Latest news with #LiYunze
Forbes
07-05-2025
- Business
- Forbes
China Market Update: PBOC Cuts Rates & Consumption Stimulus Raised
CLN KraneShares The State Council Information Office held a 9 am press conference featuring the People's Bank of China's (PBOC) Central Bank Governor Pan Gongsheng, the Financial Supervision Bureau (FSB) Director Li Yunze, and China Securities Regulatory Commission (CSRC) Chairman Wu Qing. Q1 Chinese economic data was 'relatively good' though the 'global economy is full of uncertainties, economic fragmentation, and increased trade tensions, disrupting the world's industrial supply chain'. Due to the effect of 'weakening global growth momentum,' blamed on the US' tariff policy, the PBOC announced the following measures would be taken following instruction from the CPC Central Committee's April 25th economic and monetary policy meeting: Bank's reserve requirement ratio (RRR), the amount of bank deposits kept in reserve and not lent out, will be reduced to 9.0% from 9.5%, which will add CNY 1 trillion to the market. The deposit reserve ratio of auto finance and financial leasing companies will be reduced to 0% from 5%. This should be a strong catalyst for automakers, though Hong Kong-listed stocks had a mixed performance. The 7-day reverse repo interest rate has been reduced to 1.4% from 1.5%, which will lower the LPR by 0.1%. 'The interest rate of structural monetary policy instruments was reduced by 0.25%,' including agricultural and small business loans, 1.5%, and the PBOC loan rate to commercial banks (PSL) to 2%. The personal housing fund loan was reduced by 0.25% to 2.6% for a 5-year loan. It's a bit surprising real estate stocks didn't have a better day. Loans supporting scientific and technological innovation increased to CNY 800 billion from CNY 500 billion to 'support large-scale equipment replacement and consumer goods exchange.' CNY 500 billion will be lent to commercial banks to 'service consumption and pension refinancing.' The objective is to 'encourage and guide financial institutions to increase financial support for key areas of service consumption such as accommodation, catering, culture, sports and entertainment, education, and the elderly care industry, and cooperate with fiscal and other industry policies to better meet the needs of the masses for consumption upgrading.' I highlighted this section as all the commentary/media is focused on interest rates, though no one mentions this consumption stimulus. I highlighted this section as the commentary/media is focused on interest rates, though no one mentions this consumption stimulus. Loans to agricultural and small businesses will be increased by CNY 300 billion. CNY 300 billion will be lent to support stock share repurchases, and CNY 500 billion to 'securities fund insurance companies.' Support local governments to minimize the default loss risk of bonds. The CSRC's Wu Qing spoke to the 'Nine National Policies,' which include encouraging corporate governance reforms, including buybacks and dividends. The CSRC also supports stock market purchases from sovereign wealth fund Central Huijin, national social security fund, securities and fund institutions, banking and insurance institutions. He noted that 90% of Chinese Mainland-listed companies' revenues are generated in China. FSB's Li Yunze focused on measures to support the real estate and stock markets. He stated that the 'white list', real estate projects deemed too big to fail, have received CNY 6.7 trillion of loans. Insurance companies are being encouraged to increase their equity allocations. Interestingly, the speakers explicitly blamed the US and US tariff policies for the turbulence in the global economy. US Treasury Secretary Scott Bessent and US Trade Representative Jamieson Greer will meet with Vice Premier He Lifeng this weekend in Switzerland. Progress can be made by focusing on easy wins, such as fentanyl and reducing tariffs from both sides, as we've seen already in critical goods. The Ministry of Commerce (MoC) press conference noted that, "Based on the full consideration of global expectations, Chinese interests, and appeals from American industry and consumers, China has agreed to engage with the US. Vice Premier He Lifeng, as the Chinese leader of China-US economic and trade, will talk with the US leader, US Treasury Secretary Bessent, during his visit to Switzerland.' Asian equities had a positive day despite a stronger US dollar, led by Thailand, while Pakistan underperformed following India's airstrikes. Interestingly, Indian equities overcame morning losses to post small gains, hopefully indicating the situation doesn't escalate amongst the nuclear-armed countries. Interestingly, defense and military stocks were top performers in both Mainland China and Hong Kong. Both markets opened higher following the financial press conference and US-China trade talks, though faded over the course of the trading day. The Hang Seng, Hang Seng Tech, Shanghai, and Shenzhen indexes have hit resistance levels, as they rebound to pre-Liberation Day levels. Financials were a strong performer in both markets as beneficiaries of the lower interest rate, as old school value plays outperformed growth in both markets. Mainland China had a