CX Daily: China’s Regulators Set Out Plan To Overhaul Scandal-Hit Corporate Bond Market
China’s regulators set out plan to overhaul scandal-hit corporate bond market
China’s economic and financial authorities issued new guidelines for corporate bonds to clear up confusion over issues such as whether the updated Securities Law covers the interbank bond market, reiterate their commitment to unifying rules for different bond markets, and reinforce the need to obey laws and regulations in the wake of a series of scandals and defaults.
A set of “Guiding Opinions” (指导意见) (link in Chinese) on the opening-up, reform and development of the nonfinancial corporate bond market were jointly announced by the People’s Bank of China (PBOC), the China Securities Regulatory Commission (CSRC) and four other regulatory bodies Aug. 18.
China’s bond market is the world’s second-largest, with the value of outstanding bonds, including government and corporate debt, standing at 124.6 trillion yuan ($19.2 trillion) at the end of July, PBOC data show. The nonfinancial corporate bond market was worth around 29.5 trillion yuan.
Information protection /
Six things you should know about China’s Personal Information Protection Law
China passed its first national Personal Information Protection Law last week, adding legal teeth to the country’s scrutiny of personal information collection and use and setting strict rules on how companies and government departments should treat this kind of data.
The law was passed Friday by the Standing Committee of the 13th National People’s Congress (NPC), China’s top legislature, and will come into effect Nov. 1. The full text of the law (link in Chinese) has been published on the NPC’s website.
Here’re six things you need to know about the new Personal Information Protection Law.
FINANCE & ECONOMY
As of June 30, China implemented 10,126 PPP projects with a total investment of 15.7 trillion yuan.
China to speed up public-private partnership legislation
China’s Ministry of Finance will cooperate with the Ministry of Justice to push forward long-stalled legislation on public-private partnerships (PPPs) as soon as possible, the Finance Ministry said.
Because of deficiencies in legal authority and effectiveness of the current PPP administrative rules, such projects face problems such as unstable policy expectations, unclear management responsibilities and poor procedures, the ministry said. It made the comments in response to suggestions from representatives of the 2021 National People’s Congress.
The current rules also fail to effectively spell out application of the bidding and government procurement laws and are not in line with the definition of the nature of PPP project contracts as defined by of the Supreme People’s Court, the Finance Ministry said.
China seeks to quell investors ganging up to drive down IPO prices
Stock markets specializing in high-tech listings in China plan to introduce revised rules that aim to strike a better balance between IPO applicants and investors, seeking to end practices that let bidders gang up and drive down prices of new listings on Shanghai’s (link in Chinese) STAR Market and Shenzhen’s (link in Chinese) ChiNext board, the exchanges’ owners said.
The draft revisions, published Friday and available for public comment until Sept. 5, are a response to investors’ strategy of “ganging up” and quoting low prices when inquired about at what price they would like to purchase a new stock offering, industry insiders said. Specifically, the changes call for reducing the percentage of high bids that are automatically rejected in IPO pricing inquiries.
Ex-head of Hong Kong Monetary Authority backs using yuan to invest in Hang Seng Index stocks
Joseph Yam, a former chief executive of the Hong Kong Monetary Authority, the city’s de facto central bank, said authorities can consider introducing the yuan for quotation, trading and clearing of stocks covered by the benchmark Hang Seng Index (HSI).
Yam, now a member of Hong Kong’s Executive Council, the region’s cabinet, told a press conference (link in Chinese) Monday that such use of the yuan could advance the currency’s internationalization, consolidating Hong Kong’s status as a global financial hub.
Former vice finance minister appointed to Communist Party role at top political advisory body
A former vice finance minister has been named deputy secretary of the leading Communist Party group for the General Office of the National Committee of the Chinese People’s Political Consultative Conference (CPPCC), China’s top political advisory body.
It was revealed that Zou Jiayi, 58, assumed the position when she attended a meeting (link in Chinese) in this role Friday, in which attendees discussed compiling cultural and historical materials featuring the CPPCC, according to the People’s Political Consultative Daily, a newspaper under the CPPCC.
Quick hits /
China Huarong Asset Management downgraded by Moody’s
Afghan turmoil raises migration fears in Europe
BUSINESS & TECH
Family feud at pork giant intensifies as claims of founder’s ousted son rejected
China’s biggest pork producer launched a renewed attack on allegations of financial mismanagement made against its founder by one of his sons, the latest step in an intensifying family feud that shaved $1.4 billion off the company’s market value last week.
Hong Kong-listed WH Group Ltd., which owns U.S. meat processing firm Smithfield Foods Ltd., issued a clarification Monday about allegations of tax evasion and financial mismanagement against Wan Long made by Wan Hongjian, who was removed as an executive director in June for what the company described as “misconduct of aggressive behaviors.”
The bitter family row comes as the group has been hit by turmoil in China’s pork market, which is suffering from falling prices and rising feed costs. The slump in prices has already triggered government intervention including an emergency buying program in June.
China’s box office sales slump amid Covid surge
China’s weekly box office sales hit the lowest level since May as cinemas in some parts of the country suspended operations amid the latest Covid-19 flare-ups.
In the week through Aug. 22, Chinese cinemas’ box office takings slumped 37% from the previous week to 317 million yuan ($49 million), according to statistics from the China Movie Data Information Network (link in Chinese).
Covid outbreaks cause logjams at China’s busiest container ports
China’s ports are facing their most serious levels of congestion in the past seven years due to the partial shutdown of Ningbo-Zhoushan port, one of the world’s busiest container ports, due to aggressive coronavirus measures.
On Friday, 994 bulk cargo ships were lined up to access 60 China ports, of which Ningbo and Shanghai are jammed up the most. This was more than double the number of 400 ships waiting in port queues in early August, according to Oceanbolt, a data company that tracks dry bulk commodities and shipping operations.
JD.com reports profit plunge but manages to boost revenue despite tech crackdown
Chinese e-commerce giant JD.com Inc.’s net profit plummeted in the second quarter as its revenue and active buyer numbers jumped despite a sweeping crackdown on the country’s internet platform businesses.
In the three months through June, the Beijing-based company’s net profit attributable to ordinary shareholders slid to 794.3 million yuan ($123 million) from 16.4 billion yuan a year earlier, while revenue rose 26.2% year-on-year to 253.8 billion yuan, according to its latest earnings report published Monday.
Quick hits /
Tencent-backed comics app Kuaikan raises $240 million
Chinese billionaire-linked firms convicted of fraud in U.S.
Energy Insider /
China’s domestic oil may face biggest price drop this year
Life goes on despite downpours across China
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