This episode contains segments on:

• A draft standard for government procurement of domestically produced products;
• Strengthening dual-use products export control to the United States;
• Consumer and producer price indices in November;
• Foreign trade data in November.

From the Chamber’s side, Secretary General Adam Dunnett met Hainan provincial leaders at an event on the Hainan Free Trade Port hosted by the Ministry of Foreign Affairs.

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Read more:

Government procurement

https://gks.mof.gov.cn/gongzuodongtai/202412/t20241205_3949021.htm?mc_cid=ea5024219b&mc_eid=9f900b2fb7

Export controls

https://www.mofcom.gov.cn/zwgk/zcfb/art/2024/art_3d5e990b43424e60828030f58a547b60.html?mc_cid=148cd7d6a6&mc_eid=9f900b2fb7

Consumer and producer price index

https://www.stats.gov.cn/sj/zxfb/202412/t20241209_1957688.html

https://www.stats.gov.cn/sj/zxfb/202412/t20241209_1957689.html

China’s foreign trade data, November

http://www.customs.gov.cn/customs/302249/zfxxgk/2799825/302274/302275/6252469/index.html

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 11^th December 2024.

(MUSIC)

RUI: On 5^th December, the Ministry of Finance released a draft standard for government procurement of domestically produced products, providing long-awaited guidance on what constitutes ‘Made in China.’

MARIANN: According to the draft standard, in addition to the requirement that a product be assembled in China, key components must also be made in China for the product to be considered domestic. The guidelines specify that foreign-invested enterprises—or FIEs— should be treated equally, meaning that on paper, FIEs that produce a qualifying product in China should have an equal chance of winning government procurement contracts. In practice, many Chamber members report facing informal procurement barriers, and it remains to be seen if this new standard will help reduce them. The draft standard raises the stakes even further by providing a 20 per cent price advantage to domestically produced products, meaning procurement decisions between a domestic and imported product will be made as if the domestic product is 20 per cent cheaper than its actual price.  The Chamber is currently collecting member comments on the standard for submission to the Ministry of Finance.

(MUSIC)

RUI: On 3^rd December, the Ministry of Commerce announced a ban on exports of gallium, germanium, antimony and superhard metals to the United States as well as stricter controls on exports of graphite.

MARIANN: The move marks a significant escalation of the ongoing tech war between the US and China, and Chamber members are increasingly worried about being caught in the crossfire. A number of European companies are already receiving requests from customers to produce goods with no US- or China-sourced components, depending on which market the goods are destined for, to meet both current and anticipated compliance requirements.

(MUSIC)

RUI: On 9^th December the National Bureau of Statistics released November’s consumer and producer price indices, both of which indicated continued deflationary pressure in the Chinese economy.

MARIANN:  The consumer price index increased 0.2 per cent year-on-year in November, however, this growth is partly attributable to a recent revision of how the index is calculated – more specifically that the weight pork prices bear on the overall index has been reduced. The producer price index fell by 2.5 per cent in November, marking its 26^th consecutive month of decline. Ongoing deflationary pressures continue to signal trouble for China’s economy, despite a series of support measures announced over the last few months.

(MUSIC)

RUI: According to data released by China’s customs authority on 10^th December, in November, the year-on-year growth of China’s exports slowed, with imports decreasing at a faster pace than in the previous month.

MARIANN: In dollar terms, the total value of Chinese exports increased 6.7 per cent from the same period a year ago. However, this represents a substantial decrease from October, when the year-on-year growth was 12.7 per cent. China’s imports dropped 3.9 per cent year-on-year in value, which was the starkest decline recorded since September 2023. In the first eleven months of the year, the value of China’s exports to the European Union increased 5.9 per cent, while the value of its imports from the EU dropped 10.8 per cent. Overall, the EU looks set to secure its place as China’s second largest trading partner in 2024, with the Association of Southeast Asian Nations holding on to top spot in the January-November period, and the United States following the EU in third place.

(MUSIC)

RUI: On 4^th December, European Chamber Secretary General Adam Dunnett attended an event on the Hainan Free Trade Port hosted by the Ministry of Foreign Affairs. Wang Yi, minister of foreign affairs, delivered a speech. 

MARIANN: Dunnett met and spoke with Hainan Party Secretary Feng Fei, Hainan Governor Liu Xiaoming, Hainan Executive Vice Governor Ba Teer, and Hainan Provincial Committee Chair of CCPIT Ning Hongwen. He thanked the Hainan Government for its work with the European Chamber’s Cosmetics Working Group on a pilot project for offshore duty-free e-labelling, which has resulted in a positive outcome for industry and government. 

RUI: He also highlighted the strong interest from European brands in investing in and operating in Hainan’s duty-free market, and recommended ensuring equal access to this sector after Hainan completes the establishment of a special customs system, post-2025.

(MUSIC)

MARIANN: Thanks for listening, and don’t forget to tune in again in January, when we will be back with new episodes.

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