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29th Mar. 2023: cosmetics new measures, industrial profits, Hongqiao Airport

This episode covers new measures for further optimising the management of cosmetics raw material safety information, with comments from Jacky Zhang, chair of the Cosmetics Working Group; reported profits of large industrial companies in China in January and February; and Shanghai’s Hongqiao Airport resumption of international flight services. Join our event on China’s economic recovery beyond the Two Sessions in Beijing on 31st March.

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22nd Mar. 2023: required reserve ratio; China-US trade decoupling, FDI in China

This episode covers China lowering its required reserve ratio; a report on China-US trade decoupling; and foreign direct investment in China in January and February.

Join the Chamber’s Human Capital Conference on 27th March in Beijing, to learn more about integrating environmental, social and corporate governance into your company’s human resources strategy.

Learn how to subscribe here.

Contact:

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

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

Read more:

PBOC reserve requirement ratio (in Chinese)

http://www.pbc.gov.cn/goutongjiaoliu/113456/113469/4821841/index.html

Overview of RRR cuts since 2018 (in Chinese)

http://www.pbc.gov.cn/rmyh/4027845/index.html

PIIE report on US-China trade decoupling

https://www.piie.com/blogs/realtime-economics/five-years-trade-war-china-continues-its-slow-decoupling-us-exports

Official January-February FDI data (in Chinese)

2023年1-2月全国吸收外资2684.4亿元人民币,同比增长6.1% (mofcom.gov.cn)

Chamber event: Human Capital Conference¾ESG In Human Capital Strategy Development

https://www.europeanchamber.com.cn/en/upcoming-events/23635

Transcript:

RUI: Hello and welcome to China Shortcuts,

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

(MUSIC)

RUI: On 17th March, China’s central bank announced that it would lower the amount that banks are required to keep in reserve for deposits in order to maintain sufficient liquidity in the interbank system.

MARIANN: The decision to cut the reserve requirement ratio for banks by 25 basis points will take effect on 27th March, and is expected to inject about 500 billion yuan worth of liquidity into the market. This in turn will provide lenders with more cash to pay out loans, and open up the possibility for reducing lending rates. According to data from the central bank, since 2018, the reserve requirement ratio has been lowered 14 times already, with the average ratio decreasing from 14.9 per cent to 7.8 per cent by the end of last year.

(MUSIC)

RUI: According to a new report published on 16th March by the Peterson Institute for International Economics, China has continued to decouple from US exports amid tense bilateral relations.

MARIANN: The Washington-based research organisation highlighted that as both sides fear that the other would suddenly weaponise trade flows in the name of security, to mitigate risks, they are attempting to diversify. The report points at 2022 data showing that US exports are falling farther and farther behind foreign peers also selling into the Chinese market. This trend is seen in all key areas: US manufacturing exports have for the most part disappeared, semiconductor sales dwindled and may not return due to new US export control policy, while services exports that were tarnished by the pandemic have not made a comeback. The report stressed that worrying signs have emerged even in the field of agriculture, where US sales to China hit record highs in 2022. According to the Peterson Institute, the uptick in US farm sales to China was largely due to higher prices and concerns over global food security in light of the war in Ukraine. As for the other side, the report says that US imports from China tell a similar story, and concludes that the two economies are becoming less directly interdependent through trade.

(MUSIC)

RUI: According to a note published by the Ministry of Commerce on 17th March, actual use of foreign direct investment increased 6.1 per cent in yuan terms in the first two months of 2023, compared to the same period a year ago.

MARIANN: The ministry highlighted that FDI in high-tech manufacturing picked up sharply, expanding almost 69 per cent year-on-year, while the service industry also saw a substantial increase in FDI inflow. The overall data, however, shows some slowing from January, when actual use of FDI grew 14.5 per cent year-on-year. Furthermore, the ministry’s note points out that investment from Belt and Road countries and the Association of Southeast Asian Nations increased more than 10 per cent in January-February. However, without a clear breakdown of the data, it is difficult to gauge foreign investors’ sentiment, especially since the official FDI data also includes investments from Hong Kong or tax havens like the Cayman Islands, even if the money comes from subsidiaries of Chinese companies – a phenomenon known as round-tripping investment.

(MUSIC)

RUI: Environmental, social and corporate governance or ESG is fast becoming the global standard for investors seeking responsible investment opportunities. This framework requires companies to provide data on several aspects of their operations, such as carbon emissions, employee health and safety, diversity and business ethics. More and more companies are embedding ESG in their corporate strategy to pursue sustainable development. At the same time, younger generations entering the workforce are highly motivated by an employer’s ability to demonstrate the purpose and value of its social impact.

MARIANN: It is therefore important for companies to understand how to integrate ESG into their corporate human resources strategy, and how to develop talent with ESG skills.

RUI: Join this year’s Human Capital Conference on 27th March to hear CEOs and HR leaders from top-tier companies discuss the latest trends and best practices in ESG.

