Dabble.addView({"_class": "View", "id": "7f787b22-63dc-4fd4-90f1-142d710e9c1e", "name": "Published CFCW stories with texts", "fields": [64, 43232, 6687, 46288, 46316], "entries": [
{"_name": "AGRICULTURAL BANK OF CHINA REMAINS A RISKY PLAY", "_id": 45205, "_link": "http://tromblyltd.dabbledb.com/dabble/writingprojects?view=47376&entry=45205",  "values": ["AGRICULTURAL BANK OF CHINA REMAINS A RISKY PLAY", "http://chinafcweek.com/SearchDetail.aspx?action=Article&id=199", {"name": "January 8, 2007", "start": 1168185600, "end": 1168271999 }, "Agricultural Bank of China is likely to have a greater probability of making future non-performing loans than China’s other big banks, experts say. To that end, it may be more of a risky investment for investors.", "Agricultural Bank of China (ABC) is likely to have a greater probability of making future non-performing loans (NPLs) than China’s other big banks, experts say. To that end, it may be more of a risky investment for investors.\r\n\r\nChinese authorities recently announced share reforms and capital injections to clean up the bank in 2007 as preconditions for a planned initial public offering (IPO).\r\n\r\n“There will be good news for the share reform of the Agricultural Bank of China next year,” said Liu Mingkang, chairman of the China Banking Regulatory Commission at the 2006 China Financial Forum in Beijing on Dec.26. Liu said he was hopeful the bank would receive capital injections from the government.\r\n\r\nChanging the culture of credit and emphasizing risk management is very important to the asset management of Agricultural Bank of China for its restructuring, said Charlene Chu, director at Fitch Ratings in Beijing. “Our opinion is ABC is a little bit behind in some of those areas, so the risk of the flow of new NPLs is higher than at some other institutions.”\r\n\r\nChina’s other three large state-owned banks, Industrial & Commercial Bank of China (ICBC), Bank of China and China Construction Bank have already received bailouts and gone public. In October, ICBC raised US$21.2 billion in the world's largest IPO, according to state media. Demand for Chinese bank stocks has been strong, leaving many analysts mystified because share prices have been increasing irrespective of the banks’ fundamentals, Chu said.\r\n\r\nRestructuring ABC to prepare for an IPO could take as little as three months or up to as long as a year, according to Qiang Liao, a credit analyst at Standard and Poor’s in Beijing.\r\n\r\nAt the end of 2005, ABC had non-performing loans of 739.8 billion yuan (US$94.7 billion) and a bad loan ratio of 26.31%. It will require a capital injection of about US$100 billion, according to state media. This amount surpasses the combined US$60 billion required to bail out China’s other three large state banks."]},
{"_name": "CHINA GETS SET FOR NEXT WAVE OF ASSET SECURITIZATIONS", "_id": 42804, "_link": "http://tromblyltd.dabbledb.com/dabble/writingprojects?view=47376&entry=42804",  "values": ["CHINA GETS SET FOR NEXT WAVE OF ASSET SECURITIZATIONS", "http://chinafcweek.com/SearchDetail.aspx?action=Article&id=107", {"name": "November 27, 2006", "start": 1164556800, "end": 1164643199 }, "China is set to allow its banks to partake in a second wave of asset securitizations by year-end, but it is still too early for foreign investors to get involved, experts say. ", "China is set to allow its banks to partake in a second wave of asset securitizations by year-end, but it is still too early for foreign investors to get involved, experts say.\r\n\r\nIt is still too early for foreign investors to make investments in China’s bond market because of regulatory restrictions and because accounting and taxation standards are not in line with international standards, said Warren Hua, an expert on asset securitization and a partner with Gide Loyrette Nouel, a French law firm with offices in Beijing. In addition, it is still too difficult to ascertain the full risks of bonds already on China’s inter-bank bond market, Hua added. “There is still a long way to go before securitization products can become sophisticated products in China,” he said.\r\n\r\nChinese companies are aiming to meet international accounting standards. “Most large corporations will be in compliance in 12 to 18 months,” said Jim Turnbull, managing director of Triarii Advisors Ltd., a Hong Kong consultancy firm specializing in capital markets. “But there might be some lag for some smaller corporations.”\r\n\r\nChina’s big banks are getting involved with securitization because they will be perceived as being more innovative, said May Meizhi Yan, a vice president and senior credit officer at Moody’s Investors Service in Hong Kong. Smaller banks are interested because of the opportunity to raise funds. “The big banks have a lot of liquidity but the smaller banks, because of the recent higher reserve requirement, are probably interested in getting more funding,” Yan said.\r\n\r\nCurrently, only local and foreign financial institutions licensed by the Chinese government can trade on the national inter-bank bond market, Hua said. However, some foreign banks have gone through the licensing process and one qualified foreign investor, ABF Pan Asia Bond Index Fund, has completed the process, he added.\r\n\r\n“There is a lot of pressure on the local currency right now,” Hua said. “I don’t think, in the short-term, the government will encourage foreign investors to deal in the inter-bank market.” One fear is that foreign investors could speculate on the renminbi by investing in local currency bonds, he added.\r\n\r\nThe Industrial Commercial Bank of China is expected to issue 4.5 billion yuan (US$572 million) in asset-backed bonds by year-end, the Shanghai Daily recently reported. The assets backing the deal may comprise of commercial, consumer credit or industrial loans, Hua said.\r\n\r\nChinese regulators first allowed asset securitizations in April 2005. The first round of securitized assets was in December 2005, led by China Development Bank and China Construction Bank."]},
{"_name": "China Raises New Barriers To Foreigners As Old Ones Fall", "_id": 17112, "_link": "http://tromblyltd.dabbledb.com/dabble/writingprojects?view=47376&entry=17112",  "values": ["China Raises New Barriers To Foreigners As Old Ones Fall", "http://chinafcweek.com/SearchDetail.aspx?action=Article&id=48", {"name": "October 16, 2006", "start": 1160928000, "end": 1161014399 }, "Last week, the Chinese government announced that it will issue new rules in opening up its banking sector next month – a full month earlier than the World Trade Organization deadline. In spite of that milestone, other obstacles to foreign investment are already on the rise. They include restrictions on brokerage joint ventures, real estate investments, and high capital requirements for foreign banks coming into China.", "Last week, the Chinese government announced that it will issue new rules in opening up its banking sector next month – a full month earlier than the World Trade Organization deadline. In spite of that milestone, other obstacles to foreign investment are already on the rise. They include restrictions on brokerage joint ventures, real estate investments, and high capital requirements for foreign banks coming into China.\r\n\r\n“The days of preferential treatment for foreign companies are over,” said Fons Tuinstra, director of the China Business Infocenter and the author of “The Wild East: 15 misunderstandings about China and the Chinese.”\r\n\r\nIn September the China Securities Regulatory Commission (CSRC) released a statement saying it would bar foreign-owned brokerage firms from setting up new brokerage joint ventures in China. Only Morgan Stanley, Goldman Sachs Group, Japan's Daiwa Securities SMBC Co., France's BNP Paribas and the CLSA unit of Credit Agricole currently have joint ventures, and most of these are with investment banks, not retail brokerages.\r\n\r\nIt’s a sign that officials may be feeling that foreigners are coming in too hard and too fast into China’s critical financial sector, according to Neil Katkov , a Tokyo-based analyst for research firm Celent Communications LLC.\r\n\r\nA Sept. 28 report from the US-China Business Council reported China has enacted protectionist policies, which technically comply with China’s WTO agreement, but which violate the spirit of the agreement to open markets.\r\n\r\nToday, foreign banks are only allowed to provide limited foreign currency business. To participate in yuan-denominated businesses, the banks will have to incorporate in China with 1 billion RMB in capital (about US $125 million).\r\n\r\nPatrick Martino contributed to this article. "]},
{"_name": "CHINA TO SECURITIZE BAD BANK DEBTS", "_id": 41038, "_link": "http://tromblyltd.dabbledb.com/dabble/writingprojects?view=47376&entry=41038",  "values": ["CHINA TO SECURITIZE BAD BANK DEBTS", "http://chinafcweek.com/SearchDetail.aspx?action=Article&id=71", {"name": "October 30, 2006", "start": 1162137600, "end": 1162223999 }, "China will begin securitizing its bad bank debts, a manager at one of China’s two top asset management companies told China Finance & Currency week on Friday. ", "China will begin securitizing its bad bank debts, a manager at one of China’s two top asset management companies told China Finance & Currency week on Friday.\r\n\r\nCurrently, non-performing loans can be purchased through the inter-bank market or through auctions. Securitization involves bundling up the loans and making them available to a wider pool of potential investors, including some foreign institutional investors, said Stephen Green, senior China economist at the Shanghai office of Standard Chartered.\r\n\r\nForeign investors would be interested in buying the new debt-backed securities, he said. Whether they are able to, will depend on where the securities are traded, he added.\r\n\r\nMu Baiqing, a manager at China Orient Asset Management Corp., confirmed that regulators intend to allow securitization projects for these loans, and that his company along with China Cinda Asset Management Corp. will lead the securitizations.\r\n\r\nChina first started tackling the problem of non-performing loans in 1999, when it established Cinda, Orient, and two other asset management companies to take bad debts off the books of China’s banks and resell them.\r\n\r\nAccording to Green, the four asset management companies were originally set up to deal with some 1.4 trillion RMB (US$177 billion) in bad debts – and most of those debts have now been handled. As a result, the future of these companies is now uncertain, he said. The asset management companies need to find new areas of business in order to ensure their continued existence.\r\n\r\nSo far, there have been two parallel securitization tracks in China. Credit asset securitization has been happening within the banking system, with trading on the inter-bank market. Noncredit assets, such as telecom receivables go through the securities industry, and the actual paper is traded on a stock exchange.\r\n\r\nPatrick Martino contributed to this report. "]},
{"_name": "CHINA’S REGULATORS TO EXPAND QFII PROGRAM", "_id": 43803, "_link": "http://tromblyltd.dabbledb.com/dabble/writingprojects?view=47376&entry=43803",  "values": ["CHINA’S REGULATORS TO EXPAND QFII PROGRAM", "http://chinafcweek.com/PopularStoriesDetail.aspx?action=Article&id=136", {"name": "December 11, 2006", "start": 1165766400, "end": 1165852799 }, "China’s top securities regulator said that foreign investment quotas will be expanded and analysts predict that the total allowed for foreign institutional investors could go from just under US$8 billion to US$40 billion in the next three years. ", "China’s top securities regulator said that foreign investment quotas will be expanded and analysts predict that the total allowed for foreign institutional investors could go from just under US$8 billion to US$40 billion in the next three years.\r\n\r\n“We want to steadily expand the size of the qualified foreign investor program (QFII) and the areas of investment for the program,” said Shang Fulin, chairman of the China Securities Regulatory Commission (CSRC) at the fifth annual international securities investment conference held in Shenzhen on Dec. 2. He did not give specifics, however, about when the increases will take place. Shang said that expansion of the QFII program is necessary to help enlarge the role of institutional investors and help the capital markets.\r\n\r\n“We expect the total size of the QFII program could expand by five times by 2010 to around US$40 billion,” said Goldman Sachs China strategist Thomas Deng in a November research report.\r\n\r\nQFIIs are now allowed to invest US$7.8 billion in yuan-denominated domestic stocks, accounting for 1.4% of total stock market capitalization, he said. By 2010, foreign investors could account for 8% of the total stock market value, he added.\r\n\r\n“We expect the Chinese government to further relax foreign holding restrictions as the economy/financial market gradually integrates into the global platform, he said.”\r\n\r\nAuthorities are likely to begin expanding the QFII program after share reform has been completed next year, said Zhang Qi, a securities analyst at Shanghai’s Haitong Securities. “Roughly 90% of companies have completed share reform,” he added.\r\n\r\nIn addition to increasing the amount of money that individual qualified foreign investors are allowed to put into Chinese stocks, the number of products they’re allowed to invest in is also likely to expand, and minimum capital requirements likely to be eased, said Zuo Xiaolei, chief economist at Beijing’s China Galaxy Securities Co.\r\n\r\nPossible new products investors could invest in would include financial derivatives, Zhang added.\r\n\r\nThis year, regulators approved 18 QFIIs with combined quotas of US$3 billion, bringing the total number of approved foreign institutional investors to 52. "]},
