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In the context of realizing the Chinese-style modernization and rural revitalization strategy, the five departments aim to strengthen financial support for the special action of rural revitalization, with the intention of promoting comprehensive rural revitalization through the use of "financial liquidity". The release of relevant guidance or policies may further promote the development of the rural revitalization bond market.   Key points:   ●  With the deep implementation of the rural revitalization strategy, the central government or various departments have issued a series of policies to encourage funding support for rural revitalization projects through the bond market, and these policies are gradually improving.The notice jointly issued by the five departments to strengthen financial support for the comprehensive rural revitalization special action further encourages financial institutions to issue special financial bonds to support financing tools for agricultural enterprises, and to continuously increase investment in key areas of rural revitalization.   ●   In recent years, there have been few changes in the approval policies for rural revitalization bonds by the dealer association and exchanges. Generally, issuers need to meet certain qualifications, such as rural revitalization special corporate bonds requiring registration in national rural revitalization key support counties or areas that have not lifted poverty alleviation for less than five years, and the funds raised are mainly used to support related fields of rural revitalization. In the early stage of the issuance of rural revitalization bonds, provincial-level investment companies, central enterprises, and high-quality agricultural industry entities were the main issuers, and the project approval rate was relatively high. Since 2023, the number of non-urban investment companies has decreased, and the number of district and county-level urban investment companies has increased significantly. However, affected by comprehensive debt policies such as document No. 35, the approval rate and issuance scale of rural revitalization special corporate bonds and bills have continued to tighten, with fewer new samples added.   ●   In recent years, the rural revitalization bond market has continued to expand, but the growth rate has relatively slowed down. From the overall bond structure, the issuance is mainly through the interbank market, and the issuance period is mostly between 1-5 years (including 5 years). The issuance period has gradually lengthened, and the issuance cost has slightly decreased. Looking at the issuance structure of urban investment company bonds, both the issuance scale and cost have fluctuated. Private placement products are the main bond types, and the issuer level and administrative level are relatively lower than other types of enterprises. In addition, the successfully issued bond-financed projects differ according to the function and positioning of the issuer. There are similarities with other enterprises that have similar functions and positioning, and they are basically based on the issuer's own resource endowment or regional industrial layout. In the early stage of the issuance of rural revitalization bonds, there were limitations on the geographical location of the issuers and the low proportion of funding used in the relevant areas. However, the new round of policies or guidance issued by the five departments may improve the issuance mechanism of rural revitalization bonds, activate the resources of urban investment companies in rural revitalization, promote project construction, and improve the financing environment for district and county-level urban investment companies.   Introduction   Implementing the rural revitalization strategy is a major decision and deployment made at the 19th National Congress of the Communist Party of China. It is also a significant historical task to win the decisive victory in building a moderately prosperous society in all respects and constructing a socialist modernized country. However, currently, financial resources and institutions mainly serve the industrial industry and urban areas, and resource allocation based on price is difficult to achieve the development goal of simultaneous growth in economic benefits and social benefits. Against this background, on August 5, 2024, the People's Bank of China, the China Banking and Insurance Regulatory Commission, the China Securities Regulatory Commission, the Ministry of Finance, and the Ministry of Agriculture and Rural Affairs jointly issued the "Notice on Strengthening Financial Support for the Special Action of Rural Revitalization by Learning and Applying the Experience of the "Ten Million Project"" (hereinafter referred to as the "Notice"), aiming to continuously optimize the service mechanism of financial institutions, tilt resources towards counties, and promote comprehensive rural revitalization through the use of "financial liquidity".   The "Notice" proposes to implement five special actions, namely, financial security for food security, consolidating and expanding the effectiveness of financial assistance, financial services for rural industrial development, financial support for rural construction, and financial empowerment for rural governance, to strengthen financial support for comprehensive rural revitalization. At the same time, the "Notice" also clearly proposes guidance on "guiding qualified entities to expand their funding sources in new urbanization areas such as extending municipal public facilities and integrating urban and rural road passenger transport by issuing corporate credit bonds and asset-backed securities" and "supporting qualified agricultural-related enterprises to issue asset-backed securities, rural revitalization bills, rural revitalization corporate bonds and other financing tools", which may provide new opportunities for the development of the rural revitalization bond market. Based on the policy orientation proposed in the "Notice", this article analyzes the opportunities or favorable factors that may exist in the subsequent issuance of rural revitalization bonds by reviewing the supporting policies, approval rules, trends, issuance situation, and bond-financed projects of the rural revitalization bond market in recent years.   1. Background of Financial Support Policies in the Field of Rural Revitalization   With the deep implementation of the rural revitalization strategy, the central government or various departments have issued a series of policies to encourage funding support for rural revitalization projects through the bond market, and these policies are gradually improving. In the notice jointly issued by the five departments to strengthen financial support for the comprehensive rural revitalization special action, further encouragement is given to financial institutions to issue special financial bonds and support financing tools for agricultural enterprises, and increase investment in key areas of rural revitalization.   The above-mentioned "Notice" was formulated to implement this year's Central Document No.1, with the goal of promoting comprehensive rural revitalization through financial assistance and consolidating the agricultural foundation. Rural revitalization bonds can play an important role in filling the financing gap in rural areas and supporting rural revitalization construction. Since 2021, several departments have provided supportive policies or guidance on the development of the rural revitalization field. In the Central Document No.1 of 2021, "comprehensively promoting rural revitalization" was proposed for the first time, and local governments were supported in issuing general bonds. In March of the same year, the China Interbank Market Dealers Association launched rural revitalization bills and clarified the support areas, registration and issuance requirements, and other aspects of rural revitalization bills. In July, the exchange market included rural revitalization special corporate bonds as innovative varieties of corporate bonds and issued business guidelines, clarifying the issuance conditions and use of funds for rural revitalization corporate bonds. In June and July 2023, the People's Bank of China, the China Banking and Insurance Regulatory Commission, the China Securities Regulatory Commission, the Ministry of Finance, the Ministry of Agriculture and Rural Affairs, and the dealer association successively proposed to support qualified enterprises to support the development of rural revitalization-related areas through the issuance of rural revitalization products.   On August 5, 2024, the five departments jointly issued the "Notice" again, encouraging financial institutions to issue special financial bonds and supporting financing tools for agricultural enterprises, and increasing investment in key areas of rural revitalization. The "Notice" proposes to implement five special actions. The first is the financial security for food security special action, which expands the financial service scenarios for the entire industry chain of grain production, circulation, storage, and processing, innovates the financing model for high-standard farmland and facility agriculture construction, and deepens the revitalization of the seed industry and agricultural technology financial services. It supports qualified seed industry enterprises to go public, list, and refinance. The second is to consolidate and expand the effectiveness of financial assistance special action, continue to implement differentiated financial support policies for key poverty alleviation counties, and maintain the intensity of credit investment in poverty-stricken areas. Solid work should be done in targeted assistance. The third is to implement the financial services for rural industrial development special action, using financing channels such as credit, bonds, equity, and leasing, expanding the scope of collateral, and activating rural asset resources. Promote the integrated development of the primary, secondary, and tertiary industries in rural areas and support farmers to increase their income and become affluent. Actively meet the financing needs of county-level logistics and distribution centers and other projects. The fourth is to implement the financial support for rural construction special action, develop loan products for human settlements, and strengthen financial support for rural human settlements and ecological civilization construction. Strengthen the financial guarantee for rural infrastructure construction and public service facilities. The fifth is to implement the financial empowerment for rural governance special action, innovate the financial support model for the integration of agriculture, culture, and tourism. Strengthen basic financial services in rural areas, and support digital rural construction.     2. Rural Revitalization Bond Approval Policy and Trends   In recent years, there have been few changes in the approval policy for rural revitalization bonds by the Securities Dealers Association and exchanges. Generally speaking, issuers need to meet certain qualification requirements, such as the requirement for rural revitalization special corporate bonds to be registered in key rural revitalization counties supported by the state or in areas where poverty alleviation has been achieved for less than five years, and the funds raised are mainly used to support rural revitalization-related fields. In the early stage of rural revitalization bond issuance, the main issuers were provincial-level transportation and investment companies, central enterprises, and high-quality agricultural industry entities, with a high project approval rate. Since 2023, the number of non-urban investment companies has decreased, and the number of county-level urban investment enterprises has increased significantly. However, due to the impact of policy No. 35 and other comprehensive debt-related policies, the pass rate and issuance scale of rural revitalization special corporate bonds and notes have continued to tighten, with fewer new samples added.   Approval Policy for Rural Revitalization Bonds   Currently, the interbank and exchange markets are the main issuance venues for rural revitalization bonds, and rural revitalization notes and rural revitalization special corporate bonds are innovative products directly related to rural revitalization. According to the policy of the Interbank Dealers Association, the funds raised by rural revitalization notes should be invested in accordance with the requirements of the People's Bank of China's financial services for rural revitalization, and used to support rural development related to "three rural" issues, including farmers' employment and income increase, agricultural modernization, rural construction, and other projects related to rural revitalization. The use of funds raised can be used for rural revitalization project construction, repayment of rural revitalization project loans, and supplementing rural revitalization project operating funds, but the investment projects should adhere to commercial sustainability principles and have a market-oriented investment income mechanism. The issuer should disclose the investment income model of the projects funded by the raised funds in the issuance documents. For projects registered for rural revitalization notes, the proportion of funds used for rural revitalization must be ensured to be ≥30% in the initial issuance. When the proportion of funds raised for rural revitalization reaches 30% and 100%, the issuer can choose to label the bonds as "rural revitalization" or "special rural revitalization" for identification purposes.     The Shanghai and Shenzhen stock exchanges have also issued guidelines for the issuance and listing review of special types of corporate bonds, including the rural revitalization special corporate bonds. According to these guidelines, the issuers who raise funds for rural revitalization-related projects must meet the following requirements: (1) the registered location of the company should be in key rural revitalization counties supported by the state or in areas where poverty alleviation has been achieved for less than five years, and the funds raised are mainly used to support rural revitalization-related fields; (2) the funds raised should be mainly used for the construction, operation, acquisition, or repayment of interest-bearing debts of rural revitalization-related projects. At the same time, the amount of funds raised for rural revitalization-related areas or projects should not be less than 70% of the total amount of funds raised. The Shanghai Stock Exchange allows issuers to use their own funds spent on rural revitalization-related areas or projects within three months before the issuance of bonds to exchange for the funds raised. Both of them have made special arrangements for the information disclosure of rural revitalization bonds. Issuers should disclose the basic information of the proposed investment projects in the prospectus, including the basis for the projects to belong to the rural revitalization and poverty alleviation category, specific implementation plans, policy support, and other aspects. During the bond's tenure, issuers should disclose the use of funds raised, the effects of supporting rural revitalization-related areas or projects, and other information in regular reports. In addition, the special bonds for the construction of new county towns and the integration of agricultural industry development issued by the National Development and Reform Commission have been integrated into the bond management system of the exchanges, and eligible projects can still be issued. The Beijing Stock Exchange also issued guidelines for the issuance and listing review of special types of corporate bonds, including rural revitalization special corporate bonds, which basically follow the relevant requirements of the Shanghai Stock Exchange's approval policy for rural revitalization corporate bonds.     