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PBoC calls for global cooperation in macro policies

(ATF) – The G20 should continue to be a global platform for key countries to discuss their macroeconomic policies and seek coordination, Yi Gang, governor of People’s Bank of China (PBoC), said in a speech during the G20 Finance Ministers and Central Bank Governors meeting.

The video-conference meeting was chaired by the Saudi G20 Presidency on Monday, but its content was only released on the PBoC website on Wednesday.

Yi said China supported the International Monetary Fund (IMF) in its role as the core of the global financial safety net to help maintain the stability of the global economy and financial markets. He said all G20 members should increase their cooperation and launch macro policies at the same pace to jointly reduce the negative impact of the Covid-19 pandemic on the global economy. 

Participants at the meeting agreed to work closely with the IMF and international financial firms to mobilize all available resources and explore new measures needed to support the emerging markets and developing economies.

Central bank bills swap

On Wednesday, PBoC conducted central bank bills swap (CBS) operations to improve the liquidity of bank-issued perpetual bonds, support banks to replenish capital through perpetual bond issuance and enable the financial sector to better serve the real economy. The operation registered 5 billion yuan (US$714 million), with a term of three months and a rate of 0.10%.

The PBC said it will conduct CBS operations steadily and prudently in a market-oriented manner while taking into consideration both market developments and the actual demands of primary dealers.

Renminbi to rebound

The international foreign exchange market has recently been very volatile due to the Covid-19 pandemic, but renminbi remained relatively stable with only a small fluctuation, said Wang Youxin, a researcher at the Bank of China Research Institute.

The reason was because the epidemic situations in China and the United States were different, Wang said. The US economy may see a 20% decline in the second quarter of this year, he said, citing forecasts by some global investment banks including Goldman Sachs and Morgan Stanley.

Also, the US Federal Reserve has used most of its monetary tools, while China still had a lot of room in its monetary policies, he added. Foreign funds only invested in about 2% of all the onshore renminbi stocks and bonds in China. Even if they disposed of these assets, in the short term the impact would be limited, Wang said.

Wang expected a rebound in renminbi as the Chinese economy will recover rapidly in the second quarter.

Company news

Between February 4 and March 24, a total of 334 Shanghai- and Shenzhen-listed companies announced buybacks of their shares from the markets, according to data compiled by Wind.com.

The buyback plans of 113 companies, including Zhongke Electric and Perfect World, have been approved by their boards. The buyback plans of another 54 companies, including China Quanjude and Hengrui Medicine, have been approved by their shareholders. A total of 135 companies, including Midea Group and Shandong Dong-e E-Jiao, are buying back their shares from markets, while 111 other firms have finished their buyback programs.

Hiconics Drive Technology, a listed company on the GEM board of the Shenzhen Stock Exchange, said its parent Shanghai Shangfeng Group and shareholder Liu Jincheng plan to sell the controlling stake of the company to a subsidiary of the Shenzhen-listed Midea Group. After the transaction, Midea’s co-founder He Xiangjian will become the company’s controlling shareholder.

Hiconics has registered capital of 1.129 billion yuan and engages in solar energy, photovoltaic, wind power, high voltage frequency converters and new energy vehicle businesses.


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