{"_name": "CHINA’S REGULATORY WALLS IN FINANCIAL SERVICES TO REMAIN", "_id": 17743, "_link": "http://tromblyltd.dabbledb.com/dabble/writingprojects?view=47376&entry=17743",  "values": ["CHINA’S REGULATORY WALLS IN FINANCIAL SERVICES TO REMAIN", "http://chinafcweek.com/SearchDetail.aspx?action=Article&id=63", {"name": "October 23, 2006", "start": 1161532800, "end": 1161619199 }, "China has no plans to remove the regulatory walls that separate banking, brokerage and insurance services, said Huang Yi, director-general of the China Banking and Regulatory Commission. \"Lots of people say we should change the law,\" Yi said, and China did revisit the law in 2003. \"But after discussions we won't change this article.\"", "China has no plans to remove the regulatory walls that separate banking, brokerage and insurance services, said Huang Yi, director-general of the China Banking and Regulatory Commission. \"Lots of people say we should change the law,\" Yi said, and China did revisit the law in 2003. \"But after discussions we won't change this article.\"\r\n\r\nInstead, Yi said, the Chinese government will continue to maintain three separate regulatory agencies for banking, brokerage and insurance regulation. In addition, the laws restricting the lines of business that a particular financial institution may enter will continue to stay on the books.\r\n\r\nYi said that despite the separation between businesses, some products have appeared on the market that cut across sector boundaries, and financial firms have set up subsidiaries to handle business in other sectors. To oversee this cross-sector activity, the three main regulating bodies have set up cross-sector oversight committees, he added.\r\n\r\nYi’s comments were on the heels of a speech by Suzanne Dence, managing consultant for IBM's Institute for Business Value, as she told about 350 bankers from around the world gathered in Beijing on Thursday for the China International Banking Convention 2006, that the future of the banking industry lies in specialization and the era for huge conglomerates has reached its peak.\r\n\r\nThere is limited value in combining banking, brokerage and insurance into one institution without some clear benefits or synergies, she said. \"Consolidation has peaked,\" Dence said. Specialization is next.\r\n\r\nThe statements counter a research report that Dence authored last spring, where industry participants said that universal banks were the way to go. The report surveyed 400 financial markets executives in 61 countries and found more than 75% believed universal banks had the best chance for success in the future. The next two most common answers, each mentioned by fewer than 36% of respondents, were Wall Street or Tier-1 broker-dealers such as Goldman Sachs and boutique alternative investment managers, such as Farallon Capital.\r\n\r\nDence said that IBM had doubts about the prevailing wisdom about universal banks since the report came out, and that it took a few months to determine an official position. IBM is an industry leader in providing consulting and outsourcing services to financial institutions.\r\n\r\nPatrick Martino contributed to this report."]},
{"_name": "CHINA’S REMOVAL OF CORRUPT OFFICIALS PAVES NEW BIZ ROUTE", "_id": 40864, "_link": "http://tromblyltd.dabbledb.com/dabble/writingprojects?view=47376&entry=40864",  "values": ["CHINA’S REMOVAL OF CORRUPT OFFICIALS PAVES NEW BIZ ROUTE", "http://chinafcweek.com/SearchDetail.aspx?action=Article&id=79", {"name": "November 6, 2006", "start": 1162742400, "end": 1162828799 }, "In the first eight months of 2006, more than 17,000 Chinese officials were prosecuted and punished for corruption relating to banking funds and other government controlled financing, according to the Supreme People's Procuratorate. But the corruption probe that is making the biggest waves is that of the pension fund scandal that recently brought down Shanghai’s Communist Party chief, Chen Liangyu, and a number of associated figures. ", "In the first eight months of 2006, more than 17,000 Chinese officials were prosecuted and punished for corruption relating to banking funds and other government controlled financing, according to the Supreme People's Procuratorate. But the corruption probe that is making the biggest waves is that of the pension fund scandal that recently brought down Shanghai’s Communist Party chief, Chen Liangyu, and a number of associated figures.\r\n\r\nIt is a sign, observers say, that the Chinese government is no longer willing to tolerate corruption as the price of economic progress, even in Shanghai, China’s showcase city for economic growth.\r\n\r\nRecent moves by the government to clean up corruption signal an end of the days under former premier Jiang Zemin, where development was pushed at any cost – including the cost of clean government, says Fons Tuinstra, director of the China Business Infocenter and the author of “The Wild East: 15 misunderstandings about China and the Chinese.” \"The corruption was accepted in the past as a way to keep the economy going,” he said. Tuinstra said although the government’s turn towards accountability would not hurt investors, it was important for the business community to keep an eye on developments.\r\n\r\nOther developments in China’s move to revamp its system are government efforts to push for unions and for a unified tax law. The All-China Federation of Trade Unions called on all foreign-owned companies to establish trade unions in October.\r\n\r\nMeanwhile, tax breaks for foreign investors will eventually disappear with a newly proposed unified tax law that will make foreign firms pay the same tax rates as domestic firms. Currently, many foreign firms receive lower tax rates as an incentive to invest.\r\n\r\nPatrick Martino contributed to this report."]},
{"_name": "CHINESE PENSION FUND PICKS FOREIGN FIRMS AS MANAGERS", "_id": 40865, "_link": "http://tromblyltd.dabbledb.com/dabble/writingprojects?view=47376&entry=40865",  "values": ["CHINESE PENSION FUND PICKS FOREIGN FIRMS AS MANAGERS", "http://chinafcweek.com/SearchDetail.aspx?action=Article&id=82", {"name": "November 6, 2006", "start": 1162742400, "end": 1162828799 }, "China’s National Social Security Fund (NSSF) has selected foreign firms to manage its US$1 billon pension fund assets in overseas markets, according to a source close to the deal.", "China’s National Social Security Fund (NSSF) has selected foreign firms to manage its US$1 billon pension fund assets in overseas markets, according to a source close to the deal.\r\n\r\nThe NSSF has already selected the asset management firms and is in final negotiations with them, said Li Keping, the NSSF’s director general for the investment department. Keping would not say whether the firms were foreign or domestic. However, a source close to the deal said most would be international firms, with perhaps a few from Hong Kong. Keping said the asset managers would be announced by year-end.\r\n\r\nThe asset management firms were selected based on the results of a survey sent to firms on how they would handle the fund’s assets, Keping added. A group of seven experts, primarily independent outside advisers, then selected the finalists, he said.\r\n\r\nChina’s NSSF is a reserve fund and is not the general social security fund, Keping said. It will be used to help supplement anticipated shortfalls in the general fund. Money for the fund comes from the government, the proceeds of stock investments and lottery proceeds. The funds are not from individual or company pension contributions. “We don’t have short-term liabilities,” Keping said. “The payout is perhaps 10, 15 years in the future.”\r\n\r\nThe fund was created at the end of 2000 and has invested only in the domestic market. Keping said legislation to allow the fund to invest overseas was passed only this year.\r\n\r\n“The NSSF is looking to hire the best in the world, both for asset management and asset services,” said Kevin Tan, chief representative for the Beijing office of Northern Trust Company. The fund is the first institutional retirement fund in China to invest overseas, according to Northern Trust. Northern Trust and Citigroup were selected in October as the fund’s global custodians.\r\n\r\nPatrick Martino contributed to this report. "]},
{"_name": "Chinese Regulators Up Credit Suisse Quota", "_id": 17183, "_link": "http://tromblyltd.dabbledb.com/dabble/writingprojects?view=47376&entry=17183",  "values": ["Chinese Regulators Up Credit Suisse Quota", "http://chinafcweek.com/SearchDetail.aspx?action=Article&id=43", {"name": "October 16, 2006", "start": 1160928000, "end": 1161014399 }, "Chinese regulators last week decided to allow Credit Suisse to invest an additional US$200 million in mainland stocks, bringing its total quota to US$500 million. ", "Chinese regulators last week decided to allow Credit Suisse to invest an additional US$200 million in mainland stocks, bringing its total quota to US$500 million.\r\n\r\nNormally, foreign investors are limited to buying shares denominated in dollars or listed on foreign exchanges, but the Qualified Foreign Institutional Investor (QFII) program allows 50 foreign firms to buy yuan-denominated shares. Foreign firms then resell the stocks they are able to buy through their QFII quotas to other investors, or hold them on their own accounts.\r\n\r\n“We applied for additional quota because we used up our previous one,” said Credit Suisse spokeswoman Josephine Lee. “So yes, you can say that there is a great deal of interest in China securities. China is one of the fastest-growing markets.”\r\n\r\nAccording to Credit Suisse analyst Vincent Chan, China’s capital markets are ready for a “big bang.” He predicts that the market cap of the domestic stock market will more than quadruple from US$402 million at the end of 2005, to US$1,876 billion in 2010.\r\n\r\nThat’s because China’s stock market is only 18% of gross domestic product (GDP), compared to the 80 to 90 percent which is typical of other countries, he said. “China has enough liquidity and earnings base to support a much bigger market,” he wrote in a recent research report.\r\n\r\nThe new quota marks Credit Suisse’s fourth QFII allotment. The bank started out with a US$50 million quota in 2003 and that was raised to US$300 million in 2005.\r\n\r\nLast month, Goldman Sachs Co. received a US$150 million quota, and Morgan Stanley Investment Management Inc. received US$200 million.\r\n\r\nThe new allotments raise the total value of QFII quotas to just over US$8 billion. The maximum that the quotas can go under current rules is US$10 billion.\r\n\r\n“Money isn’t the driver for the regulators to speed up QFII approval,” said Xiaolei Zuo, chief economist of Beijing-based China Galaxy Securities. Instead, the major reason for QFIIs is educational – local investment firms can learn about stock markets from their foreign counterparts, she added. "]},
{"_name": "DOMESTIC MARKETS GET IN STEP WITH HONG KONG", "_id": 45344, "_link": "http://tromblyltd.dabbledb.com/dabble/writingprojects?view=47376&entry=45344",  "values": ["DOMESTIC MARKETS GET IN STEP WITH HONG KONG", "http://chinafcweek.com/PopularStoriesDetail.aspx?action=Article&id=193", {"name": "January 8, 2007", "start": 1168185600, "end": 1168271999 }, "The China Securities Regulatory Commission (CSRC) is encouraging companies listed in Hong Kong to return to the domestic market, said Yao Gang, the assistant to the chairman of the CSRC at a working conference held by the Shenzhen Stock Exchange last month. A return of Chinese companies to China’s domestic stock markets have already strengthened the exchanges, and caused them to trade in tandem with Hong Kong’s stock exchange, experts say. ", "The China Securities Regulatory Commission (CSRC) is encouraging companies listed in Hong Kong to return to the domestic market, said Yao Gang, the assistant to the chairman of the CSRC at a working conference held by the Shenzhen Stock Exchange last month. A return of Chinese companies to China’s domestic stock markets have already strengthened the exchanges, and caused them to trade in tandem with Hong Kong’s stock exchange, experts say.\r\n\r\n“Because you are having a growing number of A-share and H-share listings,” said Fraser Howie, an expert on China’s stock markets, “You now have a feeding frenzy, with one market driving the other market up.”\r\n\r\nIf a dual-listed stock, like Industrial & Commercial Bank of China, has a strong day on the domestic Chinese stock market, it will directly lead to a stronger move on Hong Kong’s stock market and vice versa, Howie said. There was less interest in the domestic market before, but recently, A-shares reached all-time highs and it gives people a reason to pay attention, Howie said. A-shares are stocks listed in China. H-shares are listed in Hong Kong.\r\n\r\nChinese authorities want companies to return to the mainland markets because they will improve the quality of the markets and companies will want to return because domestic markets are stronger and can do larger IPOs, Howie said.\r\n\r\n“If you look back to 1999, the largest IPO to date was a four billion RMB (US$512 million) for Shanghai Pudong Development Bank,” said Howie. “Now you can do about 40 billion RMB (US$5.1 billion).”\r\n\r\nForeign investors can invest in the A-share market through the Qualified Foreign Institutional Investor (QFII) program. Growth in China’s A-share market is expected to be very strong, according to a November Goldman Sachs report. “We believe the depth of the A-share market could change significantly with total market cap tripling from the current size of US$600 billion to around US$2 trillion, driven by the return to domestic listing by offshore-listed blue-chip companies, further privatization of state-owned enterprises, equitization of private and foreign-invested companies and earnings growth from listed companies alongside robust GDP growth,” the report said."]},
