China to Broaden Stock Connect Program to Incorporate Swiss, German Exchanges (Caixin)
2021-12-20
China is planning to expand a program linking the Shanghai and London stock exchanges to incorporate bourses in Shenzhen, Switzerland and Germany as part of continuing efforts to open China's capital markets and "facilitate cross-border investment and financing," the country's securities regulator said in a statement. Launched in 2019, the Shanghai-London Stock Connect scheme allows eligible companies listed either on the Shanghai or the London exchange to issue depositary receipts — which represent ownership of their shares — on the other bourse. Under the program, eligible U.K.-listed firms are able to issue Chinese depositary receipts (CDRs) in Shanghai, while Shanghai-listed firms can likewise issue global depositary receipts (GDRs) in London. Investors can buy these depositary receipts to gain exposure to companies listed elsewhere. On Friday, the China Securities Regulatory Commission (CSRC) published draft revisions to the regulations governing the Shanghai-London Stock Connect program, and sought input from the public on the draft updated rules renamed "Regulations of Depositary Receipts Under the Stock Connect Scheme Between Domestic and Overseas Stock Exchanges," according to the statement. If finalized in its current form, the amended rules will allow eligible companies listed on the Shenzhen bourse to issue GDRs abroad, and include the Swiss and German markets, the CSRC said. The amended regulations will allow foreign-listed companies to issue CDRs that represent their new shares to raise capital from the Chinese mainland stock market. Under the current scheme, London-listed companies are not allowed to do so and can only issue CDRs for their existing shares. Currently, no London-listed company has issued CDRs through the connect program. Four Chinese companies, namely Huatai Securities Co. Ltd., China Pacific Insurance (Group) Co. Ltd., China Yangtze Power Co. Ltd. and SDIC Power Holdings Co. Ltd., have issued GDRs through the program and raised a total of $5.84 billion on the London bourse, according to the CSRC. The updated rules also clarify requirements on financial and corporate governance information disclosure for foreign-listed companies issuing CDRs. Over the past three years, China has accelerated the opening-up of its financial sector, giving foreign investors greater access to its capital market by expanding programs such as the Qualified Foreign Institutional Investor program and schemes connecting the stock and bond markets in Hong Kong and the Chinese mainland.
^ top ^ |
|
Red light for misuse of traffic cameras (China Daily)
2021-12-24
Xi'an Cuts Off Air Travel in Escalated Covid Lockdown (Caixin)
2021-12-24
Northwest China's metropolitan Xi'an suspended all domestic flights in and out the city in escalated control measures as new Covid-19 cases spike. The city of 13 million people entered a lockdown starting Thursday, barring all nonessential travel outside the city. Authorities ordered residents to stay home absent pressing needs. Public transportation services in the city were slashed as all schools and public venues offering nonessential services were closed. As of Thursday noon, only one international flight from Jeju Island, South Korea, landed at the Xianyang International Airport, with the return flight shown delayed. Xi'an, capital of Shaanxi province, has been hit by surging flare-ups since Dec. 9. As of Thursday afternoon, the city recorded 234 new infections, 91 more than the previous day. Infections have spread to at least five provinces as of Thursday. The resurgence was traced back to an imported case among inbound travelers from Pakistan who landed in the city Dec. 4, city officials said. The latest flare-up was dominated by the Delta variant, genetic sequencing showed. Xi'an city officials enacted a lockdown Wednesday to contain the virus.
