You have
implicit trust in me.
你们绝对相信我。
His silence gave
implicit consent.
他的沉默表示默许。
Implicit in her speech was the assumption that they were guilty.
她话语中的言外之意是设定他们有罪。
The increase was caused by its rectification of non-standard asset management business and rising risk exposure in some regions due to China's efforts to clear up the implicit risk of local government debt, he said.
"An implicit but valuable label of the aviation service sector is safety.
The curriculum will be designed "to address implicit bias, promote conscious inclusion, prevent discrimination and ensure everyone inside a Starbucks store feels safe and welcome," the company said in a statement.
The proportion of real estate-related tax revenue in local fiscal revenue has not fallen significantly, and the size of implicit debt of local governments has decreased and mitigated relevant risks.
As for local government debt risk resolution, the ministry said China is establishing market-oriented, law-based mechanisms to address existing local government implicit debt while resolutely forestalling any new implicit debt from emerging.
Some institutions have overestimated the size of implicit debt as they forget some local government financing vehicles are market entities with healthy cash flows and their debts will not likely default, Qiao said, adding regions like Guangdong province and Shanghai have already finished defusing the hidden local government debt risk.
Yang called for further clarity on the significance of the private sector in the country's modernization efforts, improvement to relevant legislations, better rules to protect property rights of the non-public economy — private enterprises, self-employed households, foreign businesses and the like — and removal of any implicit entry barriers facing private businesses entering the market.
"Many local protectionism behaviors are implicit, meaning that even policymakers don't realize that some policies may lead to a certain degree of protection for local companies.
"Many local protectionism behaviors are implicit, meaning that even policymakers don't realize that some policies may lead to a certain degree of protection for local companies," he said.
The guideline urged to thoroughly examine and verify policies and measures with regard to market entities economic activities, eliminate differentiated policies and measures, get rid of discrimination in ownership, location and implicit barriers, and prevent excessive use of administrative powers in competition to ensure all businesses under varied ownership and coming from different areas and regions can compete fairly and equally.
The new registration mechanism aims to encourage more overseas listings to take place in a sustainable and healthy manner, and should not be seen as "regulatory tightening" or an implicit approval system, according to the commission.
However, under the constraint that the growth rate of fiscal budgetary expenditure in the whole year is set at 1.8 percent, and the tightening of supervision on local governments' implicit debt growth, moderate infrastructure investment may be a trend in the long run, Zhang said.
Liu highlighted the need to prevent and defuse fiscal risks, stressing that local governments should efficiently use funds raised via special bonds and prevent increases in implicit debt, or the contingent liabilities.
Local governments are not allowed to increase implicit debt in any form.
They are never allowed to set up new projects by adding implicit debt, said Liu.
They said the key reforms should include harmonizing and clarifying rules, removing implicit guarantees and increasing foreign participation.
The leverage ratio of the government sector remains at a relatively high level, while implicit debt risks still exist for local governments.
If we continue to focus on the GDP growth rate, it may push the local governments to set high targets which will lift up the implicit debt risk, as borrowing is a simple method of stimulating investment to drive the growth.
However, there has also been an "implicit burden" due to public risks, such as the sudden outbreak of COVID-19, which prompted tax authorities to focus more on the medium to long-term effects on firms, said Liu Shangxi, head of the Chinese Academy of Fiscal Sciences at the Ministry of Finance.
Illegal or implicit entry barriers and locally issued negative lists will be canceled, she said.
We must contain the hidden debt of local governments from growing further, address the existing implicit debt issue and improve the government debt management system.
"The country is capable of properly handling existing debt with the road map it has employed," the source said, adding that some regions such as Guangdong province and Shanghai have already finished defusing the risks from implicit local government debt.
The implicit debt to be addressed does not include the debts of local government financial vehicles with a healthy cash flow, because their debts are unlikely to default.
While real estate-related tax revenue has declined, its proportion of local general public budget revenue has not significantly fallen, the ministry said in a statement, adding that the size of local government implicit debt has decreased, sending relevant risks easing.
