Quick Take: Government to List Firms Banned From Investing in Financial Sector
As China continues its campaign to rein in financial risks, the government is planning to draw up a “negative list” that will name companies deemed too risky to be allowed to invest in the financial sector.
The State Council and the State-owned Assets Supervision and Administration Commission (SASAC) laid out at a meeting on Tuesday the principles and the criteria for inclusion on the list, which will be compiled by the end of the year, according to a report in the official China Securities Journal.
Among those prohibited from making new investments in the financial sector will be companies whose main businesses are unprofitable, those with high asset-to-liability ratios, or those who have existing financial operations that are high-risk or whose role in supporting the company's core activities is unclear.
Reducing financial risks, and making sure the financial sector serves the real economy rather than feeding speculation in areas that don't support real activity, are top government priorities. Policymakers are also trying to curb investment by non-financial companies in the financial sector because of the abuses that have often resulted from their involvement.
The Tuesday meeting also called for controlling and lowering risk in a range of other areas such as debt, the environment, and the overseas operations of Chinese companies, the newspaper reported. Management of public private partnership (PPP) projects, also needs to be strengthened, the meeting agreed. The Ministry of Finance has heightened scrutiny of PPP, where private companies are invited to invest in infrastructure projects, amid evidence that many local governments are using them as vehicles to take on additional off-budget borrowing.
Contact reporter Ke Baili (firstname.lastname@example.org).
Aug 04 07:22 PM
Aug 03 08:05 PM
Aug 03 05:58 PM
Aug 03 03:58 PM
Aug 27 04:09 PM
Aug 02 05:39 PM
Aug 02 03:39 PM
Jul 30 07:13 PM
Jul 30 06:26 PM
Jul 30 03:58 PM
Jul 29 08:23 PM
Jul 29 07:03 PM
Jul 29 04:45 PM
Jul 28 06:49 PM
Jul 28 05:54 PM
- 1Opinion: The Who, What and Why of China’s Regulatory Campaign
- 2In Depth: The Fall of China’s Last Bitcoin Mining Haven
- 3In Depth: China’s Generation Z Inspires Homegrown Beverage-Makers to Take On Coca-Cola
- 4Hong Kong’s Tracker Fund ETF Closes Door to U.S. Investors
- 5 Weekend Long Read: Deciphering China’s Housing Conundrum
- 1Power To The People: Pintec Serves A Booming Consumer Class
- 2Largest hotel group in Europe accepts UnionPay
- 3UnionPay mobile QuickPass debuts in Hong Kong
- 4UnionPay International launches premium catering privilege U Dining Collection
- 5UnionPay International’s U Plan has covered over 1600 stores overseas