Interest Rate Deregulation to Hurt Banking Margins
China's latest move to liberalize interest rates is likely to result in a 6%-8% decline in domestic banks' net profits this year, the Wall Street Journal reported, citing an executive at China's sixth largest bank by asset value. The central bank has allowed banks to offer rates to depositors equivalent to 110% of the benchmark deposit rate and provide loans at 80% of the benchmark lending rate. The bank also cut the benchmark interest rate for savers and borrowers by 25 basis points last week.
Forex Reserves Gain $75b in Q1
China's foreign exchange reserves added $74.8 billion in Q1 2012, $63.1 billion more than in the previous quarter, the State Administration of Foreign Exchange said, without disclosing the total amount, which exceeded $3 trillion as of the end of 2011. It also said the nation recorded a $23.5 billion current account surplus for Q1 2012, without making comparison with historic figures.
Software Revenue Increases 23-Fold in 10 Years
Revenue from China's software industry has risen to ¥1.85 trillion last year from only ¥79.6 billion in 2000, representing a 23-time increase over the decade, commerce minister assistant Qiu Hong said at a software fair. The nation's software exports surged from scratch in 2000 to $14.34 billion last year, with 14 software developers each exporting over $100 million worth of products.
$1 = ¥6.31