Hi everyone. I’m Stephanie LI.
Hi everyone, I am the host Li Yingliang.
Coming up on today’s program.
Key points
Chinese and Hong Kong securities regulators agreed to further expand the scope of eligible stocks under the mainland-Hong Kong Stock Connect.;
China unveils 20 measures to build basic systems for data.
Here’s what you need to know about China in the past 24 hours
China Economic News
The top securities regulators in the Chinese mainland and the Hong Kong SAR said on Monday that they have agreed in principle to expand the range of stocks eligible under the Stock Connect program between the two capital markets.
The move seeks to further deepen mutual stock market access between the Chinese mainland and the HKSAR and promote the development of both capital markets, according to a joint statement released by the China Securities Regulatory Commission and the Hong Kong Securities and Futures Commission.
The Shanghai-Hong Kong Stock Connect and the Shenzhen-Hong Kong Stock Connect, which started operating in 2014 and 2016 respectively, give mainland and international investors direct access to each other's stock markets.
For northbound trading, eligible stocks will include constituent stocks of the Shanghai Stock Exchange A Share Index and the Shenzhen Stock Exchange Composite Index that have a market capitalization of 5 billion yuan or above and meet certain liquidity criteria.
Stocks of companies listed on the two mainland exchanges that have issued both A shares and H shares will also be included.
For southbound trading, the scope of eligible stocks will be expanded to include stocks of foreign companies primary-listed in Hong Kong that are constituents of the Hang Seng Composite Indices and meet relevant criteria.
Also, the scope of southbound eligible stocks under Shanghai-Hong Kong Stock Connect will be aligned with that under Shenzhen-Hong Kong Stock Connect to include constituents of the Hang Seng Composite SmallCap Index with a market capitalization of HK$5 billion or above.
Preparations for the expansion of eligible stocks will take about three months, and the stock exchanges will announce the official launch date in due course, the statement said.
After the expansion, stocks to be included in the Stock Connect are expected to cover more than 80 percent of the trading volume of stocks in the mainland and Hong Kong markets respectively.
Hong Kong's Chief Executive John Lee Ka-chiu said it will further strengthen "the city's role as a bridge to connect investors in China and overseas", while Financial Secretary Paul Chan Mo-po also said it will be helpful to "lure other high-quality international companies to be listed in the SAR".
On December 19, in order to further deepen the stock market interconnection mechanism between the mainland and Hong Kong, the China Securities Regulatory Commission and the Hong Kong Securities Regulatory Commission issued a joint announcement stating that they agreed in principle to further expand the scope of stock interconnection targets for the exchanges in the two places.
The announcement made it clear that the stock interconnection plans to expand the scope of targets in both directions. The scope of targets for Shanghai and Shenzhen Stock Connect will be adjusted to: A-share index /Shenzhen Stock Exchange Composite Index component stocks with a market value of 5 billion yuan or more and meeting certain liquidity standards, and A+H share companies listed on Shanghai Stock Exchange/Shenzhen Stock Exchange.The target range of Southbound Trading is adjusted to: on the basis of the current Southbound Stock Connect stock targets, the stocks of major foreign companies listed in Hong Kong that meet the relevant conditions are included in the Hang Seng Composite Index, which belongs to the Hang Seng Composite Large Cap Index, Hang Seng Composite Mid Cap Index, market capitalization 5 Major foreign companies listed in Hong Kong that are constituent stocks of the Hang Seng Composite Small Cap Index with a market value of HKD 0 billion or above will be included in the Southbound Trading Link in accordance with the current regulations; the scope of the Hong Kong Stock Connect under the Shanghai-Hong Kong Stock Connect will be expanded to be consistent with that under the Shenzhen-Hong Kong Stock Connect, that is, the Hang Seng Composite Small Cap Index component stocks with a market value of HKD 5 billion or above will be included in the Southbound Connect under the Shenzhen-Hong Kong Stock Connect.
With the approval of the China Securities Regulatory Commission and the Hong Kong Securities Regulatory Commission, the exchange may stipulate the specific conditions for the inclusion of the target, adjustment mechanisms, etc. From the date of this joint announcement to the official implementation of the above plan, it will take about 3 months to prepare. The official implementation time will be notified separately by the exchange.
