China is inspecting financial regulators, state banks


The move underscores China’s increasingly tough stance on corruption
Newsfeed13 Oct 2021
    Photo credit: AFP Photo


    MAINLAND CHINA & HONG KONG

    China is inspecting the nation’s financial regulators, biggest state-run banks, insurers, and bad-debt managers for the first time in six years to root out corruption in its USD54t financial system.

    A team led by the Central Commission for Discipline Inspection will start a two-month anti-graft check of the China Banking and Insurance Regulatory Commission (CBIRC), and accept complaint reports from whistle blowers until 15 December, according to a statement late Monday (11 October).

    CBIRC Chairman Guo Shuqing said the move is a reflection of the Communist Party’s focus on financial regulation and told his staff that cooperation with inspectors will be their top priority for now.

    The banking regulator is among the 25 financial organisations being scrutinised in the eighth round of checks by the ruling Communist Party since 2017. While previous tours covered other central and local government agencies and state-owned companies, the latest zeros in on entities including the People’s Bank of China (PBOC), the China Securities Regulatory Commission, the Shanghai and Shenzhen stock exchanges, the biggest state-owned banks, as well as bad-debt managers including China Huarong Asset Management.

    The PBOC, the State Administration of Foreign Exchange, sovereign wealth fund China Investment Corporation, and Huarong issued similar statements Tuesday announcing the start of their inspections. The inspection team heads stressed the need to prevent “systematic financial risks,” while the top officials of the inspected agencies vowed full cooperation.

    It also comes as authorities are cracking down on everything from fintech platforms to property developers to limit financial risks. Global investors have been unnerved by the regulatory onslaught from Beijing targeting its biggest technology companies and other industries as well as a push by President Xi Jinping to create “common prosperity”, a campaign to narrow the wealth divide. – Bloomberg News.

    On Tuesday, the Shanghai Composite Index closed 1.25% lower at 3,546.94. The Hang Seng Index slipped 1.43% to 24,962.59.

     

    REST OF ASIA

    Samsung Electronics’s (005930 KS) price target was cut by several analysts this week (ending 15 October), as China’s power crisis is seen worsening supply chain disruptions and weighing on the company’s profits. Shares slumped to their lowest since December.

    The persistent supply chain bottlenecks, which stemmed from the spread of the coronavirus in Southeast Asia and now from China’s limited electricity supply, will likely undermine the memory chip industry during the fourth quarter, wrote an analyst in a report Tuesday (12 October).

    Still, Samsung’s consensus 12-month price target of KRW98,944 based on contributions from 36 analysts implies a potential return about 43% from current levels, data compiled by Bloomberg show. – Bloomberg News.

    South Korea’s Kospi Index added 0.73% to 2,937.73 Wednesday morning, reversing its previous loss of 1.35% to 2,916.38.

    Australia’s S&P/ASX 200 Index opened 0.10% higher at 7,288.00 on Wednesday after losing 0.26% to 7,280.70 on Tuesday.

    The Taiwan Stock Exchange Weighted Index lost 1.07% to 16,462.84.

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