In the News: Tightened Cash Management Rules; New School Regulations; and More Stabilizing Foreign Trade Measures
July 15, 2019 | BY
Marilyn RomeroThe CBIRC will tighten regulations on China’s cash management products; increased government oversight of Chinese schooling has hit the share price of several Hong Kong-listed tutoring companies; and China’s State Council plans to adopt more fiscal, and tax- and tariff-reduction measures to maintain stability in its international trade.
CBIRC eyes tightening of rules on cash management products
China’s banking regulator, the China Banking and Insurance Regulatory Commission (CBIRC), is reportedly planning to tighten rules on the country’s cash management products (CMPs), which are issued by banks and are more liquid than money market funds. China’s CMPs, which are sold by asset managers, involved an estimated $2 trillion of investments and the CBIRC wants to impose stricter rules on pricing and restricting where and for how long the inflows can be invested, according to a Bloomberg report. The current looser regulation of CMPs enables banks to offer higher yields than those on money market funds (MMFs) and the CBIRC’s proposed changes could, if implemented, lessen their investment appeal, the sources suggested. MMFs, overseen by the securities regulator, cap duration of their investments at an average 120 days while no limit is applied to CMPs.
More from CLP: China Banking and Insurance Regulatory Commission, Measures for the Administration of Anti-money Laundering and Anti-terrorist Financing by Banking Financial Institutions; Legislation roundup: Industrial catalogue, asset management and carbon trading; Legislation roundup: Anti-money laundering, securities trading model and MOM
New rules covering schooling, tutoring business hit education firms
China’s decision to tighten its oversight of the country’s compulsory schooling and businesses providing tutoring services has taken a toll on listed Chinese education companies in Hong Kong. According to a Bloomberg report, the new guidelines issued by the State Council caused shares of Hong Kong-listed Chinese education firms to fall by at least 3.2%. The new guidelines, which cover the first nine years of schooling, seek to better regulate non-compliant, off-campus classes and competition. In a statement, the government said it wants students to master multiple skills in sports and art instead of spending extra time on academics outside of school. The new rules could have a long-term impact on demand for after-school tutoring, according to analysts. The new guidelines also prohibit the use of foreign curriculum and textbooks. Shares of China Maple Leaf Educational Systems, China Xinhua Education Group, China New Higher Education Group, and Wisdom Education International Holdings all retreated at least 3.2%.
More from CLP: Ministry of Justice, Implementing Regulations for the PRC Law on Promoting Private Education (Draft Amendments) (Sent for Deliberation); Central Committee of the Communist Party of China and State Council, Several Opinions on Intensifying the Reform and Regulating the Development of Pre-school Education
China eyes more measures to stabilize foreign trade
China will adopt more measures to ensure that its trade with foreign countries continues to be stable. This was according to a decision made by the State Council, China’s cabinet, following a meeting chaired by Premier Li Keqiang. According to a Xinhua report, the cabinet decided to further expand opening up and focus on enhancing the endogenous power of enterprises through market-oriented reforms and by economic means to keep foreign trade stable. The statement released after the State Council executive meeting also said that the country will improve its fiscal and tax policies as part of the measures. According to the statement, the meeting also studied how to further lower the country’s overall import tariff level, refine export tax rebate policies, and speed up the tax rebate process.
This premium content is reserved for
China Law & Practice Subscribers.
A Premium Subscription Provides:
- A database of over 3,000 essential documents including key PRC legislation translated into English
- A choice of newsletters to alert you to changes affecting your business including sector specific updates
- Premium access to the mobile optimized site for timely analysis that guides you through China's ever-changing business environment
Already a subscriber? Log In Now