previous month, according to a Caixin report on Monday night. The data indicates the amount of yuan injected into the market by the People’s Bank of China after purchasing foreign assets. An unnamed analyst from a foreign bank told Caixin that, unlike the foreign exchange reserve which are in dollars, the funds outstanding foreign exchange is calculated in yuan to better reflect the capital flows across the border. The decreasing number shows the need for acquiring overseas assets is still high, the analyst said.
Coal freight price hits ceiling
The rail freight rate for coal was raised the maximum allowed 10%, reported Caixin on Monday evening. The National Development and Reform Commission is ordering stockpiles built to ensure supply, with Qinghuangdao told to store 8 million tons.
Tax collection rose 7.2% in October on year
Tax revenue rose 7.2% in October to US$188.33 billion from the same month last year, the Securities Daily reported, citing the Finance Ministry. Value-added tax revenue jumped 75.6% while business taxes dropped 98.8%, reflecting the change in May when VAT replaced the business tax.
Evergrande plans 6-month lock up on trading in some shares
Evergrande Life will buy and hold some shares for six-months following price fluctuations of as much as 15% over a few days in equities in accounts linked to the company, Caixin reported Monday evening. The move is voluntary, but follows concerns raised by the Shenzhen Stock Exchange about abnormal trading activity in the accounts.
Wuhan city introduces property curbs
Wuhan city will introduce tougher curbs on property speculation, including prohibiting local residents from buying a third residence, reported National Business Daily. Hangzhou city introduced similar measures on November 9.