China is setting up a new government agency to supervise and coordinate the nation's bank, insurance and stock market regulators, as it tries to improve risk controls before allowing lenders to invest in stocks and insurance funds.
China's legislators yesterday passed amendments to the central bank law allowing the State Council to set up the new government supervisory body, and to the commercial bank law, aimed at diversifying investment opportunities for its lenders, according to a statement from the standing committee of the National People's Congress and carried by state news agency Xinhua. The changes will come into effect on Feb. 1.
China has for a decade forbidden lenders from buying stocks and bonds or offering non-banking services, to prevent the risk of financial collapse through poor investment decisions. The government is tightening regulatory controls to help banks, weighed down by US$500 billion of bad loans from five decades of state-directed lending to unprofitable businesses, expand their income to compete with overseas lenders which can enter China more freely from the end of 2005.
"While limiting commercial banks from conducting trust investment and securities investment, the law should also leave appropriate room for them to develop," said Jiang Qiangui, deputy head of the legal committee of the National People's Congress, as cited by Xinhua.
The amendment to the commercial banking law may allow the country's 126 commercial banks, including Industrial & Commercial Bank of China and China Construction Bank, to invest in the stock market, trusts, real estate and other non-banking financial businesses at some point in the future.
"There are exceptions [to the ban on outside investments] upon government approval," said the revised commercial law.
Government officials and legislators have been calling for the government to lift the ban and let commercial banks diversify their business so they can generate more profit to lower the risks caused by a reliance on lending.
In a third legal change, legislators passed a new banking supervision law to legalize the status of China's Banking Regulatory Commission. The banking regulator, run by the former head of the Bank of China Liu Mingkang, was split from the central bank in April with a mandate to oversee all banks in China, investigate illegal operations and punish offenders.
"The new law is a practical one, designed to meet the needs of the operations of the CBRC after absorbing the long-term experience of the central bank's supervision of banks and international rules," said Zhang Xiao, a member of the NPC Standing Committee in the statement.
Liu earlier this month outlined a three-part plan to help China's four biggest lenders clear their bad loans, increase capital and prepare for initial public share offers.
The government is introducing a range of measures to help its lenders improve their profitability and to meet guidelines opening the country to overseas lenders laid down when China joined the WTO at the end of 2001.
Overseas investors are each now allowed to own a maximum of 20 percent of domestic banks, up from 15 percent, as China encourages investment from global lenders such as HSBC Holdings Plc. Overseas investors can buy a combined total of 25 percent of a domestic lender up from 20 percent earlier.
Domestic lenders were this month given permission to sell subordinated debt to local investors for the first time, the banking regulator said on Dec. 9.
China's US$512 billion stock markets, regulated by the China Securities Regulatory Commission, have been hampered in attempts to open to overseas investment by concerns about price manipulation, broker corruption and corporate accounting fraud.
One in 10 public companies in a Shanghai stock exchange survey last year was found to have cooked their books.
Among the rows of vibrators, rubber torsos and leather harnesses at a Chinese sex toys exhibition in Shanghai this weekend, the beginnings of an artificial intelligence (AI)-driven shift in the industry quietly pulsed. China manufactures about 70 percent of the world’s sex toys, most of it the “hardware” on display at the fair — whether that be technicolor tentacled dildos or hyper-realistic personalized silicone dolls. Yet smart toys have been rising in popularity for some time. Many major European and US brands already offer tech-enhanced products that can enable long-distance love, monitor well-being and even bring people one step closer to
Malaysia’s leader yesterday announced plans to build a massive semiconductor design park, aiming to boost the Southeast Asian nation’s role in the global chip industry. A prominent player in the semiconductor industry for decades, Malaysia accounts for an estimated 13 percent of global back-end manufacturing, according to German tech giant Bosch. Now it wants to go beyond production and emerge as a chip design powerhouse too, Malaysian Prime Minister Anwar Ibrahim said. “I am pleased to announce the largest IC (integrated circuit) Design Park in Southeast Asia, that will house world-class anchor tenants and collaborate with global companies such as Arm [Holdings PLC],”
Sales in the retail, and food and beverage sectors last month continued to rise, increasing 0.7 percent and 13.6 percent respectively from a year earlier, setting record highs for the month of March, the Ministry of Economic Affairs said yesterday. Sales in the wholesale sector also grew last month by 4.6 annually, mainly due to the business opportunities for emerging applications related to artificial intelligence (AI) and high-performance computing technologies, the ministry said in a report. The ministry forecast that retail, and food and beverage sales this month would retain their growth momentum as the former would benefit from Tomb Sweeping Day
Thousands of parents in Singapore are furious after a Cordlife Group Ltd (康盛人生集團), a major operator of cord blood banks in Asia, irreparably damaged their children’s samples through improper handling, with some now pursuing legal action. The ongoing case, one of the worst to hit the largely untested industry, has renewed concerns over companies marketing themselves to anxious parents with mostly unproven assurances. This has implications across the region, given Cordlife’s operations in Hong Kong, Macau, Indonesia, the Philippines and India. The parents paid for years to have their infants’ cord blood stored, with the understanding that the stem cells they contained