CBN丨China's factory activity further contracts in November

Hi everyone. I’m Stephanie LI.

Coming up on today’s program

• China’s manufacturing PMI edges down in November, constrained by weak market demand;

• OECD expects China's GDP to grow by 5.2% in 2023.

Here’s what you need to know about China in the past 24 hours 

China's manufacturing sector contracted for the second straight month in November, as factory output shrank because consumption demand weakened and some sectors entered their traditional off-peak season, according to the latest official data.

The manufacturing purchasing managers' index came in at 49.4 in November, down 0.1 point from October, according to data released by the National Bureau of Statistics today. The figure was 50.2 in September.  

In terms of sub-indices, the production index settled at 50.7 in November, down 0.2 percentage points from the previous month, while the new orders index fell slightly to 49.4 in the month from October. Weak market demand has remained the primary culprit inhibiting manufacturing sector development, according to the survey.

There are two bright points, however, among the sub-indices. The expectation index for production and operating activities came in at 55.8, an increase of 0.2 percentage points from October, which indicates that the majority of manufacturers are largely optimistic about the market development prospects.

The advanced manufacturing industry kept a sound growth momentum in November. The PMI for the high-tech manufacturing sector soared 2 points to 51.2, returning to the expansion territory, while the equipment manufacturing PMI registered at 51.6, up 0.9 percentage points month-on-month, indicating that industry expansion has accelerated. 

China's non-manufacturing business activity index came in at 50.2 in November, remaining in expansion territory despite a 0.4-point decline from October, the NBS said. The comprehensive PMI fell 0.3 point to 50.4 percent in the period.

A number of recent stimulus measures will support moderate recovery of domestic market demand. But, there remains some uncertainty about whether some weak areas such as private economy and the real estate sector can stabilize soon, and the downward pressure on external demand is weighty, which will negatively impact the recovery of the manufacturing industry, experts noted.

• The Organization for Economic Co-operation and Development (OECD) expects China's real GDP to grow by 5.2 percent in 2023, according to its latest Economic Outlook published on Wednesday. The global economy is expected to slow down slightly next year as a result of tightening monetary policies, weak trade and lower business and consumer confidence, the organization said. It projects the global GDP growth to be 2.9 percent in 2023, followed by a mild slowdown to 2.7 percent in 2024 and a slight improvement to 3 percent in 2025.

Moving on to regional highlights

• Eight real estate projects for sale in Wuhan, the largest city in central China, will offer full and unconditional refunds within 30 days to home buyers who purchase a property next month to attract more clients. The buyers will also be allowed to unconditionally exit any purchasing agreements inked within the same period, the projects announced yesterday. The corresponding developers of the projects will refund the entirety paid by buyers within the agreed period, without charging any breach-of-contract fees to safeguard clients’ rights and interests and improve their purchasing confidence, the Wuhan Real Estate Development Association said on WeChat on the same day.

• At least 16 Chinese metropolises, including four cities in Shandong province, seven in Jiangsu province and four in Zhejiang province as well as one city in Guangxi province have issued policies since early June to encourage the sale of lived-in homes to help potential buyers of new apartments sell the properties they are living in. The policies differ from city to city but in general they aim to shorten the time period between when a potential buyer puts down a deposit for a new home and when he or she sells his or her old ones. The measures include cutting or canceling taxes on the sale or offering subsidies to real estate developers, agencies and individuals.

Greater Bay Area, Greater Future

• Shenzhen-Hong Kong cross-border data verification platform, the first of its kind in China, was launched in Shenzhen, South China's Guangdong Province on Wednesday. The platform was developed based on the concept of distributed data transfer protocols and the domestic open-source blockchain underlying platform. Leveraging the tamper-resistant and traceable advantages of blockchain technology, the platform has achieved user-authenticated verification of self-carried data through cross-border validation using hash values, which are often used with digital signatures, according to media reports.

• Hong Kong Secretary for Financial Services and the Treasury Christopher Hui Ching-yu said yesterday that the SAR will deepen financial industry cooperation with Beijing in four major directions, including enhancing collaboration in the capital market. Hui wrote in his blog that as of the end of October, there are 260 Beijing-based companies listed in Hong Kong, with a total market value of nearly HKD8.86 trillion. He expressed his hope for more Beijing-based companies to leverage listings on Hong Kong platforms. He also mentioned that both local governments will encourage the mutual flow of financial talent and support financial institutions in expanding their operations in each other's markets.

