Bill of exchanges is one of the most popular payment systems in China nowadays. It becomes one of the favorite because its simplicity, match for small businesses, and traded between banks are allowed. Besides of the advantages, it is also open to chances of crime, including fraud and robbery. Two of the most explicit of this type of crime are happening to ABC Banks (Referred to Agriculture Bank of China ) and China Citic Bank, two of the biggest bank in the country.

On January 2016, ABC Bank has lost 3,8 billion yuan bills of exchange. Police investigated this missing and few days later, they reported that 969 million yuan bills of exchanges was also lost from Citic Bank, located in Lanzhou, Gansu Province. From the investigation, police really positive that there must be an insider involve at this robbery of Bill of Exchanges. For the result from these two accidental case, the central government has elevated the rule of bills business by their regulation. CBRC (China Banking Regulatory Commission) had reminded the bankers on December, that there's a rise in number for fraud involving Bills of Exchanges and urge them to be very careful on carrying this business.

The investigation including the attention to the use of the fake document and the use of the cash from bills to invest in stock market. At June of 2015, the data has shown about 8 trillion yuan has lost from the interstate bank. This lost, nonetheless, are violations of Bank bills business. This procurement about bills financing has to be supervised more with professional included, not only by government regulators. There was a professional on bills financing, but only until the year of 2000. Their job is just to mediate between bank and companies who needs financing, and getting profit from that.

Bills of Exchange has a characteristic of opaque and loose, making abundantly increasing of the agents in China, and it also has the impact to increase this type of financing business. Central Banks has a report that said that bills of exchange have raised on value by 56,9 percent since 2004 until last years. This elevated has made a lot of transaction on paper, not a computer. It has make Bills of exchange become susceptible, or risky to crime. To handle this situation, CBRC makes several endeavors, which is to tighten the regulation of bills of exchange, and the central bank is trying to change the transactions into a digital format. The experts also said a lot about protecting banks from this fraudulent, one of it is the banks need to make their own supervisions to their own staff and management.

ABC and Citic Banks, also include the other few biggest banks in the country has suspended for a while for the transactions related to bills of exchange and doing some internal review. The small bank also becomes alert to the bill of business transactions. One of the sources also said that if people and paper are watched closely, then the business of bills will be okay. This is worth to try since Bills of exchange has made a significant improve to commercial banks profit, and make the share of the market grown from 32 percent in 2010 to 41 percent in 2014.

As the result of the investigation by the police department, they had arrest two suspect, which is the employee from the ABC bank as the offender. They have been accused of stealing. Later known that they were stealing those 3,8 billion yuan in the form of bills of exchange from the safe, and then stuffing it with a newspaper, exchange the bills for the cash and buy shares. There are several things unknown inside this stealing process because the bankers still wondering how both of them doing that stealing without any help from others. The police have done some more interview and investigation which deliver to the fact that the executives of the ABC Banks are also involved during the stealing process. The police tracing where the bills go to, and found it on Minsheng Bank, with the intermediate of Ningbo Bank. An agent from Chongqing is also involved. By the interview, nothing has found wrong with the bills transactions.

Police found the similarity with the offender of the Citic Bank, which also doing by the insider of the bank, but with a different mode. The offender replaces the bills with a fake document, and then sells it with discount price, more than once. One of the bankers said it is pointed out that bank procedures have been in problems to handle the bills. This is causing an open room to the robbery. The CBRC and Central Bank as the vigilance of this type of crime have made a remembrance tighten the rules of the transaction, but a lot of banks has neglected it. The bankers have put aside the risk, and choose to still have this transaction of bills of exchange because it may seem safer than the traditional transactions, which is writing the loans.

Anbang Insurance Company made it to the headlines with New York's Astoria Hotel acquisition. It is in the race to bid for the 8th largest hotel chain, Starwood Hotels & Resorts Inc. Anbang's deep funding reserve helps fuel the proposed buyout for US$14billion. Anbang earned US$9.2billion from domestic and property insurance premium, way below the standard premium cash flow typically earned by industry heavyweights China Life or Ping An, according to CIRC (China Regulatory Commission for Insurance). Anbang also earned US$6billion by selling investor insurance. It has almost 80% of market share for investment products pushed to the retail segment that has almost 10% yield. Revenue is a small proportion of its assets totaling US$292 billion in 2014. Its cash pile is being used to fund its acquisition spree with the latest being Starwood. Anbang has not revealed it financing scheme for the takeover of Starwood with partner Primavera Capital, a private equity outfit and London company J.C. Flowers. Regulators may halt the deal on ground of investment restriction for insurance companies to invest more than 15% group assets for overseas investments.

