Hi everyone. I’m Stephanie LI.
Coming up on today’s program
China's top economic meeting outlines plan to tackle challenges in 2024;
Guangdong will release 300 million yuan in vouchers to boost consumption.
Here’s what you need to know about China in the past 24 hours
China's macroeconomic policy is set to amplify support in 2024, a high-profile meeting said on Tuesday, which experts said signals proactive fiscal expansion in 2024 and more measures to reduce interest rate levels may be on the horizon.
The tone-setting annual Central Economic Work Conference was held in Beijing from Monday to Tuesday as Chinese leaders decided priorities for the economic work in 2024. The conference called for intensifying macro regulation and doing a good job in both expanding domestic demand and deepening supply-side structural reform.
The meeting made it clear that the goal is to maintain "a reasonable growth in quantity." To that end, fiscal policies should be appropriately strengthened and prudent monetary policy should be flexible, appropriate, precise and effective.
While noting that China's economic recovery faces multiple challenges, the meeting stressed that favorable conditions for the Chinese economy outweigh unfavorable factors, and it called for enhanced confidence in China's economic recovery and long-term positive outlook.
Regarding the economic work next year, the country must adhere to the principle of seeking progress while maintaining stability, promoting stability through progress and prioritizing development before addressing problems.
It urged the introduction of more policies that will help stabilize expectations, growth and employment, as well as active endeavors to promote the transition of growth models, structural adjustment, and quality and efficiency improvement, so as to consolidate the foundation of stable economic development with positive outlook.
Among the top priorities for economic work in 2024 is the call to continuously prevent and defuse risks in major areas, including the housing market, local government debt and small and medium-sized financial institutions, which have drawn great attention. Among other efforts, the meeting urged to address the reasonable financing needs of real estate companies with different ownerships equally.
As high-quality development remains a long-term top priority for China, the building of a modern industrial system through scientific and technological innovation is atop the economic agenda for 2024. The meeting highlighted various areas, including the digital economy and artificial intelligence. It has also proposed developing new industries, models, and engines with disruptive and cutting-edge technologies for the first time.
The meeting also called for a slew of measures to expand domestic demand, including creating new ways of consumption, stabilizing and boosting consumption in new-energy vehicles and electronics, as well as giving full play to the role of government investment.
China's GDP will likely expand by around 5 percent next year, and quarterly growth fluctuations will drop as consumption picks up, according to a recent report by Bank of China's research institute. Consumption in China will further recover next year and continue to play the role of ballast stone for economic growth, the report showed. Chinese people's spending power and willingness will continue to pick up. Per capita disposable income jumped 5.9 percent in the first nine months of this year, higher than the GDP growth of 5.2 percent, and the propensity to consume reached 70 percent. Investment in infrastructure and the manufacturing sector will rise fast, and that in the real estate market will fall slower, according to the report. The deficit-to-GDP ratio will likely be higher than 3 percent next year.
The Asian Development Bank (ADB) has raised its economic forecast for developing economies in Asia and the Pacific after robust domestic demand drove higher-than-expected growth in economies like China, according to a new ADB report released on Wednesday. The Asian Development Outlook December 2023 forecasts China's economy to expand 5.2 percent this year, compared with a previous forecast of 4.9 percent, after household consumption and public investment boosted growth in the third quarter. The regional economy is projected to grow 4.9 percent this year, compared with a previous forecast of 4.7 percent in September. The outlook for next year is maintained at 4.8 percent.
Greater Bay Area, Greater future
South China's Guangdong plans to issue 300 million yuan worth of consumer vouchers to boost consumption confidence and help create a hot consumption atmosphere across the province. Each of the 21 county-level cities in the province will participate in an event titled "Happy Consumption in Guangdong", organized by the Guangdong provincial department of culture and tourism, and will last to the end of January. The vouchers can be used in designated offline shopping malls, supermarkets, gas stations, catering, and related stores, while the retail catering mini-program consumption vouchers can be used online on the WeChat mini-programs of designated retail and catering merchants in the province.
Shops in Shenzhen have started offering immediate tax rebates for foreigners under a pilot scheme, allowing foreign travelers to immediately get a cash refund in participating stores upon presenting their invoice and relevant application form. Shenzhen is the sixth Chinese city to launch the pilot, after Beijing, Shanghai, Guangzhou, Hangzhou and Chengdu. The Shenzhen government picked 23 stores at The Mixc in Luohu District as the first test group for the instant tax refund.
The largest offshore wind power project in the Greater Bay Area, with an annual electricity generation capacity of 3 billion kWh, is now fully operational, according to the China General Nuclear Power Corporation. According to the firm, the electricity generated by the wind farm every year is equivalent to reducing standard coal consumption by about 1 million tons and carbon dioxide emissions by about 2.35 million tons.
