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China's ageing population a 'long-term reality', and its silver economy needs to catch up, State Council says (SCMP)
2021-11-26
China to establish negative list on entertainment, issues celebrity warning list to avoid distorted values (GT)
2021-11-24
Xi urges sci-tech management system reform, development of unified electricity market system (Xinhua)
2021-11-24
China's space programme will go nuclear to power future missions to the moon and Mars (SCMP)
2021-11-24
Former Editor at State-Run Newspaper Gets 13 Years for Bribery (Caixin)
2021-11-24
A former editor working for Communist Party's official newspaper People's Daily has been sentenced to 13 years in prison and fined 1.4 million yuan ($219,078) after being found to have both accepted and offered bribes worth 3 million yuan each, according to the court document seen by Caixin. Ding Ting, a former director at the editorial center of the People's Daily's bureau in Haikou, South China's Hainan province, was also deprived of political rights for three years, the First Intermediate People's Court of Hainan Province ruled Monday. The court said it will confiscate the 3 million yuan in illegal gains that haven't been handed. Ding, 39, had worked for the newspaper for 14 years before being expelled from the Communist Party and dismissed from public office in July 2020 over bribery allegations. Earlier that month, she was detained by Hainan police. Ding's case comes as China has stepped up its corruption crackdown with an apparent shift in focus to probing and punishing people offering and paying bribes — not just those accepting them — following a constant increase in corruption cases. According to the judgement, Ding took 3 million yuan in bribes from Wang Tieming, the then director of the Sanya Municipal Bureau of Housing and Urban-Rural Development. Prosecutors said Ding met Wang in January 2016 when she, as a reporter, interviewed Wang about Sanya's progress in carrying out a program on the local ecological restoration and urban renewal. The Sanya housing authority was one of the departments responsible for the program. Ding promised to help Wang publicize the authority's work, with an article published by People's Daily drawing widespread attention in February that year. To thank Ding for her help and with the expectation of receiving more favors in the future, Wang later sent her 3 million yuan in cash. Prosecutors also said Ding offered 3 million yuan in cash to Zhang Jiahui, former vice president at the Hainan Provincial High People's Court in April 2019 in a dispute case linked to her husband. Zhang helped "greet" the judge who finally ruled in favor of her husband's side. Ding maintained her innocence during the hearing, which opened in August, according to the judgement. "We have filed an appeal requesting that the criminal verdict of the Hainan court be revoked, and the judgment be changed to acquittal or remanded for retrial," her mother told Caixin. Wang was also expelled from the party and removed from public office in October 2019 after a months-long investigation. He was later convicted on suspicion of bribery and his case was heard via video link in July 2020. Wang pleaded guilty in court, but his ruling has not yet been made public, according to the official newspaper Hainan Daily.
