This episode contains segments on:

• China’s GDP growth in the third quarter of 2024;
• the five-year loan prime rate (LPR) cut to stabilise property market;
• guidelines to address late or missed payments of government funds to enterprises;
• new regulation on export controls; and
• opinions on improving the quality of post-graduate education.

Also, listeners are invited to join the EU-China Green Development Forum: Green Power Consumption and International Recognition on 28^th October in Beijing.

Contact:

We’d love to hear your feedback. Contact us at website@europeanchamber.com.cn.

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Read more:

GDP growth

https://www.stats.gov.cn/english/PressRelease/202410/t20241018_1957042.html

https://www.europeanchamber.com.cn/en/publicationsarchive/1177/Business_Confidence_Survey_2024

LPR cut

http://www.pbc.gov.cn/zhengcehuobisi/125207/125213/125440/3876551/5482244/index.html

http://www.pbc.gov.cn/goutongjiaoliu/113456/113469/5481367/index.html

Payment delinquency

https://english.www.gov.cn/policies/latestreleases/202410/19/content_WS6712e941c6d0868f4e8ec12b.html?utm_source=substack&utm_medium=email

Export controls

https://www.gov.cn/zhengce/content/202410/content_6981399.htm

Postgraduate education and talent acquisition

https://www.gov.cn/yaowen/liebiao/202410/content_6981721.htm

https://www.europeanchamber.com.cn/en/publications-archive/1269/European_Business_in_China_Position_Paper_2024_2025

EU-China Green Development Forum

https://www.europeanchamber.com.cn/en/upcoming-events/26740

Transcript:

RUI: Hello and welcome to China ShortCuts,

MARIANN: the European Chamber’s weekly catchup on China’s business landscape.

RUI: This episode was recorded on 23^rd October 2024.

(MUSIC)

RUI: On 18^th October, the National Bureau of Statistics reported 4.6 per cent year-on-year GDP growth for the third quarter of this year, the lowest number reported since the first quarter of 2023.  

MARIANN: The figure—despite beating expectations of 4.5 per cent—is not high enough to ensure that China meets this year’s growth target of ‘around five per cent.’ The economy grew 4.8 per cent during the first nine months of 2024, but lacklustre performance in the third quarter further highlights the importance of introducing measures that can reverse this trend before the end of the year. Whether the recently announced stimulus package will be successful in doing so is yet to be seen.

More than half of European Chamber members reported in the Business Confidence Survey 2024 that China’s economic slowdown is the top business challenge that they face. The European Chamber believes that while the GDP target of ‘around five per cent’ is not unachievable, it is important for China’s policymakers to focus on sustainable growth: success should be measured not just by whether the target is met, but also how it is met.

(MUSIC)

RUI: On 21^st October, the People’s Bank of China announced a cut to the five-year loan prime rate—or LPR—a move that is intended to help stabilise China’s property market.

MARIANN: The five-year LPR is a key benchmark rate for home loans, meaning that with a lower rate borrowers will pay less each month. The rate cut was first disclosed last week by central bank Governor Pan Gongsheng, who said that, together with the other interest rate adjustments announced earlier in the month, the LPR cut will save 50 million families 150 billion Chinese yuan (CNY) collectively over the course of one year. This works out to impacted households saving an average of 3,000 yuan per year. However, it is not clear what impact this will have on China’s real economy, especially without the support of fiscal policy measures.  

(MUSIC)

RUI: In an effort to address the prevalence of late or missed payments of government funds to companies, the Communist Party of China’s Central Committee and the State Council released guidelines with stricter standards on spending government funds.

MARIANN: The announcement, made on 18^th October, outlines the need for more oversight of government procurement payments, including ensuring the availability of required funding for projects. It also calls for the establishment of a national platform for small and medium-sized enterprises to submit complaints about delinquent payments, and for the expansion of a punishment mechanism for bad faith actors.

(MUSIC)

RUI: The State Council announced a new regulation on export controls for dual-use items on 19^th October, which will come into effect on 1^st December.  

MARIANN: The regulation specifically targets goods and technologies that have both military and civilian purposes, and falls under the framework of China’s Export Control Law. Companies exporting restricted goods will have to report both the end user of the goods and how the goods will be used in order to receive export clearance, which will add to an additional compliance burden for some businesses. Nearly a quarter of Chamber members reported that they expect to be impacted by US export controls in the Business Confidence Survey 2024. While the impact of China’s new export control regime will likely affect comparatively fewer companies in the near-term, its scope is expected to be expanded in the coming years.

(MUSIC)

RUI: On 20^th October, the Communist Party of China’s Central Committee and the State Council released opinions on improving the quality of post-graduate education, especially in key science and technology fields.

MARIANN: Areas such as medicine and engineering are in the spotlight of the push, which aims to make China a centre of global talent development. As outlined in the European Chamber’s Position Paper 2024/2025, its members have been facing increasing difficulties attracting talent. Many members report that while Chinese graduates tend to be well-educated, many lack the practical skills required in the workplace. The State Council’s 24 Measures—released in August 2023—contain a point on promoting vocational schools, but members report that little action has been taken so far, meaning that hiring highly skilled workers is still very challenging in some sectors.

(MUSIC)

RUI: Green energy access remains a key advocacy priority for Chamber members – with 82 per cent of Business Confidence Survey 2024 respondents reporting that decarbonising energy use is their primary strategy for achieving carbon neutrality.

MARIANN: More than 60 per cent of respondents reported that limited access to renewable energy is a top three barrier to achieving their carbon neutrality goals, highlighting the urgent need for China to improve green energy access to continue attracting foreign investors.

RUI: Join us on 28^th October for the EU-China Green Development Forum in Beijing. Experts and key government stakeholders will discuss policy updates, green power supply for foreign-invested enterprises, and green energy certificates among other topics related to green energy.

(MUSIC)

MARIANN: Thanks for listening, and don’t forget to tune in again next week.

RUI: In the meantime, please find useful links in the episode notes.