Hi everyone. I’m Stephanie LI.
Coming up on today’s program.
Top economic planer asks all industrial and commercial users to buy electricity from the market;
Shenzhen will issue 5 billion yuan bonds in Hong Kong;
Firms in the Greater Bay Area top China’s R&D spendings.
Here’s what you need to know about China in the past 24 hours
The other shoe finally drops on China’s electricity price reform as Beijing tries to tackle an energy crunch that sent the country’s September manufacturing PPI sliding into contraction.
The National Development and Reform Commission (NDRC) said on Tuesday it will fully liberalise pricing for electricity generated from coal and that industrial and commercial users will all have to buy from the market, without giving a specific time frame.
All coal-fired power will orderly enter the power market, as the floating range of the market-based electricity transaction prices are adjusted in principle to a range of 20 percent up or down, compared with the current ceiling of 10 percent and the floor of 15 percent from the benchmark price, said the country’s top economic planer. It also requires local government to prioritise supply of low-cost power for residents and agriculture.
Today, market reacted swiftly to the price reform, as shares of power suppliers continued to cool off, some even fell to the 10-percent daily limit.
The reforms are Beijing's latest effort to deal with an energy crisis gripping the world's second largest-economy that is expected to last through the year-end.
The notice came after Premier Li Keqiang’s remark at a Saturday meeting that the country should balance development and carbon reduction, deepen market-based reform in the energy sector, and promote green transformation.
To ease the power shortage, Shanxi, China’s top coal-producing province, is eyeing an output boost by continuing extracting the fossil fuel from coal mines that have already reached whole-year production goals and increase production capacity of the mines.
Unfortunately, the unprecedented flooding in Shanxi and Shaanxi province have added to a massive national power crisis and sent prices to a record high, as the two provinces together supply nearly half of China’s coal.
Greater Bay Area, Greater Future
Shenzhen announced today that it will issue offshore RMB municipal government bonds of 5 billion yuan in Hong Kong in October, which is the first time a mainland municipal government issues bonds outside the mainland.
Huawei ranks first among China’s privately held tech companies for patents and investment in research and development, according to the rankings by the All-China Federation of Industry and Commerce. In regional rankings, the Greater Bay Area leads with a total R&D expenditure of 272 billion yuan from 92 firms.
Next on industry and company news
China's auto sales recorded an 8.7 percent year-on-year growth to 18.62 million units in the first nine months of 2021, yet sales in September was down 19.6 percent, data from the China Association of Automobile Manufacturers showed Tuesday.
Ant Group, China’s leading financial technology services company, has raised its registered capital to 35 billion yuan from 23.8 billion yuan. The company said on Monday that the move was aimed at meeting regulatory requirements and its business needs.
Switching gears to the financial sector
Several privately owned Chinese banks have been fined at unprecedented levels for misconduct such as failing to properly control risks and manage how their loans are issued, China’s banking regulator said, as it steps up supervision over the industry. Chongqing Fumin Bank was fined 8.5 million yuan, the heaviest fine that regulators have ever levied against a privately owned bank.
Wrapping up with a quick look at the stock market
Chinese stocks closed lower on Tuesday with the benchmark Shanghai Composite Index dipping 1.25 percent at 3547 points. The Shenzhen Component Index closed 1.62 percent lower at 14135 points. The Hang Seng Index closed 1.43 percent lower to stand at 24963 points.
Biz Word of the Day
Registered capital is the total amount of capital contributions subscribed by the shareholders of a Chinese company, which must be registered with the business registration authority.
Executive Editor: Sonia YU
Editor: LI Yanxia
Host: Stephanie LI
Writer: Stephanie LI, ZHANG Ran, TIAN Chang
Producer: XIANG Xiufang
Sound Editor: ZHANG Ran, Andy YUAN
Graphic Designer: ZHENG Wenjing, LIAO Wanni
Co-produced by 21st Century Business Herald Dept. of Overseas News & SFC Audio/Video Dept.
Presented by SFC
21世纪经济报道海外部 南财音视频部 联合制作