Sector Report on China 29.11.2021

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Financial Authorities Declarations

  • Flash News!

-The Suining Police Force in the Jiangsu Province have been identifying a virtual currency pyramid scheme involving 110 000 people and 1 billion Yuan. The pyramid scheme used a platform calle BBGO to attract investors with false information on virtual currency mining machine and making believes on high-profits.

-The Shanxi Province, one of the major coal-mining province of China, has seen its monthly October raw coal output of 102.8 Million tonnes (up 5.2% yoy) exceeding 100 Million Tonnes for three consecutive months. All mines are topping their full production capacity to support the current crunch in energy supply. The National Development and Reform Commission (NDRC) indicates that “Coal inventories at China’s power plants continue to expand rapidly and may hit an all-time high by the end of this month, firmly safeguarding the country’s power supply for the winter and spring”.

-At the end of 2020, Chinese direct investment in Africa exceeded 43 billion USD according to a white paper intitled ‘’ China and Africa in the New Era: A Partnership of Equals” released by the State Council. China established 3500 companies creating millions of direct and indirect jobs as 80% firms’ employees are local. In addition, 200 Chinese firms invested 1.1 Billion USD in the agricultural sector in 35 countries to strengthened agricultural trade between China and Africa.

-The Shanghai Data Exchange was launched on November 25 and began trading. 20 data products were listed at the opening day in various fields. The Data Exchange is located in Pudong New Area of Shanghai. ZHANG Qi, chairman of the exchange, declared that “ the exchange’s digital data trading system can guarantee real-time listing and trading and ensure that every operation is traceable.” Currently there are 100 entities registered  in the data exchange.

  • The CSRC approved IPO !

The China Securities Regulatory Commission. (CSRC) approved IPO of Shenzhen Aoni Electronic Co., Ltd., Zhejiang Yayi Metal Technology Co., Ltd., Dezhou United Petroleum Technology Co., Ltd. and Nantong Chaoda Equipment Co., Ltd. will on the Shenzhen Stock Exchange’s ChiNext and the IPO of Bingo Software Co., Ltd., Focuslight Technologies Inc., Primarius Technologies Co., Ltd. and Beijing Chunlizhengda Medical Instruments Co., Ltd.on the Shanghai STAR market.

Central Bank Operations and declarations

Date Operations Maturity Amount Interest rate
November 22 Reverse Repo 7-days 50 Billion Yuan 2.2%
November 23 Reverse Repo 7-days 50 Billion Yuan 2.2%
November 24 Reverse Repo 7-days 100 Billion Yuan 2.2%
November 25 Reverse Repo 7-days 100 Billion Yuan 2.2%
November 29 Reverse Repo 7-days 100 Billion Yuan 2.2%

The 1-year Loan Prime Rate (LPR) stay unchanged at 3.85% like the 5-years LPR at 4.65%.

  • Monitored Goods Prices slowly decreased

The National Bureau of Statistics mid-November survey on 50 monitored goods highlights those 35 goods registered lower prices (or at least unchanged) while 14 reported a rising prices. Hog prices currently one of the main monitored goods see an increase of 5.4% in Mid-November compare to its level at the begennigs of the month. The survey is released every 10 days and included 2 000 wholesalers and distributors in 31 regions.

  • The China Banking and Insurance Regulatory Commission data
Jan-Oct 2021 Units
Local Gvt bonds issuance 6.49 Trillion Yuan
-Special Bond Issuance 4.02 Trillion Yuan
-General Bonds Issuance 2.47 Trillion Yuan
Average Term 11.6 years
Average Interest Rate 3.37% annual rate
Outstanding of Bonds 33.28 Trillion Yuan
New Loans for Private firms 5 Trillion Yuan
Outstanding of Loans to Private sector 53.1 Trillion Yuan
— Growth +15 Trl yoy
Average  interest rate 5.3% annual rate

 

Government Declarations

  • New SME support policy planned by the State Council !

The State Council declared further improvements of supportive policies to SME facing difficulties. The State Council considers that SME is “the main force behind national economic and social development” however the current raw materials prices hike strongly affected the financial stability and operational logistics and activities of these firms as costs rising, transportation disturbances imply higher logistics costs. In addition, the COVID-19 resurgence in some regions and the power cuts in some sectors are additional risk factors.

A circular specify the relief policies and draw a list of supports. Funding support, tax and fee reductions, financial policy are ongoing planned. Manufacturing SMEs will be allowed to defer tax payments for the Q4 like SME affected by COVID-19, floods and raw materials prices hike can receive more lending support.

 

  • A Plan to improve Foreign-Trade Quality !

The State Council approved the implementation of a Foreign-Trade quality improvement Plan included in the 14th 5-Years Plan.

The Plan will be implemented by the Ministry of Commerce and related departments in order to draw the main guidelines and objectives to improve the quality of Foreign-Trade through Innovation, digital transformation, greater opening with a better risk control, low-carbon transition, etc … .

The currently outline 45 key tasks in 10 categories on the structure of the trading of goods, innovation of the services trade, new modes of trade and risk control process.

  • Data published !
October 2021 Units
Trade Income 2.02 Trillion Yuan
Trade Expenditures 1.64 Trillion Yuan
Trade Surplus 386.2 Billion Yuan
Trade of Goods Income 1.84 Trillion Yuan
Trade of Goods Expenditures 1.44 Trillion Yuan
Trade of Goods Surplus 40.04 Billion Yuan
Trade of Services Income 184.9 Billion Yuan
Trade of Services Expenditures 199.1 Billion Yuan
Trade of Services Balance -14.2 Billion Yuan

 

Jan-Oct 2021 Units
Profits of SOE 3.8 Trillion Yuan
— Growth +47.6% yoy
SOE Revenue 60.4 Trillion Yuan
— Growth +22.1% yoy
Debt/Assets Ratio 64.3%

 

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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