Must-Read China Economic News (Jan. 1-7)
China adds 10 U.S. firms to unreliable entities list over Taiwan arms sales; Guideline for building unified national market issued; National data infrastructure to be established by 2029...
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
China adds 10 U.S. firms to unreliable entities list over Taiwan arms sales
China's Ministry of Commerce (MOC) announced on Jan. 2 that 10 U.S. companies have been added to the unreliable entities list for selling arms to the Taiwan region.
The companies include Lockheed Martin Missiles and Fire Control, Lockheed Martin Aeronautics and Lockheed Martin Missile System Integration Lab, according to the MOC announcement.
They will be prohibited from engaging in China-related import or export activities and barred from making new investments in China, the MOC said.
These companies have engaged in arms sales to the Taiwan region and conducted so-called cooperation on military technologies in recent years, despite China's strong opposition, the MOC added.
On the same day, the MOC added 28 U.S. entities to the country's export control list, prohibiting the export of dual-use items to the 28 entities, including General Dynamics, L3 Harris Technologies and Intelligent Epitaxy Technology.
⭐ Key Macroeconomic Indicators
China's operating high-speed railway to hit 60,000 km by 2030
China aims to expand the length of its operating high-speed rail tracks to around 60,000 km by 2030, up from 48,000 km at the end of 2024, according to the China State Railway Group Co., Ltd. (China Railway) on Jan. 2.
The operating mileage of the country’s railway network is expected to reach 180,000 km by 2030, up from 162,000 km at the end of 2024, the China Railway said.
China's 2024 air passenger traffic hits record high
The number of air passenger trips made in China last year is estimated to hit a record 730 million, an increase of 18 percent year on year, the Civil Aviation Administration of China (CAAC) said on Jan. 3.
It is estimated that the sector completed 13.81 million flight hours and 5.39 million flights in 2024, with those figures up 13.1 percent and 9.5 percent year on year.
The CAAC said that a record number of 90 million passenger trips is expected during the upcoming 40-day Spring Festival travel season, which runs from Jan. 14 to Feb. 22.
International air travel is also poised for a surge, driven by a boom in both inbound and outbound tourism.
The expansion of China's visa-free policy, a more convenient payment environment for foreign travelers, and other measures to facilitate entry for foreign visitors are fueling this growth. Popular international destinations for Chinese travelers include Singapore, Malaysia, Thailand and Japan, among others, according to the CAAC.
⭐ Policy Moves Much Talked About
China unveils guideline for building unified national market
China's top economic planner, the National Development and Reform Commission (NDRC), on Jan. 7 released a guideline for building a unified national market.
The move is part of the efforts to implement the key tasks outlined at the tone-setting Central Economic Work Conference held in December 2024, which emphasized the importance of formulating a guideline for building a unified national market.
The guideline aims to encourage all localities and government departments to accelerate their integration into the unified national market and actively support its development, the NDRC said.
The guideline outlined key measures including unifying the underlying institutions and rules of the market, improving the high-standard market infrastructure connectivity, building a unified market for factors and resources, advancing the high-standard integration of goods and services markets, enhancing fair and unified regulation, and curbing unfair market competition and improper intervention.
China to up funding support for equipment upgrades, consumer goods trade-in programs
China will significantly increase the issuance of ultra-long special treasury bonds in 2025 to support the implementation of large-scale equipment upgrades and consumer goods trade-in programs, according to the NDRC on Jan. 3.
China would expand the scope of areas eligible for funding support, including electronic information, production safety, and agriculture facilities. Consumers will receive subsidies to purchase three categories of digital products: mobile phones, tablets, and smartwatches and wristbands, the NDRC said.
The government will also further increase subsidies for upgrading new energy city buses, batteries, and agricultural machinery and strengthen support for renewing home decoration-related consumer goods.
China launched in March 2024 an action plan to promote large-scale equipment renewal and trade-in of consumer goods as part of efforts to boost domestic demand and support economic growth.
China's central bank outlines monetary priorities for 2025
China's central bank has outlined its monetary and financial priorities for 2025 following a two-day meeting that ended Jan. 4, emphasizing expanding domestic demand, stabilizing expectations and stimulating vitality to ensure sustained improvement in the Chinese economy.
The People's Bank of China said it will implement a moderately loose monetary policy in 2025, forestall and defuse financial risks in key areas, and further deepen financial reform and high-standard opening up.
Unveiling its monetary policy for this year, the central bank explained that it will implement a moderately loose monetary policy to create a sound monetary and financial environment for stable economic growth.
It also noted leveraging a mix of monetary policy tools to reduce the reserve requirement ratio and interest rates when appropriate in light of domestic and international economic and financial conditions and the operation of financial markets.
China to have national data infrastructure in place by 2029
China aims to complete building the main structure of a national data infrastructure by 2029, according to a guideline issued on Jan. 6 by the NDRC and two other authorities.
The country plans to finish the top-level design of a national data infrastructure between 2024 and 2026 and build an infrastructure that supports large-scale data circulation and interconnectivity while fully integrating data networks and computing power facilities between 2027 and 2028, according to the guideline.
The country also vowed to upgrade the 5G network to 5G-A level and promote 6G-related research, development and innovation.
Compiled by Jeanne Zheng