Recent Rural Revitalization Bond Application and Approval Situation   Since the Securities Dealers Association and exchanges successively launched rural revitalization notes and special corporate bonds in 2021, many places have successfully issued rural revitalization bonds, expanding the financing tool variety for agricultural enterprises and providing strong financial support for rural revitalization projects. In terms of application, the issuers of rural revitalization bonds involve central and local state-owned enterprises, private enterprises, and so on. Chinese state-owned enterprises are the absolute main issuers of credit-based rural revitalization bonds, while the participation of private enterprises has decreased to some extent. In terms of the use of raised funds, rural revitalization bonds need to explore projects related to rural infrastructure construction, agricultural modernization, rural industry development, and farmers' employment and income increase, including project construction, operation, and repayment of early-stage project loans. The main types of rural revitalization projects include traditional urbanization projects such as affordable housing, sewage networks, and road transportation, as well as green industry projects such as new energy power generation, green breeding, green food, and ecological environment management, and industrial projects such as agricultural trade markets, agricultural industry parks, and agricultural product logistics. Secondly, raised funds can also be used for the purchase of relevant agricultural products, production raw materials, and building materials, with the purchase funds mostly used to pay farmers, which can directly increase their income. In addition, raised funds can also be used for increasing capital for agricultural subsidiaries and investing in rural revitalization funds. In addition to being used for ongoing projects, the proportion of raised funds used for debt refinancing related to rural revitalization is relatively high, but after the early debts are penetrated, they still need to be linked to rural revitalization projects.   From the perspective of approval and issuance trends, in the early stage of rural revitalization bond application, provincial-level transportation and investment companies, central enterprises, and high-quality agricultural industry entities were the main applicants, with a high project approval rate. Since 2023, the number of non-urban investment companies has decreased, and the number of county-level urban investment companies has increased significantly, mainly in the form of private placement bonds. However, affected by market conditions and policy adjustments, the registration, approval, and issuance scale of rural revitalization bonds have been declining year by year, especially since the second half of 2023, under the constraints of comprehensive debt policies such as policy No. 35, the refinancing space for traditional urban investment companies, especially low-level entities or high-debt areas, has tightened, making it difficult to achieve new financing, and the pass rate and issuance scale of rural revitalization special corporate bonds and notes are relatively low. Taking the Shanghai Stock Exchange as an example, since July 2021, the Shanghai Stock Exchange has received a total of 187 applications for rural revitalization special corporate bonds, of which 74 have been approved or registered, 70 have been terminated, 39 have been feedbacked, and 4 have been accepted, with a relatively low overall pass rate. In terms of varieties, the applications for rural revitalization special corporate bonds on the Shanghai Stock Exchange are mainly concentrated in the field of private placement bonds, of which 171 private placement bonds have been accepted, with 63 approved; 4 small public offerings, 3 registered and effective; and 12 asset-backed special plans, 8 approved. From 2021 to 2023, the number of rural revitalization bonds accepted by the Shanghai Stock Exchange has been increasing year by year, but the pass rate has been continuously decreasing. Affected by policy adjustments and the tightening of new bond issuance reviews in the bond market, the pass rate has significantly decreased since 2023. Since October 2023, the Shanghai Stock Exchange has only approved 3 rural revitalization corporate bonds and 5 asset-backed special plans. Currently, the issuance of rural revitalization bonds in the market is still mainly based on obtaining approval in the early stage.   3. Analysis of the Issuance Situation and Case Study of Rural Revitalization Bonds   In recent years, the rural revitalization bond market has continued to expand, but the growth rate has slowed down. From the perspective of the overall bond structure, the issuance is mainly in the interbank market, and the issuance period is mostly between 1-5 years (including 5 years), with a gradually lengthening issuance period and a downward trend in issuance costs. From the perspective of urban investment enterprise bond issuance structure, the issuance scale and issuance costs have fluctuated, and private placement products are the main bond types, with the level of issuers and administrative levels relatively lower than other types of enterprises. In addition, the bond-funded projects that have been successfully issued have differences due to the functional positioning of the issuers themselves. They are similar to other enterprises' fundraising projects, and are basically based on the enterprise's own resource endowment or regional industrial layout. In the early stage of rural revitalization bond issuance, there were shortcomings such as geographical restrictions on issuers and a relatively low proportion of funds used in related fields. However, the new round of policies or guidance opinions issued by the five departments are conducive to promoting the improvement of the rural revitalization bond market issuance mechanism, activating the rural revitalization-related resources of urban investment enterprises, improving project construction, and improving the financing environment of county-level urban investment enterprises.   Analysis of the Issuance Overview of Rural Revitalization Bonds   The bond market is an important financing channel for China's policy-supported development areas. As of the end of July 2024, a total of 519 rural revitalization bonds had been issued in the interbank and exchange markets, with a total issuance amount of 331.048 billion yuan. The issuance of rural revitalization bonds is mainly concentrated in the interbank market, with a proportion of 67.73%, while the proportion of the exchange market and the interbank market in rural revitalization bond issuance was 32.27% and 67.73% respectively. From 2021 to 2023, the overall issuance scale of the interbank market gradually decreased, while the issuance scale of the exchange market relatively increased. However, since the comprehensive debt policy was implemented, the overall issuance scale has decreased significantly. In terms of bond issuance types, general medium-term notes, ultra-short-term financing bonds, and private placement bonds have relatively high proportions, accounting for 33.62%, 22.61%, and 20.90% respectively. In terms of bond issuance period, in recent years, rural revitalization bonds have been mainly issued for a period of 5 years or less, with proportions of 31.01% for less than 1 year and 63.29% for 1-5 years (including 5 years). The average issuance period has been lengthening in recent years. In terms of issuance cost, the issuance cost of rural revitalization bonds was relatively stable in 2021 and 2022, and increased slightly in the first half of 2023 due to the influence of the capital market. However, since the comprehensive debt policy was implemented, the overall issuance cost has decreased significantly. In addition, according to the overall use of funds raised by rural revitalization bonds in recent years, the proportion of bonds explicitly used for rural revitalization-related projects is 39.31%, the proportion used to repay early-stage project construction debt is 55.11%, and the proportion used to supplement operating capital is 21.19%.     Looking at the issuers of rural revitalization bonds, the credit level is mainly distributed among AAA and AA+ issuers, accounting for 54.74% and 17.79% of the issuance, respectively. Nearly half of the AA and unrated issuers need to issue bonds through guarantees to enhance their creditworthiness. In terms of the nature of the issuing enterprises, state-owned enterprises are the main participating entities in the issuance of rural revitalization bonds, with local state-owned enterprises and central state-owned enterprises accounting for 61.34% and 24.30% respectively. Local state-owned enterprises mainly consist of provincial industrial state-owned enterprises and urban investment enterprises. In terms of regional distribution, except for Inner Mongolia, Beijing, Guangdong, and the Yangtze River Delta region are the concentrated areas of rural revitalization bond issuance, and the overall issuance scale shows a significant step-like pattern. Looking at the specific cities where the issuing entities are located, they are mainly concentrated in provincial capitals with strong economic and financial strength, while other regions still have considerable room for expansion.     Urban investment enterprises are the main participants in the bond market among local state-owned enterprises, and they are also the main undertakers of important rural revitalization-related projects. Therefore, urban investment enterprises are also important issuers in the field of rural revitalization bonds. Since 2021, urban investment enterprises have issued a total of 141 rural revitalization bonds with a total issuance amount of 74.532 billion yuan. The overall issuance scale increased significantly in 2023, but has decreased significantly since the comprehensive debt policy was implemented. In the fourth quarter of 2023, the second quarter of 2024, and July 2024, they issued bonds of 220 million yuan, 110 million yuan, and 1.5 billion yuan respectively, and the policy impact was significant. The issuing entities were not first-time issuers. The types of rural revitalization bonds issued by urban investment enterprises are mainly private placement bonds, targeted tools, and general medium-term notes. The bond periods are mostly concentrated in 1-5 years (including 5 years), with 3-year and 5-year periods being the main ones, accounting for 38.54% and 39.09% of the issuance amount, respectively. The weighted average issuance interest rate of bonds showed an upward trend before the first quarter of 2023, but has since decreased significantly. Due to the impact of the issuing entity's qualifications, the issuance cost of rural revitalization bonds issued by urban investment enterprises is generally higher than that of other types of issuers. In terms of the use of funds raised, the proportion of rural revitalization bonds issued by urban investment enterprises that are explicitly used for project-related purposes is 53.90%, of which the proportion of bonds used for project-related purposes in the interbank market is 32.73%, and the proportion in the exchange market is 67.44%. In terms of the distribution of issuing entities, AA and AA+ entities are the main issuers of rural revitalization bonds, and their administrative levels are relatively lower than those of other types of enterprises. The issuance regions are mainly concentrated in Jiangsu, Zhejiang, and some central and western provinces.       Case Analysis of Rural Revitalization Bonds   Looking at the fundraising projects of rural revitalization bonds in recent years, out of the 73 bond samples extracted, 35 bonds were issued by local investment and construction companies. According to the requirements of the special rural revitalization corporate bond declaration and approval, "the company's place of registration is in a key poverty-stricken county for national rural revitalization or in an area where poverty alleviation and hat removal have not been achieved for less than 5 years, and the raised funds are mainly used to support related areas of rural revitalization." Most of the registration locations of local investment and construction companies do not meet the relevant requirements, but their corresponding fundraising project locations meet the regional restrictions. Therefore, especially for provincial investment and construction companies, they have a relative advantage in the qualification recognition of rural revitalization bonds. The highway projects they are responsible for cover a wide area and can basically cover the regions recognized by rural revitalization bonds. Local investment and construction companies, especially provincial investment and construction companies, have a certain monopoly on regional resources. Therefore, such projects are not universally applicable and are mainly suitable for local investment and construction companies.   In addition to local investment and construction companies, other entities involved in traditional urban infrastructure investment, agricultural investment, cultural tourism investment, and park investment also have relatively high-quality local resources that can be used to integrate rural revitalization-related projects. Looking at urban infrastructure investment companies, projects such as Chuzhou Urban Investment's clay mine mining project, Changxing Urban Investment's pipeline construction project, Qingdao Urban Investment's power station project, Huzhou Urban Investment's agricultural product logistics center, Zouping Guotou's urban water supply system project, and Yunnan Construction Investment's human settlement environment renovation all rely on the original infrastructure projects of these companies to apply for rural revitalization bonds. Looking at agricultural investment companies, LanKao Agricultural Investment's high-standard farmland, Guangxi Agricultural Investment's arable land improvement and transformation, and Peixian farmland's farm project are mainly based on agricultural infrastructure projects such as high-standard farmland, arable land, and farms to apply for rural revitalization bonds. Cultural tourism investment companies can also apply for rural revitalization bonds through rural cultural and tourism integration projects, such as Wu Zhong Culture and Tourism's village and community surrounding environment renovation project. Projects such as water conservancy, ecological environment improvement, and other related projects can also be used to apply for rural revitalization bonds by exploring their rural revitalization effects, such as Henan Water Investment's water environment management project.   