In today’s talking points: China and Hong Kong stocks rise after Beijing’s commitment to reform; Beijing to continue crackdown on financial risks; Bigger Roles to be offered to Foreign Banks in China’s Financial Services; Chinese finance giant Ping An looking to throw more into technology
China and Hong Kong stocks rise after Beijing’s commitment to reform
Stocks rose on Thursday, after investors were encouraged by news of Beijing’s commitment to deepening structural reforms and curbing financial risks next year while maintaining steady economic growth. The Chinese government will be implementing structural supply-side reforms while maintaining neutral monetary policy in 2018 in order to improve the quality of economic growth.
Read more at: Reuters
Beijing to continue crackdown on financial risks
China’s policy makers took a hard-line stance in 2017 in regard to irregular and illegal activities in the financial sector. Regulations appeared in traditional institutions like banks but also included internet finance such as micro lenders, with offenders facing heavy fines. In the first 10 months of 2017, 2617 administrative penalties were issued in the financial industry, with fines amounting to 667 million yuan. A recent statement mentions that China seeks to foster a ‘virtuous circle’ between finance and the real economy, finance and the property sector as well as within the financial system itself to combat risk. The continued restrictions are key to fighting ‘three tough battles’, namely controlling risks, poverty and pollution.
Read more at: Xinhua
Bigger Roles to be offered to Foreign Banks in China’s Financial Services
The China Banking Regulatory Commission has announced it would relax requirements for foreign banks, in its latest move to open up China’s financial sector. This amendment will include foreign banks being able to take retail yuan deposits and allowing them to do business in government bonds, giving overseas investors greater access to the Asian giant’s financial services market.
Read more at: Reuters
Chinese finance giant Ping An looking to throw more into technology
Ping An Insurance Group has invested billions in technology in the past in order to improve its insurance, lending and asset management businesses. It has recently begun to sell technology to other financial firms and reveals its ambition to eventually generate half its earnings from technology. Deputy CEO Jessica Tan says that their long-term goal is to ‘drive business on the two wheels of capital and technology’. Ping An has experienced a 99 percent surge in share prices in 2017 and believes the answer to further growth is a greater emphasis on technology. While Ping An still trails behind the technological processing power of Alibaba and Tencent, analysts appear to share confidence in its endeavours.
Read more at: Bloomberg