CBN丨China's growth target of 5% will be reached: PBOC quarterly report
Hi everyone. I’m Stephanie LI.
Coming up on today’s program
China will reach growth target of 5% this year, a central bank report said;
The first China International Supply Chain Expo (CISCE) kicks off today.
Here’s what you need to know about China in the past 24 hours
China’s central bank said on Monday that it expects the annual GDP growth target of around 5 percent will be reached, as the economy continues to return to the normal track. It also vowed to keep in place “prudent” monetary policy to ensure stable growth.
In its quarterly monetary policy report, the People’s Bank of China (PBOC) also noted both internal and external challenges, including heightened geopolitical tension globally, while maintaining that China’s long-term development fundamentals have not changed.
Pointing to emerging “favorable factors” for stable economic development, the PBOC report said “it is expected that the annual growth target of around 5 percent can be successfully achieved.”
China’s economy grew by 4.9 percent year-on-year in the third quarter of the year, beating expectations. In the first three quarters, the economy expanded by 5.2 percent, which means that to reach the annual growth rate of around 5 percent, a GDP growth rate of at least 4.8 percent in the fourth quarter is needed.
While challenges remain, many analysts and global institutions also expect that China will be able to meet its annual growth target. The IMF, for example, has projected that China’s GDP growth will reach 5.4 percent in 2023.
However, there are also challenges facing the Chinese economy, according to the PBOC. Globally, geopolitical tensions have intensified, uncertainty in the world economy has increased, interest rates in developed economies have remained high, and spillover risks may still impact emerging market economies, the report said.
From a domestic perspective, the effectiveness of using debt to drive economic growth has decreased, the relationship between real estate supply and demand has undergone major changes, and the urgency of accelerating economic transformation has increased, according to the report.
“We should also note that from the perspective of the general trend of economic development, the fundamentals of China’s development have not changed,” the report said. The bank will also carry out macro policy adjustments and controls, and steadily promote high-quality development, while also maintaining a “reasonable” economic growth rate.
The central bank added that it will maintain a moderate and steady pace of monetary and credit aggregates, give full play to the guiding role of monetary and credit policies and ensure the internal and external balance of interest and exchange rates. It also vowed to deepen financial reform and opening-up and effectively prevent and resolve financial risks.
The first China International Supply Chain Expo (CISCE) kicks off in Beijing on Tuesday, gathering a number of Fortune Global 500 companies. A total of 515 companies from 55 countries and regions will participate in the event, which will run through till Saturday. The number of US exhibitors registered for the expo accounts 20 percent of the overseas exhibitors, much higher than expected. Ren Hongbin, chairman of the China Council for the Promotion of International Trade, the event organizer, said ahead of the expo that China's efforts to advance its industrial system will effectively bolster the global industry and supply chains, empowering both international and domestic businesses to capitalize on a multitude of market opportunities and boost their willingness to invest. He stressed that the role of global manufacturing and supply chains will continue to be crucial. A new wave of scientific, technological and industrial transformation is imminent, and this will require major adjustments in the global innovation landscape and economic structure. Ren also stressed that the scarcest resource in the world today is the market, and the size of the market determines the depth of division of labor, which in turn determines the level of industrial development. With a population of over 1.4 billion and a middle-income group of over 400 million, China's "magnetic attraction" for foreign investment is constantly strengthening, he said.
Moving on to regional highlights
Multinationals from Germany, France, Japan, Hungary, Singapore, and more than 100 global purchasing companies signed contracts worth around 155.9 billion yuan at the second Global Digital Trade Expo in Hangzhou that ended yesterday. The expo attracted more than 15,000 buyers, including over 1,700 foreign exhibitors, according to the Ministry of Commerce.
China Eastern Airlines launched the first flight between Jinan, capital of East China's Shandong province, and Sydney, Australia on Monday. This is the first flight connecting the Chinese city to Oceania, according to the carrier. Direct flights from Jinan Yaoqiang International Airport to Sydney will be operated every Monday, Thursday and Saturday. The return flights will be available every Tuesday, Friday and Sunday (Australia local time).
Greater Bay Area, Greater future
A significant milestone was reached on Tuesday in the construction of the ambitious Shenzhen-Zhongshan Link, a 24-kilometer-long world-class cross-sea infrastructure project integrating bridges, islands, tunnels, and underwater communications. This completion marks the most considerable progression in the project to date, bringing it one step closer to its anticipated completion in 2024. Once operational, this project is expected to reduce the travel time between the two cities from two hours to just 30 minutes, facilitating smoother and more efficient transportation between these key economic hubs.
Next on industry and company news
Huawei Technologies has reportedly invited five car-making partners to join the new joint venture for intelligent auto systems and components that the Chinese telecoms giant plans to establish. The five partners are BAIC BluePark, Changan Automobile, Chery Automobile, JAC Motors, and Seres Group. Except for Changan Auto, which responded positively to the invitation, the others are still assessing and making related preparations. Huawei has three approaches when partnering with carmakers: vertical parts supplier, intelligent systems provider through the Huawei Inside partnership model, and full-set solutions provider via the Huawei Smart Selection business model. Among them, the third category has been the most successful so far, which BAIC BluePark, Chery Auto, JAC Motors, and Seres falls in.
