BUSINESS China to slow down deleveraging

BUSINESS

China to slow down deleveraging

Xinhua

18:14, July 25, 2018

China released details of its asset management rules, which are seen as a slow-down of the pace in financial deleveraging to keep a stable market, as the Economic Information Daily reported Monday.

Last Friday, China's securities and banking regulators issued details for asset management regulation rules, by clarifying the investment parameters, assessment methods and related macro-prudential policies during the transition period.

The announcement by the government said that publicly-offered asset management products could be invested in a non-standard asset of credit right in a proper range and in line with related rules of the government.

During the transition period, old asset management products could be invested in new assets, but the choices should give priority to the financing of small and micro-sized enterprises on the critical areas and projects of the nation.

Moreover, the due date of the new assets invested shouldn't be later than the end of 2020.

The announcement by the government also mentioned some new details on assessment methods and related macro-prudential policies during the transition period.

The transition period of China's new asset management rules, which is stipulated as the end of 2020, is set to the provide financial institutions with more time to make adjustments and transformation.

Analysts said that the details are not a clue towards a change in China's determination to carry out deleveraging policies, but a fine-tuning of the deleveraging pace.

As of June 2018, the value of the private equity asset management business of securities and futures enterprises is worth 25.91 trillion yuan, among which securities companies and their subsidiaries are about 14.92 trillion yuan, fund companies and their subsidiaries are estimated at 10.83 trillion yuan, and futures companies and their subsidiaries are approximately 160 billion yuan.


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