Chinese politics and policy updates
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The central bank of China has encouraged a further “correction” of the country’s fintech sector and put more pressure on the technology groups applied by intensifying the regulatory investigation.
Beijing’s latest warning, which did not name any companies, comes against a backdrop of intensifying headwinds for Chinese technology groups, stock markets and foreign investors in the world’s second largest economy.
Billionaire Jack Ma’s fintech Ant Group, China’s biggest coaching app Didi Chuxing and the $ 100 billion education industry has been targeted in a snowballing regulatory collapse that threatens to interfere with other technology groups, including Tencent. The delivery platform Meituan and Ma’s e-commerce company Alibaba is subject to antitrust investigations.
The People’s Bank of China has called on fintech companies to improve competition and consumer rights, as this calls for stricter supervision illegal crypto-currency activities while also continuing his own efforts to digital renminbi, reads a statement released Saturday.
Investors are ready for long-term uncertainty. At a summit meeting chaired by Xi Jinping, President of China, the authorities promised on Friday stronger controls for Chinese companies selling shares overseas. The same day, US regulators said Groups in China will have to disclose more about their structure and contact with the government in Beijing.
Despite signs from the Chinese economy experiencing an uneven economic recovery from the coronavirus pandemic, the PBOC has vowed to refrain from “flood-prone” stimulus measures because it promises the stability of monetary policy.
The message from Beijing’s central bankers comes as a key measure of the health of the manufacturing industry in China, reflecting a worse-than-expected slowdown in July.
China’s official purchasing managers’ index fell to 50.4 from 50.9 in June last month, reflecting rising inflationary pressures, shrinking export growth and the effects of extreme floods in parts of the country.
While the index was above the 50-point mark separating the contraction from contraction, July was the weakest reading since February 2020, when China was hit by major closing measures.
Analysts at Goldman Sachs, which forecast a growth of 50.7, noted that China’s new suborder index for export orders fell to 47.7 in July from 48.1 in the previous month, the lowest since June last year.
The slowdown in Chinese manufacturing activity followed Beijing warnings of an unbalanced economic recovery when it reported a quarter-on-quarter GDP growth of 1.3 percent for the three months to June.
Health officials are struggling with China’s prospects of a coronavirus outbreak that has spread from Nanjing, the provincial capital of eastern Jiangsu province, with cases transmitted locally to seven other provinces. The National Health Commission of China said in its latest update that 53 new cases have been transferred locally.
Additional Reporting by Sun Yu in Beijing