Starting on September 15, foreign investors living in the mainland will be able to trade A-shares, thanks to a rule change introduced by the China Securities Regulatory Commission (CSRC) this week. Separately, companies listed on the A-share market may also let their shares become part of incentive packages for foreign workers, according to an August 15 statement by the regulator. Previously, share incentive plans were only available to workers in the mainland.
The move, first signalled by the CSRC in early July, will help widen the A-share investor base and introduce more liquidity in the market, said the securities watchdog. This also aligns with the national strategic goals of attracting talents to China and deepening the reform and opening up of the capital markets, said the CSRC.
The Ministry of Finance has asked local governments to issue more special purpose bonds, the proceeds of which are used to fund infrastructure development. In a set of guidelines published on Tuesday, the ministry said local authorities must prepare to use up 80% of their annual quota for special purpose bond issuance by the end of September and use most of the remaining 20% in October. To hit this target, MoF has cancelled the quarterly ceilings on issuance volume for local governments. It has also scrapped restrictions on the tenors of these bonds.
Local governments should spend the proceeds of these bonds on public projects as soon as possible. The provincial branches of MoF will need to update their headquarters on plans to issue these bonds by August 20. They must also notify Mof officials in Beijing about the issuance date, size and tenors at least six working days before the bond sale, according to the statement.
The move came shortly after Xu Zhong, head of the research bureau at the People’s Bank of China, attacked MoF in the Chinese press for not providing sufficient fiscal stimulus to the slowing economy.
China and the US will start a fresh round of negotiations to resolve the ongoing trade conflict. At the invitation of the US, Wong Shouwen, vice commerce minister, will hold talks with David Malpass, undersecretary for international affairs at the US Treasury, the Chinese Ministry of Commerce (MofCom) said in an August 16 statement.
MofCom reiterated its opposition to trade protectionism in the statement but added that it welcomes dialogue, as long as both sides treat each other as equals in the talks .
Thi s is the first time the two sides have indicated that they will come back to the negotiation table after a possible deal, brokered in May by Liu He, vice premier and top economic advisor to president Xi Jinping, fell apart and the US went ahead with imposing tariffs on Chinese goods .
Meanwhil e, Larry Kudlow, an economic advisor to Trump, said China’s economy had weakened significantly over the past six to nine months, with investment down in industrial production as well as retail sales, driving foreign investors away from the country.
“Mostly, I think investors are moving out of China because they don’t like the economy, and they’re coming to the USA because they like our economy,” he told Trump at a Cabinet meeting on Thursday. “I’m not a China expert, although I’m boning up as fast as I can. I will just say, right now, their economy looks terrible.”
MofCom said it is studying the implications of a new law in the US, signed by president Donald Trump this week, that will strengthen the scrutiny on acquisitions of foreign companies, including Chinese ones, on the grounds of national security. The bill was passed by Congress in June.
“The US should treat Chinese investors objectively and impartially and avoid making the national security review an obstacle to investment co-operation between the Chinese and the US enterprises,” a MofCom spokesperson told reporters on August 16.