Freeing up Lending Rates

The People's Bank of China (PBOC), the nation's central bank, announced that it removed the floor on commercial banks' lending rates on July 19, 2013, in a step toward more market-driven credit pricing. Previously, the lending rate floor was 70 percent of the benchmark lending rate set by the PBOC. Taking effect on July 20, the easing measure is aimed at cutting financing costs for companies, the central bank said.

Financing Support

The People's Bank of China, the country's central bank, said in July that it has arranged a 12-billion-yuan ($1.94 billion) re-lending quota to boost financial support for small and micro-businesses and rural areas. Re-lending is a monetary tool used by the central bank to increase the liquidity of financial institutions and guide credit flows. The central bank requires that funds from the quota be credited to small and micro-businesses, as well as the agricultural sector, rural areas and farmers.

Free Trade Zone

The State Council approved Shanghai's free trade zone project in July. This trade zone will catapult the city to the forefront of global logistics centers. The project, mapped out at the start of this year, is the first of its kind in China. When completed, the Shanghai free trade zone will provide world-class transport and communications facilities and a tax-free environment for domestic and foreign enterprises as a major hub of their supply chains in Asia. The zone, occupying 28 square km, will take more than 10 years to build.

Tourism Revenues Up

China's tourism industry earned 1.4 trillion yuan ($228 billion) in revenues in the first six months of this year, up 10.7 percent year on year, according to the National Tourism Administration. The domestic travel and outbound travel markets both expanded during this period, although the inbound travel market shrank slightly due to weak global economic recovery, said the administration. To attract more overseas tourists, the administration said it will host a number of international exchange activities in the second half of the year.

Spending Cuts

The Ministry of Finance has issued a circular ordering the nation's Central Government agencies to cut their general expenditures in 2013 by 5 percent, a move to continue the frugality campaign launched by the country's new leadership. According to the circular, a large number of funds shall be cut, including money spent on the building and renovation of government offices, meetings, domestic and overseas trips, vehicles and official receptions.

Numbers

20.1%

China's urban fixed-asset investment up in H1

$150 bln

China's expected outbound direct investment in 2015

96

Number of Chinese banks in a list of Top 1,000 World Banks published by The Banker, a British magazine