Business
Chinese commercial banks fear stimulus measures will do littl…
China’s commercial banks are raising questions about whether the central bank’s recent cut to outstanding mortgage rates will be sufficient to hold back a flood of mortgage prepayments and help protect bank margins.
The People’s Bank of China (PBOC) unveiled new guidance last month requiring commercial banks to lower interest rates on outstanding mortgages for first-home loans. The new rates, which will be effective starting on September 25, aimed at stimulating consumption while also reducing the incentive for households to pay down their mortgages early, which had led to a decline in bank profits.
“Lowering outstanding mortgage rates will help alleviate the interest burden on households,” a spokesperson for the PBOC told local media on Wednesday, adding that the new rules have already led to a decline in prepayments, and will help improve household balance sheets and consumer confidence.
The measure has led at least some homebuyers to reconsider their mortgage prepayments.
Kang Chao, an insurance company employee in Changsha, in southeast China’s Hunan province, told the Post that a new mortgage rate of 4.2 per cent could help his family free up about 1,700 yuan (US$234) each month to cover living expenses.
“[My wife] and I both took out mortgage loans in 2018 and 2019, when the interest rates were as high as 5.15 per cent,” he said. “Each month, we need to pay about 9,800 yuan, and this leaves us no more than 3,000 yuan to spend on everything else.
“So we were under a lot of pressure to pay off our debt quickly, especially after we had a child. At one point, we were even considering selling one of our houses. Now that the new policy is out, we feel somewhat relieved.”
An estimated US$700 billion in mortgages, representing around 12 per cent of the country’s total mortgage balance, has been prepaid since 2022, according to analysts.
China property support spurs buying but sceptics warn of weak demand
China property support spurs buying but sceptics warn of weak demand
Chinese commercial banks could see an earnings decline of up to 5 per cent this year if the prepayment wave persists, according to analysts’ estimates. However, if banks refinance home loans at lower rates, their net profits could also drop by 1 to 5 per cent, a report by Fitch Ratings said.
Early repayment is a behaviour driven by interest rates, and as the gap between new and outstanding mortgage rates narrows, the incentive to pay down mortgages early will start to decrease, said Gary Ng, senior economist for Asia-Pacific thematic research at Natixis.
“However, it does not mean [lowering outstanding mortgage rates] is a panacea for boosting China’s household confidence in properties,” he said. “The confidence issue is complex, and it will take more than rate cuts to repair. Although early repayment will ease, mortgage growth is not likely to see a significant jump.”
A banking analyst at the Beijing branch of a commercial bank echoed this…
Business
BRICS: China Classifies Crypto as Property and Prohibits Business Ownership
China’s Shanghai court ruled cryptocurrencies are property, boosting optimism in the crypto industry while maintaining a ban on business transactions. This may signal a shift in future regulations.
China’s Ruling on Cryptocurrency
In a pivotal decision for the nation and its BRICS alliance, China has officially classified cryptocurrency as property while maintaining prohibitions against business transactions involving digital assets. A notable ruling from the Shanghai Songjiant People’s Court affirmed cryptocurrencies as property, sparking optimism within the crypto industry regarding future regulations.
Implications for the Crypto Industry
As cryptocurrencies gain significance globally, the Chinese ruling is viewed as a potential-positive shift amidst ongoing restrictions. While individuals can hold virtual currency, businesses remain barred from engaging in investment transactions or issuing tokens independently. This decision has generated anticipation for more accommodating regulations in the future.
Future Prospects for Cryptocurrency in China
Experts like Max Keiser believe this ruling indicates China’s growing acknowledgment of Bitcoin’s influence. As BRICS nations explore increased cryptocurrency utilization in trade, this legal shift could enhance market demand and lead to greater acceptance of cryptocurrencies as a legitimate asset class, setting the stage for potential developments in 2025.
Source : BRICS: China Rules Crypto as Property, Bars Business Holdings
Business
Wegovy: The Popular Weight-Loss Drug Now Available in China
Novo Nordisk launched Wegovy in China after approval, competing with Eli Lilly’s upcoming weight-loss drug. The treatment, costing 1,400 yuan, targets obesity but has potential side effects and isn’t covered by healthcare.
Wegovy Launch in China
Novo Nordisk recently launched its weight-loss drug, Wegovy, in China after obtaining approval from local health authorities in June. The introduction of Wegovy is expected to increase competition with Eli Lilly, which has also received approval for its weight-loss treatment, although it has not yet been released in China’s significant pharmaceutical market.
Cost and Accessibility
In China, a set of four Wegovy injections will be priced at 1,400 yuan (approximately $194), significantly lower than the drug’s U.S. price. However, patients will need to pay the full amount out of pocket since Wegovy is not yet covered by the national healthcare insurance plan.
Benefits and Side Effects
Research indicates that Wegovy can help users lose over 10% of their body weight. The drug contains semaglutide, which assists with appetite control and satiety. While Wegovy has been gaining traction globally, it may cause side effects like nausea. Concerns have emerged about its misuse among individuals who are not obese, prompting medical professionals to remain vigilant.
Source : Popular weight-loss drug Wegovy goes on sale in China
Business
China’s Golden Rooster Film Festival Kicks Off in Xiamen – Thailand Business News
The 2024 China Golden Rooster and Hundred Flowers Film Festival began in Xiamen on Nov 13, featuring awards, cultural projects worth 31.63 billion yuan, and fostering international film collaborations.
2024 China Golden Rooster and Hundred Flowers Film Festival Opens
The 2024 China Golden Rooster and Hundred Flowers Film Festival commenced in Xiamen, Fujian province, on November 13. This prestigious event showcases the top film awards in China and spans four days, concluding with the China Golden Rooster Awards ceremony on November 16.
The festival features various film exhibitions, including the Golden Rooster Mainland Film Section and the Golden Rooster International Film Section. These showcases aim to highlight the achievements of Chinese-language films and foster global cultural exchanges within the film industry.
On the festival’s opening day, a significant milestone was reached with the signing of 175 cultural and film projects, valued at 31.63 billion yuan ($4.36 billion). Additionally, the International Film and Television Copyright Service Platform was launched, furthering the globalization of Chinese film and television properties.
Source : China’s Golden Rooster film festival opens in Xiamen – Thailand Business News
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