Central bank to regulate virtual currency
People’s Bank of China vice-governor Su Ning told the International Finance Journal the bank was drafting regulations to manage virtual currency online in order . Su said the bank was aiming to encourage and regulate new payment businesses such as e-payment. The  regulations will govern licensing, internal controls and risk management of payment clearance organizations. At the same time, e-payment guidelines were being drafted to regulate the online payment services market.

Macro conditions make controls difficult: Bank governor
The governor of the People’s Bank of China, Zhou Xiaochuan, was quoted in the bank-managed Financial Times as saying that excessive liquidity and inflation risks made it more difficult to use macroeconomic controls to manage the economy, the Shanghai Morning Post reported. However, the bank has hinted recently that further interest and reserve ratio requirement hikes are likely in the near future by publishing three front-page articles in  the Financial Times in the last two weeks, the latest of which appeared on April 16. The bank lifted reserve ratio requirements by 50 basis points on the same day, and last raised benchmark deposit and lending rates on March 17.

Regulator tells Beijing banks to tackle queues
The Beijing Banking Regulatory (BBR) issued nine guidelines to Chinese commercial banks under its jurisdiction to tackle long queues, the Beijing Morning Post reported. It  asked the banks to open all desks at peak hours on both weekdays and holidays, separate staff operation and rest areas to create a more positive service image, and told branch managers to monitor, manage and tackle any problems arising on the floor. To increase ATM and e-payment usage, it also asked the banks to educate consumers and encourage them to reduce cash transactions at the counter. The regulator planned to set up a committee to issue further guidelines and monitor counter services.

CDB eyes stock reform in second half
China Development Bank (CDB) expected to launch a stock reform framework in the second half of the year, China Business News reported. Sources close to the situation said a reform program had been finalized. Under the plan, the government would inject capital from forex reserves into the bank and the China National Audit Office would begin a financial audit in July. The source added that the CDB planned to meet all commercial bank requirements, including the 8% capital sufficiency rate. The bank’s latest fiscal report showed that its capital sufficiency rate had fallen from 9.15% in 2005 to 8.05% by late 2006, and was likely to fall under 8% without an injection of capital. No upper limit for the cash injection was disclosed. The source also said the bank needed to redefine its financial bond operations, which are its main financing channel.  More than US$387.1 billion (RMB3 trillion) worth of financial bonds have been issued to date, and the People’s Bank of China has approved the bank to issue a further US$101.94 million (RMB790 million) this year.

Yangtze real estate recovery likely: Report
A report by the Shanghai Academy of Social Sciences (SASS) said the Yangtze River Delta real estate sector was likely to emerge from its temporary downward trajectory in two years, though it was unlikely to again experience the rapid growth of the past few years, China Business News reported. The SASS report said economic growth and rising income would determine the relationship between property prices and income, but migration to the area would guarantee demand growth. The report said that as a leading economic region, the Yangtze River Delta attracted highly-educated people who demanded higher-quality property.

PICC ready for home listing: Chairman
Hong Kong-listed mainland non-life insurer PICC Property & Casualty chairman Wu Yan said the company had met the necessary conditions for a mainland A-share listing, the China Securities Journal reported. However, Wu said the timing would depend on market development. The company planned to launch a nation-wide life insurance business this year through acquisitions, and expected these to be profitable in two to three years. However, the non-life business would still be core revenue source, Wu said. The company also planned to launch other financial businesses related to its property insurance business. China's non-life insurance market has grown by more than 17% a year over the past five years. PICC reported that net premiums rose 4.2% to US$7.174 billion (RMB55.6 billion) in 2006, reversing a 5.4% decline in 2005.