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Baidu Inc (ADR) (NASDAQ:BIDU): Moodys See New Cross-Border Guarantee Policy Positive For Chinese Corporates

Boston, MA 05/22/2014 (wallstreetpr) –  China’s new policy to support cross-border guarantee will be credit positive for Chinese corporate like Baidu Inc (ADR) (NASDAQ:BIDU) as it will allow them to raise offshore funds and aid them in expansions and operations overseas, according to a report issued by Moodys.

New Cross-Border Gurantee Policy

The new policy will take effect starting June 1 and remains majorly unchanged from the earlier draft version on which public comments were solicited in February by the State Administration of Foreign Exchange (SAFE). As per Moody’s Vice President and Senior Credit Officer, Kai Hu, the policy is a major step towards easing stringent capital policies in China. Hu Stated that when SAFE first tabled the policy changes in the beginning of the year than the research firm had mentioned that any explicit guarantee will be more significant to offshore bondholders than credit support mechanisms or keepwell agreements. China’s new policy will now help offshore subsidiaries to get lower financing costs than they could in absence of guarantee. Hu further states that thus, the new credit policy will aid offshore bond issuance and the new policy should also accelerate offshore bond markets growth. Moreover, the Chinese corporates will now be able to target takeover opportunities in a more timely manner.

Artificial Brain Trust

Alongside the new credit policy development, there is another news coming in from the Chinese Internet giant, Baidu. Baidu Inc (ADR) (NASDAQ:BIDU) recently announced that it has brought Andrew Ng on board to take ahead a $300 million research work spanning over the next 5 years for the company, both in China as well as Silicon. With this announcement, Baidu is sure to open its account in Silicon Valley, where uptil now it was literally invisible. NG, who headed artificial intelligence division at Google and is also a cofounder of Coursera, will work from California on the new project.

Published by Alan Masterson

Alan has over 25 years of trading experience in the U.S. equity markets. He began his career in finance working on a program trading desk specializing in over-the-counter stocks. His career progressed from that point to his current position as senior trader on an institutional trading desk. In the evenings, Alan teaches economics at a local community college. He has contributed articles to various publications over the last six years, including feature articles for an economics magazine and various financial blogs. You may contact Alan via his email ([email protected]) or his Google+ page (

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