Caixin Business English 07 财新商业英语进阶计划 07
Capital adequacy ratio
资本充足率反映银行在存款人和债权人的资产遭到损失之前，能以自有资本承担损失的程度，代表了银行对负债的最后偿债能力，是金融监管机构监测银行抗风险能力的核心指标。在中国，根据《商业银行资本管理办法》，资本充足率不得低于8％，此外还需2.5%的储备资本。例句：Now according to PBOC data released in April last year, of 4,000 small and midsized banks 605 did not meet the minimum required capital adequacy ratio of 10.5%, and 532 were at rather high risk.
To learn how the phrase is used in English reporting, please click here.
例句：In the first six months of 2020, the PBOC doled out penalties of more than 370 million yuan ($53.89 million) for money laundering violations, exceeding the total for all of 2019, data from the central bank showed.
To learn how the phrase is used in English reporting, please click here.
例句：The Tencent product runs a monopoly in China, boasting about 1.2 billion monthly active users.
To learn how the phrase is used in English reporting, please click here.
Josh: Hello and ni hao!
This is the Caixin China Biz Roundup broadcast every week day from Beijing with the essential news for everything you need to know about China and the world of business – plus a little bit more.
I’m Joshua Dummer
Nandini: And I’m Nandini Venkata
Coming up on today’s show. A young man has committed suicide after his Wechat account was temporarily frozen. What impact could the tragic case have on the Tencent app. Also, we will be hearing about how more Chinese young people are embracing the single life. We will be asking what this means for both businesses and the economy in general. Plus, China gets tougher on money laundering（洗钱）, issuing a record number of fines for the first half of the year.
Josh: For my top story I want to look at an in depth piece on our website looking at China’s banking sector.
It is no secret that parts of China’s banking sector are a mess, with the country seeing a regional bank declare bankruptcy（宣布破产） for the first time in twenty years. And we’ve covered the subject several times on this podcast. The big question is however how will china cleanup the sector and possibly, more importantly, who will have to shoulder the burden of doing so.
Nandini: OK, now I know about the bank that declared bankruptcy – I think that was Baoshang – and we’ve covered Bank of Jinzhou Co. Ltd. and Hengfeng Bank Co. Ltd. receiving state bailouts（国家救助） on the podcast. But China is massive. So three banks might not be such a big deal – so, just how big are China’s banking problems?
Josh: I am so glad you asked me that Nandini. The scale of the problem is immense. At the end of last year, China had about 4,600 licensed financial institutions in the banking industry, most of which were small and midsize banks that together accounted for about a quarter of the banking sector’s total assets. Now according to PBOC data released in April last year, of 4,000 small and midsized banks 605 did not meet the minimum required capital adequacy ratio（资本充足率） of 10.5%, and 532 were at rather high risk.
Or to put is another way around 12% of small and midsized banks in China are in serious trouble.
Nandini: OK, that is a lot of banks. So what is China doing about it.
Josh: The fact is the Chinese authorities have been working on a plan for some time which hasn’t been made public yet – but luckily for you there have been some hints as to what the plan will involve and as always Caixin journalists have been able to get some inside information.
Guo Shuqing, head of the China Banking and Insurance Regulatory Commission, referred briefly to the reform plan two weeks ago in a interview with a newspaper managed by the watchdog. The document, which has not been made public but has been seen by Caixin, was issued jointly with the Central Bank, the Ministry of Finance, the National Development and Reform Commission, the National Audit Office and the China Securities Regulatory Commission.
The plan is complex and involves an 11 point reform programme and all the details are in the really great in depth piece on our website. But all you really need to know for the podcast is local governments are going to shoulder most of the burden.
Nandini: OK, what does that mean in practice?
Josh: The reform model that has emerged is one that involves local governments taking the lead in restructuring（重组） and recapitalizing smaller lenders. Most of the banks are owned or controlled by provincial- and city-level governments already - either directly or indirectly through local SOEs and investment holding companies（投资控股企业）. So as the local governments already own the banks the authorities are kind of saying they also own the mess.
The reform plan says that provincial-level governments need to bear the brunt of regulatory responsibility for lenders in their jurisdictions and set up their own policies and plans to carry out the reform. It also recognizes that different banks will need different solutions and that flexibility will be needed in the restructurings.
Nandini: In other words it is local solutions for local problems.
Josh: Exactly. They are actively avoiding a top down – one size fits all - solution to these problems.
The problem is whether the local governments have the expertise and the funds, or will be able to attract the funds from private finance, to sort out the badly performing banks. And according to the experts Caixin spoke to, the jury is definitely still out on this one.