As of the end of October, more than 20 provincial-level regions issued over 1 trillion yuan ($137 billion) worth of such bonds during the month to swap their implicit debt, according to news reports.
By doing so, implicit debt is replaced with official government debt.
In August, China's Ministry of Finance had said in a report that it will urge local governments to resolve the existing implicit debt, improve the maturity structure and reduce interest burden.
By doing so, the implicit debt is replaced with official government debt.
According to earlier news reports, 12 provinces may issue around 1 trillion yuan to 1.5 trillion yuan worth of such bonds to swap their implicit debt.
Yang Haiping, a researcher at the Central University of Finance and Economics' Institute of Securities and Futures, said replacing the high-cost implicit debt with cheaper government debt will help reduce local government debt burden and improve debt sustainability.
Rong at BNP Paribas said the maximum value of special refinancing bonds to be issued could amount to 2.3 trillion yuan if local governments' debt headroom — the difference between the approved debt ceiling and the actual amount of outstanding bonds — is fully tapped to replace implicit debt.
Experts, however, said the "debt swap program" still looks relatively small compared with the total size of implicit debt.
However, authorities should refrain from issuing new government debt to substitute for implicit debt, Lou Jiwei, president of the Society of Public Finance of China and former finance minister, told China Daily over the weekend.
Implicit debt refers to liabilities that are not explicitly recorded in a local government's financial statements.
He also frowned upon the idea of substituting implicit local government debt with statutory government debt, as it could unintentionally encourage local governments to scale up their implicit debt in anticipation of the problem being resolved easily.
The Ministry of Finance, in a report published on Tuesday, urged local governments to make full use of their own resources and policies to resolve implicit debt risks.
Looking ahead, experts said market-oriented and law-based mechanisms may be further leveraged to address local government debt issues, while reforms regarding local government financing vehicles — a key source of implicit government debt — should be sped up.
Wen Laicheng, a professor at Central University of Finance and Economics and a fiscal expert, called for efforts to accelerate the transformation of local government financing vehicles to contain the growth of implicit government debt, especially for those areas facing sluggish economic development.
"In particular, we need to include all business of our parent company and domestic and foreign subsidiaries that bear substantial risks in unified credit management, implement unified risk preferences and standards, and prevent implicit concentration risks and cross-contagion risks brought by clients through various products or complex transaction structures," Zhang said.
It is important to achieve reasonable economic growth to service government debt, strengthen transfer payments to regions under stress and establish a clear picture of the size and risk level of implicit government debt, he said.
Corporate governance of local government financing vehicles will be improved to better resolve the risk of implicit debt, the ministry added.
Corporate governance of local government financing vehicles will also be improved to better resolve the risk of implicit debts, the ministry said.
Wealth management products with an implicit guarantee of principle had exited the market.
To help achieve the goal, qualified companies are being supported to issue corporate bonds and asset-backed securities to seek financing for urban environmental infrastructure projects as long as no new burden will be added to the local government's implicit debt, the guideline said.
Efforts will also be strengthened to make a good use of local government special bonds, support in-advance infrastructure investments, improve the structure of income distribution and resolve the risks of local government implicit debts, the statement said.
Meanwhile, the Ministry of Finance has taken measures to curb the growth of local government implicit debt.
Pilot programs that aim to clean up the implicit debt amount to zero have started in Shanghai and Guangdong province.
"In recent years, the risk of implicit debt has been steadily mitigated and the risk is generally controllable," said Xu.
"The ultimate goal of preventing and resolving the risk of implicit debt is to completely eliminate implicit debt nationwide and establish a long-term regulatory framework.
Lu Ting, chief China economist at Nomura, said that "there will be no 180-degree shift in existing property curbs for now", noting that policymakers maintained a "hawkish stance" of resolutely preventing new additions to local governments' implicit debt.
In order to regulate the use of local government special bonds and prevent an increase in implicit debt, the Ministry of Finance issued a guidance on Thursday to strictly prohibit "arbitrary adjustment" in the use of special bonds.
Local governments issuing bonds is increasing as a way to control implicit debt, he said.
