Raphael Stevens

HSBC UK Bank has agreed to acquire the U.K. subsidiary of collapsed Silicon Valley Bank for £1 ($1.21).
“I think I speak on behalf of U.K. start-ups when we say this is a huge relief,” Toby Mather, CEO of London-based tutoring app Lingumi, told CNBC.
Dom Hallas, executive director of U.K. start-up association Coadec, said the government-facilitated deal had “saved hundreds of the U.K.’s most innovative companies.”

An entrance to the Alphabeta Building, which houses the offices of UK unit of Silicon Valley Bank, in the City of London, UK, on Monday, March 13, 2023. HSBC Holdings Plc is set to buy the UK arm of Silicon Valley Bank, the culmination of a frantic weekend where ministers and bankers explored various ways to avert the SVB unit’s collapse.
Bloomberg | Bloomberg | Getty Images

LONDON — U.K. startups are breathing a sigh of relief Monday, after HSBC announced it would buy a subsidiary of collapsed U.S. tech startup lender Silicon Valley Bank.
“We can look our teams in the eye at 9 o’clock in our all-hands calls, which were going to be pretty nerve wracking this morning, and say, not only will we be able to make next payroll but we can continue business as usual,” Toby Mather, CEO of London-based tutoring app Lingumi, told CNBC’s “Squawk Box Europe.”

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His startup holds the majority of its cash with SVB UK.
“I think I speak on behalf of U.K. start-ups when we say this is a huge relief,” he said.
It follows a night of crunch talks to save customer deposits after U.S. regulators shut down SVB Friday, rocking the financial world.
HSBC said it had agreed to acquire SVB UK for £1 ($1.21) and would protect deposits.
Brent Hoberman, executive chairman of startup accelerator Founders Factory and co-founder of online businesses lastminute.com and Made.com, said that anything short of a 100% guarantee on deposits would have had significant knock-on effects for U.K. tech, and the deal was a “huge relief.”

“SVB UK has a decent balance sheet which enabled HSBC to do this deal,” he told CNBC by phone. “If it had been terrible it would have had to get government deposit insurance but that wasn’t necessary as it is profitable.” SVB UK reported profit before tax of £88 million for 2022.
“We continue to have a strong player in SVB, who provide so many services founders want,” Hoberman said, adding that the combination of SVB UK and HSBC, “if well-executed, could be even more of a positive flywheel in the U.K.”

SVB UK was set to enter insolvency after its U.S. parent company collapsed, sparking talks between the U.K. government, Bank of England and other parties in an effort to avert a crisis spreading through the tech sector.
The bosses of more than 200 tech companies had written to the government on Saturday calling for intervention.
“They have saved hundreds of the U.K.’s most innovative companies today,” Dom Hallas, executive director of U.K. start-up association Coadec, said in a statement.
He added that the government deserved credit for appreciating the scale of the challenge.
Finance Minister Jeremy Hunt had said in a statement Sunday that while SVB had a “limited presence” in the U.K., the situation was concerning for all SVB UK customers and would impact short-term cashflow positions.  
SVB UK has loans of around £5.5 billion ($6.65 billion) and deposits of around £6.7 billion, according to HSBC. Its parent company, SVB, has roughly $209 billion in total assets and $175.4 billion in total deposits.

Rescue deal

In a Tweet on Monday, Hunt said the government and Bank of England had “facilitated a private sale of Silicon Valley Bank UK to HSBC,” adding that “deposits will be protected, with no taxpayer support.”
The Bank of England added that SVB UK’s business would “continue to be operated normally,” and that customers should not notice any changes and should continue to contact the bank through usual channels and make loan repayments as normal. The bank remains authorized by U.K. financial regulators.

