CONTACT US AT: Bank regulator extends crackdown deadline...
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Business ❘ 09 CONTACT US AT: 8351-9415, [email protected] Tuesday August 8, 2017 THE banking regulator has extended by two months a June deadline for banks to submit risk assessments over concerns it was putting strain on the lenders, two sources with direct knowledge of the matter said. Under the leadership of Chair- man Guo Shuqing, the China Banking Regulatory Commission (CBRC) started the year promis- ing a “windstorm” to clean up the banking sector, which had been seen as failing to control risks as credit swelled. The CBRC has launched eight sets of rules in the months since March, and Guo imposed a June 12 deadline for banks to submit written assessments on their lending and other practices. That deadline has now been extended to mid-August, the sources said. While some lend- ers made the original deadline, adjusting their operations based on their assessments and feed- back from the regulator, others have been unable to comply and have been given the extension. The decision not to pressure banks who failed to meet the deadline reflects official worries that a tougher stance on banks could weigh on lenders and leave them and the economy weaker, the sources said. The decision, which has not been officially announced, comes ahead of a Party congress in coming months at which eco- nomic growth and financial stabil- ity are expected to be priorities. The deadline extension — together with a strain on resources reported by sources at the CBRC — underlines how tough it will be for China to cut leverage and control lenders as growth in the world’s second- largest economy eases. One of the sources said the CBRC would not issue fines and has been avoiding any form of censure since the official dead- line expired in June. “The thunder roars loudly, but little rain falls,” said one banker at a regional lender who accompanied officials during an inspection earlier this year. The CBRC did not respond to a request for comment. In July, President Xi Jinping announced the establishment of a new financial oversight body to improve coordination among regulators. While Xi said the power central bank would play a bigger role in managing risks in the financial system, the role of the CBRC in the new committee is unclear. The health of China’s banking sector, whose assets account for more than 90 percent of China’s total financial assets, is a con- cern of global proportions, and investors and bankers have urged a tougher stance from the regulator. Two people at the CBRC said regulators were worried that some banks especially small and mid-sized banks that rely heavily on the interbank market could strain under more scrutiny, which could hurt the overall financial system and slow growth. In May, a senior CBRC official, Xiao Yuanqi, told banks that the release of tougher CBRC rules and on-site inspections by the regulator would not have a negative impact. “Don’t be nervous,” he said at a press conference, referring to market jitters over the impact of the new rules. CBRC officials say they have found that on-site inspections to crack down on regulatory arbitrage and enforce rules on interbank lending and wealth management products have been tougher in practice than in theory. Part of the issue is a lack of resources. The CBRC has not received increased resources, even as demands on the regula- tor grow, officials at the regula- tor said. Salaries have stayed flat, and fallen in some cities, and staff is sparse outside the capital. The head of one Ping An Bank sub-branch in southern China said that his bank had never had a spot check. In its 2016 report ranking Asian countries’ corporate governance standards according to a number of factors including enforcement, the Asian Corporate Governance Association highlighted insuf- ficient human resources at the main Chinese regulators as an ongoing problem. But China bank stocks have been performing well, an indication of confidence in the crackdown, said Chen Jiahe, chief strategist at Cinda Securi- ties Co. in Shanghai. “You never see the financial sector kill itself because there is too much regu- lation, suicide always happens when there is no regulation,” Chen said. (SD-Agencies) Bank regulator extends crackdown deadline A HANDFUL of China’s many electric vehicle (EV) startups are considering setting up an alli- ance to pool resources, develop joint technology and bring cars more quickly to the world’s big- gest auto market. In a sign that the country’s fledgling EV industry is already consolidating as rules get tougher and competition fiercer, Shen Haiyin, co-founder and CEO of Singulato Motors, said his com- pany and four others — CHJ Automotive, Hongxing Automo- bile Manufacturing Co., AIWAYS and WM Motor — have discussed an alliance for months. Keen to push for cleaner energy cars, in part to combat air pollution and a dependence on imported oil, the government wants 8 percent of automakers’ sales to be so-called new energy vehicles (NEVs) — battery elec- tric or plug-in hybrids — by next year, rising to 12 percent in 2020, according to latest draft propos- als released last month. Sales of NEVs this year are forecast by the China