China on high alert for mounting economic headwinds as Li Keqiang meets with local government heads (SCMP)
2021-11-23
Key CPC session offers new impetus for China's pursuit of common prosperity (Xinhua)
2021-11-22
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China's zero-Covid policies causing 'major' knock-on effects for snarled global supply chains (SCMP)
2021-11-25
Tencent Barred From Releasing New Apps Over Data Breaches (Caixin)
2021-11-25
China's social media giant Tencent Holdings was suspended from releasing new mobile applications and updating existing ones without regulators' approval after allegations that several of its products violated consumer interests. The order is part of "temporary administrative guidance" against Tencent as regulators ramp up scrutiny of the country's internet sector, state media reported Wednesday. The Ministry of Industry and Information Technology (MIIT) told app stores and platforms to carry out the order immediately. Tencent, China's most valuable tech company, operates dozens of apps including WeChat, which hosts 1.2 billion users worldwide. Existing apps remain functional and available for download, Tencent said. The punishment is another blow to Tencent in China's year-long tech crackdown, which has already taken a toll on businesses like gaming and advertising. The company reported slower-than-expected revenue growth in the September quarter amid regulatory headwinds. Tencent is "continuously working to enhance user protection and also have regular cooperation with relevant government agencies to ensure regulatory compliance," the company said in a statement. The company has run afoul of regulators repeatedly during a clampdown on tech companies' violations of data protection regulations. Nine Tencent apps including Tencent News and QQ Music were named by the MIIT on four separate lists of violators after the ministry started making regular disclosures of apps' breaches of users' rights. In November last year, the company was also accused by senior MIIT official Lu Chuncong of repeated violations of personal information protection. Companies with repeat violations will face severe punishment, one regulatory official told Caixin. According to rules published by the MIIT this year, companies found to have committed violations four times will be subject to relative administrative measures. Under the latest order, the MIIT will conduct "technology testing" to ensure that Tencent's apps meet standards before the company can offer them to users, according to state media. The order will be in place from Nov. 24 to Dec. 31, and each test may last about seven days. Chinese tech giants including Tencent and its archrival Alibaba Group face greater compliance pressures after China rolled out the new Data Protection Law, which set stricter requirements on tech companies' handling of users' personal information. The MIIT announced a five-month campaign Nov. 5 targeting data-related misconduct of apps and their developers. All internet companies are scrambling to adjust their operations to comply with the new laws, a tech company's legal department staffer said. "For a long time, the internet industry has run businesses on the basis of abusing users' information," the person said. "There are so many things to be changed, and every company may run afoul of regulators in the face of the stricter laws." The new data protection law stipulates punishment of as much as 50 million yuan ($7.8 million), or as much as 5% of a company's annual revenue. The MIIT is also drafting new industry rules for mobile apps which may lead to business suspension of apps that fail to comply.
China's robust economy to attract more foreign investment, talents, economist says (Xinhua)
2021-11-24
Burned by Developers, China's Trust Industry Pulls Back From Property (Caixin)
2021-11-23
Long blessed with licenses that allow them to invest in a wide range of assets, Chinese trust firms poured the money they manage and channeled bank loans into property developers such as China Evergrande Group. But now with Evergrande in crisis and many other property developers also missing debt payments, these investments have come back to bite the trust industry. Caixin learned that debt-ridden real estate giant Evergrande failed to pay interest on multiple trust products on time in September, and some trust products that had invested in the developer were in default by the end of October, including those of Citic Trust Co. Ltd., The National Trust Ltd., China Minsheng Trust Co. Ltd. And Everbright Xinglong Trust Co. Ltd. Losing money from their property investments, some trust companies are now suffering high liquidity pressure that has in turn prompted them to scale back their immense investments in the real estate sector. This downsizing of investment from China's 21 trillion yuan ($3 trillion) trust industry is yet another blow to real estate, a crucial contributor to the Chinese economy. The property sector drives about 25% of GDP growth directly and indirectly, according to an estimate by Wang Tao, UBS Investment Bank's chief China economist. China's trust industry emerged in 1979 as a way to supplement the banking industry, which at the time couldn't provide enough financing to the fledgling market economy, according to a report by Boston Consulting Group and China Foreign Economic and Trade Trust Co. Ltd. Internationally, trust companies primarily manage trusts, trust funds, and the estates of wealthy individuals and businesses, and serve as a custodian for the owners of the assets they oversee. There are a lot of reasons to make use of trusts, such as isolating financial risks or limiting tax liability. In China, trust companies provide investment banking services to the rich, but they also play a significant role in the murky part of the financial industry called shadow