Next on industry and company news
Four senior executives at Country Garden, a cash-strapped Chinese property developer, have decided to take pay cuts of between 67 percent and 96 percent. Country Garden’s Chairwoman Yang Huiyan, President Mo Bin, Executive Director Yang Ziying, and non-Executive Director Chen Chong all voluntarily cut their annual salaries to 120,000 yuan, the company announced yesterday. Yang Huiyan’s and Chen’s annual salaries were 370,000 yuan each, Mo’s was 3 million yuan, and Yang Ziying’s was 2 million yuan. Apart from Mo, the rest are family members of Country Garden’s founder Yang Guoqiang.
Shares of Poly Development and Holdings Group jumped after China's largest property developer by sales said it plans to buy back up to 2 billion yuan worth of shares, and its parent company and major shareholder intends to invest up to 500 million yuan to hike its stake. The board of directors approved a plan to buy back between 1 billion and 2 billion yuan worth of Poly shares at a maximum price of 15.19 yuan apiece, a premium of about 58 percent over Monday's closing price, within the next three months to rectify the firm's stock price that severely deviated from the actual value, the developer said.
Huawei Technologies's planned factory in France is expected to be operational by the end of 2025, Zhang Minggang, deputy general manager of Huawei France, said in an interview with a major French public radio channel. Located in the city of Brumath in northeast France, the plant will create 500 local jobs, with an investment of 200 million euros, Zhang said.
Shares in Zhejiang Zhongke Magnetic Industry advanced today after the Chinese producer of ferrite and neodymium magnets said it is constructing a permanent magnetic materials factory in Vietnam at a cost of USD9.9 million to expand its footprint in Southeast Asia and to diversify the sources of origin of its products. Zhongke Magnetic’s Singapore subsidiary will set up a local company in the Southeast Asian country to run the plant, said the firm.
Chinese on-demand services giant Meituan plans to invest 100 million yuan to hire 300,000 deliverymen to support the rising demand for take-out during the winter season. Most of the investment amount will be used as incentives to recruit riders in Beijing, Shanghai, and northern and northeastern provinces, the firm announced on Tuesday.
A new air freight route linking southwest China's Chongqing Municipality and London was launched on Tuesday. The route, which travels between Chongqing Jiangbei International Airport (CJIA) and London Stansted Airport, marks the first direct air cargo route linking Chongqing and the United Kingdom. Operated by Titan Airways, headquartered at London Stansted Airport, the route is carried by A330-300 all-cargo aircraft three times a week on Tuesday, Thursday, and Saturday. The cargo capacity of the aircraft is 62 tons, which mainly transport cross-border e-commerce goods.
Damo Academy, Alibaba Group Holding's research and development institute, has unveiled two large language models optimized to process Southeast Asian languages and reflect local cultural nuances. SeaLLM and its conversational fine-tuned version SeaLLM-chat come in two sizes, 13 billion and 7 billion parameters, Damo Academy announced on Monday. They are capable of processing languages and perform tasks that align with local customs, style, and legal stipulations better than other LLMs trained on English and Latin-based datasets, Damo Academy said.
China's domestic tourism is expected to recover to 90 percent of the pre-pandemic level in 2019 this year, according to a report by the data center of the Ministry of Culture and Tourism. China's domestic tourism revenue will likely reach 5.2 trillion yuan this year, accounting for 91 percent of the total in 2019, the report released yesterday by the China Tourism Academy showed. Meanwhile, domestic trips are expected to reach 5.4 million, recovering to 90 percent of the pre-pandemic level.
China's national railway network handled 3.56 billion passenger trips from January to November, a year-on-year increase of 126 percent, according the national railway operator China State Railway Group today.
Switching gears to financial news
Standard Chartered Securities China said it has secured a business license from regulators and will open its doors in the first half of next year, taking advantage of the ongoing opening-up of the country’s financial sector. The firm has been approved for business in four areas, including securities underwriting and asset management. But unlike other foreign securities firms that have been given the nod in China, it will not join the stock brokerage business. Instead, it will focus on fixed income, media reported citing a company source.
Wrapping up with a quick look at the stock market
Chinese stocks fell on Wednesday with the benchmark Shanghai Composite losing 1.2 percent and the Shenzhen Component dropping 1.5 percent. Hong Kong’s Hang Seng index closed 0.9 percent lower and the TECH index shed 1.2 percent.
Biz Word of the Day
Underwriting of securities is the process by which an organization, usually an investment bank, guarantees a price for the securities issued by a corporation or a government, and sells them to the public or assists in their distribution.
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.
Presented by SFC
编委: 于晓娜
策划、编辑：李艳霞
播音：李莹亮
撰稿：李莹亮
音频制作：李莹亮
设计：郑文静、廖苑妮
21世纪经济报道海外部 制作
南方财经全媒体集团 出品
(作者：李莹亮 编辑：李艳霞）