Anbang forked out US$2billion for Waldorf Astoria, and bought Fidelity and Guaranty Life with US$1.59billion cash. In 2014, Anbang acquired Fidea, a Belgium based insurer with 220million euros and forked out 219million euros for Delta Lloyd Belgium. Blackstone sold its portfolio company stake in Strategic Hotels and Resorts to Anbang, which operates Four Seasons to Intercontinental hotel chains, for about US$6.5billion. The deals are subject to US and Chinese regulatory commission approvals. Anbang's total investment outlat for overseas purchases totaled US$27billion to-date. It has yet to compute the exact amount it could invest overseas. Non insurance company assets are supporting Anbang fianancially. The firm has major shareholding in local domestic banks and various property development outfits. Chengdu Bank was the first banking company acquired by Anbang. There are little insurance holdings. In 2014, property insurance and life insurance department has 329billion yuan in total compared to 1.9trillion assets held by Anbang.

Anbang is in competition with Marriott for the 1,222 hotel chains owned by Starwood, and that includes Sheraton as well as Westin brands. Merger between Marriott and Starwood will form the biggest hotel chain in the world. In March 2016, Anbang's offer of US$14billion is US$400million more than Marriott. Anbang joined in on the bidding when Starwood management was looking to dispose the chain into the hand of Marriott, weeks before shareholders voting. Starwood will pay Marriott a release fee if Anbang succeeds. Other Chinese entities are keen on Starwood, for instance China Investment Co., Jinjian International Corp and HNA Group. None made a firm offer. Cinda Securities analyst head commented Starwood has prime assets and solid financials. Hotel business has been providing good investment returns, around 5%. Anbang wants higher return on its cash pile. It is a good time for insurers in making investments.

Anbang had been incorporated in 2004 with registered capital of 500million yuan. Largest shareholder was SAIC Motor Co with 20% stake. Business registration files showed Anbang having 39 investors, all obscure and diverse. The addresses were similar for certain shareholders, and they have some form of connection to the Chairman who has good connection with central government. Sinopec bought 20% of Anbang and became a major shareholder in 2005. Anbang registered capital was increasedto 62billion yuan. Its equity is evenly distributed. There were changes in shareholding where SAIC reduced its stake to 1.2% while Sinopec reduced its stake to 0.5%.

Anbang was rearranging shareholding structure to comply with CIRC regulations. In the old rule, one investor cannot hold a stake exceeding 20% for insurance company. In the new rule effective 2014, one investor can hold up till 51%, subject to approval. Anbang focused on investor insurance sales for retail investors and has been a significant revenue source. It is a market leader with 80% market share. However the plans are short term (less than a year) and maturities are due. Investor expects repayment in full plus investment returns and yield. This poses a risk to Anbang, as China faces economic slowdown. Thus Anbang has been looking overseas for acquisition and growth, even it faces potential non-approval from CIRC. Anbang has shaken off the regulatory scrutiny with more than 1trillion assets in yuan, well sufficient for future foreign acquisitions.

This Jan 2017 might be a good time to look back at the last year where China's stock market was going wild with extreme volatility and record trading volume.

The stock market plunge prompted Chinese regulators from Beijing to contain the panic and fear among investors. Among the tools used by regulators is to adjust interest rate, changing stock trading regulations, loosen margin credit to prop up the falling market and many more actions deemed as brute force. There is too much similarity in interpreting market information among investors. They are speculating heavily in the market by not using any fundamental basis. They are skeptical of all actions made by the regulators and regulators are in a tight situation in order to be impartial. Investors are extremely scared of further markets actions that might impact the value of their shares and there will be further wave of irrational purchase and sales of shares.

Regulators responded by using the most direct approach which is approving large funds or stimulus to buy up huge amount of shares in proportion to the average trading volume. Beijing regulators had exerted its influence and control over its entities under the supervision by buying all shares up till the panic is over and subsided. Fear can only be removed by explicitly ordering all institutions to stop selling and buy continuously until a new order is issued. There is no other better signaling move. Regulators in fact chose this path and managed to ease the fear which sparked a rally for the markets.

