Posted inChinaJapanNortheast Asia

The Daily Brief for Friday, 30 December 2016

Riding on a fintech boom, China is going cashless, writes Johan Nylander in a special report. The majority of internet users in China are using their smartphones to conduct financial transactions, primarily through Alibaba’s Alipay or WeChat’s payment service. In Shenzhen, Johan can find hardly anyone paying with hard currency.

The markets are on edge, write Steve Wang and Benny Kung. In 2017, China’s financial institutions look set to face multiple threats: higher money market rates, a further slide in the yuan-dollar exchange rate, and intermittent shocks from high-profile defaults in the nascent bond market.

Battered Toshiba is running out of options. Faced with the prospect of a multi-billion-dollar writedown that could wipe out its shareholders’ equity, the Japanese tech conglomerate is short on fixes: it is burning cash, cannot issue shares and has few easy assets left to sell.

Chinese Catholics must run their church “independently” from the Vatican and guide believers on a path of “Sinicisation”, a senior Communist Party official has stated. Yu Zhengsheng’s comments come against the backdrop of the Church’s efforts to heal a decades-old rift with China, where Catholics are divided between those loyal to the Vatican and members of a government-controlled official church.

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Kenny Hodgart

Kenny Hodgart is an editor for Asia Times.

Posted inBeijingChinaHong Kong

China Digest for Friday, 30 December 2016

Insurance ownership cap cut to 33%

The maximum stake any single shareholder can have in an insurance company has been reduced to 33% from 51%, Caixin reported Thursday, citing the China Insurance Regulatory Commission. The regulator has been tightening controls on the structure of insurance companies because of the perceived risks to the financial system posed by the behavior of some of them.

‘Zombie killer’ reform to ease closing companies

A cure may be at hand for the many thousands of so-called zombie companies that exist even though they are unprofitable. New regulations due to take effect from March will make it simpler and less costly to deregister companies, Xinhua reported on Thursday evening, citing China’s State Administration for Industry and Commerce.

Leasing companies given green light to tap markets

Leasing companies are being encouraged to tap capital markets to strengthen their balance sheets and help develop the sector, Mao Wanyuan, a department director at the China Banking Regulatory Commission, said on Thursday, according to a report by Caixin. The regulator has given the go ahead for leasing companies to sell subordinated debt, with ICBC Leasing and Industrial Bank Financial Leasing ready to do so. Also three companies, which were not identified, will sell shares on the domestic A-share market and New Third Board as well as in Hong Kong, it said.

More tax cuts on the way for 2017

More tax cuts are coming in 2017 as the government removes or reduces administrative charges, Finance Minister Xiao Jie said at the National Fiscal Works Conference on Thursday, according to Caixin. Plans to improve the local tax system and assessment of individual incomes and assets are expected to be on the agenda, the report said.

3.5 trillion yuan rail expansion planned

China plans to invest 3.5 trillion yuan (US$500 billion) by 2020 expanding its railways, China Securities Daily reported, citing Yang Yudong, Deputy Director of China’s Ministry of Transport. The construction work will bring China’s rail network to 150,000 kilometers, Yang told reporters on Thursday.

80% of major cities to have high-speed rail by 2020

High-speed train services will connect 80% of first-tier cities by 2020, Sina Finance reported Thursday, citing a State Council white paper. The high-speed rail network will reach 30,000 kilometers by then, the paper added.

China Railway Group sells unit to parent for 2.4 billion yuan

China Railway Group sold its wholly owned Beijing Nuo Yi Jie Investment Management Co to its parent, state-owned China Railway Engineering Corp for 2.45 billion yuan, Yicai reported on Thursday night. The sale is part of the central government’s plans to restructure state-owned enterprises.

Asia Times Financial is now live. Linking accurate news, insightful analysis and local knowledge with the ATF China Bond 50 Index, the world's first benchmark cross sector Chinese Bond Indices. Read ATF now.