In the news: Predictions for 2014, shadow banking and a new face at SIPO
January 09, 2014 | BY
clpstaff &clp articles &Some of the top China pundits have made their predictions for 2014, while the State Council and CBRC have stepped up the crackdown on shadow banking. And for the first time in 10 years, SIPO has a new Commissioner.
2014 predictions
Bill Bishop, who compiles the widely-respected Sinocism China Newsletter, made 10 predictions for 2014. These include an intensification of the corruption crackdown, the economy continuing to struggle because of the build up of debt, Alibaba listing in Hong Kong after both sides make concessions and an increased focus on cleaning up the environment. McKinsey director Gordon Orr also made 10 predictions, including the rise of the chief information officer, a quiet year for the Shanghai FTZ and more M&A in logistics.
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It will be interesting to check these predictions in December, but if you make 10, the chances are that a few of them will be right. While these lists focus more generally on China's economic development, they could have some interesting legal consequences. For example, reform to China's environmental laws began last year. Will that pick up momentum in 2014?
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Crackdown on shadow banks
According to Reuters, the State Council has published guidelines calling for tighter regulation of banks' off-balance-sheet lending and stating that trust companies should return to their original purpose as asset managers and not engage in “credit-type” business. Another report states that the CBRC has asked lenders to publish data including off-balance-sheet assets and interbank liabilities.
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China's shadow banking system has quadrupled in size since 2008 to about Rmb20 trillion ($3.2 trillion). It is difficult to make a complete judgment before this State Council document 107 is published in full, but the new rules show a desire to crack down on this area and also to get a grip on local government debt, which has been fuelled by these shadow banks. Debt in China is rising at the same rate as it did in other countries before they experienced financial crises. This will not be easy.
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A new face at SIPO
Shen Changyu has replaced Tian Lipu as head of the State Intellectual Property Office. Shen was the president of Dalian University of Technology and has a PhD in computational mechanics. Before that, he was the president of Zhengzhou University. He is also a member of the Chinese Academy of Sciences.
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This is a big move that happened quietly over the New Year. Tian had been in charge of SIPO for over 10 years and had made sure that a mind boggling growth in patent filing during that time did not result in chronic delays. He had a reputation as an efficient administrator. It is interesting that the government has gone for an outsider here rather than promoting from within the organisation. With more changes to China's Patent Law planned, Shen will need to be on top of his game from day one.
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