Must-Read China Economic News (Feb. 8-14)
From regional high-quality development to box office new record, as well as a flurry of released data—take a look at the resilience and potential of China's economy in our latest post.
Greetings and welcome to the latest edition of Peking Ensight! We're thrilled to have you join us once again as we navigate the ever-evolving landscape of the Chinese economy.
⭐Under the Spotlight
Xi calls for promoting full revitalization of northeast China
Chinese President Xi Jinping on Feb. 8 urged Jilin Province to further implement the Communist Party of China (CPC) Central Committee's strategic arrangements for the full revitalization of northeast China in the new era and to play a bigger role in advancing Chinese modernization.
Stressing that Jilin must focus on high-quality development, Xi urged the province to unwaveringly take the real economy as the cornerstone and achieve coordinated development through transforming traditional industries, strengthening competitive industries, and cultivating new quality productive forces.
Xi noted that the comprehensive deepening of reform and opening up is crucial for the full revitalization of northeast China. Related policies and regulations must be fully implemented in the process of deepening the reform of state-owned assets and enterprises and promoting the development of private economy, he said.
He encouraged Jilin to prioritize the development of modern and large-scale agriculture, and to achieve coordinated advancements in applying technologies, promoting green development, improving quality and nurturing well-known brands in the sector.
Xi orders all-out rescue of people buried in SW China landslide
Chinese President Xi Jinping ordered all-out search and rescue efforts to minimize casualties after a landslide buried 10 houses and left over 30 people unaccounted for in southwest China's Sichuan Province on Feb. 8.
Xi urged efforts to properly handle the aftermath. He stressed strengthening monitoring and early warning, ensuring the rescue work is carried out properly, and preventing the occurrence of secondary disasters.
Unstable terrain and ongoing rockfalls made operations challenging, but rescue teams were advancing with a methodical, grid-based approach. A total of 949 personnel from multiple rescue teams including armed police, firefighters, mine rescue workers, police officers, and experts from transportation, medical, and telecommunication sectors had been deployed to assist in the search.
Displaced villagers at a temporary shelter set up in a secondary school in Junlian County were provided with hot meals and medical care. Psychologists had also arrived to offer counseling to survivors and the families of the missing.
9th Asian Winter Games in NE China's Harbin
Chinese President Xi Jinping on Feb. 7 evening declared the 9th Asian Winter Games open in Harbin, capital city of northeast China's Heilongjiang Province. He said that China stands ready to work with the International Olympic Committee (IOC) to continue promoting the development of the Olympic Movement.
Xi made the remarks when meeting with IOC President Thomas Bach in Harbin, who was there for the opening ceremony of the 9th Asian Winter Games. China's successful hosting of multiple major sports events in recent years demonstrated the close collaboration between China and the IOC, Xi noted.
Xi said that China is vigorously developing its sports sector and moving toward the goal of building a sports powerhouse and a healthy China, which will continuously make new contributions to the development of international sports.
Bach praised China for advocating and practicing the concepts of unity, cooperation, equality and respect, upholding multilateralism, opposing the politicization of sports, and supporting the broad participation of developing countries in international sports.
China's economy poised for steady growth in 2025
China's economy is expected to maintain stable growth in 2025, according to the Q4 2024 monetary policy report released by the People's Bank of China on Feb. 13. Stimulus measures rolled out in late 2024 have already begun to revitalize production, demand, and market sentiment, which will further sustain the recovery momentum, according to the report.
Domestic demand has shown great potential for improvement, with measures to boost consumption and investment delivering standout results. Notably, retail sales for home appliances jumped 11.8 percent year on year in 2024.
Monetary authorities will deepen market-driven exchange rate reforms, strengthen foreign exchange market resilience, and enhance cross-border capital flow monitoring, in a bid to ensure the yuan remains stable at an equilibrium level.
⭐Milestone in box office
"Ne Zha 2" becomes top-grossing film in single market worldwide
Animated blockbuster "Ne Zha 2" became the first Chinese film to gross 10 billion yuan (about 1.39 billion U.S. dollars) when its total global earnings, including presales, reached the mark on the evening of Feb. 13, according to data from ticketing platform Maoyan.
Achieved on the 16th day after the film's release on Jan. 29, Chinese New Year, this milestone adds to a growing list of records for "Ne Zha 2," which had already become the first film to gross 1 billion dollars in a single market and the first non-Hollywood title to join the coveted billion-dollar club. Box office tracker Beacon and Maoyan project the film's total domestic revenue to reach between 15 billion yuan and 16 billion yuan.
⭐Opening Doors for Foreign Investment
Tesla Megafactory in Shanghai
U.S. carmaker Tesla's new Megafactory in Shanghai, dedicated to manufacturing energy-storage batteries known as Megapacks, launched production on Feb. 11, marking a significant expansion of the company's presence in China.
