Certificate of Deposit

The People's Bank of China, China's central bank, has issued a provisional regulation allowing financial institutions to issue certificates of deposit. A certificate of deposit is a savings certificate allowing the bearer to receive a fixed rate of interest on the money deposited for a certain period of time. The interest rate is higher than that on ordinary deposits, making the scheme more appealing. From June 2, individual investors have been allowed to buy certificates of deposit worth at least 300,000 yuan ($48,860). Institutional investors can buy certificates worth at least 10 million yuan ($1.6 million). The interest rate will be mainly determined by the market. Banks and investors can set a fixed or a floating rate, using the Shanghai Interbank Offered Rate as a benchmark. 

Wooing Private Investors

China's National Development and Reform Commission (NDRC) is inviting private investors to participate in 1,043 projects through public-private partnerships (PPP). The projects are related to infrastructure and public services, such as water conservation, transport and environmental protection, and need investment worth 1.97 trillion yuan ($322 billion). China is increasingly turning to PPPs to bridge a huge financing shortfall in infrastructure. However, the NDRC did not specify whether the PPPs will be open to foreign investors. 

E-Commerce in Tibet

Tibet has launched an e-commerce project to help the region's companies expand. The 600-million-yuan ($98 million) project includes an online shopping website, a commodity trading platform and an asset exchange platform, said Zhou Hu, Deputy Director of the Department of Industry and Information Technology in Tibet. The platforms will also offer data to the government for economic regulation. Tibet's first third-party payment platform will also be established under the project.  

Test Area for Reforms

Changsha, capital of Hunan Province, has established central China's first state-level new area to roll out economic and administrative reform measures. The Xiangjiang New Area on the west bank of the Xiangjiang River spreads over 490 square km across several districts. It will pilot 10 major reform measures related to administration, the economy, environmental protection and rural-urban integration, the Changsha Municipal Government said. It will be China's 12th state-level new area since Shanghai's Pudong New Area was launched in 1992, followed by similar areas in other cities and provinces such as Tianjin, Chongqing, Zhejiang, Gansu and Guangdong. These areas pilot reforms and opening-up policies.

Leg-up for Startups

China will promote mass entrepreneurship and innovation to inject new vigor into the economy. China's cabinet, the State Council, has issued guidelines on measures to support new businesses and innovative ideas. Governments at all levels are being encouraged to purchase innovative products and services from startup companies to support their development. Startups will enjoy favorable policies to issue initial public offerings and raise funds through the bond market. Banks should strengthen their services for startups and innovative enterprises, offering targeted financial products and more professional services.

Opportunity for Africa

The chief of the African Development Bank, Donald Kaberuka, has said the time has come for Africa to become the world's manufacturing hub. This can be done by cooperation with China as the Asian giant phases out its labor-intensive industries. "The global manufacturing cycle started [in] Europe, then [moved to the United States] before moving to Southeast Asia and China. It is now coming to Africa," Kaberuka said on the sidelines of the African Union Summit in Johannesburg in June. He is urging African countries to put in place infrastructure and policies to facilitate the transfer of manufacturing industries from China.