Page 488 - 2021 White Paper
P. 488
1 White Paper on the Business Environment in China
in China's insurance sector. The perception of companies listed in the US. Such actions were
government support will ease the pressure on
China Life's standalone credit fundamentals (Fitch). not to decouple from China's financial sector
Financial Securities but to suppress Chinese companies that pose
The US really does not want to decouple a challenge to US competitors. Washington
from China in the financial industry. The Trump
administration's actions against short video- aims to prevent Chinese enterprises from
sharing app TikTok, the tightening regulatory
scrutiny of Chinese companies listed in the US, and participating in areas related to the so-called
some news of individual companies delisting from
the US stock market, have all boosted discussions national security, hoping to maintain the US
on the reported US initiative to decouple from
China in the financial services sector. Any action companies' international competitiveness
like decoupling will hurt the two sides; instead,
cooperation will achieve a win-win situation. through improper means. Financial capital is
Operations relating to flows of global capital
denominated in the US dollar are the foundation globalized, and the boundaries of international
that sustains the international monetary system.
If the US dollar does not participate in China's financial capital flows are blurred. As we can see,
economy and financial market, it could mean
the US will likely end up weakening the whole Chinese companies will list in the US even if the
monetary system. China's economy is the second-
largest in the world. Its exports account for about US government tightens regulatory scrutiny.
12 percent of the global total. China's capital
market is the world's second-largest. However, With the development of financial globalization,
the global monetary system is still dominated by
the US dollar. There is a significant asymmetry the power of the international capital dominates
in the proportion of the US economy, trade and
the dollar in the international monetary system. the development of global financial markets.
So far, about 50 percent of the global trade
settlements are done in the US dollar. China is Enterprises can choose the ways of financing, but
an important participant and promoter of global
trade. However, a large part of the trade is still there are certain differences determined by the
settled in US dollars. The greenback accounts for
about 60% of global official reserves and nearly cost of financial capital arbitrage. The financial
85% of global foreign exchange transactions.
China's huge foreign exchange reserves are also integration between China and the US has entered
denominated in the US dollar. If China does not
use the US dollar but chooses the euro or other a new stage, which is mainly determined by the
currencies to settle its trade deals, it will shock
the US dollar system. So, the US will not take the high-quality opening-up of China's capital market
risk of decoupling from China, because that will
weaken the US dollar system. The US has added and the profit-seeking behavior of the US capital.
some Chinese tech companies, including ZTE and
Huawei, to its so-called Entity List and carried out US investors hold a large amount of securities in
sanction measures. It also took unreasonable
actions against enterprises such as Byte-Dance, China's capital market, which was about US$260
and tightened regulatory scrutiny of Chinese
billion in 2018, accounting for 2.3% of their
holdings of foreign securities. Chinese investors
also hold a large number of US securities, including
more than US$1 trillion in treasury bonds. In June
2020, JPMorgan received the approval to open a
wholly foreign-owned futures company. And in
the same month, American Express received the
approval to establish its joint venture with Lianlian
DigiTech Co Ltd. AmEx became the first foreign
bank card provider to do clearing business on the
Chinese mainland. In addition, capital flows into
China's securities market this year have reached
a record high, and a part of the funds came from
US investors.
Meanwhile, Big state-owned lender Bank
of Communications (BOCOM) has become the
first Chinese bank to issue perpetual bonds
offshore. BOCOM issued US$2.8 billion in Basel
III-compliant additional tier-1 capital bonds that
were offered under Regulation S format and listed
on the Hong Kong Stock Exchange in November
2020. The instruments have no maturity date,
although they have a call date after a five-year
period. The AT 1 structure for the BOCOM issue
is the first adopted by a Chinese issuer offshore.
488
in China's insurance sector. The perception of companies listed in the US. Such actions were
government support will ease the pressure on
China Life's standalone credit fundamentals (Fitch). not to decouple from China's financial sector
Financial Securities but to suppress Chinese companies that pose
The US really does not want to decouple a challenge to US competitors. Washington
from China in the financial industry. The Trump
administration's actions against short video- aims to prevent Chinese enterprises from
sharing app TikTok, the tightening regulatory
scrutiny of Chinese companies listed in the US, and participating in areas related to the so-called
some news of individual companies delisting from
the US stock market, have all boosted discussions national security, hoping to maintain the US
on the reported US initiative to decouple from
China in the financial services sector. Any action companies' international competitiveness
like decoupling will hurt the two sides; instead,
cooperation will achieve a win-win situation. through improper means. Financial capital is
Operations relating to flows of global capital
denominated in the US dollar are the foundation globalized, and the boundaries of international
that sustains the international monetary system.
If the US dollar does not participate in China's financial capital flows are blurred. As we can see,
economy and financial market, it could mean
the US will likely end up weakening the whole Chinese companies will list in the US even if the
monetary system. China's economy is the second-
largest in the world. Its exports account for about US government tightens regulatory scrutiny.
12 percent of the global total. China's capital
market is the world's second-largest. However, With the development of financial globalization,
the global monetary system is still dominated by
the US dollar. There is a significant asymmetry the power of the international capital dominates
in the proportion of the US economy, trade and
the dollar in the international monetary system. the development of global financial markets.
So far, about 50 percent of the global trade
settlements are done in the US dollar. China is Enterprises can choose the ways of financing, but
an important participant and promoter of global
trade. However, a large part of the trade is still there are certain differences determined by the
settled in US dollars. The greenback accounts for
about 60% of global official reserves and nearly cost of financial capital arbitrage. The financial
85% of global foreign exchange transactions.
China's huge foreign exchange reserves are also integration between China and the US has entered
denominated in the US dollar. If China does not
use the US dollar but chooses the euro or other a new stage, which is mainly determined by the
currencies to settle its trade deals, it will shock
the US dollar system. So, the US will not take the high-quality opening-up of China's capital market
risk of decoupling from China, because that will
weaken the US dollar system. The US has added and the profit-seeking behavior of the US capital.
some Chinese tech companies, including ZTE and
Huawei, to its so-called Entity List and carried out US investors hold a large amount of securities in
sanction measures. It also took unreasonable
actions against enterprises such as Byte-Dance, China's capital market, which was about US$260
and tightened regulatory scrutiny of Chinese
billion in 2018, accounting for 2.3% of their
holdings of foreign securities. Chinese investors
also hold a large number of US securities, including
more than US$1 trillion in treasury bonds. In June
2020, JPMorgan received the approval to open a
wholly foreign-owned futures company. And in
the same month, American Express received the
approval to establish its joint venture with Lianlian
DigiTech Co Ltd. AmEx became the first foreign
bank card provider to do clearing business on the
Chinese mainland. In addition, capital flows into
China's securities market this year have reached
a record high, and a part of the funds came from
US investors.
Meanwhile, Big state-owned lender Bank
of Communications (BOCOM) has become the
first Chinese bank to issue perpetual bonds
offshore. BOCOM issued US$2.8 billion in Basel
III-compliant additional tier-1 capital bonds that
were offered under Regulation S format and listed
on the Hong Kong Stock Exchange in November
2020. The instruments have no maturity date,
although they have a call date after a five-year
period. The AT 1 structure for the BOCOM issue
is the first adopted by a Chinese issuer offshore.
488
