Hi everyone. I’m Stephanie LI.
Coming up on today’s program
China rolls out new rules to unify 400 trillion yuan non-bank payment sector;
East Buy jumps as star live-streamer returns as senior partner and VP of New Oriental’s culture and tourism branch.
Here’s what you need to know about China in the past 24 hours
China has introduced new regulations to better monitor and supervise non-bank payment institutions, which are entities such as fintech giant Alipay and instant messenger WeChat that provide bank-like services but do not hold a banking license, to create an equal playing field in this burgeoning 400 trillion yuan (USD56.5 trillion) industry.
The payment sector is now classified into two categories, namely stored value account operations and payment transaction processing, as opposed to the previous three segments of online payments, bank cards and prepaid cards, according to a 60-point document released yesterday. The new rules will take effect on May 1 next year.
New payment methods such as barcode payments and face-scanning payments have been included to prevent regulatory gaps, the People’s Bank of China said. Business requirements as well as capital and other conditions have been unified to form a fair institutional environment. Chinese and foreign payment platforms will be treated equally to prevent monopolies or unfair competition.
The new regulations are conducive to the standardized development of the payment industry, said several non-bank payment institutions, including Alipay, WeChat’s payment platform Tenpay, Douyin’s payment unit Hezhong Yibao Technology, Meituan’s Beijing Qiandaibao Payment Technology, PayPal’s Chinese arm and China UnionPay.
There were 185 such entities in China as of the end of September and they processed more than 1 trillion transactions last year amounting to almost 400 trillion yuan, according to PBOC data. This accounts for approximately 80 percent and 10 percent of the total national electronic payment business, respectively.
In a joint statement released on Sunday, spokespeople from the PBOC and the Ministry of Justice offered a more detailed explanation.
Payment institutions should establish sound business management systems and possess business systems, facilities and technology that meet the required standards. There should be a reinforcement of management rules for payment accounts, reserve funds and payment instructions, according to the statement.
It also stated that payment institutions are not allowed to misappropriate, occupy or borrow customer reserve funds and are prohibited from forging or altering payment instructions. The responsibility for due diligence investigations and risk monitoring by users of payment institutions should be effectively enforced.
Institutions should enhance the safeguarding of user information, provide transparent pricing for their services and impose "reasonable" fees. Additionally, in cases of violation of the rules, the central bank will impose fines or restrictions on some payment operations, or order them to suspend business for rectification, up to the revocation of their payment business licenses, according to the statement.
Moving on to regional highlights
Tibet Airlines, China's first airline flying at high altitudes and with rich experience in plateaus, and Commercial Aircraft Corporation of China have partnered to develop a plateau model of the C919 aircraft, the country's first large self-developed passenger plane. Tibet Airlines became the first domestic carrier to start developing the C919, according to a deal it penned with the plane's maker Comac in Shanghai yesterday.
A new high-speed railway that links North China's port city of Tianjin with Beijing Daxing International Airport will start commercial operation on Monday, according to China's state railway operator. The railway, which covers a distance of 101 kilometers with six stations, can send passengers from Tianjin West Railway Station to Beijing Daxing International Airport in 41 minutes at a top design speed of 250 kilometers per hour, and will become the fourth HSR linking capital city of Beijing and Tianjin, China State Railway Group said in a statement on Sunday.
Greater Bay Area, Greater future
Shenzhen is promoting the low-altitude “flying economy” to facilitate fast logistics, urban governance and emergency rescue. In the first 11 months of 2023, Shenzhen completed 541,000 cargo drone flights, opened 75 new drone flying routes and built 69 new drone take-off and landing sites, data from Shenzhen Municipal Bureau of Transport showed Sunday.
A C919 passenger aircraft flew over Victoria Harbour on Saturday, marking the first time for a domestically-made commercial aircraft to fly over Hong Kong. After taking off from the airport at around 10:26 on Saturday morning, the C919 passenger aircraft reached the Victoria Harbour about 20 minutes later. It flew from west to east over Victoria Harbour and circled Hong Kong Island twice. The plane received a ceremonial water salute from Hong Kong International Airport when it, together with an ARJ21, a domestically developed Chinese passenger jetliner, arrived in the city on Dec 12.
