Funding Small Firms
The China Banking Regulatory Commission (CBRC) recently announced that it had urged lenders to extend loan periods for small firms.
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BUILDING BOOM: Ningxia Hui Autonomous Region in northwest China has recently started construction on 24 key projects as part of its economic stimulation efforts. They include the Wuzhong Yellow River Bridge and mining projects of the Shenhua Ningxia Coal Group (WANG PENG) | The banking regulator said it had issued a notice, stating that banks and small firms could adjust terms in loan contracts to allow borrowers to file new requests for credit checkups before their loans were due.
If no problems were found, borrowers could directly extend their loan periods without having to sign new contracts.
The CBRC said it hoped lenders could be more innovative and flexible with their loan repayment terms for small firms.
The commission did not clarify which small firms would be eligible for the policy.
Direct Stock Purchases
China is set to allow small and medium-sized insurance companies to invest directly in the stock market without having to go through fund or wealth management firms, according to a recent report in the Shanghai Securities News.
This move aims to expand stock investments and help firms increase their growth, Sun Jianyong, an official at the China Insurance Regulatory Commission, said in the report.
Analysts say the reform would cut investment costs for smaller insurers, although it may not bolster the stock market in the short term.
The country’s big insurers such as China Life Insurance Co. Ltd. already can buy stocks directly, but their equities investments are limited to 15 percent of their total assets.
Steel Acquisitions
Baosteel Group Corp., China’s largest steelmaker, will take over two of its domestic rivals-Ningbo Iron and Steel Group and Baotou Iron and Steel Group-according to a recent report by Xinhua News Agency.
The takeover is part of the government’s effort to consolidate the fragmented steel industry and help big steelmakers gain bargaining power in international iron ore talks, said Chi Jindong, Secretary General of China Iron and Steel Association, in a statement.
The government also will push Anben Steel Group, China’s fourth largest steelmaker, to merge with Panzhihua Iron and Steel Group Co. Ltd., while Taiyuan Iron and Steel Group Co. Ltd., the biggest stainless steelmaker, will merge with rivals in Shanxi Province, Chi said.
Job Destination
The accounting firm PricewaterhouseCoopers Inc. (PwC) released a survey on February 24 indicating that the Chinese mainland has become the most favored job assignment destination in Asia for multinational companies.
More than 70 percent of the 12 multinationals surveyed said the mainland was their favorite assignment location in Asia, followed by Singapore and Hong Kong.
The survey also found that a large number of Hong Kong-based firms have plans to relocate employees to the mainland for middle management positions.
The mainland “is still anticipated to grow as an assignment location, albeit at a slower rate due to the global economic downturn,” said PwC in a statement.
Oil Deal
Exxon Mobil Corp., the largest oil company in the world, agreed to annually sell 2 million tons of liquefied natural gas (LNG) from the Australian Gorgon project to PetroChina Co. Ltd., China’s largest oil and gas producer, for the next 20 to 25 years, according to a report in the Shanghai Daily.
The accord still needs final approval from China’s National Development and Reform Commission. The value of the deal remains unclear.
China has been looking abroad to meet its rising demand for LNG. Last November, the European oil giant Royal Dutch Shell Plc also agreed to sell China 2 million tons of LNG annually for 20 years. |