Must-Read China Economic News (Nov. 10-Nov. 16)
Tax breaks for homebuyers, stronger economic recovery signs, anti-dumping measures on EU brandy, upgraded trade pact with Peru...
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 launches tax policies to support property market
China on Nov.14 rolled out tax policies to support the steady and healthy development of the real estate market, a move that analysts believe will maintain stable expectations concerning a pillar industry which underpins the country's economic growth.
Individuals purchasing their only residential property or a second home, as long as the area does not exceed 140 square meters, will pay deed tax at a rate of 1 percent across the country.
For properties with an area exceeding 140 square meters, the deed tax will be levied at a rate of 1.5 percent, according to an announcement jointly made by the Ministry of Finance, the State Tax Administration and the Ministry of Housing and Urban-Rural Development.
Under the new policy, buyers planning to buy a second home with a floor area of 140 square meters or less will enjoy a lowered deed tax of 1 percent, while for those intending to buy a second home with a floor area above 140 square meters, the revised deed tax has been lowered to 2 percent.
According to the new policies, the minimum prepayment rate for land appreciation tax will be lowered by 0.5 percentage points to alleviate the financial difficulties of real estate companies.
China's economic recovery firms up in October
China's economic recovery showed further signs of strengthening in October as recent pro-growth policies provided a fresh boost to the world's second-largest economy, data from the National Bureau of Statistics showed.
Key economic indicators for the past month have recovered markedly, said the National Bureau of Statistics (NBS), which highlighted growth in consumption, services and foreign trade, as well as steady performance in investment and industrial production.
"The combined policy effects have been effectively unleashed, yielding excellent results," NBS Spokesperson Fu Linghui told a press conference Friday.
Retail sales of consumer goods expanded 4.8 percent year on year, quickening from the 3.2 percent increase in September, according to the NBS.
Industrial production and investment both maintained steady growth, with a value-added industrial output up 5.3 percent year on year last month and fixed-asset investment rising 3.4 percent in the first 10 months.
The surveyed urban unemployment rate on average in China stood at 5.1 percent in the first 10 months of 2024, down 0.2 percentage points from the same period last year.
In October, the index of services production grew by 6.3 percent year on year, while total goods imports and exports expanded 4.6 percent in yuan terms.
⭐China and the World
China, EU on brandy
China's Ministry of Commerce announced that it will impose temporary anti-dumping measures on certain brandy imports originating from the European Union (EU), effective Nov. 15.
The decision follows a preliminary investigation that found EU brandy producers were dumping certain products in China, threatening to cause substantial damage to the domestic industry, the ministry said in a statement.
Importers of brandy originating in the EU must place deposits with Chinese customs based on dumping margins of between 30.6 percent and 39 percent, according to the ministry. The measures apply to grape-based spirits in containers less than 200 liters.
China, U.S. on semiconductors
China's Ministry of Commerce on Nov. 14 slammed the U.S. suppression of China in the semiconductor industry as a "typical non-market practice."
MOC spokesperson He Yongqian made the remarks at a press conference when responding to a journalist's query regarding the U.S. reportedly ordering Taiwan Semiconductor Manufacturing Company Ltd. to restrict shipments of certain sophisticated chips to the Chinese mainland.
"For some time, the United States has been abusing export control measures, implementing long-arm jurisdiction, and continuously intensifying the suppression and containment of China in the semiconductor sector, which is cutting off the global semiconductor market," said the spokesperson.
"This was a serious breach of international economic and trade rules and a gross interference in free trade," the spokesperson said.
China, Peru upgrade free trade agreement
China and Peru have signed a protocol to upgrade the bilateral free trade agreement in Lima, the Peruvian capital, according to China's Ministry of Commerce.
The protocol was signed on Nov. 14 by Chinese Commerce Minister Wang Wentao and Peru's Minister of Foreign Trade and Tourism Ursula Leon Chempen, representing their respective governments.
Based on the original free trade agreement signed in 2009, the protocol aims to optimize provisions in various areas, including rules of origin, customs procedures and trade facilitation, intellectual property rights, and trade in services.
The signing of the protocol will help unleash the potential of bilateral trade and investment cooperation, create a better business environment for companies of both countries, better protect and promote two-way investment, and deliver more tangible benefits to businesses and people of both countries, according to the MOC.
China's trade with other APEC economies hits record high in Jan.-Oct.
China's trade with other APEC economies reached a record high of 21.27 trillion yuan (about 2.95 trillion U.S. dollars) in the first 10 months of 2024, data from the General Administration of Customs showed.
The figure marked a 5.7 percent increase from a year earlier, outpacing the country's total trade growth by 0.5 percentage points during the period, according to the administration.
Between January and October, intermediate goods accounted for over 45 percent of China's exports to other APEC economies.
⭐ Key Economic Indicators
China's home price decline narrows in October
The decline in the prices of commercial residential homes in China's 70 large and medium-sized cities generally moderated on a month-on-month basis in October, data from the National Bureau of Statistics (NBS) showed.
In the country's first-tier cities, namely Beijing, Shanghai, Guangzhou and Shenzhen, new home prices edged down by 0.2 percent, narrowing from a 0.5-percent drop in the previous month, according to the NBS.
Prices of second-hand homes in first-tier cities rose 0.4 percent in October, reversing a 1.2 percent decline in the previous month and marking the first increase in 13 months.
"Property market expectations further improved in October as home prices in Chinese cities either rose or declined at a slower pace month and month," said NBS statistician Wang Zhonghua.
"Double 11" shopping festival sees China handle record-high parcel volume
China's postal and express delivery companies handled a record-high 701 million parcels on Nov. 11, the peak day of this year's "Double 11" shopping festival, according to data from the State Post Bureau.
