MNI China Press Digest Dec 28: CBIRC, Bank Rules, Covid Peak

Highlights from Chinese press reports on Wednesday:

• China’s top banking watchdog will work to resolve dangerous local government hidden debt and prevent the resurgence of high-risk shadow banking, according to the Shanghai Securities News. The China Banking and Insurance Regulatory Commission (CBIRC) said it would proactively address the risk of deteriorating quality credit assets, and encourage banking institutions to increase the disposal of non-performing assets. The CBIRC also noted at a recent meeting that expanding consumption is a priority, with a focus on service industries and small enterprises, which have been affected by the epidemic. The meeting, which committed to implementing the policies and guidance from the Central Economic Work Conference, was chaired by Guo Shuqing, secretary of the party committee and chairman of the CBIRC.
• China’s top banking regulator has established new criteria to assess the operational risk of foreign banks operating in China including the amount of support they receive from their global headquarters, according to Caixin. For operational risk, the CBIRC will evaluate risk management, operational control, compliance and asset quality. For headquarters support, the CBIRC will look at the level of financial and management support. For risky banks, the CBIRC can take measures such as restricting the outflow of funds abroad, order the suspension of some businesses or the removal of senior management, or remove market access, Caixin said.
• The peak of Covid-19 outbreaks is accelerating and sweeping through smaller cities from first-tier cities such as Beijing and Guangzhou, with medical institutions and staff across the country facing unprecedented challenges and pressures, 21st Century Business Herald reported. Zhejiang province has reported over one million infections per day, with the peak expected to arrive ahead of schedule around New Year’s Day, the newspaper said. While Beijing and Wuhan city are currently fighting the peak of severe cases and aiming to reduce the mortality rate as more patients develop lung infections, the newspaper said. Most locations forecast a peak in infections will be concentrated in January, the newspaper added.