Lingumi CEO Mather described the HSBC rescue as a “great outcome.”
“For the bank to go to a really large household name that has got hundreds of years of history is one of the best outcomes we could have had to feel like we can stay with the new SVB, which has been such an important partner to the start-up ecosystem here and in the US for decades now,” he said.
When asked why his startup had not banked with a bigger name like HSBC in the first place, he said: “When you’re a small startup, you’re looking for a bank that understands the unique nature of what you’re doing, which is raising capital from investors that you’re then deploying into research and development, sometimes for several years, before your first revenues arrive.”
“Large banks like HSBC typically until now haven’t offered products that really suit start-ups. SVB has always been really good at doing that,” he said.
SVB’s collapse is the second-largest bank collapse in U.S. history, and on Monday contagion fears dragged down international banking stocks.

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U.S. regulators on Sunday approved plans to backstop depositors and financial institutions linked with SVB.
The bank had been in operation for 40 years but some of its primary assets, including U.S. Treasurys and government-backed mortgage securities, have been hit by U.S. interest rate hikes.
Last week it was pushed to crisis point when it announced it needed to raise $2.25 billion to meet clients’ withdrawal needs and fund new lending. Its stock price plunged and the news sparked panic-withdrawals from VCs and other depositors.
The European Commission said on Monday it was monitoring the situation.

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A trader works on the floor during morning trading at the New York Stock Exchange (NYSE) on March 10, 2023 in New York City. 
Spencer Platt | Getty Images

Investors flocked to safe-haven assets such as Treasurys and gold on Monday amid an extraordinary plan to backstop the banking system and limit the impact from the collapse of Silicon Valley Bank.
The benchmark 10-year Treasury yield fell nearly 20 basis points to 3.50%, touching the lowest level since Feb.3. The 10-year rate last traded around 3.54%. The yield on the 2-year Treasury tumbled more than 40 basis points to 4.16%, also the lowest in over five weeks. Yields move inversely to prices and one basis point equals 0.01%. The iShares 20+ Treasury Bond ETF jumped 1.6%.

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Meanwhile, prices of gold hit their highest since early Feb. at $1,893.96. U.S. gold futures gained 1.2% to $1,889.40, while the SPDR Gold Trust gained 1.5% in premarket. Investors tend to rotate into the metal during financial shocks. What’s more, lower interest rates decrease the opportunity cost of holding zero-yielding gold.

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Investors sought safety as banking regulators rushed to backstop depositors with money at Silicon Valley Bank and now-shattered Signature Bank, seeking to ease systemic contagion fears. Depositors at both failed institutions will have full access to their deposits as part of multiple moves that officials approved over the weekend.
“Angst about what might be ‘the next shoe to fall’ spread through the markets like wildfire,” said John Stoltzfus, chief investment strategist at Oppenheimer Asset Management. “We continue to believe that while we are not yet out of the woods.”
Stock futures initially opened higher Sunday evening on the government’s plans, but have since rolled over.
Concerns about the health of smaller, regional banks deepened after regulators shut down a second institution Sunday. First Republic Bank led a decline in bank shares Monday after it said Sunday it had received additional liquidity from the Federal Reserve and JPMorgan Chase.

San Francisco’s First Republic shares lost 70% in premarket trading Monday after declining 33% last week. PacWest Bancorp dropped 37%, and Western Alliance Bancorp lost 29% in the premarket. Zions Bancorporation shed 11%, while KeyCorp fell 10%.
SVB’s collapse marked the largest U.S. banking failure since the 2008 financial crisis — and the second-largest ever.  HSBC on Monday announced a deal to buy the U.K. subsidiary of the failed U.S. tech startup lender following all-night talks.

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Offices of Illumina, in San Diego, California.
Mike Blake | Reuters

Check out the companies making headlines before the bell.
First Republic — Shares of First Republic cratered more than 64% before the bell, building on last week’s losses. Shares led a decline in bank stocks despite plans from the government to backstop depositors of Silicon Valley Bank and Signature Bank.