The unconventional forceful method of propping up the market, accompanied by the surge could mean further rise of more serious fall. It could go either way and market will be extremely brutal to speculators. Investors will never be able to fully comprehend the complexities of regulatory behavior and market starts to behave in other ways as we slowly understand the impact. Market is always forward looking and will reflect all interpretations of the collective investors.

Many market watchers have differing opinions as to the effectiveness of the control measure in terms of size and importance. However there is one specific action that will send a very clear signal to the market, which may well be the most widely covered methods for rescuing the markets. The action includes a meeting involving 21 leaders of China's largest brokerage firms with CSRC, the powerful market regulator. The outcome of the meeting was an official statement by all parties that they will collectively spend 120 billion yuan to stabilize all parts of the equity market by buying exchange floated funds tied to high grade blue chip shares that are trading on Shenzhen & Shanghai markets.

The firm had unanimously agreed to continue holding on all the stocks purchased in the open market with their internal funds until the stock index benchmark recovers to a comfortable level at 4,500 index points. Brokers are holding on to huge amount of shares that could be offloaded any time as soon as the opportunity arrives. Regulators have restricted the selling until at least the index reaches a level at 4,500 points. There is a big resistance level at 4,500 levels and no market observers could foresee or forecast the impact. This in essence acts as a similar call option that buyers must forgo when the purchase stocks when the index trades under 4,500. As the stock index closes in at 4,100 or much higher, there will be heavy selling by brokers who are cash-strapped and running out of capital at index level of 4,500. Investors who bought shares are providing a free of charge call option at 4,500. As prices trend higher, upside is capped and downside risk becomes more apparent.

How China became an economic powerhouse

Currently, China's economy boasts the world's highest GDP, above the USA. In fact, yes, the Chinese economy did overtake the States. That means it has a bigger economy than every Eurozone nation combined. Plus it's only likely to get bigger in the coming years. China's GDP Grows 6.7% currently.

So how did this happen? In this article, we present a timeline of the major events of the last 40 years that have seen China take over the financial world.

The Late 70s

Since October 1st 1949, China had been the world's largest communist state. Throughout this entire period, the economy had been strictly monitored and structured in accordance with government initiatives. 1978, however, was a year of huge economic reform, as the Central Committee increased the potential for market mechanics to affect the system, while planning a huge reduction in its control over the economy.

The first thing the rest of the world noticed was the sudden eagerness Chinese farmers had to trade with foreign food companies. For the first time, Chinese agricultural organisations were allowed to sell their surplus crops abroad.

Another key change came with the Duel Track System, also established that year. This created two prices for goods and services: one for State Owned Enterprises and a second for the private sector. So, while the SOEs would be offered lower prices, private companies would still be able to trade and grow.

The following year, the Law on Sino-Foreign Equity Joint Ventures was passed by the Committee, which officially allowed and encourage foreign companies to invest in the Chinese economy.

The 1980s

The People's Republic of China marked the new decade by becoming an official member of the International Monetary Fund and the World Bank. In order to support foreign investment, the Committee created four ‘economic zones' that would be specifically structured to attract capital from abroad. These zones were in Zhuhai, Xiamen, Shenzhen and Shantou.

Over the next decade, several huge reforms were brought in to inject life into the Chinese economy.

• Household Responsibility Reform: This allowed China's farmers to keep their can retain surpluses rather than give them back to the government.

• The 6th Five Year Plan: For the first time, a Five Year Plan had the growth of a market-based economy at its core.

• Open Areas: In 1984, the state began work on 14 cities and ‘open areas' for investment that would not be governed by the red tape of other areas of the country.

• General Principles of Civil Law: This provide providing the legal structure needed for a market economy.

The 1990s

China began the 90s by opening its first ever stock markets in Shanghai and Shenzhen. Though, midway through the decade, inflation rates threatened to derail the economy, the Committee acted swiftly, bringing in banking reforms that controlled lending, easing the state through the late 90s Asian economic downturn.

In fact China was in a position to help other nations in the continent during this period, including Thailand, offering over $4 billion worth of aid to its neighbours.

The 2000s

The new millennium saw China moving ever closer to becoming a free market state, with membership of the World Trade Organisation spurring a number of reforms such as the elimination of domestic price controls and agricultural subsidies. Also share markets opened to foreign investment and private property was protected by the constitution.

By the end of the 2000s, China had reached an important understanding with the United States, with a ten year co-operation deal on sustainability and increased market access.

Thank to these huge steps taken over the last four decades, China is now one of the world's most influential economic states.