Home Non classé Sector Report on China 13.09.2021

Sector Report on China 13.09.2021

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Financial Authorities Declarations

  • Flash News !

-A pilot scheme focus on green power trading will established to support development and consumption of green energy in a move to quicken low-carbon transition. The National Development and Reform Commission (NDRC) doesn’t specify a timeline as the State Energy Administration is working on the file.

-The National Food and Strategic Reserves Administration will release crude oil from national reserves to alleviate price rising pressure.

-The chinese authorities declared that customs clearances procedure will be streamlined to boost the China-Europe train freight (especially for ports in the Western Provinces as Chongqing, Chengdu and Xinjiang).

-Xiaomi becomes the world top vendor of wearable band in 2021 Q2 with 8 million units. Apple is 2d with 7.9 Million units and Huawei third with 3.7 Million units.

-The China Securities Depository and Clearing Corporation data show that 1.87 million new investors entered in the Chinese securities market in August (+4.43% yoy). In breakdown, there are 1.86 newly Individuals investors the remaining are new Institutional investors. The total investors in securities at the end of August stood at 192.1 Million up 11.71% yoy.

  • The CSRC approved IPO !

The China Securities Regulatory Commission. (CSRC) approved IPO on the Shanghai STAR market of Zhuhai CosMX Battery Co., Ltd. and Hangzhou Kaierda Robot Technology Co., Ltd. In addition, the CSRC approved IPO of   Asiacom Information Technology, Cofoe Medical Technology Co., Ltd., Jinpu Landscape Architecture Co., Ltd. and China Resources Chemical Innovative Materials Co., Ltd.   on the Shenzhen ChiNext market. CRSC also approved IPO on A-Share Market : Zhejiang Sunrise Garment Group Co., Ltd., Springsnow Food Group Co., Ltd. and Hunan Resun Co., Ltd.

  • The CSRC support market opening and regulation international cooperation !

The CSRC chairman YI Huiman declared that new measures will be launch to support opening up and strengthen cross-border regulatory cooperation.

China will study and introduce relevant measures to further expand opening-up, including expanding the country’s Stock Connect programs and increasing the supply of international futures products” he said.

  • The CSRC sanctions chips dealers !

The CSRC fined three auto-chip dealers for prices gouging behaviros. The total fine reach 2.5 million Yuan. The dealers applied a markup rate of 40 times the purchase prices while in normal condition the rate is between 7% and 10%.

Because of the global shortage of chips especially in the Automotive sectors and Electronics Equipments the State Administration For Market Regulation launched launched a series of investigations to identify dealers who sustain prices hike through gouging behaviors.

  • Hengqin Zone between Macao and China !

Chinese Government released on Sept. 5 the general plan of the Guangdong-Macao in-depth cooperation zone in Hengqin, located in the southern part of Zhuhai city in Guangdong Province, adjacent to Macao.

The main objective of this platform is to deepen economic and financial exchange between China and Macao in many sectors like bio-medical industry, traditional medicine, integrated circuits, new materials and new energy and big data.

In addition, financial development is a key part of the Hengqin area to promote Bond market wealth management products among others. A services platform will be established to enhance cooperation with China-Macao and the Portuguese-speaking countries.

  • The Beijing Stock Exchange solicit opinions on trading rules!

The new Beijing Stock Exchange (BSE) solicit public opinions on the review rules for IPO, refinancing of listed firms and material assets reorganization.

As this market is dedicated to SME financing, the rules were tailored to support innovative SME and the listing mechanism follow a market-issuance mechanism under the registration-based IPO system. There is no limit on the prices change for the first trading day but trading will be suspended for ten minutes in case of 60% prices drop or 30% prices increase.  The daily trading fluctuation will be limited to 30% after the first day of trading.The BSE will continue listing of listed firms in the NEEQ.

The Beijing Stock Exchange is registered with a capital of 1 Billion Yuan as Limited Company.

