CX Daily: China's Bank Regulators Try to Defuse Bank Run Jitters
Financial risk /
Top bank regulators move to defuse jitters after two bank runs
Officials of the China Banking and Insurance Regulatory Commission (CBIRC) have addressed bank runs involving Yingkou Coastal Bank in northeastern Liaoning province and Yichuan Rural Bank in Luoyang, Henan province, in recent weeks, pledging to contain liquidity risks among the country’s thousands of smaller banks.
The regulators attributed the runs to false online rumors and sought to restore confidence in the lenders. The world’s largest banking system has been rattled this year not only by those two incidents but also by earlier crises at three other banks. China has about 4,500 banks, most of which are small and medium-sized institutions.
The remarks come amid reports that China’s local governments are helping bail out troubled banks by injecting capital into small lenders across the country, as part of an expanding campaign to restore confidence in the banking system.
FINANCE & ECONOMICS
An excavator works at a construction site in Chenggong District of Kunming, Yunnan province, April 14, 2019. Photo: VCG
Sales of Chinese-made excavators hit record even as economic growth slows
Sales of excavators by Chinese manufacturers have hit a record high this year as the central government ramps up efforts to bolster the country’s slowing economic growth by boosting infrastructure spending.
From January to October, 25 manufacturers in China sold 196,222 of the dirt-moving machines, according to data released Friday by the China Construction Machinery Association (CCMA), an industry group. It was an increase of 14.4% YOY, although well below 52.5% growth for the same period in 2018. About 89% of the excavators, or 174,680, were sold in the domestic market.
Money laundering /
Expanding central bank campaign imposes more fines for money laundering
The PBOC took a total of 189.3 million yuan ($27.6 million) in fines relating to money laundering in 2018, a YOY increase of 41%, according to a PBOC report released last week. According to Chinese law, money laundering carries a maximum one-off fine of 5 million yuan for a financial institution and 500,000 yuan for an individual.
Chinese prosecutors approved the arrests of 7,881 people suspected of involvement in money-laundering schemes last year, 313 more than in 2017, according to the report. The report also said the PBOC has issued more regulations to crack down on the practice in non-financial sectors like real estate, accountancy, law, and jewelry, such as asking companies to report data relevant to anti-money laundering work.
Hong Kong stocks slump as bulls scatter amid widening protests
The Hang Seng Index lost 2.1% as of Wednesday morning, heading for its lowest close in a month. Local developers and landlords suffered the brunt of the selling as all stocks dropped — a broad risk-off session that’s only happened twice before in the last three years.
Swings in stocks are now becoming more extreme, with traders rushing to buy volatility. It’s been a swift reversal from just last week, when improving sentiment globally meant the Hang Seng measure joined many of the world’s stock benchmarks in overbought territory.
BUSINESS & TECH
Alibaba is one of the world’s most valuable companies, with a current market capitalization of nearly $500 million. Photo: IC Photo
Alibaba gets stock exchange approval for Hong Kong IPO
Alibaba Group Holding Ltd. has passed a hearing with the Hong Kong stock exchange, according to a person familiar with the process, marking the clearest step yet of the e-commerce giant’s intent to list in the former British colony to complement its current New York listing.
The hearing with stock market operator Hong Kong Exchanges & Clearing Ltd. occurred on Tuesday, the source said, speaking on condition of anonymity because of the sensitivity of the issue. A separate source close to Alibaba told us last week the company is aiming to raise between $10 billion and $15 billion in the offering. Even at the low end of that range, the offering would be the largest for Hong Kong this year.
Two persons diagnosed with pneumonic plague in Beijing
Beijing health authorities have confirmed that two individuals from northern China’s Inner Mongolia autonomous region have been diagnosed with pneumonic plague, a potentially deadly and extremely contagious lung infection.
The two patients have received "proper treatment" at "relevant medical institutions" in Beijing’s Chaoyang district and disease prevention and control measures have been taken, local health authorities said Tuesday. The emergency room at Chaoyang Hospital, where the two patients were treated, was blocked off by police Monday night, nearby residents told us. Chaoyang Hospital said the two patients have been transferred to another hospital, without disclosing its name.
Tencent Profits Drop 13% in 3rd Quarter
Chinese social media and gaming giant Tencent Holdings Ltd. reported a 13% decline in net profit in the third quarter on Wednesday, reflecting slower income growth from advertising and PC games.
Tencent booked a 20.4 billion yuan ($2.9 billion) profit for the three months through September, missing analysts’ estimates. Revenue increased 21% to 97.2 billion yuan, according to the company’s unaudited financial report.
The most valuable Asia-listed company, Tencent attributed its revenue growth to commercial payment services and other fintech services, as well as smartphone games. Income from PC games and advertising on media platforms weakened, the company said.
Exclusive: Chinese online car loan platform raided by police
Police raided the offices of Huachang Finance Lease (China) Co. Ltd., the operator of used car installment loan platform mlcjr.com, which just filed for an IPO in the U.S. Our reporter was onsite at the Beijing Greenland Center Monday evening, and witnessed the incident.
We've learned that the raid was related to illegal debt collection activities at Huachang affiliates. There were complaints regarding mlcjr.com on a third-party complaint platform, including fraud and using violence to collect debt. This was the third police raid of an online financing company in the past month.
China’s tobacco regulator mulls protecting offline e-cig sales
China’s powerful tobacco regulator is weighing whether to stop local authorities from banning the sale of e-cigarettes in brick-and-mortar stores — except for those near schools. The unreleased policy from the State Tobacco Monopoly Administration (STMA), which oversees and shares staff and offices with China National Tobacco Corp., the world’s largest tobacco company by sales, would come even after the body banned all online sales of e-cigarettes earlier this month.
The plan to enshrine the right of vendors to continue to sell the products, which would be at odds with decisions some regions have already taken, was discussed at a recent meeting of the STMA, we learned from multiple regulatory sources who requested anonymity.
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