In the News: Alibaba's Proposed Hong Kong Listing; Debt-Equity Swaps; A-Share Investment for Insurers; and Higher Penalties for IP Violations

More from CLP: The Outlook for the Mainland and Hong Kong Capital Markets in 2019; Regulating U.S.-listed Chinese companies; 

China's state planner to push for more debt-to-equity swaps

China's state planner, the National Development and Reform Commission, or NDRC, said the government will encourage more private companies to enter into debt-to-equity swaps as part of a sweeping campaign to reduce risks in the financial system. At a press conference, NDRC deputy director Lian Weiliang said debt-to-equity swap programs worth Rmb909.5 billion, or $131.3 billion, have been invested into actual projects, out of the total Rmb2.3 trillion eligible agreements, at the end of April this year. The programs covered 26 industries including steel, coal, and transport. Lian said the Chinese government continues to push for the use of market-based debt-equity swaps to drive reform, mitigate risk, and reduce leverage. As such, the government is encouraging more privately-owned companies to participate, Lian said. Only 24 of the 106 companies that had implemented debt-for-equity swaps by April were private companies.

More from CLP: China Banking Regulatory Commission, Measures for the Administration of the Establishment by Commercial Banks of Institutions that Carry Out the Conversion of Debt to Equity (Trial Implementation) (Draft for Comments); Legislation roundup: Debt-for-equity swaps, PPP and individual income tax

CBIRC mulls allowing insurance firms to invest more in equities

The China Banking and Insurance Regulatory Commission, or CBIRC, is looking at the possibility of allowing insurance companies to invest more in the Chinese A-share market to stabilize the Chinese capital markets. In an interview with China's central bank-run publication Financial News, a CBIRC spokesperson said the commission is “actively studying the issue.” A moderate relaxation on insurance capital being invested in equities will bring long-term and stable development to the Chinese capital markets, the spokesperson said. Although the exact increased ratio has not been decided, industry insiders and experts believe it may go as high as 40%. Statistics from the CBIRC show that about 49.2% of insurance capital was invested in fixed income assets last year, while stocks and related funds only accounted for 11.7% of the total.

More from CLP: China Banking and Insurance Regulatory Commission, Rules for the Regulation of the Solvency of Insurance Companies; Answers to Questions No.2: Perpetual Capital Bonds; Legislation roundup: Bond investment, insurance capital and receivables pledges; China Plans 12 New Measures to Open up Banking, Insurance Sectors

Chinese State Councillor Wang Yong wants higher penalties for IP violations

China's State Council is pushing to increase the cost to offenders of violating laws related to intellectual property rights in the country. Chinese State Councillor Wang Yong, chief of a leading group that campaigns against IP infringements and counterfeits, said more efforts are needed to crack down on IP infringements and counterfeit goods to ensure that the legitimate rights and interests of consumers and market entities are protected. He has urged greater punishment for those who produce counterfeit goods and who are involved in repeated IP infringements. Protecting IP will maintain fair market competition, protect and encourage innovation and entrepreneurship, and create a sound business environment, said Wang.

More from CLP: Rising Above the Fake to Keep It Real; Revised Trademark Law Targets Bad Faith Registration and Infringements; Recent Developments in PRC Foreign Investment, Cross-border Tech Transfer, and Trade Secrets Laws – Implications for Foreign IP Owners