Shenzhen will ease license plate application rules with a special additional quota, the local transport authorities announced today. The special quota will be in place for 12 months, with each month adding 80,000 plates for ordinary private cars, allocated equally through lottery and bidding, while licenses for hybrid and pure electric cars are unlimited.
Next on industry and company news
The Hong Kong-listed East Buy soared over 20 percent today after the e-commerce platform run by New Oriental promoted star influencer Dong Yuhui as East Buy's senior partner. In a separate statement by New Oriental today, Dong is appointed as New Oriental's founder Yu Minhong’s Cultural Assistant and VP of the group’s culture and tourism business. Sun Dongxu was discharged from his position as the company's CEO while Yu will concurrently serve as the chief executive, East Buy announced on Saturday. The decision came after a week-long dispute in East Buy over promotional content that involves Dong.
Chinese artificial intelligence firm SenseTime Group slid as much as 18 percent in Hong Kong on Monday, the biggest loss in more than a year after its co-founder’s surprise death. SenseTime disclosed that co-founder and major shareholder Tang Xiao’ou died on Friday after an illness. Born in 1968, the Massachusetts Institute of Technology graduate was regarded as a pioneer in China’s burgeoning AI sector, helping create one of the nation’s leaders in computer vision. He held a 20.6 percent stake in the company, making him its biggest shareholder, followed by Alibaba Group Holding with 10.8 percent.
Germany's largest offshore wind farm project has increased the equipment order from Chinese wind power equipment maker. Dajin Heavy's unit Penglai Dajin Offshore Heavy Industry signed a deal with the operator of the German project to expand the initial supply deal inked in early May to EUR626 million from EUR547 million, the parent company announced late yesterday, without revealing the names of the developer and the project.
China's largest unicorn ByteDance will reportedly soon do a thorough check to ensure strict compliance with relevant services' terms of use after a report that OpenAI has suspended its account. ByteDance emphasizes compliance with OpenAI's terms of use when using its services, media reported yesterday, citing a manager at the Chinese owner of TikTok. It is getting in touch with the developer of ChatGPT to clarify misunderstandings that external reports may cause, the person added.
Switching gears to financial news
China has issued a budget for the first batch of projects to use funds raised through the additional 1 trillion yuan of sovereign bonds announced in October, media reported today citing data from the Ministry of Finance. Totaling 237.9 billion yuan, the budgeted amount was issued recently and will be allocated as subsidy funds to three areas: 107.5 billion yuan for post-disaster recovery and reconstruction and improvement of disaster prevention and reduction capability, 125.4 billion yuan for high-standard farmland construction in places including Northeast China and disaster-stricken areas in Beijing-Tianjin-Hebei region, and 5 billion yuan for the construction of key comprehensive natural disaster prevention and control systems.
Wrapping up with a quick look at the stock market
Chinese stocks fell on Monday with the benchmark Shanghai Composite down 0.4 percent and the Shenzhen Component losing 1.1 percent. Hong Kong’s Hang Seng index also sank 1 percent and the TECH index fell 1.3 percent.
Biz Word of the Day
A sovereign bond is a debt security issued by a national government for the purpose of financing spending programs, such as infrastructure programs, social programs, war efforts, or other spending programs.
Executive Editor: Sonia YU
Editor: LI Yanxia
Host: Stephanie LI
Writer: Stephanie LI
Sound Editor: Stephanie LI
Graphic Designer: ZHENG Wenjing, LIAO Yuanni
Produced by 21st Century Business Herald Dept. of Overseas News.
Presented by SFC
编委: 于晓娜
策划、编辑：李艳霞
播音：李莹亮
撰稿：李莹亮
音频制作：李莹亮
设计：郑文静、廖苑妮
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