Yet, some experts said the future expansion in special bond issuances may be limited amid stricter regulation to contain implicit government debts.
China issued new rules to strengthen the regulation of institutional sellers of wealth management products, requiring relevant financial institutions to take responsibilities for WMP sales and management, and shatter the assumption that risky investments carry implicit guarantees from the government and banks.
This will help promote the transition of WMPs toward net-asset-value products and remove implicit guarantees of principal and yield, the official said.
They will help curb the rise of local government implicit debt and maintain financial sustainability based on an institutional system," said Yang.
"We will not allow the financing of new projects by raising implicit debt," said Ou, adding that local governments are not allowed to increase contingent liabilities through corporate borrowings.
Last year, CCB's infrastructure-related NPLs increased slightly, which was caused by its rectification of the nonstandard asset management business and growing risk exposure in some regions due to China's efforts to clear up implicit risks of local government debt, Jin said.
The implicit lower limit of loan interest rates will be removed, guiding financial resources to small, micro and private enterprises, while improving their competitiveness in the credit market and solving their financing difficulties.
One way to do this is to swap the implicit local government debt by issuing new bonds.
The "implicit debt" is mainly formed through financing activities of the State-owned enterprises and guaranteed by the local governments.
As banks' explicit and implicit guarantees to investors on wealth management products, which we call 'a free lunch', are coming to an end, individual investors become increasingly focused on how to achieve their investment goals by allocating assets into financial products that have some fluctuations," he said.
Liu also stressed the need to actually implement tasks for defusing the implicit debt risks of local governments.
Some areas with difficulties in reducing the local government's implicit debt can start the new "debt swap" pilot programs, taking the last round of debt swap measures as reference－shifting the local government's contingent liability into publicly issued bonds, the research report said.
The new rules aim to rein in risky lending practices in the financial system and eliminate banks' explicit and implicit guarantees to investors on wealth management products.
The key mechanisms to eliminate implicit guarantees include converting existing WMPs valued on an amortized-cost basis to a net asset basis and permitting new WMP issuances to be valued on a net asset basis.
This switch would make volatility in investment returns transparent to investors, incentivizing them to rely on risk assessment when deciding whether or not to purchase a WMP rather than soon-to-be-prohibited implicit guarantees, said Moody's Investors Service.
The extension of the deadline for implementing new rules implies that implicit guarantees on WMPs will remain a key risk for Chinese banks, said analysts of Moody's in a research note.
Song Xuetao, chief macroeconomic analyst with TF Securities, said the cross-border monetary policy framework will help China overcome the mid-to long-term challenges as it will help preserve policy space and rectify structural problems such as property bubbles and implicit debt.
"The PBOC would lower lending rates and push banks to 'remove the implicit floor on lending rates', increase uncollateralized loans and medium-to long-term loans, and guide financial institutions to lend more to small and medium, private and manufacturing enterprises," said Maggie Wei, an economist with Goldman Sachs, who expected further monetary policy easing in coming months, including more reserve requirement ratio, medium-term lending facility and LPR cuts.
Indeed, investors are exposed to higher risks under the registration-based system, in terms of either judging whether an unprofitable company will succeed over time or understanding the implicit risks of the dual-class share structure.
Even worse, many investors believed that there may be an implicit government guarantee that the markets would not be allowed to fall or that indebted companies would not be allowed to fail.
More importantly, according to Zhu, Chinese investors have seen the IPO registration process as a kind of government stamp of approval for the stocks－strengthening the belief that there is an implicit government guarantee and discouraging investors from doing proper fundamental research and due diligence.
They force investors to be cautious about where they put their money, instead of relying on an implicit government guarantee－this reduces the total risk in the system and helps ensure that funds flow to the best companies.
To prevent local government debt risks, at a two-day annual meeting that concluded last week, Finance Minister Liu Kun asked local government officials to carry out debt dissolving plans "in a practical and detailed way", accelerate the market-oriented reform of local government financing platforms, most of which are indebted State-owned companies guaranteed by the local governments, and strengthen supervision to curb growth in implicit debt.
Meanwhile, the government's implicit guarantee on companies' cross-border debt should be controlled, to reduce moral hazards, he said.