banking. Trust companies often lend to high-risk companies that can't get banks loans and are also used by lenders and many other financial institutions as a vehicle to invest off-balance-sheet. That's because traditional banks and many other financial institutions are restricted from making certain investments. To bypass these restrictions, they have often made use of trust companies, which are allowed to raise money from a variety of sources and can invest in a wide range of assets including bonds, stocks, unlisted companies and local government financing vehicles. Trust investments made on behalf of other financial institutions, which bear the investment risk themselves, are called conduit, or "channeling," business. As of the end of June, conduit business accounted for 43% of all trust assets under management of China's 68 licensed trust firms, according to data from the China Trustee Association (CTA), an industry group. China's financial regulators have grown concerned about risks in the trust industry, in part because the conduit business enabled banks to skirt regulations and helped fuel the rapid build-up of corporate debt, particularly in the real estate industry. Industry insiders say property investments have been the biggest money-generating business for many trust firms. It's difficult to gauge exactly how much money trusts have invested in China's real estate sector due to insufficient data. However, people in the industry said the two businesses are tightly interconnected. At first glance, it appears that only a fraction of the money managed by trust firms goes into real estate. According to a breakdown by the CTA, 13% of the 16 trillion yuan in money entrusted to trust companies had been invested in real estate as of the end of June, just short of the 13.4% invested in infrastructure and well behind the 30% in industrial and commercial enterprises. Annual reports of trust firms show that by the end of 2020, property investments accounted for more than 50% of a few trust firms' business. But official data only tell part of the story, trust industry insiders said. Many of the industrial and commercial enterprises that have received trust company investments are part of the supply chain for real estate. Many conduit investments made through trust firms went to local government financing vehicles, which raise money to develop land. About 70% to 80% of conduit investments involve property, people with knowledge of the industry said. Now, as real estate developers struggle with restricted access to financing and a plunge in sales, the trust industry is experiencing troubles of its own. Not all trust firms invested in developers that defaulted, but out of the long list of troubled developers, it's almost unavoidable that many trust firms have invested in at least one, a person at a trust company said. A source who works at a trust company in eastern China said the recent real estate company defaults have done considerable damage to the trust industry. People in the industry who have tallied up trust product defaults said in the third quarter, nearly 60% of such defaults involve real estate by value. Trust defaults in the property sector in the first 10 months of 2021 exceeded the total for all of 2020 by value, according to data from the Use Finance & Trust Research Institute. Recent debt defaults by many developers, such as luxury villa developer Tahoe Group Co. Ltd. And China Fortune Land Development Co. Ltd., included defaults on trust products. Several trust companies that put more money into Evergrande have had to inform investors in some relevant trust products that interest payments would be delayed, said a senior manager at a small trust company, who noted that his company immediately demanded payment from Evergrande once it started showing signs of liquidity problems in the second half of 2020. Defaults by property developers mean that trust firms need to find a way by themselves to make up for the loss. What's more, many trust firms often choose to offer guaranteed returns to their investors in a bid to retain their reputation, although the trust regulator has said they shouldn't do so. Trust companies are now investing less of their money in real estate, though the trend began before all the trouble with developers emerged. CTA data show that the share of property investment in outstanding trust funds, which ranged between 8% and 18% since 2010, has been on a downward trend since a recent peak of 15.38% in 2019, when the government stepped up efforts to rein in real estate financing to curb speculation. The recent defaults are scaring off more trust firms from the real estate industry. Several people who work in the industry said that their companies have restricted new investments into the sector since the second half of 2020 and have redoubled efforts to collect the money that real estate companies owe them. Data from China Trust Registration Co. Ltd. show that the amount of trust money newly invested in the real estate sector in September was 39 billion yuan, down 44.8% from the 12-month average. The thinning of trust investments has created more headaches for property developers, after regulators told banks to screen developers' qualifications before issuing loans and imposed rules such as the "three red lines" to restrict how much developers can borrow. "Frequent debt defaults by property developers are indeed a huge point of risk for trusts," the senior manager from a small trust company said. "Many trust firms are afraid of lending to developers even if they have unused credit lines."
Chinese premier stresses importance of reform, opening-up to unleash market vitality (Xinhua)
2021-11-22
China Foreign Exchange Committee tells banks to limit speculative trading as yuan surges (SCMP)
2021-11-22
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