New policies to foster Chinese innovation
On Wednesday China’s State Council announced multiple policies designed to encourage homegrown innovation. This comes as response to China’s new shift from a manufacturing based economy to a services and investment led one. As part of this, three new ‘national innovation demonstration zones’ will be set up in the provinces of Henan, Shandong and Liaoning. These zones, including ‘China’s Silicon Valley’ in Beijing’s Zhongguangcun, will act as testing grounds for new ideas and development models to be rolled out across China in the future. The State Council has also noted that government intervention will be reduced in these areas in the hopes of building an environment supportive of start-ups and new innovation. Click here for the full article.
Australian Dollar jumps past US77c this morning
Last night the Australian dollar reached a new nine-month high, buying US76.71c as of 8:40am this morning. This represents the currencies strongest position since early July last year. Symptomatic of this incline, yearly currency predictions from national banks such as Commonwealth have also been raised, with forecasts of US70c changing to US78c and mid-2017 predications reaching US80c. Click here for the full article.
China expanding financial support to increase consumption
New guidelines have been issued on Wednesday by the People’s Bank of China and China Banking Regulatory Commission in an effort to spur consumption in a select number of promising fields. Financial institutions have been encouraged to set up more consumer finance firms in order to increase lending to consumers. Fields such as health care, information and green consumption have been identified as areas for consumer credit to offer more services. China initially began consumer credit programs in 2010. Click here for the full article.
AIIB will provide first loans to India
The Asian Infrastructure Investment Bank (AIIB ) will likely see India as its first loan customer as India plans to raise $500m to fund solar power projects. The new bank will fund infrastructure projects across the one belt, one road initiative and hopes invest in green projects which promote clean energy and sustainable development across the whole program. India is the AIIB banks second largest shareholder and will look to the bank to fund its future investments in the hope to drive initiatives which will promote trade between the countries along the ‘silk road’. The interest for this loan is likely to be tracked to the LIBOR , which is the common standard that banks use to lend to each other, at a rate of 2 -2.5. In addition to this India expects to raise more than $3 billion for its investment from new banks set up to fund BRIC countries within the new financial year. The AIIB provides developing countries access to cheaper funds which will work out below 10% which is cheaper than the domestic 12%. Jin Liqun (AIIB president) mentioned the future pipeline of funding projects will stand in good favour for the bank. Click here for the full article.