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Seagen — Shares soared more than 18% in early market trading on news it will be acquired by Pfizer in a deal worth roughly $43 billion, which will boost Pfizer’s cancer treatment portfolio as it endures a decline in Covid-19 product sales. Pfizer offered $229 in cash per share of Seagen, a 32.7% upside to Friday’s closing price.
Illumina — Shares of the biotech company rose 8.2% after The Wall Street Journal reported that billionaire activist Carl Icahn is preparing a proxy fight at Illumina. Icahn is arguing the company cost its shareholders about $50 billion after pushing through a risky acquisition despite facing opposition from regulators, the Journal said.  
PacWest Bancorp, Western Alliance Bancorp — Regional lenders PacWest Bancorp’s shares fell by more than 40% while Western Alliance’s stock fell by more than 51%, with both banks stinging from the closure of Silicon Valley Bank and Signature Bank. In an attempt to calm investors, both banks said on Friday that their liquidity and deposits remained strong.
Bank of America, JP Morgan, Citigroup — Shares of major banks saw significant losses in early market trading, after the closure of two major banks has spread fear among investors and pushed regulators to further clamp down on risks associated with the bank closures. Bank of America lost 4.2%, JP Morgan shed about 1.4%, and Citi was down 2.25%.
Charles Schwab — Shares declined by more than 6.6% before the bell. Citi upgraded the stock to buy from neutral, however, saying the company’s 23% decline over the last two trading days gives it a “compelling” risk-reward ratio. Citi expects near-term revenue and earnings headwinds from rising funding costs and continued client cash sorting, which it believes are already reflected in the current stock price.

PNC — Shares lost nearly 5.2% early Monday morning after the bank decided against bidding on Silicon Valley Bank as regulators struggle to find buyers for the failed bank.
Roku — Roku’s shares fell more than 2% before the bell. The streaming and media company said in a Friday SEC filing that around $487 million, or 26%, of its cash reserves are stuck at Silicon Valley Bank. 
Petco Health and Wellness — Shares slipped less than 1% after the company was downgraded by Citi to neutral from buy. The Wall Street firm cited continued weakness in discretionary spending and the potential for consumers to trade down to cheaper offerings among the reasons for the call.

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Circle, which issues USD Coin (USDC), said that the $3.3 billion it held with the now-collapsed Silicon Valley Bank will be “fully available” on Monday when U.S. banks open.
After SVB’s collapse, USDC lost its $1 peg, falling as low as 86 cents on Saturday.
The broader cryptocurrency market rallied Monday as regulators stepped in.
Bitcoin jumped as much as 10%, rallying above $22,000.

In this photo illustration, a woman holds a smartphone with the USD Coin (USDC) logo displayed on the screen.
Rafael Henrique | SOPA Images | Lightrocket | Getty Images

USD Coin (USDC) came close to regaining its dollar peg on Monday after Circle, which issues the stablecoin, said that the $3.3 billion it held with the now-collapsed Silicon Valley Bank will be “fully available” when U.S. banks open.
USDC is a type of cryptocurrency called a stablecoin which is supposed to be pegged one-to-one with the U.S. dollar. It is backed by real assets including U.S. Treasurys and cash and is the second-largest stablecoin in existence, behind tether.

Last week Circle said that $3.3 billion of its cash reserve is with SVB. After the bank’s collapse, USDC lost its $1 peg, falling as low as 86 cents on Saturday, according to CoinDesk data.
Circle said in total, it holds about $9.7 billion in cash. $5.4 billion of that is now held with BNY Mellon.

The company said that when U.S. banks open on Monday, the $3.3 billion USDC reserve deposit held at Silicon Valley Bank will be fully available to people.
USDC was close to regaining its peg after Circle’s reassurance and was hovering just under the $1 mark at about 99 cents on Monday, according to CoinDesk data.

Circle’s announcement comes after U.S. regulators last week closed SVB and took control of its deposits, in what was the biggest banking failure since the 2008 financial crisis.

On Sunday, the U.S. Treasury, Federal Reserve and Federal Deposit Insurance Corporation said that depositors of SVB will have access to all of their money starting Monday.
Circle said USDC remains redeemable 1-to-1 with the U.S. dollar.
Jeremy Allaire, CEO of Circle, said Sunday that the company has struck a new partnership with Cross River Bank to mint and redeem USDC.
Allaire also praised the government’s intervention in the SVB fiasco.
“We are heartened to see the U.S. government and financial regulators take crucial steps to mitigate risks extending from the banking system,” he said in a press release.

