A Chinese lender’s stunt to woo depositors with gifts including the wildly popular Labubu dolls has been barred by financial regulators, underscoring the increasingly fraught battle among banks for customers as interest rates and profit margins fall.
The Zhejiang branch of the National Financial Regulatory Administration has asked local banks to refrain from giving non-compliant perks to attract deposits, according to people familiar with the matter.
The guidance came in the wake of a promotion by Ping An Bank Co., which has been offering Labubu collectibles—blind box toys endorsed by celebrities including Lisa from the K-pop group Blackpink—in multiple cities for new depositors who can park in 50,000 yuan ($6,960) for three months.
Such a practice, which often involves offering free items like rice or small home appliances, as well as e-gifts such as memberships at Internet platforms, was seen as driving up costs at banks and hurting their margins, said the people, who asked not to be named discussing a private matter.
While Ping An Bank’s marketing campaign went viral on Chinese social media platform Xiaohongshu and sparked strong interest from potential savers, it also drew criticism from state media which said it was “not a long-term solution.”
Chinese lenders are walking a tightrope as they balance between deposit taking and protecting margins that are now at record-low levels across the sector. The nation’s big banks just conducted a new round of deposit rate cuts in May, with smaller peers following suit and pushing term deposit interests down to just a little above 1%.
The Zhejiang banking regulator has urged the immediate suspension of any products involved in non-compliant deposit-gathering practices, along with the removal of related promotional materials, the people said. It remains unclear whether the regulator’s other local divisions have issued similar guidance.
The regulator didn’t immediately respond to a request for comment. Ping An Bank said the initiative started off as a small-scale project launched by a local branch, declining to comment further.
China said in a 2018 rule that commercial banks shouldn’t attract deposits through “inappropriate means” such as giving away physical gifts or returning cash.
Dozens of legal scholars and economists have issued stark warnings over attempts by the European Commission (EC) to weaken corporate accountability laws, saying the action will wreck corporate accountability commitments, slash human rights and environmental protections, and lead to higher costs for companies and society.
Under pressure from corporate lobbyists, the EC has been discussing reshaping rules that govern how companies monitor and report their activity. Last month, both French President Emmanuel Macron and German Chancellor Friedrich Merz escalated their campaign against the EU’s Corporate Sustainability Due Diligence Directive (CSDDD), which covers firms’ supply chains, claiming that the regulations threatened to make European businesses uncompetitive. In a speech, Macron told business executives the CSDDD should be “put off the table” entirely, expressing support for an EC “Omnibus Simplification Package” that would eliminate requirements for companies to monitor their supply chains for violations, remove mandatory climate transition plans, and significantly weaken enforcement mechanisms including civil liability provisions.
But legal and economics scholars, environmental organizations and businesses, along with countries such as Sweden and Denmark, have united to defend the regulations.
“The members of the European Parliament shouldn’t be fooled into thinking that if they remove this article that that’s going to somehow amount to a reduction in regulatory burden,” said Thom Wetzer, associate professor of law and finance at the University of Oxford, and the founding director of the Oxford Sustainable Law Programme. “What will come in its place is a very litigious landscape and differential implementation of national requirements. You will have replaced a nicely uniform obligation with a patchwork of a variety of different and uncertain obligations.”
In May, Wetzer and more than 30 other legal scholars sent a letter to the EC warning that, far from reducing costs, scrapping the regulations would create a range of new financial and legal risks for companies, as well as making it harder for them to achieve their sustainability and climate goals. The scholars warn that, “Without guiding regulations, corporate climate transitions will be more disorderly and costly.”
Furthermore, Wetzer notes, many European companies have already taken steps to comply with the regulations. Indeed, towards the beginning of the year, 11 major brands, including the likes of IKEA [F500E #85, as Ingka], Maersk [F500E #70] and Unilever [F500E #49] came out in support of the CSDDD, signing and open letter that stated: “Investment and competitiveness are founded on policy certainty and legal predictability. The announcement that the European Commission will bring forward an ‘omnibus’ initiative that could include revisiting existing legislation risks undermining both of these.”