Looking at specific cases, local urban investment enterprises issue rural revitalization bonds based on their own resource endowments, main business advantages, or regional industrial planning. For example, the "23 Zouping State-owned Assets MTN001" bond is for the upgrading of the urban water supply system, and the "G Juxin 02V" bond is for the comprehensive ecological environment improvement project in Shiyan City, which are both linked to traditional infrastructure projects and urban-rural environmental improvement. The "22 Xinglan GV" bond packages high-standard farmland projects based on the agricultural resource advantages of the issuing entity. The fundraising projects basically meet the recognition criteria and policy support of rural revitalization. In practice, in addition to support policies issued by the central government and the State Council, relevant support policies formulated by provincial governments under the guidance of central policies, as well as local government recognition opinions, can be used as effective policy bases. For example, the "23 Xuanda V1" bond is mainly based on the opinion of the management committee of the Yueyang Economic and Technological Development Zone to include the relevant project in the plan for stable employment of poor populations. At the same time, fundraising projects can basically meet the development requirements of the local rural revitalization related areas, and the feasibility of the balance of project benefits and corresponding use of fundraising purposes needs to be effectively demonstrated. The fundraising used for rural revitalization-related debt refinancing, and the pre-project linked to the rural revitalization area also need to meet relevant policy bases and effectiveness requirements. In addition, issuing entities can choose to combine with other innovative varieties according to their own conditions and project types, such as "rural revitalization + green, scientific and technological innovation, revolutionary old areas" and other "compound label" products. The "22 Xinglan GV" and "G Juxin 02V" bonds have both been certified as green bonds.     In addition to relying on traditional infrastructure projects to apply for rural revitalization bonds, local industrial state-owned enterprises also rely on their own high-quality industrial resources to apply for bonds, which is also an important channel. This part of resources involves a wide range of areas, but is basically closely related to agriculture, rural areas, and farmers. Specifically, they include bulk grain source bases, seed fertilizers and labor related to planting, ecological breeding, rural revitalization-related cultural tourism and health care, wind and solar power and other new energy projects.   Looking at the case examples in the table, the "22 Guangxi Tourism Development MTN002 (Green Rural Revitalization)", "22 YueXiu Group GN001 (Special Rural Revitalization)", and "23 CITIC New Energy MTN002 (Carbon Neutral Bond)" bonds are involved in different industries, but basically meet the requirements of local dominant industry development plans. The areas where the projects are located all meet the regional restrictions of rural revitalization bonds, and all the funds raised are used for rural revitalization-related projects. At the same time, all three bonds are "green + rural revitalization" labeled bonds. Among them, "23 CITIC New Energy MTN002 (Carbon Neutral Bond)" involves 17 projects, and the sub-projects correspond to the requirements of green and rural revitalization labeling, with the use of fundraising for rural revitalization accounting for 58.78%. In terms of specific project integration, all three bonds utilize local resource endowment advantages. For example, the first phase of Bama Cifu Lake International Health Center project combines the advantages of the Bama core area of the Northwestern Guangxi Longevity Health Tourism Area and the longevity culture, and the YueXiu Fengxing Fengkai County pig breeding industry park project (Phase I) combines the ecological breeding and planting industry in Zhaoqing City. The Hebei CITIC New Energy project combines the new energy industry planning in Weixian County. They meet the requirements of rural revitalization in terms of the nature of the field. At the same time, the relevant projects themselves can also utilize local resource endowment advantages to form relatively stable income and cash flow.       The shortcomings and opportunities in the issuance of rural revitalization bonds market   Despite the gradual expansion of the rural revitalization bond market in recent years, there are still shortcomings in the issuance sector, such as regional restrictions on issuing entities and a relatively low proportion of funds used in rural revitalization:   First, there are regional restrictions on issuing entities. According to the Shanghai Stock Exchange and Shenzhen Stock Exchange's audit guidelines for rural revitalization corporate bonds, enterprises applying for rural revitalization bonds must be registered in areas where poverty alleviation and hat removal have not been achieved for less than five years, and the raised funds must be mainly used to support related areas of rural revitalization. Although the Shanghai Stock Exchange updated the relevant rules of rural revitalization corporate bonds in June 2022, clarifying that enterprises registered in national key poverty-stricken counties can directly apply for specific types of rural revitalization corporate bonds, the strict regional restrictions have resulted in a limited overall fundraising size for rural revitalization bonds.   Second, there is a relatively low proportion of funds used in rural revitalization. According to bond review requirements, the exchange stipulates that funds raised for rural revitalization-related projects should account for no less than 70% of the total funds raised. The Securities Dealers Association requires that the proportion of funds raised for rural revitalization purposes must be more than 30% to use the "rural revitalization" label, and when the proportion of funds used for rural revitalization purposes is 100%, the "special rural revitalization" label can be used. However, from the overall issuance situation, the proportion of bonds issued in the bond market related to rural revitalization with funds raised for projects accounted for 39.31%. Among them, the proportion of bonds issued by urban investment and construction companies involved in rural revitalization with funds raised for projects accounted for 53.90%. The proportion of funds raised for rural revitalization projects is higher than the overall issuance situation, but the actual proportion of funds used in specific rural revitalization-related projects is still relatively low.   However, due to the importance of rural revitalization in China's future development planning and layout, the further effective development of the rural revitalization bond market also has a good foundation:   First, the policy side continues to push for the improvement of the bond issuance mechanism. The importance of rural revitalization has been repeatedly emphasized in various aspects such as the 20th National Congress of the Communist Party of China, the 2nd and 3rd Plenary Sessions of the 20th Central Committee, the Central Economic Work Conference, the Central Financial Work Conference, and the Central Rural Work Conference. Relevant development guidance opinions or policies have also been introduced. In April of this year, the Shanghai Stock Exchange also made it clear that the financing structure of transformational enterprises can focus on tools such as rural revitalization bonds. The recent "Five Departments" announcement of strengthening financial support for the comprehensive revitalization of the countryside once again emphasizes the importance of bonds in helping to build a modern rural industrial system. The continuous efforts of the policy side will be more conducive to the further improvement of the bond issuance mechanism for rural revitalization.   Secondly, there are favorable factors for urban investment and construction companies to revitalize rural revitalization-related resources and project construction. This announcement also clearly states that it will "increase financial support for the construction of distributed new energy in rural areas, key village and town new energy vehicle charging and swapping facilities, etc." and "guide eligible entities to broaden the funding sources for new urbanization in areas such as extending municipal public facilities and integrating urban and rural road passenger transport through the issuance of corporate credit bonds and asset-backed securities." Some local agricultural and rural-related resources are mainly held by urban investment and construction companies, which are also key project construction and operation entities for regional rural revitalization. The further development of rural revitalization bonds will help urban investment and construction companies to promote the construction of local rural revitalization-related projects and the revitalization of agricultural and rural-related resources. However, how urban investment and construction companies or newly integrated industrial entities can use rural revitalization bonds to support their development still needs further policy clarification under the context of package bond policies.   Thirdly, the promulgation of relevant policies is expected to help improve the current financing environment of county-level urban investment and construction companies. Counties are the main regions for promoting comprehensive rural revitalization. In the early stage of local enterprise rural revitalization bond issuance, provincial and municipal-level enterprises were the main issuers. However, county-level state-owned enterprises actually have rich rural revitalization-related resources available for development. The promulgation of the new policy is expected to promote further effective integration of regional resources by county-level urban investment and construction companies, and by leveraging their own resources to support platform enterprises to obtain more financial support, thereby improving their own financing environment.   Conclusion   In recent years, various departments have supported the development of the rural revitalization field through multiple financial policies or measures. The five major special actions proposed in this announcement are intended to improve the comprehensive financial service capabilities and levels through the synergistic effect of financial policies, and further promote the more effective implementation of the rural revitalization strategy. As an important financing channel supported by China's policy support field, the bond market has a significant functional role in rural revitalization-related project construction and asset revitalization. At the same time, the bond market audit policy mechanism is continuously optimized to meet the actual development needs of the rural revitalization field. Since the introduction of rural revitalization products by the Securities Dealers Association and the exchanges, the initial application and issuance of rural revitalization bonds have seen significant growth. The overall issuance has been dominated by local state-owned enterprises as issuers, with the issuance period concentrated on 1-5 years (including 5 years), and the overall issuance cost fluctuating downward. Since the introduction of package bond policies, the approval and actual issuance of rural revitalization bonds have significantly declined, and there have been no new first-time issuers. The successful issuance of bond-raised projects varies due to the positioning of the issuer, while the projects raised by enterprises with similar positioning have similarities, and are basically based on the enterprise's own resource endowment or regional industrial layout. At the same time, there have been shortcomings in the past, such as the geographical concentration of rural revitalization bond issuers in areas with strong economic and financial strength, and a low proportion of funds raised for specific projects. The release of the "Five Departments" announcement is expected to have certain benefits for the improvement of the rural revitalization bond issuance market mechanism, the revitalization of urban investment and construction companies' rural revitalization-related resources, and project construction, and is expected to help improve the financing environment of county-level urban investment and construction companies.     Appendix         [1] The rural revitalization bonds referred to in this article are limited to bonds with the "rural revitalization" or "special rural revitalization" labels in the market. Currently, the types of rural revitalization bonds mainly include local government special bonds, medium-term notes, corporate bonds, asset-backed securities, etc., and the issuance market mainly involves the interbank and Shanghai and Shenzhen Stock Exchanges. The issuers of local government special bonds are local governments, which will not be discussed in this article. [2] Opinions of the Central Committee of the Communist Party of China and the State Council on Learning and Applying the Experience of the "Thousand Villages Demonstration, Ten Thousand Villages Renovation" Project to Effectively Promote the Comprehensive Revitalization of the Countryside (January 1, 2024). [3] Application Guidelines for the Review and Approval of Corporate Bond Issuance and Listing on the Shanghai Stock Exchange (Revised in 2021) No. 2 - Specific Types of Corporate Bonds, which was released on July 13, 2021, and the Guidelines for the Application of the Review and Approval of Corporate Bond Issuance and Listing on the Shanghai Stock Exchange No. 2 - Specific Types of Corporate Bonds (Revised in 2023) published on March 14, 2023 have been abolished. [4] The rural revitalization field includes supporting stable food and important agricultural product security, supporting the integrated development of rural industries, accelerating the modernization of agriculture and rural areas, promoting rural employment and income growth, improving rural infrastructure conditions, and improving rural public service levels, etc. The national rural revitalization support areas optimize the rural employment structure, improve the rural industrial system, promote the upgrading of the rural industrial chain, and improve rural infrastructure through market-oriented and rule-of-law methods. [5] The data analysis for urban investment and construction companies in this article uses the WIND database up to July 31, 2024. [6] The analysis data in this article uses a sample of rural revitalization bonds issued since 2021, with the issuer being a local state-owned enterprise and having a specific raised project. Please refer to the attached table for details.    

