Financial Regulation

Pension funds invest in A-shares

China’s national pension fund has invested over Rmb10bn ($1.6bn, £1.0bn, €1.2bn) into the domestic stock market, state media announced. Dai Xianglong, the head of National Social Security Council, a government entity that manages national pension fund, also encouraged local authority pension funds to invest in equities to preserve and increase their value. He added that 90% of around Rmb1,500bn in pension funds managed by the local government were deposited in banks for an average annual return of 2% in the past decade. In addition, pension funds’ deficits in 14 provinces nearly doubled to Rmb67.9bn in 2010, according to official data. Investing pension funds into stocks has sparked a debate among domestic commentators.

Financial sunshine and shade

Shadow lending is ebbing but this does not herald a harsh government crackdown. More likely is a gradual process aimed at reasserting Beijing’s control.

Crisis-hit Wenzhou tells banks to lend to private enterprises

City authorities in Wenzhou, a prosperous private business hub south of Shanghai, have ordered emergency measures to combat a credit crunch that has already prompted over 20 private enterprise bosses to flee the city and one to commit suicide.

Financial reform hit as "China sub-prime" concerns grow

Concerns over financial fragility, mixed with a conservative political atmosphere ahead of the 2012 political succession is hitting the pace of financial reform.

Regulators get tough on local government debt

Local government financing vehicles are trying to repackage debts to escape default but the sector still looks shaky.

LGFV loans, still a time bomb

The new figures released by the National Audit Office grossly understate the scale of local government financing vehicle debt in the economy.

Another big liquidity call augurs ill for A-shares

Tighter capital adequacy ratio requirements are driving banks to tap the liquidity pool through share and bond issuance.

Borrowing costs for individuals and SMEs surge

Banks are seeking to offset lost revenues from reserve requirement ratio hikes and other factors by hiking borrowing rates for individuals and SMEs.

Property rules set to curtail activity

New regulations limiting home buying by non-residency permit holders are set to damp transaction volumes and ease prices in key cities.

PBoC to hike bank reserve requirements

The People's Bank of China, the central bank, announced a hike of 50 basis points in bank reserve requirement ratios (RRR) amid rising concerns over domestic inflation, inflows of funds from overseas and a widening trade surplus for October.

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09 Feb 2012

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