“Businesses have already started to put in place reporting frameworks to be able to align with the regulatory package,” Wetzer told Fortune. “There has been a lot of investment in the regulatory architecture on the assumption that this would stay in place for a long time. If you change this regulation and you go beyond simplification, you run the risk that all of those investments go down the drain.”
Legal scholars aren’t the only experts to have sounded the alarm on the EC’s plans. Also in May, more than 90 prominent economists criticized Omnibus proposals, strongly refuting claims that the sustainability regulations harm European competitiveness. Instead, they point to other factors behind Europe’s economic challenges, including the energy price crisis following Russia’s invasion of Ukraine, declining global demand, wage stagnation, and chronic underinvestment in public infrastructure.
The economists’ statement emphasizes that implementation costs for sustainability regulations are minimal, citing a London School of Economics study that estimated compliance costs for large companies at just 0.009% of revenue. They argue that the benefits of the regulations far outweigh such modest expenses, and further note that, with an estimated €750 billion investment gap in sustainable initiatives, the weakening of sustainability reporting requirements could undermine crucial programs like the Clean Industrial Deal and discourage private investment in sustainable projects.
“Economic choices are political choices,” said Johannes Jäger, a professor at the University of Applied Sciences BFi Vienna. “With the Omnibus proposal, the European Commission is choosing to reward short-sighted corporate lobbying at the expense of people, planet, and long-term economic resilience.”
To this point, many critics of the Omnibus package have framed it as opportunistic, saying it is an attempt to both mimic and placate U.S. President Donald Trump who, whilst threatening Europe with tariffs, is carrying out a program of sweeping deregulation across America. U.S. companies have been at the forefront of lobbying efforts to undermine the CSDDD, with watchdogs claiming that investment giant BlackRock helped carve out exemptions from the directive for large financial firms.
“With the Omnibus proposal, the European Commission is choosing to reward short-sighted corporate lobbying at the expense of people, planet, and long-term economic resilience.”Johannes Jäger, professor, University of Applied Sciences BFi Vienna
Such actions have motivated other European finance leaders to rally around the CSDDD. In February, more than 200 financial institutions, representing $7.6 trillion in assets under management, urged the EC to maintain strong sustainability standards. Aleksandra Palinska, executive director at the European Sustainable Investment Forum, warned that the Omnibus would “limit investor access to comparable and reliable sustainability data and impair their ability to scale-up investments for industrial decarbonisation.”
Rather than following Trump and doubling down on deregulation, European finance experts have urged the EU to maintain its resolve, along with its reputation for probity. In January, François Gemenne, a professor at HEC Paris and a lead author of the Intergovernmental Panel on Climate Change’s sixth assessment report, said that “the best response to the policies implemented in the U.S. is to beef up the EU green agenda, not to weaken it. Rather than follow Trump’s way, we should design our own path.”
Wetzer agreed, saying that the Omnibus proposals harm the European Union’s standing as a rational actor. “The European Union is proving itself not to be a reliable regulator because they’re flip-flopping in the face of changing political winds,” he said. In turbulent times, he suggested, a strong stabilizing influence is required. “We should chart our own course based on our assessment of the fundamentals.”
But beyond the legal and economic impacts, it is the environmental and human rights implications of the EC’s proposed changes that have drawn the most fire. In March, more than 360 global NGOs and civil society groups issued a joint statement against the Omnibus, stating that EC President Ursula von der Leyen was “deprioritizing human rights, workers’ rights and environmental protections for the sake of dangerous deregulation.”
“The European Union is proving itself not to be a reliable regulator because they’re flip-flopping in the face of changing political winds…”Thom Wetzer, associate professor of law and finance, University of Oxford and founding director of the Oxford Sustainable Law Programme
In comments accompanying the letter, Marion Lupin, policy officer for the European Coalition for Corporate Justice, said: “The message from Brussels couldn’t be clearer: industry interests come first, while people and the planet are left behind … hundreds of civil society organisations around the world are standing up—no to deregulation, no to greenwashing, and no to this reckless rollback of corporate accountability.”
As the Omnibus proposal moves through the European Parliament, the key question is whether EU institutions will preserve their original ambition to guide Europe through its sustainability transition, or acquiesce to corporate lobbying power. The outcome will likely have far-reaching implications for corporate accountability, human rights, and the fight against climate change.