Li Yongquan Director and Senior Advisor of China Chengxin (Asia Pacific) Credit Rating Co., Ltd.   China's credit rating agency breakthrough   In 2012, Director Li Yongquan assisted China Chengxin International Credit Rating Co., Ltd. (CCXI, headquartered in Beijing) in establishing a credit rating agency (CRA) in Hong Kong, named China Chengxin (Asia Pacific) Credit Rating Co., Ltd. (CCXAP).     After nearly 12 years of hard work, CCXI was recognized as an approved CRA by the Mandatory Provident Fund Schemes Authority (MPFA) of Hong Kong on March 31, 2023, and was recognized as an approved CRA under the Qualifying Debt Instrument Scheme (QDI Scheme) by the Hong Kong Monetary Authority (HKMA) on Wednesday. CCXI is the first Chinese CRA to [go global] through CCXAP and enter the international market with Hong Kong as its base. There are currently five CRAs recognized by MPFA, including CCXAP, Fitch, Moody's, R&I, and S&P. The MPF can use the minimum credit rating requirements set by any one or more of the above CRAs as investments in long-term bonds and short-term debt instruments (hereinafter collectively referred to as debt instruments) in accordance with the MPF guidelines issued by MPFA.   The CRAs approved by HKMA are the same as the five approved by MPFA. Before 1996, Hong Kong institutional investors, such as banks and enterprises, had to pay Hong Kong profits tax on the interest and profits they earned from investing in debt instruments issued in Hong Kong. In 1996, the Hong Kong government launched the QDI program to attract overseas issuers to issue bonds in Hong Kong and better develop the Hong Kong bond market.   QDI Program Under the QDI program, institutional investors holding eligible debt instruments can enjoy a 50% tax reduction or tax exemption. For newly issued eligible debt instruments held after April 1, 2018, interest and profits are all exempted from tax. In addition, under the Green and Sustainable Finance Funding Program, debt instruments rated by an approved CRA recognized by HKMA can be subsidized for issuance costs.   Global CRA Institutional Market The development of Hong Kong's bond market can help stabilize the financial market, allow companies and institutions to raise funds, and provide investors with a variety of investment options. Before the outbreak of the Asian financial crisis, former HKMA President Joseph Yam had already made efforts to promote the development of Hong Kong's bond market. In a speech, he proposed that the development of the debt instrument market requires four conditions, including: interest rate benchmark (Benchmark), underwriter (Intermediary), credit rating (Rating), and demand (Demand). He referred to these four conditions as BIRD (bird). He may not have realized at the time that a bird does not build a nest, but a group of birds need to build a nest to reproduce offspring. If bonds lack a settlement system (Settlement), it is difficult for the bond market to develop effectively. In fact, before he gave his speech, HKMA had already accepted the suggestion of the Hong Kong Capital Market Association (HKCMA) in 1990 to establish the Central Uniting and Clearing System for Debt Instruments (CMU System). Therefore, BIRD should be written as the plural BIRDS.   Undoubtedly, credit rating is an important part of the development of the bond market. Therefore, China, Japan, South Korea, Thailand, Indonesia, Portugal, Russia, Argentina, etc. all have their own local CRAs. International financial centers such as New York, London, Hong Kong, and Singapore all have international CRAs stationed there. Although, in the future, debt instruments are not required to be rated before they can be issued. However, in order to expand the investor base, bond issuers are willing to entrust CRAs with ratings.   Each country's local CRA uses a local rating scale to assess the credit status of its own currency bonds. CRA rates the country's government bonds as AAA, the highest level, and rates other rated entities in order of credit status.   When an issuer "goes out" to an international financial center to issue international debt instruments in foreign or domestic currencies, they are rated by international CRAs using an international rating scale. In the absence of explicit market consensus, the country or international financial organization with the strongest debt repayment capacity, such as the United States and the World Bank, is rated as the highest level of AAA, and the credit status of other rated entities is rated from AAA to default level. An issuer and its debt instruments that receive an AAA rating under the local rating scale may only receive a BBB rating under the international rating scale. Therefore, when investors buy bonds, they must be clear whether the bond's credit rating is international or local.   Does the difference between local ratings and international ratings mean that local ratings are inflated and untrustworthy? Not necessarily. Local debt instruments are issued in the country's currency, and the government has policies or window guidance to prevent debt instrument defaults to a certain extent and protect investors. International bonds that "go global" may lack the above-mentioned special features.     There are currently 9 CRAs licensed by the SFC in Hong Kong, 4 in China, 4 in the US and 1 in Hong Kong, all of which use international rating scales to assess the rated entities (issuers, debt instruments). The three with the longest history, Moody's, S&P and Fitch, have the largest market share in Hong Kong, and CCXAP is already catching up very closely. There are many rating agencies in Europe, and there are 28 credit rating agencies that have obtained licenses or certificates from the European Securities and Markets Authority (ESMA). The large number of rating agencies reflects the active European debt instrument market on the one hand, and the different licensing regulations for CRAs in European countries on the other hand.   The increase in the number of credit ratings in Hong Kong reflects, to a certain extent, that the development of Hong Kong's debt market has risen to a new level. In particular, since 2012, the entry of Chinese CRAs has reflected that more and more Chinese companies and institutions are going to the international market to issue bonds. In addition, when the US Federal Reserve implemented QE, the extremely low US dollar interest rate attracted many mainland companies and local financing platforms to come to Hong Kong to issue US dollar bonds. Investors who are greedy for high interest rates and forget about risks have suffered heavy losses in the domino-like default of Chinese real estate companies' bonds. Even if they are willing to reach a debt restructuring agreement with the issuer, the restructuring will take a long time. After the restructuring, whether the issuer can sell assets at a reasonable price and other risks that the issuer will face in the future may not allow investors to get back the interest and principal they deserve.   Therefore, when investing in debt instruments, it is advisable to buy investment-grade ones; when investing in unrated or low-rated ones, you need to be more aware of your risk tolerance.  

China Chengxin Certification, a subsidiary of China Chengxin International, was officially approved by the State Administration of Market Supervision and Administration of China and the Certification and Accreditation Administration of the People's Republic of China (hereinafter referred to as: CNCA) to become a third-party certification body in 2019, with institutional approval number CNCA-R-2019-594. China Chengxin Certification focuses on customers and endeavours to provide a wider range of credit services, especially in the development of high-quality finance, the creation of double first-class enterprises, climate investment and financing, ESG, healthcare, etc., and provides management system certification and training, as well as third-party forensic services in the field of climate finance and dual-carbon. The certification, assurance and training provided by China Chengxin are based on the latest international and Chinese national standards, and can help to gain wider acceptance and performance improvement at home and abroad.   Recruitment Positions Lists     Position 1: Sales Manager   Position Responsibilities  1. Familiar with the certification market and related implementation process, formulate and execute project development strategy according to individual annual performance target; 2. Understand the potential needs of customers, maintenance and development of customer resources.  Job Requirements  1. Bachelor degree or above, with relevant experience in training, consulting and certification industry is preferred;2. experience in business development and client management in ESG, sustainable development, organisational governance, compliance risk, internal control, audit and legal affairs;3. strong business negotiation quality, market independent development ability, excellent learning ability, good English and anti-pressure ability.4. work experience: with more than 3 years of sales experience, certification industry practitioners and legal background is preferred. Working Base Shenzhen, Beijing, Shanghai Salary The company's salary, performance appraisal, employee welfare system is perfect, the project is sufficient, income is guaranteed. According to national regulations to pay five insurance and one gold, another purchase of personal accident insurance, annual physical examination and so on.     Position 2: Management System Lead Auditor (full-time)   Job Responsibilities  1. leading audit teams to conduct multi-standard third-party management system certification audits of complex organisations involving multiple sites, and tailoring audit programmes to meet complex client needs; 2. Plan and execute routine audits, mentor other auditors or trainee auditors, and undertake client and audit team management activities; 3. comply with CCS certification procedures, management system certification and accreditation requirements, regulations and industry standards, and lead or participate in all types of audits, including pre-audits, initial certification audits, surveillance audits, re-certification audits and special audits; 4. discuss and justify audit findings in the report and agree with the client on the results; produce written reports in an agreed format and on time; 5. independent review of audit reports, undertake the necessary documentation, data, administrative and communication activities required to perform their duties, pursue continuous professional development and maintain a high level of expertise;.  Job Requirements 1. Bachelor degree or above, at least 10 years of experience in third party management system certification auditing; 2. experience in leading multi-criteria teams in large and complex certification audits, CCAA registered QMS, EMS and OHSMS triple standard auditor, working in an international certification body or having experience in managing large clients in a certification body is preferred; 3. strong customer service orientation, ability to provide high quality customer service, maintain customer satisfaction and transfer knowledge to members of own team; 4. strong collaboration and teamwork skills and the ability to work under pressure; 5. the ability to learn new management system standards and participate in the development, release and servicing of relevant new management system products; 6. the ability to proactively manage own workload and resolve conflicting priorities in order to meet project deadlines and quality standards; 7. good writing skills in English and Chinese, fluent in Mandarin and general spoken English is preferred; 8. proficient in the use of MS Office, MS Outlook and Chinese word processing, etc.9. Work experience: 10 years and above auditing experience. Working Base Shenzhen, Beijing Salary The company's salary, performance appraisal, employee welfare system is perfect, with sufficient projects and guaranteed income. According to national regulations to pay five insurance and one gold, another purchase of personal accident insurance, annual physical examination.     Position 3: Management System Auditor (full-time/part-time)   Job Responsibilities  1.Build and manage the audit team, responsible for the work quality and efficiency of the audit department;. 2.Operate auditing process and standards, execute certification programme and implement customer relationship management; 3.Manage the planning, implementation and reporting activities of daily audit activities for auditors and customer service staff; and 4.Participate in the design of the company's product process, and issue opinions and recommendations. 5.Collect and feedback certification risk and quality information, promote the continuous optimisation of the certification process.   Position Requirements  1.Registered quality management system QMS auditor qualification, bachelor degree or above, more than three years working experience; ISO 9001, 14001, 45001 audit qualification is preferred; 2.Learning interest in ESG certification, dual carbon compliance, green finance, climate investment and financing and other related cutting-edge areas; 3.Strong communication, collaboration, risk identification and control skills. 4.Continuous learning ability, service innovation ability, strong customer service awareness and commitment to quality and compliance; 5.Experience in professional services management is preferred. Working Base Shenzhen, Beijing Salary The company's salary, performance appraisal, employee welfare system is perfect, with sufficient projects and guaranteed income. According to national regulations to pay five insurance and one gold, another purchase of personal accident insurance, annual physical examination and so on.   Position 4: Delivery Planning Manager   Position Responsibilities 1. Maintain good communication with the marketing department to understand the requirements of each project delivery (including third party audit projects, training programmes, etc.);2. According to the requirements of each project delivery and the company's regulations, with the relevant parties (customers / marketing department) to determine the delivery date, select the appropriate delivery team and personnel, and monitor the implementation of the delivery programme; 3. according to the project delivery situation and changes, consult with relevant parties, and timely adjust the delivery plan, including but not limited to adjusting the delivery date or personnel; 4. optimise the utilisation of full-time delivery staff through monitoring and analysis, and establish and maintain good working relationship with part-time delivery staff. 5. provide data required for the preparation of the annual budget. 6. Perform other customer service duties as assigned by the Leader.  Job Requirements 1. Bachelor's degree or above, at least 5-6 years of experience in customer service field, experience in ISO 9001 or other management system certification is preferred; 2. good writing skills in English and Chinese, fluent communication in English is preferred; 3. strong collaboration and teamwork skills, attention to detail and willingness to learn the rules of delivery arrangements related to different services;4. ability to work under pressure, prioritise and handle multiple work demands; 5. proficient in the use of MS Office, MS Outlook and Chinese word processing, etc.6. working experience: more than 5 years Working Base Shenzhen Salary The company's salary, performance appraisal, employee benefits system is perfect, the project is sufficient, income is guaranteed. According to national regulations to pay five insurance and one gold, another purchase of personal accident insurance, annual physical examination.     Position 5: Marketing Assistant Job Responsibilities  1. Marketing activities: assist in the execution of marketing activities to promote the company's development of relevant forensic auditing practices. Work with the business team to complete marketing materials such as brochures, promotional videos and social media publics, and video number content updates and collation; 2. content development: working with the business team to deliver compelling and informative content related to ESG topics for a variety of marketing channels (including websites, blog posts, social media platforms and newsletters); 3. press release writing, tender materials and certification, contract collation: assist in writing and issuing press releases, tender materials and contract collation to ensure accuracy and timeliness of information; 4. Industry research: conduct industry research under the guidance of the business team according to the company's needs, collect and analyse industry trends, and provide the basis for market strategies.  Job Requirements 1. Bachelor degree or above in marketing, communication, sustainable development or related majors, with knowledge of ISO three system certification audit rules, ESG framework, standards and reporting guidelines (e.g. GRI, SASB, TCFD), and familiarity with sustainability reporting and ESG disclosure practices is preferred; 2. familiarity with marketing principles and strategies and ability to create engaging written or video content; 3. proficiency in digital marketing tools and platforms, including social media management, content management systems and email marketing software; 4. excellent communication skills, strong organisational and project management skills, attention to detail, commitment to delivering high-quality work, and the ability to work collaboratively within the team and externally; 5. have a strong interest in ESG climate sustainability, compliance anti-bribery, certification audit practices in the field of big health. Working Base Shenzhen, Beijing Salary The company's salary, performance appraisal, employee welfare system is perfect, the project is sufficient, income is guaranteed. According to national regulations to pay five insurance and one gold, another purchase of personal accident insurance, annual physical examination.   Please read the recruitment content carefully and send email with your CV and relevant supporting materials attached to zonghe@ccxi.com.cn. The subject of the email should indicate ‘Application + Job Title + Name’. The company will notify the candidates for follow-up interviews after screening according to the recruitment conditions and CVs.   

