RMB round-up: MofCom drafts foreign investment law, BEA AM gets greenlight for Shenzhen WFOE, Chinese academic says RMB to be fully convertible in five years

The Ministry of Commerce (MofCom) completes the first draft of foreign investment law, regulators give BEA Union Investment Management the go-ahead to launch a wholly foreign owned enterprise (WFOE) in Shenzhen, and Renmin University’s vice president claims the renminbi will be fully convertible within five years.

  • By Noah Sin
  • 03 Nov 2017
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Investment:

  • The first draft of China’s foreign investment law has been submitted to the State Council, a spokesperson from the Ministry of Commerce told a press conference on November 2. He noted that the new law would promote fair competition in China, and create a more stable, transparent and rule-based business environment.
    The announcement came two weeks after president Xi Jinping said foreign businesses in China should be treated on an equal basis with their local peers. Xi was speaking at the 19th Communist Party Congress.

WFOE:

  • BEA Union Investment Management has won regulatory approval to establish an investment management WFOE in Shenzhen, the company announced on October 30. The planned WFOE, named BEA Union Investment Management (Shenzhen), will be the first pilot private fund management company in the Qianhai region, according to the announcement.

FX:


  • The renminbi will be fully convertible in five years, Wu Xiaoqiu, vice president of Renmin University of China, said on October 28. In a speech published by Global Times, the Chinese Communist Party’s mouthpiece, Wu noted that RMB FX reforms will be completed within this timeframe, which will allow the renminbi to be more widely used as a reserve currency globally.
    But he added that China will have to tread a fine line when pushing for renminbi internationalisation, noting that it will take time to convince the markets that the renminbi is a reliable and stable asset.
    “It's unlikely that the yuan's internationalisation will happen without a hitch,” he said. “A balance needs to be struck between actions to stabilise the economy in the short term and efforts to maintain the yuan's creditworthiness over the long term.”


Trade:


  • North Korea and the US-China economic relationship will be at the top of the agenda in the forthcoming bilateral talks between presidents Donald Trump and Xi Jinping, according to a statement by the US Department of State. Trump is visiting Beijing on November 8-10.
  • China and Russia have agreed to promote the use of each other’s currency in investment and trade, according to a joint communique published on November 1, after the meeting between Chinese premier Li Keqiang and his Russian counterpart, Dmitry Medvedev.
    The two countries also agreed to continue the co-operation between Chinese and Russian banks, in payment system and services, and in the insurance sector.


Quotas:

  • No qualified foreign institutional investor (QFII) quotas were given out in October, according to monthly figures released by the State Administration for Foreign Exchange, while Australian company Russell Investment Management was the sole recipient of a renminbi QFII (RQFII) quota in October worth Rmb906m ($137.1m).

Hubs:

Ratings:

  • Chinese Golden Credit Rating International has agreed to share methodologies and analytics with the Analytical Credit Rating Agency (ACRA), a Russian credit rating company, according to a November 2 announcement.
  • By Noah Sin
  • 03 Nov 2017

GlobalRMB Panda Bonds league table

Rank Arranger Share % by Volume
1 China Merchants Securities Co 21.76
2 Agricultural Bank of China (ABC) 15.11
2 CITIC Securities 15.11
4 China CITIC Bank Corp 13.60
5 Industrial and Commercial Bank of China (ICBC) 10.58

Panda Bond Database

Pricing Date Issuer Country Size Rmb (m)
1 09-May-18 Daimler Germany 5,000
2 26-Apr-18 Global Logistic Properties via Iowa China Offshore Holdings Hong Kong 1,500
3 26-Apr-18 Trafigura Singapore 500
4 23-Apr-18 CAR Inc Hong Kong 730
5 11-Apr-18 China Jinmao Holdings China 3,000

Offshore RMB Bond Top Bookrunners

Rank Bookrunner Share % by Volume
1 Standard Chartered Bank 36.83
2 HSBC 14.94
3 Bank of Taiwan 4.77
3 Cathay United Bank 4.77
5 Societe Generale Securities Services 4.13

Latest Offshore RMB Bonds

Pricing Date Issuer Country Size Rmb (m)
1 23-May-18 QNB Finance Qatar 600
2 16-May-18 First Abu Dhabi Bank PJSC United Arab Emirates 1,100
3 04-May-18 Busan Bank South Korea 500
4 27-Apr-18 Central American Bank for Economic Integration (CABEI) Honduras 2,000
5 24-Apr-18 CAR Inc China 350