Associa- tion of Automobile Manufactur- ers at around 700,000, roughly 3 percent of the overall Chinese auto market. Shen, known as Tiger Shen, said the startups aim to final- ize the move by end-September with the aim to start developing a common EV platform by the end of this year. As the industry shifts toward smart, Internet-connected, bat- tery cars, with electrified pow- ertrains, it’s increasingly hard for automakers to differentiate, said Tiger Shen. “Just like smartphones, whose gut is the same Android operat- ing system across many brands, smart EVs should compete more on ownership experience and services,” Tiger Shen said. The move to pool resources and know-how highlights how Chinese startups are scram- bling to save time and money in developing products as they face increased pressure from established global automakers shifting into a new market, so far led by Tesla Inc. Also, Chinese policymakers have put on hold approving new EV ventures because of concern that some startups have cut cor- ners on technology or have set up just to access attractive subsidies. Regulators are reviewing licens- ing procedures and may bring in tougher technical requirements early next year, three EV startup founders and executives said. Freeman Shen, co-founder and CEO of WM Motor, reck- ons the prospect of tougher new technical requirements is a big factor spurring startups to consider an alliance to develop basic vehicle technology. “The government worries about some new startups, thinking some of them actually don’t have the technology and management expertise to be a legitimate player,” Freeman Shen said. “This shows startups need to work together to face competition from traditional automakers.” David Jin, spokesman for AIWAYS, said the Shang- hai-based startup “welcomes cooperation within the industry Some electric-car makers mull alliance to save money, time permitted [under] Chinese law and anti-monopoly law and technical exchanges. We need to make a decision after we get further information.” The com- pany’s CEO Fu Qiang declined to comment on any alliance talks, referring questions to Jin. A spokeswoman for CHJ Automotive and an official at Hongxing Automobile declined to comment. Despite years of effort to reduce costs for traditional gasoline-fuelled cars through common vehicle platform tech- nologies, these are still often designed separately for differ- ent car models. “Gasoline car platforms are often over-designed,” said Singulato’s Shen. “Who needs cars with platforms that allow you to do a high-speed U-turn or slalom? While we want to design an advanced platform for plug-in battery cars, we don’t want to make platforms excessively over-spec’d.” WM Motor’s Shen said he supports the idea of an alli- ance, but is unlikely to be part of it, for now, as his company’s first vehicles are to be based on vehicle architecture it has already developed itself. Singulato’s Shen said com- bining resources would allow alliance members to develop a far more advanced vehicle tech- nology, and for less money. “Let’s say each player planned to spend 200 million yuan (US$30 million) to develop a next-generation platform; if four players each threw in 100 million yuan, we’d all save money but end up with a 400 million yuan platform rather than a 200 mil- lion yuan platform,” he said, “the benefits are clear.” He said that if the alliance does take shape, it would set up a separate company to oversee platform development, and ask independent automotive engi- neering companies around the world to bid for a contract to help in advanced vehicle technologies that could be shared among alli- ance partners. Alliance partners would also share, and possibly jointly pro- cure from outside suppliers, basic car platform parts like axles and suspension. “We plan to ask component sup- pliers to join the joint venture, too,” Tiger Shen said. (SD-Agencies) CHINA’S foreign exchange reserves rose twice as much as expected in July to a nine-month high as tighter regulations and a weaker U.S. dollar curbed capi- tal outflows. Reserves rose US$24 billion in July to US$3.081 trillion, compared with an increase of US$3.2 billion in June. Economists polled had expected foreign exchange reserves to rise US$12 billion. It was the first time that Chi- na’s reserves had climbed for six months in a row since June 2014, with the latest gain lifting them to the highest level since October last year. China’s foreign exchange regu- lator said weakness in the dollar helped push up the value of non- dollar currencies in its reserves. The euro, in particular, gained more than 3 percent against the dollar last month. China burned through nearly US$320 billion in reserves last year, but the yuan still fell about 6.5 percent against the surging dollar, its biggest annual drop since 1994. China’s forex pile is the world’s largest. (SD-Agencies) Forex reserves at 9-month high A visitor test drives an electric car at an auto expo in Shanghai in this file photo. A handful of China’s many electric vehicle start- ups are considering setting up an alliance to pool resources, develop joint technology and bring cars more quickly to the world’s biggest auto market. Xinhua
Transcript of CONTACT US AT: Bank regulator extends crackdown deadline...