On October 31, the Hong Kong Securities and Futures Commission (HK SFC) announced its support and advocacy for the development of a set of voluntary codes of conduct for environmental, social and governance (ESG) rating and data product providers that provide products and services in Hong Kong. The voluntary code of conduct will be developed by an industry-led working group, namely the Hong Kong ESG Rating and Data Product Provider Voluntary Code of Conduct Working Group. As the only subsidiary of a Chinese credit rating agency, China Chengxin Green Finance serves as a member of the working group.   The Hong Kong Securities and Futures Commission welcomes the International Capital Market Association (ICMA) to serve as the secretariat of the working group. ICMA will convene and lead the working group, whose members include representatives from local, mainland and other international ESG rating and data product providers, as well as major product users in the local financial industry. The first meeting of the working group will be held this month, and it is planned to conduct a public consultation on the voluntary code of conduct three months later.   China Chengxin Green Finance is a wholly-owned subsidiary of China Chengxin International that specializes in the field of green finance. As one of the leading institutions in China's green finance and ESG sustainable development market, it has always insisted on making innovative research and product and service development as its long-term key development strategy. China Chengxin Green Finance has a complete green bond database, ESG database of listed companies and issuers, etc.; it is in a leading position in the market in regional green financial system construction services, green banking services, green bond assessments, ESG services, etc.   China Chengxin Green Finance International Co., Ltd. is a third-party service provider under China Chengxin International that specializes in green finance and ESG-related services , focusing on business development in the Hong Kong market. The scope of services includes green/sustainable bond and loan certification, TCFD disclosure by financial institutions, ESG reporting and investment services, and training. China Chengxin International and its subsidiaries have played an active role in the construction of the green financial system in mainland China, including policy research, standard setting, product innovation, market education, etc. China Chengxin Green Finance International provides unique technical capabilities and business experience from a third-party perspective, integrates cross-border cooperation and partnerships, and contributes to the long-term development of Hong Kong's green finance and ESG markets .   In June 2023, China Chengxin Green Finance International Co., Ltd. officially entered the list of external review agencies approved by the Hong Kong Monetary Authority's "Green and Sustainable Finance Funding Program", becoming the first Chinese rating agency to obtain this qualification. In the future, China Chengxin will vigorously promote green and sustainable finance business in Hong Kong, linking the team strength and service advantages of the mainland to provide customers with professional offshore green and ESG services in Hong Kong.   Hong Kong Securities and Futures Commission (HK SFC) announced to develop an ESG code of conduct yesterday, in supporting the ESG ratings and data product providers in Hong Kong. A Voluntary Code of Conduct Working Group (VCWG) will be convened, aiming to develop and promote a globally consistent, interoperable, and proportionate voluntary code of conduct for ESG ratings and data product providers providing products and/or services in Hong Kong (VCoC). As the only subsidiary of Chinese credit rating agency, China Chengxin Green Finance (CCXGF) serves as a member of the working group.   The International Capital Market Association (ICMA) serves as the Secretariat for the working group, members include representatives from local, Mainland and other international ESG rating and data product providers, as well as key product users in the local financial industry. The first meeting of VCWG will be held this month, and a public consultation on the draft of the VCoC is planned to be published three months later.   CCX Green Finance International Limited is a third-party service provider specializes in green finance and ESG related services under China Chengxin International Credit Rating Co. Ltd, CCXI, particularly focuses on business development in Hong Kong market. The scope service includes the certification of green/ sustainable bonds and loans, TCFD disclosure for financial institutions, ESG reporting and investing services, and trainings. CCXI and its subsidiary has been playing an active role in the establishment of green financial system in Mainland, including policy research, standard development, product innovation, and market education etc. By bringing the unique technical capabilities and business experiences from a third party’s perspective and mobilizing resources for cross-border collaborations and partnerships, CCXGF aims to contribute to the long-term development of green finance and ESG market in Hong Kong.   In June 2023, CCX Green Finance International Limited was officially listed as a recognized external reviewer of HKMA ' s Green and Sustainable Finance Grant Scheme, making it the first Chinese CRA subsidiary in the list. CCX Group will keep on developing Hong Kong market, by leveraging the team strength and service advantages from Mainland and providing sustainable finance/ ESG services for offshore clients.

The report of the 20th National Congress of the Communist Party of China pointed out that green and low-carbon development is a distinctive feature of Chinese modernization, and promoting green and low-carbon economic and social development is a key link in achieving high-quality development. In order to implement the strategic deployment of the five major articles of the Central Financial Work Conference on Green Finance and give full play to the important function of the capital market in optimizing resource allocation and the leading and exemplary role of central enterprises in green investment, the China Securities Regulatory Commission and the State-owned Assets Supervision and Administration Commission of the State Council recently jointly issued the "About Notice on Supporting the Issuance of Green Bonds by Central Enterprises (hereinafter referred to as the “Notice”).   In recent years, the China Securities Regulatory Commission has earnestly implemented the new development concept and actively promoted the capital market to serve green development. In 2016, the green bond pilot was launched to improve the relevant institutional arrangements such as green bond issuers, investment directions of raised funds, and information disclosure, vigorously support qualified enterprises to develop through green bond financing, and steadily expand the scale of green bonds. The State-owned Assets Supervision and Administration Commission of the State Council has promoted central enterprises to actively participate in the green bond market and take advantage of the opportunities of bond market reform and development to accelerate the promotion of green, low-carbon transformation and high-quality development. Up to now, the exchange market has issued more than 700 billion yuan of green bonds, and the funds raised have been invested in resource conservation and recycling, pollution prevention and control, clean energy, ecological protection and other fields, effectively guiding the allocation of more factor resources to the green field. Central enterprises are the key entities for China to achieve the goals of carbon peak and carbon neutrality, and are also the main force in the issuance of green bonds.   The release of this "Notice" will further enhance the ability of the capital market to serve the green and low-carbon development of central enterprises, support the optimization and upgrading of the industrial structure and energy structure of central enterprises, strengthen the scientific and technological research and application layout of green and low-carbon technologies of central enterprises, form a demonstration effect, better drive and support the green and low-carbon development of the private economy, and promote the comprehensive green transformation of economic and social development. The main contents of the "Notice" include: First, improve the green bond financing support mechanism, develop various industries such as energy conservation and carbon reduction, environmental protection, resource recycling, and clean energy. Second, help central enterprises in green and low-carbon transformation and high-quality development, reasonably arrange bond financing, accelerate the formation of green and low-carbon production methods, strengthen green scientific and technological innovation, and play the demonstration role of central enterprises in green and low-carbon development. Third, play the leading role of central enterprises in green investment, lead the supply of funds in key areas of green development, and support central enterprises in carrying out infrastructure REITs pilot projects. Fourth, strengthen organizational implementation guarantees. The China Securities Regulatory Commission and the State-owned Assets Supervision and Administration Commission of the State Council will work together to promote central enterprises to better use green bond financing and optimize the capital market to serve green financing. In the next step, the China Securities Regulatory Commission and the State-owned Assets Supervision and Administration Commission of the State Council will thoroughly implement the spirit of the Central Financial Work Conference, work with relevant parties to ensure the implementation of various measures, strengthen the construction of capital market capabilities to serve green development, promote synergy and efficiency in pollution reduction and carbon reduction, and actively contribute to further promoting high-quality financial development and achieving carbon peak and carbon neutrality goals.

