Hu Kaihong:
Ladies and gentlemen, good morning. Welcome to this press conference being held by the Joint Prevention and Control Mechanism of the State Council. Just now, the State Council Information Office held a press conference in Wuhan, introducing updates on COVID-19 (also known as novel coronavirus pneumonia) epidemic prevention and control as well as medical treatment in Hubei province. For this press conference, we have invited Mr. Fan Yifei, vice governor of the People's Bank of China (PBOC); Mr. Liang Tao, vice chairman of the China Banking and Insurance Regulatory Commission (CBIRC); Mr. Yan Qingmin, vice chairman of the China Securities Regulatory Commission (CSRC); and Mr. Xuan Changneng, deputy director of the State Administration of Foreign Exchange (SAFE). They will explain the measures being taken by China's financial system to fully support the epidemic control and production resumption, as well as answer any questions you might have.
First, I will give the floor to Mr. Fan.
Fan Yifei:
Friends from the media, good morning. Recently, media personnel have honored their mission despite risks, covering the epidemic prevention and control on the frontlines. On behalf of the PBOC, I would like to express our appreciation for your efforts and long-term support for financial work.
Since the COVID-19 outbreak began, the PBOC has firmly implemented the important instructions given by General Secretary Xi Jinping, and acted on the decisions made by the Leading Group of the CPC Central Committee for Novel Coronavirus Prevention and Control. Committed to a people-centered approach, we have promoted epidemic prevention and control, and the resumption of work and production as a major political task, trying to achieve solid progress with all-out efforts and targeted measures. In cooperation with other departments, we have introduced a series of measures to fully support the epidemic prevention and control, and help qualified enterprises resume production. The PBOC and the CBIRC made a detailed introduction of the macro-policies at the previous press conference. So today, I will focus on financial services regarding payments and clearing, money supply and financial infrastructure, as well as measures to support qualified enterprises in resuming production and operation as soon as possible.
First, we set up a "green channel" for payments and clearing to ensure money transfers are made in a timely manner.
The first is regarding remittance. Generally, the high-value payment system is suspended during the Spring Festival holiday. This year, however, amid the fight against the novel coronavirus outbreak, the PBOC set up a "green channel" for high-value remittances, and lifted the amount limits of the micropayment system, so that all types of large-amount remittances can be achieved at home and abroad. Between Jan. 24 and Feb.14, a total of 393,500 transactions above 10 million yuan were handled through the high-value and micropayment systems of the PBOC, totaling an amount of 77.37 trillion yuan (about $11.06 trillion). Among them, 872 transactions or 44.8 billion yuan were related to the epidemic prevention and control. Meanwhile, the Cross-border Interbank Payment System (CIPS) opened a "special channel" for cross-border payments. Starting from Feb. 3, we extended the operation period of the high-value payment system to meet the demand of interbank market trading and special re-lending businesses for combating the virus.
Regarding account services, we set up a "green channel" to serve the accounts of institutions. We also adopted more flexible and efficient methods when approving the accounts for receiving special fiscal allocation and emergency response funds. For clients unable to provide all certification documents when applying for an account being used for epidemic control, commercial banks are permitted to open the account first after checking the identity of the client and claim the documents afterwards. In addition, we actively improved the efficiency of our services, offering guidance for individuals and enterprises to carry out payments, clearing and account business online.
Second, we strengthened the supply of money and liquidity management to ensure the safety of cash use.
The first is taking special money supply measures for the hardest-hit Hubei province. The PBOC allocated 4 billion yuan ($572.47 million) to Wuhan before Spring Festival, to strengthen money supply to key institutions involved in prevention and control in the city, including hospitals. The second is ordering all local branches to ensure money supply, and release newly printed banknotes or funds withdrawn before the outbreak as far as possible. Third is disinfecting banknotes in circulation, and temporarily storing those withdrawn from key institutions in warehouses. The allocation across provinces and within some provinces heavily affected by the outbreak had been halted to curb the spread of the coronavirus. The fourth is requesting commercial banks to isolate used banknotes from those to be released, and to disinfect used banknotes before recirculation.
Third, we ensured the continuous and safe operation of financial technology and major financial infrastructure.
