China policy round-up: CBIRC publishes foreign bank rules, PBoC suspends open market operations for 26 days, Spain and China deepen financial ties

In this round-up, the China Banking and Insurance Regulatory Commission (CBIRC) published 18 new regulations for foreign banks in China, the People’s Bank of China (PBoC) has not injected money through reverse repo for a number record number of days and Spain and China sign MoU for closer financial collaboration and potential Panda bonds.

  • By Rebecca Feng
  • 30 Nov 2018
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The CBIRC unveiled 18 new regulations for foreign banks’ operation in China on Wednesday. The new rules will be open to public comments until December 27.

The revision touched on some reporting and business requirements. For instance, foreign banks’ Chinese branches should report to the CBIRC within five days after they take up responsibilities of selling or underwriting government bonds (including foreign sovereign Panda bonds as well as Chinese government bonds). They should also report to the CBIRC if they have provided financial advice or wealth management services related to government bonds. 

Among the other rules, wholly foreign-owned banks, joint ventures, and foreign banks with two or more branches in China will need to hire Chinese domestic accounting firms to audit the institutions’ financial records and report to Chinese regulators.

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The PBoC has broken its record for not injecting money into the banking system through reverse repo, hitting 26 consecutive trading days, local media reported. The move is seen as a way to soak up excess liquidity. 

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Bank of China and Instituto de Crédito Oficial, a Spanish state-owned bank attached to the Ministry of Economy and Business, signed a Memorandum of Understanding (MoU) to collaborate in areas of project financing, interbank financing, and small and medium enterprises financing, according to a November 28 statement.

The statement also indicated the possibility for Spain to issue Panda bonds in China in the near future.

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China is raising the tax threshold for e-commerce imports to boost consumption starting from January 1 next year, according to a Thursday statement by the State Council.

The tax quota will be increased by 30%, from Rmb20,000 ($2,880) to Rmb26,000. The limit for a single transaction will also rise from Rmb2,000 to Rmb5,000.

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Moscow Exchange signed an MoU with China International Capital Corporation (CICC) on November 22. The agreement aims to strengthen cooperation between Russia and China and develop offshore renminbi market in Russia, according to a press release by Moscow Exchange.

CICC was the sole underwriter and bookrunner for the only two Panda bonds issued by Russian corporations to date. Both were private placement deals by Rusal, according to GlobalRMB data.

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The Monetary Authority of Singapore (MAS) and Shanghai Municipal Financial Regulatory Bureau (SFRB) will forge closer ties in four areas – financing Belt and Road projects, improving capital market connectivity between two countries, facilitating RMB internationalization, and boosting fintech cooperation, according to a press release by MAS on November 27 during the fourth Shanghai-Singapore Financial Forum.

“In 2017, Shanghai-Singapore trade amounted to $17.5bn, an increase of 33.8% from 2016,” Zheng Yang, director of the Shanghai Municipal Financial Regulatory Bureau, said during a keynote speech. “On the investment front, Singapore has been China’s largest foreign investor for five consecutive years.”

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The PBoC, the CBIRC, and the China Securities Regulatory Commission (CSRC) jointly issued new guidelines to add more members into the existing group of systemically important financial institutions (SIFIs), according to a statement released on Tuesday.

China already has five financial institutions on the list – Ping An Insurance, Industrial and Commercial Bank of China, Agriculture Bank of China, Bank of China, and China Construction Bank.

New members will have to comply with stricter regulatory requirements on leverage ratios, liquidity and exposure risks, according to the guidelines.

The new list will comprise at least 30 banks, 10 securities firms and 10 insurance companies. Together, they will account for at least 75% of total assets in their respective sectors.

Local media group Caixin speculated that non-traditional financial institutions such as Ant Financial Services Group will also be included.

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The Philippines RMB Trading Community, the would-be community that seeks to facilitate direct foreign exchange trading between the RMB and peso, has adopted Bloomberg FXGO, a multi-bank FX trading platform, to be the electronic trading platform for the new RMB-peso spot market, according to a press release by Bloomberg on November 29.

The development followed the MoA signed by BOC Manila branch and 13 local banks to create the RMB Trading Community in the Philippines last month.


  • By Rebecca Feng
  • 30 Nov 2018

GlobalRMB Panda Bonds league table

Rank Arranger Share % by Volume
1 China Merchants Securities Co 15.31
2 Industrial and Commercial Bank of China (ICBC) 12.35
3 CITIC Securities 8.92
4 Agricultural Bank of China (ABC) 7.60
5 China CITIC Bank Corp 6.76

Panda Bond Database

Pricing Date Issuer Country Size Rmb (m)
1 06-Dec-18 China Gas Holdings China 1,300
2 27-Nov-18 Daimler Germany 4,000
3 26-Nov-18 Beijing Enterprises Clean Energy China 2,800
4 15-Nov-18 Sun Hung Kai Properties Hong Kong 1,200
5 12-Nov-18 Global Logistic Properties via Iowa China Offshore Holdings Hong Kong 1,500

Offshore RMB Bond Top Bookrunners

Rank Bookrunner Share % by Volume
1 Standard Chartered Bank 30.97
2 HSBC 18.82
3 Societe Generale 3.85
4 Bank of China (BOC) 3.68
5 Bank of Taiwan 3.30

Latest Offshore RMB Bonds

Pricing Date Issuer Country Size Rmb (m)
1 03-Dec-18 Huzhou Communications Investment Group China 500
2 22-Nov-18 Bank of China Tokyo Branch (BOC Tokyo) China 800
3 15-Nov-18 RusHydro Russian Federation 1,500
4 13-Nov-18 Bank of China (Hong Kong) (BOCHK) China 1,000
5 19-Sep-18 Agricultural Development Bank of China (ADBC) China 1,200