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The Daily Brief for Wednesday, 10 May 2017

Seoul welcomes Moon: South Korea’s new president Moon Jae-in, a human rights lawyer and son of North Korean refugees once jailed for political activism, promises reform. Asia Times reports more immediately he must handle pressing issues that include rising tensions over North Korea, a China angry with Seoul over missiles and the risk of a rift with the US.

Japan’s corporate challenge: The head of Japan’s Financial Services Agency told investors he doesn’t expect to see another Toshiba-type accounting and financial disaster in the country. Yuriy Humber writes that as Japan’s unique corporate culture doesn’t typically pressure management to improve governance or motivate staff to report irregularities, it could easily happen again.

Beijing blows cold: China’s factory level inflation has cooled more than expected in April, writes Steve Wang and Lin Wanxia. It is yet another factor in a now long list of economic indicators that suggest the world’s most populous country is facing a stiff ascent ahead, following a blockbuster first quarter which generated nominal growth nearing 12%.

India summons Mallya: The Supreme Court of India on Tuesday ordered businessman Vijay Mallya to appear before it following a petition filed by a consortium of banks in the failed Kingfisher Airlines US$1.4 billion loan default case. Asia Times reports that Mallya is currently in the UK and a London court will hear an Indian government extradition case on May 17.

Race for AI: Artificial Intelligence is expected to have a bigger impact than bombs or missiles on the future of global heavyweights such as the United States, China and Japan, writes Doug Tsuruoka. Asian and US companies are racing to develop AI technology, which promises to revolutionize every aspect of humanity, from business to space exploration.

Posted inChinaShanghai

China Digest for Wednesday, 10 May 2017

Spotlight on insurers’ investments

Insurer’s investment portfolios are under closer scrutiny from the China Insurance Regulatory Commission, with a newly released document signalling tighter supervision to control leverage and asset quality in four areas: large-scale equity holdings; alternative financial products; real estate; and overseas investments.

PBOC’s Zhou offers 8 paths to fund New Silk Roads

The One Belt, One Road project will require development of a “rich and diverse” system of funding, including the connection of different capital markets, financial infrastructure and financial centers, People’s Bank of China Governor Zhou Xiaochuan wrote in the central bank’s China Finance magazine, according to a summary in Finance Sina.

Telecom giant embraces payment innovation

China Unicom has teamed up with Zhima Credit to allow customers with good personal credit scores to use the company’s services first and pay later, signalling a move away from the industry’s typical prepayment model, according to National Business Daily.

Local government debt sales slow

The pace of debt sales by local governments has slowed this year as interest rates rise, with only 17% – or 866.8 billion yuan (US$126 billion) – of the allocated budget reached as of May 9, Sina News reported. Banks bought 80% of the debt, it said. Local governments have been trying to diversify their investment base, it said.

Shanghai exchange in listed-bond push

Increasing the number of listed local government bonds will be one of this year’s main focuses for the Shanghai Stock Exchange, which has set up a special team to work on the project, 21st Century Business Herald reported. Eighty-nine bonds from 18 provinces and with a total face value of 453 billion yuan have already been listed this year, it said.

Brokerage revenues tumbles in April

Net revenue of China’s 28 listed securities firms fell 54% to 4.69 billion yuan in April from the month before, and 25.96% from a year earlier, the Securities Daily reported.

Government seeds VC funds to back innovation

China launched 17.85 billion yuan of venture capital funds, with 80% targeting innovative start-ups and the remainder aimed at growth businesses in emerging industries, Yicai reported.

Bank squeeze on second-home loans

Twelve banks stopped giving mortgages for second homes from April this year, Sina News reported, while all Tier 1 cities have raised interest rates for housing loans as of May 8.

Wuhu locks homeowners in for two years

Homeowners in Wuhu in Anhui province will not be allowed to sell their new or second-hand properties for two years after they receive a real estate license, the Paper reported. The city will also increase land supply and cancel deed tax subsidies, it said.