After the epidemic outbreak, the PBOC launched emergency plans in a timely manner, consolidated major infrastructure of the financial system, monitored the operation of key posts, and arranged staff to be on duty around the clock. At present, payments and settlements, the treasury, currency issuance, credit reference system, financial accounting, financial market custodian clearing, and other important financial infrastructure nationwide continue to operate in a safe and stable manner. The interbank bond market, foreign exchange market, bill market, gold market and other financial markets are operating normally, and the technical support capability and the emergency response mechanism of our financial industry have withstood the test. At the same time, financial infrastructure organizations, commercial banks and non-bank payment organizations took the initiative to reduce fees for payments and settlement. The Shanghai Clearing House, Shanghai Gold Exchange, China Central Depository and Clearing, and Shanghai Commercial Paper Exchange all reduced fees for handling more than 20 types of businesses. China UnionPay cut service fees for hospitals and charities involved in the epidemic prevention and control across the country, and will refund a proportion of service fees if small and micro merchants use UnionPay QR codes to receive payments. NetsUnion Clearing Corporation waived network service fees for barcode collection and the settlement and payment business of national non-profit medical organizations and charities. Fifteen national commercial banks charge zero service fees for handling donated funds for fighting the epidemic. Tenpay and Alipay have also waived service fees for non-profit medical organizations and cut commissions charged on express deliveries, takeaway food and other businesses.
In the fight against the epidemic, CPC members, officials and employees of the PBOC and various financial organizations have overcome difficulties, performed their duties, acted bravely, and are dedicated to implementing the financial policies to support the epidemic prevention and control, facilitate the resumption of work and production, and guarantee the basic financial services for the people. Currently, we are at the most crucial stage of the epidemic prevention and control, and the PBOC will live up to the expectations of the Party and the people, resolutely implement the decisions and arrangements of the CPC Central Committee with Comrade Xi Jinping at its core, carry out the 30 measures to offer financial support for the epidemic prevention and control, facilitate the work and production resumption of companies with conditions to do so, ensure a stable economy, minimize the impact of the epidemic, and work hard towards the goals set by the CPC Central Committee.
Thank you.
Hu Kaihong:
Thank you, Mr. Fan. Next, I'll now give the floor to Mr. Liang Tao.
Liang Tao:
Good morning, ladies and gentlemen. First of all, on behalf of the CBIRC, I would like to thank you for the continued support you have shown us. Since the epidemic outbreak, the CBIRC has resolutely implemented the important instructions made by General Secretary Xi Jinping and the decisions and arrangements of the CPC Central Committee and the State Council. It has also coordinated financial services to support the epidemic prevention and control as well as economic and social development, helped companies resume work and production, and supported the fight against the epidemic. We have focused our work in the following areas.
First, strengthening Party leadership. The Party committee and organizations at all levels of the CBIRC have resolutely shouldered the political responsibility for the prevention and control of the epidemic, taken it as the most important work at present, and precisely implemented various policies. We have required Party members and officials at all levels to perform their duties, take the lead, set an example, make concrete moves and avoid formalism and bureaucracy.
Second, offering support with policies. The CBIRC responded swiftly after the epidemic outbreak, releasing a number of timely financial policies since Jan. 26, and put forward specific requirements for banks and insurance organizations in supporting the epidemic prevention and control as well as strengthening financial services. Agencies at various levels, while paying close attention to the implementation of policies, have also released effective financial policies on their own or together with local government departments.
Third, we have provided differentiated preferential financial credit support. We have prompted banking institutions to increase support in areas hit hard by the epidemic by adjusting regional financing policies, internal fund transfer pricing, and performance appraisal measures. For industries most affected by the epidemic, such as wholesale and retail, accommodation and catering, logistics and transportation, and culture and tourism, as well as enterprises that have development prospects but have been temporarily affected by the epidemic, especially small and micro enterprises, their loans must not be blindly withdrawn, suspended or postponed. For enterprises that have been severely affected by the epidemic situation, if they have difficulties repaying loans when due, the banking institutions have been asked to extend the date or renew their loans. Banking institutions have also taken such measures as appropriately reducing the loan interest rate and increasing credit loans and medium- and long-term loans to support relevant enterprises to resume work and production and overcome the epidemic's impact. As of 12:00 on Feb. 14, the credit support provided by financial institutions in the banking industry to fight the epidemic exceeded 537 billion yuan.
