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The outstanding amount of China’s social financing grew 12% at the end of April, the highest level since June 2018, after the country launched measures to encourage direct financing and the issuance of government bonds earlier this year.
Social financing, a measurement of funds that individuals and non-financial firms receive from the financial system, amounted to 14.19 trillion yuan (US$2 trillion) in the first four months of this year, the equivalent of the amount in the first half of 2019, according to the People’s Bank of China (PBoC).
Social financing increased significantly as financial institutions offered more loans to corporates while more companies were allowed to raise funds by issuing bonds and equity shares, said the PBoC. In the first four months of this year, a total of 2.68 trillion yuan of corporate bonds was issued, which was the equivalent to 80% of the total amount in the full year of 2019.
Government bond issuance totaled 1.91 trillion yuan in the first four months, an increase of 524.6 trillion yuan, or 38.87%, from the same period last year.
The central bank said the country’s macro leverage ratio increased in the first quarter as the country stepped up credit support to mitigate the impact of Covid-19. It said the macro leverage ratio had remained generally stable since 2017, with a decline in 2018 and a mild increase in 2019. However, the ratio climbed notably in the first quarter, affected by the novel coronavirus outbreak.
The rise in leverage is a result of counter-cyclical policies aimed at supporting the resumption of work by companies, the PBoC said, adding that the increase was only temporary and would eventually trend down after companies resumed operations.
Local debt issuance
The Guangdong provincial government was allowed by the Ministry of Finance to issue bonds through the electronic platform of the Shenzhen stock exchange. This was the first time the Shenzhen stock exchange issued local government bonds since the outbreak of the Covid-19 pandemic early this year.
The issuance included the first round of general bonds and the 32nd round of special bonds, with maturity periods of 7, 10, 15, 20 and 30 years. The total size of the bonds amounted to 103.51 billion yuan.
The net proceeds of the bond issuance will be used in infrastructure projects in the Greater Bay Area, the transportation system, agricultural and irrigation works, ecological and environmental protection, social services and other key industrial projects.
Civil aviation sector
China’s Civil Aviation Administration has released a document aimed at optimizing the business environment in the civil aviation sector, which specifies directions for fostering a fair and transparent market.
The document details the implementation rules of a regulation issued in October 2019, which signals a milestone in China’s bid to explore institutional improvement for a better business environment.
It pledges to provide wider market access by implementing unified negative lists for market access across the country, as well as protection to all market entities to ensure they can make equal use of market resources.
Foreign-funded civil aviation projects, except for those on the negative list for foreign investment market access, should be treated the same as other types of enterprises, said the document.
Digital economy in Zhejiang
The added value of core industries in the digital economy of east China’s Zhejiang province exceeded 622.89 billion yuan in 2019, up 14.5% year on year, according to a report released by the provincial government.
The core industries include electronic information manufacturing and software. In 2019, the revenue of software industries in the province grew 17.6% to 610.18 billion yuan. The number of internet users in the province exceeded 47.29 million last year, while the internet penetration rate reached 80.9%.
With the digitalization in agriculture, manufacturing and other industries, the digital economy has become an important engine of the province’s high-quality development, said the report.
China Vanke, a property developer, said it was hiring people to work in its five pig farms in Guangdong province. In March, the company assigned vice-president Tan Huajie to lead its newly-established hog-raising and food supply department.
The company has recently been recruiting managers and professionals for its hog farms. According to the job description for the new unit’s general manager, the company plans to raise up to 250,000 hogs.
Earlier, Country Garden Holdings announced it would step into the hog-raising business in 2018. The Hong Kong-listed company said it would focus on high-tech and modern agriculture, agricultural industry zones and fresh food stores in residential areas.
Vanke said previously that it was inconvenient for residents living in its properties to purchase food during the coronavirus outbreak, so it decided to set up the new business unit to “provide safe, healthy and affordable food” for ordinary families.
Huawei Technologies said its first 5G smart port in Xiamen, Fujian province, recently commenced operations.
The COSCO shipping port in Xiamen is the first 5G fully-automated container terminal, which covers an area of 1.3 million square meters, said Huawei. China Mobile’s Fujian branch has provided support for the project.
The story was written by Xu Jiangshan and Nadeem Xu and first published at ATimesCN.com.