Relevant persons in charge of the Shanghai and Shenzhen Stock Exchanges said on the same day that the expansion of the target scope is another powerful measure to deepen the pragmatic cooperation between the two places' capital markets. It has positive significance for promoting the coordinated development of the two markets and will help the mainland capital market achieve a higher level of two-way opening up. The Shanghai and Shenzhen Stock Exchanges will work with relevant parties to revise and improve relevant business rules and complete business and technical preparations related to target expansion to ensure the smooth implementation of relevant plans.
has estimated that under this change, the screening range of eligible targets for Shanghai-Shenzhen Stock Connect (northbound trading), which is screened according to index composition and market capitalization requirements, is expected to increase from the original 1,458 to 2,516, and the proportion of covering the A-share market will increase from 28.9% to 50.2%; for the scope of the Hong Kong Stock Connect (southbound trading), a total of 6 companies may meet the inclusion criteria. In the southbound trading under the Shanghai-Hong Kong Stock Connect, it is expected that the 167 targets currently under the Shenzhen-Hong Kong Stock Connect will also be within the tradable range under the Shanghai-Hong Kong Stock Connect.
China released on Monday 20 measures to build basic systems for data, aiming to give full play to China's massive data and rich application scenarios to strengthen the digital economy and boost high-quality economic development, while also stressing regulations to protect national security related to data transactions. According to the document, the country will build basic data systems in four aspects, including data property rights, circulation and transaction, revenue distribution and security governance. The measures also called for the building of a mechanism for data security compliance and orderly cross-border circulation, which supports international exchanges and cooperation in data and calls for exploring safe and standardized cross-border data flow.
"Twenty Data Articles" released : Recently, the Central Committee of the Communist Party of China and the State Council issued the "Central Committee of the Communist Party of China" The State Council’s Opinions on Building a Data Basic System to Better Play the Role of Data Elements, also known as the “Twenty Data Measures,” established four systems including data property rights, circulation and transactions, income distribution, and security governance, totaling 20 policies and measures. In terms of data property rights, it is proposed to promote the classification and classification of public data, enterprise data, and personal data to confirm and authorize rights, and to establish a separate property rights operating mechanism for data resource holding rights, data processing and use rights, and data product operating rights. In terms of circulation and transactions, it is proposed to improve the full-process compliance and regulatory rule system for data, coordinate the construction of standardized and efficient data trading venues, cultivate the circulation of data elements and the trading service ecology, and build a safe, compliant and orderly cross-border circulation mechanism for data. In terms of income distribution, it is proposed to improve the contribution of data elements by market evaluation and determine the remuneration mechanism based on contribution, so as to better play the guiding and regulatory role of the government in the income distribution of data elements. In terms of security governance, it is proposed to innovate the government data governance mechanism, consolidate the corporate data governance responsibilities, and give full play to the collaborative governance role of social forces participating in multiple parties.
Moving on to regional highlights
Regional Observation
China's State Council said Tuesday that it has allowed a further six cities to launch comprehensive pilot programs for opening up the service sector. The six cities, which are Shenyang, Nanjing, Hangzhou, Wuhan, Guangzhou and Chengdu, can carry out the pilot programs for a period of three years, starting from the date when their plans for the programs were approved. The six cities are urged to speed up reform and opening up in the service sector, accelerate development of modern services, and forge new advantages in international competition and cooperation, according to the State Council.
Six cities were approved to carry out comprehensive pilot projects to expand the opening up of the service industry: On December 20, the Chinese government website released the "Reply of the State Council on Approving the Comprehensive Pilot Project to Expand the Opening Up of the Service Industry in Six Cities including Shenyang". Guangzhou, Shenyang, Nanjing, Hangzhou, Wuhan, Chengdu and other six cities were approved to carry out comprehensive pilot projects to expand the opening up of the service industry, with a period of 3 years from the date of approval. This is the first time since Beijing took the lead in implementing a comprehensive pilot program to expand the opening up of the service industry in 2015 that this pilot program has been implemented at the prefectural level. The overall pilot plan will be issued by the Ministry of Commerce authorized by the State Council in the near future.
Greater Bay Area, Greater future
New Mission, Greater Future
Guangdong Province announced Tuesday that private cars in Macau can now apply to enter the mainland. After successful booking, Macau private cars can enter Guangdong via the Hong Kong-Zhuhai-Macau Bridge starting Jan.1. It is estimated that about 80,000 private car owners in the SAR will benefit from the new policy.
Macau private cars will officially enter Guangdong : Deng Zhengyu, director of the Traffic Management Bureau of the Guangdong Provincial Department of Public Security , said that all preparations for the implementation of the "Macau Cars Going North" policy are now in place and will start today (1 Effective from February 20), Macao private car applications will be accepted starting from 14:00 today. From 0:00 on January 1, 2023, Macao private cars will officially enter Guangdong. Macao private cars that have successfully made reservations will be able to drive into Guangdong via the Zhuhai Highway Port of the Hong Kong-Zhuhai-Macao Bridge on the same day. It is estimated that about 80,000 Macau private car owners can enjoy this policy.