The figure was 1.51 times the normal daily business volume and registered a 9.7 percent year-on-year increase.
Since entering the peak days of the shopping festival on Oct. 21, the express delivery market has continued to expand, handling an average of more than 580 million parcels each day, the data shows.
First held in 2009, "Double 11" has continued to stimulate robust spending streams in one of the world's largest consumption markets.
China's auto sector registers expansion in October
China's auto sales rose 7 percent year on year to 3.05 million units in October, data from the China Association of Automobile Manufacturers showed.
During the first 10 months of the year, auto sales amounted to over 24.6 million units, up 2.7 percent year on year, according to the association.
The data also showed that the country's new energy vehicle (NEV) sector sustained its sound growth momentum last month.
The national NEV output surged 48 percent year on year to nearly 1.46 million units in October, and NEV sales climbed 49.6 percent to 1.43 million units.
China's auto exports hit 542,000 units last month, up 11.1 percent from a year ago and bringing the country's total auto exports for the January-October period to about 4.86 million units, the data showed.
Number of foreign-invested firms in China up 11.8 pct
A total of 46,893 new foreign-invested firms were established across China in the first 10 months of 2024, an increase of 11.8 percent year on year, the Ministry of Commerce said.
During this period, foreign direct investment (FDI) in the Chinese mainland in actual use totaled 693.21 billion yuan (about 96.29 billion U.S. dollars), down 29.8 percent from a year earlier, the ministry revealed in a statement on its website.
The hi-tech manufacturing sector attracted 80.18 billion yuan, or 11.6 percent, of the total FDI inflow, up 0.7 percentage points from the same period of 2023.
Notably, FDI inflows into medical equipment and instrument manufacturing surged 61.7 percent, while inflows into computer and office device manufacturing grew by 48.8 percent in this period.
In terms of source countries, FDI from Germany and Australia increased by 7.5 percent and 6 percent year on year, respectively, data from the ministry showed.
China's yuan loans grow by 16.52 trln yuan in Jan.-Oct.
China's yuan-denominated loans rose by 16.52 trillion yuan (about 2.3 trillion U.S. dollars) in the first 10 months of the year, central bank data showed.
The M2, a broad measure of money supply that covers cash in circulation and all deposits, increased 7.5 percent year on year to 309.71 trillion yuan at the end of October.
The M1, which covers cash in circulation plus demand deposits, stood at 63.34 trillion yuan at the end of October, down 6.1 percent year on year.
The M0, which indicates the amount of cash in circulation, rose by 12.8 percent from the previous year to a total of 12.24 trillion yuan at the end of last month, the data revealed.
⭐ Policy Moves Much Talked About
China extends public holidays by two days
Chinese Premier Li Qiang has signed a State Council decree unveiling revised measures on holiday arrangements, extending public holidays by two days.
The Spring Festival holiday is extended from three days to four days, with the eve of the Chinese Lunar New Year added. The May Day holiday is increased from one day to two days, with May 2 added.
Public holidays can be arranged to combine with adjacent weekends or paid annual leave to form longer holiday periods. Except in rare cases, the working days surrounding national holidays generally won't exceed six consecutive days.
The new measures will come into effect on Jan. 1, 2025, the State Council said in a statement.
⭐ Read More
7 Chinese villages recognized as Best Tourism Villages by UN Tourism
Seven villages in China have been honored as Best Tourism Villages by the United Nations World Tourism Organization (UN Tourism) in its 2024 selection, according to the Ministry of Culture and Tourism.
Announced at a UN Tourism meeting held in Cartagena, Colombia, the seven new additions bring the total number of Chinese villages recognized as Best Tourism Villages to 15, making China the country with the highest number of villages holding this title.
The seven Chinese villages picked by UN Tourism this year are Azheke Village in Yunnan, Guanyang Village in Fujian, Shibadong Village in Hunan, Taoping Village in Sichuan, Xiaogang Village in Anhui, Xitou Village in Zhejiang and Yandunjiao Village in Shandong.
Over 80 pct of China's buses powered by new energy
China boasts 554,000 new energy buses, accounting for 81.2 percent of its total bus fleet, according to the Ministry of Transport.
The figure was released during an urban transportation work conference held in Hangzhou, Zhejiang Province.
To date, there are nearly 80,000 public bus lines across the country, with buses plying a cumulative route length of more than 1.7 million kilometers and dedicated bus lanes surpassing 20,000 kilometers.
Currently, 313 urban rail transit lines operate in 54 Chinese cities, with an operational mileage of 10,455 kilometers, according to the ministry.
China's homegrown wide-body C929 aircraft gets first intended user
A user framework agreement for the C929 passenger aircraft, China's first jet-type long-range wide-body aircraft independently developed in accordance with international airworthiness standards, was signed on Nov. 12.
The agreement between the Commercial Aircraft Corporation of China (COMAC) and Air China was signed at the ongoing 15th China International Aviation and Aerospace Exhibition (Airshow China), which made Air China the first intended user of this aircraft type.
The baseline version of the C929 accommodates 280 seats with a range of 12,000 kilometers, effectively meeting the global demand for international and regional air passenger transport.
This is a fresh move for China, a massive civil aviation market with great potential, to enhance its competitiveness in the global aviation market.
The C919, China's self-developed large passenger aircraft, completed its first commercial flight in May 2023, marking its official entry into the civil aviation market.
As of late September this year, COMAC had delivered nine C919 aircraft to three leading Chinese airlines. With its self-developed trunk jetliner, China aims to secure a share of the global civil aviation market, which Boeing and Airbus currently dominate.
Compiled by Jingxia Z.