SVB is the latest in a handful of technology and cryptocurrency-focused lenders to go under over the past few days. Silvergate Capital, a major lender to the crypto industry, said Wednesday it is winding down operations and liquidating its bank. And on Sunday, U.S. regulators closed down another crypto lender Signature Bank, to prevent contagion to the banking sector.
Circle said that it didn’t have any cash reserves at Signature Bank.
The broader cryptocurrency market rallied Monday as regulators stepped in. Bitcoin jumped as much as 10%, rallying above $22,000.

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U.S. regulators shut down Silicon Valley Bank on Friday in the country’s second-biggest banking failure.
The bank was popular with tech startups, including those based in China and backed by U.S. venture capitalists.
The online system for opening an account at SVB had allowed the use of a Chinese mobile number for verification, a Chinese tech startup founder said.

Silicon Valley Bank has a 50% stake in its joint venture with Shanghai Pudong Development Bank.
Future Publishing | Future Publishing | Getty Images

The Silicon Valley Bank fallout has ripple effects on Chinese startups, particularly those backed by U.S. dollar-denominated funds.
U.S. regulators shut down the bank Friday in what has become the country’s second-biggest banking failure. Silicon Valley Bank had built its business on supporting tech startups, including those from China.

The online system for opening an account at SVB had allowed the use of a Chinese mobile number for verification, according to one Chinese tech startup founder who requested anonymity due to the sensitive nature of the situation. The source highlighted that they once had tens of millions of U.S. dollars at SVB.
He’s since moved most funds out, but he said he still had more than $250,000 at SVB.
Along with the backing of a mainstream venture capitalist, a startup could open an account at SVB within a week, the source said in Mandarin, according to a CNBC translation. “Mainstream traditional banks, such as Standard Chartered, HSBC, Citi have strict compliance and it takes a long time to start a bank account with them. It can take up to 3-6 months,” he said.
The source, who founded a fintech company and two other tech companies, said venture capitalists liked working with SVB because the bank allowed the investors to see and approve how the startups used their funds.

“If there will be no SVB, it will harm the tech industry because there is no other bank which provides these two features,” the source said, referring to the speedy account opening for startups and visibility for venture capitalists.

Having a bank account with SVB allowed China-based startups to tap funding from U.S.-based investors, with an eye to a public offering in the U.S. Regulatory pressure from both Beijing and Washington, D.C., has restricted the growth of that China-to-U.S. IPO pipeline in the last two years.
It was not immediately clear how many China-based startups had SVB accounts. However, the CNBC source noted many China-based startups with U.S. VC funding have tended to start off with bank accounts at SVB.
Shanghai-based biotech company Zai Lab said that as of the end of December, about 2.3% of its roughly $1.01 billion in cash and cash equivalents were held at SVB. Most were at JPMorgan Chase, Citigroup and Bank of China (Hong Kong), Zai Lab said in an official statement.
Another biotech company called Everest Medicines said it had less than 1% of its cash at SVB, and that it expects to recover most of its deposits at the bank through the U.S. Federal Deposit Insurance Corporation.
The FDIC said insured depositors can access their deposits no later than Monday morning local time. Its standard insurance covers up to $250,000 per depositor, per bank, for each account ownership category.
However, most deposits held by SVB were uninsured. The FDIC said uninsured depositors will get receivership certificates for their balances.

China joint venture claims independence

SVB’s joint venture in China — held 50-50 with Shanghai Pudong Development Bank — said in a statement it has an independent balance sheet.
Called SPD Silicon Valley Bank, the joint venture had 2 billion Chinese yuan ($290 million) in registered capital, according to business database Tianyancha.
That’s about 6.8% of Shanghai Pudong Development Bank’s registered capital of 29.35 billion yuan, the data showed.
As of the end of December, SVB had roughly $209 billion in total assets and $175.4 billion in total deposits, according to a press release.
— CNBC’s Hugh Son, Rohan Goswami, Jonathan Vanian and Jesse Pound contributed to this report.

