CX Daily: China Revises Rules to Offer Foreign Investors More Leeway
China revises rules to offer foreign investors more leeway
China’s stock exchange regulators published revised rules Friday to give foreign investors more leeway to adjust their investments in the country’s capital market as China continues expanding investment access to foreigners.
The new rules are part of guidelines released by the Shenzhen and Shanghai stock exchanges regarding the country’s two major programs offering foreign investors access to Chinese financial assets — the Qualified Foreign Institutional Investor (QFII) plan and its yuan-denominated sibling, the Renminbi Qualified Foreign Institutional Investor (RQFII) system.
Under the guidelines, exchange regulators will publish warnings when total foreign shareholding in a single domestically listed company reaches 24%, rather than at 26% as previously. China caps overall foreign ownership in a single listed company at 30% while limiting each foreign shareholder to no more than 10% of a listed business.
Cover Story: China’s ‘fire extinguisher’ fight against deadly new wave
Eleven months after the first case of Covid-19 broke out in central China’s Wuhan, the world outside China continues racking up infections in an alarming rate. The approaching flu season is causing challenges by adding more pressure on already exhausted medical systems.
In China, the coronavirus has been largely contained. But to block its return from abroad, the nation is taking unprecedented and controversial measures to build up medical capacity, trace down every imported case and conduct mass testing in cities where sporadic new cases are found.
“We must know that no place in the world can be secluded from the rest of the world,” said top Shanghai infectious diseases expert Zhang Wenhong. “As long as the global pandemic is not over, the epidemic in China will not be completely solved.” In April Zhang predicted that a second wave of Covid-19 pandemic globally would be likely to take place after the fall.
FINANCE & ECONOMICS
China manufacturing records fastest expansion in nearly a decade
China’s manufacturing activity expanded at the fastest pace in nearly a decade as a recovery in supply and demand continued to pick up speed in the post-epidemic period, a Caixin-sponsored survey showed Monday.
The Caixin China General Manufacturing Purchasing Managers’ Index (PMI), which gives an independent snapshot of the country’s manufacturing sector, rose to 53.6 in October from 53 the previous month. The October reading was the highest since January 2011 and marked the sixth straight month of expansion. Readings greater than 50 indicate expansion.
“Recovery was the word in the current macro economy, with the domestic epidemic under control,” said Wang Zhe, senior economist at Caixin Insight Group.
Financial regulators summon Jack Ma ahead of mega listing
China’s top financial regulators held a meeting with top executives of Ant Group Co. Ltd., including billionaire founder Jack Ma, just ahead of the fintech giant’s $34.5 billion public offering.
Ma, the controlling shareholder of Ant, and Chairman Eric Jing and Chief Executive Officer Simon Hu were summoned for a regulatory interview by the People’s s Bank of China, the China Banking and Insurance Regulatory Commission, the Securities Regulatory Commission and the State Administration of Foreign Exchange, the regulators said Monday in a brief statement, without providing further details.
“Ant will implement the meeting opinions in depth,” Ant said in a statement. The company will continue improving services of inclusive finance and supporting the economic and social development, the fintech giant said.
Liu He-headed meeting advises balancing fintech’s breakneck growth with stability and security
As China’s fintech sector grows rapidly, it is necessary to properly deal with the relationship between financial development, stability and security, according to an official statement (link in Chinese) released after a meeting chaired by Liu He, a vice premier and head of the financial stability body.
While innovation and entrepreneurship are encouraged, all financial activities should be supervised in accordance with related laws to effectively manage risks, the meeting said. Regulators should treat different enterprises that conduct the same type of financial activity equally, according to the meeting.
The meeting also called for financial regulations and standards which are generally adopted globally to be respected in China.
Chart of the day: Banks stem profit decline in third quarter
After China’s banking regulator relented on its demand that banks’ profits fall by roughly a set amount this year, many big lenders reported that their net profit declines narrowed in the first three quarters compared with the first half.
The net profit performance of China’s six biggest state-owned commercial banks — Industrial and Commercial Bank of China Ltd. (ICBC), China Construction Bank Corp. (CCB), Agricultural Bank of China Ltd. (ABC), Bank of China Ltd. (BoC), Bank of Communications Co. Ltd. and Postal Savings Bank of China Co. Ltd. — all improved from the first half, despite all recording a decline from the first nine months of 2019.
