Hi everyone. I’m Stephanie LI.
Coming up on today’s program.
PPI in September soared by a historic high of 10.7%, driven by the relentless rise in coal prices;
Oversubscription of two municipal government bonds issues in HK and Macau.
Here’s what you need to know about China in the past 24 hours
China’s factory-gate prices in September rose at their fastest pace in more than two decades amid power crisis. The reading is the highest since the start of the National Bureau of Statistics (NBS) database in October 1996 after the index hit 10.1 in August 2008.
The producer price index (PPI), which reflects the prices factories charge wholesalers for their products, rose by 10.7 percent in September from a year earlier, up from a gain of 9.5 percent in August, the NBS said.
Rising commodity prices have been blamed for the sharp rise in PPI this year after the index rose by just 0.3 percent in January this year. The increase was largely driven by a 75 percent year-on-year rise in the coal mining and dressing sector in September, up from a rise of 57 percent in August. Among 40 industrial sectors surveyed, 36 saw price hikes, said an NBS official.
The consumer price index (CPI), meanwhile, rose by only 0.7 percent in September from a year earlier, dragged mainly by a lower cost of food. Yet economists warned that the energy crisis that may not ease until the end of this year could weigh on China’s inflation.
The National Development and Reform Commission announced on Tuesday that the market-based electricity prices will be allowed to rise by as much as 20 percent against the benchmark. Economists estimated that the move would impact CPI and PPI, and the effect on PPI could be bigger given higher costs for energy-intensive industries.
Greater Bay Area, Greater Future
The first municipal government bond issued offshore, the 5 billion Shenzhen government yuan bonds listed in Hong Kong, which was completed on Monday, had been oversubscribed by 2.48 times and attracted subscriptions worth 17.4 billion yuan. Also, the Guangdong provincial government issued 2.2 billion offshore bonds to the Macao market on Tuesday, marking another milestone that a mainland provincial government bond issued in Macao. The bond offering had been oversubscribed by 3.4 times.
Next on industry and company news
Chip giant Taiwan Semiconductor Manufacturing Company (TSMC) posted a 13.8 percent jump in third quarter profit on Thursday on the back of booming demand for semiconductors amid a chip supply crunch. Third quarter revenue for the world's largest contract chipmaker and a key supplier to Apple, climbed 22.6 percent year-on-year to $14.88 billion, with a net profit came in at $5.56 billion.
Salt Lake Energy was suspected by the police of illegal coal mining in Qinghai province as it had not obtained the necessary exploration and mining licenses, its parent company said in a statement on Tuesday. Salt Lake Energy will return the income from the mining to public security organs. That is expected to reduce Qinghai Salt Lake’s annual net profit by 357 million yuan this year.
Shares of the New York-listed OneSmart International Education Group has plummeted 18.4 percent on Tuesday before being held for trading. The Chinese edtech firm said it is suspending all of its teaching programs and learning centres in China amid the country’s crackdown on for-profit tutoring. Its total market value has dropped to less than $65 million.
Switching gears to the financial sector
China's new yuan-denominated loans increased to 1.66 trillion yuan last month, down by 232.7 billion yuan from a year ago, central bank data showed on Wednesday. The broad money supply, or M2, increased 8.3 percent year-on-year by the end of last month and the outstanding amount reached 234.28 trillion yuan. The M2 growth rate was up 0.1 percentage points compared with the August reading, while it was down 2.6 percent from the same period in 2020.
Wrapping up with a quick look at the stock market
Chinese stocks closed lower on Thursday with the benchmark Shanghai Composite Index down 0.1 percent, at 3558 points. The Shenzhen Component Index closed 0.08 percent lower at 14341 points. Tradings on the Hong Kong bourse was canceled today due to public holiday.
Biz Word of the Day
M2 is a calculation of themoney supply that includes all elements of M1 as well as "near money." M1 includes cash and checking deposits, while near money refers to savings deposits, money market securities, mutual funds, and other time deposits.
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
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