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China policy round-up: Top anti-corruption regulator focuses on local government debt, Shanghai welcomes more tech firms and MNCs, Guangdong to launch futures exchange

China Shanghai photo from Adobe 17Dec19 230x150
By Addison Gong, Rebecca Feng
17 Jan 2020

In this round-up, Chinese premier Li Keqiang encourages local government bond issuance, the Central Commission for Discipline Inspection plans to investigate corruption around local government debt, and Shanghai is working to grow the Star board and attract more foreign investment into the city.

Li Keqiang, China’s premier, called for the speedy issuance and “better usage” of local government special purpose bonds in a state council meeting on Monday.

He said the government will guide financial institutions to provide more credit support for the manufacturing industry, privately-owned companies as well as medium, small and micro enterprises, and help lower their financing costs.

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The Central Commission for Discipline Inspection (CCDI), China’s top anti-corruption watchdog, has put investigating “the hidden corruption issues” in local government debt risks as one of its key missions for 2020, according to memos from a CCDI meeting that was held on Wednesday. 

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Ying Yong, the mayor of Shanghai, said the city will support and encourage the listing of more technology and innovative companies on Shanghai Stock Exchange’s Star board, where 70 of the 205 companies that applied debuted in 2019. They raised Rmb82.4bn ($12bn) between them, Ying said in Shanghai’s annual government work report on Wednesday.

The city also welcomed 54 newly licensed financial institutions last year, according to Ying. He promised that Shanghai will implement the foreign investment law, and attract more multinational companies to set up their regional headquarters in the city.

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The governor of the Guangdong province, Ma Xingrui, said the Guangdong government will support the reform of a registration-based system for ChiNext, a Nasdaq-style board of the Shenzhen Stock Exchange that was launched in 2009, from the current approval system.

Ma will also push for the launch of the Guangzhou Futures Exchange, he said in the annual provincial government work report on Tuesday.

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China and the US signed the phase one trade deal on Wednesday. GlobalCapital China breaks down the agreements between the two countries on the financial sector in our trade war diaries this week.

The trade truce came just two days after the US removed the label of currency manipulator on China, according to a Monday press release by the US Department of Treasury.

China now instead joins Japan, Korea, Ireland, Germany, Italy, Singapore, Malaysia, Vietnam and Switzerland on the US's currency monitoring list.

“China is not a currency manipulator in the first place,” Geng Shuang, a spokesperson at China’s foreign ministry, said when responding to the news in a Tuesday press conference. “The US’ new conclusion is in line with international consensus.”

The General Administration of Customs of China also called the development a “right choice with a positive meaning” on Tuesday.

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China should continue to shorten the negative list for foreign investment and reduce import tariffs, Ning Jizhe, the deputy head of the National Development and Reform Commission and head of the National Bureau of Statistics, said in an article he wrote for a party magazine, Current Affairs Report. 

By Addison Gong, Rebecca Feng
17 Jan 2020