China policy round-up: fourth plenum wraps up, trade deal meeting cancelled, China publishes first list of certified fintech products
In this round-up, the Chinese Communist Party (CCP) said it will strengthen the country’s ideological and institutional design, the Chilean government called off a planned Apec meeting and the State Administration for Market Regulation (SAMR) and the People’s Bank of China released a list of certified fintech products.
The four-day fourth plenum meeting of the 19th CCP Central Committee wrapped up on Thursday.
A statement issued after the meeting listed three major goals for the next stage of growth. By 2021, government regulations on all fronts would be matured and finalised. By 2035, the modernisation of the Chinese governance system and government capacity would be mostly completed. And by 2049, all such modernisation should be fully completed.
The statement also mentioned the importance of strengthening people’s faith in the socialist system, managing domestic risks and improving ideological purity, according to state media Xinhua News.
The US Federal Communications Commission (FCC) is mulling placing another restraint on Chinese companies Huawei's and ZTE Corp's US businesses.
The commission’s chairman, Ajit Pai, published a two-part proposal on Monday hoping to ban US companies from receiving federal subsidies from purchasing the two Chinese firms’ equipment. The commission will meet on November 19 to vote on the proposal.
The ban could take effect within 30 days after the vote. Should Huawei and ZTE contest it, the implementation may take 120 days.
Chinese companies have been targeted by the US on other fronts too. US senator Marco Rubio proposed new legislation on Monday that will ban federal pension funds from investing in Chinese-listed stocks. The move aims to reverse the Federal Retirement Thrift Investment Board’s decision to invest in one of MSCI's global indexes that includes Chinese companies such as Tencent Holdings, ZTE and Hangzhou Hikvision Digital Technology.
On a brighter note for China, the office of the US Trade Representative said on Monday that it is considering extending certain exclusions from additional tariffs on nearly 1,000 Chinese imports for up to 12 months. These exclusions were first granted last December and are set to expire on December 28 this year.
The Chilean government called off the Asia Pacific Economic Cooperation (Apec) meeting on Wednesday. Originally, the US and China hoped to sign the phase one trade deal during the meeting since US president Donald Trump and Chinese president Xi Jinping will both be there. The cancellation was due to social unrest in Santiago, the Chilean capital.
The Chinese Ministry of Commerce issued a standalone statement on Thursday: “China and the US have been keeping in close contact and the negotiation work has been going well. Both sides will carry on the negotiation as planned. The leaders of the two negotiation teams will hold another phone call on Friday.”
Trump also tweeted on Thursday evening: “China and the USA are working on selecting a new site for the signing of Phase One of Trade Agreement, about 60% of the total deal, after [Apec] in Chile was cancelled due to unrelated circumstances. The new location will be announced soon. President Xi and President Trump will do signing!”
China’s State Administration for Market Regulation (SAMR) and the People’s Bank of China released the country’s first list of certified fintech products on Tuesday.
The list has 11 categories ranging from platforms for financial transactions to terminals of automated teller machines (ATM). The two authorities will also run tests on products that have applied to qualify for fintech status. These fintech certificates last for three years.
The Hong Kong Monetary Authority lowered its benchmark lending rate by 25bp to 2% on October 31, immediately effective. The move followed the US Federal Reserve’s decision to cut its overnight lending rate for the third time this year to a range of between 1.5% and 1.75% on Wednesday.
The PBoC, however, did not lower its benchmark rates. The central bank also did not inject bank liquidity via targeted medium-term lending facility (TMLF) on Thursday.