Economy

Chinese Banks to Issue Large-denomination Certificates of Deposit

The Peoples Bank of China， the countrys central bank， issued a provisional regulation on June 2 that allows financial institutions to issue large-denomination certificates of deposit （CD）， giving banks more freedom in pricing interest rates. Individual investors can buy certificates of deposit worth at least RMB 300，000 and institutional investors at least RMB 10 millions worth.

A certificate of large-denomination deposit is a time deposit that entitles the holder to receive interest at a higher rate than ordinary deposits. Thus， it is more appealing to savers.

According to the central bank， in the initial stage， the CD scheme will be introduced on a trial basis to banks designated as core members of the Chinese financial sectors market interest rate self-discipline mechanism. Later， in light of the countrys interest rate liberalization progress and development of the CD market， the central bank will expand the CD scheme to more financial institutions and recalibrate its minimum value requirements.

In recent years， China has ratcheted up its efforts to advance interest rate liberalization. Apart from its control of deposit interest rates， China has basically loosened its grip on interest rates. The current ceiling on deposit rates is 1.5 times the benchmark. All this has remarkably improved financial institutions capability to independently decide interest rates. Therefore， its time for China to introduce the CD scheme， according to the central bank.

The CD scheme is expected to contribute to improving a market-based interest pricing mechanism， further honing banks autonomous pricing ability， and nurturing social expectations of market-based rates， thus gaining valuable experience for the country to further advance deposit interest rates liberalization.

Chinese Firm Cooperates with WB to Develop Low-cost Housing in Africa

The World Banks private sector arm， the International Finance Corporation （IFC）， on May 29 inked a new partnership with Chinese construction company CITIC Construction Co.， Ltd to develop lowcost housing in Sub-Saharan Africa. The two sides released the news in Nairobi， capital city of Kenya.

Rapid urbanization in SubSaharan Africa has spurred rising housing demands. In the region， an average of 40，000 rural people stream into cities for jobs on a daily basis， but many cant find affordable accommodation. In Nigeria， the country with the largest population in Africa， the gap between housing supply and demand is 17 million housing units. Owing to the inadequate technical and financing capacity of African local developers， there are no prospects in sight of local governments and firms closing the gap. The IFC and CITIC Construction Co.， Ltd will set up a joint venture and inject US $300 million to develop 30，000 homes in Kenya， Rwanda and Nigeria in the next five years.endprint

IFC director for Eastern and Southern Africa Oumar Seydi said the joint venture with the Chinese construction firm would transform the housing market across Sub-Saharan Africa by providing high quality， affordable homes， creating jobs， so demonstrating the viability of the sector to local developers.

Chinese Dairy Firm Wins Monde Selection Gold for Second Year

Chinas dairy firm Modern Farming won gold for a second consecutive year at the 54th edition of Monde Selection held in Portugals capital Lisbon on June 1.

Modern Farmings win demonstrated that its milk products have met the highest international food standards and obtained an internationally recognized quality passport， said Monde Selection Chairman Patrick de Halleux at the awards ceremony.

The jury members have spoken highly of the milk produced by Modern Farming as it contains no additives and retains freshness， de Halleux said.

Modern Farming President and Board Chairwoman Gao Lina regarded winning the prize as an endorsement of the quality of her firms milk products globally， saying it was an honor shared by all Chinese dairy firms. Over recent years China has increased its support of the dairy industry. It advocates quality milk sources and the integrated business mode of cow breeding and raising and product processing to ensure product safety and quality.

Gao said her companys sales surged 159 percent last year as domestic demand for highquality milk steadily rose.

First World Credit Rating Forum Held in Beijing

The first World Credit Rating Forum， jointly organized by the Universal Credit Rating Group（UCRG）， Xinhua News Agency， and Dagong Global Credit Rating Group， was held in Beijing on June 29-30.

“The choice of the model for a new international rating system will be discussed at the forum，” the organizing committee said.

The 2008 global credit crisis， which first broke out in the U.S.， proved that credit rating is crucial to sound global economic development， and indicated that flawed credit ratings were the perpetrators of the crunch， the organizers said.

Since the outbreak of the credit crisis， the three most influential credit rating agencies， namely S&P， Moodys， and Fitch， have been widely questioned and criticized for their lack of foresight， the organizers said， adding that it was imperative to make changes in the international credit rating system.

The other aspects discussed at the forum included： The relationship between credit rating and the worlds economic development； how to develop regulation concepts and a regulatory system for credit ratings that are in line with the law governing the development of credit rating； and the importance of rating theory in the fulfillment of rating responsibility.

Rating regulators from different countries， renowned economists， credit scholars， credit rating agencies， credit application organizations， and other relevant entities were invited to this forum.endprint