SINOWEEKLYPLUS

Liu He, the next central bank chief?; what the detention of CEFC chairman Ye Jianming signals

SinoInsight 1
Zhang Yesui, a spokesperson for the first session of the National People’s Congress, said during a press conference on March 4 that there are plans to accelerate the drafting of real estate tax legislation.

OUR TAKE
America’s economic policies (tax cuts; Fed shrinking balance sheet and raising rates) and an impending trade war will significantly impact the Chinese economy. In particular, the return or moving of big-name enterprises to the United States will also inspire the move of supply chains to the U.S.

In 2018, 21 Chinese provinces slashed their projected budget and revenue for the year, a signal that provincial governments are not optimistic about the economy. Hence, the Chinese regime wants to speed up the drafting of property tax legislation to gain a new tax source to bolster revenue. However, the issue of property rights could mire the new legislation in controversies.

SinoInsight 2
The China Securities Regulatory Commission released a notice in the afternoon of March 4 announcing the auditing of Foxconn Industrial Internet Co. Ltd. (FII) on March 8. Given that Foxconn had just submitted its draft prospectus for listing on the Shanghai Stock Exchange on Feb. 1, the company’s IPO appears to be speeded along at an unprecedented pace.

OUR TAKE
Foxconn could very possibly start issuing A-shares as soon as April. This is in line with our Feb. 21 brief where we noted that Foxconn could obtain a special exemption from the Chinese authorities to get listed.

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