{"_name": "Edgar Online To Offer Company Data To Investors In China", "_id": 17363, "_link": "http://tromblyltd.dabbledb.com/dabble/writingprojects?view=47376&entry=17363",  "values": ["Edgar Online To Offer Company Data To Investors In China", "http://chinafcweek.com/SearchDetail.aspx?action=Article&id=51", {"name": "October 16, 2006", "start": 1160928000, "end": 1161014399 }, "Edgar Online Inc. plans to offer online tools to institutional investors in China – to further facilitate the country’s drive to modernize its financial information system – and to provide investors and analysts with easier access to corporate data, executives from Edgar Online told China Finance & Currency Week last Thursday. In addition, the company hopes to offer some free online tools to retail investors through the websites of local stock exchanges.", "Edgar Online Inc. plans to offer online tools to institutional investors in China – to further facilitate the country’s drive to modernize its financial information system – and to provide investors and analysts with easier access to corporate data, executives from Edgar Online told China Finance & Currency Week last Thursday. In addition, the company hopes to offer some free online tools to retail investors through the websites of local stock exchanges.\r\n\r\nIf they are implemented, China may beat the United States to offering free online tools to retail investors. Meanwhile, the tools for institutional investors will be available through for-profit subsidiaries of the Shanghai and Shenzhen stock exchanges. The service is likely to go live early next year, said Jennifer Wu, vice president for business development at Edgar Online.\r\n\r\nWu and Liv Watson, Edgar’s vice president for global strategy, met with stock exchange officials last week to discuss the tools. “The Shanghai Stock Exchange is very excited to see what we’ve done with their data,” Watson said. “They haven’t been able to do it internally or with a local vendor. But they want to attract investors to listed companies -- it’s part of the value-add for the stock exchange.”\r\n\r\nThe key to the online tools is XBRL – or eXtensible Business Reporting Language – an XML-based, open standard for corporate financial data. In 2004, China became the first country in the world to mandate that all listed companies file their reports in XBRL format. To date, only 24 U.S. corporations have adopted XBRL for their SEC filings. Spain is the only other country to mandate that all listed companies use it, Watson said. With Edgar Online, investors in China should soon be able to access the XBRL reports through the online tools.\r\n\r\nThe alternative to XBRL – paper documents and PDF files – require that investors retype or cut-and-paste numbers into Excel spreadsheets to make sense of them. The XBRL format provides all the numbers in electronic form and makes it easier for analysts, investors and government regulators to explore company financials, to review historical trends, and to compare companies with others in the same industry. Companies would no longer have to waste time and money producing multiple financial reports for different regulatory agencies as the same XBRL data can be used in many different forms. The result would be greater transparency in the Chinese stock market, and the transparency extends to the internal operations of the companies. Companies will be able to shift people from routine data-gathering tasks, to higher-level financial analysis, which could help improve corporate governance.\r\n\r\n“With the conversion to XBRL, the bookkeepers are all going to be obsolete,” said Kurt Ramin, global chair of the XBRL Steering Committee of the International Accounting Standards Committee Foundation. “The company burden is going to be much reduced. It’s going to change everything.”\r\n"]},
{"_name": "EXPERTS CAUTION FOREIGN FIRMS AHEAD OF BAND WIDENING", "_id": 43198, "_link": "http://tromblyltd.dabbledb.com/dabble/writingprojects?view=47376&entry=43198",  "values": ["EXPERTS CAUTION FOREIGN FIRMS AHEAD OF BAND WIDENING", "http://chinafcweek.com/SearchDetail.aspx?action=NewsItem&id=551", {"name": "December 4, 2006", "start": 1165161600, "end": 1165247999 }, "Foreign corporations in China will need to monitor exposure to currency fluctuations more closely when China increases the daily trading band on the yuan against the U.S. dollar. The change will affect all foreign companies because roughly 80% of trade is settled in U.S. dollars, said Thomas Liu, a professor of finance at Jiaotong University in Shanghai.", "Foreign corporations in China will need to monitor exposure to currency fluctuations more closely when China increases the daily trading band on the yuan against the U.S. dollar. The change will affect all foreign companies because roughly 80% of trade is settled in U.S. dollars, said Thomas Liu, a professor of finance at Jiaotong University in Shanghai.\r\n\r\n“Foreign corporations will need to be more wary of the exchange rate as an extra risk factor that needs to be monitored and mitigated,” said David Mann, a senior foreign exchange strategist at Standard Chartered Bank in Hong Kong, “At the moment, the yuan is moving more quickly [than before], but it is still moving very slowly compared to other major currencies.”\r\n\r\nCurrently, the Chinese yuan is not allowed to move more than 0.3% against the U.S. dollar each day. Until recently, the yuan had an exchange rate set by the government and investors had grown accustomed to its predictability. A wider trading band would allow the yuan to be more volatile and respond to changes in the Chinese economy more quickly, Mann said.\r\n\r\nAn increase in the trading band is not necessary for at least a year, Liu said. The yuan is currently trading within the band and expanding the trading band would put too much pressure on monitory authorities to keep the yuan stable, he added.\r\n\r\nWen Jiandong of the policy research division of the State Administration of Foreign Exchange, last week told China Money magazine that \"(We) should not wait for movement in the yuan to top 0.3 % before widening the trading band. It should be widened while there is still some room.”\r\n\r\nChinese authorities are moving to make Chinese companies aware of the currency risks by slowly increasing the daily trading band and consequently volatility, Mann said.\r\n\r\n“Right now there is such a small amount of volatility in the exchange rate people are barely recognizing that anything has really changed since the revaluation last year,” Mann said. “So it [a wider band] will boost awareness and increase the sophistication of hedging in China.”\r\n\r\nCurrently, currency-hedging instruments are only available outside of China.\r\n"]},
{"_name": "EXPERTS PUSH FOR STRONGER BOND MARKET", "_id": 42897, "_link": "http://tromblyltd.dabbledb.com/dabble/writingprojects?view=47376&entry=42897",  "values": ["EXPERTS PUSH FOR STRONGER BOND MARKET", "http://chinafcweek.com/SearchDetail.aspx?action=Article&id=99", {"name": "November 27, 2006", "start": 1164556800, "end": 1164643199 }, "China is over-dependent on bank financing and needs to develop a better bond market, according to experts, even as a new report released this month by the Asian Development Bank shows China’s bond market increased 22% for the first half of 2006. ", "China is over-dependent on bank financing and needs to develop a better bond market, according to experts, even as a new report released this month by the Asian Development Bank shows China’s bond market increased 22% for the first half of 2006.\r\n\r\nMuch of the growth was due to higher reserve requirements, which forced banks to buy more government bonds, the ADB said.\r\n\r\nThe growth numbers for China’s bond markets are impressive, but the bond market is still weak, said Jim Turnbull, managing director of Triarii Advisors Ltd., a Hong Kong consultancy firm specializing in capital markets. “There is still a reliance on bank financing,” Trumbull said.\r\n\r\n“The main issue is that the corporate bond market is very small in China,” said Charlene Chu, director at Fitch Ratings in Beijing. “Improving the corporate bond market is the fundamental thing the government needs to work on.”\r\n\r\nJohn Pattison, senior vice-president of treasury and risk management at the Canadian Imperial Bank of Commerce, said China should encourage financial intermediation to promote a healthy banking system. \"A system that is too bank dominated has problems,\" he added.\r\n\r\n“The danger of banks doing too much financing has to do with the banks having to hold too much risk,” Pattison said. “On the other side, firms don't have access to specific types of financing to give them the healthiest balance sheets. For example, insurance companies lend long term and that is needed for many types of financing. Equally as important, access to debt markets is critical. Companies with too little equity are extremely vulnerable to problems arising in their businesses.”\r\n\r\nPattison said he saw signs that China is working to take pressure off the banks by spreading the risks, adding that there are indications that the insurance industry and equity underwriting and distribution are growing. “Also, foreign involvement helps diversify risks, especially for very risky projects and areas where foreign firms have expertise at deal analysis,” Pattison said.\r\n\r\nTurnbull noted the ongoing efforts to reform the bond markets. “The corporate bond market is expanding reasonably quickly, but from a low base,” he said. “There needs to be some reforms, but to the government’s credit, the authorities are embarking on a lot of reforms.”\r\n\r\nPatrick Martino contributed to this report."]},
{"_name": "EXPERTS: FEAR OF FOREIGN COMPETITION OBSTRUCTS PROGRESS", "_id": 42171, "_link": "http://tromblyltd.dabbledb.com/dabble/writingprojects?view=47376&entry=42171",  "values": ["EXPERTS: FEAR OF FOREIGN COMPETITION OBSTRUCTS PROGRESS", "http://chinafcweek.com/SearchDetail.aspx?action=Article&id=16", {"name": "November 20, 2006", "start": 1163952000, "end": 1164038399 }, "Fear of foreign competition is the main reason China’s regulators continue to block foreign brokerages from fully participating in the Chinese securities market, experts say.", "Fear of foreign competition is the main reason China’s regulators continue to block foreign brokerages from fully participating in the Chinese securities market, experts say.\r\n\r\nCurrently, foreign brokers are prohibited from investing in Chinese brokerages to allow the domestic industry time to restructure. Fraser Howie co-author of “Privatizing China,” and an expert on China’s capital markets, said Chinese brokerages don’t have the skills or expertise of foreign brokerages. Howie said the Chinese government might be right, however, and that allowing foreign participation could kill the Chinese securities industry. But he said the ban on foreign investment is still frustrating.\r\n\r\nThe National Development and Reform Commission said in a statement posted on its website on Nov. 11 that China’s securities sector will be reopened to foreign joint ventures – sometime before 2010. But a local newspaper, state-owned Shanghai Daily, reports that foreign joint ventures may be re-allowed by next August. The NDRC did not respond to repeated requests for comments on a timeframe for the opening.\r\n\r\nThe goal is to “guide securities investment in an orderly, controlled flow,” the state planning agency said in the announcement posted on its website. China stopped approving new applications for joint ventures last December. Meanwhile, the government is trying to clean up the domestic industry, plagued by scandals and bad management.\r\n\r\nThe finance sector is very ignorant of what will happen if we will allow 100% participation (by foreign players),” said Ray Di, a business professor at Beijing’s Tsinghua University. “I would argue for a gradual transformation. I think the Chinese government should first allow joint ventures then open the market to outside investors.” Di said he expected the market to be open in five years.\r\n\r\nCurrently only Goldman Sachs has a foothold in the industry, with a joint venture with Gao Hua Securities. UBS AG negotiated to invest in Beijing Securities before the ban, but the deal has not been finalized.\r\n\r\nPatrick Martino contributed to this report."]},
{"_name": "Financial Futures Exchange", "_id": 14895, "_link": "http://tromblyltd.dabbledb.com/dabble/writingprojects?view=47376&entry=14895",  "values": ["Financial Futures Exchange", "http://chinafcweek.com/PopularStoriesDetail.aspx?action=Article&id=35", {"name": "October 9, 2006", "start": 1160323200, "end": 1160409599 }, "Members of the newly opened China Financial Futures Exchange (CFFEX) could start making practice futures trades as early as this week. Futures contracts – obligations to buy or sell goods at a certain price in the future – will allow investors to mitigate the risks of investing in Chinese stocks. By investing in futures, an investor can obtain protection from fluctuating share prices because that investor has already locked in the price at which the shares will be purchased or sold. ", "Members of the newly opened China Financial Futures Exchange (CFFEX) could start making practice futures trades as early as this week. Futures contracts – obligations to buy or sell goods at a certain price in the future – will allow investors to mitigate the risks of investing in Chinese stocks. By investing in futures, an investor can obtain protection from fluctuating share prices because that investor has already locked in the price at which the shares will be purchased or sold.\r\n\r\nThe CFFEX was created to give China “more financial tools to manage market risk,” said Zhongsu Chen managing director of venture capital firm Time Innovation Ventures, and who served on the working group that created the CFFEX.\r\n\r\nThe exchange opened on Sept. 8 in Shanghai. The first product traded will be based on the Shanghai and Shenzhen 300 Index, which tracks companies listed on the country’s two stock exchanges, exchange officials say. CFFEX has not yet announced what other products it will offer.\r\n\r\nA CFFEX official, who asked not to be identified because he was not authorized to speak with the media, said a contract based on the Shanghai and Shenzhen 300 Index was chosen as the first product because it is a “big basket” of shares. He also said using an index comprising both exchanges would avoid disappointing the smaller Shenzhen Stock Exchange, which an index based only on the larger Shanghai Stock Exchange would have done.\r\n\r\n“With the non-tradable stock (reforms) in the market almost accomplished, we need this product to hedge the risk in the market,” the same CFFEX official said.\r\n\r\nThomas Liu, a finance professor at Shanghai’s Jiaotong University, said choosing the Shanghai and Shenzhen 300 Index was an important first step for the financial futures market in China. “We have to choose an index that reflects both Shenzhen and Shanghai. The object is to make the stock market more stable.”\r\n\r\nThe Shanghai and Shenzhen 300 Index covers roughly 60% of the value of the Chinese stock market.\r\n\r\nFormal trading will begin by the end of this year or the very beginning of the next, officials say, but would not comment on the next products likely to be traded. Observers have begun speculating.\r\n\r\n“Interest rate and RMB foreign exchange contracts are likely to be launched subsequently,” said Steve Ng, Asia managing director of Exchange Traded Derivatives at UBS AG. “A contract based on the Chinese government bonds will be most welcome by market participants.”\r\n\r\nChinese financial futures can already be traded overseas. In September, the Singapore Exchange launched a China stock index futures product based on the FTSE/Xinhua index of the top 50 stocks listed on the Shanghai and Shenzhen exchanges.\r\n"]},