much better day compared to Hong Kong due to the higher growth exposure, as Hong Kong's growth stocks appeared to be hit with profit taking. gained +2.29%, a rare growth outperformer following the strong May Day holiday travel data. Mainland investors sold -$1.038 billion of Hong Kong (net buying year-to-date is $78.585 billion). President Xi's visit to Moscow might weigh on foreign investors' sentiment, though it is hard to say. Potentially, today's press conference didn't meet expectations, though the fact that it was called at all should be taken as a positive. The Chinese government is very focused on stimulating its economy, supporting the real estate and stock markets. All good things in my opinion. New Content Read our latest article: New Drivers For China Healthcare: AI Med-Tech Innovation, Cancer Treatment, & Favorable Balance of Trade Please click here to read Chart1 KraneShares Chart2 KraneShares Chart3 KraneShares Chart4 KraneShares Chart5 KraneShares Chart6 KraneShares CNY per USD 7.22 versus 7.21 yesterday CNY per EUR 8.21 versus 8.16 yesterday Yield on 10-Year Government Bond 1.64% versus 1.63% yesterday Yield on 10-Year China Development Bank Bond 1.67% versus 1.66% yesterday Copper Price +0.46% Steel Price +0.45%
RTHK
07-05-2025
- Business
- RTHK
China rolls out a slew of measures to lift economy
China rolls out a slew of measures to lift economy People's Bank of China governor Pan Gongsheng said funding for factory upgrades and other innovations and to facilitate trading-in of consumer goods will be increased to 800 billion yuan. File photo: RTHK National Administration of Financial Regulation director Li Yunze said a package of financing policies will soon be forthcoming to help stabilise the property market and support small and micro companies as well as private entities. File photo: RTHK China Securities and Regulatory Commission chairman Wu Qing said Beijing plans to help facilitate the return of foreign-listed Chinese firms to mainland and Hong Kong stock markets. File photo: RTHK Beijing announced on Wednesday a whole basket of new measures, including interest rate cuts and extra funding, to prop up the economy as it steps up efforts to offset the impact from sky-high US tariffs. The measures came shortly after US and mainland officials said US Treasury Secretary Scott Bessent and chief trade negotiation Jamieson Greer will meet with China's top economic official He Lifeng in Switzerland this weekend for talks, paving the way for a potential de-escalation between the two sides. Speaking in a press briefing in Beijing, People's Bank of China governor Pan Gongsheng said the central bank will lower the borrowing cost of its seven-day reverse repurchase rate, its benchmark interest rate, by 10 basis points, to 1.4 percent, effective on Thursday. The central bank, he added, will also reduce the amount of cash that banks must hold in reserve, also known as the reserve requirement ratio (RRR), by 50 basis points from May 15, which will inject a trillion yuan in liquidity into the market. Other measures include lowering the mortgage rate by 25 basis points, scrapping the RRR for auto financing firms, a new 500 billion yuan relending tool to support service consumption and elderly care, as well as increased funds for factory upgrades and other innovative projects. "[For example,] relending funds for factory upgrades and other innovations currently involve a quota of 500 billion yuan," said Pan. "So we will increase this by 300 billion yuan to a total of 800 billion yuan, to support our 'two new' policies of upgrading large-scale equipment and trading-in of consumer goods." Separately, Li Yunze, director of the National Administration of Financial Regulation (NAFR), said authorities will soon introduce a package of financing policies to help stabilise the property market and support small and micro companies as well as private entities. Li said there will be "tailor-made services" for business entities that are significantly affected by tariffs and that these will ensure all foreign trade enterprises are able to access financial support and necessary loans with increased capital support. "Capital replenishment work for large commercial banks is being accelerated...," Li said in explaining about the increased funding work. "Different regions are also replenishing capital for small and medium-sized financial institutions through multiple channels. At the same event, China Securities and Regulatory Commission chairman Wu Qing said that despite pressure from US tariffs, markets have stabilised following intervention efforts by the authorities. Wu also noted that Beijing would continue to support state-owned investment company, Central Huijin, to further stabilise the A-share market, which he said is "currently undervalued" and has room for gains. He added the country planned to help facilitate the return of foreign-listed Chinese firms to mainland and Hong Kong stock markets. Separately, Wu singled out US investor Warren Buffett, who is set to retire this year, for mention for his fundamental principles of long-term value investing and rational investing, noting that such principles and efforts to reward investors will not end with the retirement of the investment legend.
