China’s state planner launches policies to boost private investment

China’s state planner has unveiled measures that seek to promote, encourage and spur private investment in various infrastructure sectors and said it will strengthen financing support for private projects.

The National Development and Reform Commission (NDRC) said in a statement that it wants to attract more private capital to participate in the construction of national major projects.

The NDRC said a list of sectors ranging from transport, water, clean energy, new infrastructure to advanced manufacturing and modern agriculture will be available for private investors to participate in, according to the statement. More specific details on this will be provided later, it added.

The announcement comes as China last week pledged to improve the private sector, releasing guidelines by the Communist Party and the cabinet as authorities vowed to make it "bigger, better and stronger" amid a slowing post-pandemic economic recovery.

In recent weeks, investors have been betting on more stimulus measures to prop up an economy that has started to rapidly lose momentum following the initial post-Covid bounce. However, some piecemeal steps announced by the authorities have underwhelmed markets.

In the guidelines released last week, China said it will create a "traffic light" system to make clear the areas in which private investors are able to invest.

"Significance of improving private investment should be fully recognised" and the NDRC will strive to keep the proportion of private fixed-asset investment among all investment at a "reasonable level," the statement said.

Private fixed-asset investment shrank by 0.2% in the first six months of 2023 from a year earlier, in contrast to an 8.1% rise in investment by state entities, official data showed last week, highlighting weak private sector confidence.

The NDRC also pledged to strengthen financial support for private-invested projects.

A special fund from central government budget will be set up by the NDRC to give annual support for 20 cities with high private investment growth and strong policy implementation, the statement said.

Stocks in China and Hong Kong have gegun the week with strong gains. Steve Clayton, head of equity funds at financial services group Hargreaves Lansdown said that "traders became optimistic that Beijing will take steps to boost the flagging Chinese economy. A key session in the Politburo saw Chinese leaders flagging that more would be done to support the economy, leading to property and technology sectors racing ahead."

 

JPMorgan confirms online bank Chase to launch in EU

JPMorgan CEO Jamie Dimon has confirmed that its online bank Chase, which launched in the UK two years ago, will expand across the European Union to Germany and other EU countries, a move that increases competition for European rivals in a crowded market.

Earlier reports suggested that the bank was preparing for the move, but the CEO's comments to German daily Handelsblatt was the first official confirmation.

The bank’s first such foray outside the US was to enter the British market with a digital-only retail offering in 2021. In May, it was reported that Chase UK had accumulated 1.6 million customers and £15 billion in deposits since launching and executives have signalled their aim was to expand this to other countries.

“It has always been clear to us that we want to introduce Chase not only in the UK, but also in Germany and other European countries,” Dimon told the paper. “We have ambitious plans.” However, no date was given for when the EU launch would take place.

US banks have been looking to offset lucrative but at times volatile returns in investment banking with steadier revenues, although they face a competitive consumer market dominated by local incumbents, where margins are thin.

JPMorgan, whose European Union hub is in the German financial centre of Frankfurt, has become one of the largest advisory banks in Germany in recent years, and is expanding to target more of the medium-sized firms on which Europe’s largest economy depends.

Last year, Deutsche Bank analysts wrote in a note that while JPMorgan seemed likely to expand its retail business into the EU, "why does it make sense to expand retail banking globally when other banks haven't been able to do so and the global regulatory burden is high?"

Dimon told Handelsblatt he was confident of success. “In Germany, 'Chase' is not yet so well known, but worldwide it is a strong brand. We are also a trustworthy bank with a strong balance sheet - and private customers know that,” he commented.

 

Angaye revealed that the CBDC would be equipped with programmability features capable of limiting CBDC payments exclusively to designated government programmes, reducing the risk of fraud.  Programmability allows for targeted fund allocation to farmers, enabling specific purposes such as tool acquisition. By implementing this approach, the funds transferred into their eNaira wallet become non-divertible for any unrelated purposes, ensuring that the intended use is strictly adhered to.

United Parcel Services and Teamsters union to resume labour talks

United Parcel Services (UPS) will resume labour talks today with the International Brotherhood of Teamsters (IBT) union representing 340,000 employees, in an effort to avert a strike that could disrupt supply chains and impact on America’s economy.

UPS handles around 28% of the 75 million packages delivered in the US on a typical day, roughly split equally between businesses and homes.

