CBN丨China’s consumption in 2023 contributes 82.5% to GDP growth

Hi everyone. I’m Stephanie LI.

Coming up on today’s program

• Retail sales in China bounce back last year to hit a new record;
• Chinese stocks rebounded after the benchmark Shanghai composite dipped below 2,800 points.

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

China's consumption in 2023 played a vital role in bolstering economic development. Final consumption contributed 82.5 percent of overall GDP growth, while retail sales set a new record of 47.15 trillion yuan ($6.62 trillion), data from the National Bureau of Statistics (NBS) showed on Wednesday.

The Chinese economic growth in 2023 is good news for China and beyond, the managing director of the International Monetary Fund said on Wednesday.

"The Chinese economy met the national target, which was set at around 5 percent, and actually exceeded it. That is good news for China and also good news for Asia and the world because China delivers one-third of global growth," Kristalina Georgieva said on the sidelines of the World Economic Forum annual meeting in Davos.

Georgieva noted that the Chinese government was concentrating on moving to high-quality growth and changing the growth model from one primarily oriented by export to a model where consumption plays a bigger role.

China's consumption in 2023 demonstrated a continuous recovery, as retail sales grew 7.2 percent to a record high, Kang Yi, head of the NBS, said at a press conference. 

Kang said that the sector re-emerged as the major driver of economic development. Domestic demand contributed 111 percent to China’s economic growth last year, an increase of 25 percentage points on the previous 12 months, NBS data showed.

Domestic demand also drove imports, with the value of imported agricultural produce jumping 5 percent last year, consumer goods rising 1.2 percent, and energy products up 27 percent.

The NBS said China’s consumption potential is still huge, with a market of more than 1.4 billion people and a continuously upgrading consumption pattern. And the rapid development of new consumption patterns across a wide range of sectors from the digital industry to culture and tourism is injecting vitality into the consumption market. 

• China launched cargo spacecraft Tianzhou-7 on Wednesday night to deliver supplies for its orbiting Tiangong space station, according to the China Manned Space Agency (CMSA). The Long March-7 Y8 rocket, carrying Tianzhou-7, blasted off at 10:27 p.m. (Beijing Time) from the Wenchang Spacecraft Launch Site in the southern island province of Hainan, the CMSA said. The spacecraft docked with the orbiting Tiangong space station on Thursday.
• The Jakarta-Bandung High-speed Railway, the first of its kind in Indonesia and Southeast Asia, has set a target to serve 31,000 passengers per day throughout this year, said PT Kereta Cepat Indonesia-China (KCIC), a joint venture consortium between Indonesian and Chinese state-owned firms that constructs and runs the HSR. KCIC told local media on Wednesday that the HSR, locally known as Whoosh, has delivered more than 1.3 million passengers since it was officially put into commercial operation in October last year, adding that KCIC will continue to work on increasing the number of trips.

Moving on to regional highlights

• Hainan province has received more than 92,000 visa-free international tourists since the National Immigration Administration reinstated the visa-free policy for people from 59 countries to the Chinese island in March last year. Nearly 20,000 visa-free foreign visitors entered Hainan in December alone, compared with 2,000 last April, according to the local entry and exit bureau.
• SAIC Motor’s first custom-built, ocean-going car carrier ship, known as roll-on/roll-off, set off on its maiden voyage from Shanghai to Europe Wednesday, transporting about 5,000 cars of indigenous Chinese brands and some construction machinery. The SAIC Anji Sincerity, built by China State Shipbuilding Corp. and operated by SAIC’s Anji Logistics unit, is the world’s largest ro-ro ship equipped with a dual-fuel system that utilizes liquefied natural gas and diesel, which enables it to reduce carbon emissions by 30 percent compared with ships of a similar size.

Greater Bay Area, Greater future

• Shenzhen saw its foreign trade grow 5.9 percent year on year to 3.87 trillion yuan in 2023, according to Shenzhen customs authorities on Wednesday. Last year, the foreign trade of Shenzhen's private enterprises reached 2.54 trillion yuan, up 12.3 percent year on year and accounting for 65.7 percent of the city's total trade volume. In 2023, Shenzhen exported 1.78 trillion yuan of mechanical and electrical products, a year-on-year increase of 6.7 percent, accounting for 72.6 percent of the city's total export value.
• Hong Kong Financial Secretary Paul Chan said on Wednesday he has no plans to impose a departure tax on residents, rejecting a proposal aimed at easing the government’s widening deficit. Meanwhile, Chan met finance officials from Central Asia and the Middle East in Davos to encourage them to take advantage of the SAR's financial market to facilitate their countries' economic diversification and green transformation. Hong Kong can help connect different financial systems in the region, boost trade and promote cultural exchanges by serving as a platform to support the growth of the Belt and Road Initiative, Chan said.

Next on industry and company news

• Sinopec yesterday signed a memorandum of understanding with UK oil and gas giant BP to deepen their cooperation on the exploration of new energy transformation opportunities to better serve China’s fast-developing NEV market, as well as enhancing sustained partnership in refined oil and natural gas at the Davos forum. 
• SenseTime Group, a Chinese artificial intelligence company, showed the new-generation large language model InternLM2, developed in cooperation with Shanghai AI Laboratory, the Chinese University of Hong Kong, and Fudan University. The updated version of the InternLM can simultaneously accept and process up to 300,000 Chinese characters, SenseTime unveiled yesterday.
• Chinese electric vehicle giant BYD will hold a product launch event Thursday in Jakarta, media reported today, as it is poised to enter Indonesia’s passenger car market in the latest step of its global expansion. In 2023, BYD delivered 500 EVs of the E6 and T3 models to Indonesia's Blue Bird Taxi, as well as 22 electric buses to the country's electric bus distributor VKTR Group. 
• Huawei Technologies has completed registration of a new company dedicated to developing intelligent car systems and components. The new firm Shenzhen Yinwang Intelligent Technology Co. Ltd, 100 percent owned by Huawei, was set up Tuesday with a registered capital of 1 billion yuan, according to corporate database Tianyancha.  
• Chinese tech giant ByteDance reportedly plans to build research and development centers in Canada and Australia to develop its overseas business and better meet users' demand. Some of the R&D centers have been running on a trial basis for around half a year, media reported today, citing a source close to ByteDance. They will support the company's overseas businesses, including TikTok, CapCut, and Lemon8, the person added.
• China slashes the retail prices of gasoline and diesel on Thursday, the first price cut in 2024. Gasoline and diesel prices will both drop by 50 yuan per ton, according to the National Development and Reform Commission on Wednesday.

Switching gears to financial news

• China has cut more than 2.2 trillion yuan ($305 billion) of taxes and fees last year, with a significant rise of tax deduction on R&D for enterprises, said the State Taxation Administration on Thursday.  

Wrapping up with a quick look at the stock market

• Chinese stocks staged a miraculous turnaround on Thursday, with the benchmark index breaking the psychologically important 2,800 points in the morning session, the lowest since April 2020. However, the Shanghai Composite Index closed up by 0.43 percent to end at 2,845 and the Shenzhen Component Index rose by 1.0 percent. Hong Kong’s Hang Seng index also took a hit and touched an over 14-month low, yet it rebounded slightly over the course and closed 0.75 percent higher.

Biz Word of the Day

• Roll-on/roll-off (RORO) ships are cargo ships designed to carry wheeled cargo, such as cars, motorcycles, trucks, semi-trailer trucks, buses, trailers, and railroad cars, that are driven on and off the ship on their own wheels or using a platform vehicle, such as a self-propelled modular transporter.  

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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策划、编辑：李艳霞 

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