Sector Report on China 01.11.2021

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Financial Authorities Declarations

  • Flash News!

-The China Iron and Steel Association (CISA) indicates that the crude steel output stand at a 3 years low level in September with an average daily production at 2.46 Million Tonnes (-21.2% yoy).

This drop is explained by the energy consumption control set in September in short run and in long-run by the green transition planned

-China Petroleum & Chemical Corporation (Sinopec Corp.) will launch diesel production in November to fill supply gap.

-The Chinese Government bonds are officially included in the FTSE World Governement Bond Index (WGBI).

-The National Development and Reform Commission (NDRC) will launch a series of wind and photovoltaic projects of installed capacity of 30 Million KwH in desert areas of inner Mongolia and Gansu, Qinghai and Ningxia Provinces.

-The CSRC unveiled the rules for IPO, refinancing and supervision for the Beijing Stock Exchange. The rules will be effective on November 15.

-The China Council for the Promotion of International Trade released commercial mediation rules concerning settlement of an resolution mechanism for intellectual property rights (IPR) disputes with foreign investors.  The rules are effective since November 1 and detailed the legal and economic aspects of IPR mediation processes.

-The State Taxation Administration registered an increase of 16.1% (or 9.7 Million entities) of new taxpaying market entities since the beginnings of the year.

  • The CSRC approved IPO !

The China Securities Regulatory Commission. (CSRC) approved IPO of Shanghai Prisemi Electronics Co., Ltd. and Hubei Huaqiang High-Tech Co., Ltd. on Shanghai STAR market. The Hunan Dajia Weikang Pharmaceutical Industry Co., Ltd., Ningbo Joy Smart Technology Co., Ltd., Tongling Jieya Biologic Technology Co., Ltd., Yingkou Fengguang Advanced Material Co., Ltd. and Anhui Provincial Architectural Design and Research Institute Co., Ltd. will be listed on the Shenzhen Stock Exchange’s Chinnext.

In addition, Ningbo Fujia Industrial Co., Ltd. eceived approbation to be listed on A-share market.

Central Bank Operations and declarations

Date Operations Maturity Amount Interest rate
October 25 Reverse Repo 7-days 200 Billion Yuan 2.2%
October 26 Reverse Repo 7-days 200 Billion Yuan 2.2%
October 27 Reverse Repo 7-days 200 Billion Yuan 2.2%
October 28 Reverse Repo 7-days 200 Billion Yuan 2.2%
October 29 Reverse Repo 7-days 200 Billion Yuan 2.2%

 

The People’s Bank of China (PBOC) conducted the 10th Central Bank Bills Swap (CBS) operation on October 29. The CBS value set at 5 Billion Yuan is open to primary dealer at 0.1% interest rate due on January 29 2022.

  • State Administration Foreign Exchange data
September 2021 Units
Trade income 2.1 Trillion Yuan
– of goods 1.89 Trillion Yuan
– of services 207.2 billion yuan
Trade Expenditures 1.8 Trillion Yuan
– of goods 1.52 Trillion Yuan
– of services 279.6 billion yuan
Trade of Goods surplus 368.2 billion yuan
Trade od Services deficit 72.3 billion yuan

 

Government Declarations

  • Preferential tax policy for foreign investors in Chinese Bonds extented !

The State Council chaired by Premier LI Keqiang announced extension of the preferential tax policy for overseas investors involved in the mainland bond market in a move to better support opening-up of the bond market.

Overseas institutional investors are exempt from corporate income tax and value-added tax on their bond interest gains arising from investment in the mainland bond market until the end of the 14th Five-years Plan (2025).

  • Chinese Government will launch SME support policy

The State Council also decided to defer tax payment for manufacturing sector SME (about 200 Billion Yuan) in order to smooth impact of rising costs (energy, raw material etc …).  In addition, the State Council will defer about 17 Billion Yuan of tax for coal-fired power companies and heating firms to support their operating activities facing strong turbulences.

The Ministry of Industry and Information Technology (MIIT) is currently focusing on a Five-Years Plan for SME underlying keys tasks to enhance playing fields, financial availability, innovation and professionalism of these entities.

From 2021 to 2025, the country is expected to incubate and cultivate about one million innovative SMEs and 100,000 SMEs that feature specialization, refinement, uniqueness and innovation” declared MIIT Minister XIAO Yaqing.

  • MOC will intervein in vegetables markets to stabilize prices

The Ministry of Commerce (MOC) is working on a plan to ensure supplies and vegetable prices stabilities.

“The ministry tracks the market operation of staple goods such as vegetables, meat, grain and edible oil daily. They also closely monitor market supply, demand and price changes in the whole country and areas with sporadic COVID-19 cases” SHU Jueting, spokesperson of the MOC.

  • Commerce Ministry declaration on it 2022 policy

The Commerce Minister WANG Wentao announced the 2022 plan focused on higher opening level !

« The country needs to connect the domestic and international markets, and form a modern market that is unified, open and has orderly competition, » he said.

Access to Chinese market will be eased for foreign investors as shortened negative lists will be released soon.

Data Published

  Jan-Sept 2021 Units
Profits of major industrial firms 6.34 Trillion Yuan
— Growth +44.7% yoy
— Growth from 2019 +41.2% over 2 years
SOE Profits 3.5 Trillion Yuan
— Growth +55.4% yoy
Operating revenue 54 Trillion Yuan
— Growth +23% yoy
Debt/Asset ratio 64.2% -0.1 pp yoy
  October 2021 Units
Manufacturing PMI 49.2 50 points basis
— Growth – 0.4 pp mom
Non-Manufacturing PMI 52.4 50 points basis
— Growth – 0.8 pp mom
Services PMI 51.6 50 points basis
— Growth – 0.8 pp mom

 

  Jan-Sept 2021 Units
Gold consumption 813.59 Tonnes
— growth +48.44% yoy
For Jewelry 529.06 tonnes
— growth +54.21% yoy
For Gold coins and bars 214.12 tonnes
— growth +50.25% yoy
For Industry 70.4 Tonnes
— growth +12.66% yoy
Gold Prodcution 236.75 Tonnes
— growth +26.18% yoy

 

Sources : Ministry of Finance, People’s Bank of China and the State Administration of Foreign Exchange, National Bureau of Statistics, Ministry of Commerce, Ministry of Finance, General Administration of Customs, State-owned Assets Supervision and Administration Commission

 

 

 

 

 

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