China Digest

Economics and policy from China’s newspapers

Wednesday May 10, 2017

Spotlight on insurers’ investments

Insurer’s investment portfolios are under closer scrutiny from the China Insurance Regulatory Commission, with a newly released document signalling tighter supervision to control leverage and asset quality in four areas: large-scale equity holdings; alternative financial products; real estate; and overseas investments.

PBOC’s Zhou offers 8 paths to fund New Silk Roads

The One Belt, One Road project will require development of a “rich and diverse” system of funding, including the connection of different capital markets, financial infrastructure and financial centers, People’s Bank of China Governor Zhou Xiaochuan wrote in the central bank’s China Finance magazine, according to a summary in Finance Sina.

Telecom giant embraces payment innovation

China Unicom has teamed up with Zhima Credit to allow customers with good personal credit scores to use the company’s services first and pay later, signalling a move away from the industry’s typical prepayment model, according to National Business Daily.

China Eco Watch Table 0510-01

Local government debt sales slow

The pace of debt sales by local governments has slowed this year as interest rates rise, with only 17% – or 866.8 billion yuan (US$126 billion) – of the allocated budget reached as of May 9, Sina News reported. Banks bought 80% of the debt, it said. Local governments have been trying to diversify their investment base, it said.

Shanghai exchange in listed-bond push

Increasing the number of listed local government bonds will be one of this year’s main focuses for the Shanghai Stock Exchange, which has set up a special team to work on the project, 21st Century Business Herald reported. Eighty-nine bonds from 18 provinces and with a total face value of 453 billion yuan have already been listed this year, it said.

Brokerage revenues tumbles in April

Net revenue of China’s 28 listed securities firms fell 54% to 4.69 billion yuan in April from the month before, and 25.96% from a year earlier, the Securities Daily reported.

Government seeds VC funds to back innovation

China launched 17.85 billion yuan of venture capital funds, with 80% targeting innovative start-ups and the remainder aimed at growth businesses in emerging industries, Yicai reported.

Bank squeeze on second-home loans

Twelve banks stopped giving mortgages for second homes from April this year, Sina News reported, while all Tier 1 cities have raised interest rates for housing loans as of May 8.

Wuhu locks homeowners in for two years

Homeowners in Wuhu in Anhui province will not be allowed to sell their new or second-hand properties for two years after they receive a real estate license, the Paper reported. The city will also increase land supply and cancel deed tax subsidies, it said.