This episode contains segments on:

• Guidelines to further develop digital trade;
• Pilot work plan permitting the establishment of wholly foreign-owned hospitals;
• November Official Purchasing Managers Index (PMI) and Caixin China Manufacturing and Services PMI;
• January to October industrial profits;

Listeners are also invited to join the European Chamber Annual Conference: Looking Back and Moving Forward on 10^th December in Beijing to hear from business leader, economists, academics and China experts.

Contact:

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

Follow the European Chamber on LinkedIn, Twitter, WeChat (europeanchamber), and sign up for our newsletter here, to get notified on new episodes.

Read more:

Guidelines on the development of digital trade

https://english.www.gov.cn/policies/latestreleases/202411/29/content_WS6748f504c6d0868f4e8ed7fb.html

Pilot work plan permitting the establishment of wholly foreign-owned hospitals (NHS)

http://english.scio.gov.cn/chinavoices/2024-12/02/content_117580667.html

China November Official PMI (NBS)

https://www.stats.gov.cn/sj/zxfb/202411/t20241130_1957624.html

China Caixin Manufacturing and Services PMI

https://www.pmi.spglobal.com/Public/Home/PressRelease/3516d9096c574bee9ded33a3cd219e28

https://www.pmi.spglobal.com/Public/Home/PressRelease/c7d6a8039f78475ca4fc6970a111f81d

China January-October industrial profits (NBS)

https://www.stats.gov.cn/sj/zxfb/202411/t20241127_1957580.html

European Chamber event: Annual Conference 2024 – Looking Back, Moving Forward

https://www.europeanchamber.com.cn/en/upcoming-events/26792/European_Chamber_Annual_Conference_2024_Looking_Back_Moving_Forward

Transcript:

RUI: Hello and welcome to China ShortCuts,

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

RUI: This episode—the 100^th in our series—was recorded on 4^th December 2024.

(MUSIC)

RUI: In a high-level policy document issued on 28^th November, China has set goals to further develop digital trade.  

MARIANN: The guideline, co-published by the general offices of the Communist Party of China Central Committee and the State Council, contains 18 points. A concrete target set is that the share of digitally delivered trade in services should exceed 45 per cent of overall trade in services by 2029, and should make up more than half of it by 2035. The document also pledges that China will ease market access for foreign investors in the digital sector, promising the opening of the telecommunications, internet and culture industries.

(MUSIC)

RUI: On 29^th November, the National Health Commission and three other government departments released a pilot work plan that grants approval to eight cities and one province to allow the establishment of wholly foreign-owned hospitals.

MARIANN: The plan is not completely new. In 2014, the National Health Commission launched a similar pilot, with a larger geographical scope, that included four provinces. The pilot, however, did not lead to significant changes in the country’s medical services landscape. The National Health Commission and the Ministry of Commerce pledged to provide policy interpretations and address challenges faced by foreign investors with regard to land use and financing. It is a positive that according to the plan, wholly foreign owned hospitals will be able to apply to be included in the public health insurance system. Ultimately, the success of this scheme will also depend on how successfully participating foreign-owned hospitals will be able to compete with other public and private hospitals to secure highly qualified healthcare professionals.

(MUSIC)

RUI: Manufacturing activity in China strengthened slightly in November, while services growth remained subdued, according to official data released by the National Bureau of Statistics on 30^th November.

MARIANN:The official manufacturing purchasing managers’ index or PMI climbed to 50.3 points. This marked the second consecutive month when the index stayed above the 50-point benchmark separating growth from contraction. The increase in activity is attributable to large manufacturing companies, as a breakdown of the data showed that they were the only ones able to achieve growth, with activity at medium sized companies stagnating and even shrinking at small firms during the past month. As for the different aspects of activity: production continued to increase at a faster pace than new orders and the decrease in staffing levels accelerated.

The non-manufacturing PMI, which combines data about the construction and services sectors, stood at 50-points in November, indicating stagnation. While services activity did increase slightly, construction activity contracted.  Both sectors were weighed down by a continued drop in demand.

(MUSIC)

RUI: The Caixin Manufacturing PMI, a dataset based on a private survey, also signalled an uptick in China’s manufacturing activity in November.

MARIANN:The Caixin data, released on 2^nd December, showed that expansion in manufacturing picked up speed from the previous month. This was attributed to an increase in new orders as both domestic and export demand edged up in November. A rise in raw material costs hiked up selling prices. However, cost concerns were also reported to play a part in a decline in employment levels. Overall, sentiment among surveyed manufacturing firms improved, with respondents projecting better economic conditions for the year ahead.  

As for the services sector, the Caixin data indicated that activity continued to grow in November, but at a slower pace, following a slowdown in new business growth. Despite this, an accumulation of backlogs led to service providers hiring additional staff.

(MUSIC)

RUI: Profits at larger industrial companies in China dropped year-on-year in the first ten months of 2024, at the fastest pace recorded in almost a year.

MARIANN:Data released by the statistics bureau on 27^th November showed that in the January-October period, industrial profits dropped 4.3 per cent compared to the same period last year. A breakdown by the three largest industrial sectors indicated that the drop in profits was the most significant in the mining sector. Conversely, utilities firms were able to increase their profits. While manufacturing companies’ profits also shrank, overall, this sector made the most profits in absolute terms.

(MUSIC)

RUI: Despite the headwinds that China’s economy is facing, it demonstrated small signs of recovery over the past. The government support package announced in September provided a welcome boost, and there are more incremental policies in the pipeline. This could be good news for European companies that had reported in the Chamber’s Business Confidence Survey 2024 that China’s economic slowdown is currently the biggest business challenge they face.

MARIANN: Join us in Beijing on 10 December at this year’s annual conference to hear from business leaders, economists, academics and China experts, who will look back at the pivotal moments of 2024, discuss the key drivers for economic growth in the year ahead, and identify where the business opportunities still lie.

(MUSIC)

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

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