China policy round-up: Shanghai encourages Star listings, China to support WHO, micro and small enterprises get more help
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Asia

China policy round-up: Shanghai encourages Star listings, China to support WHO, micro and small enterprises get more help

Shanghai_skyline_575px_Adobe_24Apr2020

In this round-up, Shanghai-based companies are being encouraged to take advantage of the city’s Star board, China has pledged another $30m to the World Health Organization and the State Council has urged banks to boost lending to micro and small enterprises.

The city of Shanghai will encourage more companies based in the city to list on the Shanghai Stock Exchange’s tech-heavy Star Board, the deputy head of the local Finance Bureau said on Tuesday.

Of the 248 companies whose listing applications have been accepted by the bourse, only 41 are from Shanghai, he added. Sixteen firms have already completed their IPOs, raising Rmb20.9bn ($2.95bn) between them.

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China will donate another $30m to the World Health Organization (WHO), Geng Shuang, a spokesperson at the foreign ministry, said in a Thursday press conference. China already pledged $20m to WHO last month. 

The news came a week after US president Donald Trump said he would freeze US contributions to WHO. Trump earlier accused the international organisation of being China centric.

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Chinese premier Li Keqiang said he will give greater weight to inclusive financing in evaluating the performance of the country’s financial institutions, according to a Tuesday statement following the State Council meeting.

The government has also decided to lower the required provision ratios for losses from non-performing loans for small and medium-sized banks by 20 percentage points to encourage more lending to micro and small enterprises.

By 2019, China’s commercial banks had an average loan provision ratio of 186.08% for loan losses, according to data from the China Banking and Insurance Regulatory Commission (CBIRC). CBIRC requires all banks to have a minimum loan loss provision coverage ratio of 120%-150%.

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The CBIRC became the latest Chinese regulator to publicly condemn Luckin Coffee, which admitted this month to allegedly fabricating Rmb2.2bn of sales last year. The regulator said it will support “severe punishment” of the US-listed company, and that there is zero tolerance for financial frauds.

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