Business x 09CONTACT US AT: 8351-9415, [email protected]
Tuesday August 8, 2017
THE banking regulator has extended by two months a June deadline for banks to submit risk assessments over concerns it was putting strain on the lenders, two sources with direct knowledge of the matter said.
Under the leadership of Chair-man Guo Shuqing, the China Banking Regulatory Commission (CBRC) started the year promis-ing a “windstorm” to clean up the banking sector, which had been seen as failing to control risks as credit swelled.
The CBRC has launched eight sets of rules in the months since March, and Guo imposed a June 12 deadline for banks to submit written assessments on their lending and other practices.
That deadline has now been extended to mid-August, the sources said. While some lend-ers made the original deadline, adjusting their operations based on their assessments and feed-back from the regulator, others have been unable to comply and have been given the extension.
The decision not to pressure banks who failed to meet the deadline refl ects offi cial worries that a tougher stance on banks could weigh on lenders and leave
them and the economy weaker, the sources said.
The decision, which has not been offi cially announced, comes ahead of a Party congress in coming months at which eco-nomic growth and fi nancial stabil-ity are expected to be priorities.
The deadline extension — together with a strain on resources reported by sources at the CBRC — underlines how tough it will be for China to cut leverage and control lenders as growth in the world’s second-largest economy eases.
One of the sources said the CBRC would not issue fi nes and has been avoiding any form of censure since the offi cial dead-line expired in June.
“The thunder roars loudly, but little rain falls,” said one banker at a regional lender who accompanied offi cials during an inspection earlier this year.
The CBRC did not respond to a request for comment.
In July, President Xi Jinping announced the establishment of a new fi nancial oversight body to improve coordination among regulators. While Xi said the power central bank would play a bigger role in managing risks in
the fi nancial system, the role of the CBRC in the new committee is unclear.
The health of China’s banking sector, whose assets account for more than 90 percent of China’s total fi nancial assets, is a con-cern of global proportions, and investors and bankers have urged a tougher stance from the regulator.
Two people at the CBRC said regulators were worried that some banks especially small and mid-sized banks that rely heavily on the interbank market could strain under more scrutiny, which could hurt the overall fi nancial system and slow growth.
In May, a senior CBRC offi cial, Xiao Yuanqi, told banks that the release of tougher CBRC rules and on-site inspections by the regulator would not have a negative impact.
“Don’t be nervous,” he said at a press conference, referring to market jitters over the impact of the new rules.
CBRC offi cials say they have found that on-site inspections to crack down on regulatory arbitrage and enforce rules on interbank lending and wealth
management products have been tougher in practice than in theory.
Part of the issue is a lack of resources. The CBRC has not received increased resources, even as demands on the regula-tor grow, offi cials at the regula-tor said. Salaries have stayed fl at, and fallen in some cities, and staff is sparse outside the capital.
The head of one Ping An Bank sub-branch in southern China said that his bank had never had a spot check.
In its 2016 report ranking Asian countries’ corporate governance standards according to a number of factors including enforcement, the Asian Corporate Governance Association highlighted insuf-fi cient human resources at the main Chinese regulators as an ongoing problem.
But China bank stocks have been performing well, an indication of confi dence in the crackdown, said Chen Jiahe, chief strategist at Cinda Securi-ties Co. in Shanghai. “You never see the fi nancial sector kill itself because there is too much regu-lation, suicide always happens when there is no regulation,” Chen said. (SD-Agencies)
Bank regulator extends crackdown deadline
A HANDFUL of China’s many electric vehicle (EV) startups are considering setting up an alli-ance to pool resources, develop joint technology and bring cars more quickly to the world’s big-gest auto market.
In a sign that the country’s fl edgling EV industry is already consolidating as rules get tougher and competition fi ercer, Shen Haiyin, co-founder and CEO of Singulato Motors, said his com-pany and four others — CHJ Automotive, Hongxing Automo-bile Manufacturing Co., AIWAYS and WM Motor — have discussed an alliance for months.
Keen to push for cleaner energy cars, in part to combat air pollution and a dependence on imported oil, the government wants 8 percent of automakers’ sales to be so-called new energy vehicles (NEVs) — battery elec-tric or plug-in hybrids — by next year, rising to 12 percent in 2020, according to latest draft propos-als released last month.
Sales of NEVs this year are forecast by the China Associa-tion of Automobile Manufactur-ers at around 700,000, roughly 3 percent of the overall Chinese auto market.