{"_name": "FOREIGN ASSET MANAGERS TO INVEST CHINESE CURRENCY ABROAD", "_id": 44738, "_link": "http://tromblyltd.dabbledb.com/dabble/writingprojects?view=47376&entry=44738",  "values": ["FOREIGN ASSET MANAGERS TO INVEST CHINESE CURRENCY ABROAD", "http://chinafcweek.com/PopularStoriesDetail.aspx?action=Article&id=176", {"name": "January 2, 2007", "start": 1167667200, "end": 1167753599 }, "Foreign asset managers are looking to move aggressively into China’s Qualified Domestic Institutional Investor (QDII) program, a potential gold mine that will allow Chinese clients to invest their US$1.84 trillion in bank savings overseas for the first time. ", "Foreign asset managers are looking to move aggressively into China’s Qualified Domestic Institutional Investor (QDII) program, a potential gold mine that will allow Chinese clients to invest their US$1.84 trillion in bank savings overseas for the first time.\r\n\r\nSchroders, an asset management company headquartered in the UK with US$229.4 billion under management, announced Dec. 11th it will enter the QDII market. “We are looking to develop Schroders business in the area of international asset mandates from domestic institutions i.e. QDII. We will also be working with our JV on the development of QDII products as this part of the market continues to open,\" said CEO Lester Gray of Schroders Asia Pacific in an email. Gray did not disclose when Schroders will start its QDII program.\r\n\r\n“China’s rapidly developing and increasingly liberalized investment management sector presents a huge opportunity for financial services groups,” said Matthew Phillips, a partner with PricewaterhouseCoopers in Shanghai in a November report. “The economy is soaring, markets are maturing and the country’s increasingly affluent citizens have built up household bank savings of US$1.84 trillion. This represents a savings to Gross Domestic Product (GDP) ratio of 80%, a potential bonanza for investment managers.”\r\n\r\nThe QDII program will start with relatively small quotas, Phillips said. “But there is potential for this to be one of the main conduits for the relaxation of China's capital account over the medium-term and therefore this is an exciting area for foreign money managers.”\r\n\r\nHua An Fund Management Co., Ltd, became China’s first QDII and began operating a U.S. dollar denominated fund in coordination with Lehman Brothers in September. Hua An was awarded a quota of US$500 million to invest abroad, according to state media.\r\n\r\nPatrick Martino contributed to this report."]},
{"_name": "ICBC IPO Underwriting Process: Guanxi Connections?", "_id": 14737, "_link": "http://tromblyltd.dabbledb.com/dabble/writingprojects?view=47376&entry=14737",  "values": ["ICBC IPO Underwriting Process: Guanxi Connections?", "http://chinafcweek.com/SearchDetail.aspx?action=Article&id=30", {"name": "October 9, 2006", "start": 1160323200, "end": 1160409599 }, "The lead investment banks on the Industrial and Commercial Bank of China’s (ICBC) upcoming $19 billion initial public offering –the largest in history– declined to disclose the process of selection for the key players on the deal, but market players would not rule out Guanxi connections. ", "The lead investment banks on the Industrial and Commercial Bank of China’s (ICBC) upcoming $19 billion initial public offering –the largest in history– declined to disclose the process of selection for the key players on the deal, but market players would not rule out Guanxi connections.\r\n\r\nHowie Fraser, co-author of “Privatizing China,” said he felt every bank would have been pulling the same strings to get the deal. “The guanxi [connections] can never go away,” he said. “No bank would not have a relative of a major political figure working this close to the deal. There will always be brother or sister-in-law, whatever.”\r\n\r\nThe IPO for China’s largest bank is scheduled to take place simultaneously in Hong Kong and Shanghai on Oct. 27 and is to be handled by global powerhouses. Investment banks Credit Suisse, Deutsche Bank and Merrill Lynch could stand to make as much as $570 million in fees if awarded a standard 3% fee for their role in launching the Hong Kong portion of the IPO. A fee of 2.5% to 3% is standard, according to Neil Katkov, an analyst at Celent Communications LLC. But all of the banks are keeping silent about how they got the deal.\r\n\r\nThe process for choosing underwriting partners is no more secretive in China than in the United States or anywhere else in the world, said Zhongsu Chen, managing director at venture capital firm Time Innovation Ventures. “They pick who they like. It depends on the team, the people and the commitment.”\r\n\r\nFraser noted that the significant size of the IPO requires the involvement of large banks with a global presence. “They [ICBC] obviously must employ a number of large firms,” he said. “There is no Chinese firm who could do it. You need a number of large banks covering a large number of institutions.”\r\n\r\nMerrill Lynch spokesman, Mark Tsang, Deutsche Bank spokesman, Michael West, Credit Suisse spokeswoman, Josephine Lee, and Goldman Sachs spokesman, Wayne Fu, all refused to comment. An ICBC spokesman also refused to comment and to give his name.\r\n\r\nICBC, which is China’s largest bank, has already lined up commitments from investors to buy $3.5 billion in shares. Investors will include the Kuwaiti Investment Authority and two companies owned by Hong Kong billionaire Li Ka-shing. Fraser said he expected demand for ICBC shares to be strong. Investment in China is “the flavor of the month, the flavor of the year, the flavor of the decade,” Fraser added."]},
{"_name": "INFUSIONS INTO WEAKER BANKS HEIGHTEN INVESTOR APPEAL", "_id": 43574, "_link": "http://tromblyltd.dabbledb.com/dabble/writingprojects?view=47376&entry=43574",  "values": ["INFUSIONS INTO WEAKER BANKS HEIGHTEN INVESTOR APPEAL", "http://chinafcweek.com/PopularStoriesDetail.aspx?action=Article&id=127", {"name": "December 11, 2006", "start": 1165766400, "end": 1165852799 }, "A Chinese regulator announced late last month that the government will put more capital into China’s weaker banks – a move that will make those banks more attractive to foreign investors, experts say. Capital injections are necessary because the banks are weak on almost all financial parameters.", "A Chinese regulator announced late last month that the government will put more capital into China’s weaker banks – a move that will make those banks more attractive to foreign investors, experts say. Capital injections are necessary because the banks are weak on almost all financial parameters.\r\n\r\n“For banks that have not met each aspect of their financial requirements, they will carry out financial restructuring, optimization of their financial affairs and undergo positive injections of capital,” said China Banking Regulatory Commission vice chairman Tang Shuangning at the 21st Century Asian Finance Annual Meeting held in Beijing on Nov. 25. “Local governments will also take charge of matters and use their own energy to aid in the bank reform,” he added.\r\n\r\nCapital injections into weaker banks would improve their appeal to investors, said Charlene Chu, director at Fitch Ratings in Beijing. The government started with capital injections into China’s large banks and is now attending to smaller banks. The amounts to be infused into the banks are decided on an individual basis, Chu said.\r\n\r\nTwo shareholding banks that are likely to receive capital injections from the central government are Guangdong Development Bank and China Everbright Bank, said May Meizhi Yan, vice president and senior credit officer at Moody’s Investors Service in Hong Kong. For smaller city commercial banks, help is likely to come from local government sources, Yan said.\r\n\r\nCity commercial banks are smaller than China’s state-controlled and shareholding banks and are usually privately-held and controlled by local governments, according to Moody’s. As of the end of 2005, there were 117 city commercial banks in China with assets ranging from the tens of millions of dollars to US$30 billion. City commercial bank assets made up 16% of China’s total banking assets at the end of 2005, according to Moody’s.\r\n\r\n“There has been a lot of investor appetite for smaller banks,” Chu said.\r\n\r\nAustralia and New Zealand Banking Group is the most recent foreign bank with an interest in a city commercial bank. The bank announced an agreement last month to purchase a 19.9% stake in Shanghai Rural Commercial Bank.\r\n\r\nPatrick Martino contributed to this report."]},
{"_name": "INTEREST RATE DERIVATIVES EXPECTED TO GROW ON HIGH DEMAND", "_id": 44806, "_link": "http://tromblyltd.dabbledb.com/dabble/writingprojects?view=47376&entry=44806",  "values": ["INTEREST RATE DERIVATIVES EXPECTED TO GROW ON HIGH DEMAND", "http://chinafcweek.com/SearchDetail.aspx?action=Article&id=186", {"name": "January 2, 2007", "start": 1167667200, "end": 1167753599 }, "The interest rate option’s market could grow to rival that of the United States in five-to ten-years as the result of investor demand for new derivative products to hedge against interest rate risks, experts say.", "The interest rate option’s market could grow to rival that of the United States in five-to ten-years as the result of investor demand for new derivative products to hedge against interest rate risks, experts say.\r\n\r\nThe large demand for interest rate derivatives is being sparked by increased uncertainty about interest rates and the yuan itself and a need to hedge against those risks, said Stephen Tsang, head of Hong Kong and China derivatives trading for HSBC. “The People’s Bank of China has come out and raised rates twice this year. This has started to jolt people’s thinking about interest rate stability. Secondly, there is the whole liberalization of the yuan and hence the interest rate market. When people see more volatility they have to think about those kinds of risks.”\r\n\r\nThe main thing holding back the onshore market is related regulations, said Noel Vaillant, Standard Chartered Bank's head of interest rate derivatives exotic trading. Options are not currently allowed to be traded on the onshore market, he added.\r\n\r\nOptions on non-deliverable interest rate swaps are the newest product on china’s derivatives market. HSBC and Standard Chartered Bank launched the first product of this kind on Dec. 14. China’s currency restrictions make it difficult to settle accounts in yuan, so accounts are settled in Hong Kong using U.S. dollars.\r\n\r\nInterest rate swaps are financial contracts to exchange fixed-rate interest rate payments for variable interest rate payments or vice versa between two parties. Investors who have positions in products with variable interest rates are attracted to swaps because they can lock in fixed rates. Options on swaps give a buyer the option to exercise a contract as opposed to an obligation.\r\n\r\nChina’s central bank hiked rates by 27 basis points in April and August, leaving the one-year lending rate at 6.12%. They were the first rate hikes since October 2004. A basis point equals .01%.\r\n\r\nLikely investors in interest rate derivatives include corporations, hedge funds and banks.\r\n\r\nNon-deliverable interest rate swaps, the underlining product for the interest rate options, were first traded in August. In the three months they have been traded, the market has grown to 6.7 billion yuan (US$858 million), according to HSBC."]},
