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Monday June 12, 2017

THE banking regulator has urged lenders to devolve responsibility for loan approv-als in order to boost credit to small and micro businesses, but also emphasized that risks need to be kept under control.

Guo Shuqing, who was appointed chairman of the regulator in February, said it would also explore preferential policies to alleviate poverty and spur industrial development to help smaller businesses.

Guo’s comments were made at a forum Friday, the China Bank-ing Regulatory Commission said in a statement on its website.

“Banks and fi nancial institu-tions are encouraged to, under the premise that risks are con-trollable, to decentralize credit approval authority,” it quoted him as saying.

China launched a plan last year to promote “inclusive fi nance” with a target of launching fi nancial services

across all rungs of society, and has urged State-owned banks to take the lead.

However, it has in the past had diffi culties in supervis-ing the micro-fi nance sector, especially in the peer-to-peer lending sector which was found to be riddled with run-away managers and pyramid schemes last year.

Guo said that China’s largest banks will have established “inclusive fi nance” depart-

ments by the end of this year.China has been promoting

inclusive fi nance in recent years, striving to reach less affl uent individuals and small companies.

Last month, the banking regulator released guidelines to prompt large and medium-sized banks to set up inclusive fi nance divisions.

A State Council meeting earlier last month also allowed banks to tolerate a reasonably

higher nonperforming loan ratio for small and micro enterprises, agriculture and poverty alleviation. Monetary and credit policy incentives will be offered to banks that increase such lending.

By March, outstanding loans to small fi rms stood at 27.8 tril-lion yuan (US$4.05 trillion), up 14.4 percent from a year ago, and agriculture related loans 29.2 trillion yuan, up 8.9 per-cent. (SD-Agencies)

Banks urged to support smaller businesses

Chinese fi rms see less bias in US: surveyTHE percentage of Chinese com-panies with U.S. operations that perceive bias in how Washington enforces rules and implements policies has dropped sharply from previous years, according to a latest survey.

However, the Committee on Foreign Investment in the United States (CFIUS), an interagency government panel which reviews proposed takeovers of U.S. businesses by foreign entities on national security grounds, remains a con-cern for Chinese fi rms, accord-ing to the survey by the China General Chamber of Commerce (CGCC) and its affi liated CGCC Foundation.

A quarter of the 213 Chinese

companies that responded to the questionnaire consider the CFIUS review to be politicized and opaque, the survey said.

Chinese banks and companies must further their understand-ing of U.S. law and regulatory compliance, said Xu Chen, president of the U.S. unit of Bank of China and the CGCC chairman.

However, there is much dis-trust and misunderstanding about Chinese investment and of China in the U.S. market, Xu told reporters.

While some Chinese fi rms perceived a bias in how the U.S. Government enforces rules and implements policies, 65 percent did not encounter

this, 23 percentage points higher from last year.

The survey found that the new administration of Presi-dent Donald Trump has put China-U.S. relations, especially bilateral trade and investment, at a crossroads.

For example, 53 percent of respondents believe Washington will increase its regulatory over-sight of Chinese investments.

Only 25 percent of the sur-veyed companies expect ten-sions to rise and U.S.-Chinese relations to deteriorate in 2017 or in the near future.

Despite these views, many Chinese companies are thriving in a competitive U.S. market, the survey said. (SD-Agencies)

TANZANIA’S government signed a US$154 million contract Sat-urday with China Harbor Engi-neering Co. (CHEC) to expand the main port in the commercial capital, Dar es Salaam.

Tanzania is seeking fi nancing for infrastructure projects as part of its plans to transform the country into a regional transport and trade hub.

Under the contract funded by a World Bank loan, CHEC, a subsidiary of the State-run China Communications Construction Co., will build a roll-on, roll-off (ro-ro) terminal and deepen and strengthen seven berths at Dar es Salaam port.

Tanzania hopes expansion of the port will increase container throughput to 28 million tons a year by 2020 from around 20 million tons currently.

“Deepening and strengthen-ing of the berths will allow big container ships to dock in Dar es Salaam. All these efforts are being done in order to increase competitiveness of the port,” works, transport and com-munications minister Makame Mbarawa said.

