Chinese policy lender Agricultural Development Bank of China (ADBC) has signed a memorandum of understanding with the Asian Development Bank (ADB) to co-operate under the country’s ‘rural vitalisation’ initiative, according to a Thursday press release.
The concept was first brought up by president Xi Jinping in 2017, as part of Beijing’s efforts to fight poverty and promote the development of rural regions. The ADBC and ADB will work together on supporting rural infrastructure, environment improvement, and agribusiness value chain development.
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State-owned enterprises (SOEs) in China recorded a revenue growth of 26.6% year-on-year during the first seven months of 2021 to Rmb41.44tr ($6.4tr), according to the Ministry of Finance.
Their total profits surged 92.1% over the same period to Rmb2.79tr. The SOEs’ asset-to-debt ratio stood at 64.3% by the end of July, which is 0.2 percentage point lower than a year ago.
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The People’s Bank of China (PBoC) on Monday accepted an application from Beijing Financial Holdings Group to establish a financial holding company, according to an update on the regulator’s website. The entity will be wholly owned by Beijing State-owned Capital Operation and Management Co.
Earlier this year, China Citic and China Everbright Corp submitted similar applications to the central bank.
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The Shanghai municipal government has released a five year plan for the 2021 to 2025 period in its efforts to transform the city into an international financial centre.
China wants Shanghai to become an “international financial centre with significant global influence” by 2035. To that end, the plan detailed 44 measures, including improving capital market access for companies from areas such as integrated circuit, biopharmaceuticals, and artificial intelligence. More medium-to-long-term loans should be provided by financial institutions to industries like car manufacturing, high-end equipment manufacturing and new materials. Pension and healthcare companies are being encouraged to finance their businesses through IPOs and the issuance of bonds and securitization.
Shanghai also wants to attract foreign banks, securities houses, fund management companies, futures companies and insurers, as well as international financial institutions, foreign central banks and multilateral development agencies to establish a presence in the city. Foreign firms are also being encouraged to set up or invest in different types of domestic financial institutions. Foreign banks will be supported in their applications to become securities investment fund custodians and interbank market bond underwriters.
There will be more Panda bond and Yulan bond issuance. The government also reiterated its intention to introduce a market-making mechanism in the technology-focused Star market.
In green finance, Shanghai wants to promote green loans, green ABS, and the development of carbon-related financial products. Financial institutions are being encouraged to set up green dedicated business units, and start climate-related financing and investment businesses.
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The State Council has announced several measures to support the development of the Yangtze River Economic Belt, including for the National Green Development Fund to step up investments in the region.
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China Evergrande Group expects its first half 2021 net profits to drop 29% to 39% year-on-year to between Rmb9bn and Rmb10.5bn, the company said in a stock exchange filing in Hong Kong. The losses will be around Rmb4bn for its property development business, and Rmb4.8bn from the new energy vehicle segment.
Separately, Shenzhen-listed Yonggao Co, a plastics pipe company, said Evergrande owes it Rmb478m in commercial bills. Of that amount, Rmb195m has become overdue, Yonggao said in a Wednesday exchange filing.
Earlier this week, onshore newspaper Yicai reported that state-owned entities, like Guangzhou City Construction Investment Group and Guangzhou Yuexiu Group, have started to take over some of Evergrande’s assets, including the Guangzhou Evergrande Football Stadium currently under construction. An earlier report by Redd Intelligence suggested that Evergrande is in talks to sell its headquarters located in Wan Chai in Hong Kong to Guangzhou Yuexiu’s unit, Yuexiu Property Co.
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Local governments in China sold Rmb656.8bn of bonds in July, taking this year’s total to nearly Rmb4tr, MoF data showed on Wednesday.
By the end of July, the local government issuers had used Rmb79.3bn of the Rmb200bn quota assigned for bonds dedicated to supporting small regional lenders, according to the MoF.
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The National Association of Financial Market Institutional Investors, an interbank market bond regulator, has taken different regulatory measures, such as warning letters and regulatory talks, against six issuers that have delayed publishing their latest annual and/or interim results.
The issuers are Datang Sichuan Power Generation Co, Huarong Jinshang Asset Management Co, Qinhuangdao Urban Development Investment Holding, Shaanxi Water Affair Group Co, Xinyang Huaxin Investment Group and Zhengzhou Coal Industry (Group) Co.
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The Insurance Asset Management Association of China has published its ranking of 10 domestic credit rating agencies, which it said reflects the views of investors in the insurance industry. China Bond Rating Co was ranked top, followed by S&P Global China Ratings and China Lianhe Credit Rating Co.
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Some 184 companies have listed on Shenzhen’s ChiNext board since China introduced a registration-based system for equity financing on the start-up focused board a year ago, data from the Shenzhen Stock Exchange showed. The bourse has accepted applications for 728 IPOs over the past year. The companies that have successfully listed raised a combined Rmb142.1bn.
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The province of Heilongjiang plans to provide a one-off cash incentive of Rmb5m to local companies that successfully list on an onshore exchange, or Rmb2m on the New Third Board, the government announced. Those that complete an IPO of over Rmb200m in the overseas markets will also receive Rmb5m.
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The State Council released new guidelines for the accounting industry on Monday. It plans to step up supervision of accounting firms and their financial auditing work, with a view to roll out detailed rules and a blacklist for the industry. Inspections will be launched more frequently and punishment for violations will become harsher, the guidelines said.
China also promised to work on cross-border supervision of accounting and auditing, to safeguard national security on economic information, as well as the legitimate rights of Chinese companies, said the State Council.
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Chinese regulators recently summoned six state-owned banks and their wealth management arms, outlining more requirement on the methods for valuing banks’ wealth management products, onshore newspaper Caixin reported.