Wilmar International, the Singapore-based agrifood giant, has handed over 11.9 trillion Indonesian rupiah ($729 million) to Indonesia as a “security deposit,” related to misconduct allegations over palm oil export permits. Wilmar’s shares dropped by 3% on the news, reaching their lowest point in a decade.
Wilmar generated $67.4 billion in revenue last year, a 0.3% increase year-on-year. The agrifood giant earned $1.2 billion in annual profit, meaning its $729 million “security deposit” is equal to about 60% of Wilmar’s entire 2024 net income.
Indonesian prosecutors accuse Wilmar of bribing officials to obtain the permits in 2022, during a national cooking oil shortage. While an Indonesian court cleared Wilmar and two other companies in March, the three judges behind the ruling were arrested on graft charges a month later.
Indonesia’s Attorney General’s Office claims that corruption tied to these export permits cost the state 12.3 trillion rupiah ($755 million).
On Tuesday, Wilmar claimed that “all acts carried out by [Wilmar] during this period in relation to the export of cooking oil was done in compliance with prevailing regulations.” Wilmar will get its “security deposit” back if Indonesia’s Supreme Court upholds the acquittal–but will forfeit the money if it loses the case.
“Wilmar paid for the state losses they caused,” a senior official from Indonesia’s AGO said at a Tuesday press conference.
Indonesia accounts for about 60% of global palm oil supply. Crude palm oil is a major ingredient in food products and household goods. In response to a cooking oil shortage in late 2021 and early 2022, Indonesia imposed strict export restrictions on palm oil, including a three-week-long export ban, in order to preserve local supply and rein in rising prices.
Wilmar is one of the world’s largest owners of oil palm plantations, with a total planted area of over 230,000 hectares. It’s one of the region’s largest companies, ranked No. 4 on Fortune’s Southeast Asia 500; it’s also one of the few companies in the region to make it onto the Global 500, Fortune’s ranking of the world’s largest companies by revenue.
Two-thirds of Wilmar’s oil palm plantations are in Indonesia. Besides palm oil and cooking oil, Wilmar also produces other food products like rice, noodles and margarine for global markets.
Fortune’s Southeast Asia 500, which measures the largest companies in the region by revenue, covers seven economies: Indonesia, Thailand, Malaysia, Cambodia, Vietnam, the Philippines, and Singapore.
Indonesia, Southeast Asia’s largest economy in terms of both GDP and population, has the biggest footprint on the list, covering more than a fifth of the total ranking with 109 companies. Thailand, the region’s second-largest economy, sits in second place with 100.
Singapore, the region’s wealthiest economy by GDP per capita, sits in the middle of the pack, with 81 companies on the Southeast Asia 500.
Measured by revenue, however, the tiny city-state of six million ends up far ahead of its ASEAN peers.
Total revenue from Singapore-based Southeast Asia 500 companies reached $637 billion, or about a third of the list’s total revenue of $1.8 trillion. That’s twice as much of Thailand, which sits in second place with revenue of $352 billion.
What’s driving Singapore up the revenue rankings?
Singapore’s “Big Three” banks—DBS, OCBC, and UOB—are perhaps the city-state’s most prominent companies. The three banks are the most profitable companies on the Southeast Asia 500.
Yet they’re not actually the largest Singaporean-based companies on the list.
No. 1 on the list is Trafigura Group, a commodities group that deals with metals, minerals, oil, and gas. Trafigura’s revenue for 2024 reached $243.2 billion, more than any other company on the list and almost four times more than the next biggest company by revenue in Singapore.
Wilmar and Olam, No. 4 and No. 5, are both in the agribusiness space. These two companies are deeply embedded in the supply chain for consumer goods like butter, nuts, grains, and cooking oils. Revenues for Wilmar and Olam reached $67.4 billion and $42 billion respectively in 2024.
Singapore’s central position as a hub makes it a prime location for companies hoping to do business across the region, particularly in neighboring Malaysia and Indonesia.
Singapore’s status as a financial center also helps to inflate its revenue share. Trafigura and Flex (No. 10) are both legally domiciled in Singapore, which makes them Singaporean companies according to Fortune’s methodology–even though both companies have most of their operations, and even their operational headquarters, in other countries.
Politics8 years ago