Monthly Archives: June 2017 - 4. page

China News recently reported that the “first tier” real estate cities (Beijing, Shanghai, Guangzhou, and Shenzhen) have all been increasing home loan interest rates. Cities in the second and the third tiers are following suit. China has been tightening up the real estate market in an effort to control the ever-increasing housing prices. The banks are seeing a sharp decline in terms of business volume. Their response is to introduce an interest rate hike on those who will have to buy a home no matter where the market is heading. According to new market study statistics, out of 533 banks in the home loan market, around 170 banks have lowered interest rate discounts, 244 banks have switched to the standard (government set) interest rate, 20 banks have even stopped providing home loans. The Chinese government’s current policy of restricting home loans is taking effect. The housing market is expected to cool down and banks are expecting a much lower profit level.

Source: China News, June 10, 2017
http://www.chinanews.com/cj/2017/06-10/8247092.shtml

According to iFeng.com, the Tsinghua PBCSF Global Finance Forum was held on June 3-4 in Beijing. The theme of the forum was Economic Globalization and Financial Stability. At the forum, Zhou Yanli, the former Vice Chairman of the China Insurance Regulatory Commission (CIRC) gave a lunch presentation. During his delivery, Zhou disclosed that China faces a large shortage in its pension reserves amounting to eight to 10 trillion yuan (US$1.18 trillion to 1.47 trillion) over the next five to 10 years. At the same time, social security funding has a balance of over 2 trillion yuan (US$0.29 trillion) and also faces a large shortfall. Zhou proposed that, in addition to the funding that the Ministry of Finance provides and what business enterprises contribute, more effort is needed to expand investment in pension insurance as well as pushing growth in the social security fund in order to supplement the shortage in the pension fund. By the end of 2016, China had a population of 22.4 billion people who were over 60-years-old.

Source: ifeng.com, June 3, 2017
http://finance.ifeng.com/a/20170603/15426251_0.shtml

Epoch Times published an article stating that the EU will impose an anti-dumping tariff on China’s steel products. The article said that, on June 9, the EU announced that it will impose a high tariff on Hot Rolled Steel Flat Bars. On June 2, one week earlier, EU leaders had a summit meeting with Chinese Premier Li Keqiang in Brussels. The summit happened to take place when the U.S. decided to withdraw from the Paris Agreement. It was expected, under the circumstances, that cooperation between China and the EU would improve and both sides would be willing to work with each other. However the outcome of the meeting did not turn out that way. The EU maintains it has strong grounds for its anti-dumping policy and demands changes from China, which has made China quite unhappy. According to an article in Politico, European Commission President Jean-Claude Juncker stated that “Chinese steel overcapacity is now more than double the EU’s total capacity. If we fail to make progress … the only winners will be political forces that oppose the progress we seek.” Section 15 of the Protocol on the Accession of the PRC expired last December. According to the policy, China would have been granted Market Economy Status by then. It would have meant that Western countries should not impose anti-dumping tariffs on China. However, China has faced resistance from the U.S. and from European countries. So far, it has not been granted this status.

According to Asahi Shimbun, a Japanese media, China was denied qualification for Market Economy Status during the EU and China Summit on June 2. China has expressed strong discontent about it. Li Keqiang even refused to publicize the joint announcement both parties made on the Paris Agreement.

Meanwhile Deutsche Welle published an article that stated that the EU will impose a 35.9 percent tariff on Hot Rolled Steel Flat Bars made in China. Currently the EU has trade protection measures on over 100 products. Of those, 40 of them are on steel products and among those 15 of them come from China. Hot Rolled Steel Flat Bars can be used to build ships, gas containers, and energy pipes. According to the EU, the 35.9 percent temporary tariff will be in effect for five years starting on June 10.

Source:
Epoch Times, June 11, 2017
http://www.epochtimes.com/gb/17/6/11/n9250440.htm
Deutsche Welle, June 9, 2017
http://www.dw.com/zh/盟亮红牌-中国钢产品再遇反倾销/a-39189121?&zhongwen=simp
Politico, “EU-China trade tensions undermine climate unity, June 2, 2017
http://www.politico.eu/article/eu-china-trade-tensions-undermine-climate-unity-summit-steel-dumping/

Xi Jinping and Wang Qishan expanded the anti-corruption campaign into the financial sector this year.  The Communist Party’s Central Commission on Discipline Inspection (CCDI) listed 53 officials in the financial sector who have been taken down since 2012. Among them, ten were from the four top financial oversight offices: the Central Bank (People’s Bank of China), China Banking Regulatory Commission (CBRC), China Securities Regulatory Commission (CSRC), and the China Insurance Regulatory Commission (CIRC).

Among those ten, five were from the CSRC, four from CBRC, and one from CIRC. However, the CIRC official held the highest rank: Xiang Junbo (项俊波), Chairman of the CIRC. No one from the Central Bank was taken down.

Source: Phoenix New Media, May 7, 2017
http://news.ifeng.com/a/20170507/51055004_0.shtml?wratingModule=1_9_1