Shen, known as Tiger Shen, said the startups aim to fi nal-ize the move by end-September with the aim to start developing a common EV platform by the end of this year.
As the industry shifts toward smart, Internet-connected, bat-tery cars, with electrifi ed pow-ertrains, it’s increasingly hard for automakers to differentiate, said Tiger Shen.
“Just like smartphones, whose gut is the same Android operat-ing system across many brands, smart EVs should compete more on ownership experience and services,” Tiger Shen said.
The move to pool resources and know-how highlights how Chinese startups are scram-bling to save time and money in developing products as they face increased pressure from established global automakers shifting into a new market, so far led by Tesla Inc.
Also, Chinese policymakers have put on hold approving new EV ventures because of concern that some startups have cut cor-ners on technology or have set up just to access attractive subsidies. Regulators are reviewing licens-ing procedures and may bring in tougher technical requirements early next year, three EV startup founders and executives said.
Freeman Shen, co-founder and CEO of WM Motor, reck-ons the prospect of tougher new technical requirements is a big factor spurring startups to consider an alliance to develop basic vehicle technology.
“The government worries about some new startups, thinking some of them actually don’t have the technology and management expertise to be a legitimate player,” Freeman Shen said. “This shows startups need to work together to face competition from traditional automakers.”
David Jin, spokesman for AIWAYS, said the Shang-hai-based startup “welcomes cooperation within the industry
Some electric-car makers mull alliance to save money, time
permitted [under] Chinese law and anti-monopoly law and technical exchanges. We need to make a decision after we get further information.” The com-pany’s CEO Fu Qiang declined to comment on any alliance talks, referring questions to Jin.
A spokeswoman for CHJ Automotive and an offi cial at Hongxing Automobile declined to comment.
Despite years of effort to reduce costs for traditional gasoline-fuelled cars through common vehicle platform tech-nologies, these are still often designed separately for differ-ent car models.
“Gasoline car platforms are often over-designed,” said Singulato’s Shen. “Who needs cars with platforms that allow
you to do a high-speed U-turn or slalom? While we want to design an advanced platform for plug-in battery cars, we don’t want to make platforms excessively over-spec’d.”
WM Motor’s Shen said he supports the idea of an alli-ance, but is unlikely to be part of it, for now, as his company’s fi rst vehicles are to be based on vehicle architecture it has already developed itself.
Singulato’s Shen said com-bining resources would allow alliance members to develop a far more advanced vehicle tech-nology, and for less money.
“Let’s say each player planned to spend 200 million yuan (US$30 million) to develop a next-generation platform; if four players each threw in 100 million
yuan, we’d all save money but end up with a 400 million yuan platform rather than a 200 mil-lion yuan platform,” he said, “the benefi ts are clear.”
He said that if the alliance does take shape, it would set up a separate company to oversee platform development, and ask independent automotive engi-neering companies around the world to bid for a contract to help in advanced vehicle technologies that could be shared among alli-ance partners.
Alliance partners would also share, and possibly jointly pro-cure from outside suppliers, basic car platform parts like axles and suspension.
“We plan to ask component sup-pliers to join the joint venture, too,” Tiger Shen said. (SD-Agencies)
CHINA’S foreign exchange reserves rose twice as much as expected in July to a nine-month high as tighter regulations and a weaker U.S. dollar curbed capi-tal outfl ows.
Reserves rose US$24 billion in July to US$3.081 trillion, compared with an increase of US$3.2 billion in June.
Economists polled had expected foreign exchange reserves to rise US$12 billion.
It was the fi rst time that Chi-na’s reserves had climbed for six months in a row since June 2014, with the latest gain lifting them to the highest level since October last year.
China’s foreign exchange regu-lator said weakness in the dollar helped push up the value of non-dollar currencies in its reserves. The euro, in particular, gained more than 3 percent against the dollar last month.
China burned through nearly US$320 billion in reserves last year, but the yuan still fell about 6.5 percent against the surging dollar, its biggest annual drop since 1994.
China’s forex pile is the world’s largest. (SD-Agencies)
Forex reserves at 9-month high
A visitor test drives an electric car at an auto expo in Shanghai in this fi le photo. A handful of China’s many electric vehicle start-ups are considering setting up an alliance to pool resources, develop joint technology and bring cars more quickly to the world’s biggest auto market. Xinhua
