Must-Read China Economic News (Nov. 17-Nov. 23)
China-U.S. economic ties, World Internet Conference Wuzhen Summit, and visa-free entry for more countries...
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's international trade representative speaks about China-U.S. ties
China is ready to engage in dialogue, expand areas of cooperation and manage differences with the United States to promote steady and sustained development of bilateral economic and trade relations, China International Trade Representative and Vice Minister of Commerce Wang Shouwen said Friday.
That will be based on mutual respect, peaceful coexistence and win-win cooperation, Wang told a press conference, adding that China will also firmly safeguard its sovereignty, security and development interests in the process.
The Chinese and U.S. economies are highly complementary, Wang said, emphasizing the critical importance of their relations.
Moreover, Wang highlighted China's capacity to deal with external shocks, largely owing to its resilient and vibrant economy that has great potential.
History has shown that raising tariffs on Chinese goods cannot resolve the tariff-imposing country's trade deficit; instead, it leads to higher prices for imported products and inflation, with the burden ultimately falling on consumers, he said.
World Internet Conference Wuzhen Summit
The 2024 World Internet Conference (WIC) Wuzhen Summit was held in the ancient water town of Wuzhen in east China's Zhejiang Province this week, highlighting efforts to build a people-centered and AI-for-good digital future.
The 2024 edition, themed "Embracing a People-centered and AI-for-good Digital Future -- Building a Community with a Shared Future in Cyberspace," included 24 sub-forums on topics such as the Global Development Initiative, digital economy and artificial intelligence (AI) technology governance, along with a series of activities.
The main forum of this year's summit underscored the dual priorities of advancing AI innovation and fostering a people-centered digital future. The event brought together over 1,800 participants, including representatives from international organizations, government agencies, leading internet companies, as well as experts, scholars and media professionals.
China is home to almost 10,000 digitalized workshops and smart factories nationwide, according to the China Internet Development Report 2024 released at the summit.
Among them, 421 have been cultivated as national-level smart manufacturing demonstration factories, 90 percent of which have applied technologies such as AI and digital twins, the report said.
China offers visa-free entry for more countries
China will soon grant visa-free entry to citizens of another nine countries as part of its ongoing efforts to boost international tourism and business travel, Chinese authorities announced Friday.
From Nov. 30, 2024 to Dec. 31, 2025, trial visa exemption will be applied to ordinary passport holders from Bulgaria, Romania, Croatia, Montenegro, North Macedonia, Malta, Estonia, Latvia and Japan.
The duration of visa-free stays allowed will be doubled to 30 days, foreign ministry spokesperson Lin Jian said.
The addition will expand the coverage of China's unilateral visa-free policy from 29 to 38 countries.
China began implementing unilateral visa-free entry trials last December for ordinary passport holders from France, Germany, Italy, the Netherlands, Spain and Malaysia. The policies were later expanded several times to more countries.
⭐ Key Economic Indicators
Fiscal revenue
China's fiscal revenue increased 5.5 percent year on year in October, continuing a growth trajectory, data from the Ministry of Finance showed.
According to a breakdown of the data, the country's tax revenue edged up 1.8 percent from a year earlier.
In the first ten months of the year, China's fiscal revenue dipped 1.3 percent year on year, while fiscal expenditure expanded 2.7 percent year on year.
Specifically, the central government's fiscal expenditure rose 7.9 percent year on year, compared to a 1.8 percent increase in expenditure by local governments, according to the data.
ODI
China's non-financial outbound direct investment (ODI) increased 10.6 percent year on year to 115.83 billion U.S. dollars in the first 10 months of the year, data from the Ministry of Commerce showed.
Chinese companies' non-financial ODI in countries participating in the Belt and Road Initiative (BRI) reached 26.65 billion dollars, up 3 percent from the previous year.
During the reporting period, the turnover of contracted overseas projects by Chinese companies amounted to 124.38 billion dollars, an increase of 2 percent, and the value of newly signed contracts rose 15.3 percent to 177.65 billion dollars.
Loan prime rates
China's one-year loan prime rate (LPR), a market-based benchmark lending rate, came in at 3.1 percent in November, unchanged from the previous month.
The over-five-year LPR, on which many lenders base their mortgage rates, also remained unchanged from the previous reading of 3.6 percent.
In October, China lowered the one-year LPR to 3.1 percent from the previous 3.35 percent, and the over-five-year LPR was lowered to 3.6 percent from 3.85 percent, marking the third LPR reduction this year.
The cut was part of a broader policy push to reduce financing costs, support the recovery of credit demand, and further fuel consumption and investment growth.
Power use
China's electricity consumption, a key barometer of economic activity, rose by 7.6 percent year on year in the first 10 months of 2024, according to data released by the National Energy Administration.
In October alone, power usage climbed 4.3 percent from one year earlier.
During the January-October period, power consumption of China's primary industries increased by 6.7 percent year on year, while power consumption of its secondary and tertiary sectors rose by 5.6 percent and 11 percent, respectively.
Residential power usage saw strong growth of 12.3 percent during this period, the administration said.
⭐ Policy Moves Much Talked About
Major Chinese cities reduce taxes on larger housing transactions
Several major Chinese cities have moved to reduce taxes for transactions involving larger houses this week amid the latest wave of pro-housing policies, including the capital city of Beijing, the metropolis of Shanghai and the southern cities of Shenzhen and Guangzhou.
From December on, there will be no distinction between ordinary and non-ordinary housing, or larger (or more expensive) ones, during housing transactions in these cities, according to local government notices.
This means the tax benefits previously reserved for ordinary homes will now apply to non-ordinary ones as well.
For instance, in Beijing, non-ordinary properties that have been owned for two years or more will be exempted from a 5-percent value-added tax (VAT) during transactions, which means they will enjoy the same tax exemption as ordinary homes.
China has rolled out a slew of measures to prop up the sluggish property market, including cutting mortgage rates, lowering down payment ratios and relaxing purchase restrictions.
Backed by the supportive policies, the country's property market displayed positive changes in October, with narrowing price declines, stronger sales and improved market sentiment.
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, said the National Bureau of Statistics last Friday.
⭐ Read More
Nature Index shows China has half of top 20 science cities
Half of the top 20 science cities are now in China, according to the Nature Index 2024 Science Cities, a supplement to Nature.
During a forum themed on sci-tech innovation hubs and science cities, Springer Nature issued the supplement acknowledging that Beijing leads the cities. Shanghai now takes second place, pushing New York into third.
The Nature Index showed that Beijing has remained the world's top science city since 2016. Meanwhile, Chinese cities, especially provincial capitals such as Nanjing, Wuhan, Hangzhou, Hefei and Xi'an, have greatly enhanced their position as globally competitive science centers.
According to the supplement, there is evident progress in the health sciences, an area where Chinese cities still lag behind their Western counterparts.
In physical sciences, the eastern city of Nanjing climbed above Boston and New York for the first time to reach third place.
With its continued focus on sustainability and ecological protection, China is cementing itself as a leader in Earth and environmental sciences, according to the Nature Index. Beijing, Nanjing and Guangzhou are the three leading cities in the subject.
Compiled by CYR