Hong Kong’s Securities and Futures Commission (SFC) set 2027 targets for renminbi-counter trading through Southbound Stock Connect and for REIT Connect. Mainland insurers also gained access to Hong Kong-listed exchange-traded funds (ETFs) through an existing Connect channel this week.

On the mainland, Reuters reported that regulators had asked some banks to extend China Vanke’s repayment deadlines and delay classifying overdue loans as non-performing. The People’s Bank of China (PBOC) prepared liquidity operations for the National Day holiday, while the Shanghai office of the National Financial Regulatory Administration set pre-launch controls for banks’ artificial intelligence applications.

Read more on the week’s key developments:

1. Mainland insurer ETF access takes effect as SFC details Connect plans

SFC chief executive Julia Leung said on 23 September that the regulator aims to introduce renminbi-counter trading into Southbound Stock Connect by 1 July 2027 and launch REIT Connect in the first half of that year. Mainland insurers gained access to Hong Kong-listed ETFs through ETF Connect on 21 September under a policy announced in August. The two 2027 launches remain targets.

The measures address different limits on cross-border investment. Renminbi counters would let mainland investors trade eligible Hong Kong shares in renminbi, while REIT Connect would extend mainland–Hong Kong market access to real estate investment trusts (REITs). Insurer access brings another group of investors into an existing ETF channel. Leung said 10 of the 31 eligible Hong Kong ETFs can invest up to 40% of their portfolios in international equities. The effect on investment flows remains to be seen.

2. Regulators reportedly ask banks to keep Vanke overdue loans off bad-debt books

Chinese financial regulators have reportedly asked some banks to extend repayment deadlines for China Vanke and refrain from classifying its overdue loans as non-performing. The guidance was directed mainly at larger banks and also asked some lenders to defer interest collection, according to sources close to the matter. Regulators and Vanke did not respond to its requests for comment.

Vanke is a Shenzhen-based property developer listed in Shenzhen and Hong Kong. Its largest shareholder, state-owned Shenzhen Metro, held about 27% of its shares at the end of June. Bank loans accounted for 72% of Vanke’s CNY 351 billion ($52.4 billion) in interest-bearing debt at that date. If the reported guidance is implemented, payment extensions would ease Vanke’s immediate cash pressure, while delayed non-performing classification would affect when lenders recognise the strain in their loan books. Neither step would reduce the debt owed or restore the developer’s weak property sales.

3. PBOC sets daily ceiling for holiday overnight reverse repos

In a notice dated 23 September, the PBOC said it would conduct overnight reverse repo operations from 28 September to 8 October to meet banks’ short-term liquidity needs. The operations will use a fixed rate and quantity tender, with a daily ceiling of CNY 1 trillion ($149.3 billion). That is the most the PBOC may offer on any day, rather than an amount already injected. The central bank also announced a CNY 800 billion ($119.4 billion) one-year medium-term lending facility (MLF) operation for 24 September, against CNY 600 billion ($89.6 billion) maturing during the month. The planned operation would add a net CNY 200 billion ($29.9 billion).

Cash withdrawals, month-end balance-sheet demands and maturing open-market operations can put pressure on short-term funding around the holiday. The overnight facility gives the PBOC room to respond day by day, while the MLF operation provides funding for a year.

4. Five industry associations standardise disclosure of personal-loan costs

On 18 September, the National Internet Finance Association of China, China Banking Association, China Trustee Association, China Association of Finance Companies and China Micro-credit Companies Association jointly issued a Self-regulatory Standard for Disclosure of Comprehensive Financing Costs in Personal Loan Business. Lenders must show borrowers a standardised breakdown of interest and other charges under normal repayment, expressed as an annualised comprehensive financing cost using the internal rate of return method. A daily interest rate or monthly fee rate cannot substitute for that figure. For online loans, a separate disclosure pop-up must remain visible for a reading period generally no shorter than 10 seconds. The standard applies to new business from publication.

The standard provides a common way to implement the personal-loan cost disclosure rules that took effect on 1 August. Lenders also remain responsible for disclosure when a partner platform presents their product, giving the standard reach beyond the lender’s own website or app.

