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1. LPR Cut for the First Time in 20 Months

The last loan prime rate (LPR) for 2021 was released: 1-year LPR was cut by 5 basis points, and 5-year LPR was unchanged from the previous one. On December 20, the People’s Bank of China authorized the National Interbank Funding Centre (NIFC) to announce that the quoted LPR rate was 3.8% for the 1-year LPR and 4.65% for the 5-year LPR and above on December 20, 2021. Previously, LPR quotes have been “unchanged” for 19 consecutive months.

2. Communist China’s Property Distress Spill Over into Steel Sector

The debt problems of Communist China’s real estate developers have now spilled over into one of the key arteries of the country’s industrial engine, the steel industry, and are beginning to spill over into other key areas of the world’s second-largest economy. The spreading balance sheet crisis for real estate companies is a cautionary tale for policymakers, as the ups and downs of the steel sector will have a major impact on the Chinese economy, with cement, glass and home appliances all vulnerable to falling demand. Steel prices have already retreated from record highs earlier this year due to a slowdown in demand from the construction sector, which accounts for more than half of steel consumption, while steelmakers’ share prices have also taken a hit.

3. Communist China’s SOE Reform Plan 70% Complete

The reporter learned from State-owned Assets Supervision and Administration Commission (SASAC) that since this year, the SASAC has promoted six cases of restructuring and integration of state-owned enterprises (SOE), the so-called modern enterprise system and state-owned capital regulatory system of the Communist China has taken substantial steps toward maturity and finalization. From January to November, the total profit of SOE was RMB 2.3 trillion and net profit was RMB 1.75 trillion. In the first three quarters, SOE completed investment of 726.7 billion yuan in strategic emerging industries, up 6.3% year-on-year. 70% of the target tasks of the three-year action of SOE reform have been completed.

4. Foreclosure to be Fully Implemented with Home-purchase Restriction

The Supreme Court released on its official website the “Provisions on the Qualifications of Bidders for Judicial Auction of Real Estate in the People’s Courts”, which was adopted by the 1846th meeting of the Judicial Committee of the Supreme People’s Court in September this year and will come into effect on January 1 next year. It is clearly pointed out that the People’s Court will not allow the bidders who are subject to the restrictive purchase policy of the property location to apply for participation in the judicial auction organized by the People’s Court. This means that purchasers who do not have the qualification to purchase a house in the location of the property being auctioned cannot participate in the foreclosure bidding. In addition, if a bidder applies to participate in the auction, he or she should undertake to be qualified to purchase the property and voluntarily bear the legal consequences.

5. Communist China Pension Development Report 2021 Released

The release ceremony of Communist China Pension Development Report 2021 was held in Beijing recently. Authorities in the industry discussed the topic of “pension funds and ESG investment”. According to the report, the three types of domestic pension funds have reached RMB 13 trillion at present. Entering the ESG (Environmental, Social and Corporate governance) field will find more great investment opportunities, enhance the ability to preserve and increase value, and better react to the aging of the population. However, industry insiders also believe that the overall scale of Communist China’s pension funds is still small, the proportion of green and sustainable investments is not yet high, the lack of data, the lack of uniform evaluation standards and the lack of mandatory information disclosure are the external environment that restricts ESG investment by pension funds.

6. REHT and CRE Signed Strategic Cooperation Framework Agreement

Inner Mongolia Baotou Steel Rare-Earth (REHT) announced in the evening of December 19 that it signed a strategic cooperation framework agreement with China Rare Earth Holding Co. (CRE). The two sides will strengthen communication on the existing rare earth industry and business of CRE, and cooperate in the southern mine and northern mineral energy; the two sides will cooperate on rare earth trade and rare earth deep processing to extend the rare earth cooperation industry chain; the two sides will maintain close communication and consultation, make full use of the overseas capital platform of CRE to revitalize the assets of both sides and improve the industrial aggregation of both sides; according to the specific situation of the project and market, the two sides can adopt various cooperation modes, and the two sides agree to provide each other with the most favorable cooperation conditions to promote the sound operation of the project, and the specific cooperation will be signed in a separate investment cooperation agreement.

7. China’s Corn Imports Plunge 35.7% YOY in November

(Reuters) China’s corn imports plunged to a 19-month low in November from a year earlier due to rising costs and weak demand, customs data showed Saturday. China imported 790,000 tons of corn in November, down 35.7 percent from a year earlier. It was 1.3 million tons in October, according to data from the General Administration of Customs. A trader based in Asia, who asked to remain anonymous, said high transportation costs led to lower arrivals. November imports were the lowest since May 2020. Customs data showed that China imported 27.02 million tons of corn in the first 11 months of the year, up 199% from the same period a year earlier.

8. Sensetime Relaunches IPO

On December 20, AI software company Sensetime relaunched its public offering. The offering of 1.5 billion Class B shares, priced between HK$3.85 and HK$3.99 per share, will raise approximately HK$6 billion, in line with previous offerings in terms of size, amount raised and pricing range. CICC, Haitong International and HSBC are acting as joint sponsors. The public offering of Shang Tang begins at 9:00 a.m. on Monday, December 20, 2021, and closes at 12:00 noon on Thursday, December 23, 2021. Dealings are expected to commence on Thursday, 30 December 2021 on the Main Board of the Hong Kong Stock Exchange under the stock code 0020 in board lots of 1,000 shares.

【G Translators- Financial Team】
Author: Rosy Cloud