Skip to main content




"[We will] consider treating state-owned enterprises with the principle of 'competitive neutrality.'"

- Yi Gang, PBoC governor

Some context: Yi said that over the weekend in Bali. It's a sign that China is increasingly worried about its SOEs facing market access restrictions abroad. More in the Tip Sheet below.

There are no restrictions on forwarding the Tip Sheet, so send it on to friends and colleagues who can click here to subscribe.

And let us know what you think – your feedback is always appreciated.



1. Yi Gang’s weekend media blitz

"Nothing to see here."

That was the essence of PBoC Governor Yi Gang’s statements to media over the weekend. Yi made the comments while attending the G20 Meeting of Finance Ministers and Central Bank Governors and IMF fall meetings in Bali. 

Yi tried to convey a sense of confidence and calm, despite a slowing economy, depreciating currency, continued debt challenges, and escalating trade war with the US. 

He also indicated that China’s monetary policy stance hasn’t changed, that liquidity injections have been reasonable, and that there are plenty of tools to trot out if economic growth further deteriorates. 

And he was blunt about the trade war:

“We prepared for the worst.""You see a lot of people in China now are preparing for the trade tension to be a prolonged situation.”  

Yi also highlighted China’s more concerted efforts to open the services sector, particularly the financial sector.

Get smart: Yi's attempt to project calm is no surprise – any central banker would do the same. But the PBoC is indeed concerned about the effectiveness of monetary policy right now, which is why they have not loosened much despite the economic slowdown. 

Bloomberg: China Weighing Up Range of Risks in Currency Policy, PBOC Says
Caixin: 专访易纲:走向高质量发展


2. China may be willing to deal on SOEs

While most of his remarks were pedestrian, Yi Gang did make one bit of real news over the weekend.

Yi floated an interesting idea while speaking at a banking industry symposium hosted by the expanded G30 (PBoC):

“In order to solve the structural problems in the Chinese economy, we will…consider treating state-owned enterprises with the principle of ‘competitive neutrality.’”

Some context: Competitive neutrality means maintaining a level playing field in terms of private versus state-owned companies.

More context: China has been trumpeting equal treatment for a long time. Yi’s statement indicates that practical discussions on how to achieve such a policy are underway in Beijing. 

Even officials at the SOE administrator (SASAC) are on board, albeit for a different reason (Yicai):

"We also advocate 'neutrality of ownership'…and oppose discriminatory treatment of state-owned enterprises in the formulation of international rules."

Get smart: These statements reveal anxiety in Beijing that Chinese SOEs may get shut out of global markets. Chinese authorities may be willing to offer more access to foreign private companies in order to stop that from happening.

Our take: Any genuine movement from China toward competitive neutrality would be significant – this issue has long been a sticking point in foreign trade and investment negotiations.

PBoC: 易纲行长在2018年G30国际银行业研讨会的发言及答问
Yicai: 国资委回应第一财经记者:改革后的国企和其他所有制企业是一样的


3. Getting equity investors on side

While Yi Gang was off schmoozing in Bali (see previous two entries), the head of the securities regulator, Liu Shiyu, was meeting investors in Beijing. 

Liu wants to build confidence in China's equity markets. That's a tough sell, given that China’s main stock index is down over 21% on the year. 

His goal was to make market actors feel heard – emphasizing that regulators are keen to interact more with market players, to understand their mindset, and to heed their suggestions. 

Liu also emphasized that market stability is now key – but not simply to stabilize the current market slump. He was also focused on overall risk prevention and information disclosure, both of which are currently weak in Chinese equity markets.  

Get smart: This meeting was geared toward domestic institutional investors – not foreign investors. But domestic asset managers largely have the same complaints as the foreign community – there is too much funny business in the equities market.

Our take: Listening to the market is a step forward, but it will take a lot more to fundamentally change how things work.

21st Century Business Herald: 周末不平静!刘士余、易纲罕见发声!信息量大!


4. Insurance companies’ leash gets longer

China’s insurers look set to get more leeway in how they invest domestically. 

That’s according to Ren Chunsheng, director of the Insurance Capital Operations Department at the China Banking and Insurance Regulatory Commission (CBIRC).

Ren was speaking at a conference over the weekend and flagged a few changes for industry folks and investors to watch for:

In the short-term, insurers will be asked to boost their strategic investments in quality private companies, to help protect market liquidity.In the longer-term, the restrictions that insurers face on investing in certain industries will be relaxed.Instead of approving individual investments, the regulator will adopt a negative-list approach.Soon insurers may also be allowed to invest in asset-backed securities and other derivatives – to enhance their hedging capabilities – and debt-for-equity swaps.

Why it matters: The insurance industry has long been the neglected stepchild of financial services in China. Over the years, that led to lax oversight and a big risk buildup in the sector – which subsequently led to a regulatory crackdown. 

What to watch: Regulators need more liquidity in various asset markets, so we could see further easing of investment restrictions. 

Caijing: 银保监会官员:险资股权投资行业限制未来或取消


5. Li Keqiang in Tajikistan

Li Keqiang was in Dushanbe, Tajikistan, over the weekend attending a meeting of the heads of government from Shanghai Cooperation Organization (SCO) countries.

Some context (

"The SCO was established in 2001 by China, Kazakhstan, Kyrgyzstan, Russia, Tajikistan and Uzbekistan. India and Pakistan joined as full members in 2017." "Its Council of Heads of Government meets once a year to discuss the organization’s multilateral cooperation strategy and priorities."

