The People's Bank of China (PBoC) cut the interest rate of the targeted medium-term lending facility (TMLF) to 2.95%, 20 basis points lower than the previous one. Amid the overall downward trend in interest rates, the 20-basis-point cut was to coordinate with previous interest rate reduction of the reverse repo and medium-term lending facility.
The issuance of inclusive loans for small to micro and small-sized enterprises have increased by 25.93% y-o-y in Q1 2020, according to China Banking and Insurance Regulatory Commission (CBIRC). The interest rate of the inclusive loans issued by the top five state-owned banks in the country stands at 4.3%, down 0.3% compared to last year.
CBIRC (China Banking and Insurance Regulatory Commission) is consulting the insurers in the country regarding reforms in the auto insurance regulations. The reform aims to improve the quality of the auto insurance market development. This is the first reform since 2008. The regulator is consulting the market in 13 issues including the auto insurance rates and mandatory liability insurance for traffic accidents of motor vehicles (MLI).
Due to the pandemic and slumping oil prices, China's central state-owned enterprises (SOEs) see profits and revenues have decreased by 11.8% y-o-y to 6 trillion yuan (US$857.14 billion) during the first quarter, according to State-owned Assets Supervision and Administration Commission of the State Council (SASAC). The profits have plunged 58.8% y-o-y to 130.4 billion yuan.
China's epidemic centre Wuhan will hand out vouchers worth 500 million yuan (US$71 million) to boost consumption. This move aims to boost the consumption which has been hit hard by the health crisis. The regulators in the country have been rolling out measures to support sectors including commercial, trade, cultural and tourism.
The People's Bank of China (PBoC) has further lowered the interest rate of the one-year medium-term lending facility (MLF) loans by 20 bps, down from 3.15% to 2.95%. The MLF loans help commercial and policy banks maintain liquidity by allowing them to borrow from PBoC. The MLF loans that got rate cuts is worth 100 billion yuan (US$14.2 billion). This is in line with the country's efforts to mitigate the economic impact of Covid-19.
Two Covid-19 inactivated vaccine candidates are approved for clinical trials. These two vaccines are China's first batch of inactivated vaccines for Covid-19 that have obtained clinical trial approval. The vaccines' developers have the capacity for large-scale production.
The Covid-19 pandemic has hit many industries including the real estate sector in China. In February, 19 out of the 70 major Chinese cities tracked by the country's National Bureau of Statistics reported zero new homes trades, while 24 cities had no deals in pre-owned residential apartments. The market starts recovering recently with the top 100 leading property developers in China saw sales revenue surge 136.2% month-on-month to 769 billion yuan (US$108 billion) in March.
China has reduced the interest rate on financial institutions' excess reserves with the People's Bank of China (PBoC) as part of the efforts to boost the real economy and enhance the efficiency of capital use amid Covid-19. The interest rate is lowered from 0.72% to 0.35%.
China will seek further opening-up and upgrade of foreign trade and investment which is one of the hardest-hit sectors amid the Covid-19. The country's regulators will show strong support to streamline clearance procedures, improve logistic service and advance free trade agreement negotiations to strengthen trade sectors.
China's State Council has decided to increase small to medium banks' quota of re-lending and rediscount by 1 trillion yuan (US$141 billion). The fund will be majorly used to offer loans with lower interest rates to small-to-medium enterprises. Companies in sectors such as agriculture, foreign trade, and other industries that have been impacted by the pandemic are supported to receive such loans.
The total net profits of China's five major insurance companies, namely China Life, Ping An, China Pacific Insurance, People's Insurance Company, and New China Life, surged 72.2% y-o-y to 272.4 billion yuan (US$38.4 billion) in 2019. The strong profit growth is due to improved operations and government tax reductions. China Life ranked first in terms of the net profit growth, with its net profits attributable to shareholders up 411.5% y-o-y to 58.29 billion yuan.