2/6/2021 Financial News: Suzhou Kicks Off A New Round Of Digital RMB Testing

Image source: https://www.piyao.org.cn/2020-09/02/c_1210782572.html

1.The Peak of Debt Repayment of Real Estate Enterprises Is Coming Soon

On February 5, according to CRIC statistical analysis, the total debt servicing of real estate enterprises in 2021 is approximately RMB 1,639.32 billion, and the debt repayment peak will occur in March and April 2021. In this regard, market participants believe that real estate companies may increase promotional efforts to withdraw funds. In January, many small and medium-sized real estate companies were issuing bonds, actually “borrowing the new to repay the old” to make their own funds more abundant. In fact, the recent real estate company China Fortune Land Development (9.450, 0.00, 0.00%) announced that it had overdue debt (the amount of principal and interest involved was 5.255 billion yuan), which precisely reflects the great financial pressure of some real estate companies.

2.Suzhou Kicks Off A New Round Of Digital Rmb Testing And Distributes 30 Million Yuan In New Year Red Envelopes

After issuing 20 million digital RMB consumption red envelopes in December last year, Suzhou, Jiangsu issued 30 million digital RMB New Year red envelopes on February 5, each with a value of 200 yuan, totaling 150,000. Currently, digital RMB is undergoing internal closed pilot tests in Shenzhen, Suzhou, Xiongan New District, Chengdu, and future Winter Olympics scenarios. In terms of the pilot situation, the closed test content of the four pilot cities is mainly focused on small amount, retail, and high-frequency business scenarios. In terms of consumer payment methods, scan, touch, and face payment have been fully applied in digital currencies.

3.Foreign Banks in China Are Forced To Reduce Foreign Currency Loan Business Due To New Regulations

In December last year, the Central Bank of China and SAFE lowered the macro-prudential adjustment parameter for cross-border financing of financial institutions from 1.25 to 1. The new rules and regulations include foreign currency deposits deposited by foreign entities in financial institutions, foreign interbank foreign currency deposits, foreign currency lending, and foreign currency transactions between banks and affiliates in the calculation of cross-border financing risk-weighted balance. This measure will directly lower the upper limit of the risk-weighted balance of cross-border financing of financial institutions, which is intended to reduce the pressure on capital inflows and ease the rise of the RMB.

4.A Huge Loss of More Than 6 Billion Yuan, Only One Year From The Peak To The Bottom

According to a number of employees revealed on social media, BAIC BJEV is not only implementing the first full pay cut since its establishment 12 years ago, but also launched the layoff plan at the end of the Chinese Year, and has clearly issued a list of layoffs, with a ratio of 20%. Even some executives responsible for research and development are on the list.

5.Alibaba Will Issue Us$5 Billion In Bonds

Alibaba Group launches a US dollar bond issuance with a financing scale of up to US$5billion, which will be the largest US dollar bond issuance in Asia in eight months. Alibaba plans to issue 10-year, 20-year, 30-year, and 40-year bonds. The preliminary price guidelines are set at approximately 130 basis points, 140 basis points, 150 basis points and 160 basis points higher than US Treasury bonds. Bloomberg reported earlier last month that Alibaba’s initial goal was to raise at least US$5 billion through bond issuance, and the scale may increase to US$8 billion based on demand.

6, Luckin Coffee Files Bankruptcy in U.S., Will Keep Shops Open

Embattled Chinese coffee chain Luckin Coffee Inc. filed for Chapter 15 bankruptcy in New York, less than a year after the company said that more than a quarter’s worth of business may have been faked. The move is designed to protect the company from lawsuits by U.S. creditors, including bondholders owed $460 million and shareholders. Luckin’s coffee shops in China will remain open and operations won’t be affected by the filing, according to a statement issued on Friday.

7.SMIC Says It Is Unable to Keep Up with Customer Demand Amid Chip Industry Shortage And Sanctions Squeez

SMIC is a key player in China’s efforts to build up its domestic semiconductor manufacturing capabilities, but sanctions by the former Trump administration have curbed U.S. companies from supplying it. SMIC is also an important player in the global semiconductor supply chain, which is under heavy pressure as pandemic lockdowns drive up demand for electronics such as laptops and phones.

By 【Financial Team】

News Collection: Kate, Sharon

Translation & Writer: 小海星 (Starfish)

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