This episode covers China’s carbon emissions in the first quarter of 2023, with comments from Clement Lix, vice chair of the European Chamber’s Energy Working Group; producer and consumer prices in April; industrial production activity, retail sales and urban unemployment data in April. From the Chamber side, South China Chapter attended a meeting with the Guangdong governor.
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China’s CO2 emissions hit Q1 record high after 4% rise in early 2023
April official CPI/PPI (in Chinese)
April official macroeconomic data (in Chinese):
Meeting with Governor Wang Weizhong of Guangdong Province:
RUI: Hello and welcome to China Shortcuts,
MARIANN: the European Chamber’s weekly catchup on China’s business landscape.
RUI: A new analysis by the Center for Research on Energy and Clean Air, published by Carbon Brief on 12th May found that China’s carbon emissions reached a record high for the first quarter of 2023 as the government put the focus on economic recovery.
MARIANN: While the analysis expects this trend to continue in the rest of the year, it also sees the possibility for emissions to peak and enter into a structural decline, as China is increasing its capacity of electricity generation from non-fossil sources.
RUI: Commenting on the key findings of the analysis and the trends looking ahead is Clement Lix, vice chair of the European Chamber’s Energy working group.
CLÉMENT LIX: Power production is a major contributor to China’s emissions. With a focus on energy security and stability, it is still largely based on coal with a recent increase of new coal power plants authorisation. Besides, we see interesting trends, as for the first time the non-fossil power capacity and building nuclear and all types of renewable [capacities], surpasses fossil one thanks to a tremendous pace of solar and wind installation. There will be growing need for energy storage, where battery, hydro, liquid air storage or hydrogen production are areas for collaboration with European companies. Electricity markets are going through the regulation. European companies are willing to engage with the Chinese energy ecosystem with their experience in the field and their digital solutions for energy efficiency and virtual power plants.
RUI: Producer price deflation continued in April, while consumer prices only moderately increased compared to the same period last year, according to data released on 11th May by the National Bureau of Statistics.
MARIANN: On a year-on-year basis, prices paid by wholesalers shrank at the fastest pace in almost three years, and for the seventh month in a row. The contraction was only moderate month-on-month, but even in a monthly comparison, factory gate prices have not increased since last November.
The year-on-year rise in consumer prices slowed for the fourth consecutive month in April, shrinking to the lowest level since early 2021. On a monthly basis, the drop in prices continued the slowing trend of the previous two months.
RUI: Macroeconomic data released by China’s National Bureau of Statistics on 16th May suggests an uneven recovery in production and consumption, with youth unemployment hitting a record high in April.
MARIANN: The rate of expansion of production activity at larger industrial firms further accelerated in April compared to the same period last year. However, the year-on-year comparison might distort the picture about this year’s recovery trend, as in April 2022, the disruptive impact of Shanghai’s lockdown sent industrial production to contract for the first time since the initial onset of the COVID-19 pandemic in China. Therefore, the month-on-month data might provide a better indication of China’s current economic recovery. Compared to the previous month, industrial production shrank 0.47 per cent, following a slight month-on-month increase in March, indicating a slowing trend overall.
Similarly, retail sales data also showed some discrepancy: while the year-on-year data signaled the fastest expansion recorded in over two years, on a month-on-month basis, the rate of growth was only the second fastest this year.
The surveyed urban unemployment rate dropped slightly from March. However, youth unemployment hit record high in April, with 20.4 per cent of people between the ages of 16 and 24 out of a job in China’s big cities.
RUI: On 11th May, Fabian Blake, vice chair of the European Chamber’s South China Chapter, attended a roundtable meeting with Wang Weizhong, governor of Guangdong Province.
MARIANN: At the event, Mr Blake explained the Chamber’s concerns regarding various factors impacting member companies, including the latest updates to the Greater Bay Area Preferential Individual Income Tax policy, as well as government support for SMEs and the decarbonisation roadmap for companies.
RUI: The governor expressed his hope that the Chamber’s member companies would increase their investments in Guangdong and pledged efforts to provide logistics support and high-quality services to companies wishing to develop their operations in the province.
MARIANN: Thanks for listening. Tune in again next week.
RUI: In the meantime, please find useful links in the episode notes.