This episode contains segments on:
- The communique issued at the Third Plenum;
- The World Trade Organization’s ninth review of China’s trade policy; and
- Youth unemployment data in June.
Also, the European Chamber joined a roundtable on Large-scale Equipment Renewals and Trade-in of Consumer Goods hosted by the Vice Minister of Commerce Ling Ji on 17th July. Listen to learn more.
Contact:
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Read more:
Third Plenum of the 20th Central Committee of the Communist Party of China
https://global.chinadaily.com.cn/a/202407/18/WS6698f75aa31095c51c50ec9d.html
WTO’s 9th Trade Policy Review of China
https://www.wto.org/english/tratop_e/tpr_e/s458_e.pdf
China youth unemployment data, June (NBS)
https://data.stats.gov.cn/easyquery.htm?cn=A01
European Chamber joins MOFCOM Roundtable on Large-scale Equipment Renewals and Trade-in of Consumer Goods
https://mp.weixin.qq.com/s/ZiCnxsTrMMaP-3bZKdqbzg
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 24th July 2024.
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RUI: On 18th July, the Central Committee of the Chinese Communist Party concluded its Third Plenum and passed a resolution on deepening reform to advance the country’s modernisation.
MARIANN: In a communiqué issued on the closing day of the third plenary session, China’s leadership reaffirmed its resolution to “pursue progress while ensuring stability”. The document emphasised the need to better leverage the role of the market and foster a fairer and more dynamic market environment. Among some of the highlighted tasks for deepening reform, it listed removing restrictions on the market and providing an equal footing for economic entities of different ownership structures to compete and develop. The communique also stated the intent of deepening reforms pertaining to foreign trade, as well as outbound and inbound investment. The tasks listed in the communique are to be completed by 2029.
RUI: It is positive that China’s leadership has again acknowledged many of the headwinds facing the country’s economy, including risks in the real estate sector and local government debt, and signalled its intent to deepen reforms. It is notable that the Communique is largely a reiteration of points that have been outlined by the Chinese Government over recent years, underscoring the fact that there appears to be no deviation from its immediate priority, which is to balance its economic recovery against national security concerns, while maintaining social stability.
MARIANN: In an interview with CGTN, European Chamber President Jens Eskelund highlighted some of the key takeaways from the Third Plenum Communique:
JENS: Our immediate observations are that it is very much a reaffirmation of some of the policy initiatives that we have seen before, earlier, in connection, for example, with the NPC in March – the National People’s Congress – where we saw, really, a high emphasis on new quality productive forces. And we see that continue here with a high focus on developing more sophisticated manufacturing, on growing into higher value-added manufacturing. But I think also other aspects were notable to us. We saw that there was a focus on also looking at the healthcare system, at elderly care, at education – and these are things that we think are important in the sense that one of the issues, challenges that China is facing today is low demand. It’s not because the money is not there, because the savings rate is actually pretty high in China. But if you have more of a safety net, if you don’t have to worry to the same extent about pension, about education, about healthcare, maybe that would make people more likely to spend some of those money that now are being kept in bank accounts, and in that way, help stimulate demand growth in China presently.
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RUI: Between 17th and 19th July, the World Trade Organization conducted its ninth review of China’s trade policies and practices, acknowledging China’s important role in global economic growth, but also highlighting that the service-orientated structural shift that the country had previously embarked upon came to a standstill.
MARIANN: The review was based on a report compiled by the organisation’s secretariat and another one submitted by the Chinese Government. China’s efforts to further attract foreign investment were lauded along with a lifting of restrictions on foreign investment into key sectors, including manufacturing. However, some WTO members also expressed concerns over discriminatory treatment against foreign-funded enterprises and a lack of transparency in the application of certain regulations.
In a statement delivered by João Aguiar Machado, the European Union’s Ambassador to the WTO, the EU called on China to refrain from claiming developing country status and to fulfil its notification and transparency obligation to the WTO, calling it troubling that “important gaps in relation to information on China’s industrial subsidies as well as domestic support in the agriculture sector remain”. On the topic of financial support and other incentives to different industries, the WTO’s report said that its secretariat was “not able to gain deeper insight into the levels of financial support for certain highly traded sectors, such as aluminium, electric vehicles, glass, shipbuilding, semiconductors, or steel.”
(MUSIC)
RUI: Data published by China’s National Bureau of Statistics showed that the urban youth unemployment rate shrank to the lowest level in half a year in June. Even so, the jobless rate among 16- to 24-year-olds not enrolled in schools was more than twice as high as among the general urban, working-age population.
MARIANN: Since December last year, the statistics bureau changed the criteria for its urban youth unemployment rate, and no longer include young people on the job market who are still affiliated with a school. The revised index peaked at 15.3 per cent in February and March, and dropped to 13.2 per cent by June. In the adjacent age group, between the ages of 25 and 29, 6.4 per cent of jobseekers in China’s big cities were unable to finding an occupation. By comparison, the general urban unemployment rate stood at 5 per cent in June.
(MUSIC)
RUI: On 17th July, European Chamber Secretary General Adam Dunnett and representatives of the Chamber’s Advisory Council attended a roundtable meeting hosted by Vice Minister Ling Ji of the Ministry of Commerce.
MARIANN: At the roundtable, which focussed on large-scale equipment renewals and the trade-in of consumer goods, the Chamber raised concerns over foreign companies’ participation in large-scale equipment renewal programmes in the healthcare equipment sector due to the lack of clarity and publicly available information about specific measures and processes. In addition, in some sectors, such as the rail industry, the industry-specific action plans or guidelines on major equipment upgrades emphasise the idea of self-reliance, which tilts the playing field toward domestic suppliers.
RUI: At the same time, the Chamber commended the continued development of remanufacturing standards in areas such as automotive components, and acknowledged China’s efforts at cultivating consumer awareness of the need for the timely replacement of equipment with high energy consumption and emission rates.
(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.