Nandini: But let’s be honest China often has a way of pulling rabbits out of hats and making things work when everyone else is raising doubts. So do you think the fact they have created this reform plan means we won’t see any more bankruptcies like Baoshang?
Josh: Personally I suspect we might see a few more bankruptcies, or at least they are not being ruled out. The reform plan proposes that for individual institutions that are particularly problematic and have no real value to save, the instruction is to quote: “sell those that can be sold, and let those that should go bankrupt go bankrupt.” And improving the country’s bankruptcy laws is now seen as a matter of urgency.
Nandini: Now I am not going to ask why this story is important – if you are listening to a China finance podcast and can’t figure out why reform of a banking system which has over 10% of its small and midsized banks in serious distress is important, I suspect you’ve downloaded the wrong podcast.
Josh: OK, but if you are not going to ask our favourite podcast question I will end on one of our favourite podcast lines – I have only been able to scratch the surface of this important story so I would urge people to go online and read the full in depth piece after this podcast.
Nandini: Thanks Josh.
My top story is pretty tragic. It revolves around a young Shenzhen shopkeeper who committed suicide earlier this month after being suspended from Wechat.
Josh: How about we start with some background. How did this user get banned from Wechat?
Nandini: So, the person at the centre of this story is a man in his early 20s who ran a local store selling cooking oil and grain. Tencent, the Chinese internet giant that runs Wechat, says he was suspended from the app for 72 hours for breaching its rules on quote “pornographic and sexually offensive content” endquote on Aug. 12. According to the company, the user would have been able to end the suspension himself on Aug. 15.
However, that very same day, the young shopkeeper fell from Tencent’s customer service center building in the Guangdong province city. Police in Shenzhen’s downtown Nanshan district told Caixin they concluded the case was a suicide.
Josh: Is there anything else that could suggest the man’s suicide may have resulted from his suspension from the app?
Nandini: Well, the shopkeeper’s brother told Caixin the suspension created significant issues for the man. He also said his brother recorded a video on his phone on the day he died, where he spoke about his frustrations from the ban. Caixin hasn’t seen this footage, but according to his brother, in the video, the shopkeeper says he appealed（申诉） repeatedly to WeChat to explain why his account had been suspended, but could not reach a human customer service representative, and was instead stuck in conversations with the company’s customer service bots.
But I should also point out that there are a number of unanswered questions surrounding the case.
Josh: What do you mean?
Nandini: For one, the deceased man’s brother says police convinced him to sign a waiver on August 21st, promising to stay silent about the circumstances of his sibling’s death. But, he says that it was only after he signed the waiver（弃权证书） that police handed him the man’s phone, which contained the video blaming Tencent. Prior to that, he had no idea this video existed. Since discovering the footage, the brother has decided to break his silence and adds that police had told him that if he did not sign the consent form, his family would not receive any compensation（补偿）.
And speaking of compensation, the deceased man’s family also received a mystery payment of 150,000 yuan or roughly 22,000 USD – but, again, the family would only receive the payment if they signed a confidentiality agreement（保密协议）. An anonymous source from Tencent denied that the payment had come from the tech giant, and said it must have come from the local government’s social stability maintenance fund.
Josh: Could the family appeal for greater compensation if they feel wronged?
Nandini: A local lawyer told us that the family could definitely do so, and that would involve turning to the courts. In such a case, the court would need to decide whether Tencent was responsible for causing the man’s death. However, the lawyer says that based on the available information, it seems unlikely that a court would support the family’s compensation claim.
Josh: Why do you think we should be paying attention to this story?
Nandini: Without a doubt, this raises some serious questions about Wechat and the lack of independent oversight of account suspensions on the app.
These are matters that should not be dismissed lightly. After all, the Tencent product runs a monopoly（垄断） in China, boasting about 1.2 billion monthly active users（月活用户）. On top of that, Wechat has developed into something of a super app. That’s because it offers such a large number of services, spanning personal, professional and financial spheres. So, although last week, we discussed what the U.S.’ looming ban on Wechat could mean for American companies, we should also not forget that for ordinary people to get shut out of the app would have major costs to their lives and livelihoods. The tragic story serves as a shocking example of what can happen when someone is exiled（被放逐） from this system.
Josh: Alright thanks Nandini. Now, something for all the singles out there. My next story looks at the rising movement of China’s millennials who are proudly embracing their singlehood. This is all based on a new article by Sixth Tone.
Nandini: Ok, just before we start, can we clear something up? We hear the term being thrown around time and again, but what exactly is a millennial?
Josh: Well, according to the Merriam-Webster dictionary, the term describes the generation of people born in the 1980s or 1990s. Therefore, I am afraid to say both you and I are, indeed, millennial.