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Billionaire investor Bill Ackman said the U.S. government’s intervention to protect depositors after the implosion of Silicon Valley Bank, is “not a bailout” and helps restore confidence in the banking system.
In a tweet, Pershing Square CEO said SVB’s fallout on Monday noted the government did the “right thing.”
But not all Wall Street analysts are convinced the regulators action will shore up confidence in the U.S. banking system and limit the fallout. 
“I don’t think that you can understate the danger that the American banking system is in,” veteran bank analyst Dick Bove, told CNBC’s “Squawk Box Asia” on Monday.

A sign hangs at Silicon Valley Banks headquarters in Santa Clara, California on March 10, 2023.
Noah Berger | AFP | Getty Images

Billionaire investor Bill Ackman said the U.S. government’s action to protect depositors after the implosion of Silicon Valley Bank is “not a bailout” and helps restore confidence in the banking system.
In his latest tweet on SVB’s collapse, the hedge fund investor said the U.S. government did the “right thing.”

“This was not a bailout in any form. The people who screwed up will bear the consequences,” wrote the CEO of Pershing Square. “Importantly, our gov’t has sent a message that depositors can trust the banking system.”
Ackman’s comments came after banking regulators announced plans over the weekend to backstop depositors with money at Silicon Valley Bank, which was shut down on Friday after a bank run.
“Without this confidence, we are left with three or possibly four too-big-to-fail banks where the taxpayer is explicitly on the hook, and our national system of community and regional banks is toast,” Ackman added.
Ackman further explained that in this incident, shareholders and bondholders of the banks will be mainly the ones affected, and the losses will be absorbed by the Federal Deposit Insurance Corporation’s (FDIC) insurance fund.
This is in contrast to the great financial crisis in 2007-2008, where the U.S. government injected taxpayers’ money in the form of preferred stock into banks, and bondholders were protected.

The decisive government action was seen by some as a critical step in stemming contagion fears brought on by the collapse of SVB, a key bank for start-ups and other venture-backed companies.
Not everyone agrees.
Peter Schiff, chief economist and global strategist at Euro Pacific Capital, said the move is “yet another mistake” by the U.S. government and the Fed.
He explained in another tweet: “The bailout means depositors will put their money in the riskiest banks and get paid higher interest, as there’s no downside risk.”
The result?
“… all banks will take on greater risks to pay higher rates. So in the long-run many more banks will fall, with far greater long-term costs,” Schiff said.

Clear roadmap

In a statement late Sunday — issued jointly by the Federal Reserve, Treasury Department and the FDIC — regulators said there would be no bailouts and no taxpayer costs associated with any of the new plans.
“Today we are taking decisive actions to protect the U.S. economy by strengthening public confidence in our banking system,” said a joint statement from Federal Reserve Chair Jerome Powell, Treasury Secretary Janet Yellen and FDIC Chair Martin Gruenberg.
Along with that move, the Fed also said it is creating a new Bank Term Funding Program aimed at safeguarding institutions affected by the market instability of the SVB failure.
The statement — also said New York-based Signature Bank will be closed due to systemic risk. Signature had been a popular funding source for cryptocurrency companies.
Ackman said in the tweet that had the government “not intervened today, we would have had a 1930s bank run continuing first thing Monday causing enormous economic damage and hardship to millions.”
“More banks will likely fail despite the intervention, but we now have a clear roadmap for how the gov’t will manage them.”

‘Lost faith’

Still, some analysts are not convinced the regulators’ action will shore up confidence in the U.S. banking system and limit the fallout. 
“I don’t think that you can understate the danger that the American banking system is in,” veteran bank analyst Dick Bove, told CNBC’s “Squawk Box Asia” on Monday.

