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Monday June 19, 2017

CHINA has removed 27 restric-tions in its newly issued nega-tive list for foreign investment in its free trade zones, the State Council said Friday in a notice.

The government has pledged to open the world’s second-larg-est economy wider to foreign investors but a negative list specifying the areas off limits to foreign capital is in place for its eleven free trade zones, which enjoy looser trade and fi nancial regulations on a trial basis.

Among the benefi ciaries of the new negative list across more than 20 industries are

foreign makers of rail transport equipment and civilian satellites, who will no longer be obliged to enter a joint venture with Chi-nese partners or let the Chinese side take the majority share.

Previously restricted sectors such as precious metals and lithium mining, as well as Inter-net access services, credit rating services, and large-scale theme park construction are now open to foreign capital.

Rules on banking services, which in the past forbade foreign banks from under-writing Chinese government

bonds, have also been eased.China opened its fi rst free

trade zone in Shanghai in 2013. Since then, 10 major provinces and cities such as Zhejiang and Chongqing have been approved to establish such zones.

The State Council earlier this year announced an easing of curbs on foreign investment, in sectors such as banking, credit ratings and accounting.

China’s foreign direct invest-ment (FDI) decreased for the second straight month in May, underscoring the challenges China faces in attracting foreign

businesses, offi cial data showed Thursday.

China attracted 54.67 billion yuan (US$8.05 billion) in FDI last month, down 3.7 percent from a year earlier, the Ministry of Commerce said Thursday. That followed April’s year-on-year decline of 4.3 percent.

FDI dropped 0.7 percent in the January-May period com-pared with a year ago, to 341.08 billion yuan.

Last year, China’s FDI increased by 4.1 percent from a year ago to US$118 billion, offi cial data showed. (SD-Agencies)

Curbs eased on foreign investors At a Glance

Corporate loan costsTHE State planner urged banks in Beijing to cancel an interest rate fl oor for corporate loans as soon as possible to reduce companies’ borrowing costs, a newspaper said Friday.

Companies in Beijing have been unable to borrow from banks at a rate lower than 90 percent of the benchmark lending rate under the cur-rent rule, China Securities Journal reported. Disneyland ShanghaiSHANGHAI Disneyland’s fi rst year was encouraging and the “right precursors” are in place for development of the brand in China, Bob Chapek, head of parks and resorts at Walt Disney, said Friday.

“We’re extraordinarily encouraged by the unbeliev-able result of 11 million guests in the fi rst year ... and I think those are the sort of right pre-cursors, if you will, for future development,” he said when asked about expansion plans.SOE reformTHE government must resist “erroneous” ideas such as privatization and strengthen the role of the Party in State-owned enterprises (SOEs), the head of the country’s State asset regulator said in remarks published Friday.

Xiao Yaqing, chairman of the State-owned Asset Super-vision and Administration Commission (SASAC), said the government must “reso-lutely resist erroneous thinking such as privatization.”

THE insurance regulator will continue to crack down on ille-gal sales of Hong Kong insur-ance products by mainland agencies, which it says has led to capital outfl ows and money laundering.

The China Insurance Regu-latory Commission (CIRC) withdrew one agency’s permit and shut down 35 websites or public accounts on WeChat — a leading instant messaging platform — during a targeted investigation launched last year that was aimed at those products, the regulator said in a statement Friday.

The CIRC said that those activities have not only “dis-torted the order of the domes-tic insurance market” but also “disturbed the government’s foreign currency management and led to asset outfl ows and even money laundering.”

The regulator said it would have “zero tolerance” for the illegal sales of Hong Kong products, but did not provide details about the activities.

Regulators are concerned that the purchase of over-seas insurance products has become a channel for mainland residents to move money abroad, avoiding capi-tal restrictions.

The Hong Kong life insur-ance market has seen very strong demand from main-land residents in the past year, despite some curbs imposed on purchases of insurance by mainland visi-tors to the city.

Most recently, China’s biggest bank card provider UnionPay said it would tighten regulations over how mainland customers can use its debit and credit cards to purchase Hong Kong insurance products, potentially restricting another gateway for capital fl ight.

Hong Kong’s life insurance market saw strong new busi-ness growth of 41.5 percent in 2016, with a significant portion of business coming from mainland customers, Standard & Poor’s said.