Fourth, we have given full play to the role of insurance protection. We have prompted various insurance institutions to simplify the process and improve the efficiency for insurance claims by customers who have been infected with COVID-19 or affected by the epidemic, and make payouts as soon as possible. We have asked them to actively expand the liability of insurance products, reduce standards for making claim, and donate insurance protection products to frontline workers fighting the epidemic. We also asked them to actively provide risk insurance protection products covering safe production and COVID-19 infection for key materials companies to help them resume work and production. According to preliminary statistics, 35 personal insurance companies have expanded more than 400 accident and illness insurance products to include death, disability and severe illness caused by COVID-19 without increasing premiums. In addition, 74 insurance companies have donated a variety of insurance protections such as accident insurance and term life insurance to medical staff, their families and disease control personnel who are fighting the epidemic. The total insurance amount is around 9 trillion yuan.
Fifth, we have improved the efficiency and level of financial services. We actively expanded online financial services, promoting banking and insurance institutions to strengthen the management and security of e-channel services such as online banking, mobile banking, and apps, and optimized and enriched "non-contact service" channels and scenarios. For customers who have temporarily lost their income sources because of the epidemic, banking institutions are asked to flexibly adjust credit repayment arrangements such as for housing mortgages and credit cards, and delay the repayment period reasonably.
Next, the China Banking and Insurance Regulatory Commission system will continue to strictly implement the decisions and deployment by the CPC Central Committee and the State Council, and guide financial institutions to further implement relevant policies in accordance with the requirements of firm confidence, concerted effort, scientific epidemic prevention, and precise policy implementation. It will bring together banking and insurance institutions to guarantee financial services against the epidemic as best as they can, and make greater contributions to the epidemic prevention and control, the smooth development of economy and society, and social harmony and stability.
Thank you all.
Hu Kaihong:
Thank you, Vice Chairman Liang Tao. Now, Vice Chairman Yan Qingmin, please make your presentation.
Yan Qingmin:
Hello, friends from the media. First, on behalf of the China Securities Regulatory Commission (CSRC), I would like to thank you for your long-term support for the commission and your interest in the capital market.
Since the COVID-19 outbreak, the CSRC has earnestly implemented the spirit of General Secretary Xi Jinping's instructions, implemented the decisions and deployment of the CPC Central Committee and the State Council, and done its best to fight the epidemic, support the economy and prevent risks under the overall guidance of the Financial Stability and Development Committee of the State Council. Allow me to introduce our work in five aspects:
First, we spared no effort to ensure the opening of the stock market on Feb. 3. Regarding the timing of the market's opening, there were lots of discussions among the market. The CSRC sufficiently listened to the opinions of all parties, and after comprehensive evaluation and weighing the advantages and disadvantages, we decided to open the market on Feb. 3. This respected market rules and trading rules, and also reflected the mission and responsibility of regulators. Since the opening, the market's self-adjustment function has been effectively exerted, investors' transactions have been smooth, and market expectations have generally shown a stable trend, reflecting the good results of policy and work coordination between various departments. The A-share market has withstood the severe test of the epidemic situation, and the market has now basically returned to normal operation.
Second, we have stepped up efforts to prevent risks during this special period. Given the impact of the epidemic, some concrete measures have been taken to ease liquidity difficulties for companies and individuals, and prevent unusual market fluctuations. According to the specific situation in different regions affected by the epidemic, we have supported market institutions to extend share pledge agreements. We also introduced a policy of no forced liquidations for some financing and securities clients and appropriately extending the time for customers to replenish collateral. The stock pledge business has declined slightly, while the overall performance remains stable. The financing balance of pledge shares in the exchange floor is 880 billion yuan, a more than 45% decline from its peak. The balance of margin trading and short-selling in the market is about 1.05 trillion yuan, accounting for 2.13% of the market value of the A-share market. All these risks are generally controllable. Moreover, night trading for futures have been suspended, and we have also guided investors to trade off-site to avoid the gathering of crowds.
Third, we have introduced preferential policies for financing in areas seriously affected by the epidemic and enterprises involved in the fight against the epidemic. We have simplified procedures to support related enterprises in heavily affected areas in issuing corporate bonds and asset-backed securities. As of Feb. 14, several companies registered in Hubei province, such as Wuhan DDMC Culture Corporation Limited, Wuhan Che Du Si Shui Project Management co. LTD and Xiangyang Dongjin Investment Group, have issued bonds through the "green channel," planning to raise 2.8 billion yuan. Also, 10 corporate bonds and one asset-back securities worth 11.23 billion yuan have been issued. Some of the funding will be used for containing the outbreak. Moreover, two companies based in Hubei have been approved to issue bonds, and several special bonds for containing the epidemic are being planned. We have also adopted "green channel" policies for medicine and health private equity fund and venture capital funds record to direct more social funding toward enterprises engaged in production of epidemic prevention supply . As of Feb. 12, according to incomplete statistics,17.046 billion yuan had been invested into 46 anti-epidemic projects set up by equity and venture capital funds.
