Global EditionASIA 中文雙語Fran?ais
    Business
    Home / Business / Finance

    New rules to de-risk investments

    By CHEN JIA | China Daily | Updated: 2020-12-17 09:10
    Share
    Share - WeChat
    A worker counts Chinese currency renminbi at a bank in Linyi, East China's Shandong province. [Photo/Xinhua]

    Ministry asks financial institutions to focus on core business, cut hierarchies

    China has asked State-owned financial institutions to remain focused on their main business and eliminate unnecessary operational hierarchies, while stepping up efforts to prevent risks from the inappropriate transactions of affiliates and false capital injection, the Ministry of Finance said on Wednesday.

    State-owned financial institutions that are engaged in overseas investment and have subsidiaries abroad should focus on their main business, follow the necessary prudential and compliance requirements, and strictly implement the due diligence and feasibility requirements, the ministry said in a notice.

    The notice is an indication that the central government is tightening scrutiny of State-owned capital investment, as financial risks and fluctuations are increasing due to the slower economic growth since the COVID-19 pandemic and the rise in new cases in some major Western countries, experts said.

    State-owned financial institutions should withdraw from business areas that are not at the core of their development strategies or have not yielded any financial returns for a long time, the notice said.

    In general, for providing the same kind of financial service, they can keep only one subsidiary, and there should be no more than three hierarchies in the operational structure, said the notice.

    The new rules also forbid false and circulatory capital injection among different subsidiaries within the same group, or using share pledges for financing, the Ministry of Finance said.

    "Except for financial investment, subsidiaries at all levels are not allowed to hold equities of the parent company, and the subsidiaries at all levels shall not hold each other's shares."

    Zhou Maohua, an analyst with China Everbright Bank, said the new rules will help streamline the main businesses of State-owned financial companies and improve the regulatory efficiency.

    "Financial resources will be invested in areas that can support the growth of the real economy and limit unnecessary competition between financial service providers in the same field."

    Recent data from the banking sector, which dominates China's financial system, showed a moderate deterioration in asset quality, profitability and capitalization during the third quarter.

    Financial regulators have also started signaling a resumption of de-risking measures such as tighter supervision of the domestic systemically important banks.

    Besides, the People's Bank of China, the central bank, is ensuring sufficient supply of liquidity to ease the temporary volatility from the recent corporate bond defaults.

    It has not eased the monetary policy significantly as the economic recovery is becoming increasingly broad-based. It will also lead to balanced liquidity in the financial system, said Nicholas Zhu, a senior credit officer with Moody's Investors Service, a global credit ratings agency.

    The new regulations also indicate the cautious stance of the government on overseas investments by SOEs, experts said.

    But some experts feel that the increasingly attractive offshore funding costs will spur an increase in offshore financing next year, as the Chinese economy continues to recover and credit easing measures in the onshore market will be less forthcoming compared to the first half of this year.

    Commenting on the bond default cases, Ivan Chung, an associate managing director of Moody's, said: "We believe the Chinese government's willingness to support SOEs will remain, but its tolerance for isolated defaults will increase as long as they do not trigger systemic risks or undermine economic and social stability."

    Top
    BACK TO THE TOP
    English
    Copyright 1995 - . All rights reserved. The content (including but not limited to text, photo, multimedia information, etc) published in this site belongs to China Daily Information Co (CDIC). Without written authorization from CDIC, such content shall not be republished or used in any form. Note: Browsers with 1024*768 or higher resolution are suggested for this site.
    License for publishing multimedia online 0108263

    Registration Number: 130349
    FOLLOW US
    CLOSE
     
    精品亚洲综合久久中文字幕| 日韩精品无码中文字幕一区二区| 亚洲av无码片在线播放| 在线天堂中文WWW官网| 无码AV天堂一区二区三区| 日韩欧美中文字幕一字不卡| 无码人妻精品一区二| 欧洲无码一区二区三区在线观看| 亚洲av中文无码| 中文精品久久久久人妻不卡| 久久久久成人精品无码中文字幕| 免费无码一区二区三区蜜桃| 精品久久久久中文字幕日本| 蜜臀精品无码AV在线播放| 秋霞无码一区二区| 亚洲AV无码一区二区二三区软件| 亚洲日韩在线中文字幕综合| 中文字幕欧美日韩| 暖暖日本中文视频| 亚洲 欧美 国产 日韩 中文字幕| 97无码免费人妻超级碰碰夜夜| 无码专区永久免费AV网站| 一本加勒比HEZYO无码人妻| 中文字幕日韩第十页在线观看| 在线中文字幕播放| 欧美中文字幕一区二区三区| 亚洲中文久久精品无码ww16| 亚洲中文字幕AV在天堂| 中文字幕精品亚洲无线码二区 | 日韩三级中文字幕| 中文字幕亚洲色图| 中文字幕一区二区人妻| 日韩人妻无码中文字幕视频| 亚洲中文字幕无码永久在线| 人妻精品久久久久中文字幕一冢本 | 日本中文字幕在线| 亚洲高清中文字幕免费| 一本无码中文字幕在线观| 中文字幕一二区| 成人午夜亚洲精品无码网站 | 中文字幕丰满伦子无码|