Latest news with #SASAC
Coin Geek
21-07-2025
- Business
- Coin Geek
HK's stablecoin signals China's changing digital asset stance
Getting your Trinity Audio player ready... One of Hong Kong's top financial regulators recently held a meeting focused on stablecoin risks and opportunities, which, according to experts, signals a gradual shift in China's anti-digital asset stance. The meeting by the Shanghai State-owned Assets Supervision and Administration Commission (SASAC) included over 60 government officials, policymakers, and digital asset industry leaders, sources told Reuters. Stablecoins were at the top of the agenda at a time when the sector recorded explosive growth and mainstream attention. These fiat-pegged tokens are now a $260 billion market with over $200 billion in daily trading volume. He Qing, the SASAC director, told the attendees that the city-state needs to have 'greater sensitivity to emerging technologies and enhanced research into digital currencies.' A policy expert from China's largest securities brokerage, Guotai Haitong Securities, discussed recent stablecoin growth, their opportunities and risks, and analyzed some of the regulatory approaches various jurisdictions have pursued, SASAC revealed in a WeChat post. The policy expert also offered recommendations to boost the development and adoption of stablecoins and other digital currencies. According to experts, this continued exploration of stablecoins by mainland Chinese companies indicates that the Asian superpower could finally be warming up to digital assets. Some believe that if China gives the green light to stablecoin exploration, it will likely be limited to Shanghai, the country's financial hub, where the government has traditionally piloted new regulatory approaches. 'Given China's strong fintech ecosystem, it has the potential to be a key player in shaping the future of blockchain-based payments,' commented Nick Ruck, the director of Hong Kong-based LVRG Research. Some of China's largest companies are chasing a stablecoin issuance license in Hong Kong. E-commerce giant (NASDAQ: JD) and Alibaba-affiliated (NASDAQ: BABA) Ant Group have applied for the license and are reportedly lobbying the Chinese government to authorize stablecoins in Hong Kong backed by its offshore yuan. China's delicate stablecoin balance act For China, stablecoins are a double-edged tool that promises to boost the yuan's global competitiveness but threatens the country's longstanding conservative financial approach. Despite being the world's second-largest economy, China's yuan has failed to gain ground in global trade, accounting for less than 3% of international transactions. Stablecoins present a fresh threat to the yuan's global position, with over 95% backed by U.S. dollars. 'For China, ignoring this trend risks being left behind in the digital infrastructure race—especially as stablecoins increasingly function as bypass mechanisms to traditional banking networks,' Morgan Stanley said in a recent note. Launching a yuan-pegged stablecoin could allow China to compete in the digital realm, even as its digital yuan central bank digital currency (CBDC) stalls. Sources at and Ant told Reuters that they have been cautiously pushing stablecoins as one of the best ways to promote the globalization of the yuan. Experts have suggested Hong Kong as the perfect testing ground for such a stablecoin, as it insulates China from the direct risks. The city also has a far more advanced regulatory framework. 'Hong Kong has an offshore market for the renminbi, and if the offshore market develops, it is possible to create a stablecoin pegged to the offshore RMB in Hong Kong in the future,' stated Huang Yiping, an adviser to the People's Bank of China. China can't sit still One of the biggest hurdles to developing a stablecoin in China is the country's tight capital controls. The PBoC limits the ability of Chinese firms and individuals to move money in and out of the country, with the buying and selling of foreign currencies also strictly regulated. And yet, China can't afford to sit still. Some reports estimate that stablecoins will eclipse $400 billion in market cap this year, with Citi (NASDAQ: C) predicting that the sector will hit $1.6 trillion by 2030 in a base-case scenario and up to $3.7 trillion in a bull case. 'China has reached a point where it can no longer avoid taking action,' stated Xiao Feng, the chairman of HashKey, one of the 11 regulated exchanges in Hong Kong. According to Feng, Chinese traders already use USD-pegged stablecoins to make payments globally. Crypto HK, the city's largest over-the-counter digital currency exchange, concurs, noting that the monthly trading volume of USD stablecoins by its Chinese clientele has surged fivefold since 2021. Watch | Spotlight On: Centi Franc—the truly stable stablecoin title="YouTube video player" frameborder="0" allow="accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share" referrerpolicy="strict-origin-when-cross-origin" allowfullscreen="">
The Star
11-07-2025
- Business
- The Star
Asia's budding dividend zeal needs more support
WHILE the United States and European companies have reduced their average dividend payouts over the past decade, Asian corporates have maintained consistent payout ratios, reflecting the region's improving balance sheets, shifting investor preferences and increasingly supportive regulatory environment. To maximise shareholder value, economic theory argues that excess cash should be distributed to shareholders. Companies do this through dividends or share buybacks. Asian companies pay more dividends than their US peers, who typically prefer share buybacks, but less than Europeans. Asia's average dividend payout ratio was 40% in 2024, compared to 31% for S&P 500 companies and 48% for Eurostoxx 50 companies, according to Factset. Asian companies were not always in the middle of the dividend rankings. Asia recorded the lowest dividend payouts of the three regions only a decade ago, when European companies sent more than 60% of their profits back to shareholders and Americans disbursed 40%. The decline in the