CHINA’S securities regulator has ratcheted up the frequency of interactions with global banks, intensifying what had been quarterly discussions to sometimes weekly or ad-hoc queries aimed at gathering perspectives on recent stimulus measures, according to sources familiar with the matter.
Over the past few weeks, the regulator has especially had an interest in revisions global banks make to their economic forecasts and analysing daily flows to understand foreign investment trends, the sources said, asking not to be identified because the deliberations are private.
Investors have had mixed reactions to Beijing’s latest stimulus package, which offered partial relief on local government debt but fell short of the robust fiscal support many had anticipated. The effort to gather data and feedback signals Beijing’s heightened urgency to revive the economy, as regulators have typically mainly held quarterly roundtables with foreign banks operating in the country.
In discussions with one of the banks, the regulator sought advice on how to boost foreign sentiment and appetite for Chinese assets, one of the sources said. In the back and forth, the banks suggested holding international roadshows to clarify the new policies and improving communications with the market.
The China Securities Regulatory Commission did not respond to a request for a comment.
At a rare joint press conference in late September, China’s three top financial regulators unveiled a broad package of measures to help the US$18 trillion economy, including interest rate cuts, more support for the stock and property markets, steps to reduce local debt risks and a recapitalisation of the big state-owned banks.
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The moves prompted a number of economists to upgrade their economic growth forecasts as well as rally in Chinese stocks. Still, enthusiasm quickly waned as investors held off to see whether authorities will deploy even greater fiscal support. Donald Trump’s election victory, which could lead to higher tariffs on China, has also added to the uncertainty over China’s economy.
At the same time, global banks have struggled to expand in mainland China years after the nation opened its financial market to full ownership for foreign institutions. Many have put the brakes on expansion plans, but are maintaining a presence should economic growth and dealmaking pick up.
The People’s Bank of China also last week held a symposium with representatives from foreign financial institutions including HSBC Holdings, Standard Chartered, and Citigroup, according to a statement. Governor Pan Gongsheng said it would continue to implement accommodative monetary policy, expand connectivity between domestic and overseas financial markets and enhance communications with the market.
Premier Li Qiang last week expressed confidence that his government can pull off an economic recovery. A private gauge of services activity last month expanded at the fastest pace since July, a sign that consumer demand may be on the mend. A report on Thursday (Nov 7) showed export growth surged in October to the fastest since July 2022. BLOOMBERG