{"_name": "INVESTORS FLOCK TO ICBC IPO DESPITE DOUBTS ABOUT QUALITY", "_id": 17468, "_link": "http://tromblyltd.dabbledb.com/dabble/writingprojects?view=47376&entry=17468",  "values": ["INVESTORS FLOCK TO ICBC IPO DESPITE DOUBTS ABOUT QUALITY", "http://chinafcweek.com/SearchDetail.aspx?action=Article&id=64", {"name": "October 23, 2006", "start": 1161532800, "end": 1161619199 }, "As thousands in Hong Kong deluged bank branches to apply for Industrial and Commercial Bank of China’s (ICBC) shares during its initial public offering to retail customers in Hong Kong last Monday, experts remain cautious about whether investing in ICBC is a sound strategy.", "As thousands in Hong Kong deluged bank branches to apply for Industrial and Commercial Bank of China’s (ICBC) shares during its initial public offering to retail customers in Hong Kong last Monday, experts remain cautious about whether investing in ICBC is a sound strategy.\r\n\r\n“It’s a little hyped for the risk,” said Walter Hutchens, a professor at the Smith School of Business at the University of Maryland. “But it’s the biggest bank in China and China is a fast-growing economy and people are expecting it to continue to grow. So people think the bank is a good proxy for the Chinese economy.”\r\n\r\nThe $19.07 billion IPO is the largest in history and listed on both the Hong Kong and Shanghai stock exchanges last week. ICBC, China’s largest bank, will begin trading Oct. 27th.\r\n\r\nICBC cleaned up the non-performing loans on its balance sheet in preparation for the IPO. Two years ago, over 20% of its loans were classified as non-performing. By the end of June 2006, only 4% of loans were non- performing. To lower ICBC’s non-performing loan rate, RMB 705 billion (US$89.1 billion) of bad loans were divided between the Ministry of Finance and four asset management companies last year. ICBC claimed full face value for the loans, which were paid for with IOUs – so ICBC is still stuck with the risk.\r\n\r\n“Our results of operations have been and will continue to be negatively affected by our non-performing loans,” ICBC said in its offering prospectus. If the bank does get in trouble, the Ministry of Finance is likely to come to its aid, ICBC’s prospectus said.\r\n\r\nThere are still other risks for the bank, however. China’s banks will face foreign competition in December when foreign lenders are allowed to enter the Chinese market as part of China’s World Trade Organization accession commitments.\r\n\r\nPatrick Martino contributed to this report. "]},
{"_name": "LIBERALIZATION OF RATES WILL LEVEL THE PLAYING FIELD", "_id": 44759, "_link": "http://tromblyltd.dabbledb.com/dabble/writingprojects?view=47376&entry=44759",  "values": ["LIBERALIZATION OF RATES WILL LEVEL THE PLAYING FIELD", "http://chinafcweek.com/SearchDetail.aspx?action=Article&id=184", {"name": "January 2, 2007", "start": 1167667200, "end": 1167753599 }, "A plan to liberalize interest rates will promote fair competition between foreign and Chinese banks, experts said, as China moves to more market-oriented interest rates. ", "A plan to liberalize interest rates will promote fair competition between foreign and Chinese banks, experts said, as China moves to more market-oriented interest rates.\r\n\r\nWu Xiaoling, deputy central bank governor, said at a recent forum that China’s interest rates will be liberalized. “With the mechanism of financial institutions improving, the floor and ceiling will gradually fade out,” Xiaoling said.\r\n\r\nCurrently, Chinese authorities have set a one-year loan rate floor of 6.12% and a one-year deposit rate ceiling of 2.52%. Xiaoling did not give any specifics on when the liberalization would occur.\r\n\r\nRestrictions on interest rates are leftovers of a planned economy and are not market-based, according to Thomas Liu, professor of finance at Jiaotong University. The current system provides fat margins for Chinese banks, which rely nearly completely on the spread between deposit and loan rates for income, Liu said. “We have to get rid of the ceilings and floors,” he added.\r\n\r\nA lending rate floor discriminates against foreign banks because it does not allow foreign banks to offer loans at lower interest rates than Chinese banks. Deposit rate ceilings keep foreign banks from offering depositors higher returns, which can attract more customers and deposits, Liu said.\r\n\r\nThe announcement by China's central bank that it would remove interest rate restrictions was a warning to Chinese banks to modernize and to branch out into other businesses, besides accepting deposits and making loans, Liu said. It also means that banks need to get ready to compete with foreign lenders, he added.\r\n\r\nThere would be problems if the central banks liberalize rates too quickly, said Huang Yiping, chief Asia economist for Citigroup and based in Hong Kong. “If the banks engage in competition that narrows the spread significantly, there is a question whether bank operations are sustainable,” Huang said. “If the spread is narrowed significantly, there is a point where the spread is not able to cover the banks’ operations.”\r\n\r\nThe interest rate restrictions could be gradually loosened starting in six months to a year, Liu said. It will take years, however, for the complete liberalization to take place, said Huang."]},
{"_name": "LOAN-TO-DEPOSIT RULE TO CONSTRAIN LENDING", "_id": 43004, "_link": "http://tromblyltd.dabbledb.com/dabble/writingprojects?view=47376&entry=43004",  "values": ["LOAN-TO-DEPOSIT RULE TO CONSTRAIN LENDING", "http://chinafcweek.com/PopularStoriesDetail.aspx?action=Article&id=119", {"name": "December 4, 2006", "start": 1165161600, "end": 1165247999 }, "Maintaining a loan-to-deposit ratio requirement of 75% will constrain locally incorporated foreign banks from lending, experts agree. The challenges for foreign banks are expected even as Chinese banking authorities have changed draft regulations to give them a five-year grace period to comply with the requirement.", "Maintaining a loan-to-deposit ratio requirement of 75% will constrain locally incorporated foreign banks from lending, experts agree. The challenges for foreign banks are expected even as Chinese banking authorities have changed draft regulations to give them a five-year grace period to comply with the requirement.\r\n\r\nThe mandated ratio will constrain foreign banks because they will have extra money sitting on their balance sheets that they won’t be allowed to lend, said Logan Wright, a Beijing-based analyst with Stone and McCarthy Research Associates,. “Foreign banks’ deposits will increase, but they will have to cut down on lending,” he added.\r\n\r\nWithout the five-year grace period, the lending capacity of foreign banks would be significantly constrained due to their limited network to attract deposits, while those foreign banks with significant lending portfolios in China would be unable to comply with the regulation in the short-term without substantial balance sheet adjustments, said Qiang Liao, credit analyst with Standard and Poor’s Beijing office. “This is a compromise between foreign banks and Chinese authorities,” Liao said. “It is the only solution which is acceptable for both parties.”\r\n\r\nWhile Chinese banks have traditionally relied on deposits for funding, foreign banks have been able to tap other markets, such as bond markets. As a result, foreign banks are able to cover their loans because they have access to capital from elsewhere, Liao said.\r\n\r\nThe original intent of the law mandating loan-to-deposit ratios was to ensure Chinese banks could cover their loans. But because foreign lenders have been barred from taking local currency deposits from retail customers, their loan-to-deposit ratios have been upwards of 100%, Wright said.\r\n\r\nUnder new banking regulations which go into effect Dec. 11th , foreign banks will be allowed to take local currency deposits from retail customers for the first time. The five-year grace period will give banks time to either work hard to increase their deposits or reposition their China strategy, Liao said.\r\n\r\nPatrick Martino contributed to this report."]},
{"_name": "LOCAL CURRENCY BIZ TO HELP FOREIGN BANKS MOVE WEST", "_id": 43891, "_link": "http://tromblyltd.dabbledb.com/dabble/writingprojects?view=47376&entry=43891",  "values": ["LOCAL CURRENCY BIZ TO HELP FOREIGN BANKS MOVE WEST", "http://chinafcweek.com/PopularStoriesDetail.aspx?action=Article&id=130", {"name": "December 11, 2006", "start": 1165766400, "end": 1165852799 }, "Foreign banks in China are now restricted to taking yuan deposits from Chinese corporations in 25 cities, mainly on the east coast. However, after today, all geographical restrictions on yuan deposits from corporations will be lifted, and banks will be able to take yuan deposits from Chinese individuals for the first time – in line with World Trade Organization requirements, and giving foreign banks another incentive to move inland.", " \t\r\nForeign banks in China are now restricted to taking yuan deposits from Chinese corporations in 25 cities, mainly on the east coast. However, after today, all geographical restrictions on yuan deposits from corporations will be lifted, and banks will be able to take yuan deposits from Chinese individuals for the first time – in line with World Trade Organization requirements, and giving foreign banks another incentive to move inland.\r\n\r\n“When you are able to do local currency business, the more presence you have, the better off you are,” said Linda Wong, country executive for ABN AMRO China.\r\n\r\nABN AMRO opened a branch in Chengdu in November and is confident in getting approval for a branch in Chongqing by year-end. Chengdu is China’s tenth largest city, while Chongqing is China’s third largest. Both are located in the center of China.\r\n\r\nThe increasing presence of multinationals and the rising affluence of an emerging middle class attracted ABN AMRO to the Chengdu and Chongqing markets, Wong said.\r\n\r\n“The west is developing and it is developing fast or faster than the national average,” she said. “Secondly, the government is encouraging western expansion and they are making branch licensing easier.”\r\n\r\nForeign banks were first allowed to open branches in western and northeastern China in late 2003, she said.\r\n\r\nThe Chinese government has recently been trying to duplicate the success of Shanghai and other central cities by promoting westward investment.\r\n\r\n“In the west, the government is trying to encourage more foreign investment and encourage more fixed asset investments,” said Logan Wright, a Beijing-based analyst with Stone and McCarthy Research Associates. “There is going to be more investment opportunities for banks and more projects for banks to lend to,” he added.\r\n\r\nBut because of a 100 million yuan (US$12.8 million) capital requirement to open a branch, foreign banks won’t be rushing to set up too many branches in the Chinese heartland, Wright said. Wealthy clients are still concentrated in coastal cites such as Shanghai and Guangzhou, he said.\r\n\r\nPatrick Martino contributed to this report."]},
{"_name": "MAJOR CHINESE BANKS TO PARTNER WITH FOREIGN FIRMS", "_id": 42155, "_link": "http://tromblyltd.dabbledb.com/dabble/writingprojects?view=47376&entry=42155",  "values": ["MAJOR CHINESE BANKS TO PARTNER WITH FOREIGN FIRMS", "http://chinafcweek.com/SearchDetail.aspx?action=Article&id=13", {"name": "November 20, 2006", "start": 1163952000, "end": 1164038399 }, "Bank of China and Agricultural Bank of China will soon join the ranks of local banks that have formed asset management companies with foreign partners. ", "Bank of China and Agricultural Bank of China will soon join the ranks of local banks that have formed asset management companies with foreign partners.\r\n\r\nLegislation allowing Chinese banks to form asset management companies took effect in February 2005. Since then, Bank of Communications has partnered with Schroders Plc, Industrial and Commercial Bank of China with Credit Suisse, and China Construction Bank with Principal Financial Group Inc. Most recently the Royal Bank of Canada announced a joint venture with China Minsheng Banking Corp., Ltd. on Oct. 30.\r\n\r\nAsset management companies create, manage and sell mutual funds, denominated in yuan, to retail and institutional investors in China. Entering the asset management market is a way to generate steady fee income without increasing the banks’ credit exposure, according to May Meizhi Yan, a vice president and senior credit officer at Moody’s Investors Service in Hong Kong. “If you look at banks in other countries, fee income is usually a very large portion of revenue,” Yan said.\r\n\r\nState-owned Shanghai Securities News reported earlier this month that Merrill Lynch may be the foreign partner that teams with Bank of China this year. It’s a natural development for Chinese banks to get involved in asset management, said Charlene Chu, director at Fitch Ratings in Beijing. For most of their history, Chinese banks only took deposits and made loans, she said, but this is changing as the industry matures. “It’s a natural progression to more developed and diversified banks,” Chu said. Yan said that Chinese banks benefit from working with foreign firms in that they gain knowledge and skills. Foreign firms, in turn, gain access to China’s market.\r\n\r\nUrban Chinese are becoming wealthier and will have more money to invest. According to China’s 11th five year plan, in 2005, the per capita annual income of urban residents was 10,493 yuan. This is expected to reach 13,390 yuan in 2010.\r\n\r\nPatrick Martino contributed to this report. "]},