So, the brutal truth is that, according to the stereotype, you and I will never be able to afford buying a house because we love avocados on toast too much.
Nandini: Sounds about right.
Josh: We are also meant to be slackers and have a strong sense of entitlement – so let’s really hope our bosses are not listening in on this.
Nandini: Don’t worry, I’ll edit that part out, that is, of course, if I can be bothered. So just how many people are flying solo out there in China?
Nandini: Well, according to the article, this number could be greater than 200 million. It’s also projected that by next year there could as much as 90 million people living alone.
And, quite clearly, this reflects on pretty striking trends within Chinese society. Whereas before young people would be expected to settle down with another half shortly after completing their higher education and getting their degrees, there’s a wave of millenials who want to focus on building up their careers and, therefore, wait on into their 30s until they tie the knot.
Nandini: Well, that all sounds very interesting – but how is this relevant to our business news podcast?
Josh: Well, not so fast Nandini. These social trends could have major implications for businesses.
Indeed, as Sixth Tone reports, companies across a range of sectors are cottoning onto the rise of so-called single dogs and are therefore keen to tap into this new market.
One phenomenon is solo-dining as more well-heeled young people opt to eat out by themselves. To feed off this trend, a number of restaurants are trying to tweak their venues and services to optimise the solo diner’s experience. Some are offering special meal deals aimed at single customers, and others have come up with seating arrangements to help individual diners feel less conspicuous.
For instance, the ultra hip noodle bar, 23 Seats, introduced enclosed individual cubicles to help their customers better enjoy some lone time. Meanwhile, the popular hot pot chain Haidilao, plops a huge teddy bear in empty seats next to such people.
Nandini: Err, being seated by a mammoth teddy would make me feel more like a sore thumb.
Josh: Well, anyway, restaurants aren’t the only ones getting in on the game.
What with some many people choosing to live alone, home appliance-makers（家电制造商） are also increasingly turning their attention to this market by introducing a range of smaller, single-friendly kitchen gadgets. For instance, rice cookers which cater to an individual portion, not that of a family. Similarly, Alibaba claims that about 2.3 million mini electric appliances were snapped up during 2019’s online single’s day shopping extravaganza.
And this may just be the tip of the iceberg. Yuan Yibo, an analyst at investment company Mude Capital told Sixth Tone that a range of other sectors could also profit from the growing trend of people living alone. Those predicted to benefit from the trend include for-rent real estate, food delivery as well as pets, and gaming.
Nandini: And what could this all mean for the economy?
Josh: Well, I am afraid the jury is still out on that. On the one hand, with people increasingly less willing to marry, there are concerns about whether this could further slow down China’s birth rate（生育率） and have a knock-on effect on economic growth. Some also worry that singletons who are low earners may be too preoccupied on saving, which again could dent growth.
But, others suggest these millennials could offer the economy a much needed financial injection. Without kids or a spouse to look after, many of these singletons have more money to spend on themselves. As Yuan says quote “They dare to spend their money, no matter whether it’s planned or not,” endquote, adding that this group does not shy away from spending if their incomes rise.
Nandini: So, irresponsible spending money on myself is actually a good thing? Hmm, I need to get onto Taobao pronto. Well, now let’s check out the rest of the days news.
Josh: Bloomberg reports that Centricus Asset Management Ltd. and Triller are seeking to buy TikTok’s operations in the U.S. and several other countries from ByteDance Ltd. for $20 billion, citing a source close to the matter. According to the source, Centricus and social media app Triller have already handed in their joint bid to Tiktok’s parent company, ByteDance.
Nandini: French telecom operator Bouygues Telecom will dismantle 3,000 Huawei-made mobile antennas in France’s highly populated areas by 2028, the latest blow to the besieged Chinese tech giant which is the target of countries labeling its 5G equipment as a potential national security threat. Bouygues’s deputy CEO Olivier Roussat confirmed the plan during a conference call, without detailing which company’s equipment it will use to replace Huawei’s, according to a report by Reuters Thursday.
Josh: Chinese authorities are getting more serious about fighting money laundering, or the illegal hiding of the origins of money obtained through criminal activities.
In the first six months of 2020, the PBOC doled out penalties of more than 370 million yuan ($53.89 million) for money laundering（洗钱） violations, exceeding the total for all of 2019, data from the central bank（中央银行） showed. The significant increase in fines reflects a revision in the way the central bank calculates punishment of financial institutions that fail to effectively guard against money laundering. Such institutions would previously receive only one fine at a time regardless of how many rules they broke. Now multiple penalties（罚款） are imposed for multiple violations. The largest single fine the central bank imposed exceeded 100 million yuan
Nandini: And that completes today’s Caixin China Biz Roundup. Goodbye and Zaijian.
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