The new Megafactory, hailed by the company as a "milestone," is its second major facility in Shanghai and the first of its kind outside the United States, showcasing the company's deepening investment in China amid the global challenges of unilateralism and trade protectionism.
Tesla's move highlights the importance of economic cooperation between the two countries, countering protectionist rhetoric and underscoring the risks of decoupling for U.S. industries, said Wu Xinbo, dean of the Institute of International Studies at Fudan University.
⭐Policy Moves Much Talked About
Measures to boost consumer spending, foreign investment
Chinese Premier Li Qiang on Feb. 10 presided over a State Council executive meeting that outlined measures to boost domestic consumption and approved an action plan to stabilize foreign investment in 2025.
The meeting called for strong support to increase household incomes, promote reasonable wage growth, broaden property-related income channels, and enhance consumption capacities. It emphasized the importance of focusing on consumption sectors with a strong spillover effect and large growth potential to tap into consumption potential.
It also highlighted the importance of expanding consumption in the culture, sports and tourism sectors, of promoting consumption in the snow-and-ice industry, of developing inbound tourism consumption, and of strengthening support for China's consumer goods trade-in program.
The meeting also noted that foreign enterprises play an important role in job creation, export stabilization and industrial upgrading, and urged more practical, effective measures to stabilize existing foreign investment and expand new investment. It called for the optimization of a comprehensive services sector opening-up pilot program and the expansion of industries that encourage foreign investment.
Reform of renewable power pricing
China is accelerating the market-oriented reform of its renewable power pricing system in a bid to build a new power system and promote the sustainable development of renewable energy generation. The National Development and Reform Commission (NDRC) and the National Energy Administration (NEA) recently issued a joint notice on deepening the pricing reform for electricity generated from renewable energy.
The reform focuses on three key aspects: allowing market forces to determine renewable power pricing, establishing a pricing and settlement mechanism that supports the long-term sustainability, and adopting differentiated policies for existing and new projects.
The costs of wind and solar power generation in China have dropped significantly compared to early development stages, now ranging between 0.2 yuan (about 3 U.S. cents) and 0.3 yuan per kilowatt-hour. Meanwhile, local electricity markets have matured, with improved regulations facilitating broader participation.
Trade-in campaign for consumer goods during Spring Festival holiday
Chinese consumers made the most of the country's trade-in campaign, which covers goods such as mobile phones, home appliances and automobiles, during the recent Spring Festival holiday, with mobile phone sales surging by 182 percent year on year, official data showed on Feb. 10.
The trade-in sales volume of automobiles, home appliances, furniture and digital products reached 8.6 million units during the holiday from Jan. 28 to Feb. 4, with total sales exceeding 31 billion yuan (about 4.32 billion U.S. dollars), according to the National Development and Reform Commission.
During the Spring Festival period, provincial-level regions such as Beijing, Jiangsu, Zhejiang, Henan, Hubei and Guangdong all achieved trade-in sales exceeding 1.5 billion yuan, placing them among the top performers nationwide.
Specialized train services for senior-friendly tourism
China on Feb. 11 unveiled an action plan to expand and improve senior-friendly tourism train services, in its latest bid to create more inclusive and enjoyable travel experiences for the elderly.
The initiative, jointly issued by the Ministry of Commerce and eight other government agencies and state-owned enterprises, aims to enrich the tourism market, promote service consumption, and cater to the growing demand for elderly-friendly travel options.
The action plan advocates for improved coordination between tourism trains and scenic spots, encouraging local tourist destinations to offer tailored services such as reservations, green channels, transportation connections, and dedicated reception services for senior travelers.
⭐Key Macroeconomic Indicators
CPI
Consumer inflation rose faster in January, driven by a surging demand for travel, dining and shopping during the Spring Festival holiday, the country's most celebrated festival.
China's consumer price index (CPI), a main inflation gauge, was up 0.5 percent year on year in January, up from a 0.1 percent increase in December, the National Bureau of Statistics (NBS) said on Feb. 9.
NBS statistician Dong Lijuan attributed the year-on-year CPI rise to higher service and food prices during the holiday and a rebound in gasoline prices.
The holiday economy remained strong, with tourism and consumer spending hitting record highs. According to the Ministry of Culture and Tourism, China saw a record 501 million domestic tourist trips during the eight-day holiday, which concluded on Feb. 6, up 5.9 percent year on year.
PPI
Data released on Feb. 9 also showed the China's producer price index (PPI), which measures costs for goods at the factory gate, went down 2.3 percent year on year in January, flat with that in December last year. On a month-on-month basis, the PPI dropped 0.2 percent in January.
Dong attributed the decrease to the off-season industrial production during the holiday period. Analysts forecast that driven by proactive macroeconomic policies and the steady recovery of domestic demand, the CPI and PPI are expected to sustain their moderate rebound throughout 2025.
Compiled by Bruce Lu