Central Bank Operations and declarations

Date Operations Maturity Amount Interest rate
September 6 Reverse Repo 7-days 10 Billion Yuan 2.2%
September 7 Reverse Repo 7-days 10 Billion Yuan 2.2%
September 8 Reverse Repo 7-days 10 Billion Yuan 2.2%
September 9 Reverse Repo 7-days 10 Billion Yuan 2.2%
September 10 Reverse Repo 7-days 10 Billion Yuan 2.2%

 

The People’s Bank of China will add 300 Billion Yuan of reloan quota in the next four months to help SME and micro firms/self-employed businesses. According to PAN Gongsheng declarations (deputy governor of the PBOC )

 

  • Macro Monetary indicators
  August 2021 Units
Forex Reserves 3.2321 Trillion USD
— Growth in Volume -3.8 Bln USD mom
— Growth in % -0.12% mom
PPI +9.5 % yoy
PPI +0.7 % mom
CPI +0.8 % yoy
New Yuan loans 1.22 Trillion Yuan
— Growth -63.1 Bln yoy
M2 231.23 Trillion Yuan
— Growth +8.2% yoy
M1 62.67 Trillion Yuan
— Growth +4.2% yoy
M0 8.51 Trillion Yuan
— Growth +6.3% yoy
Net Cash Injection 34.2 Billion Yuan

 

  • Non-Cash payment
  2021 Q2 Units
Non-Cash Payments 1080.82 Trillion Yuan
— Growth +6.25% yoy
– Mobile Payments 117.13 Trillion Yuan
— Growth +10.32% yoy
-Bank cardsPayments 240.25 Trillion Yuan
— Growth +9.66% yoy

 

Government Declarations

  • MOC data on Foreign contracted project value.

The Ministry of Commerce (MOC) declared that the contract value of China’s Foreign contracted project stood at 255.54 billion USD in 2020 while business the turnover reached 155.94 billion USD. “The country’s foreign contracted projects spread in various industries, with focuses on transport, construction, power engineering, and petrochemical sectors” said SHU Jueting the MOC spokersperson.

In breakdown, about 80% of contracts is made with Asian and African countries. The value of contracts between China and the 61 B&R countries members stood at 141.46 billion USD (55.4% of the Total contract value) for a turnover of 91.12 billion USD (58.4% of the total turnover).

  • Government urges internet platforms to be exemplary in workers’ rights protection.

Chinese Government conducted discussion with internet platforms (including Meituan, Ele.me, Didi, Alibaba and Tencent) urging them to be an example of worker’s rights protections

The Ministry of Human Resources and Social Security, the Ministry of Transport, the State Administration for Market Regulation and the All-China Federation of Trade Unions jointly declared that the internet economy through platforms have a big impact on society creating new type of works and contracts or agreements etc and then they should be exemplary in their behaviors.

As new employment forms emerge, there are growing issues on the protection of labor rights and interests, and the leading internet platforms should be exemplary in complying with the rules in this aspect

  • New measures announced to support FDI and investment in China

The National Development and Reform Commission (NDRC) declared that the actual use of FDI is improve in 2021 despite the global challenge. The FDI in actual use into China up 25.5% yoy to 672.19 billion Yuan (100.74 billion USD) or up 26.1% since 2019 same period.

“Stabilizing foreign investment is of great significance to China’s wider opening-up, high-quality development and job stability […] it is also conducive to supporting global anti-COVID-19 efforts and worldwide economic recovery” said LIU Xiaonan an NDRC official.

He added that China will improve the business environment for foreign investments and firms shortening the negative lists, and expand the scope and scale of the Free Trade Zone while ease market access.

All of these aspects will be released soon with more details.

  • China new taxation system announced.

As a part of the 14th 5-Year Plan, the State Administration of Taxation (STATA) unveil a road map to establish an ‘’intelligent taxation system” and enhance international cooperation in this domain as indicate WANG Jun, head of the STATA, at the opening ceremony of the 2d conference of the Belt and Road Initiative Tax Administration Cooperation (BRITACOF) Forum.

The BRITACOF implemented 2 years ago the Belt and Road Initiative Tax Administration Cooperation Mechanism (BRITACOM), a non-official mechanism for tax administration cooperation among 36 B&R members and 30 observers’ countries to ease tax clearance, promote trade and liberalization etc.

WANG Jun also highlight that digitalization  and new technology will be the core of this new system.

  • Data on Trade
  Jan-Aug 2021 Units
Total Trade 24.78 Trillion Yuan
— Growth +23.7% yoy
— Growth from 2019 +22.8% over 2 years
Exports +23.2% yoy
Imports +24.4% yoy
Trade Surplus 2.34 Trillion Yuan
— Growth +17.8% yoy

Trade Partners

% of Total Trade
ASEAN 22.8%
Europena Union 22.1%
USA 25.8%
B&R members 24.6%

 

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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