On August 2, 2024, China's leading third-party certification agency, China Chengxin Certification (CCXC), and China's leading employer branding research and communication agency, the Employer Branding Institute, are pleased to announce that the Engma Group has become the first enterprise in China to pass the ISO 30415:2021 certification for Diversity and Inclusion (D&I) in Human Resources Management.   Through ISO 30415, the Engma Group has made a significant contribution to promoting world-class workplace culture and the highest global labor standards in China, setting an example for China's human resources service industry and leading the industry to align with world-class management systems.   The Engma Group was founded in 2002 and is a leading human resources outsourcing service provider in China. The group is committed to becoming an expert in human capital management services in China, maximizing the value of human capital to promote social development and make our world a better place. The group's main businesses include manufacturing outsourcing, service outsourcing, internet outsourcing, platform economy, Engma finance, state-owned enterprise services, legal outsourcing, recruitment services, management consulting and training, and other professional service areas.   The Engma Group has established dual headquarters in Suzhou and Shanghai and established regional headquarters throughout the country (Beijing/ Hangzhou/ Chengdu/ Xi'an/ Guangzhou/ Wuhan/ Shenzhen). It has more than 140 branch offices (including cities such as Chongqing/ Hefei/ Shenyang/ Wuxi/ Changzhou/ Qingdao/ Tianjin/ Nanjing/ Changsha/ Jinan/ Zhengzhou/ Dalian/ Harbin/ Guiyang, etc.). The group has a management team of over 1,000 people and more than 117,000 employees are dispatched externally, with an annual training and talent supply capacity of over 200,000 people.                                                                                                                        Mr. Zhuang Zhi, Chairman and CEO of the Engma Group, made a certification statement                                                                                                Ms. Fu Haiyang, head of the Employer Branding Institute, served as the host of the first certification award ceremony                                                                                                           Ms. Guo Yueting, Vice President of China Chengxin Certification, delivered a congratulatory speech                                                                                                                         Dr. Tang Qiuyong, Executive Director of HRflag, delivered a congratulatory speech                                                                                                                               On the right is Ms. Chen Jingjing, General Counsel of the Engma Group ISO 30415   ISO 30415 is an international standard of the International Organization for Standardization (ISO) that focuses on Diversity and Inclusion (D&I) in human resources management. This standard aims to help all types of organizations establish and maintain a diverse and inclusive work environment. The following is a detailed explanation of this standard:   The ISO 30415 standard emphasizes the need for organizations to adopt a continuous improvement approach by planning, implementing, monitoring, and reviewing D&I goals, and regularly evaluating their impact on personnel, communities, and society. Additionally, the document provides information related to United Nations Sustainable Development Goals and follows workplace human rights principles.     Main Evaluation Content ORGANIZATIONAL GOVERNANCE ·Guide senior leadership to establish D&I principles and goals and allocate resources to achieve these goals.  ·Demonstrate commitment to D&I and set an example through behavior consistent with D&I principles.  ·Challenge behaviors that do not align with D&I principles and ensure that those who challenge inappropriate behavior and those affected by it are protected and supported.  ·Hold senior leadership accountable when evaluating the organization's D&I opportunities and risks, as well as reviewing performance and progress towards achieving D&I goals.   ORGANIZATIONAL  LEADERSHIP ·Establish D&I principles and goals, and establish a support framework to achieve these goals. ·Promote an inclusive organizational culture by establishing D&I expectations and responsibilities, communicating with all stakeholders, and promoting inclusive relationships and shared values. ·Set behavioral expectations for employees through demonstrating inclusive behavior, challenging and addressing inappropriate behavior, and recognizing and rewarding D&I inclusive practices and behaviors to demonstrate commitment. ·Designate organizational functional area leaders responsible for achieving D&I goals.   ORGANIZATIONAL DELEGATED RESPONSIBILITIES FOR D&I ·Ensure that D&I principles are embedded into functional systems, policies, processes, and practices. ·Share D&I knowledge, skills, and expertise and provide advocacy and guidance to promote diversity and inclusive organizational culture in policies, processes, and practices. ·Demonstrate and model inclusive behavior. ·Deploy resources to address opportunities, risks, constraints, and challenges to achieve D&I goals.   INDIVIDUAL RESPONSIBILITIE ·Treat colleagues, customers, suppliers, and other stakeholders with respect and fairness. ·Meet expectations for the organization's D&I principles and goals. ·Act in an inclusive manner, actively promoting inclusivity, trust, and a sense of belonging. ·Express concern and challenge inappropriate behavior.   D&I FRAMEWORK ·Designate responsibility to ensure the relevance, development, and maintenance of the framework. ·Establish the rationale for D&I. ·Ensure organizational leaders express their commitment to sponsoring, developing, and maintaining an inclusive organization. ·Integrate D&I principles and goals into organizational policies, processes, and practices.   INCLUSIVE CULTURE ·Prioritize and promote D&I principles and goals through communication, engagement, and outreach activities. ·Ensure ethical and regulatory considerations are applied when collecting, interpreting, and using data.   HUMAN RESOURCE MANAGEMENT LIFE CYCL including D&I actions at each stage such as workforce planning, compensation, recruitment, onboarding, learning and development, performance management, succession planning, workforce mobility, and employment termination.   PRODUCTS AND SERVICES Integrate D&I principles into the design, development, and delivery of products and services, and promote inclusive and respectful customer service.   PROCUREMENT AND SUPPLY CHAIN RELATIONSHIPS Integrate and communicate D&I principles, goals, and expectations at each stage of the procurement process.   EXTERNAL STAKEHOLDER RELATIONSHIPS ·Identify the needs, expectations, and interests of external stakeholders related to the organization's D&I principles and goals. ·Use self-assessment checklists to help the organization identify D&I opportunities and risks, optimize and mitigate these risks, and develop gap-closing strategies by providing specific D&I actions and corresponding supporting evidence.     About the International Organization for Standardization (ISO):  The International Organization for Standardization (ISO) was founded in 1947 and is an international organization in the field of standardization. The organization defines itself as a non-governmental organization, with official languages of English, French, and Russian. ISO has 165 members, including national standardization institutions of member countries and major industrial and service enterprises. The Standardization Administration of China (SAC), managed by the State Administration for Market Regulation, joined ISO in 1978 and officially became a permanent member of ISO at the 31st International Organization for Standardization General Assembly in October 2008. ISO is responsible for standardization activities in most fields in the world today and carries out technical activities through 2,856 technical structures (including 611 technical committees, 2,022 working groups, and 38 special working groups). ISO 30415:2021: an officially certified introduction to ISO: https://www.iso.org/standard/71164.html   About the certification audit party: CCXC is a professional service organization under the global leading credit industry group, dedicated to helping create double first-class organizations and providing comprehensive solutions in the fields of green, compliance, excellence, and innovation. As a wholly-owned subsidiary of CCX Group, it is a professional third-party certification body approved by the State Administration for Market Regulation and the Certification and Accreditation Administration of China, with an institutional approval number of CNCA-R-2019-594. CCXC focuses on providing our clients with a wider range of credit services, especially in the areas of developing high-quality finance, creating double first-class enterprises, climate investment and financing, ESG, medical and health, providing management system certification, service certification, and training, as well as third-party certification services in the field of climate finance and double carbon. CCXC relies on CCX Group and has brand influence in the government and financial industries, with strong professional service capabilities in credit rating, double carbon technology, green finance, ESG rating, credit reporting, and other fields. The Employer Branding Institute is a leading research institution in the field of employer branding, bringing together experts and human resources professionals in the global employer branding field, such as the founder of employer branding concept, Simon Barrow, and the father of employer branding, Richard Mosley. The Employer Branding Institute has more than 2,000 corporate clients, including over 300 Fortune 500 companies. The business of the Employer Branding Institute includes the flagship global employer branding creative event - the Employer Branding Creative Festival and Competition, with more than 1,000 leading companies participating each year. The second major business line is membership services, with over 300 paying corporate members, mostly Fortune 500 and industry champion enterprises. The third major business line of the Employer Branding Institute provides comprehensive DEI solutions through leading technology, including DEI Employer Awards and DEI Employer Top 100 List, DEI System Testing, DEI Data and Benchmarking Services, DEI Assessment Services, DEI Culture Building Guidance, Inclusive Leadership Development Projects and Inclusive Leadership Expert Certification, and Customized DEI Development Project Tools and Services in seven major modules. As a pioneer in employer branding and diversity, equity, and inclusion, the Employer Branding Institute has released multiple research reports, such as the DEI Employer Guide, the 2024 Global DEI Compliance Guide, DEI Trends and Practice Cases, and the Employer Branding Executive Guide. The Employer Branding Institute is a joint brand of HRflag and Wisers Culture.

Ganzhou City Investment Holdings Group Co., Ltd. (referred to as "Ganzhou City Investment Group") will issue a 3-year US dollar sustainable bond on September 4, 2024 on the Hong Kong Stock Exchange with an initial price guidance of 6.60%. CCXGFI has been appointed by Ganzhou City Investment Group as an external review agency with relevant expertise and qualifications recognized by the Hong Kong Monetary Authority's Sustainable Finance Grant Scheme to provide a second-party opinion on the sustainable financing framework formulated by Ganzhou City Investment Group.   Ganzhou City Investment Group will integrate the concept of sustainable development into its overall business strategy, investments, construction, operations, and other aspects by establishing the Ganzhou City Investment Holdings Group Co., Ltd. sustainable finance framework for green, sustainable, and socially responsible financing transactions.   Following approval by the CCX Sustainable Development Assessment Committee, CCXGFI has awarded Ganzhou City Investment Holdings Group Co., Ltd. a Sustainable Finance Framework Sf-2 rating. It confirms that the four core elements of Ganzhou City Investment Holdings Group Co., Ltd.'s sustainable finance framework comply with the requirements set forth in the International Capital Market Association's Green Bond Principles (2021 version), Social Bond Principles (2023 version), Sustainable Development Bond Guidelines (2021 version), Loan Market Association, Asia-Pacific Loan Market Association, and Loan Syndications and Trading Association's Green Loan Principles (2023 version), and Social Loan Principles (2023 version). The framework also demonstrates a strong alignment with the company's sustainable development strategy, indicating a high likelihood of achieving established environmental and/or social objectives and effective management of environmental and/or social risks.    The funds raised from this sustainable bond issuance will be used to refinance existing debts in accordance with the issuer's framework and the certification from the National Development and Reform Commission. Eligible environmental financing project categories include sustainable water resources and wastewater management, renewable energy, energy efficiency, sustainable management of biological natural resources and land use, and green buildings. Eligible social financing project categories include affordable infrastructure, provision of basic services, and affordable housing.      

