In the News: PBOC Easing Policy; P2P Consolidation; and Property Tax Delay
May 20, 2019 | BY
Marilyn RomeroCentral banks is expected to increase easing measures in the financial sector; Industry regulator calls for P2P lenders to register and consolidate; and trade war with the U.S. may cause delay of China's planned property tax legislation.
China's central bank likely to ease finance policy further
The People's Bank of China, or PBOC, is expected to further ease policy to help maintain economic growth as trade tensions with the United States escalate. The trade disputes have already depressed new lending in April, analysts say. And the PBOC is expected to provide more support for the banking industry. After a record first quarter in bank lending, the failure to reach any near term resolution over U.S.-China trade tariffs, has resulted in more modest lending in April, with only Rmb1.02 trillion, or $150.16 billion, in net new renminbi loans made. The central bank has already said it will cut reserve requirement ratios for some small and medium-sized banks, but analysts anticipate more will need to be done to bolster confidence and stabilize growth in the event that trade tensions escalate; and to shore up stock prices, which have made a sharp dive recently.
More from CLP: China Accelerates National Fintech Development Plan; People's Bank of China, Ministry of Finance and China Banking and Insurance Regulatory Commission, Circular on Launching Over-the-Counter Business for Local Government Bonds on the National Interbank Bond Market; People's Bank of China, Circular on Further Improving the Policies for Cross-border Renminbi Business to Facilitate Trade and Investment
China's internet regulator seeks consolidation in P2P industry
The Beijing Internet Finance Association, a regulator for China's online finance industry, is encouraging consolidation within China's online peer-to-peer, or P2P, lending industry, which is undergoing a massive shakeup. Zhang Yu, deputy secretary general of the association, said all P2P players in the country need to accelerate their consolidation process, and revitalize existing resources by obtaining qualification under a new industry registration system that is being introduced. The registration program is expected to be piloted in some cities during the second half of this year. By 2020, the regulator said it expects the registration of all the remaining P2P online lending platforms in the national monitoring system to be completed. Since March, Chinese authorities have intensified their campaign against fraudulent P2P platforms, arresting 62 people from 16 countries and regions, and freezing about $1.5 billion in assets linked to 380 platforms.
More from CLP: China Ramps up Enforcement Against P2P Lending; General Office of the China Banking Regulatory Commission, Guidelines on the Depositary Business for Peer-to-peer Loan Proceeds; National Internet Finance Association of China, Standard No.1 – Internet Finance Information Disclosure: Peer-to-peer Lending
U.S. trade war could delay draft China property tax legislation
According to an official with the Ministry of Finance, the government's property tax proposal could be pushed back, as it focuses on the ongoing U.S.-China trade war, the South China Morning Post has reported. Zhang Yiqun, a finance ministry official, said the conditions are not ready for rolling out a property tax law, given the rising uncertainties in the international environment. During the opening legislative session in Beijing in March, lawmakers signaled their desire to move ahead with the tax legislation, but the proposal was not mentioned on the 2019 legislation agenda released recently by the State Council, fueling speculation that it has been dropped for the time being. According to the SCMP, the current U.S. trade tariff issues were unlikely to derail the law completely, but the timing could be affected. A significant downturn in the property market could also delay the schedule.
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