China Digest

Economics and policy from China’s newspapers

Wednesday July 26, 2017

PBOC to strengthen financial supervision

The People’s Bank of China (PBOC) said it will strictly regulate transactions in financial markets and strengthen internet finance supervision, the Shanghai Securities Journal reported, citing a statement released after a meeting attended by heads of PBOC branches. The central bank said it will improve integrated supervision of important financial institutions, push forward supply-side structural reform and help maintain stable and healthy economic development.

Sichuan plans US$4.4 billion bond issue

Southwest Sichuan Province will issue 30 billion yuan (US$4.44 billion) in local government bonds via open bidding on the Shenzhen Stock Exchange on August 1, the Paper reported. Individual investors can offer to buy the bonds together with institutional investors. Zhejiang Province and Inner Mongolia Autonomous Region first issued government bonds for individual investors on the Shanghai Stock Exchange on July 7, worth 29.9 billion and 35.94 billion yuan respectively.

Xinhua backs moves to rein in property market prices

The state-owned newspaper published an editorial on Tuesday, advocating for the government to make “fine and substantial” adjustments in the property market in order to rein in prices, following the party’s top leadership meeting on the economy on Monday. Xinhua urged better use of city migration data to adjust land and housing supply and also advocated for more transparency in the housing market to assist consumers. The country’s first set of housing rental and transaction regulations is also underway, the report added.

US$4.98 trillion funnelled into ‘real economy’

New research by the National Institute for Finance and Development under Tsinghua University and Zheshang Bank has found more than 70% of the 33.64 trillion yuan (US$4.98 trillion) wealth management industry is being funnelled into the “real economy,” Yicai reported. The remaining 20% is held within the financial system and is mostly used for speculative purposes on arbitrary trades, taking huge risks within the financial system, the report added.

Chongqing tops provincial GDP performance

China’s statistics bureau released its provincial GDP report recently, with Chongqing rising 10.5% for the first six months this year, Sina Finance reported. Guizhou is second at 10.4% while Liaoning, Gansu and Beijing completing the bottom three, rising 2.1%, 5% and 6.8% respectively, the report said.

Wanda Group pulls back US$5.94 billion from 84 malls

Wanda Group, a conglomerate that is also one of China’s leading real estate developers, has pulled 40.1 billion yuan (US$5.94 billion) in registered capital from 84 malls, with the majority of the pull-back in the last two months, Caixin reported. The shares of at least eight malls have been transferred to financial institutions, the report added. The news casts doubt on chairman Wang Jianlin’s claims that the company is focusing on investment opportunities within China, amid news reports that Chinese banks were told to stop funding Wanda’s overseas acquisitions.

JPMF Guangdong buys Triumph Lead Group for US$3.07 billion

One of China’s largest ferrite magnet manufacturers, JPMF Guangdong, has bought Triumph Lead Group, a precision parts manufacturer, for 20.73 billion yuan (US$3.07 billion), the Shanghai Securities Journal reported. The purchase will allow JPMF Guangdong to do a backdoor listing via Triump Lead, the report added.

Cost index indicates needs of the elderly

The Insurance Asset Management Association of China (IAMAC) issued the Sino Life China Senior Living Cost Index (ISLCI) on Tuesday, the first index that details the comprehensive living expenses of the elderly, the Economic Information Daily reported. Cao Deyun, executive vice chairman of the IAMAC, said the index shows changes in the needs of China’s elderly, and it may also help provide future references for pension investment.

ICO projects raise US$388 million in 2017

In the first half of 2017, 65 Initial Coin Offering (ICO) projects raised 2.62 billion yuan, involving over one hundred thousand participants, Caixin reported. ICO works like an initial public offering (IPO) for digital currency, which is often used by startups to bypass the regulated capital raising process required by venture capitalists or banks.

Registration-based IPO system sees progress: CSRC

Information on 80 committee candidates for the China Securities Regulatory Commission (CSRC) was provided for public review, Caixin reported. At least 14 candidates will be rejected from the designated 66 positions, as the securities regulator aims to speed up reforms in the registration-based IPO system, combining a main board and second board issuing committee.