United States is largely because corporates have increasingly jumped on the buyback bandwagon, despite a modest jump in dividend payouts in 2019 to 2020. Meanwhile, in Europe, firms have increasingly preferred to retain more capital, largely due to uncertainties created by rising competition from Asian imports. Dividend payouts in Asia, on the other hand, have benefited from investor preference for high dividend-yielding stocks and regulatory pushes. Cash is king Reflecting the maxim that in uncertain times cash is king, Asian investors have shown a strong preference for dividend-paying companies in the volatile period since 2020. The MSCI Asia ex Japan High Dividend Yield Index has generated total returns that are more than double those of the MSCI Asia ex Japan Index over the past five years. This gap has shrunk in the first half of 2025 due to strong performance among low-dividend yielding sectors such as China Internet platforms and South Korean tech, but demand for dividends will likely get a boost if interest rates continue to decline in many major Asian markets. Regulatory push If investors are indirectly pushing Asian companies to distribute more cash, regulators' approach is more direct, with officials in China, Japan and South Korea at the forefront of this effort, though the results have been mixed. In January 2023, SASAC, the Chinese state-owned company (SOE) regulator, announced a shift in the key performance indicator used for evaluating state-owned enterprises, replacing net earnings with return on equity (ROE). A company can enhance its ROE by distributing excess cash and thus reducing the size of its balance sheet, a course of action that most of the SOEs took. On top of this, the Chinese securities regulator CSRC in August 2023 restricted controlling shareholders of listed companies from selling shares in the secondary market if the company has not paid significant dividends in the previous three years. Japan's regulatory efforts commenced almost simultaneously. In March 2023, the Tokyo Stock Exchange asked firms to disclose plans to improve capital efficiency, especially if their share prices were below book value. And then in February 2024, South Korea's Financial Services Commission announced the 'Corporate Value Up Programme', which urged companies to prioritise shareholder returns in exchange for tax benefits. The outcomes have varied meaningfully by country. China's and South Korea's average dividend payout ratios have increased over the past few years, though South Korea's has recently fallen and Japan's has stayed virtually flat. Exhortations by the regulators, in the absence of other reforms, particularly of tax laws, seem to be having limited impact on corporate behaviour. Indeed, tax treatment of dividends appears to be a key driver of companies' payout decisions. A wide range of dividend taxation policies apply in Asia, ranging from no or very low tax in Hong Kong, Singapore and Malaysia to 20% to 30% in China, Japan and India. Unsurprisingly, the companies in the highest tax regimes have the lowest average dividend payouts. The earliest dividend tax reform, the elimination of double taxation of dividends by Taiwan in 1999, significantly increased dividend payouts among Taiwanese firms, a trend that continues to this day. Sustainable trend? Investors often reward companies for sustainable, increasing dividend payments, which ultimately depend on companies maintaining resilient profitability, strong cash generation and a healthy balance sheet. On these counts, many large Asian corporate markets score highly on average. Corporate leverage in India, Hong Kong, Taiwan and South Korea has been declining since 2023, while cash generation in all four has been increasing, and both trends are expected to continue, through 2027, according to Factset consensus forecasts. Asian corporates' shift toward greater dividend payments could still run into hurdles. Companies' profitability may be hurt by the ambiguity surrounding global trade policy, and this could lead them to conserve cash rather than distribute it. The persistence of this trend may largely depend on whether governments match supportive market regulations with beneficial tax treatment and whether high dividend-yielding stocks continue to generate robust performance, which management teams will have little choice but to notice. — Reuters Manishi Raychaudhuri is the founder and chief executive officer of Emmer Capital Partners Ltd and the former head of Asia-Pacific Equity Research at BNP Paribas Securities. The views expressed here are the writer's own.
South China Morning Post
11-07-2025
- Business
- South China Morning Post
China's state-asset watchdog explores potential role of stablecoins, other digital assets
The Shanghai branch of the regulator overseeing the assets of state-owned enterprises (SOEs) called on these organisations to explore the potential role of stablecoins and other digital assets in trade. The State-owned Assets Supervision and Administration Commission (SASAC) in Shanghai said SOEs must 'maintain a keen awareness of emerging technologies' and strengthen research on digital currencies , according to the agency's statement on Friday. The statement followed SASAC's study session on the 'development trend and response strategies' of cryptocurrencies and stablecoins held in China's financial hub, where the regulator urged state-backed organisations to explore the use of blockchain technology in cross-border trade, supply chain finance and asset tokenisation. It reflects recent calls made by state media for Beijing to be more proactive in considering legislation to regulate stablecoins , while studying their potential role in making the yuan a more global currency. Examples of popular stablecoin tokens in the market, from left: Dai, USD Coin, Tether, Binance USD and TrueUSD. Photo: Shutterstock According to an article last month by state-owned financial newspaper Securities Times, 'the unique advantages and potential risks of stablecoins cannot be ignored', and 'the development of [yuan-backed] stablecoins should be sooner rather than later'.
