In the news: Apple wins iPhone 6 patent case, the PBOC tightens mortgage lending rules and 13 nations join the AIIB

The PBOC tightens Beijing home lending rules

The People's Bank of China (PBOC) has asked banks in Beijing to scrutinize home loans to newly divorced couples and funding sources for borrowers, adding to other restrictions aimed at reining in property prices. Purchasers in the area divorced for less than a year will be considered second home buyers when applying for mortgage loans, the PBOC Beijing branch said, and banks are banned from providing mortgages to buyers using leveraged financial products for down payment. The move follows as Beijing imposed the highest mortgage criteria among Chinese cities the previous week by raising down payments by 10 percentage points for people buying second homes, to between 60% and 80%. The issue illustrates the tightrope that Chinese policymakers have to tread: their efforts to curb capital outflows threatens to spur a flood of money into real estate, and risk exacerbating an asset bubble that even the Politburo has expressed concern over. Premier Li Keqiang now has to find a balance, even while ensuring that his efforts ensure the bubble is deflated gradually and not burst. The general market view is that the government won't prompt a crisis—its stated aim is to reduce risk after all.

13 more countries join the AIIB

The China-led Asian Infrastructure Investment Bank (AIIB) has accepted applications by 13 more nations, bringing the total number of member states to 70 and leaving Japan and U.S. as the only Group of Seven without a stake in the lender. Memberships for Afghanistan, Armenia, Belgium, Canada, Ethiopia, Fiji, Hong Kong, Hungary, Ireland, Peru, Sudan, Timor Leste and Venezuela will be completed once they finish domestic processes and deposit the first payment of capital, the AIIB said. These additions signal China's increased role on the global stage at a time when the Trump administration is signaling it will cut foreign aid and more broadly disengage from multilateral organizations, with market observers commenting that the U.S. withdrawal from the TPP in particular leaves a huge window of opportunity open for China. American allies including the UK, Germany, France, Italy, Australia and South Korea already signed up to the AIIB last year, and the bank backed nine projects in seven countries in 2016, with a total lending of $1.73 billion.

Apple wins iPhone 6 infringement case in Beijing

The Beijing IP Court has overturned a ruling against Apple Inc. over iPhone 6 and iPhone 6 Plus patents, deciding that the two models do not infringe on exterior smartphone design patents held by a defunct local manufacturer, Shenzhen Baili Marketing Services Co. The court found Baili had no grounds to claim the designs were exclusive, and that it was easy for consumers to detect the differences. In May last year, the Beijing IP Office granted Baili a sales injunction in the capital city against the iPhone 6 and 6 Plus. The injunction was immediately suspended pending an appeal from Apple, and the phones remained in stores. This is quite the victory for Apple in what has proved to be one of its more difficult markets. Lower-priced competitors and high import duties have hurt the U.S. giant, with the odd legal challenge thrown in. While the ruling is unlikely to spur any material change in Apple's bottom line, it does provide a benchmark of sorts that the company may use to combat similar challenges in the future.

The PBOC tightens Beijing home lending rules

The People's Bank of China (PBOC) has asked banks in Beijing to scrutinize home loans to newly divorced couples and funding sources for borrowers, adding to other restrictions aimed at reining in property prices. Purchasers in the area divorced for less than a year will be considered second home buyers when applying for mortgage loans, the PBOC Beijing branch said, and banks are banned from providing mortgages to buyers using leveraged financial products for down payment. The move follows as Beijing imposed the highest mortgage criteria among Chinese cities the previous week by raising down payments by 10 percentage points for people buying second homes, to between 60% and 80%. The issue illustrates the tightrope that Chinese policymakers have to tread: their efforts to curb capital outflows threatens to spur a flood of money into real estate, and risk exacerbating an asset bubble that even the Politburo has expressed concern over. Premier Li Keqiang now has to find a balance, even while ensuring that his efforts ensure the bubble is deflated gradually and not burst. The general market view is that the government won't prompt a crisis—its stated aim is to reduce risk after all.

13 more countries join the AIIB

The China-led Asian Infrastructure Investment Bank (AIIB) has accepted applications by 13 more nations, bringing the total number of member states to 70 and leaving Japan and U.S. as the only Group of Seven without a stake in the lender. Memberships for Afghanistan, Armenia, Belgium, Canada, Ethiopia, Fiji, Hong Kong, Hungary, Ireland, Peru, Sudan, Timor Leste and Venezuela will be completed once they finish domestic processes and deposit the first payment of capital, the AIIB said. These additions signal China's increased role on the global stage at a time when the Trump administration is signaling it will cut foreign aid and more broadly disengage from multilateral organizations, with market observers commenting that the U.S. withdrawal from the TPP in particular leaves a huge window of opportunity open for China. American allies including the UK, Germany, France, Italy, Australia and South Korea already signed up to the AIIB last year, and the bank backed nine projects in seven countries in 2016, with a total lending of $1.73 billion.

In the news: Apple wins iPhone 6 patent case, the PBOC tightens mortgage lending rules and 13 nations join the AIIB

This premium content is reserved for China Law & Practice Subscribers.

This premium content is reserved for
China Law & Practice Subscribers.