{"_name": "MARKET NEED PUSHES HONG KONG TO CREATE RMB FUTURES", "_id": 44178, "_link": "http://tromblyltd.dabbledb.com/dabble/writingprojects?view=47376&entry=44178",  "values": ["MARKET NEED PUSHES HONG KONG TO CREATE RMB FUTURES", "http://chinafcweek.com/SearchDetail.aspx?action=Article&id=156", {"name": "December 18, 2006", "start": 1166371200, "end": 1166457599 }, "A market need for yuan-based currency contracts to hedge against currency risk is driving Hong Kong’s stock exchange to establish yuan-based futures contracts, experts say. ", "A market need for yuan-based currency contracts to hedge against currency risk is driving Hong Kong’s stock exchange to establish yuan-based futures contracts, experts say.\r\n\r\nThe yuan-based futures contracts is expected to be launched by the middle of next year, Hong Kong Exchanges and Clearing Limited (HKEx) CEO, Paul Chow, said at a luncheon hosted by the Hong Kong Securities Institute on Dec. 7.\r\n\r\nThe Hong Kong Exchange will have two RMB futures contracts, one against the United States dollar and one against the Hong Kong dollar, an exchange spokesman said. The contract will have a minimum value of HK$1 million (US$128,700), he added.\r\n\r\n“As China’s markets open up under its WTO commitments and there is more business being done internationally, companies need this type of futures contract,” said Wang Xueqin, an economist at the Zhengzhou Commodity Exchange. “It’s a market need.”\r\n\r\nAs the yuan moves to a fully floating currency, companies doing business in China will need ways to reduce currency risk and yuan futures contracts fulfill that need, he said.\r\n\r\nWhile foreign investors will be able to purchase yuan-based futures contracts from the Hong Kong exchange, investors will primarily be Asian investors since American investors can already purchase yuan futures contracts on the Chicago Mercantile Exchange (CME), Wang said.\r\n\r\nThe Hong Kong exchange is also offering yuan-based futures because it is reacting to public criticism, especially from brokerage houses, that the exchange has neglected the derivatives market, said a Singapore-based head of a derivatives department at a major foreign bank, who could not go on the record because he was not authorized to speak on the subject. “The Hong Kong exchange was criticized when the CME launched its RMB futures because it lost its first mover advantage,” he said.\r\n\r\nIn August, the CME became the first to create a yuan-based futures contract.\r\n\r\nBut the Hong Kong exchange will have better RMB futures contracts than the CME, said Wang. Hong Kong is closer to China and as a result, the exchange will be able to react faster to changes in currency policy made in Beijing.\r\n\r\nCurrently, China’s financial futures exchange, launched in September, does not have a RMB futures contract. The China Financial Futures Exchange (CFFEX) is concentrating on stock futures and on creating an index futures contract, Wang said."]},
{"_name": "NEW FUTURES EXCHANGE RULES TO KEEP OUT SMALL INVESTORS", "_id": 17985, "_link": "http://tromblyltd.dabbledb.com/dabble/writingprojects?view=47376&entry=17985",  "values": ["NEW FUTURES EXCHANGE RULES TO KEEP OUT SMALL INVESTORS", "http://chinafcweek.com/SearchDetail.aspx?action=Article&id=73", {"name": "October 30, 2006", "start": 1162137600, "end": 1162223999 }, "The China Financial Futures Exchange (CFFEX) issued draft rules last Monday designed to keep small investors from trading in its risky derivatives contracts that will be sold on the exchange in early 2007.", "The China Financial Futures Exchange (CFFEX) issued draft rules last Monday designed to keep small investors from trading in its risky derivatives contracts that will be sold on the exchange in early 2007.\r\n\r\nUnder the rules, investors will need to deposit eight percent of the value of each contract in order to trade. Another measure to protect investors is a 10% daily limit on fluctuations in which the contracts price will not be allowed to increase or decrease more than 10% in one day. The daily price limit is stricter than the trading rules in Singapore and Hong Kong.\r\n\r\nSteve Ng, Asia managing director of Exchange Traded Derivatives at UBS AG said, \"The China Financial Futures Exchange would like to attract institutional clients initially. The Chinese regulators are concerned that the smaller investors do not have sufficient sophistication to use the product. The higher margin requirement will discourage speculation.\"\r\n\r\nBased on Friday’s close of 1,439 for the Shanghai and Shenzhen 300 Index, a single contract would be worth 431,700 yuan (US$54,645). An 8% margin requirement would mean a deposit of US$4,371.64 with the exchange in order to trade. People with government jobs in China earn 5,000 yuan monthly (US$632). The vast majority of migrant workers and farmers earn 800 yuan (US$100) or less, monthly. As a result, the average worker is not able to afford the margin requirement.\r\n\r\nA spokeswoman at the CFFEX said the exchange would wait for one to two months to gather opinions from traders and the public before the draft rules were finalized.\r\n\r\nQualified Foreign Institutional Investors, will be allowed to participate in the futures market, Ng said. Many asset managers and hedge funds are interested, but will not be able to gain direct access in the immediate future, he added.\r\n\r\nThe CFFEX would not comment on what products may be in the works. Ng said likely products include government bonds and RMB foreign exchange contracts.\r\n\r\nPatrick Martino contributed to this report. "]},
{"_name": "NEW INTEREST-RATE BENCHMARK KEY TO LIBERALIZATION", "_id": 45416, "_link": "http://tromblyltd.dabbledb.com/dabble/writingprojects?view=47376&entry=45416",  "values": ["NEW INTEREST-RATE BENCHMARK KEY TO LIBERALIZATION", "http://chinafcweek.com/SearchDetail.aspx?action=Article&id=196", {"name": "January 8, 2007", "start": 1168185600, "end": 1168271999 }, "China’s Shanghai Interbank Offered Rate (SHIBOR) – a benchmark interest rate launched on Wednesday – is key to allowing banks to set their own rates as the financial markets experience significant growth. Market-based interest rates will make banks more competitive, increase interest rates for depositors and make borrowing cheaper, according to Stephen Green, senior economist at Standard Chartered Bank. ", "China’s Shanghai Interbank Offered Rate (SHIBOR) – a benchmark interest rate launched on Wednesday – is key to allowing banks to set their own rates as the financial markets experience significant growth. Market-based interest rates will make banks more competitive, increase interest rates for depositors and make borrowing cheaper, according to Stephen Green, senior economist at Standard Chartered Bank.\r\n\r\nFor banks to lend and take deposits at market rates, they need a benchmark to judge that market interest rate. “The idea behind SHIBOR is to give banks exactly that,” Green said. “The market-making banks will make a bid and, just like the LIBOR system in London, the central bank will then take the bids and publish an average, which can then be used as a reference interest rate.”\r\n\r\nBut it will take some time for SHIBOR to take hold and become effective because China’s bond markets are still immature, which makes it difficult for market-making banks to give the central bank bids to create SHIBOR since the banks have difficulty reading the market, Green said.\r\n\r\nA clear standard for interest rates will help liquidity and confidence in the on-shore interest rate swaps market, said Noel Vaillant, Standard Chartered Bank's head of interest rate derivatives exotic trading. An interest rate swap is when a financial instrument, such as a loan, with fixed interest rate payments is exchanged for one with variable interest rate payments or vice versa.\r\n\r\nSHIBOR will also help develop interest rate options. “Once you have a thriving on-shore swaps market, based on the SHIBOR three-month rate, people can start doing non-deliverable equivalents and once you have non-derivable equivalents, people can start doing options on them,” Vaillant said.\r\n\r\nSHIBOR will function like the London Interbank Offered Rate (LIBOR) and loan agreements will eventually all be based on SHIBOR, Green said. Interest rates are currently fixed by the central bank with a one-year loan rate floor of 6.12% and a one-year deposit rate ceiling of 2.52%.\r\n\r\nCurrently, SHIBOR consists of overnight, one-week, two-week, one-month, three-month, six-month, nine-month and one-year interest rates, according to the central bank’s website."]},
{"_name": "NYSE POSITIONS FOR GROWTH IN CHINA", "_id": 43289, "_link": "http://tromblyltd.dabbledb.com/dabble/writingprojects?view=47376&entry=43289",  "values": ["NYSE POSITIONS FOR GROWTH IN CHINA", "http://chinafcweek.com/PopularStoriesDetail.aspx?action=Article&id=118", {"name": "December 4, 2006", "start": 1165161600, "end": 1165247999 }, "The New York Stock Exchange will open an office in Beijing as part of its plans to expand globally, said John Thain, chief executive officer of the NYSE Group Inc., speaking to MBA students at the China Europe International Business School in Shanghai Tuesday.", "The New York Stock Exchange (NYSE) will open an office in Beijing as part of its plans to expand globally, said John Thain, chief executive officer of the NYSE Group Inc., speaking to MBA students at the China Europe International Business School in Shanghai Tuesday.\r\n\r\n“We would like to open a Beijing office and I am optimistic that we will get permission soon,” Thain told reporters after the speech.\r\n\r\nThain would not give specifics on when the office would open, or the number of employees it would have. A NYSE spokesman told China Finance & Currency Week that the exchange is waiting for government approval. If granted, the NYSE would become the first international exchange to have an office on the Chinese mainland. NYSE has offices in Hong Kong and Japan.\r\n\r\nThe NYSE is prospecting in China for companies to list on its exchange because of the growth potential there, according to Xinge Zhao, finance professor at CEIBS. “My sense is the several high profile Hong Kong listings definitely play a roll here,” Zhao said. The listing of the Industrial & Commercial Bank of China in Hong Kong as the largest initial public offering in history certainly might have been a surprise to the NYSE, Zhao said. “The NYSE may have said this is the time to go to China in order to send a strong signal to the Chinese media and to Chinese companies that the NYSE is seriously interested in Chinese companies,” Zhao said.\r\n\r\nZhao said the only major obstacle keeping Chinese companies from listing in the United States is Sarbanes-Oxley (SOX), a rule that mandates enormous disclosure of accounting and financial information. Thain said he is hopeful changes to SOX will lower the costs and improve the speed of having to comply with that law.\r\n\r\nAs one of the world’s fastest emerging economies, China is an important area for new investment, Thain said, adding that he met with a number of companies from China who may list in New York. “They range across pretty much every industry from technology, pharmaceutical to basic industry,” he added.\r\n\r\nCurrently, there are 18 Chinese mainland companies listed on the NYSE with a total market capitalization of US$458 billion.\r\n\r\nPatrick Martino contributed to this report."]},
{"_name": "PANDA BONDS TO BOLSTER CHINA’S MARKET", "_id": 42697, "_link": "http://tromblyltd.dabbledb.com/dabble/writingprojects?view=47376&entry=42697",  "values": ["PANDA BONDS TO BOLSTER CHINA’S MARKET", "http://chinafcweek.com/SearchDetail.aspx?action=Article&id=101", {"name": "November 27, 2006", "start": 1164556800, "end": 1164643199 }, "Panda bonds – bonds issued by foreign organizations locally – will help expand China’s domestic commercial bond market as it is forecasted to grow by as much as 20% a year for the next decade, according to a new Goldman Sachs report issued Tuesday. ", "Panda bonds – bonds issued by foreign organizations locally – will help expand China’s domestic commercial bond market as it is forecasted to grow by as much as 20% a year for the next decade, according to a new Goldman Sachs report issued Tuesday.\r\n\r\n“The Chinese government is opening up the doors with panda bonds,” said Jim Turnbull managing director of Triarii Advisors Ltd., a Hong Kong consultancy firm specializing in capital markets. The first step to creating a bond market is for the government to issue bonds to set the yield curve in the government bond market, said Turnbull. The second step is to have a highly rated multinational corporation or financial institution issue bonds in the corporate bond market, he said. The bonds of the highly rated multinationals can then be used as benchmarks to build the corporate bond yield curve. This is the function the International Finance Corp. and the Asian Development Bank are fulfilling by issuing panda bonds in China, Turnbull said. The Chinese government allowing both to issue bonds is also the first step to allowing foreign companies to follow, he added.\r\n\r\n“For now, only international development institutions are allowed to tap the domestic debt market, but we see this as the early stages of an effort to open up to a broader range of international issuers,” reported Francesco Garzarelli, chief interest rate strategist at Goldman Sachs. “Foreign participation in the RMB market could help mop up excess liquidity without having to resort to expanding the size of the central bank’s balance sheet.”\r\n\r\nPanda bonds contribute to the development of China's bond market by strengthening the confidence of international investors in the local market and adding to existing choices for local investors, according to an official at the Beijing-based Asian Development Bank. Panda bonds are intended to be sold to local investors, Turnbull said, adding that the bonds also help to stretch the yield curve by serving as an important bench mark against which local corporate bonds can be priced. Panda bonds are also accompanied by international best practices for documentation, disclosure and deal management, the ADB official said.\r\n\r\nPanda bonds issued have been used to loan money to government-approved sectors, such as agribusiness, health care, and small and medium enterprise finance, according to the IFC. Earlier this month the IFC raised RMB 870 million (US$111 million) for three Chinese companies using panda bonds.\r\n\r\nPatrick Martino contributed to this report. "]},