5. Shanghai NFRA office sets pre-launch controls for banks’ AI applications

The Shanghai office of the National Financial Regulatory Administration (NFRA) published measures on 24 September encouraging banks and insurers it supervises to use artificial intelligence (AI) in customer service, lending, operations and risk management. High-risk applications require approval from an institution’s risk management committee. Public-facing or high-risk applications using generative AI must be reported to the Shanghai office before launch. External computing, model and data services must be managed as technology outsourcing risks.

The measures build on the NFRA’s national guidance on safe AI development and use, but spell out steps for institutions under its Shanghai office’s supervision. For banks, the decision to use AI in lending or customer-facing services now includes an assessment of the application’s risk, the controls needed before launch and, where an outside provider is involved, the risks of relying on that provider.

6. Gansu Rural Commercial Bank approved to absorb 24 rural lenders

The Gansu office of the National Financial Regulatory Administration approved Gansu Rural Commercial Bank’s absorption of 24 institutions on 18 September. They include rural commercial banks, rural cooperative banks, credit cooperatives and village banks. The provincial bank is to take on their assets, liabilities, businesses, outlets and staff; the institutions are to become branches as the merger and licensing steps are completed. Gansu is a province in northwestern China with a population of about 24 million.

Gansu Rural Commercial Bank was formed earlier this year through the consolidation of 66 institutions; the latest approval brings another 24 into the provincial structure. The merger places their credit exposures under one bank’s oversight while retaining local outlets. That gives the provincial bank a common supervisory structure, but also leaves it responsible for identifying and managing risks inherited from each lender.

7. Overseas securities firms make first trades on CFETS offshore RMB platform

Five overseas securities firms joined the China Foreign Exchange Trade System (CFETS) offshore renminbi foreign-exchange trading platform on 21 September. By the time of CFETS’s 23 September statement, all five had completed transactions covering spot and swap trades. They were Huatai Financial Holdings (Hong Kong), CITIC Securities International Capital Management, Jiantou (Overseas) Investment, Guotai Junan Securities Investment (Hong Kong) and CICC Financial Products. The platform was already operating; these are its first overseas securities-firm participants.

The platform began with six pilot banks in June. Securities-firm access brings in institutions managing currency exposures arising from cross-border investment and client trading, extending participation beyond the banks that launched the service.

8. Digital RMB trade service links cross-border settlement with controlled supplier payments

The digital-renminbi cross-border settlement platform introduced a trade settlement and financing service, 数币达·励付, at a China–ASEAN financial forum on 18 September. China Construction Bank (CCB) said it was among the first participating banks and had worked with Southern Power Grid’s Lancang–Mekong business on two applications: a cross-border corporate order payment and a payment governed by smart-contract conditions. CCB said the cross-border transfer in its case arrived in real time after compliance checks.

The first application addresses the timing of a cross-border trade payment after compliance checks. The second controls when, and to whom, funds are released further down the supply chain. CCB has not disclosed transaction volumes or costs across wider use.

9. China holds loan prime rates for 16th consecutive month

China left its one-year loan prime rate (LPR) at 3.0% and its five-year-plus rate at 3.5% on 20 September. Both have been unchanged since June 2025, following cuts the previous month. The one-year rate is a reference for many business loans, while the five-year-plus rate is used in mortgage pricing. Actual borrowing costs also depend on the terms set by lenders and, for existing floating-rate loans, when their rates are due to reset.

The five-year rate has remained unchanged despite continued weakness in new-home sales. Sales of new residential property by floor area fell 13% year on year in January–August, according to the National Bureau of Statistics.

10. Insurance association seeks comments on participating-policy model clauses

The Insurance Association of China invited public comments on 18 September on draft model clauses for three participating insurance products: whole-life, endowment and annuity policies. Each draft contains 32 clauses. The association proposes standard wording for terms including policy dividends, cash value and how dividends can affect the insured amount. Comments are due by 30 September; the clauses have not been implemented.

The proposal builds on model clauses for ordinary life policies issued in 2023. It distinguishes basic wording that insurers would use in full from optional provisions and details they could adapt to their products. A common description of how dividends arise and are distributed could make participating policies easier to compare, particularly where customers must distinguish guaranteed benefits from returns that depend on the insurer’s performance.

What to watch

China’s September manufacturing and non-manufacturing purchasing managers’ indices on 30 September; September consumer and producer price data on 14 October; and third-quarter economic results on 19 October, including retail sales, investment and property-market figures.