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Regulators:
The PBoC has reaffirmed its commitment to a neutral monetary policy, according to a September 30 statement. The central bank said it will use multiple monetary policy tools to ensure the stability of RMB liquidity, strengthen risk management, continue to reform the RMB exchange rate, and ensure that the renminbi remains stable at a reasonable level.
China wants to build first-class investment banks, CSRC was quoted by media as saying on September 29. The regulator did not give further details on the plans but added that it will also help securities firms to compete internationally in conducting cross-border M&A and overseas financing through the Belt and Road Initiative, according to the media report.
China should accelerate the internationalization of its futures market to grow its influence in the global futures market, Fang Xinghai, vice chairman of CSRC, said on September 26. Fang said China could begin this process by opening up its domestic commodity futures market.
“We can start from highly internationalized products, such as crude oil, iron ore, natural rubber, to gradually introduce Belt and Road initiative-related foreign investors to the domestic commodity futures market,” he said.
Debt:
The volume of China’s external debt – including debt denominated in the renminbi – stood at $1.56tr at the end of June, up $125bn or 8.7% from March, according to statistics released by the State Administration of Foreign Exchange (Safe). The regulator noted that banks’ debt made up around 70% of this uptick in volume.
Investment:
FTSE Russell has kept the China A-shares on the watch list for reclassification as a secondary emerging market, the index provider said in a September 29 statement. FTSE Russell divides markets into four categories: developed, advanced emerging, secondary emerging and frontier.
Eventual change in the A-share market’s classification will hinge on the level of activity of FTSE Russell’s A-Share indices, said Mark Makepeace, CEO at FTSE Russell.
“I expect to see growing use of our FTSE Global China A Inclusion Indexes prior to China A-Shares entering our core global benchmarks,” he said.
Bank of China held a conference for sovereign investors on China’s capital markets in Shanghai on September 26-27. The event was attended by 27 central banks and monetary authorities, including the Hong Kong Monetary Authority, Germany’s Deutsche Bundesbank and Hungary’s Magyar Nemzeti Bank.
Speaking at the conference, Gao Yingxin, vice president of BOC, said BOC will provide investors, including sovereigns, with a platform to understand the Chinese market and invest in RMB assets.
Some Rmb4.6bn ($693.1m) of new renminbi qualified foreign institutional investor (RQFII) quotas were given out in September, according to monthly figures released by Safe. Luxembourg-based Lemanik Asset Management, Shenwan Hongyuan Singapore Private and US-based Acadian Asset Management received Rmb1bn, Rmb2bn and Rmb1.6bn of quotas, respectively.
Meanwhile, only one company was granted qualified foreign institutional investor (QFII) quotas in the same month. China Industrial Securities International Asset Management, which is based in Hong Kong, received its first batch of QFII quotas, worth $500m.
Trade:
China and the Philippines should speed up their co-operation on infrastructure investment, said Zhong Shan, China’s minister of commerce, at a meeting with Carlos Dominguez, the Philippine finance secretary, on September 27. Zhong said the two countries should continue to collaborate under the framework of the Belt and Road Initiative and the Philippines’ own development plan, and explore a variety of financing channels for infrastructure projects in the future.
Officials from the Philippines also co-hosted a briefing session on the Philippines’ economy with Bank of China on September 29.
FX:
Due to the China National Day and Mid-Autumn Festival holidays (October 2-6), the last PBoC’s renminbi fix against the dollar was last Friday’s 6.6369. The NEX CNH benchmark came in at 6.6429 at 4.31pm on October 5, firmer than 6.6478 on Wednesday.
The dollar index closed at 93.961 on Thursday, up 0.5% from Wednesday, according to Bloomberg. The Thomson Reuters CNY reference index closed at 95.52 on Thursday, up 0.04% from its previous close.