This caught our eye: New members India and Pakistan did not send their heads of government, instead sending only their foreign ministers. The addition of India and Pakistan was supposed to make the SCO a more important group, but if they don't fully participate, it could undermine the group.

Li had some ideas for the organization to consider:

"The Premier proposed advancing SCO cooperation in six areas: security, multilateral economic cooperation and trade, industrial capacity cooperation, connectivity, innovation, and people-to-people ties."

Get smart: It’s no surprise that security cooperation was Li’s top priority – fears of terrorism are one of the few things that all SCO states have in common.

Our question: How are the Xinjiang re-education camps affecting China’s relations with its Central Asian neighbors? Citizens from several SCO member countries have been put in the camps.

READ MORE China elevates SCO practical cooperation for common development Premier vows to advance production capacity cooperation with SCO members


6. CPPCC ordered to be loyal to the Party

On Sunday, the Chinese Communist Party General Office issued new opinions on Party-building in the Chinese People’s Political Consultative Conference (CPPCC).

Some context: The CPPCC is China’s top political advisory body. Its job is to solicit policy ideas and suggestions from non-Party groups and individuals.

The new opinions call on the CPPCC to be loyal to the Party – and to Xi Jinping (Xinhua):

"The CPPCC is a political organization; taking a clear-cut stand when discussing politics is the fundamental requirement of the CPPCC.”“The most important task is firmly protecting General Secretary Xi Jinping’s core status.” 

Get smart: At this point, new regulations demanding loyalty to Xi should come as no surprise.

Get smarter: As the pressure to show loyalty to Xi mounts in all parts of the Party-state, the risk that Xi fails to get honest advice increases.

And ICYMI: It’s ironic that the body whose main task it to represent the ideas of non-Party entities would have to double down on its support of the Party. Such is the state of play in Xi’s China.

Xinhua: 中共中央办公厅印发《关于加强新时代人民政协党的建设工作的若干意见》


If the Tip Sheet isn't the best thing in your inbox every day,
we'd like to know why.


Popular posts from this blog

SSG Commando Muddassir Iqbal of Pakistan Army

“ Commando Muddassir Iqbal was part of the team who conducted Army Public School operation on 16 December 2014. In this video he reveals that he along with other commandos was ordered to kill the innocent children inside school, when asked why should they kill children after killing all the terrorist he was told that it would be a chance to defame Taliban and get nation on the side. He and all other commandos killed children and later Taliban was blamed.
Muddassir Iqbal has deserted the military and now he is  with mujahedeen somewhere in AF PAK border area”
For authenticity of  this tape journalists can easy reach to his home town to interview his family members or   ISPR as he reveals his army service number”
Asalam o Alaikum: My name is Muddassir Iqbal. My father’s name is Naimat Ali. I belong to Sialkot divison (Punjab province), my village is Shamsher Poor and district, tehsil and post office  Narowal. Unfortunately I was working in Pakistan army. I feel embarrassed to tell you …

CPEC Jobs in Pakistan, salary details

JOBS...نوکریاں چائنہ کمپنی میںPlease help the deserving persons...Salary:Salary package in China–Pakistan Economic Corridor (CPEC) in these 300,000 jobs shall be on daily wages. The details of the daily wages are as follows;Welder: Rs. 1,700 dailyHeavy Duty Driver: Rs. 1,700 dailyMason: Rs. 1,500 dailyHelper: Rs. 850 dailyElectrician: Rs. 1,700 dailySurveyor: Rs. 2,500 dailySecurity Guard: Rs. 1,600 dailyBulldozer operator: Rs. 2,200 dailyConcrete mixer machine operator: Rs. 2,000 dailyRoller operator: Rs. 2,000 dailySteel fixer: Rs. 2,200 dailyIron Shuttering fixer: Rs. 1,800 dailyAccount clerk: Rs. 2,200 dailyCarpenter: Rs. 1,700 dailyLight duty driver: Rs. 1,700 dailyLabour: Rs. 900 dailyPara Engine mechanic: Rs. 1,700 dailyPipe fitter: Rs. 1,700 dailyStorekeeper: Rs. 1,700 dailyOffice boy: Rs. 1,200 dailyExcavator operator: Rs. 2,200 dailyShovel operator: Rs. 2,200 dailyComputer operator: Rs. 2,200 dailySecurity Supervisor: Rs. 2,200 dailyCook for Chinese food: Rs. 2,000 dailyCook…

The Rise of China-Europe Railways

The Rise of China-Europe RailwaysMarch 6, 2018The Dawn of a New Commercial Era?For over two millennia, technology and politics have shaped trade across the Eurasian supercontinent. The compass and domesticated camels helped the “silk routes” emerge between 200 and 400 CE, and peaceful interactions between the Han and Hellenic empires allowed overland trade to flourish. A major shift occurred in the late fifteenth century, when the invention of large ocean-going vessels and new navigation methods made maritime trade more competitive. Mercantilism and competition among Europe’s colonial powers helped pull commerce to the coastlines. Since then, commerce between Asia and Europe has traveled primarily by sea.1Against this historical backdrop, new railway services between China and Europe have emerged rapidly. Just 10 years ago, regular direct freight services from China to Europe did not exist.2 Today, they connect roughly 35 Chinese…