Must-Read China Economic News (April 3-9)
U.S. Treasury Secretary Janet Yellen's China visit; central bank unveils new relending facility for sci-tech innovation; the Qingming holiday travel frenzy...
Greetings and welcome to the latest edition of PekingEnsight! We're thrilled to have you join us once again as we navigate the ever-evolving landscape of the Chinese economy.
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At Peking Ensight, we've painstakingly gathered all the essential updates to help you unravel the complexities of this pivotal moment. Your journey through China's economic landscape is about to become even more enlightening, and we're thrilled to have you along for the ride.
⭐Under Spotlight:
U.S. Treasury Secretary Janet Yellen visits China
U.S. Treasury Secretary Janet Yellen visited China from April 4 to 9 to discuss economic issues concerning the world's two largest economies with senior Chinese officials.
China and the United States have reached important consensus on economic and financial cooperation after in-depth consultations and discussions, China's Vice Finance Minister Liao Min told the press.
In her second trip to China in nine months, Yellen met with Chinese Premier Li Qiang in Beijing on April 7. On April 5 and 6, she had several rounds of talks with Vice Premier He Lifeng, also the Chinese lead person for China-U.S. economic and trade affairs, in Guangzhou. She also talked with China's finance minister and central bank governor in Beijing.
The two sides had "in-depth, candid, pragmatic and constructive" communication on topics including the macroeconomic situation in both countries and globally as well as addressing global challenges, according to Liao.
China and the United States have agreed to hold in-depth discussions on balancing the growth of the two countries and the global economy, and are willing to further strengthen economic exchanges and cooperation, said Liao.
China clearly expressed its serious concerns to the U.S. side about U.S. sanctions on Chinese companies, tariffs levied on Chinese goods, and restrictions on investment in China, Liao said.
China also provided a full and rational response to the issue of industrial capacity during the meetings and talks, he noted.
During his meeting with Yellen, Premier Li Qiang told Yellen that the development of China's new energy industry will make important contributions to the global green and low-carbon transition.
China hopes that the United States will abide by the basic norms of market economy including fair competition and open cooperation, refrain from turning economic and trade issues into political or security issues, and view the issue of production capacity objectively and dialectically from a market-oriented and global perspective, said the premier.
📢Voices on Spot:
The accusations of “overcapacity” by the United States and Europe are groundless.
Chinese electric vehicle (EV) manufacturers' rapid development is a result of tech innovations, well-established supply chains and full market competition, not subsidies, Chinese Commerce Minister Wang Wentao said at a roundtable with Chinese automakers in Paris Sunday.
He said the accusations of "overcapacity" by the United States and Europe are groundless.
In the face of external challenges and uncertainties, Wang said enterprises should enhance their internal capabilities, adhere to innovation, strengthen risk management and attach importance to green development.
Chinese enterprises, he said, should also deepen cooperation with local enterprises, seek common development, and act as firm participants and contributors in global green transformation.
"In no other country is the dynamic of transformation and innovation in the automotive sector as pronounced as it is in China."
“China has already become our second home. Volkswagen, with a strategy of 'In China, For China,' is deeply engaged in cultivating the new quality productive forces and contributing to China's development," Chairman and CEO of Volkswagen Group China Ralf Brandstätter said in a recent interview with state media.
Brandstätter noted that China's new energy vehicle industry is leading the global market and exemplifying new quality productive forces thanks to its vigorous focus on — and its advancements in — technological innovation.
“In no other country is the dynamic of transformation and innovation in the automotive sector as pronounced as it is in China," Brandstätter said.
⭐Policy Moves Much-Talked:
Central bank unveils relending facility for sci-tech innovation
China's central bank has established a special relending facility worth 500 billion yuan (about 70.47 billion U.S. dollars) to support sci-tech innovation, technical transformation and equipment renewal.
The facility aims to encourage financial institutions to step up credit support for sci-tech-oriented small and medium-sized firms in their early stage of development or growth stage, and for technical transformation and equipment renewal projects to help key sectors become more digitalized, smart, advanced, and green, according to the People's Bank of China.
The interest rate of the one-year facility stands at 1.75 percent. It can be extended twice, with a one-year term each.
China relaxes loan ratios for car purchases
China has relaxed the loan ratios for personal vehicle purchases to boost consumption and trade-in of automobiles, according to a plan released by the country's financial authorities.
Financial institutions can independently determine the upper limits of loan ratios for personal gasoline cars and new energy vehicles (NEVs) purchases, according to the central bank and the National Financial Regulatory Administration.
The ratios for both personal gasoline car and NEV purchases could be raised to 100 percent from the current highest ratios of 80 percent and 85 percent, respectively.
📊Key Macroeconomic Indicators:
Holiday Travel Frenzy
China saw about 119 million domestic tourist trips made during the holiday, up 11.5 percent from the same period in 2019, data from the Ministry of Culture and Tourism shows.
Domestic tourism revenue during the period totaled 53.95 billion yuan (about 7.6 billion U.S. dollars), up 12.7 percent from the same period in 2019.
Global market share of passenger NEVs
China's NEVs captured a 62 percent share of the global NEV market in the first two months of this year, according to Cui Dongshu, secretary general of the China Passenger Car Association.
In the same period, China has achieved a remarkable 70 percent market share in the global plug-in hybrid market.
Profits of foreign-invested industrial firms
Foreign-invested industrial firms as well as those with investors from China's Hong Kong, Macao and Taiwan regions reported profit growth of 31.2 percent year on year in the first two months of 2024, according to data released by the National Bureau of Statistics.
Compiled by CYR