China's celebrities and internet influencers given 10 days to pay outstanding taxes (SCMP)
2021-12-23
China steps up efforts to accelerate reform, opening-up (Xinhua)
2021-12-23
A year into China's tech crackdown, the sky is no longer the limit for China's Big Tech (SCMP)
2021-12-23
China looks to 'update and strengthen' women's rights law (SCMP)
2021-12-22
China's top legislature starts standing committee session (Xinhua)
2021-12-21
New bureau fights anticompetitive market practices (China Daily)
2021-12-21
^ top ^ |
China yuan: Beijing sets out policies to stem fast appreciation to support exporters amid economic headwinds (SCMP)
2021-12-24
What to Expect of China's Economy in 2022 (Caixin)
2021-12-23
After a bumpy ride in 2021, China enters a politically important year ahead. Where are the trends headed toward? What are the things to watch? And what will surprise us most? The readout from the Central Economic Work Conference (CEWC) that concluded on Dec. 10 became the most widely dissected document of this economically turbulent year. Every single word of the 4,000-character long statement was put under the microscope: In describing the real estate market, why was achieving a "virtuous cycle" put before "healthy development," a placement that differs from the Dec. 6 Politburo meeting statement? Why was the "houses are for living in, not speculation" position mentioned only in the CEWC, but not in the Politburo meeting? But one thing that's certain is that growth will become the top priority in 2022. This can be seen in the CEWC statement, which said "taking economic development as the central task is the requirement of the (Communist) Party's basic line." That quote last appeared in the July 2015 Politburo meeting, when the Chinese economy was also in trouble. "Stability," mentioned 25 times in the CEWC readout this time, is the paramount goal before the party's 20th National Congress later in 2022. What does that mean? First, macro policies will be more supportive. Per the CEWC readout which stated that "policies could be preemptive." This suggests an approach of thinking ahead, doing extra, and doing more rather than too little. On monetary policy, we've see required reserve ratio cuts. In 2022, more quantitative policies could come. Fiscal policy has been a drag on growth in 2020 because, one, there was the contraction effect from unwinding of 2019 fiscal stimulus; and, two, fiscal outlay has been slow. Some estimates point to 1.8 trillion yuan ($283 billion) of unspent fiscal resources to be rolled over to 2022. That is why the CEWC wants to "accelerate the process of spending." Investment might be the main driver of growth. Strong exports were a main driver in 2021, a result of surprisingly slower resumption of global production due to multiple waves of pandemic outbreaks. It's almost certain that exports won't be so strong going forward. Either investment or consumption has to pick up the slack. Consumption is stable and slow to recover, while "forward-thinking" infrastructure investment is warranted by the leaders. Second, policymakers want to avoid "flooding" the market with too much credit, which is always a challenge when growth is preferred. That, as the statement points out, needs policies to be precise, targeted and structured, to help small businesses, innovative sectors and green industries. The central bank has been rolling out special programs for each of the three areas. We will see more in 2022. But the bigger question still lies in how much is too much. Sector-specific measures and what local governments do often matter more than macro policies put in abstract terms on paper. Third, restrictions on the property market will be further loosened. Long-time watchers know when the term "specific policies for specific cities" comes back, as it does this time, it usually marks a turn. Local governments may now adjust their restrictions on homebuyer qualifications and financing. But the principle of "houses are for living in" will hold. And the bottom line is no developer is too big to fail. Some believe the recent turmoil in the real estate market could have finally broken people's perception that home prices would always rise. So 2022 won't see a very hot property market. Fourth, phasing out coal will be more pragmatic. Representatives at the meeting conceded that coal is China's main energy supply and it should be replaced with sufficiently large renewable energy sources. Based on learnings from the power shortage and factory shutdown debacle, policymakers want to improve the "dual control" targets, which puts a lid on total and per-unit GDP energy consumption. As the share of renewable energy in total consumption keeps rising, it is only natural to substitute the restrictions on energy consumption with those on carbon emission. However, as measurement in carbon is not good enough now, a temporary compromise is to keep the dual control targets intact, but exclude consumption in renewable energy and its raw materials from them. Fifth, reining in big capital remains a critical task for 2022. The meeting promised to establish "traffic lights" for investments, to strengthen supervision and prevent reckless capital expansion. This new system, along with the upcoming rules on overseas listings with a variable interest entity (VIE) structure, are supposed to bring clearer guidance to investors. All told, the CEWC marks a turning point in preference, shifting from risk reduction to safeguarding growth. There is clearly some reflection or "soul searching" among the regulators, who are encouraged to learn more about economics and technology, and have gained a broader view beyond their own jobs and the importance of coordinating with others. But that shift also accompanies new risks. Three of them are worth noting. First, policy overreaction that leads to flooding the market with credit, eventually building up asset bubbles, financial risks and inflation. Second, the impact of implementation of the series of new rules regarding data security, personal information protection, anti-trust and labor protection. All these developments have good intentions, but the devil lies in the details. Finally, the job market will likely face strong headwinds in 2022.
NDRC stresses 2022 growth in decent band (China Daily)
2021-12-23
China confident of keeping economy running within reasonable range (Xinhua)
2021-12-22
China approves major rare-earth merger to stabilize supply chain (GT)
2021-12-22
New chapter to open on international taxation (China Daily)
2021-12-22
China's Big Tech crackdown: number of apps falls 40 per cent over 3 years amid new data laws and clean-up campaigns (SCMP)
2021-12-21
China's consumption market in solid expansion with emerging trends (Xinhua)
2021-12-21
China cuts benchmark loan rate for first time in almost 2 years amid mounting economic pressures (SCMP)
2021-12-20
^ top ^ |
