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Initial public offerings in China’s A-share markets set a record last month.

In July, IPOs in the A-share markets raised a record 109.81 billion yuan (US$15.73 billion), surpassing 100 billion yuan in a single month the first time, Shanghai Securities News reported.

Listed in July were 52 firms, accounting for 30% of all the 169 newly-listed companies in the first seven months of 2020.

In breakdown, the main board of the Shanghai Stock Exchange attracted 35 listings while the Growth Enterprise Market of the Shenzhen Stock Exchange hosted 43 IPOs from January through July, according to the report.

Meanwhile, the Shanghai Stock Exchange’s sci-tech innovation board, known as the STAR market, saw 73 companies listed during the same period. The stock market posted stronger gains amid the robust IPO activities.

In July, The benchmark Shanghai Composite Index, Shenzhen Component Index and the ChiNext Index, which is often referred to as “China’s Nasdaq,” went up 10.9%, 13.72% and 14.65%, respectively.

Experts say that sufficient liquidity has created conditions for high-quality companies in different industries to raise funds in the A-share markets, thus directing funds from the capital market to the real economy.

Service trade

China’s service trade fell in the first half of 2020 from a year ago due to the Covid-19 epidemic, but the trade deficit continued to narrow, said the Ministry of Commerce (MoC). Service trade declined 14.7% to 2.2 trillion yuan (US$315.2 billion) during the period.

MoC official Xian Guoyi said that China’s service exports outperformed imports in recent months, with the service trade deficit narrowing by 46.1% from the same period last year to 401.7 billion yuan in the first half of the year.

The ministry highlighted strong resilience in China’s trade of knowledge-intensive services amid the epidemic, which increased by 9.2% year on year in the period, accounting for 43.7% of the total trade in services.

Xian attributed the decline in service trade to virus-induced contraction in the travel industry, adding that after stripping out the impact of this sector, the country’s service imports and exports rose by 2.1% year on year in the first half.

Local government bonds

The value of China’s local government bond issuance stood at 272.2 billion yuan in July, said the Ministry of Finance (MoF).

Total local government bond issuance amounted to 3.76 trillion yuan at the end of July as authorities quickened bond sales as part of proactive fiscal policies to shore up the virus-hit economy.

Among the issuance, new sales amounted to 2.83 trillion yuan, accounting for 59.8% of the 4.73 trillion yuan quota planned for the year, the MOF data showed.

The ministry pledged to continue to quicken bond sales to facilitate the implementation of proactive fiscal policy. China has accelerated local government bond issuance this year to help the timely implementation of various projects in order to mitigate the impacts of the novel coronavirus outbreak.

External position

China’s external position in 2019 was broadly in line with the level “implied by medium-term fundamentals and desirable policies,” the International Monetary Fund (IMF) said in its new External Sector Report.

“Policy reactions have appropriately prioritised support to the most affected households, workers, and firms, with increased focus on further supporting the demand recovery,” the IMF said.

The multilateral lender said China has room to provide more policy support if needed, including on green investment and strengthening the public health system and social safety net.

“If imbalances that existed prior to the Covid-19 outbreak persist in the medium term, policies to achieve a lasting balance in the external position should include a gradual fiscal consolidation and successful implementation of the authorities’ reform agenda, which addresses distortions and supports rebalancing,” the report said.

The stories were written by Xu Jiangshan and Liu Licong and first published at ATimesCN.com. They were translated by Nadeem Xu.

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