Talks between the two sides began in April began talks on a contract covering the company’s US drivers, package handlers and loaders ahead of the expiry of an existing five-year labour pact agreement next Monday. However, they broke down on July 5 without agreement being reached and with each side blaming the other.

“With the contract expiration less than two weeks away, we need to work quickly to finalise a fair deal that provides certainty for our customers, our employees and businesses across the country,” Atlanta, Georgia -based UPS said at the weekend.

A spokesperson for the IBT confirmed the resumption of talks and pointed to a statement detailing its goals for a five-year agreement that increases pay and full-time jobs and strengthens protections for workers.

UPS said it hope to “resolve the few remaining open issues” at the talks. The company started negotiations “prepared to increase the already industry-leading pay and benefits we provide our full and part-time union employees and are committed to reaching an agreement that will do just that.”

The two sides have reached tentative agreements on eliminating a two-tier pay structure for delivery drivers and installing air conditioning in vehicles. However, unresolved issues centre on pay increases for part-time workers who sort packages and load trucks.

Under Sean O’Brien, the Teamster’s general president, contract negotiations between the two have become a test case for a union giant that is flexing its muscles after corporations have stonewalled nascent labor movements at Starbucks and Amazon with long delays toward a first contract, reports UK daily The Guardian.

“We are going to set the tone – and we have – for how organised labour should deal with corporate America, with politicians, and how they should stand up and fight. We will set the example through this situation with UPS whether we get a deal or if UPS chooses not to do the right thing to strike themselves,” the paper quotes O’Brien as saying.
 

Algeria submits application for BRICS membership

Algeria’s President Abdelmadjid Tebboune said that the country has applied to join the BRICS group of major emerging economies and submitted a request to become a shareholder member of the group’s New Development Bank.

“We officially applied to join the BRICS group, we sent a letter asking to be shareholder members in the bank ... Algeria's first contribution in the bank will be $1.5 billion," Tebboune said.

He added that Algeria was seeking to join the bloc to open new economic opportunities. The North Africa country is rich in oil and gas resources and seeking to diversify its economy and strengthen its partnership with countries such as China.

The BRICS group of nations comprises Brazil, Russia, India, China, and South Africa and accounts for more than 40% of the world's population and about 26% of the global economy.

More than 40 countries have expressed interest in joining the BRICS group of nations, South Africa's top diplomat in charge of relations with the bloc said last week. Saudi Arabia, the UAE, Syria, Egypt, Bahrain, Iran, Argentina, Cuba, the Democratic Republic of Congo, Comoros, Gabon, and Kazakhstan are among the countries that have expressed interest in joining BRICS.

The announcement on Algeria’s application was made following Tebboune's visit to China, during which the two sides signed 19 cooperation agreements. Beijing agreed to invest US$36 billion in the North African nation in manufacturing, new technology, knowledge economy, transport, and agriculture.

Tebboune also told his Chinese President Xi Jinping that Algiers is ready to play “an active part” in Belt and Road Initiative (BRI) to deepen economic ties with China. Algerian imports from China have steadily increased, rising from US$400 million in 2003 to US$8 billion in 2022.

Presidents from BRICS member states are set to discuss the group’s expansion in August, during a summit where they are also expected to launch a currency to rival US dollar hegemony.

Last December, Tebboune outlined his government’s plans for economic development over the next 12 months. He said Algeria would boost investments, improve human development, and shift towards a more advanced export structure relying less on hydrocarbons to qualify for membership of BRICS. 

 

SWIFT denies “false” allegations by Union Bank

SWIFT Networks has denied what it termed as “false” and “baseless” accusations which formed the basis of an ex parte order granted against it by a Federal High court in Lagos, Nigeria, restricting it from accessing its account with the plaintiff, Union Bank and 24 other banks.

According to reports the financial messaging services provider said that it would be “rigorously opposing” the order in court while also trying to reach an amicable resolution with Union Bank. It also said that it was neither informed about the order either by Union Bank nor did the court reach out to it to get its statement before the order was granted.

The statement reads; “The board of directors and shareholders of Swift Networks Limited have just been made aware of a federal high court ex parte injunction granted to Union Bank. We wish to state that the allegations that formed the basis of this ex parte injunction are false and baseless, and as such, we shall be rigorously opposing the ex parte order in court while also trying to reach an amicable resolution with Union Bank.”