Next on industry and company news
INDUSTRY AND COMPANY NEWS
China's National Medical Products Administration (NMPA) said Tuesday the current raw material for two antipyretics, ibuprofen and acetaminophen, is sufficient, and the production capacity for the two medicines is being released amid surging market demand. Data from NMPA showed that 446 domestic companies hold production licenses for producing ibuprofen, 104 of which were in operation in 2021; 986 companies have been permitted to produce acetaminophen with 111 companies in operation as of 2021.
Ibuprofen, acetaminophen and other pharmaceutical raw materials Production capacity is sufficient: On the 20th, the State Food and Drug Administration stated that currently, there are 194 types of antipyretic, antitussive, antibacterial, and antiviral drugs on the market in my country, involving more than 9,000 approval numbers. Although there is a large demand for anti-epidemic drugs such as ibuprofen and acetaminophen, the production capacity of raw materials is sufficient to meet the production needs of domestic preparations. According to data from the 2021 corporate annual report, there are 446 valid registration numbers for ibuprofen, of which 104 are in production in 2021; there are 986 valid registration numbers for acetaminophen, of which 111 are in production in 2021. With the coordination and support of relevant departments, currently, preparation companies in production for these two varieties are gradually releasing production capacity.
A cargo flight using China's self-developed aviation biofuel has arrived in Belgium after a 12-hour journey from Hangzhou, East China's Zhejiang Province, marking the first time that the country uses such fuel for an international cargo route since it was mass produced this year, according to Sinopec Group on Monday.
Bio-jet fuel green international cargo first flight : Sinopec announced on December 19 that the first international cargo flight loaded with my country's independently developed bio-jet fuel took off from Hangzhou and arrived safely in Belgium after a 12-hour flight. This is the first time that international cargo routes have started green aviation with sustainable fuel since the first batch of large-scale production of bio-jet fuel independently developed by my country this year.
China has cut the retail prices of gasoline and diesel from Tuesday based on recent changes in international oil prices. Gasoline and diesel prices will be reduced by 480 yuan and 460 yuan per ton, respectively, the NDRC said Monday. Car owners can save 19.5 yuan to fill up a 50-liter tank.
Oil prices will be lowered again starting today : According to the National Development and Reform Commission, according to recent changes in oil prices in the international market and in accordance with the current refined oil price formation mechanism, a new round of refined oil price adjustment windows will open at 0:00 today. Domestic gasoline and diesel prices will be reduced by 480 yuan and 460 yuan per ton respectively. Taking a private car with a fuel tank capacity of 50 liters as an example, filling up a tank of No. 92 gasoline will save 19.5 yuan. After this price adjustment, the price adjustment of refined oil products this year showed a pattern of "13 increases, 10 decreases, and 1 stranded".
Shares in Shanghai Fosun Pharmaceutical Group advanced today after the Chinese drugmaker said that it has been granted formal approval from the Hong Kong government to take the mRNA Covid-19 vaccines developed by Germany’s BioNTech, for which Fosun Pharma is exclusive China distributor, to market. The two vaccines are now available at hospitals and clinics in Hong Kong and Those who wish to be inoculated should first obtain a prescription from a doctor, the Shanghai-based drugmaker added.
Forbidden COVID-19 vaccine is officially registered in Hong Kong: On December 19, Fosun Pharmaceuticals announced that the mRNA new crown vaccine Forbidden BNT162b2 and the Forbidden bivalent vaccine have been officially registered as drugs/products in Hong Kong, China. Previously, Forbitac BNT162b2, related pediatric dosage forms, infant dosage forms, and Forbitac bivalent vaccine have respectively received Emergency Use Authorization (EUA) from Hong Kong, China, for use in the local government's vaccination plan. Relevant sources from Fosun Pharma said that after the registration of the above-mentioned vaccine , people who are willing to be vaccinated can receive the vaccine at medical institutions or clinics in Hong Kong, China with a local doctor's prescription. The scope of use will no longer be limited to vaccination under the local government's vaccination plan, which means that mainland residents can go to Hong Kong to receive and Fubitai at their own expense in the future.
AIA is set to invest a total of 8.7 billion yuan in its first-ever real estate project in Shanghai. The insurer obtained the north bund plot by splashing out over 5 billion yuan to acquire a 90 percent stake in a project company from units of Shanghai Industrial, a Hong Kong based company mostly owned by the Shanghai government, according to the latter's filing yesterday.