  In the first half of 2024, global economic activity and trade stabilized and rebounded, but economic growth still faced significant downward pressure under the background of high interest rates. Inflation decreased from its high level, but inflation risks still exist. Recently, the US economy has shown signs of cooling, and there is uncertainty about the pace of future interest rate cuts by the Federal Reserve. The Bank of Japan's interest rate hike has led to increased volatility in global financial markets. At the same time, global geopolitical games are becoming increasingly fierce and the political situation is becoming more complex. The attack on Hamas leaders may intensify conflicts in the Middle East, and frequent political events in countries such as the UK and Bangladesh have led to a decline in domestic political stability. The US election is also causing disturbances to the global geopolitical situation. Overall, geopolitical and political risks have become key factors in raising global sovereign credit risks in 2024. With the universal increase in global debt levels, the fiscal vulnerability of some countries has further intensified. In the future, it is still necessary to focus on the direction of geopolitical conflicts, the impact of the Federal Reserve's interest rate cuts on global capital market liquidity, and how global economic growth can support the increasingly high debt levels in the above background.   Since April 2024, China Chengxin International has completed 13 sovereign rating actions, including 5 rating or outlook adjustments, 1 new rating, and 7 level and outlook maintenance.   Abstract          The countries whose ratings or outlooks were negatively adjusted include Japan and France. The downgrade of Japan's sovereign credit rating is mainly based on the bleak prospects for Japan's economic recovery, limited room for monetary policy adjustments, and the effectiveness of policies being affected by changes in the external environment. At the same time, with the advancement of monetary policy normalization, government debt repayment pressure will rise significantly, and debt sustainability may face challenges. The outlook for France's sovereign credit rating was changed from stable to negative, mainly based on France's fiscal deficit exceeding expectations since 2023, coupled with weak domestic demand and economic recovery, and the deterioration of France's fiscal strength. At the same time, the recently established "three-legged" suspended parliament has weakened France's political stability.           The outlook for the UK's credit rating remains negative. The UK's economy showed a trend of decline in the second half of 2023, and Brexit still limits the UK's medium- and long-term growth potential. At the same time, the UK's political situation has changed frequently in recent years. Large-scale riots have recently occurred to protest against the UK government's immigration policy, reflecting significant divisions among the British people on race, religion, and immigration. The British people's dissatisfaction with the government and distrust of politics have had a negative impact on the political stability of the UK, and China Chengxin International will continue to pay attention to the UK's political situation.           The countries whose ratings or outlooks were positively adjusted include Turkey, Spain, and Brazil. The outlook for Turkey's sovereign credit rating was changed from stable to positive, mainly based on the new government's continuous return to orthodox economic policies, which helps to enhance policy predictability, curb the accumulation of external vulnerabilities, and boost investor confidence. The upgrade of Spain's sovereign credit rating is mainly due to the improvement in household consumption and the full recovery of the tourism industry. The Spanish economy has achieved steady growth, and the increase in fiscal revenue has led to a further narrowing of the fiscal deficit. The upgrade of Brazil's sovereign credit rating is mainly due to the higher-than-expected economic growth rate in 2023, and the progress of economic and fiscal reforms under the Lula government will help to improve medium- and long-term growth potential and fiscal efficiency.           The credit ratings of Canada, the Nordic countries, India, and Nigeria remain stable. India maintains strong economic growth and continued net inflows of foreign direct investment, but low per capita GDP, increased fiscal pressure under expansionary policies, and uncertainty in reform progress after parliamentary elections pose downward pressure on sovereign credit. Nigeria's economic growth in 2023 slowed due to insufficient oil production, and its fiscal situation is under pressure. However, thanks to a series of reform measures by the new government and the commissioning of refineries, it is expected that the economic growth rate will rebound slightly in 2024.           Iran is the newly rated country in this report. Iran has a large economic size, strong fiscal sustainability, and external payment capacity. After the recent presidential election, the political situation is expected to transition smoothly, but it faces a high risk of geopolitical conflicts due to the impact of the attack on Hamas leaders.   On April 19, 2024, China Chengxin International announced that it had changed the outlook for the Republic of Turkey's sovereign credit rating from stable to positive, while maintaining the BB-g sovereign credit rating.   China Chengxin International believes that since the second half of 2023, the new government's economic policies have continuously returned to orthodox routes, which helps to enhance policy predictability, reduce the risk of economic "hard landing," curb the accumulation of external vulnerabilities, and boost investor confidence. In addition, the ruling party's victory in the 2023 elections is favorable for maintaining the continuity of overall policies. In the future, attention still needs to be paid to inflation risks and the high external account vulnerability, as well as the pressure from internal governance and party games on sovereign credit.   On April 19, 2024, China Chengxin International announced that it had upgraded the Kingdom of Spain's sovereign credit rating from BBBg to BBB+g, while maintaining a stable outlook.    China Chengxin International believes that due to the improvement in household consumption and the full recovery of the tourism industry, the Spanish economy achieved steady growth in 2023 and is expected to continue the trend in 2024. At the same time, the increase in fiscal revenue has led to a further narrowing of the fiscal deficit, and the debt burden has steadily decreased, which supports the upgrade of Spain's sovereign credit rating. In the future, attention still needs to be paid to the high unemployment rate in Spain and the conflicts between the central and local governments, which may affect sovereign credit.   On April 19, 2024, China Chengxin International announced that it had upgraded the Federative Republic of Brazil's sovereign credit rating from BBg to BB+g, while maintaining a stable outlook.            China Chengxin International believes that the Brazilian economy has strong resilience, benefiting from the strong performance of the agricultural sector and the continuous expansion of domestic consumption. The economic growth rate in 2023 exceeded expectations, and the progress of economic and fiscal reforms under the Lula government will help to improve medium- and long-term growth potential and fiscal efficiency. At the same time, the continuous narrowing of the current account deficit and the rebound of foreign direct investment have further improved Brazil's external payment capacity. These factors provide support for the upgrade of Brazil's sovereign credit rating, but attention still needs to be paid to the pressure on sovereign credit caused by issues such as the low efficiency of the Brazilian government and weak fiscal strength.   On April 19, 2024, China Chengxin International maintained the sovereign credit rating of the United Kingdom of Great Britain and Northern Ireland (hereinafter referred to as "the UK") at AA-g, with a negative outlook.    China Chengxin International believes that the ongoing Russia-Ukraine conflict continues to impact the UK economy, and the UK's economy showed a trend of decline in the second half of 2023. Brexit still limits the UK's medium- and long-term growth potential, and attention needs to be paid to the UK's fiscal sustainability. At the same time, the frequent changes in the UK's political situation need to be monitored for their impact on political stability, and attention needs to be paid to the risk of UK separation. However, at the same time, the UK still has a large economic size, high national income, unobstructed financing channels, and a very low banking risk, which can support its current credit rating.   On June 17, 2024, China Chengxin International maintained the sovereign credit rating of the Republic of India (hereinafter referred to as "India") at BBB-g, with a stable outlook.    China Chengxin International believes that India has a large economic size, a diverse economic structure, strong economic growth for the past three years, a population dividend to support long-term economic growth prospects, a relatively favorable government debt structure, continuous net inflows of foreign direct investment, and high coverage of short-term external debt by foreign exchange reserves, which provide strong support for its current credit rating. However, attention needs to be paid to the high fiscal deficit under expansionary fiscal policies, high government debt with weak debt repayment ability, low per capita GDP, high unemployment rate, and increased uncertainty in reform agenda progress after parliamentary elections, which pose downward pressure on sovereign credit.   On July 5, 2024, China Chengxin International maintained the sovereign credit rating of Canada at AA+g, with a stable outlook.   China Chengxin International believes that Canada has a diverse economic structure, unobstructed financing channels to support its strong debt burden capacity, and its status as a net creditor country provides guarantees for external payment. At the same time, Canada has a high government efficiency and a sound judicial system, which can support its current credit rating. Attention needs to be paid to the pressure of the domestic economy under the background of high interest rates and global economic growth slowdown, the negative impact of high debt on fiscal strength, and long-term structural problems such as aging population and labor shortage.   On July 5, 2024, China Chengxin International downgraded the sovereign credit rating of Japan (hereinafter referred to as "Japan") from AAg to AA-g, with a stable outlook.    China Chengxin International believes that the downgrade of Japan's sovereign credit rating is mainly due to the following reasons: (1) the continuous depreciation of the yen makes it difficult to predict the timing of the "wage-price" loop forming a virtuous cycle, and the sluggish domestic demand combined with the suspension of automobile production due to certification violations have dimmed Japan's economic recovery prospects; (2) the accelerated depreciation of the yen has intensified the challenges of balancing economic growth, inflation management, and currency management by the central bank. Constrained by fragile economic growth and a huge government debt scale, the Bank of Japan has limited room for adjusting policy interest rates, and policy effectiveness will be greatly affected by changes in the external environment; (3) against the background of weak economic growth and increasing fiscal expenditure pressure, Japan's fiscal consolidation may face obstacles. If the central bank gradually advances monetary policy normalization and gradually reduces its holdings of government bonds, the government's debt repayment pressure will significantly increase; (4) in the medium and long term, under the exacerbation of population aging and defense expenditure demand, Japan's slow-growing economy may not be able to bear the huge government debt, and the sustainability of debt may face challenges. However, Japan's larger economic size, higher per capita income and savings rate, long-term current account surplus and net creditor status, and favorable debt structure can still support its sovereign credit rating.   On July 5, 2024, China Chengxin International maintained the sovereign credit rating of the Federal Republic of Nigeria (hereinafter referred to as "Nigeria") at B+g, with a stable outlook.    China Chengxin International believes that although Nigeria's economic growth slowed down in 2023 due to insufficient oil production and the debt burden is still increasing, the fiscal situation is under certain pressure. However, thanks to a series of reform measures by the new government and the commissioning of refineries, it is expected that the economic growth rate will rebound slightly in 2024. At the same time, the multiple measures taken by the new president since taking office, including canceling fuel subsidies and unifying exchange rates, demonstrate the effectiveness of policies, which is beneficial for Nigeria's long-term fiscal stability and economic growth.    On July 8, 2024, China Chengxin International announced that it had rated the Islamic Republic of Iran (hereinafter referred to as "Iran") as B+g, with a stable outlook.   China Chengxin International believes that Iran has a large economic size, limited government debt burden, strong fiscal sustainability, and external payment capacity. After the recent presidential election, the political situation is expected to transition smoothly, and these factors can provide support for its credit rating. At the same time, China Chengxin International is concerned about the complex domestic and international situations in Iran, weak institutional strength, low efficiency of economic operation and use of fiscal resources, relatively backward banking system, limited oil and gas exports and lagging industrial upgrading under the resumption of US sanctions, and high geopolitical and ESG risks.   On July 31, 2024, China Chengxin International announced that it had changed the sovereign credit rating outlook of the French Republic (hereinafter referred to as "France") from stable to negative, while maintaining its AAg sovereign credit rating.    China Chengxin International believes that since 2023, France's fiscal deficit has exceeded expectations, coupled with weak domestic demand and economic recovery, the fiscal strength of France has deteriorated. At the same time, the establishment of the "three-legged" suspended parliament weakened France's political stability and brought challenges to the smooth progress of France's fiscal consolidation. In the short term, France's fiscal situation will be difficult to significantly improve. However, France has a high economic size and per capita income level, strong debt-bearing capacity, and maintains a strong external payment level under the support of the euro currency status, which can support its sovereign credit rating.   On August 1, 2024, China Chengxin International maintained the sovereign credit ratings of the Kingdom of Norway (hereinafter referred to as "Norway"), the Kingdom of Sweden (hereinafter referred to as "Sweden"), and the Kingdom of Denmark (hereinafter referred to as "Denmark") at AAAg, with a stable outlook.   Norway, Sweden, and Denmark are all located in the Nordic region with a strong economic foundation and high national income ranking among the world's top. The three Nordic countries are dominated by the tertiary industry, with a high degree of economic openness and a high dependence on foreign trade, and have strong economic strength. The Russia-Ukraine conflict has had a negative impact on the economies of the three countries, with Sweden being more affected. At the same time, the fiscal foundation of the three Nordic countries is sound, with fiscal surpluses or small deficits in 2023, and the government debt ratio is low, indicating strong fiscal strength. The current account of the three Nordic countries has a long-term surplus, the financing channels are unobstructed, and the foreign exchange reserves are sufficient, indicating strong external payment capacity. In addition, the political systems of the three Nordic countries are complete and have a sound governance framework, with high governance levels and strong institutional strength. The financial systems of the three Nordic countries operate stably, and the system risks are low, but attention needs to be paid to the impact of the Russia-Ukraine conflict on the geopolitical situation of the three Nordic countries.      

