China Press Digest Oct 26: Overseas Listings, PBOC, SOE Bonds

The following lists highlights from Chinese press reports on Tuesday:

• China will accelerate the resolution of issues related to the audit and supervision of companies' overseas listings and strengthen cross-border investment monitoring, the Shanghai Securities Journal reported citing a speech by Fang Xinghai, deputy chairman of the China Securities Regulatory Commission. The aim is to improve domestic issuance and listings for overseas entities along with regulations on overseas listings, so that Chinese companies can make better use of both the domestic and international capital markets, said Fang. China will improve and expand the Shanghai-Shenzhen-Hong Kong Stock Connect, Shanghai-London Stock Connect, and China-Japan ETF Connectivity, as well as further opening the futures market, Fang was cited as saying.
• The PBOC will orderly carry out climate risk stress tests to respond to any financial stability issues, and improve the green financial system including the establishment of a carbon pricing mechanism, the Shanghai Securities Journal reported citing a speech by PBOC Deputy Governor Liu Guiping. China's coal-based energy and power structures are difficult to fundamentally change in the short term, so financial support cannot be simply withdrawn from the traditional sector too quickly, the newspaper cited Liu as saying. Financial institutions should continue to supply projects meeting the standards of reducing or substituting coal consumption, and seek the orderly exit of projects that fail to meet environmental requirements, said Liu.
• Many provinces in China including Hebei, Henan and Guangxi have set up, or are prepared to establish, credit guarantee funds to help resolve risks of state-owned enterprise bonds, the 21st Century Business Herald reported. Such funds are mainly sourced from local finances, SOEs and financial institutions, and will provide credit guarantees and short-term liquidity support for up to three months to SOEs to avoid bond defaults, the newspaper said citing an unnamed insider. The establishment of such funds can help to improve local credit environment, though the final effect could still be limited by the attitude of the government, the management model and size of the fund, the newspaper said citing analysts.