Financial Services Talking Points 23-06-16


In today’s Talking Points: Yuan conversion pilot program set to expand; Trade with Belt and Road nations passed $1 trillion in 2015; What slowdown? China still top investment location; and, Chinese State Grid makes $3 billion deal with Singapore Power

Yuan conversion pilot program set to expand

China’s State Administration of Foreign Exchange has made a move to allow all companies to freely convert 100 percent of money in capital accounts into China’s currency. The relaxed restrictions on foreign exchange conversions involving incidental expenses for all mainland-based non-financial companies will no longer be limited to China’s four free trade zones in Shanghai, Tianjin, Guangdong and Fujian. Under the old system companies were required to report to SAFE every time they needed to make a conversion. Whilst the old system will continue to co-exist along with the new one, it merely acts as a supplement. The new change will be effective immediately.

Read more at Caixin

Trade with Belt and Road nations passed $1 trillion in 2015

China’s trade with One Belt One Road countries passed US$1 trillion in 2015 and accounted for over a quarter of its foreign trade, President Xi Jinping said Wednesday while in Uzbekistan on a state visit. The Belt and Road initiative includes over 70 countries and international organisations and lead to the creation of 46 economic cooperation zones. President Xi said Chinese enterprises’ direct investment in the economic corridor reached nearly 15 billion dollars in 2015, up 18 percent year on year, while those countries’ investment in China exceeded 8.2 billion dollars, up 25 percent.

Read more at Asia Times.

What slowdown? China still top investment location

 Foreign direct investment into China rose by 6.4 percent to US$126.7 billion in 2015, making it the world’s second most attractive location for investment according to the United Nations Conference on Trade and Development (UNCTAD).   Zhan Xiaoning, an official with UNCTAD in charge of investment and enterprises, said their surveys showed a trend in the flow of investment towards technology intensive and high-value added fields. Global FDI surged 38 percent in 2015 to US$1.76 trillion, the highest since the Global Financial Crisis of 2008.

Read more at China Daily.

Chinese State Grid makes $3 billion deal with Singapore Power

Chinese government owned State Grid Corporation is poised to become one of the biggest energy infrastructure investors in Australia after its deal with Temasek-owned Singapore Power. State Grid will pay Singapore Power $824 million for a 19.9 per cent stake in SP Ausnet, cutting Singapore Power’s stake in the company from 51 per cent to 31 per cent. State Grid will also purchase a 60 per cent stake in SPI Australia (trades as Jemena), a Singapore Power subsidiary. No agreed price for the 60 per cent Jemena stake has been agreed upon but it is believed to be valued at about $8 billion including $4.5 billion debt.

Read More at the Sydney Morning Herald