Recently, CCSI announced that it has removed the United States of America (“U.S.”) from the watch list for possible downgrade, revised the outlook to negative, and maintained the sovereign credit rating at AA+g. Previously, on March 16, 2023, CCSI announced that it had placed the U.S. sovereign credit rating on the watch list for possible downgrade. On May 25, 2023, CCSIC downgraded the U.S. sovereign credit rating from AAAg to AA+g, and continued to place the U.S. sovereign on the watch list for possible downgrade.   Historical Downgrades of the U.S. Sovereign by CSI     CITIC believes that the weakening of financial strength is a key factor restricting the enhancement of the U.S. sovereign credit level, the U.S. debt level is the highest among countries of the same level, and the debt level and cost of debt are in a continuing trend of rising, Trump advocates tax cuts or to further push up the debt, and in the absence of substantive reforms of the high cost of debt, the sustainability of the debt is constantly decreasing; at the same time, the rise of trade protectionism may have a dampening effect on the U.S. economic prospects. At the same time, rising trade protectionism may inhibit the U.S. economic outlook, and attention should also be paid to the impact of political party rivalry on U.S. social stability and policy continuity. These factors are the main reasons for the negative outlook on the U.S. sovereign credit rating. At the same time, however, the U.S., as the world's largest economy, has a diversified economic structure and a high level of national income, and occupies a dominant position in the fields of science and technology, commerce and finance. Benefiting from the centrality of the United States dollar and United States debt in the global financial system, the United States Government has been able to raise international financing at a relatively low cost for a long time, and its debt sustainability is relatively high.   The U.S. debt level is at the highest in the same class of countries, Trump's advocated tax cuts may further push up the debt, and in the expectation of high inflation, the high cost of debt increases the U.S. long-term fiscal risk, and the fiscal strength may be further weakened. Prior to the outbreak of the New Crown epidemic, the U.S. fiscal deficit and debt levels were already on an upward trajectory. the U.S. government's fiscal deficit rate exceeded 7% in FY2023, and the government's debt ratio[1] was about 109%, which is at a very high level. As of November 5, 2024, the stock of federal government debt has exceeded $35.9 trillion and is on an accelerated upward path since the suspension of the debt ceiling constraint. Trump's advocated fiscal policy, which includes lowering the corporate tax rate and personal income tax rate and setting higher spending levels, including increased infrastructure and defense spending, may lead to further upward movement of the government's fiscal deficit and indebtedness, and, in the absence of substantive reforms, the fiscal deficit rate is expected to remain at a high level of more than 7% over the medium term, and the government's indebtedness may rise to more than 110%. Meanwhile, high interest rates have led to a significant rise in the cost of government debt, and in the absence of substantial fiscal consolidation measures by the government, debt sustainability has been declining.2022 The prolonged period of high interest rates since then has pushed up the cost of U.S. government debt, with interest payments on the U.S. government's public debt reaching US$1.1 trillion in FY2024, a year-on-year increase of 29% from FY2023. Trump's advocacy of stimulative policies or push up inflation expectations, resulting in a slower pace of interest rates downward, and due to the cost of the national debt there is a certain lag, is expected to 2025 ~ 2026 fiscal year interest expenses as a percentage will remain high. Against the backdrop of a slowing economy, rising debt costs overlaid with excessive debt burdens will drive refinancing risk to the upside. When the debt ceiling negotiations are restarted in 2025, the total federal government debt could reach $40 trillion, and weakening fiscal strength has become a key factor constraining the upgrading of the U.S. sovereign credit level.   In the context of the U.S. economic slowdown, the dovish policies advocated by Trump may lead to a resurgence of inflation risk, and the Federal Reserve's policy path choice faces multiple challenges; at the same time, the warming of trade protectionism may inhibit the U.S. economic outlook. Since the beginning of the year, the U.S. economy has shown strong resilience, and inflationary pressures have eased under persistently high interest rates, providing a certain cushion for the Fed to cut interest rates. Employment data volatility for the market to form a certain disturbance, but a comprehensive view of the labor market shows a moderate slowdown trend, the U.S. unemployment rate has risen from 3.7% at the beginning of 2024 to 4.1% in September. At the same time, long-term high interest rates for the fiscal debt, the banking sector and other extensive risks, and the economy to form a certain inhibition, is expected to 2024 U.S. economic growth will slow down slightly to 2.7%. Trump advocates dovish policies, including large-scale tax cuts, promises to ease restrictions on fossil fuels, while increasing investment in infrastructure and defense, or a short-term boost to the economy, but its trade protection policy triggered by rising tariffs will further push up inflation, U.S. inflation risk or re-emergence, which leads to increased variability in the path of the Federal Reserve's subsequent monetary policy. At the same time, Trump came to power if he seeks to “unilateralism” policy return, will lead to global trade environment tensions, superimposed on the global geopolitical risks and restrictive immigration policy, for the U.S. economic outlook constitutes a negative impact on the subsequent economic trends facing a high degree of uncertainty.     The escalation of the complexity of bipartisan tug-of-war in the United States has had a negative impact on the effectiveness and continuity of policies, while the impact of class antagonism and cleavage on the stability of American society needs to be guarded against. In recent years, political differences between the two parties in the U.S. have led to a reduction in legislative efficiency, weakening the ability of U.S. policymakers to plan substantive changes in policy, and the two-party game has repeatedly caused government shutdowns. The campaign for this election involved a large amount of financial investment, increasing the influence of capital in politics, and due to the U.S. federal state election system, resulting in an imbalance in the distribution of resources and attention, in the final sprint of the campaign, both Democrats and Republicans in the swing states filed a large number of lawsuits against the eligibility of the vote, the rules, and other details of the issue.2024 U.S. presidential election was the closest in history in the polls of the candidates. The 2024 U.S. presidential election was the closest election in history in terms of candidate polls, but the final results showed that Republican candidate Donald Trump had a big lead in the vote, while the Republican Party had a high probability of “sweeping” Congress, and the Democrats' crushing defeat showed that the American people were dissatisfied with the status quo. From the riots on Capitol Hill to the attack on Trump, political violence in the United States has intensified in recent years, showing that politicians of both parties and the public on many issues there are serious differences [2], the election process has also intensified the contradictions between different social groups, expanding the partisan rivalry, and we need to be vigilant about the possible social instability after the election. Trump's domination of the government and majority support from Congress is conducive to accelerating the legislative process and promoting the implementation of policies, but may weaken the U.S. power checks and balances mechanism to a certain extent. CCSIC will keep an eye on the political stability and policy effectiveness of the US.   The deterioration of the U.S. fiscal strength and the continuous breach of the debt ceiling are eroding the credit foundation of the U.S. dollar, and in the long run, the relative weakening of the international status of the U.S. dollar will fundamentally shake its sovereign credit strength. In the short term, Trump's rise to power will support a strong U.S. dollar, but against the backdrop of accelerating anti-globalization, slowing U.S. economic growth, and intensifying domestic political divisions, the accelerating upward movement of debt and rising costs are leading to decreasing U.S. debt sustainability, which will have a certain impact on the status of the U.S. dollar and U.S. debt as a safe asset. Currently, the U.S. dollar, as the world's most widely held reserve currency, has no possibility of being replaced in the short term, but its leading position has declined, with its share of global reserve currencies dropping from 72% to less than 60% over the past 20 years. Along with the opening of the Federal Reserve's rate-cutting cycle in September 2024, the dollar index has declined from a high level to the level of early 2022, and Trump's advocacy of expansionary fiscal policy and high tariffs are expected to drive up U.S. bond yields, and the attractiveness of U.S. bonds may decline in the medium term. In addition, after Trump took office, the trend of “anti-globalization” will further intensify, or lead to a decline in the demand for the dollar in the world. In the longer term, the deterioration of U.S. fiscal strength and the continuous breach of the debt ceiling will erode the credit foundation of the U.S. dollar, and along with the relative weakening of the U.S. geopolitical position and the increase in demand for non-dollar currencies in other economies, the dollar's international status will be weakened, which will fundamentally destabilize its sovereign credit strength.   Factors that could trigger a future Factors that could trigger a change in the rating outlook from negative to stable: The U.S. negative outlook could be revised to stable if the U.S. economy achieves a soft landing, debt pressures gradually ease, and a smooth transition is achieved after the election.   Factors that may trigger a rating downgrade in the future: If the U.S. economy experiences a recession, the debt becomes unsustainable due to accumulating fiscal deficits, and an unanticipated negative political event occurs, CITIC will consider downgrading the U.S. sovereign credit rating.     Review of CSI's U.S. Sovereign Rating Actions   In 2012, China Chengxin International released its sovereign credit rating system, focusing on 76 countries or regions, including 52 countries along the “Belt and Road”, with more than 130 sovereign rating actions in the past three years. 2015 was the first time that China released the “Belt and Road” Countries' Sovereign Credit Risk Report. In 2015, CCSIC issued the “Report on Sovereign Credit Risks of Countries Along the Belt and Road” for the first time in China, and from 2017 to 2023, CCSIC will jointly issue the “Report on Risks of Countries Along the Belt and Road” with overseas credit rating agencies for seven consecutive years. Relying on the panda bond business, CCSIC has successively undertaken the entrusted sovereign rating business of South Korea, Poland, Turkey, Belarus, etc. The panda bond business involves countries covering nearly 20 economies, such as Germany, France, Canada, Italy, Malaysia and Brazil. From a comprehensive point of view, CCSIC is in the forefront of the industry in terms of sovereign tracking efficiency, market attention, and sovereign Panda debt underwriting, etc. In recent years, CCSIC has closely tracked the sovereign ratings of Korea, Turkey, Belarus, and other countries.   In recent years, CCSIC has closely tracked changes in U.S. sovereign credit, and in the adjustments to U.S. sovereign credit ratings since 2020, CCSIC's adjustments have been made earlier than those of international rating agencies, relatively reflecting the timeliness of the ratings.   On April 21, 2020, CCSIC revised the outlook on the U.S. rating from stable to negative, and then Fitch revised the outlook on the U.S. rating to negative in July of the same year. On May 25, 2023, CSCI downgraded the U.S. sovereign credit rating from AAAg to AA+g, ahead of Fitch's downgrade of the U.S. on August 2, 2023, and Moody's downgraded the outlook on the U.S. sovereign credit rating on November 10, 2023 from stable to negative. A number of well-known media at home and abroad reported extensively on this, and the U.S. downgrade was publicized in a number of mainstream media at home and abroad, and interviewed by CCTV CGTN.   [1] The U.S. general government debt ratio is the sum of the public debt of the U.S. federal government and local governments as a percentage of GDP. [2] Democrats and Republican support groups have significantly divergent positions on issues such as race, immigration, climate policy, healthcare, and gun control.

On June 13, 2024, Ren Hui, Co-President of CCX Green Finance International, led a team to visit Helge Muenkel, Group Chief Sustainability Officer of DBS Bank in Shanghai. The heads of DBS China business and risk control teams attended the meeting. DBS Bank attaches great importance to the sustainable development level and capabilities of its credit customers and business departments, continues to promote the green and low-carbon development of financing projects, promotes the integration of ESG ratings and ESG data into its own business management, and maintains its leading position in the green and sustainable financial market.   Helge Muenkel, Chief Sustainability Officer of DBS Bank (third from left) Ren Hui, Co-President of China Chengxin Green Finance International (second from left)   The China Chengxin Green Finance International team comprehensively introduced China Chengxin's credit rating business, panda bond business and green and sustainable finance business in the Chinese mainland and overseas markets to the DBS Bank team. The two sides exchanged their own views on the green finance and ESG rating market, transitional finance and the transformation path of high-carbon industries, and conducted in-depth analysis of relevant assessment standards and methodologies. Both parties look forward to continuing in-depth project cooperation in the Chinese mainland and overseas markets and in the field of transitional finance. Wang Teze, Marketing Director of China Chengxin Green Finance International, and Cui Zixiao, Marketing Director of China Chengxin Green Finance, attended the meeting and reported on relevant business situations.   DBS Group is a leading Asian financial institution headquartered in Singapore, with business covering three major growth axes in Asia, namely Greater China, Southeast Asia and South Asia. In recent years, CCX Green Finance has maintained close communication with DBS Bank , continuously promoted business cooperation, and generated good market response. In the future, CCX Green Finance International will further strengthen product research and development and business layout in the fields of green and sustainable finance and transitional finance, and promote the business development of both parties in the Asian market.