{"_name": "RISK MANAGEMENT: KEY ISSUE FACED BY CHINESE BANKS", "_id": 17734, "_link": "http://tromblyltd.dabbledb.com/dabble/writingprojects?view=47376&entry=17734",  "values": ["RISK MANAGEMENT: KEY ISSUE FACED BY CHINESE BANKS", "http://chinafcweek.com/SearchDetail.aspx?action=Article&id=66", {"name": "October 23, 2006", "start": 1161532800, "end": 1161619199 }, "Strong foreign competition is likely to force Chinese banks to manage risks better in the future, said Roger Ferguson, former vice chairman of the U.S. Federal Reserve and one of the keynote speakers at the China International Banking Convention held last Thursday and Friday in Beijing.", "Strong foreign competition is likely to force Chinese banks to manage risks better in the future, said Roger Ferguson, former vice chairman of the U.S. Federal Reserve and one of the keynote speakers at the China International Banking Convention held last Thursday and Friday in Beijing.\r\n\r\n\"I firmly believe that financial systems that are open to foreign entry are far more able to manage change,\" he said. Having a large safety net can backfire, he added. If a bank is protected against the consequences of its decisions by guaranteed government bailouts, bankers will make increasingly risky loans or mis-price products. The end result is increased risk for the entire industry, he said.\r\n\r\nRisk management goes beyond just having the IT systems to gather and calculate credit data, said Guo Shuqing, the chairman of China Construction Bank. It is important to create a culture where employees understand the risks undertaken by the bank to \"make China Construction Bank into a real commercial Bank.\"\r\n\r\n\"Nobody at the banks is really responsible for the results and performance and the assets,\" Shuqing said. \"That, I would say, is the biggest problem.\"\r\n\r\n\"The greatest risk is people risk,\" said Andrew Sheng, chief advisor for the Chinese Banking and Regulatory Commission and adjunct professor at the Economics and Management School of Tsinghua University. \"Change and risks and markets – it is all about the people.\"\r\n\r\nManaging risk is an issue that cuts across the entire business – there are credit risks, operational risks, market risks. Dealing with them requires adequate corporate governance and good IT systems, Sheng said.\r\n\r\n“My question is, ‘how can we impose discipline?’\" he asked. \"All the banks are facing similar issues. Employees, attitudes, values. For me, the core of the values has to be respect. We have to respect the shareholders, respect the decisions of the board, respect the needs of the customers, respect the requirement of regulators.\"\r\n\r\nPatrick Martino contributed to this report. "]},
{"_name": "Share Reforms Compel Short-term Lull, Long-term Value", "_id": 14898, "_link": "http://tromblyltd.dabbledb.com/dabble/writingprojects?view=47376&entry=14898",  "values": ["Share Reforms Compel Short-term Lull, Long-term Value", "http://chinafcweek.com/SearchDetail.aspx?action=Article&id=36", {"name": "October 9, 2006", "start": 1160323200, "end": 1160409599 }, "With share reforms hot on the agenda, industry participants in the Chinese capital markets expect short-term pressure on stocks, but a strong rebound over the long-term. ", "With share reforms hot on the agenda, industry participants in the Chinese capital markets expect short-term pressure on stocks, but a strong rebound over the long-term.\r\n\r\nLate last month, the Chinese government announced that 1,169 listed companies have finished converting their non-tradable shares into tradable form – allowing them to get away from government control. The 174 companies that still haven’t done so have until the end of this year to complete their reforms.\r\n\r\nThomas Liu, a finance professor at Jiaotong University, noted that in the short-term, this could mean downward pressure on stock prices as newly tradable shares come on the market – but in the long-term, it means that Chinese companies will become more responsible to market needs rather than political pressures and thus more profitable and valuable.\r\n\r\nThe reforms mark a major milestone. To keep the Chinese government from losing control over its industries, companies were only allowed to sell a third of their stock before changes were made in April 2005. As a result, government ministries owned two-thirds of all outstanding shares of listed companies, and company executives made decisions based on political reasons first, and business needs second.\r\n\r\nConverting the non-tradable shares to tradable form posed political difficulties. The Chinese government loathed to cede control over its companies, and private, minority investors didn’t want to see the value of their shares diluted because newly tradable shares flooded the market. Finally, in April 2005, Chinese companies were allowed to start converting their non-tradable, government-owned shares to tradable form, as long as they got approval from their other investors – and agreed to a very gradual sell-off process.\r\n\r\nThe stock market has already rebounded due to increased optimism on the part of individual investors that the market now has long-term potential. The short-term downward impact on stock prices will have an effect on containing price increases, but prices will eventually go up, said Jiming Ha, chief economist at Beijing’s China International Capital Corp.\r\n"]},
{"_name": "SHORT SELLING OF BONDS EXPECTED TO IMPROVE LIQUIDITY", "_id": 41782, "_link": "http://tromblyltd.dabbledb.com/dabble/writingprojects?view=47376&entry=41782",  "values": ["SHORT SELLING OF BONDS EXPECTED TO IMPROVE LIQUIDITY", "http://chinafcweek.com/SearchDetail.aspx?action=Article&id=94", {"name": "November 13, 2006", "start": 1163347200, "end": 1163433599 }, "Chinese institutional investors will be able to short sell bonds starting Nov.20, China’s central bank announced early last week. The goal is to improve liquidity in the bond market and to give participants ways to hedge against the risk of falling bond prices, the bank said.", "Chinese institutional investors will be able to short sell bonds starting Nov.20, China’s central bank announced early last week. The goal is to improve liquidity in the bond market and to give participants ways to hedge against the risk of falling bond prices, the bank said.\r\n\r\nA central bank spokesperson confirmed the announcement, but refused to give details.\r\n\r\nThe new rules will allow qualified domestic institutional investors trading on the inter-bank market to borrow or lend bonds for a maximum of 365 days. The rules do not apply to qualified foreign institutional investors, according to Logan Wright, a Beijing-based analyst with Stone and McCarthy Research Associates.\r\n\r\nThere are more than 5,000 institutional investors, both financial and non-financial in the inter-bank bond markets, said Wang Guangying, an associate in the securities group at Beijing-based King & Wood, China’s largest law firm, in a recent report. They were only allowed to start trading bonds last December. Previously, all bond purchases and sales had to take place on the stock exchanges, he said, which significantly limited liquidity.\r\n\r\nA bigger problem is that the Chinese bond market is almost completely dominated by government issues. The value of corporate bonds outstanding in the mainland amounts to only 1% of GDP, compared with 68% in South Korea and 74% in Malaysia, said Diana Farrell, the director of the McKinsey Global Institute, McKinsey & Co.’s economics think tank, in a recent report.\r\n\r\n“Improving the allocation of capital in China and improving the efficiency of the financial system could boost GDP by up to 17% annually—or well north of US$300 billion,” she said.\r\n\r\nToday, Chinese companies mostly turn to bank loans when they need financing, Guangying said. This is expensive for companies, and risky for banks.\r\n\r\n“In comparison with bond markets in the developed nations or even its own stock market, China’s corporate bond market is considerably underdeveloped,” Guangying added. “This has created numerous roadblocks for domestic enterprises.”\r\n\r\nThe decision to allow securities lending should get more institutional investors buying and selling bonds, increasing liquidity in the market. Today, investors buy and hold, Wright said. “They did this proposal to get traders to start shorting,” he added. But changes probably won’t happen right away, he said, as the current lack of liquidity will discourage short selling.\r\n\r\nThe bond market has been growing at around 30% a year since 1999, mostly due to treasury bonds and central bank bills, reports the Asian Development Bank. The total value of debt issued last year came close to RMB 3.7 trillion, an increase of 74% over the previous year. Total bonds and bills outstanding stood at RMB 7 trillion, a 42% increase.\r\n\r\nPatrick Martino contributed to this report."]},
{"_name": "SINGAPORE TO OFFER CHINA FUTURES DESPITE LAWSUIT, FINES", "_id": 41035, "_link": "http://tromblyltd.dabbledb.com/dabble/writingprojects?view=47376&entry=41035",  "values": ["SINGAPORE TO OFFER CHINA FUTURES DESPITE LAWSUIT, FINES", "http://chinafcweek.com/SearchDetail.aspx?action=Article&id=77", {"name": "November 6, 2006", "start": 1162742400, "end": 1162828799 }, "The producers of a futures contract based on an index of China’s top 50 stocks will continue selling the product on the Singapore Exchange despite losing a lawsuit Tuesday and receiving US$20,000 in fines. ", "The producers of a futures contract based on an index of China’s top 50 stocks will continue selling the product on the Singapore Exchange despite losing a lawsuit Tuesday and receiving US$20,000 in fines.\r\n\r\nLast year, a FTSE Group joint venture with Xinhua Index Ltd. signed a contract with the Shanghai Stock Exchange (SSE) to use its data to create an index. In September, the joint venture launched a derivatives index in Singapore, using the data. It was the first indexed futures contract for Chinese stocks. A domestic version will be launched early next year by the Shanghai-based China Financial Futures Exchange.\r\n\r\nIn August, the joint venture – FTSE/Xinhua Index Ltd. (FXI) – was sued by a SSE subsidiary, data vendor SSE InfoNet Ltd. for violating terms of its contract. The Pudong New Area People's Court agreed, ruling last week that FXI was not authorized to use data provided by the SSE to create derivatives under its contract with SSE Infonet. The contract has been terminated.\r\n\r\nHowever, FXI announced last week it would continue to license its index to Singapore Exchange Ltd., which confirmed in a statement that the FTSE/Xinhua index-based futures contract would continue to be listed.\r\n\r\nJoy Tsang, corporate communications director for Xinhua Finance Ltd., said FXI had other contractual arrangements to get the market data it required. Tsang also said other major providers do not have contracts in China, yet still engage in licensing their data. “We own our indices and have the right to license others to develop derivatives,” FXI CEO Fredy Bush, said in a statement.\r\n\r\n“The verdict will have a bigger influence on the Singapore futures market than it will on China’s market,” said Lin Hui, a senior analyst with China International Futures Co. Ltd., a China-based futures brokerage firm. “But it still won’t be much of an influence.” The only likely effect of the lawsuit is that any contract will be constructed a little differently, she said.\r\n\r\nAs of press time, the SSE had not responded to requests for comments. Meanwhile, the FXI is appealing the court’s decision.\r\n\r\nPatrick Martino contributed to this report. "]},
{"_name": "STRONG DEMAND EXPECTED FOR CURRENCY-BASED DERIVATIVES", "_id": 41736, "_link": "http://tromblyltd.dabbledb.com/dabble/writingprojects?view=47376&entry=41736",  "values": ["STRONG DEMAND EXPECTED FOR CURRENCY-BASED DERIVATIVES", "http://chinafcweek.com/SearchDetail.aspx?action=Article&id=92", {"name": "November 13, 2006", "start": 1163347200, "end": 1163433599 }, "Chinese companies need yuan-based derivatives and China should create a yuan forwards market to meet that need, said vice finance minister Lou Jiwei earlier this month at a financial conference in Beijing promoting the 2007 China Industrial Development report.", "Chinese companies need yuan-based derivatives and China should create a yuan forwards market to meet that need, said vice finance minister Lou Jiwei earlier this month at a financial conference in Beijing promoting the 2007 China Industrial Development report.\r\n\r\n“As China deals with a great deal of import and export trade, domestic enterprises are facing a lot of renminbi versus the dollar exchange rate risk arising from fluctuations in production and operation costs,” agreed Lin Hui, a chief analyst with China International Futures (Shanghai) Co., Ltd. “Right now there is a huge lack of tools to hedge against risk and the majority of companies are unable to deal with the risks associated with currency fluctuations, therefore there is urgent demand for derivatives, particularly for currency futures.”\r\n\r\nChinese investors will have to wait, however, for currency futures to become available since current regulations prohibit such trading. “It is clear that the first financial derivatives will be index futures contracts,” Hui said. “In the future, interest rate futures or other financial derivatives will be issued one after the other as conditions permit.”\r\n\r\nEven when new derivatives products are allowed, foreign investors will not be able to directly invest in China’s futures markets, due to government restrictions, she said. However, indirect options are available. Qualified foreign institutional investors will be able to invest in China’s first financial derivative, a futures contract based on an index of China’s top 300 stocks, scheduled to begin trading early next year, said Steve Ng, Asia managing director for exchange traded derivatives at UBS AG.\r\n\r\n“If China can really achieve a mature financial derivatives market, as far as foreign investors are concerned, there will be huge opportunities in this untapped market,” Hui said.\r\n\r\nDespite the need for yuan futures contracts, China has banned its banks from trading in overseas yuan derivative products, according to an announcement issued on Oct. 20 by the State Administration of Foreign Exchange.\r\n\r\nMeanwhile, the yuan continues to rise. It closed at 7.8697 yuan to the dollar on Thursday. The yuan has gradually appreciated against the dollar since a fixed peg was removed in July 2005.\r\n\r\nPatrick Martino contributed to this report."]},
