A bridge under construction in Guizhou. Photo: Wikimedia Commons/Glabb

A total of 150 public-private partnership (PPP) projects were proposed in China during the first three months of this year and agreements have been signed for 31 of them.

The National Development and Reform Commission (NDRC) said private companies continued to have strong interests in PPP projects despite the Covid-19 outbreak in the first quarter. It said the 31 signed PPP projects had a total investment size of 9 billion yuan (US$1.28 billion).

Of the 150 newly-proposed PPP projects, 55 were related to urban infrastructure facilities, while 10 were agricultural, transportation, environmental protection and new energy. The NDRC did not provide comparable figures for the first quarter of 2019 as it started disclosing the figures from the end of last year. 

As of last November, about 7,000 PPP projects had been proposed in different provinces and cities in China with an estimated investment value of 9 trillion yuan. Of all the proposed projects, 510 would be implemented in Guizhou, 479 in Anhui, 475 in Guangdong, 460 in Shandong and 443 in Zhejiang province. The investment size in the five provinces accounted for 31% of all the PPP investment in China. 

About 1,300 of the 7,000 PPP projects had their agreements signed so far, the NDRC said. 

Medium-term lending facility

The People’s Bank of China, the country’s central bank, lowered the interest rate of its medium-term lending facility (MLF) loans on Wednesday by 20 basis points amid a slew of monetary policy maneuvres to mitigate the impact of Covid-19 on its economy.

The central bank lowered the rate of 100 billion yuan worth of one-year MLFs to financial institutions to 2.95%, compared with 3.15% on the previous operation.

The MLF tool was introduced in 2014 to help commercial and policy banks maintain liquidity by allowing them to borrow from the central bank using securities as collateral. No MLF loans are set to mature on Wednesday. 

Trade and investment

The State Administration of Foreign Exchange (SAFE) said it would streamline or ease some rules to facilitate cross-border trade and investment. Under the new rules, eligible companies will be able to use the capital they have raised overseas for domestic payments without providing relevant certificates beforehand. 

Exporters will be allowed to purchase foreign exchange for the repayment of their foreign currency loans borrowed onshore. In the past, they had to use their own foreign exchange reserves to repay such loans. SAFE also encouraged banks to support export-oriented small businesses by extending their foreign currency loans and streamlining application procedures.

Trust sector

The China Banking and Insurance Regulatory Commission (CBIRC) on Tuesday announced a further opening up of China’s trust sector by lifting the $1 billion asset requirement for overseas financial institutions.

The top banking and insurance watchdog has revised rules regulating trust companies and solicited public opinions to expand opening-up the trust sector.

The country will further promote streamlined administrations and delegated powers, optimizing licensing procedures and simplifying application materials for trust companies, said the CBIRC.

Shopping coupons

The Wuhan municipal government has decided to deliver shopping coupons worth a total of 20 million yuan to the city’s residents, the 21st Century Business Herald reported. Residents will be able to receive their e-coupons from Wednesday. 

As of early April, more than 30 cities across China had issued more than 5.6 billion yuan worth of shopping coupons, aiming to offset the negative impact of the Covid-19 epidemic on local consumption.

Coupons have a stronger boosting effect in consumption than cash as people have to use the coupons within a period of time, said Hu Yifan, Chief China Economist at UBS Wealth Management Asia-Pacific. 

Shenzhen SMEs

Shenzhen Municipal Financial Service Office, a financial regulator, recently launched a loan scheme called the “Financial Ark” to support the city’s small-and-medium-sized enterprises (SMEs). The first batch of 1,020 companies can obtain bank loans more easily through the project’s “green channel.”

The scheme aims to support three types of SMEs, which include those affected by the epidemic, key companies in the industrial chain and advanced manufacturers facing short-term financial difficulty. 

Company news

China Development Bank, one of the country’s major policy banks, issued special bonds worth 11 billion yuan on Tuesday, raising funds for poverty alleviation.

The bank will mainly use the funds to grant poverty relief loans, supporting major and rural infrastructure construction as well as industrial poverty alleviation in deeply impoverished areas.

With a one-year maturity and a fixed interest rate at 1.11 %, the bonds were issued through multiple market channels. Some 9.2 billion yuan of bonds were issued through the interbank bond market, while bonds worth 1.8 billion yuan were available to be purchased by investors through commercial banks.

The bank said it will further explore innovative modes of special bond issuance to offer financial support for the economic and social development of poor areas.

IFlytek Co Ltd, an artificial intelligence technology firm, said it will record a net loss of between 125 million yuan and 135 million yuan in the first quarter of this year as some of its projects were delayed due to the Covid-19 epidemic. The company said it saw a net profit of 101.88 million yuan in the same period last year.

The story was written by Xu Jiangshan and first published at ATimesCN.com. It was translated into English by Nadeem Xu.