Commercial banks in China are setting up their own wealth management subsidiaries in response to the regulator's call to end implicit guarantees for principal and interest payments on wealth management products.
The reformed LPR formation mechanism will help lower the real lending rates as it will be more market-based, thus making it difficult for banks to set an "implicit interest rate floor" for loans and the breaking of the implicit floor will, in turn, prompt lending rates to drop, the central bank explained in a statement.
Therefore, among the current wave of central bank easing, the PBOC's rate cut is perhaps the weakest version as it is implicit (reduction in the LPR but not the policy rate), gradual (unit change is only 5 basis points) and limited.
To ensure that the new plan is well implemented, enterprises can report banks' practices of setting an implicit interest rate floor to market regulators and self-disciplinary industrial bodies.
Subsidiaries can help in transition to high-quality development, say industry expertsCommercial lenders in China are establishing their own wealth management subsidiaries in response to the banking regulator's call to end implicit guarantees for principal and interest payments on wealth management products.
Regulators require financial institutions to break implicit guarantees for principal and interest payments on wealth management products.
The financing needs of private corporate borrowers in China are still underserved by the formal banking sector because of structural factors, including implicit and explicit government guarantees for State-owned enterprises, and information asymmetries between lenders and private sector borrowers, according to industry experts.
"Attaching great importance to this issue, the People's Bank of China, the central bank, and regulatory authorities have put the maintenance of financial stability at the top of their list of priorities, which also include reducing moral hazards, cracking down on shadow banking activities, and abstaining from providing implicit guarantees and making rigid repayments.
The support will be under the premise of not increasing the implicit debt scale of local governments, and in accordance with the principles of controllable risk and commercial sustainability, according to the bank.
Chinese authorities have pledged to rigorously control risks in local government bonds and implicit debt while using bond issuance to finance infrastructure projects and improve weak areas.
"As for implicit government debt, we have taken stringent measures to avoid new implicit debt from taking place," Liu said, adding that progress has been made resolving risk with existing implicit debt.
The ministry will continue to forestall and defuse risk arising from implicit debt, cracking down on violations of laws and regulations, as well as pushing reform of financing companies, Liu said.
"The launch of the deposit insurance scheme was aimed to change implicit government guarantees into a market-based mechanism for risk disposal, and China will further improve the scheme," Wen said.
Establishing wealth management subsidiaries will help improve the overall level of valuation for banks by releasing risks associated with implicit guarantees and rigid redemption for banks' wealth management products.
Last year local governments' implicit debt risk was controlled effectively, however, the total debt level was still huge, the academy said.
"Under the pressure of removing implicit guarantees for wealth management products and shifting from an expected return model to a net value model for such products, banks will hopefully deepen their cooperation with private funds through their wealth management subsidiaries," said Yi in a report.
The latter is an implicit form of guarantee for issuers to get high ratings.
"We should definitely not allow new investment projects to raise capital through implicit local government debt," especially in terms of illegal public-private-partnership financing, government investment funds and government purchase of services," he said.
Though some default cases have occurred, the new defaults are sporadically distributed instead of demonstrating a risk concentration, reflecting the effects of stronger market discipline and orderly unwinding of implicit repayment guarantees.
Compared with State-owned enterprises, which are usually backed by local governments' "implicit guarantees" when borrowing money from commercial banks, the nation's small and medium-sized enterprises have long struggled to secure credit as the risk-averse banks offer tough qualifying conditions with higher costs.
An appropriate default rate, other than an implicit guarantee, will help to develop a more healthy bond market as the investment instruments' prices will better reflect the different levels of credit risk.
"Some analysts expect the next wave of defaults could be in the real estate sector and local government financing vehicles, as they have relatively easy access to financing－they either get funds from shadow banking channels or use the implicit guarantee from the local governments to borrow.
State-owned companies, usually with an implicit guarantee by local governments, are their priorities to issue loans to rather than private and small companies, said experts.
The new rules unify regulatory standards for asset management products and address issues such as implicit guarantees by banks on many WMPs.