Next on industry and company news

• E-commerce platform Pinduoduo saw its US-listed shares rise by over 4 percent on Wednesday, continuing the previous day's upward trend. At one point it surpassed e-commerce giant Alibaba in market value, giving it the largest market capitalization among Chinese concept stocks. The company's market cap reached as high as USD192.3 billion during intraday trading, exceeding Alibaba's USD191 billion in the US stock market.

• The Tarim Oilfield, under the China National Petroleum Corporation (CNPC), China's top oil and gas producer, has seen its annual oil and gas production reach 30 million tons so far this year, six days earlier reaching the same benchmark than last year, the company announced on Thursday. Located in Northwest China's Xinjiang, the Tarim Oilfield is a major oil and gas field in China, and a significant source of natural gas, linked by the country's West-to-East Gas Transmission Pipeline project.

• About 75 percent of smart manufacturing equipment bought by US tech giant Apple is reportedly developed in China, media reported yesterday, citing Vice President of Asia Procurement and Operations Iris Cui. Smart manufacturing transformation is mainly seen in the talent, technology, and equipment aspects, she noted. Apple buys 98 percent of its equipment from its top 200 global suppliers, with 151 of them manufacturing it in China, according to company data released at the ongoing first China International Supply Chain Expo.

• Zhuhai Wanda Commercial Management Group, the debt-laden commercial property management unit of Chinese real estate giant Dalian Wanda Group, said that its adjusted repayment scheme of a USD600 million bond was approved by creditors. The ratio of in-favor creditors participating in the voting was over 99 percent, with bonds held by voters being at least 66 percent of the total principal, Wanda Commercial Management announced today. The bond was scheduled to mature in January, but the date was extended to Dec. 29 of next year, it added. 

• Shares of Simei Media keep tanking for the third straight day after China's securities watchdog started investigating the advertising agency that claimed earlier this week that it will operate the online supermarket business of the Chinese version of TikTok. The China Securities Regulatory Commission has built a case against Simei Media's alleged violations of information disclosure about Douyin, the firm said yesterday. The Zhejiang branch of the regulator has sent warning letters to the company and its board secretary.

Earnings reports express

• Video-sharing platform Bilibili narrowed its net loss for the quarter ending September by 21 percent year-on-year, or 13 percent quarterly, to 1.35 billion yuan, according to its latest financial reported release late Wednesday. Net revenues were 5.8 billion yuan, in which revenue from value-added services was nearly 2.6 billion yuan, representing a 17 percent year-on-year increase, while advertising revenue grew by 21 percent yearly to 1.64 billion yuan and mobile game revenue was 990 million yuan, down by 33 percent year-on-year. Average daily active users increased by 14 percent to 102.8 million compared to the quarter in 2022.

Switching gears to financial news

• The London Metal Exchange (LME) yesterday won a legal battle against US financial firms demanding USD472 million in compensation after the exchange canceled billions of dollars in nickel trades last year after a surge in prices. The London lawsuit was brought by hedge fund Elliott Associates and market maker Jane Street Global Trading after the world's largest metals marketplace canceled USD12 billion in trades when prices shot above USD100,000 a ton in a few hours of chaotic trade in March 2022. Nicolas Aguzin, CEO of the Hong Kong Exchanges and Clearing, LME’s parent, said in a statement after the ruling that it is ready to move forward and the key role that the LME will continue to play in the pricing of the metal.

Wrapping up with a quick look at the stock market

• Chinese stocks ended mixed on Thursday with the benchmark Shanghai Composite up 0.3 percent, while the Shenzhen Component dipped 0.2 percent. Hong Kong’s Hang Seng index added 0.3 percent, while the TECH index fell 0.3 percent.  

Biz Word of the Day

• Data verification is a process in which different types of data are checked for accuracy and inconsistencies after data migration is done. Data verification helps to determine whether data was accurately translated when data is transferred from one source to another, is complete, and supports processes in the new system. During verification, there may be a need for a parallel run of both systems to identify areas of disparity and forestall erroneous data loss.

Executive Editor: Sonia YU

Editor: LI Yanxia

Host: Stephanie LI

Writer: Stephanie LI 

Sound Editor: Stephanie LI

Graphic Designer: ZHENG Wenjing, LIAO Yuanni

Produced by 21st Century Business Herald Dept. of Overseas News.

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编委:  于晓娜

策划、编辑：李艳霞 

播音：李莹亮

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