Following is a summary of major news and comments in the Hong Kong Economic Journal, the parent publication of EJ Insight, on Monday, March 10:
Bank of East Asia sees funding costs rising in mainland
Interview: Shadow banking activities and tightened control over interbank lending in China have led to more fierce competition on deposits, jacking up funding costs in the mainland, said Brian Li, deputy chief executive of The Bank of East Asia Ltd. (00023.HK). Li said money-market funds provided by non-banks like Alipay have been growing fast. BEA will seek to enlarge its client base and engage in more cross-border businesses to absorb renminbi, Li said, adding that the bank’s China subsidiary is planning to launch large denomination negotiable certificates of deposit later this year when authorities open the market to foreign banks.
HSBC eyes double-digit loan growth in Hong Kong, mainland
HSBC Holdings Plc. (00005.HK) is eyeing double-digit growth in lending in the mainland and Hong Kong this year, said general manager and The Hongkong and Shanghai Banking Corp. Ltd. chief executive Anita Fung. The group is planning to hire more staff in its most profitable region where opportunities outnumber other markets in the West. Meanwhile, a trend of a weaker renminbi is seen, probably heralding a more flexible exchange rate that will bring along higher demand for renminbi-dominated investment products, Fung added.
Link REIT seeks to reach first mainland deal this year
The Link Real Estate Investment Trust (00823.HK) may reach its first deal in acquiring certain shopping centers in mainland China later this year, said The Link Management Ltd. investment director Christine Chan. The move comes after the operator of Hong Kong public estate malls tied up with China Vanke Co. Ltd. late last year in retail property development in the mainland. The fund intends to buy stakes in new premises with existing tenants in the Pearl River Delta region, Chan said, adding that it plans to conclude one to two deals each year.
Occupy Central movement may hold referendum earlier than planned
Organizers of the Occupy Central movement plan to hold their first referendum on political reform blueprint on June 22. Results of the referendum will be submitted to the central and Hong Kong governments. A group of 2,000 people who have signed up to join the civil disobedience movement will decide whether to hold their blockade campaign earlier than planned if China’s National People’s Congress standing committee makes a decision on universal suffrage for the 2017 chief executive election in its meeting between August and October. The revised timetable was announced at their second “deliberation day” yesterday.
Political reform fiasco may prompt Beijing to revive anti-subversion law, Fan says
A Hong Kong deputy at the Chinese National People’s Congress Standing Committee, Rita Fan, fears Beijing might put pressure on Hong Kong to enact an anti-subversion law if the city plunges into chaos after the political reform talks end in failure. She said Beijing might feel worried that foreign forces would take advantage of chaos in Hong Kong to turn it into a base to subvert China. Fan said China would not budge on political reform because of the Occupy Central movement.
Slowing inflation allows room for loosening liquidity
Recent data showing tepid manufacturing activities and weaker producer prices are clear signs of a slowing Chinese economy. Pressure on major enterprises will grow if interest rates stay at a high level. It is clear that China’s central bank should consider loosening its present moderately tight monetary policy to avoid a major slowdown in the economy. The recent drop of inflation rate to two percent in February provides room for flexibility for the central bank to revise downward the reserve requirement ratio for commercial lenders.
Xi masterminds plan to eliminate Zhou Yongkang gang, Ren says
The ongoing plan to dismantle the gang of corrupt officials headed by former Communist Party Politburo Standing Committee member Zhou Yongkang was masterminded by Xi Jinping to showcase the commitment to fight graft, Beijing-based China watcher Ren Huiwen wrote. Xi’s move to abandon the longstanding party rule that spares former Politburo standing committee members from criminal offences would boost public confidence and set a precedent in the anti-graft battle, Ren said. But the country still needs to establish an anti-corruption system in the long run.
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