Changde Rural Commercial Bank's Main Credit Rating Downgraded to A+; China Ruixin to Acquire 30% Stake in Quick Money Financial | Financial Early Report
｜2025-07-23 Wednesday｜
NO.1 People's Bank of China: Cross-border capital inflow into non-bank institutions totaled $1273 billion in the first half of 2025.
On July 22, Vice Governor Li Bin of the State Administration of Foreign Exchange introduced the foreign exchange data for the first half of 2025 at a press conference held by the National Bureau of Statistics. The data showed that non-bank institutions in China recorded a net inflow of $1273 billion in the first half of 2025, with a year-on-year increase of 46% in the second quarter. Meanwhile, the net inflow of direct investment and securities investments totaled $311 billion, up 16% from the same period last year. As of June 30, China's foreign exchange reserves stood at $33174 billion, an increase of $1151 billion from the end of 2024.
Comment: The continuous net inflow of cross-border capital reflects the strengthened resilience of China's foreign exchange market. The improvement in direct investment and securities investments also indicates a rise in foreign investors' confidence in China's assets. The stable foreign exchange reserves and the two-way floating exchange rate provide a flexible adjustment space for monetary policy and create a favorable environment for cross-border financing.
NO.2 Changde Rural Commercial Bank's Main Credit Rating Downgraded to A+
Recently, China Everbright International downgraded Changde Rural Commercial Bank's main credit rating from AA to A+, and its subordinate capital debt rating from A+ to A. The reason for this downgrade was attributed to three aspects: one, asset quality pressure, with the bank's non-performing loan ratio rising sharply; two, profit ability decline; and three, capital adequacy ratio falling below regulatory requirements, placing significant pressure on capital replenishment.
Comment: Credit rating is an important basis for investors to assess risk. A downgrade in credit rating means that the risk has increased, leading investors to require higher returns to compensate for the risks, which will directly affect banks' issuance of bonds and other financing activities.
NO.3 China Ruixin to Acquire 30% Stake in Quick Money Financial for 240 Million Yuan
On July 22, China Ruixin announced that its indirect wholly-owned subsidiary, Shanghai Ruixin Starlight, plans to acquire a 30% stake in Quick Money Financial for 240 million yuan. Quick Money Financial was granted a third-party payment license in 2011 and provides payment solutions for large and medium-sized enterprises, making it one of the first batch of cooperation institutions with the People's Bank of China's Digital Currency Research Institute. After the acquisition, China Ruixin will become the single largest shareholder of Quick Money Financial, expanding its business to include third-party payments and financial technology.
Comment: China Ruixin is entering the payment track through this acquisition, positioning itself in the financial technology field. As a licensed payment institution, Quick Money's accumulation of expertise in cross-border payments and digital currency may be complementary to China Ruixin's ecosystem.
NO.4 Postal Savings Insurance Takes Up Green Power
On July 22, Postal Savings Insurance announced that it purchased 72.6 million shares of Green Power Holdings Limited through the Hong Kong Stock Exchange's secondary market on July 4, triggering a takeover notice. Prior to this takeover, Postal Savings Insurance held 1978.4 million shares of Green Power's H-shares, accounting for 4.8927% of its total share capital. After the takeover, it will hold 2051 million shares, accounting for 5.0722%.
Comment: From a market perspective, insurance funds have long-term and stable investment characteristics, making them an important force driving the healthy development of the stock market. From the perspective of the insurer, increasing its allocation to stocks and holding them for the long term can better implement value investing principles and focus on matching long-term liabilities, achieving cross-cycle operations.
NO.5 Tianan Life Insurance Approved to Exit Market
Recently, the China Banking Regulatory Commission announced that Tianan Life Insurance has been approved to exit the market. Tianan Life Insurance was granted a insurance intermediary license on November 17, 2016, and its business scope includes agencying corporate property insurance and household property insurance.
Comment: The current Chinese insurance intermediary market is characterized by a "head concentration" phenomenon, where large institutions dominate the market due to their brand, channels, and service advantages. Meanwhile, small and medium-sized institutions face survival pressure due to policy changes such as unified reporting and declining commissions.
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