Fourth, we have launched a regulatory "green channel" policy in a timely manner. We have reasonably extended the validity of licenses for related businesses such as stock and bond financing, relaxed time limits related to M&A and reorganization business, and postponed the due date for listed companies affected by the epidemic to disclose their annual reports. We also lowered the requirements for securities agencies whose performance were temporarily below the standard due to the impact of the epidemic. We have eliminated annual fees for listed companies registered in Hubei, and exempted relevant fees for futures companies in the province. We encouraged securities companies to issue bonds to raise funds through banks and stock exchange market, and worked to improve the capabilities of industry institutions to prevent risks.
Fifth, we have called on listed companies as well as securities and futures operating agencies to fulfill their social responsibilities. While ensuring the effective prevention and control of the epidemic in the CSRC system, we have been urging listed companies as well as securities and futures operating agencies to step up their efforts in helping to contain the epidemic outbreak, focusing on production and business and fulfilling their social responsibilities. Nearly a thousand listed companies have donated materials and money totaling over 5 billion yuan. Donations from securities companies, futures companies, public fund firms and private equity firms reached 900 million yuan. Listed companies engaged in medical materials and facilities business have stepped up production and development of protection, detection and treatment products for the new coronavirus. Listed companies engaged in logistics and construction business have played a crucial part in delivering supplies and constructing designated hospitals.
China Securities Regulatory Commission will continue to implement a series of important instructions made by General Secretary Xi Jinping as well as decisions and arrangements of the CPC Central Committee and the State Council so as to make greater contributions in fighting the epidemic, supporting economic development and preventing risks. Finally, I would like to again extend my sincere appreciation to the media.
Hu Kaihong:
Xuan Changneng, deputy head of the State Administration of Foreign Exchange (SAFE), will speak next.
Xuan Changneng:
Good morning, friends from the press. Since the outbreak of COVID-19, the SAFE has firmly implemented the important instructions of Xi Jinping, general secretary of the Communist Party of China Central Committee, on the prevention and control of the new coronavirus-related pneumonia and the arrangements of the Leading Group of the CPC Central Committee on coping with the novel coronavirus, and the Joint Prevention and Control Mechanism of the State Council.
Under the instructions of the Financial Stability and Development Committee of the State Council, we have taken effective measures, proactively participated in epidemic prevention and control, and offered our full support for businesses in resuming operation or production. We have carried out detailed tasks in several aspects.
First, we adopted policies to fast track foreign exchange transactions to support the prevention and control of the epidemic. We simplified the procedures needed for handling FOREX payments for imported supplies for epidemic prevention and control, FOREX receipts of donations, FOREX receipts and payments of capital accounts, and cross-border financing. Local foreign exchange administrations, including those in Hubei province, have instructed banks to handle special issues with special methods, and urgent issues as quickly as possible. From Jan. 27 to Feb. 12, a total of 1,370 business transactions were expedited across the country, including 70 FOREX payments for imported goods and materials needed for epidemic prevention and control in Hubei, which were mainly used to purchase masks, protective clothing and the raw materials needed for manufacturing these products from overseas markets.
Second, we optimized government services in foreign exchange administration. We offered support for market entities to conduct foreign exchange transactions online, at appointed times, or through mail services. At present, major foreign exchange-related transactions can be handled on the ASOne system – the SAFE's digital service platform – including FOREX trading by individuals, overseas bank card transactions, trading of goods and services, and foreign debts registration. A total of 86% of foreign exchange-related administrative licenses can be applied for on the platform. From Jan. 27 to Feb. 12, the platform received a total of 479 applications and completed 466 of them.
Third, we made efforts to ensure people's needs to conduct normal foreign exchange transactions were met, including transferring tuition fees overseas. We encouraged people to conduct transactions online at home. From Jan. 27 to Feb. 12, Chinese residents conducted 915,000 foreign exchange transactions via banks, 830,000 of which were handled online, accounting for 91% of the total, up from 61% in 2019.
Fourth, we instructed the Shanghai Clearing House and the China Foreign Exchange Trade System to reduce foreign exchange trading costs and liquidation expenses for institutional clients in Hubei.
Thank you.
Hu Kaihong:
Next, we will open the floor for questions. Please identify your news outlet before asking your questions.