“Right at this moment, I don’t think you would expect to see the Treasury Secretary, the head of the Fed and the head of the FDIC, making a public joint statement — unless they understood clearly the risk that the banking system and the American in America is facing right now,” he said.
Bove pointed out the U.S. banking system is at risk for two reasons.
“Number one, the depositors have lost faith in American banks: Forget the people who may or may not have been taking money out of SVB. Deposits in American banks have dropped 6% in the last 12 months,” he noted.
“The second group that has lost faith in the American banking system are investors,” he added. “The investors have lost faith because the American banks have a whole bunch of accounting tricks that they can play, to show earnings when earnings don’t exist, to show capital when capital doesn’t exist.”
He went on to say that accounting practices for the banking industry are “totally unacceptable,” and that banks are using “accounting gimmickry to avoid indicating what the true equity is in these banks.”
“The government is now on its back feet. And the government is trying to do whatever it can to stop what could be a major, major negative thrust,” Bove said.

Political support

The White House said President Joe Biden will address the nation on Monday morning on how to strengthen the banking system.
“I am firmly committed to holding those responsible for this mess fully accountable and to continuing our efforts to strengthen oversight and regulation of larger banks so that we are not in this position again,” Biden said in a statement. 
Jeremy Siegel, Wharton School of business professor, noted the government’s intervention will “fortunately” stem the losses from SVB’s fallout.
He said SVB is more like a regional bank unlike other big Wall Street players. As a result, the government is unlikely to take a political hit from its latest action.
“They’re more in the category we call regional banks. And actually,  politicians love regional banks, in contrast to the big names, which are easy to target, to … hit politically,” Siegel told CNBC’s “Street Signs Asia.”
“They have a lot of political support. All the Congress men and women, are going to be hearing from their people and their district,” Siegel said. “The smaller banks are not the JP Morgans, Goldman Sachs and all those. These are the banks that we use … getting down to the regional level.”  
 — CNBC’s Jeff Cox contributed to this report.

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Cryptocurrencies rallied on Monday as the U.S. government moved to protect depositors of the collapsed Silicon Valley Bank and HSBC bought the bank’s U.K. arm.
Bitcoin was up nearly 10% at 3 a.m ET at $22,560.20, its highest level in 10 days.
The U.S. Treasury, Federal Reserve and Federal Deposit Insurance Corporation said Sunday that depositors of SVB will have access to all of their money starting Monday.
HSBC said it had agreed to acquire the U.K. arm of SVB for £1 ($1.21).
The U.K. Treasury said Monday that “no taxpayer money is involved, and customer deposits have been protected.”

Jakub Porzycki | Nurphoto | Getty Images

Cryptocurrencies rallied on Monday as the U.S. government moved to protect depositors of the collapsed Silicon Valley Bank and HSBC bought the lender’s U.K. arm.
Bitcoin was up nearly 10% at 3 a.m ET at $22,560.20, its highest level in 10 days, according to CoinDesk data. Ether was also around 10% higher at $1,614.89.

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The overall cryptocurrency market gained more than $70 billion in the 24 hours to 2 a.m. ET, jumping back above $1 trillion on Monday.

It has been a rollercoaster ride for crypto markets after the collapse last week of Silvergate Capital, a major lender to the crytpo industry. Silvergate said Wednesday it is winding down operations and liquidating its bank.
Then came the collapse of Silicon Valley Bank on Friday in what was the biggest banking failure since the 2008 financial crisis.
Both Silvergate and SVB put their money into U.S. Treasurys which have lost value as the U.S. Federal Reserve has raised interested rates. These banks have been forced to sell these bonds at a loss to shore up their capital position.
That was followed on Sunday by the closure of Signature Bank, a major lender in the crypto industry, by U.S. regulators to stem any contagion to the broader banking sector.

