MNI INTERVIEW: China To Facilitate O/S Investors-PBOC Official
MNI (BEIJING) - China will continue to facilitate foreign institutional investors to enter its private equity and venture capital markets and further open up its interbank bond market in a bid to attract funds for key sectors and steadily strengthen the yuan's global role, a senior People's Bank of China official told MNI.
Shanghai financial regulators will carry out foreign exchange management involving the Qualified Foreign Limited Partner (QFLP) pilot programme at an effective and pragmatic pace as the city strives to build a global asset management hub, said Jin Penghui, president of the PBOC Shanghai Head Office.
The QFLP, introduced in Shanghai in 2010, is one of the most important channels for foreign equity investment in China under the condition that the country's foreign exchange management and the yuan is not fully convertible.
Jin, a deputy to the National People's Congress, introduced that as of the end of 2024, a total of 95 institutions had been approved for the programme, with cumulative investments exceeding CNY50 billion, more than half of those in the high-tech sector.
The PBOC Shanghai Head Office is also operating a pilot mechanism for cross-border investment by equity investment funds in tech enterprises, and will use structural monetary tools to support tech innovation through diversified financing channels such as credit, equity and bonds, Jin said. (See MNI INTERVIEW: PBOC To Spur Tech Firm Bond Issuance)
YUAN INTERNATIONALISATION
China has continued to promote the cross-border use of the yuan over recent years and the Shanghai authorities will guide financial institutions to diversify yuan-denominated financial products, and improve free trade accounts to encourage the yuan's use in cross-border trade, investment, and financing, Jin noted. Chinese and foreign financial institutions will be encouraged to cooperate and provide more services to meet enterprises' practical yuan cross-border needs, he continued.
Authorities will also enhance the international influence of yuan-denominated bonds and commodity futures markets, Jin noted, pointing to the growing use of Shanghai-listed gold, crude oil and copper prices as benchmarks. A total of 1,156 overseas institutions had participated in the interbank-bond market at the end of 2024, with holdings of CNY4.16 trillion, he said.
The PBOC Shanghai Head Office has initiated pilot policies to provide multi-currency cash pool operations to streamline liquidity management by multinational firms, and to strengthen support for cross-border investment and financing, he said.
PROPERTY MARKET
As a first-tier city and the mainland's largest financial centre, the Shanghai property market is a leading indicator for nationwide trends. Jin said the real-estate market had rebounded in activity since the beginning of the year.
Prices for both new and used homes are stabilising, and real-estate loans have increased year-on-year thanks to policy measures including reductions to down payments and mortgage interest rates, he continued.
Jin noted the PBOC had also moved to support troubled developers, guiding lenders to increase loans for real-estate projects. The PBOC Shanghai Head Office will continue to monitor the property market closely, and promote its healthy development, he said. (See MNI INTERVIEW2: China Developers Need More Help To Consolidate)