{"_name": "STRONG DEMAND EXPECTED FOR SHARES IN CHINA’S CITY BANKS", "_id": 44184, "_link": "http://tromblyltd.dabbledb.com/dabble/writingprojects?view=47376&entry=44184",  "values": ["STRONG DEMAND EXPECTED FOR SHARES IN CHINA’S CITY BANKS", "http://chinafcweek.com/PopularStoriesDetail.aspx?action=Article&id=154", {"name": "December 18, 2006", "start": 1166371200, "end": 1166457599 }, "Experts predict strong demand for shares in a number of China’s 117 smaller city commercial banks – many of which are expected to go public next year – in view of improved corporate governance and disclosure, and the absence of a huge cache of nonperforming loans. ", "Experts predict strong demand for shares in a number of China’s 117 smaller city commercial banks – many of which are expected to go public next year – in view of improved corporate governance and disclosure, and the absence of a huge cache of nonperforming loans.\r\n\r\nThe banks are expected to attract investors because they are smaller with fewer branches and less employees, and thus more manageable than the larger banks, said Fraser Howie, author of “Privatizing China, The Stock Markets and their Role in Corporate Reform.” They won’t have such grave problems with non-performing loans and nonperforming rural credit sectors as some of the large banks, he said. In addition, they can be a more focused play, letting investors buy into booming cities like Tianjin, or Beijing, where the 2008 Summer Olympics will be held.\r\n\r\nCity commercial banks are looking to go public because it will help their capital adequacy, said Simo Ho, head of Asian financial research at ABN AMRO in Hong Kong. “Most of the non-listed banks in China, even the ones listed in the A shares, have pretty thin capital ratios,” Ho said. “The ones listed in the A share markets are already better capitalized, but are still sitting at the minimum 8% ratio, so non-listed banks, without the avenues to raise capital as easily, typically have lower capital ratios or at best satisfy the minimum requirements of the regulator. To continue growing their assets, they obviously need more capital.”\r\n\r\n“Regulators are encouraging this listing because [they] believe this could be conducive to improving corporate governance through better information disclosure,” said Qiang Liao, a credit analyst at Standard and Poor’s in Beijing.\r\n\r\nA number of banks have indicated plans to list. Gaungzhou Commercial Bank has plans to go public, while Bank of Beijing is scheduled to go public next year. Chongqing City Commercial Bank has announced that it will list within the next couple of years.\r\n\r\nPatrick Martino contributed to this report."]},
{"_name": "UNIFIED TAX LAW TO BOOST RATES FOR FOREIGN FIRMS", "_id": 18015, "_link": "http://tromblyltd.dabbledb.com/dabble/writingprojects?view=47376&entry=18015",  "values": ["UNIFIED TAX LAW TO BOOST RATES FOR FOREIGN FIRMS", "http://chinafcweek.com/SearchDetail.aspx?action=Article&id=74", {"name": "October 30, 2006", "start": 1162137600, "end": 1162223999 }, "Foreign firms could see their corporate taxes almost double over the next five years under a proposed Chinese law to unify China’s tax codes so foreign and domestic companies pay the same rates. The Chinese government said it is changing the tax rules now because it wants to fund a variety of initiatives, including new infrastructure. It also wants to develop high-tech industries and implement environmental protection measures, government officials said. ", "Foreign firms could see their corporate taxes almost double over the next five years under a proposed Chinese law to unify China’s tax codes so foreign and domestic companies pay the same rates. The Chinese government said it is changing the tax rules now because it wants to fund a variety of initiatives, including new infrastructure. It also wants to develop high-tech industries and implement environmental protection measures, government officials said.\r\n\r\nCurrently, foreign firms pay a 15% tax rate, while Chinese firms pay up to 33%. According to state media, the draft of the new tax law would set the unified rates between 24% and 27%.\r\n\r\nThe new law may make investing in China less attractive as it could hurt foreign manufacturers’ ability to compete, said James Boyle, managing partner of Shanghai-based Expat-CFO Services Ltd., which does due diligence and tax reporting for foreign firms in China.\r\n\r\n“Chinese firms’ cost structures are so far out of compliance (with tax laws) they are able to operate their processes below competition,” Boyle said. “They are not paying pension or individual income taxes. The Chinese are bringing the tax laws to an equal footing, but in reality that is not what is happening because [many] Chinese companies are so good at cheating.”\r\n\r\nRyan Chang, international tax partner at Deloitte Touche Tohmatsu, said the law will not force foreign companies to leave China. \"This potential tax reform has been talked about for a couple of years at least,” he said. “People have been thinking about a strategy to deal with the changes.\"\r\n\r\nForeign firms get other tax breaks. According to Boyle, foreign manufacturers get a tax-free holiday for their first two profitable years in China. Their rates are cut in half for the following three years.\r\n\r\nThe new laws are expected to take effect in a three - to five-year transition period.\r\n\r\nLast Monday, the National Development and Reform Commission also announced new tax reductions for private equity and venture capital firms, scheduled to go into effect by mid-November. The goal of the tax breaks is to encourage investments in high-tech startup firms.\r\n\r\nPatrick Martino contributed to this report. "]},
{"_name": "VENTURE CAPITAL HITS NEW HIGH AS INVESTORS GO BEYOND I.T.", "_id": 44520, "_link": "http://tromblyltd.dabbledb.com/dabble/writingprojects?view=47376&entry=44520",  "values": ["VENTURE CAPITAL HITS NEW HIGH AS INVESTORS GO BEYOND I.T.", "http://chinafcweek.com/PopularStoriesDetail.aspx?action=Article&id=151", {"name": "December 18, 2006", "start": 1166371200, "end": 1166457599 }, "Venture capital investment in China has reached a new high – half a billion dollars higher than last year’s US$1.17 billion – but the traditional tech, media and telecom (TMT) investment sectors have cooled down and investors are looking to other places to invest money, experts say. ", "Venture capital investment in China has reached a new high – half a billion dollars higher than last year’s US$1.17 billion – but the traditional tech, media and telecom (TMT) investment sectors have cooled down and investors are looking to other places to invest money, experts say.\r\n\r\nForeign investors account for 74.2% of the total with joint ventures contributing another 7.4%. “Investors are looking to new sectors since the sum of domestic industry investment in China has not yet reached its potential,” said Charles Wang, vice president of venture capital consulting firm, Zero2IPO. New sectors for investment include emerging consumer markets, green tech, logistic services and outsourcing, said York Chen, president and managing partner of iD TechVentures, Inc., a venture capital firm in Shanghai.\r\n\r\nVenture capitalists are now suffering from having made overly high valuations in TMT sectors and are now more careful, Chen added. Too many new venture capitalists and a high volume of money entering China too quickly put pressure on venture capitalists to raise valuations and close deals fast, Chen said. TMT investment sectors are coming in for a “soft landing,” he said. According to data released by Zero2IPO last Tuesday, IT sector investment fell about 10% and now accounts for 62.1% of total venture capital investment.\r\n\r\nNew government regulations issued in September requiring Chinese companies to get permission before listing on overseas bourses are contributing to the TMT investment slowdown. Venture capitalists prefer to have companies list on foreign exchanges because China’s strict foreign exchange requirements make it difficult to move money out of the country.\r\n\r\nBut overall, venture capital investment into China, in the near term, will continue to increase, Wang added. According to Zero2IPO data, by the end of November, investment in China reached US$1.69 billion, up 44% from last year’s total of US$1.17 billion. The number of deals was up 34% from 2005, with 305 deals completed by the end of November, compared with last year’s total of 228.\r\n\r\n“At the same time, there is a piling up of foreign funds looking for Chinese deals to do,” Chen said.\r\n\r\nPatrick Martino contributed to this report."]},
{"_name": "VENTURE CAPITAL INVESTMENT IN CHINA LEAPS", "_id": 42259, "_link": "http://tromblyltd.dabbledb.com/dabble/writingprojects?view=47376&entry=42259",  "values": ["VENTURE CAPITAL INVESTMENT IN CHINA LEAPS", "http://chinafcweek.com/SearchDetail.aspx?action=Article&id=26", {"name": "November 20, 2006", "start": 1163952000, "end": 1164038399 }, "China’s high gross domestic product growth rate, its fast-growing consumer market, and regulatory changes that are simplifying exit strategies for successful companies, are all contributing to the strong rise in venture capital in the world’s fastest growing economy, according to Bobby Chao, managing director of Silicon Valley-based VC firm DFJ DragonFund. ", "China’s high gross domestic product growth rate, its fast-growing consumer market, and regulatory changes that are simplifying exit strategies for successful companies, are all contributing to the strong rise in venture capital in the world’s fastest growing economy, according to Bobby Chao, managing director of Silicon Valley-based VC firm DFJ DragonFund.\r\n\r\nTotal venture capital investment in China increased by 47% in the third quarter of 2006 compared to the same period last year, according to a report released last Tuesday. According to the “China Quarterly Venture Capital Report,” compiled by Ernst & Young and Dow Jones VentureOne, there were 54 deals and US$361.1 million invested in the third quarter of 2006. China is on track to surpass last year’s investment total of US$1.20 billion, with US$1.18 billion already invested as of the end of September.\r\n\r\nAccording to Kerin Lanyi an investment manager at DFJ DragonFund, 70% of total funds raised by VC’s in China is from overseas and 30% is raised locally.\r\n\r\nDespite the fact that technology dominates venture capital investment into China, IT is not necessarily the area with the best potential, said Michael Kuan, managing partner at SIG Capital Partners, a Shanghai-based investment fund. There is a lot of money invested in venture capital firms and they are all chasing the same good IT deals, he said. “In the IT sector, maybe there is a little bubble because the valuations are very high,” Kuan said.\r\n\r\nVenture capital funds should now be looking to areas outside of traditional IT deals, such as in the medical sector and in consumer services, he said.\r\n\r\nThe IT sector had the largest number of deals and the greatest amount of investment, according to the report. There was US$221.8 million invested in 34 IT companies in the third quarter, an increase of 85% from the same period last year. The energy and consumer service sectors were also growing sectors, according to the report.\r\n\r\nThere are several drivers for the increase in venture capital investment, Chao said. He noted that high profile initial public offerings, such as those of Focus Media and Baidu have also attracted venture capitalists. They revolutionized the use of the Internet in China and advertising worldwide, Lanyi said, noting both were high profile exits that provided attractive liquidity for investors."]},
{"_name": "WTO CHANGES TO SPUR BIFURCATION IN BANKING INDUSTRY", "_id": 41778, "_link": "http://tromblyltd.dabbledb.com/dabble/writingprojects?view=47376&entry=41778",  "values": ["WTO CHANGES TO SPUR BIFURCATION IN BANKING INDUSTRY", "http://chinafcweek.com/SearchDetail.aspx?action=Article&id=89", {"name": "November 13, 2006", "start": 1163347200, "end": 1163433599 }, "Commercial banks in China will divide into two groups after the sector’s World Trade Organization-mandated opening. Experts expect a divide into a group offering high-end services to affluent customers, and a larger group serving the masses.", "Commercial banks in China will divide into two groups after the sector’s World Trade Organization-mandated opening. Experts expect a divide into a group offering high-end services to affluent customers, and a larger group serving the masses.\r\n\r\n“The banks will basically segment,” said Logan Wright, a Beijing-based analyst with Stone and McCarthy Research Associates. Wright said foreign banks entering China are likely to target affluent customers with services offering high profit margins, rather than going after China’s millions of average savings account holders.\r\n\r\nLarge Chinese banks with established national networks will continue to dominate the retail banking industry, said Nick Protti, international business development manager with the American Bankers Association.\r\n\r\n“Mass affluent banking in China is rapidly growing and foreign banks will most likely choose to focus on this clientele, rather than establish large branch networks and compete with the large Chinese domestic banks,” Protti said.\r\n\r\nMass affluent customers are those with investment assets of US$250,000 to US$1 million, according to The Boston Consulting Group.\r\n\r\n“Private wealth management, mass affluent banking and small and medium-sized enterprise lending should be three of the more attractive market segments for foreign banks,” Protti said. “Chinese banks are quickly moving into these sectors, but foreign banks have years of experience in these segments in terms of product development and know-how.”\r\n\r\nThe Chinese government is scheduled to lift all geographical restrictions on foreign banks and allow them to conduct business in both local and foreign currency by Dec. 11. However, foreign banks will not be able to receive deposits of less than RMB 1 million (US$127,000). That restriction will make the development of nation-wide branch networks difficult, according to a report from the US-China Business Council.\r\n\r\nInvestment banks already have a head-start on the banking sector. To get into China, many have purchased stakes in Chinese banks or formed joint ventures with local institutions."]}]});