The Bank of China said the government may look to introduce more macroeconomic controls in the second half of the year to cool an apparent economic overheating, the Shanghai Securities News reported. In the bank’s monthly monetary market report, the bank said that most macroeconomic indicators pointed to continued rapid growth during the first half of this year, predicting GDP would increase 11.3% this year, beyond the central bank's expectation of 11%. Likely measure included rate hikes and the cancellation or reduction of taxes on bank interest. The bank added that increases in the price of agricultural products, rebounding oil prices, resource price adjustment and the "wealth effect" of the stock market were probably the main pressures driving the consumer price index (CPI) to 4% in June.

New rules designed to ease the use of personal cheque accounts were issued on July 9. However, as the Information Times reports, much more needs to be done to get consumers, banks and merchants on board.

Silos in China’s financial sector are slowly being eroded and financial conglomerates are set to emerge. As the China Securities Journal reports, better cooperation between the sector’s disparate regulators will be required if the financial sector is to cope with these new financial giants.

The central government is preparing to launch a long-awaited rescue plan for the Agricultural Bank of China (ABC), one of the nation’s four largest commercial banks, the Shanghai Financial News reported. The bank won official backing for its reform plans at a key central government finance meeting in January, although details were never revealed. However, according to the newspaper, ABC is likely to receive US$140 billion from the central government to cover accumulated non-performing loans worth nearly US$100 billion and kick start corporate restructuring. ABC’s NPL ratio stood at over 23% last year compared to the 7.5% average of China’s commercial banks. [Caijing magazine puts the bank’s NPLs at US$115 billion (RMB 900 billion) – TCP]. ABC is the only one of the Big Four banks not to have undergone a significant financial overhaul. The Bank of China and the China Construction Bank each received US$22.5 billion dollars and the Industrial Bank of China US$15 billion dollars from the government as part of a three-step plan that eventually led to their stock market listings in Hong Kong.

The Shanghai Gold Exchange plans to work with the Industrial and Commercial Bank of China (ICBC) to launch gold bullion trading for individuals across the country in July, the Shanghai Financial News reported. Individual investors will be required to trade from a minimum threshold of 100 grams, which is worth around US$2,100 (RMB16,000) based on Tuesday’s prices. ICBC’s Shanghai Branch launched an individual gold trading pilot program in July 2005, but lowered the threshold from 1,000 grams to 100 grams last December to appeal to more traders. By last Friday, the bank had had 3,301 gold-trading accounts with a cumulated turnover of 7,557.6 kilograms. Gold is a traditional symbol of  wealth in China, and the country is the third largest gold consumer in the world. The Shanghai Gold Exchange – the nation’s only bourse for precious metal, trading platinum, gold, and silver – traded 1,249 tons of gold in 2006, up nearly 37.8% from 2005.

China Mobile is planning a domestic IPO as early as next month, the Oriental Morning Post reported today. The world’s largest mobile phone company by users could raise as much as RMB80 billion through a mainland offering, surpassing the record IPO of the Industrial and Commercial Bank of China with its IPO. Its Hong Kong shares closed up on the news Tuesday at a record HK$80.35. China’s securities regulator has encouraged mainland companies listed offshore to go public on mainland bourses.

Export rebates to be slashed or scrapped

China Mobile eyes home IPO

Shanghai retail sales surge in May