MNI China Press Digest Nov 8: PBOC, CSRC, FX Reserves

Highlights from Chinese press reports on Wednesday:

• The People’s Bank of China plans to establish a bond default resolution framework and an early warning mechanism for SOE bond defaults, the PBOC said in an article on its website. The central bank will improve judiciary and administration processes and build a variety of market-based default resolution methods to promote the orderly clearing of credit risks, and enhance market resilience. Additionally, the PBOC will strengthen the regulation of secondary transactions in the bond market and improve market liquidity. (Source: PBOC Website)
• China will further strengthen its connection with overseas markets, optimize the Qualified Foreign Institutional Investor (QFII) programme, and attract more overseas institutions to operate in its capital market, said Wang Jianjun, vice chairman of China Securities Regulatory Commission in a speech at the Global Financial Leaders' Investment Summit. The CSRC will implement new overseas listing regulations for mainland companies to list conveniently in Hong Kong. For Stock Connect, authorities will promote the inclusion of large-sized transactions and add a yuan trading desk option, according to Wang. (Source: Securities Daily)
• China's foreign exchange reserves dropped by USD13.8 billion to USD3.1 trillion by end of October, according to the State Administration of Foreign Exchange. China, which holds USD800 billion of U.S. treasury bonds has seen a decrease in FX reserves due to a sharp fall in U.S. bond prices, said an unnamed Wall Street hedge fund manager. The 21st Century Business Herald noticed China has increased its gold reserves by 740,000 ounces to 71.2 million ounces by end-October, the 12th consecutive month of increases, to improve its FX reserve asset security.