China policy round-up: PBoC renews swap line with Indonesia, exchanges make progress on suspension rules, China issues new FTZ rules

In this round-up, People’s Bank of China (PBoC) signs a currency swap with Indonesia, Shanghai and Shenzhen Stock Exchanges publish rules to limit the length of trading halts, and the Chinese authorities publish new rules to boost the domestic free trade zones (FTZs).

  • By Rebecca Feng
  • 23 Nov 2018
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The People’s Bank of China (PBoC) signed a bilateral currency swap agreement with its Indonesian counterpart, according to a statement published by PBoC on Monday.

The agreement will allow the two sides to tap up to Rmb200bn ($28.8bn) or Indonesian rupiah 440tn to meet liquidity demands in the two markets. The swap line will be valid for three years and is extendable. China has agreed on Rmb3.1tr in swap lines with over 30 countries


The Shanghai Stock Exchange (SSE) published rules for trading suspension and resumption, following guidance from the China Securities Regulatory Commission (CSRC), according to a Tuesday news release.

The guidance did not provide finalized rules but stated that exchanges would reduce the duration of trading suspensions and strengthen disclosure requirements.

SSE drafted its own corresponding rules to discourage long-term and continuous suspensions. The draft will be open for public comments until December 1. Shenzhen Stock Exchange (SZE) drafted preliminary suspension rules as well, open for feedback until December 21.

SSE identified “major asset restructuring matters” and “significant risks or major non-precedents with complex situations” as the main reasons for a trading halt.

The new rules will shorten the maximum length of suspensions for corporate restructurings from the previous three months to ten days. Companies can apply to extend the ten-day limit to 25 days if they need extra time to disclose information.

The SSE said in a separate statement that it had encouraged 29 listed companies to push forward restructuring matters through phased disclosure without the trading suspension since the beginning of this year. Apart from the requirements by the CSRC, the SSE will also try to work out a mechanism that links the suspension time of a stock with the chance of it being excluded from the constituent index.

Property developer Yinyi became the first listed company forced to resume stock trading. After restarting its stock trading on November 20, the company’s stock dropped 22% in the next three days, according to Bloomberg data.


The State Council issued a document listing 53 measures to support further reforms in the free-trade zones (FTZs).

In the area of finance, the government will allow banks and financial institutions in the FTZs to serve overseas institutions in renminbi derivatives to further renminbi internationalisation.

The government will also encourage banks and financial institutions in FTZs to issue renminbi loans to overseas institutions or to overseas projects. Qualified individuals residing in FTZs are also encouraged to invest in offshore bond markets. 

Lastly, the government encourages financial institutions in the FTZs to explore possibilities of securitising intellectual properties.


The US authorities are planning to introduce a stricter export control regime, according to a November 19 statement by the Department of Commerce, Bureau of Industry and Security.

The pilot programme has outlined 27 critical technologies including artificial intelligence, microprocessors, and nanotechnology. The US government is seeking public comments on whether these new technologies have national security applications and should be subject to stricter export-control rules.

Investment in high-end technology is one of the central themes in the trade war between the US and China, with the latter being a likely primary target of the draft rules, although the new rules will apply to all foreign investments into the United States.


The Chinese government said existing policies on cross-border e-commerce retail imports will continue from January, meaning that there will be no new requirement on importers for licensing, registration with government or record-filing, according to a statement published on November 21.

Further, implementation of the existing policies will be expanded from the initial 15 cities to another 22 cities, including Beijing.

The cross-border e-commerce retail imports list will include 63 additional “high-demand goods”. These goods will enjoy preferential treatments. Their import value-added taxes and consumer tax are collected at 70% of the statutory taxable amount. Additionally, they are also enjoying zero tariffs within a set quota. This quota will also be made higher from Rmb2,000 to Rmb5,000 per transaction and from Rmb20,000 to Rmb26,000 per person per year.

In a separate statement, the government promised to aid logistics companies in their expansion into Western China and ease their financing burdens.


More measures to ease the financing burden of private companies were issued. The State Administration of Taxation is allowing those private companies experiencing “special difficulties” to request tax deferrals of up to three months. The difficulties refer to situations where taxpayers suffered great losses due to circumstances out of their control, according to a November 19 statement.


The IMF published a paper on China’s monetary policy communication on November 19. The paper pointed out that communication is crucial in the implementation of unconventional monetary policies and the Chinese government’s growing focus on financial stability.

However, the authors of the report are also quick to point out that PBoC does not have full-decision-making power over the money supply and interest rate policies. Therefore, some of the difficulties in forward guidance and providing information are out of PBoC’s control.

“Financial markets are eager for any signal of monetary policy from the People’s Bank of China,” the paper read. “The importance of effective monetary policy communication will only increase as China continues to liberalize its financial system and open its economy.”

The report concluded that PBoC’s communication is still evolving toward the level of other major economies and recommends medium-term policy reforms and quickly adoptable reforms.


Over 6,000 students participated in the initial rounds of “Belt and Road Challenge” inter-school contest, hosted by the Hong Kong Trade Development Council (HKTDC), according to a November 21 statement by HKTDC.

The contest covers topics including “Belt and Road Basics”, “Business and Economics” and “Culture”. It is open for enrollment to all Hong Kong secondary school students. The preliminary stage took place in the form of online quizzes from September 24 to September 30. Students from 88 secondary schools participated according to the statement.

  • By Rebecca Feng
  • 23 Nov 2018

GlobalRMB Panda Bonds league table

Rank Arranger Share % by Volume
1 Bank of China (BOC) 21.17
2 China Merchants Securities Co 17.84
3 Industrial and Commercial Bank of China (ICBC) 14.86
4 Agricultural Bank of China (ABC) 10.81
5 China Securities 9.01

Panda Bond Database

Pricing Date Issuer Country Size Rmb (m)
1 17-May-19 Trafigura The Netherlands 540
2 16-May-19 CITIC Pacific China 1,000
3 15-May-19 Republic of the Philippines Philippines 2,500
4 29-Apr-19 Semiconductor Manufacturing International Corp (SMIC) China 1,000
5 29-Apr-19 Semiconductor Manufacturing International Corp (SMIC) China 500

Offshore RMB Bond Top Bookrunners

Rank Bookrunner Share % by Volume
1 Standard Chartered Bank 25.05
2 Credit Agricole 7.04
2 HSBC 7.04
4 Bank of China (Hong Kong) (BOCHK) 6.90
4 Bank of Communications Hong Kong Branch (BOCOM HK) 6.90

Latest Offshore RMB Bonds

Pricing Date Issuer Country Size Rmb (m)
1 22-May-19 Agricultural Development Bank of China (ADBC) China 3,000
2 16-Apr-19 ICBC Singapore Branch China 1,000
3 10-Apr-19 Bank of China Macau Branch (BOC Macau) China 4,500
4 15-Mar-19 Bank of Communications Hong Kong Branch (BOCOM HK) China 2,500
5 13-Mar-19 Daimler International Finance Germany 1,000