(SD-Agencies)

Illegal sales of HK policies under scrutiny

Walmart opens 28th store in ShenzhenShoppers at a newly opened Walmart store in Shenzhen’s Longgang District during the weekend. Located in Yicheng Square in the Pingdi area of Longgang, the store is the 28th store the world’s largest retailer has opened in Shenzhen and seventh in Longgang. Fan Ping, a senior operations manager with Walmart’s China division, said the company is committed to the Shenzhen market. The retailer’s Shekou store has been ranked No. 1 among all Walmart stores in China for years in terms of sales, Fan said. SD-Agencies

Liu Minxiamllmx@msn.com

THE exponential rise of fi nancial technology (fi ntech) in China — and worldwide in general — has spurred the conventional banking sector into some seri-ous reappraisal of its business operations, but the CEO of a Chinese fi ntech fi rm, which existed before fi ntech became a hashtag, has reminded the bur-geoning sector that the ongoing evolution is fundamentally driven by demand for improved fi nancial services.

Delivering a keynote speech at the 18th Asian Banker Summit, which was rebranded as the Future of Finance Summit this year in order to include the increas-ingly infl uential disrupters of the conventional banking industry, Tang Ning, founder and CEO of CreditEase, shared his insights as a Chinese fi ntech pioneer — peer-to-peer (P2P) lending at the beginning and wealth management at a later stage, to be specifi c.

“The story of CreditEase is about the emergence and rise of fi ntech in China,” he said. “It’s been customer needs that

have driven our adoption of new technology and innovation in our business models.”

Having listed its P2P arm, Yirendai, on the New York Stock Exchange in 2015 and invested in almost every other fi eld of fi ntech, including pay-ment, robot advising, crowd-funding, blockchain, as used by Bitcoin, and insurance technol-ogy, Tang expects the sector to experience long-term growth in the coming years.

“The subordinate fi elds of fi ntech are currently at different stages of growth,” he told report-ers after the summit. “China has already become a global leader in inclusive fi nance and payment and will continue to grow, while the remaining fi elds are about to catch up in three, fi ve or 10 years.”

The views of Tang, who created CreditEase 11 years ago, are supported by a report jointly produced by professional services fi rm Ernst & Young (EY) and leading Singaporean bank DBS in December, which stated in no uncertain terms that China has now overtaken global technology hubs such as Silicon Valley and London to become “the undoubted center

of global fi ntech innovation and adoption.”

Multiple fi ntech hubs have emerged in China alone, most prominently in Shanghai, Hang-zhou, Beijing and Shenzhen, which has led to EY and DBS concluding that the country now clearly leads the way in fi ntech and is “revolutionizing many aspects of fi nancial services.”

Cost-cutting, higher customer expectations and better external technologies led to the steep ascent of fi ntech, according to David Shrier, managing direc-tor of MIT Connection Science and Engineering, another key-note speaker at the summit.

“I found on my visit to tech-nology hubs worldwide that there are new technologies abound, but only those that can tackle the pain points of a considerable group of consum-ers will be widely applied,” Tang said. “The key is to fi nd out customers’ real and long-term needs, the needs that they even don’t know they have.”

The future of fi ntech, in Tang’s eyes, doesn’t rely solely on technological advances, but also on the constant innovation of fi nancial service models.

He cited Prof. Muhammad

Yunus as an example, saying the Bangladeshi social entrepre-neur and banker revolutionized fi nancial service models when he invented a system of “solidarity groups” while founding the Grameen Bank and pioneering the concepts of microcredit and microfi nance in the 1970s.

Yunus, who was awarded the Nobel Peace Prize for the proj-ect, asked these small informal groups to apply together for loans and to have the members then act as co-guarantors of repayment and support for one another’s efforts at economic self-advancement, in order to ensure repayment.

Fintech was previously para-phrased in China as Internet fi nance, which became a buzz-word starting in 2013 when Internet giants like Alibaba and Tencent began to offer money market funds online. The term Internet fi nance was soon replaced after more technolo-gies besides the Internet were applied. The word fi ntech, just like Internet fi nance, will be dis-carded one day, Tang predicted. “Although I don’t know what the next catchword will be, it will defi nitely mean better fi nancial services,” he said.

‘Financial services remain at core of fi ntech’