Damo Academy, Alibaba Group Holding’s research and development institute, has donated its quantum laboratory and experimental gear to Zhejiang University to support the buildout of quantum technology. Damo Academy gave the lab and transferable experimental instruments and equipment to the Hangzhou-based university, as well as making them available to other universities and scientific research institutions, media report said yesterday, citing the academy.
Chinese tech giant ByteDance has established a new division, named Flow, which will focus on artificial intelligence applications. Flow has already released recruitment-related information both internally and to the public, according to media report. The new division has already released two AI chatbots, DouBao and Cici, for domestic and overseas markets, with multiple other innovative AI products under incubation. The new unit will be headed by Zhu Wenjia who is leading ByteDance’s generative AI team, the report said.
Chinese ride-hailing giant Didi Chuxing has reported a widespread service breakdown affecting users across major cities, including Beijing, Shanghai and Guangzhou, according to the company and its users. The company apologized for the app outage late on Monday, including failure of the app’s navigation and ride-hailing functions as well as bike-sharing, due to a “system failure” in a post on its Weibo account today. The statement came hours after the service disruption affected some of its 400 million users in China, as well as drivers.
Lotus Technology, the electric vehicle arm of British sports car brand Lotus, has secured USD870 million of financing commitments this year before its planned listing on the Nasdaq via a special purpose acquisition company, the firm controlled by Chinese car giant Geely Holdings announced yesterday. The headline figure consists of private investment in public equity financing and convertible notes, used to advance product innovation and expand global distribution, the luxury brand said without naming the investors.
Searches for Malaysia on Chinese online travel platforms surged after the Southeast Asian country announced a 30-day visa-free entry policy for Chinese passport holders on Sunday. Travel inquiries for Malaysia soared 173 percent on Monday from the day before on LY.Com, with hotel searches surging 112 percent, according to the travel agency’s data. People in Shanghai and the provinces of Guangdong, Jiangsu, Zhejiang, and Shandong have shown the most interest.
Zhuhai Wanda Commercial Management Group, the commercial property management unit of Chinese real estate giant Dalian Wanda Group, is reportedly trying to delay its initial public offering in Hong Kong which will expire next month. Zhuhai Wanda Commercial is negotiating with its 22 pre-IPO investors to postpone the listing to as late as 2026, media reported yesterday. In July 2021, Zhuhai Wanda Commercial signed a bet-on agreement with 22 investors for 38 billion yuan.
Switching gears to financial news
An index of small-capitalization companies trading on China’s smallest stock exchange tumbled by a record amount, after the bourse operator took measures to cool the recent rally. The Beijing Stock Exchange (BSE) 50 Index slumped by 4.2 percent on Tuesday, the gauge’s biggest single-day loss, halting a rally that had driven the measure over 50 percent higher in the past month. From November 20 to 24, the exchange issued 93 verbal warnings, supervision notices and written warnings for abnormal trading, including pump-and-dump and continuous bidding for stocks by the daily limit, the bourse said Monday.
China's first batch of Real Estate Investment Trusts backed by shopping malls were given the green light by regulators, marking the expansion of the country's REITs market into the consumption sector from infrastructure. Three trusts backed by the China Resources Mixc in Qingdao, the Jinmao Mall of Splendors in Changsha, Xixi Incity in Hangzhou, as well as one trust by two government-subsidized rental housing communities under Shanghai Chengtou Group were approved by the China Securities Regulatory Commission for trading on the Shanghai or Shenzhen stock exchanges. The four trusts have a combined value of 14 billion yuan.
Newly-implemented tax refunds, tax and fee cuts and deferrals exceeded 1.66 trillion yuan in the first 10 months of this year, data from the State Taxation Administration showed Monday. Notably, taxpayers from the private sector have become a major beneficiary of the country's tax and fee relief measures, as nearly 1.24 trillion yuan of tax and fee payments were rebated, deducted or deferred for private businesses during the period.
Wrapping up with a quick look at the stock market
Chinese stocks rose on Tuesday with the benchmark Shanghai Composite climbing 0.2 percent and the Shenzhen Component gaining 0.5 percent. Hong Kong’s stocks closed lower as the Hang Seng index lost 1 percent and the TECH index fell 0.8 percent.
Biz Word of the Day
A real estate investment trust (REIT) is a company that owns, operates, or finances income-generating real estate. Modeled after mutual funds, REITs make it possible for individual investors to earn dividends from real estate investments―without having to buy, manage, or finance any properties themselves.
Executive Editor: Sonia YU
Editor: LI Yanxia
Host: Stephanie LI
Writer: Stephanie LI
Sound Editor: Stephanie LI
Graphic Designer: ZHENG Wenjing, LIAO Yuanni
Produced by 21st Century Business Herald Dept. of Overseas News.
Presented by SFC
编委: 于晓娜
策划、编辑：李艳霞
播音：李莹亮
撰稿：李莹亮
音频制作：李莹亮
设计：郑文静、廖苑妮
21世纪经济报道海外部 制作
南方财经全媒体集团 出品