This episode covers the National Development and Reform Commission’s take on the third-quarter performance of China’s economy; September producer and consumer price data; revised regulations relating to foreign-funded financial firms that service enterprise groups, with comments from Susan Gao, vice chair of the Chamber’s Banking and Securities Working Group; and the latest drop in container freight rates. News from the Chamber includes recent high-level meetings with EU stakeholders and an event on decarbonisation on 27th October (sign up here).
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Data release postponed (in Chinese):
Zhao Chenxin’s Speech:
CPI, PPI (in Chinese):
Revised measures by the Banking and Insurance Regulatory Commission (in Chinese)
Shanghai Export Container Freight Index:
European Chamber event – The Path to Decarbonisation: Challenges and Opportunities:
European Chamber Report – European Business in China Position Paper 2022/2023
European Chamber Report – Carbon Neutrality: The Role of European Companies in China’s Race to 2060
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RUI: Hello and welcome to China Shortcuts,
MARIANN: the European Chamber’s weekly catchup about the Chinese business landscape.
RUI: China postponed the release of key economic indicators, including the third quarter GDP data while the Communist Party is convening in Beijing for its 20th National Congress.
MARIANN: Third quarter GDP had originally been set to be published on the 18th of October alongside a list of other September figures such as industrial production, retail sales and fixed asset investment. Similarly, the release of last month’s foreign trade data has also been delayed. Meanwhile, at the ongoing Party Congress, Zhào Chénxīn, vice chairman of the National Development and Reform Commission said that the country’s economy had rebounded significantly in the third quarter. Zhào highlighted that the moderate rise in Chinese consumer prices contrasts sharply with high global inflation. Looking ahead, Zhao promised more policy measures to spur foreign investment – both in terms of quality and quantity –, with a focus on the manufacturing sector.
RUI: In September, the year-on-year increase of Chinese producer prices was the slowest since January 2021, after decelerating for seven months straight.
MARIANN: On a month-on-month basis, the factory gate prices even showed a drop in September. With the prices of raw materials, such as crude oil easing in the international market, producers had more wiggle room at lowering the prices they charged for goods and services in an attempt to boost demand. At the same time, growing food prices pushed consumer prices to rise at the fastest pace in seventeen months. Consumer price inflation, however, was still relatively subdued at 2.8 per cent.
RUI: New measures coming to effect in November aim to open up China’s financial sector further for foreign-funded companies.
MARIANN: China’s Banking and Insurance Regulatory Commission has issued revised measures for financial companies of enterprise groups. The new measures clarify that foreign-funded multinational groups can directly initiate the establishment of foreign-funded financial companies to provide financial services to their member units in China.
RUI: Commenting on the revised measures that will take effect on 13th November is Susan Gao, Vice Chair of the Chamber’s Banking and Securities working group:
SUSAN GAO: CBIRC wants to further optimise their management for the finance companies. They had set up a few key regulatory indicators to enhance the finance companies’ liquidity management: the loan balance cannot exceed 80 per cent of deposit and paid-in capitals. They strengthened supervision over the bills transaction as well as the debt outside of the group. One more change is that finance companies are not allowed to invest into any finance institution and enterprises anymore.
RUI: According to the latest data released by the Shanghai Shipping exchange, container freight rates continued declining sharply in October.
MARIANN: The Shanghai Export Container Freight Index has shrunken nearly 70 per cent compared to the beginning of this year. Freight prices have dropped significantly on the routes from Shanghai to Europe as well as to the West coast of the Unites States due to muted demand in those markets. To stop prices from sliding down further, shipping companies have started reducing the number of ships they operate on these routes.
RUI: The European Chamber launched the 2022/2023 edition of the European Business in China Position Paper late September. The annual Position Paper is the Chamber’s most important publication, serving as the cornerstone of its annual advocacy plan.
MARIANN: As part of the Chamber’s advocacy efforts, President Joerg Wuttke together with other Chamber representatives had a series of meetings with key European stakeholders in early October.
RUI: Over the meetings, the key takeaways from the Position Paper were presented to high-level officials from the European Parliament’s Committee on International Trade, the cabinet of the European Council’s President and the European Commission’s Directorate General of Trade.
MARIANN: Decarbonisation has become a global imperative and one of the top priorities for governments, companies, and society at large. The European Chamber published its Carbon Neutrality report in May, identifying areas where EU-China cooperation can be deepened so that China can front load the technologies it needs to accelerate its carbon neutrality drive.
RUI: Join us on 27th October, to gain experts insights about the impacts of the carbon pricing scheme, decarbonisation technologies and their implementation, and about the different approaches to address challenges and utilise opportunities.
MARIANN: Thanks for listening. Tune in again next week.
RUI: In the meantime, find useful links in the episode notes.