China ESG - Weekly news update: China’s Pension Scheme Has Set Up A Special ESG Investment Research

China Removes Limits on Credit Card Interest Rates

China’s central bank removed the upper and lower limits on credit card interest rates starting Jan. 1 as part of a strategic move to let markets set rates. The measure could foster greater competition between conventional banks and fintech rivals, lowering costs for borrowers, industry experts said.

Under the new policy, credit card issuers can set their own interest rates for unpaid monthly balances, also known as overdrafts. Previously, the upper limit was a daily interest rate of 0.05%, equivalent to an annualized rate of 18.25%, and the lower limit was 0.7 times the upper limit, or an annualized 12.775%. According to a notice issued in late 2020, credit card operators must fully disclose annualized interest rates and ensure that cardholders know and accept the rates.

The move is a signal that regulators are trying to help credit cards regain mainstream status in the consumer credit market, analysts said. Removal of the interest rate caps will have little impact on bigger credit card providers but is expected to benefit smaller issuers, a credit card executive at a big bank told Caixin.

Source: Caixin

China’s Pension Scheme Has Set Up A Special ESG Investment Research Group To Carry Out Systematic Research

Chen Wenhui, vice chairman of China’s National Social Security Fund, said at a January 8 summit that China’s environmental, social and governance (ESG) investment approach was lagging that of many developed countries. As of March 2020, only 44 investment institutions joined the United Nations Principles for Responsible Investment (UN PRI) and the country's ESG investing volume stood at Rmb10 trillion ($1.54 trillion), a tiny portion of the global figure of $90 trillion.

China’s pension scheme has set up a special ESG investment research group to carry out systematic research, and Chen said the government would further improve information disclosure in line with international standards.

Source: Yicai

QDII Added $9.02 Billion, Fund Companies Accounted For 90%

The State Administration of Foreign Affairs (SAFE) announced the latest Qualified Domestic Institutional Investor (QDII) investment quota approval this Wednesday (Jan. 13), showing that as of Jan. 13, SAFE approved a total of $125.719 billion (the same unit below) in QDII investment quotas, an increase of $9.02 billion from the previous one, which was $116.699 billion on Nov. 30, 2020, with 14 fund companies added 8.15 billion new quotas, accounting for 90%.

According to the announcement of the FCM, from December 1, 2020 to January 13, 2021, a total of 21 institutions were approved for new the QDII investment quotas, including 5 banking institutions, 14 fund companies, and 2 insurance companies, of which NINGYIN Wealth Management and Taikang Insurance Group were approved for the first time.

Source: Insights & Mandate

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