Yahoo
07-05-2025
- Business
- Yahoo
China Cuts Key Rate, Reserve Ratio to Aid Economy Hit by Tariffs
(Bloomberg) -- Most Read from Bloomberg China reduced its policy rate and lowered the amount of cash lenders must keep in reserve, as Beijing ramps up efforts to help an economy caught in a second trade war with the US. The People's Bank of China cut the seven-day reverse repurchase rate to 1.4% from 1.5%, according to Governor Pan Gongsheng. The central bank will also trim the reserve requirement ratio by half a percentage point, Pan said at a briefing on Wednesday. Pan's announcement came hours after China revealed it would hold its first trade talks this weekend with US officials since Donald Trump unleashed a 145% tariff on most Chinese goods. The governor spoke alongside China Securities Regulatory Commission Chairman Wu Qing and the head of the National Financial Regulatory Administration, Li Yunze. 'The US abuses of tariffs have severely disrupted global economic and trade orders,' said the CSRC's Wu. 'The production and operation of listed companies have inevitably been affected directly or indirectly.' The latest steps aim to guide borrowing costs lower and are among the 10 measures outlined by Pan, which also include rate reductions on a slew of relending tools and and loans for policy banks. The RRR cut will release about 1 trillion yuan ($139 billion) in long-term liquidity, Pan said. The seven-day reverse repo cut will go into force on Thursday, with the RRR reduction in effect a week later, the PBOC said in separate statements. As markets digested the news of the looming trade talks and China's announcements, the offshore yuan erased gains to trade 0.1% weaker, while the 10-year government yield edged one basis point higher. Stocks also pared an early advance, with the Hang Seng China Enterprises Index up just 0.3% at the mid-day break after rising more than 2% earlier. The CSI 300 Index, a benchmark for onshore shares, was up just 0.5%. 'The market is now turning to see the progress in trade talks,' said Jason Chan, a senior investment strategist at Bank of East Asia. 'Investors may be more cautious that both sides may not be able to make a deal in the near term and that's why Chinese policymakers need to roll out so many easing measures prior to the meeting.' The decisions demonstrate policymakers are acting with urgency to support the world's second-largest economy in the face of the US-China trade war. Expectations that Beijing would deploy more stimulus have risen after Trump brought US tariffs to a level economists say would decimate bilateral trade.
Reuters
07-05-2025
- Business
- Reuters
China to expand scheme allowing insurers to invest in stock market
A man walks past the Shanghai Stock Exchange building in the Pudong financial district in Shanghai, China, February 3, 2020. REUTERS/Aly Song/File Photo Purchase Licensing Rights , opens new tab BEIJING, May 7 (Reuters) - China will expand a pilot scheme allowing insurance companies to invest in stock markets, the head of the financial regulator said on Wednesday. The country will approve the investment of an additional 60 billion yuan ($8.31 billion) from long-term insurance funds in the stock market, Li Yunze, head of the National Financial Regulatory Administration, told a news briefing. The Reuters Tariff Watch newsletter is your daily guide to the latest global trade and tariff news. Sign up here. The regulator will also take further steps to stabilise the property market, Li said. Advertisement · Scroll to continue ($1 = 7.2237 Chinese yuan renminbi) Reporting by Beijing Newsroom; Editing by Christopher Cushing Our Standards: The Thomson Reuters Trust Principles. , opens new tab Share X Facebook Linkedin Email Link Purchase Licensing Rights
Bloomberg
07-05-2025
- Business
- Bloomberg
PBOC Chief Among Top Chinese Officials Set to Join Briefing
Updated on Save China's central bank chief is among top officials set to join a press briefing on Wednesday, underlining the importance of the event aiming to discuss policies to stabilize markets. People's Bank of China Governor Pan Gongsheng, China Securities Regulatory Commission Chairman Wu Qing and the head of the National Financial Regulatory Administration, Li Yunze, are scheduled to attend the news conference in Beijing, according to the names seen displayed on the stage set for speakers.