These moves by regulators to create a backstop for SVB and protect depositors in these institutions has boosted investor confidence.
The U.S. Treasury, Federal Reserve and Federal Deposit Insurance Corporation said Sunday that depositors of SVB will have access to all of their money starting Monday.
“No losses associated with the resolution of Silicon Valley Bank will be borne by the taxpayer,” the regulators said.
Depositors at Signature Bank will be “made whole,” they added.
“Given the Fed announcement over the weekend of a backstop for banks and specifically Silicon Valley Bank, markets have turned euphoric knowing that depositors’ money is safe and a major potential bank run has been averted,” Vijay Ayyar, vice president of corporate development and international at crypto exchange Luno, told CNBC via email.
Adding to that, HSBC said it had agreed to acquire the U.K. arm of SVB for £1 ($1.21). The U.K. Treasury said Monday that “no taxpayer money is involved, and customer deposits have been protected.”

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China’s new premier Li Qiang said Monday that policymakers would focus on the quality of growth — especially on ordinary people’s need for housing, income, education and health care.
He said China’s growth target of around 5% won’t be easy to achieve. But he said policymakers would push for growth, and claimed non-state-owned enterprises would have greater room for development.
Li was named China’s new premier on Sunday, in a widely expected move.

China’s new premier Li Qiang said Monday that policymakers would focus on the quality of growth. While he said China’s growth target of around 5% won’t be easy to achieve, policymakers would push for growth, he added.
Lintao Zhang | Getty Images News

BEIJING — China’s new premier Li Qiang said Monday that policymakers would focus on the quality of growth — with special attention to ordinary people’s need for housing, income, education and health care.
His comments reflected how Beijing is still focused on priorities other than growth itself.

“Most people do not keep their eye on GDP growth all the time,” Li said in Mandarin, according to an official translation. “What they care more about are things that happen in their everyday life.”
“Currently our development is focused on providing for people’s basic needs,” he said. “Going forward, the focus will be shifted toward delivering a life of better quality for the people.”
Li was addressing reporters for the first time since assuming the role of premier, which oversees China’s top executive body, the State Council.

“On progress, the key will be making progress on high-quality development,“ Li said. He said policymakers would work toward stability in prices and employment.
That shift to high-quality development includes building up tech and so-called green industries, Li said.

In terms of macro policy, he said leaders would focus on stability, boosting domestic and external demand, tech innovation and diffusing risks.
He said China’s growth target of around 5% won’t be easy to achieve. But he said policymakers would push for growth, and claimed non-state-owned enterprises would have greater room for development.
On relations with the U.S., China’s largest trading partner on a single country basis, Li said it is important to implement what Chinese President Xi Jinping and U.S. President Joe Biden called for during their meeting in November.

China’s cabinet reshuffle

Li was named China’s new premier on Sunday, in a widely expected move. He is a known protege of Xi and never served as vice premier — his appointment breaks with precedent.
On Friday, Xi gained an unprecedented third term as president, further consolidating his power.
Xi was widely expected to retain the role in this month’s largely ceremonial parliamentary meeting, known as the “Two Sessions.” The annual gathering marks the meetings of an advisory group and a legislature, the National People’s Congress.

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In other leadership changes announced over the weekend, He Lifeng was among four people named vice premier. He formerly led the National Development and Reform Commission, China’s economic planning agency.
Several ministers retained their roles. Yi Gang remains the head of the People’s Bank of China, Liu Kun the head of the Ministry of Finance and Commerce Minister Wang Wentao, according to state media.

New Chinese Premier Li Qiang, pictured on the right, is a known protege of Chinese President Xi Jinping, pictured on the left.
Lintao Zhang | Getty Images News | Getty Images

Beijing has yet to announce who will head the China Securities Regulatory Commission and the newly formed National Financial Regulatory Administration, which replaces the China Banking and Insurance Regulatory Commission and expands its role.
The administration is set to oversee most of the financial industry — except for the securities industry.
Beijing established the new finance administration as part of a restructuring of the State Council, the Chinese government’s top executive body. As premier, Li Qiang heads the State Council.
The restructuring comes as the ruling Communist Party of China is expected to significantly increase its direct control of the government.
The latest shuffle in government leadership will help make China’s monetary and fiscal policies more consistent, said JLL’s Bruce Pang. He expects the new team will help establish a “more growth-friendly stance.”

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