Current initial public offering rules give investors in secondary markets consistently high expectations and thus they blindly seek stock rises, and this generates great price distortions and low long-term returns on new share issues, Fang Xinghai, vice chairman of the China Securities Regulatory Commission, said at the Chinese Economists 50 Forum in Beijing on Feb. 16.

Shanghai's Songjiang district and the cities of Jiaxing, Hangzhou, Jinhua, Suzhou, Huzhou, Xuancheng, Wuhu and Hefei signed their agreement in the trading hall of the Shanghai Stock Exchange on Feb. 15, then announced their joint setup of the SSE capital market service G60 Sci-Tech Innovation Corridor base and officially released the SSE G60 Sci-Tech Corridor Index. G60 is a regional development program established by Songjiang District and the other eight cities, all of which lie in the Yangtze River Delta.

On Feb. 12, China's central bank the People's Bank of China and the State Administration of Foreign Exchange jointly issued a notice to specify management principles for funds foreign employees of China's listed firms spend on equity incentives. The first of these is that these funds must be registered and managed, and the second is that foreign employees can choose their own sources of financing. These can be their legal income from within the country or funds remitted from abroad.

The SSE Composite Index rose 2.45 percent, the Shenzhen Stock Exchange Composite Index increased 5.75 percent, and the Growth Enterprise Market Index went up 6.81 percent in five trading days after China's Spring Festival holiday ended last week. The surge in overseas funds in the GEM will be inevitable because the GEM is set to be included in the Morgan Stanley Capital International index. As of Feb. 14, the ratio of over-allotment options of northbound funds in the GEM had gone up to 3.53 percent, and the ratio of over-allotment options by qualified foreign institutional investors in the GEM was 0.52 percent.

The China Banking and Insurance Regulatory Commission classified China Postal Savings Bank as a state-owned large commercial bank in its latest document on Feb. 14. This means that it joins the ranks of the Industrial and Commercial Bank of China, Agricultural Bank of China, Bank of China, China Construction Bank and Bank of Communications as one of China's six state-backed banks. The institution has a prominent and differentiated positioning, mainly serving agriculture, rural areas and their residents and small, micro and retail customers. The bank has nearly 40,000 business outlets and serves 565 million individual customers.

The broad money (M2) balance was CNY186.6 trillion (USD27.6 trillion) late last month, up 8.4 percent from a year earlier, per the financial statistics report for last month PBOC released on its website on Feb. 15. The narrow money (M1) balance was CNY54.6 trillion, up 0.4 percent, and the balance of currency in circulation (M0) was CNY8.8 trillion, rising 17.2 percent. Net cash for the month was CNY1.4 trillion. The increase in private financing last month totaled CNY4.6 trillion in a record high, and CNY1.6 trillion more than the same time last year. The increase in yuan loans amounted to CNY3.2 trillion, hitting a monthly record high, and CNY328.4 billion (USD48.5 billion) more than the same period last year as stable monetary policies have remained unchanged. The reasonable increase in broad money and private financing shows the need for counter-cyclical regulation, and the macro leverage ratio is stable, so the central bank is not increasing liquidity.

Services' export growth last year reached an eight-year high, with exports totaling CNY1.8 trillion for the year, up 14.6 percent from 2017, the biggest growth since 2011. Annual service imports were CNY3.5 trillion, an increase of 10 percent, China's Ministry of Commerce announced on its website on Feb. 12. Intellectual property royalties on imports also soared, and demand for high-end productive services and export competitiveness both grew, with IP royalties of CNY235.5 billion for imports -- up 22 percent -- and CNY36.8 billion for exports in a 14.4 percent rise.

The consumer price index rose 1.7 percent last month from a year earlier to plumb an annual low. Food prices climbed 1.9 percent, while non-food prices went up 1.7 percent over the same period last year, figures China's National Bureau of Statistics released on Feb. 15 show.

China's had 5.5 billion domestic tourists last year, up 10.8 percent from the year before. Inbound and outbound tourists combined amounted to 291 million, up 7.8 percent, the country's Ministry of Culture and Tourism said on Feb. 13, adding annual revenue from the sector was CNY6 trillion, up 10.5 percent. The overall contribution of tourism nationwide to gross domestic product in the whole year was CNY9.9 trillion, making up 11 percent of GDP, per the ministry's preliminary calculations.

Editor: Ben Armour