“We were not informed by Union Bank, nor did the court hear our own side before this injunction was granted”, it added.
 

Romania open banking initiative launched

The Romanian Fintech Association (RoFintech) has announced the launch of the Romanian Open Banking Initiative (ROBI) to support Open Banking adoption.

The initiative aims to minimise the burdens faced by industry participants, particularly in the context of slow adoption rates caused by a lack of harmonisation and transparency. ROBI will also address the misalignment between the implementation of the Payment Service Directive (PSD2 and upcoming PSD3) and its objectives regarding competition and innovation. 

RoFintech has created an open banking working group designed specifically for the Romanian market. The group includes several contributors such as licensed Third-Party Provider (TPP) companies Paysera, Finqware, SmartFintech, Kevin, and TrueLayer.

ROBI’s objective roadmap includes the improvement of current open banking development and adoption processes by implementing best practices. The initiative will also leverage upcoming PSD3 anticipated legislative updates to foster a unified approach and perspective, as well as establish a robust collaboration platform among industry participants. 

The group will analyse and monitor the current state of the Romanian open banking market to identify key obstacles and opportunities, and it will also work to create a common framework for cooperation among Romania-based Open Banking players. 

Officials from Paysera commented that the Romanian public is still largely unaware of the benefits of open Bbanking. They also stressed the need for more support from the National Bank of Romania to do more in educating the public about its importance and potential.

 

Myanmar’s central bank to issue highest denomination banknote

The military regime-controlled Central Bank of Myanmar (CBM) has announced plans on to issue a “limited number” of new 20,000-kyat banknotes from the end of this month.

Worth twice the highest denomination currently available—Ks10,000 (about US$4.75)—the newly issued banknote will commemorate the completion of a giant Buddha statue now under construction in the regime’s administrative capital of Naypyitaw, the central bank’s announcement stated, and mark one year since the 2022 birth of a “white elephant” that the junta celebrated as a sign of its right to rule. 

The CBM’s plans are possibly a response to Myanmar’s economy becoming more unstable since the generals seized power in 2021. Since the military ousted the elected government of Aung San Suu Kyi, economic boycotts and sanctions imposed by Western nations have impacted both big businesses and ordinary people, many of whose lives have already been disrupted by civil war and the coronavirus pandemic.

The issue of new, higher denomination currency is associated in popular belief with a risk of inflation, though there isn’t necessarily a link. Older Myanmar residents are especially sensitive to changes affecting the currency, recalling the sudden demonetisation of banknotes in 1987 during an earlier dictatorship, which reportedly affected around 80% of the money in circulation.

The action spurred discontent that contributed to a 1988 uprising against military rule that failed but also led to the birth of the Suu Kyi's National League for Democracy party.

A report on state-run MRTV television said the Ks20,000 notes will be issued in a limited number beginning July 31. State media reports said the new banknotes would be available only by exchanging damaged lower denomination notes with the same value at branches of the central bank in the capital Naypyitaw and the cities of Yangon and Mandalay.

The notes show an albino elephant on the front and two bridges, a symbol of infrastructure development, on the back. Albino elephants are usually dubbed white elephants, symbols of good luck in several Southeast Asian cultures.

 

BCFC and Mastercard renew partnership in Bahrain

Bahrain Commercial Facilities Company (BCFC) has renewed its partnership agreement with Mastercard to introduce payment solutions and further enhance its IMTIAZ card offering.

The agreement featured several initiatives, including the introduction of the Mastercard World Elite card for affluent clients and the launch of corporate credit cards designed to cater to the specific requirements of corporates and small and medium sized enterprises (CSME) and other businesses within the Kingdom of Bahrain.

Abdulla Bukhowa, Chief Executive Officer BCFC, said: “The renewal of our 14-year partnership with Mastercard demonstrates the success of IMTIAZ card in satisfying and exceeding the needs and expectations of our customers. We are delighted to announce that our collaboration with Mastercard has now moved to a new level of coordination.”

The partnership will also introduce Mastercard loyalty solutions to provide consumers with an enhanced experience and extend benefits matching their lifestyles and aspirations.

Khalid Elgibali, Division President, Middle East and North Africa at Mastercard, said: “Our partnership with BCFC is a key milestone in our journey to build an inclusive digital economy that works for all, in Bahrain and beyond. We look forward to expanding our portfolio and introducing innovative payment solutions to meet the evolving needs of our consumers.”