South China Morning Post
10-07-2025
- Business
- South China Morning Post
DeepSeek, Unitree Robotics host head of China's state-owned firm regulator on Zhejiang tour
As part of his two-day visit to east Zhejiang province, where the two companies are based, Zhang aimed to learn from the two companies about 'how enterprises effectively gather innovative resources and stimulate vitality in the field of AI', according to an original statement released on SASAC's website on Thursday. However, an updated version of the statement omitted any mention of DeepSeek. Neither SASAC nor DeepSeek immediately responded to a request for comment. Zhang also toured research centres and manufacturing facilities belonging to the state-owned China Electronics Technology Group and China Electronics, with a focus on how Internet-of-Things, AI and Big Data technologies enhance these companies' operations. Zhang Yuzhuo, director of the State-owned Assets Supervision and Administration Commission. Photo: Handout He said state-owned enterprises (SOEs) should learn from the agile innovation practices of private firms and improve their employee evaluation systems to prioritise innovation, capability and contribution, according to the SASAC statement.
Business Times
23-06-2025
- Business
- Business Times
China asks state-owned developers to avoid public debt defaults
China has introduced a requirement for state-owned developers to avoid defaulting on publicly issued debt, in the latest attempt by authorities to contain the nation's prolonged property crisis. The State-owned Assets Supervision and Administration Commission (SASAC) added the directive to its latest performance metrics for about 20 developers that are controlled by the central government, people with knowledge of the matter said, asking not to be identified discussing a private matter. The commission did not respond to a faxed request for comment on Monday (Jun 23). While the regulator has so far stopped short of providing additional support to backstop the developers, the new stipulation underscores growing urgency to contain credit risks from China's protracted property downturn. Most of the biggest private developers have defaulted since 2021, shattering confidence in the housing market and leaving a pile of distressed debt that currently stands at almost US$140 billion. So far, state-owned developers have avoided the same fate, and their onshore bonds are trading at levels that suggest bondholders expect repayment. The companies overseen by SASAC range from leading firm Poly Developments & Holdings Group to smaller builder CCCG Real Estate. SASAC sets financial indicators for state-owned enterprises such as total profit and the ratio of debts to assets. While there's no guaranteed way to prevent SOEs from defaulting without higher-level intervention, the requirements are designed to ensure officials at the helm remain accountable for performance. A NEWSLETTER FOR YOU Tuesday, 12 pm Property Insights Get an exclusive analysis of real estate and property news in Singapore and beyond. Sign Up Sign Up One major developer, China Vanke, received state support in January, although that was led by local authorities in the company's hometown of Shenzhen. Vanke, which is backed by a local SOE, is not considered a central government-controlled developer. China's housing slump has dragged on for four years, with little sign of improvement. Prices of new homes slid the most in seven months in May, and sales also fell, signalling the effects of a stimulus blitz last September is wearing off. Like their privately owned peers, SOE developers have felt pressure from slumping sales. Last year, some resorted to steep price cuts to rekindle transactions. 'China's state-owned and private developers are both susceptible to a possible renewed property sales downturn,' Bloomberg Intelligence analyst Kristy Hung wrote in a recent note. She warned that state-owned builders face the risk of a full-year decline in sales this year. Central government-owned developers mostly rely on domestic financing, and the majority of their onshore bonds trade near or at par. Poly's 3.17 per cent yuan bond due next year even traded above par last week. But when considering those owned by local governments, yields of yuan bonds of state developers were the highest among 32 sectors, standing above 2.2 per cent in May, according to a note by China International Capital Corp. Some smaller firms are struggling. CCCG Real Estate, which operates under a state-owned infrastructure enterprise, has been on the brink of delisting from the Shenzhen stock exchange since April. It's the first listed state builder to be warned by the exchange for such risk. CCCG Real Estate expanded quickly in the three years since 2019, when it made a bold target to triple sales. Later, it booked two straight years of losses that left it with negative net equity, breaching the bourse's listing rules. To avoid delisting, it agreed to sell its entire real estate business to its parent firm for one yuan (S$0.18), according to an exchange filing on Jun 16. Still, all of CCCG Real Estate's 5 yuan bonds were trading above 98 yuan last week, Bloomberg-compiled data show. Premier Li Qiang this month pledged action to stop the decline in the real estate market, which has been depressing household sentiment just as the government is trying to boost consumption and offset the threat to exports from US tariffs. Even if China's housing market picks up, the long-term outlook remains grim. Demand for new homes in cities is expected to stay at 75 per cent below its 2017 peak in the coming years, due in part to a shrinking population, Goldman Sachs Group estimated. BLOOMBERG
