MNI China Press Digest Oct 13:Investment, Special Bond, Pandas

Highlights from Chinese press reports on Friday:

• China will continue to reduce reasonably the negative list for foreign investment access and study the feasibility of further canceling or relaxing restrictions on foreign equity ratios, said He Yadong, spokesman at the Ministry of Commerce. Chen Jianwei, professor at the University of International Business and Economics, expects modern services and advanced manufacturing industries to benefit, such as financial services, vocational education, medical and health, alogside high-end equipment and biomedicine. The government has reduced the 2021 version of the negative list to 31 items, while further relaxation on foreign equity ratios in software and information technology is possible, said Xiao Benhua, deputy head at the FTZ research institute with the Shanghai Lixin University of Accounting and Finance. (Source: Securities Daily)
• Local governments have begun to prepare special bond projects in 2024 and they are allowed to expand the use of such bonds to invest in urban village renovation and affordable housing. The amount of new special bonds next year may be around CNY3.5 trillion and if 10% of it were prioritised to support these two areas, it could bring about CNY400 billion. Previously, special bond funds were forbidden to use in real estate-related fields, debt replacement and projects that can be fully commercialised. (Source: 21st Century Business Herald)
• Panda-bond issuance has grown rapidly this year, supported by the economic recovery, lower financing costs, increased varieties and rising demand for yuan assets, said Fan Ruoying, researcher at Bank of China Research Institute. A total of 73 panda bonds totaling CNY126.4 billion were issued as of Oct 12, which exceeded 2022's volume with 52 bonds totaling CNY85 billion, a rise of 62% y/y. Authorities will likely improve the efficiency of registration and issuance, including the introduction of a regular issuance plan for panda bonds, said Tian Huimin, commentator at Beijing Reform and Development Research Association. The return of red-chip companies can also help promote the expansion of the panda-bond market, said Tian. (Source: Securities Daily)