AIA won the Shanghai Bund real estate project for 115 billion: On December 19, AIA Life Insurance Co., Ltd. signed a property rights transaction contract at the Shanghai United Equity Exchange, and won 90% of the equity of Shanghai Shisen and 100% of its shareholder loan claims for a total of approximately 5.03 billion yuan. After the transaction is completed, AIA Life will control and Shanghai Shisen, thereby acquiring the 89 Neighborhood Real Estate Project on the North Bund in Shanghai. AIA Life stated that the overall project is expected to be completed in the first half of 2023. The company will continue to provide funds to complete the construction and subsequent operations of the project. The total project investment is expected to not exceed RMB 8.7 billion.
Switching gears to financial news
financial market news
China's one-year loan prime rate (LPR), a market-based benchmark lending rate, came in at 3.65 percent Tuesday, unchanged from the previous month. The over-five-year LPR, on which many lenders base their mortgage rates, also remained unchanged from the previous reading of 4.3 percent, According to the National Interbank Funding Center.
12 LPR remained unchanged : The last loan market quotation rate (LPR) of 2022 was released and remained unchanged for four consecutive months. The People's Bank of China authorized the National Interbank Funding Center to announce that the loan market quoted interest rate (LPR) on December 20, 2022 was: 1-year LPR was 3.65%, and 5-year and above LPR was 4.3%, both remaining consistent with the previous month.
The Shanghai branch of the People's Bank of China has launched a pilot project in the China (Shanghai) Pilot Free Trade Zone (FTZ) to allow firms to combine yuan and overseas currencies accounts into one, according to media reports on Monday. A total of 242 business outlets from five financial institutions, including the Bank of China and the Industrial and Commercial Bank of China, in the FTZ have participated in the project.
Shanghai Free Trade Zone’s pilot program for integrating domestic and foreign currency bank settlement account systems was launched : The Shanghai headquarters of the People’s Bank of China launched a pilot program for integrating domestic and foreign currency bank settlement account systems in the China (Shanghai) Pilot Free Trade Zone on the 19th. Participating in this pilot are the 242 business outlets of five banking financial institutions in the China (Shanghai) Free Trade Pilot Zone, including the Industrial and Commercial Bank of China, Agricultural Bank of China, Bank of China, China Construction Bank, and China Merchants Bank Shanghai (City) Branch.
Wrapping up with a quick look at the stock market
stock market closing situation
Chinese stocks slumped on Tuesday as the country grappled with surging COVID-19 cases, with the benchmark Shanghai Composite losing 1.07 percent, and the Shenzhen Component fell 1.58 percent. Hong Kong stocks closed with more losses. The Hang Seng index shed 1.33 percent, while the TECH index plunged 3.12 percent.
A-share Hong Kong stocks continued to fall : On Tuesday, the three major A-share indexes opened lower and moved lower throughout the day. As of the close, the Shanghai Index fell 1.07%, the Shenzhen Component Index fell 1.58%, and the GEM Index fell 1.53%. The Shanghai and Shenzhen stock exchanges' full-day turnover was 639.8 billion yuan. Hong Kong stocks continued to fall, with the Hang Seng Index closing down 1.33% and the Hang Seng Technology Index closing down 3.12%.
Biz Word of the Day
Financial Vocabulary Focus
Stock Connect is a pilot program established upon the Mutual Market Access model. For the first time ever, investors in the Mainland and Hong Kong markets are able to have direct access to each other’s stock markets. Under Stock Connect, Hong Kong and overseas investors and their brokers can source market data through information vendors and public websites.
Shanghai-Hong Kong Stock Connect and Shenzhen-Hong Kong Stock Connect are pilot plans for the market interconnection mechanism between the mainland and Hong Kong. The interconnection mechanism allows investors in the two markets to directly enter each other's market for investment. Shanghai-Hong Kong Stock Connect and Shenzhen-Hong Kong Stock Connect are market interconnection schemes that allow investors in Hong Kong and Mainland China to trade and settle stocks listed on each other's markets through exchanges and clearing houses in the local markets.
Executive Editor: Sonia YU
Editor: LI Yanxia
Host: Stephanie LI
Writer: Stephanie LI
Sound Editor: Stephanie LI
Graphic Designer: ZHENG Wenjing, LIAO Yuanni
Produced by 21st Century Business Herald Dept. of Overseas News.
Presented by SFC
Editorial Board: Yu Xiaona
Planning and editing: Li Yanxia
Broadcaster: Li Yingliang
Writing: Li Yingliang
Audio production: Li Yingliang
Design: Zheng Wenjing, Liao Yuanni
21 Century Economic Report Overseas Department Production
Southern Finance Omni Media Group Produced by
For more content, please download 21 Finance APP
