Financial Services Talking Points | 03/01/2017


financialstpbIn today’s talking points: E-Commerce transactions to reach 40 trillion RMB by 2020; Regulators attempting to redirect insurance sector back to basics; Australian Bank sells off Chinese shares; China brings in new yuan transfer measures.

E-Commerce transactions to reach 40 trillion RMB by 2020

According the China’s latest five year plan, China is aims to drive its e-commerce sector to grow at 12% annually through 2020. With the largest e-commerce market in the world, it is expected to double in size in the coming four years. The sector is further expected to provide more than 50 million jobs by the end of 2020. Cross-border pilot programs will spearhead the e-commerce market with a fusion of social networking and online shopping; farm produce will be brought online and virtual reality technology incorporated into the shopping experience. Currently there are 27 million people working in e-commerce having given rise to a roaring delivery sector, with more than 3o billion parcels sent this year.

Read more at: Caixin

Regulators attempting to redirect insurance sector back to basics

New government rules implemented to better control the insurance industry aims to encourage China’s insurance companies to avoid high stakes investing.  The China Insurance Regulatory Commission (CIRC) have promised to lower the ceiling on a majority shareholder’s stake in an insurance company to one-third of the insurer’s total equity shares. Currently, the limit sits at 51%. Li Xiaolin, chief analyst at the Beijing Insurance Research Institute stated that, ‘this arrangement will demonstrate its usefulness when shareholders have different opinions… it will help prevent any investor from seeking (personal) benefits and not what benefits the company and the industry.’

Read more at: Caixin

Australian Bank sells off Chinese shares

Following its offload of Chinese assets, Australian bank ANZ has sold its 20% stake in Shanghai Rural Commercial Bank for $1.84 billion. These holdings will be equally split between COSCO and Sino-poland Enterprise, which will each receive a 10% share. This follows on from the announcement from the bank in October, in which they agreed to sell retail and wealth management business to Singapore’s DBS Bank located in five Asian countries. ANZ says the sale will allow the bank to focus on “institutional banking business in Asia.”

Read more at: Yahoo Finance

China brings in new yuan transfer measures

In 2017, banks and other financial institutions in China will have to report cash transactions larger than 50,000 yuan ($9984) on all domestic and overseas cash transactions. This amount was previously set to 200,000 yuan. It is said that reporting responsibility would be assumed by financial institutions, with no extra documentation or approval procedures required for individuals and companies. The central bank has claimed that the move was intended to improve monitoring of money laundering and financing for terrorism rather than regular business activity. This has  followed an onset of rules released from Beijing this month in relation to stem capital outflows after its yuan hit an eight-year low.

Read More at: The Sydney Morning Herald