China will hold off on further retaliation to US tariffs, Gao Feng, the Chinese Ministry of Commerce spokesman, suggested on Thursday morning at a press conference.
When asked whether China is planning to take relevant retaliation against the US’s move of imposing an additional 5% tariff on all $550bn of Chinese imports, Gao said: “China has plenty of retaliatory measures in-store. However, given the current situation, we should be talking about how to cancel the proposed tariffs on the $550bn imports to prevent the trade war from escalating further.”
China announced the set up of six new pilot free trade zones on Monday. The pilot FTZs will be located in the six provincial regions of Shandong, Jiangsu, Guangxi, Hebei, Yunnan and Heilongjiang, according to the plan released by the State Council.
The total number of the country's pilot FTZs have now reached 18. FTZs are designed to be the pioneers of China’s reform and opening-up efforts. They are usually used as testing grounds when the government wants to introduce international practices to China.
Wang Shouwen, vice minister of commerce, said at a press conference that the new FTZs will deepen China’s trade and economic co-operation with neighbouring countries.
The People’s Bank of China's Shanghai branch convened representatives from more than 170 banks to talk about the implementation of the new loan prime rate (LPR).
The central bank told the banks that by the end of September, 30% of their new loans should be issued based on the LPR. By the end of the year, that proportion should reach 50%. By the end of March next year, 80% of the loans should be priced on the back of LPR.
Officials will also make LPR compliance part of the Macro-Prudential Assessments that the central bank uses to grade each bank’s performance on a quarterly basis. A bad MPA grade may lead to fines and licences removal in the interbank market.
The European Union Chamber of Commerce in China and Sinolytics, a Berlin-based consultancy specialising in China, jointly released a report on Wednesday about the establishment of a corporate social credit system (SCS) in China.
The report, titled the digital hand: how China’s social credit system conditions market actors, said that the “digital hand” will replace the hard market access constraints for international players, such as the negative list. The negative list is a list of industries where foreign investment is prohibited.
The SCS will start to steer companies’ behaviour through a more targeted way. The report also warned that the system is no longer just a vision and market actors should get ready.
“The Corporate SCS uses modern technologies to monitor, control and steer market participants,” the report read. “It comprises a diverse range of rating requirements, which form the basis for calculating regulatory ratings awarded to all market actors. Companies’ behaviour will be continually monitored, with scores being adjusted accordingly. If businesses fail to clearly grasp all aspects of the System and what they need to do to comply, they risk serious repercussions like sanctions or even blacklisting.”