Counting renminbi notes. Photo: Xinhua

China’s small and medium-sized banks are stable and the risks they face are manageable, according to the China Banking and Insurance Regulatory Commission (CBIRC).

With sound fundamentals of capital, provision and profit, city commercial banks have the capability to fend off various risks, said Liu Rong, an official with the CBIRC.

The capital adequacy ratio of city commercial banks came in at 12.7%, while the provision coverage ratio and the non-performing loan ratio registered 150.5% and 2.34%, respectively, all running in a reasonable range.

Rural small and medium-sized banks, accounting for 85% of banking financial institutions nationwide, have seen an increasing ability to serve the real economy with their solid deposit base and controllable liquidity risks, said Hong Xiaoping, another official with the CBIRC.

Although a few small and medium-sized banks are indeed facing high risks, this will not weigh on the whole industry, said Xiao Yuanqi, chief risk officer of the CBIRC.

Xiao noted that China’s efforts in cracking down on illegal activities in the banking sector have paid off, creating conditions for the industry’s healthy development.

Foreign direct investment

Foreign direct investment (FDI) into the Chinese mainland fell by 1.3% year on year to 472.18 billion yuan (US$66.13 billion) in the first half of this year, said Gao Feng, spokesperson for the Ministry of Commerce (MoC).

In US dollar terms, the FDI inflow stood at $67.9 billion during the first six months of the year, down by 4% year on year. In June alone, FDI climbed by 7.1% year on year to 117 billion yuan, MoC data showed.

The reading amounted to a total of $16.72 billion, an increase of 3.7% from the same period last year.

Foreign investment in the high-tech service industry hiked by 19.2% year on year during the January-June period, with that of information services, as well as R&D and design, rising by 20.9% and 35.7% respectively.

During the period, investment from Hong Kong, Singapore and the United States logged a year-on-year expansion of 4.2%, 7.8% and 6%, respectively, while FDI from countries along the Belt and Road maintained a steady growth of 2.9%.

Gao said that the performance of FDI inflow in the first half of the year was better than expected, a sign of foreign investors’ stabilizing expectations and confidence in the country’s economy.

Fixed-asset investment

The fixed-asset investment of China’s centrally-administered state-owned enterprises (SOEs) rose 7.2% year on year to 1 trillion yuan in the first half of 2020 despite the adverse impact of Covid-19, official data showed.

The growth was 5.9 percentage points higher than in the first five months of the year, and 11.7 percentage points more than that of the first quarter, according to the State-owned Assets Supervision and Administration Commission (SASAC).

The central SOEs have increased their monthly fixed-asset investment since fully resuming operations in March. From March to June, the growth rates of their monthly fixed-asset investment came in at 4.1%, 11.8%, 13% and 21.2%, respectively.

Rare earth industry

The China Rare Earth Industry Prosperity Index, a gauge of the industry’s overall performance, rose to 103.70 points in the second quarter this year, up 4.26% from last quarter, according to the report released by the China Economic Information Service and the Baotou Rare Earth Products Exchange.

A reading above 100 indicates an expansion of the sector, while below 100 represents a contraction.

The sub-index of market performance hit 106.98 points, the highest among all the six sub-indices in the second quarter, on Thursday in Beijing.

As China has taken effective Covid-19 epidemic prevention and control measures, rare earth enterprises’ production and operations recovered well in the second quarter, and the rare earth market confidence is on the up in the third quarter, according to the report.

The index is a key part of China Rare Earth Serial Indices which also includes the China Rare Earth Price Index and the China Rare Earth Development Index.

Company news

Huawei Technologies would probably replace Samsung as the world’s top smartphone maker from April through June, reported.

Affected by the global expansion of Covid-19, shipments of Samsung’s smartphones are expected to drop about 30% from April through June, while a slight shrink in Huawei shipments is predicted, according to the report.

According to Samsung’s fiscal report from April to June, its operating profit stood at 8.1 trillion won ($6.78 billion), up 23% year-on-year, but operational revenue was down 7% to 52 trillion yuan.

SK Securities estimated from April through June, Huawei shipments stood at 55 million while Samsung’s was 51 million, which means Huawei may for the first time be crowned No 1 in smartphone shipments.

The story was written by Xu Jiangshan and Liu Licong and first published at It was translated by Nadeem Xu.

Xu Yuenai

Xu Yuenai is a Beijing-based columnist specializing in international relations.