This narrowing of profit declines was mainly due to the banks setting aside less money to guard against loan losses, according to their latest quarterly reports. At the end of the second quarter, Chinese commercial banks’ nonperforming loan (NPL) ratio rose to an 11-year high.
After paring profit drops, big Chinese banks’s bad debt problems come due
China tightens coronavirus screening of inbound travelers
China tightened requirements for travelers from a number of countries by demanding proof of negative antibody tests in addition to nucleic acid tests as a Covid-19 resurgence worsens in many parts of the world.
Chinese embassies in the U.S., the U.K., France, Italy, Poland and several other European and American countries published statements that China is requiring inbound travelers to present negative coronavirus antibody tests as well as nucleic acid tests before boarding flights to the country.
Quick hits /
China fintech firm Lufax raises $2.4 billion in U.S. IPO
Embattled state conglomerate reneges on bond buyback promise as debt woes deepen
Editorial: Economic policy must recognize that China’s domestic and overseas markets reinforce each other
BUSINESS & TECH
Claiming to represent only “the most ordinary” WeChat users in the United States, the alliance has so far successfully argued that Trump’s ban could unlawfully sever their communications with people in both the U.S. and China.
In Depth: Inside the legal battle to defeat Trump’s WeChat ban
Millions of WeChat users in the U.S. could breathe a temporary sigh of relief after an appeals court last week quashed a government request to restrict China’s biggest social messaging app in the United States.
The decision marked a new setback for an executive order issued by U.S. President Donald Trump in August banning WeChat on national security grounds. The platform has around 1.2 billion users, including 19 million in the United States.
For the plaintiffs, among them a nonprofit called the U.S. WeChat Users Alliance (USWUA), Monday’s ruling was the latest in a string of courtroom victories in the battle to defeat an order they say seriously violates their constitutional rights, including freedom of speech.
Huawei launches what may be its swan song high-end phone in home China market
Embattled Huawei Technologies Co. Ltd. unveiled its latest flagship smartphones, the Mate 40 series, for the Chinese mainland, even as models were set to be in short supply and could be the last from its premium line due to U.S. sanctions.
The four new Mate 40 models, ranging from 4,999 yuan ($747) to as much as 12,999 yuan, all use chips from Huawei’s self-designed Kirin series with 5-nanometer technology. Three went on sale Friday in China.
But Huawei fans may find it difficult to buy the new phones due to limited supply. On Friday night, the first batch was sold out shortly after being put up for sale online. Other batches were released over the weekend, and buyers could also register online for specific models and wait for an “invitation” to place an order.
Chinese beauty company Yatsen files for U.S. IPO
Guangzhou-based Yatsen Holding Ltd., the parent company of budget cosmetics and skin-care brand Perfect Diary, filed for an IPO on the New York Stock Exchange (NYSE), joining a flurry of Chinese companies planning to list on U.S. bourses this year despite mounting tensions between Beijing and Washington.
The company, which targets younger consumers with budget products undercutting more established international brands, intends to use proceeds to make investments and acquisitions, develop new products and data analytics technology, open new physical stores and maintain daily business operations, according to a prospectus submitted Friday to the U.S. Securities and Exchange Commission. The prospectus did not specify how much money Yatsen plans to raise.
China’s steel industry argues it’s forging a low-emission future
Hundreds of Chinese steel companies are upgrading their mills to meet strict emissions targets, a high-ranking member of a leading industry group said, as the world’s top steel producer clamps down on its largest industrial source of air pollution.
Some 228 companies accounting for about 610 million tons of crude steel production capacity “are implementing the transformation to ultra-low emissions,” Jiang Wei, the deputy Communist Party secretary of the China Iron and Steel Association, said Friday at an industry conference.
The transition reflects government efforts to bring 60% of steel capacity in “key regions” in line with so-called “ultra-low” emissions standards by the end of this year and do the same across 80% of national capacity by 2025.
Quick hits /
Xiaomi sees smartphone growth in China as rivals struggle
‘Hydrogen wars’ pit Europe versus China for $700 billion business
Construction-machinery makers’ sales soar on China’s economic recovery
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