Non-bank payment service providers to be overseen by the PBOC
Jun-28-2010 By : agxadmin
Non-bank payment service providers such as Alipay and Paypal will be supervised by the People’s Bank of China (PBOC) under new rules which will come into effect in September. They will have to apply for a license from the central bank within one year and be required to submit financial reports and client information, and if they take client deposits, they must set up a special reserve account at a commercial bank. The online payment market reached CNY555 billion on September 1 last year, up 135.6% from 2008. Non-bank payment service providers will need to have a registered capital of at least CNY100 million for a nationwide business license, and should have been making profits for two successive years. Separate rules will be issued for foreign-funded companies, which could face stricter requirements. The nation’s online payment market has been growing at more than 100% annually in the past five years. According to industry experts, there are more than 100 online payment companies in China, but there are also problems due to a lack of regulation. Alipay had a 52% share of the online payment market in 2009, followed by Tenpay, an online payment unit of Tencent, with 24.7%.
Munich Re looking for joint venture partners
By : agxadmin
Munich Re is looking for Chinese partners to form life and property insurance joint ventures, Chief Executive Nikolaus von Bomhard told a briefing. Munich Re opened its first representative office in China in 1997 and it obtained a reinsurance operating license in 2003, the first international company to receive such approval in the country. It hopes to set up a joint-venture life insurer, to be followed later by a property venture. A foreign investor can own up to 50% of a joint-venture life insurer while the investment cap for a non-life insurer is set at 25%. The company is now actively working with several clients to develop new products. The insurance penetration rate is low in China at 3.3%, compared with 7.8% in the U.S. and 6.6% in Germany, Munich Re said.
China and Australia ink investment deals
By : agxadmin
China is keen to strike a free trade pact with Australia soon and opposes any return to protectionism by countries in response to the global economic crisis, Vice President Xi Jinping said in Canberra. Bilateral free trade talks started in 2005 and will enter a 15th round in Beijing this month. During Xi’s visit, 10 agreements were signed, most related to resources and energy. The deals included a facility agreement for USD1.2 billion between Karara Mining and the China Development Bank (CDB) to develop a port and rail infrastructure at Oakajee in Western Australia; a memorandum of understanding (MOU) between Aquila Resources and CDB to develop and expand Aquila’s coal and iron ore mining projects in Western Australia; and a cooperation agreement for China Gezhouba Group to provide procurement, engineering and design services to Fortescue Metals Group.
Yuan-denominated cross-border trade to be expanded
By : agxadmin
China widely expanded a trial program on yuan-denominated cross-border trade. The program, started last July in Shanghai and four cities in Guangdong province, is spreading to 20 provinces and will cover trade with any country, the People’s Bank of China (PBOC) announced. The settlement will apply to trade in services, not just products, as before. Up to now, the trial has been limited to 365 firms in Shanghai and four Guangdong cities, allowing them to use the yuan to settle trade with counterparts in Hong Kong, Macao and the 10 countries of the Association of Southeast Asian Nations (ASEAN). HSBC finished a cross-border yuan settlement in Qingdao, Shandong province, its first transaction in the expanded program. Standard Chartered Bank has already launched road shows on the program in Hong Kong, South Korea, Japan, and in London, Frankfurt and Paris to attract more companies to join the program. Companies in China have to meet certain standards and gain approval. The trial will eventually be expanded nationwide, the Shanghai Daily reports.
Mainland and Taiwan to sign ECFA this week
By : agxadmin
Taiwan and the mainland are expected to sign the Economic Cooperation Framework Agreement (ECFA) when Taiwan’s top negotiator Chiang Pin-kung meets his mainland counterpart Chen Yunlin in Chongqing from June 28 to 30. This will be the fifth meeting between the two since Taiwanese President Ma Ying-jeou took office in 2008. 539 industrial items from Taiwan are expected to be allowed preferential tariffs under the agreement, covering industries ranging from petrochemicals to car parts worth USD13.8 billion. Mainland companies will receive advantages on 267 products in the Taiwan market, worth USD2.86 billion. The value of the products accounted for about 10% of Taiwan’s total imports from the mainland last year. Under the agreement, Taiwanese companies will receive tariff benefits on the mainland similar to those received by Southeast Asian countries under a trade pact that went into effect earlier this year. The two sides also worked out provisions protecting intellectual property rights and regulating cross-strait banking. Further negotiations on commodity trade and service trade pacts will be held six months after the signing of the ECFA agreement.
Both sides will also agree to open markets for some non-financial services, with the mainland opening up accounting, auditing, hospitals and aircraft maintenance and repair, and Taiwan removing restrictions on research and development (R&D), conferences and exhibitions, and computer bookings for air transport services. On the financial services front, the mainland will allow Taiwanese banks to operate yuan currency services, including financing, for solely mainland-based Taiwanese firms, but Taiwan will only allow mainland banks to set up offices that could become branches after a year. The mainland will let Taiwanese insurance firms apply to enter the mainland market, based on current criteria applying to foreign firms, and will also allow Taiwanese securities professionals to get accreditation for practicing on the mainland.
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