China aims for extensive investor-friendlier IPO rules
The Chinese government has decided to expand its pilot registration-based initial public offering (IPO) system to the entire stock market. The authorities started testing this U.S.-style IPO mechanism in the stock markets out of the Shanghai and Shenzhen main boards in 2018. According to the draft rules (Zh) published by the China Securities Regulatory Commission (CSRC) on Wednesday, the new measure aims “to give the right of choice to the market.” “Making IPOs more regulated, transparent, and predictable” is at the core of the reforms. The adoption of the new measures will mark a milestone in China’s IPO system development and significantly encourage corporate funding through public listings. However, investors could bear bigger risks when investing in a freer market.
Fed increases rates by 0.25 percent
The U.S. Federal Open Market Committee (FOMC) announced yesterday to raise the target range for the Fed-fund rates by 0.25% to 4.50-4.75%, further slowing its pace of rate hikes. A “couple” of more rate increases are in sight, Chair Jerome Powell said at the press conference (transcript, video) after the FOMC meeting. The central bank ended its zero-interest era in March last year and brought the year-on-year personal consumption expenditures (PCE) inflation fell from its peak at 7.0% in June to 5.0% in December. However, the number is still above the Fed’s 2% target.
NATO, Japan to strengthen ties against China, Russia
NATO Secretary General Jens Stoltenberg and Japanese Prime Minister Fumio Kishida signed a joint statement during their meeting in Tokyo on Tuesday. In the statement, the two condemned Russia, China, and North Korea and vowed to expand their cooperation into defense science and technology. “No NATO partner is closer or more capable than Japan,” Stoltenberg said at their joint press conference.
In the regular press conference yesterday, China’s Foreign Ministry spokesperson criticized NATO for constantly seeking to “reach beyond its traditional defense zone and scope,” adding that “the Asia-Pacific…does not welcome the Cold-War mentality and bloc confrontation.”
By actively engaging and standing with the West, Japan is increasingly isolating itself from countries around it. Such a tendency of isolation, in turn, pushes it further toward the camp led by the U.S.
Commentaries of the day
Before Blinken’s and Yellen’s China trips: Antony Blinken’s trip to China from Sunday to Monday will be the first by a U.S. State Secretary since October 2018. Last month, Treasury Secretary Janet Yellen signaled a China visit “in the near future.” The Center for Strategic and International Studies hosted a press briefing on Monday to preview the visit. In China, the Zhongsheng (钟声) Column in the People’s Daily, the mouthpiece for the CPC, published a commentary against decoupling today.
Editorial Board | “脱钩断链”行不通，深化合作是出路 Decoupling and breaking supply chains" will not work, deepening cooperation is the way out. 人民日报 People’s Daily, 2023-02-02.
Multilateralism: Jeffrey Sachs at Columbia University reviewed five popular theories of today’s geopolitical landscape and held that multilateralism is the ultimate prescription for today’s world. Instead of “idealistic” as conventional wisdom suggests, Sachs argued that multilateralism is actually “more realistic than the Realist theory.”
Chip war: Former investment banker Anjani Trivedi reminded us that China was among the top three investment destinations for the world’s leading semiconductor equipment companies. Many of these companies are from the U.S. and its allies. Blocking China on chips, batteries, and others will impede not only innovation but also production expansion. Fostering competition instead of shutting China from the field is more “productive and profitable,” concludes Trivedi.
Here is today’s question: How would Tokyo’s cooperation with Washington in curbing China’s chip technology affect Japan?
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