East Africa’s second-biggest economy wants to profi t from its long coastline and upgrade its rickety railways and roads to serve the growing economies in the land-locked heart of Africa.

Big gas fi nds in Tanzania and oil discoveries in Kenya and Uganda have turned East Africa into an exploration hotspot for oil fi rms, but transport infra-structure in those countries has suffered from decades of under-investment.

Tanzania said in January it will receive a US$305 million loan from the World Bank to expand its main port, where congestion and ineffi ciencies are hampering service delivery.

The port, whose main rival is the bigger but also congested port of Mombasa in Kenya, acts as a trade gateway for landlocked African states.

Chinese President Xi Jinping announced plans to plow US$60 billion into African development projects at a summit in Johan-nesburg in 2015, saying it would boost agriculture, build roads, ports and railways and cancel some debt. (SD-Agencies)

China Harbor, Tanzania ink port deal

Models of residential buildings are seen during an overseas property exposition in Beijing in this fi le photo. Home prices could rise by another 50 percent in China’s biggest cities, according to Zhu Ning, deputy director of the National Institute of Financial Research at Tsinghua University. SD-Agencies

HOSPITAL operator IHH Health care Bhd is looking to expand its operations in China and is open to potential deals to help it grow its presence in the market, its chief executive said Friday.

The world’s second-largest health care group by market capitalization has ample cash to fund deals in the country and beyond, helping it tap “enormous” fast-growing Chi-nese health care demand, CEO Tan See Leng told reporters in Shanghai.

“China is our key growth market and we are commit-ted to signifi cantly expanding our presence here,” he said at an event after the fi rm broke ground on a 1.36-billion-yuan (US$200 million) 450-bed pri-vate hospital in Shanghai.

“We are actually sitting on quite a lot of cash and our gearing is actually very low, so we have the ability to do fairly sizable mergers and acquisi-tions (M&As),” he added when asked about looking for deals in China. “We would be on the look out for M&A opportuni-ties.”

China’s health care market is a magnet for fi rms from medi-cal devices to private hospital operators, especially as China looks for help from the private sector to rein in a health care bill estimated to hit US$1 tril-lion by 2020.

Paul Gregersen, CEO of the fi rm’s China division, said an aging population and rising incomes were driving demand for health care services, creating the need for more private care.

“This is going to put a huge pressure on the public health care system,” he said. “Our private hospitals will help alleviate the strain from this pent-up demand.”

IHH has 50 hospitals in 10 countries, with a focus on Singapore, Malaysia, Turkey and India. It plans to open a new hospital in China each year from 2018-2020 and has a China pipeline of hospitals worth around 8 billion yuan.

IHH said it was working closely with local insurer Tai-kang Insurance Group.

(SD-Agencies)

IHH, hospital operator, eyes expansion

HOME prices could rise by another 50 percent in China’s biggest cities, as the latest mea-sures to rein them in are likely to be eased by policymakers seeking to support the broader economy.

So says Zhu Ning, deputy director of the National Institute of Financial Research at Tsing-hua University. As measures to curb housing prices drag on growth in the second half and early next year, he said, the government will resort to its old playbook of dialing them back again to shore up expansion.

“We’re living through a bubble,” Zhu said. “If we don’t

engage in more meaningful reform, which we haven’t, we’re very likely to have a burst of the bubble.”

Real estate prices in major cities will surge again “by another 50 percent or so” after measures to rein them in are eased, said Zhu, without specifying a time. Because policymakers have previously imposed curbs only to ease them again, people see them as a bluff, he said.

Last year, 45 percent of new loans went to mortgages. Local authorities have boosted down payment requirements, restricted purchases by non-

residents, and capped the number of dwellings that a household can own. Since March, at least 26 cities have imposed resale lock-up peri-ods, with Hebei’s Baoding City slapping a decade-long ban on some homes, according to Shanghai-based Tospur Real Estate Consulting Co.

Zhu said he arrived at the 50 percent estimate based on the average price appreciation after past curbs were lifted, an ever-stronger belief among buyers that housing prices will rise, China’s humongous supply of credit, and tighter controls on capital outfl ows. (SD-Agencies)

Expert sees sharp rise in home prices in big cities