MARIANN: Thanks for listening. Tune in again next week.

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

15th Mar. 2023: new cabinet, visas issuance resumed, production & retail sales, PPI & CPI

This episode covers China’s top leadership new line-up; the resumption of all types of Chinese visas issuance; production and retail sales data in January and February; as well as producer and consumer prices and urban unemployment rate in February. From the Chamber side, join our events on the implications of the Two Sessions on 22nd March in Shanghai and 31st March in Beijing.

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8th Mar. 2023: Lianghui, Feb. economic activity, exports and imports

This episode covers China’s 2023 Lianghui (‘Two Sessions’), with comments from Jens Eskelund, vice president of the European Chamber; manufacturing and services activity in February; and imports and exports in January and February. From the Chamber side, the Tianjin Position Paper will launch and be available to download on 10th March.

Learn how to subscribe here.

Contact:

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

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

Read more:

Full text of the 2023 Government Work Report:

China’s Official February PMI data (in Chinese):

http://www.stats.gov.cn/tjsj/sjjd/202303/t20230301_1919035.html

Official foreign trade data January-February (in Chinese):

http://www.customs.gov.cn/customs/302249/zfxxgk/2799825/302274/302275/9f806879-1.html

European Chamber Tianjin Position Paper launch:

https://www.europeanchamber.com.cn/en/upcoming-events/23194

Transcript:

RUI: Hello and welcome to China Shortcuts,

MARIANN: the European Chamber’s weekly catchup about the Chinese business landscape.

(MUSIC)

RUI: China’s 2023 Lianghui, the annual sessions of the country’s national legislature and top political advisory body, opened on 4th March. During the Two Sessions, major policy priorities are outlined, legislation is ratified and key personnel changes within the government are confirmed.

MARIANN: China’s outgoing premier, Li Keqiang delivered the government’s annual work report on 5th March, reviewing the progress made on the government’s development plans from last year and setting out the key priorities for the coming year. The GDP target for 2023 was set at around 5 per cent, and his presentation emphasised economic recovery and stability for the year ahead. Premier Li reiterated China’s drive for self-reliance in some strategic areas, including science and technology, and pledged that the country would continue its transition to sustainable green development.

RUI: Commenting on the business community’s reception of the newly announced economic targets is Jens Eskelund, vice president of the European Chamber.

Jens Eskelund: The economic targets announced for 2023 confirm to us what we have been able to see on the streets of China over the past few months. We have put COVID behind us, economic activity is picking up and we are confident that for many of us 2023 would be a good year. It’s important now when we have a little bit of tailwind that this opportunity is being used in the right way to make changes that will allow us all to go sustainable in the future. There’s still work to do in terms of opening markets, levelling playing fields, growing domestic consumption and promoting high-quality and sustainable growth. We hope that that also would be a big part of the deliberations at the NPC.

(MUSIC)

RUI: China’s manufacturing and services activity both continued to recover in February, with the pace of expansion exceeding expectations as business operations were getting back on track after a decrease in the number of COVID-infections across the country.

MARIANN: According to the National Bureau of Statistics, factory activity increased at the fastest pace recorded in almost eleven years, with 18 out of the 21 surveyed sectors registering expansion. While the largest expansion was seen among large enterprises, small and medium-sized companies registered the steepest rebounds last month, with their activity recovering to expansion territory after several months of decline. Services activity also continued to strengthen in February, with the rate of expansion the fastest recorded since March 2021.

(MUSIC)

RUI: China’s exports continued to drop in the first two months of 2023 amid weak global demand, and imports also fell sharply from the same period last year, according to data released by the Chinese customs authorities on 7th March.

MARIANN: In the January-February period, the value of exports shrank 6.8 per cent year-on-year in dollar terms, with the rate of decline easing from the previous two months. At the same time, the value of imports fell more than 10 per cent, which exceeded the rate of decline recorded in December. Data from the first two months of the year are usually combined to avoid any distortions caused by the Chinese New Year holiday, which always falls in this period. The official data also revealed that China’s trade with the European Union dropped 10 per cent in January-February, with exports from China to the EU shrinking more than twice as much as imports from the EU.

(MUSIC)

RUI: Tianjin is one of four cities in China with provincial status reporting directly to the central government. In the earlier years of 2000 it posted an annual GDP well above the national average. However, by 2021, the city fell out of the list of the top ten cities in terms of their contribution to GDP, a sign that it is falling short of its potential.

MARIANN: The European Chamber is launching the second edition of its Tianjin Position Paper on 10th March, which puts forward 20 constructive recommendations outlining how Tianjin can get its economic development back on track and further boost business confidence.

RUI: Join our event in Tianjin and download the Tianjin Position Paper from the Chamber’s website to find out more about how European companies operating in Tianjin see the situation on the ground, and what tangible steps they recommend the local government takes for the city to realise its potential.

MARIANN: Thanks for listening. Tune in again next week.

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

1st Mar. 2023: national standards-setting in 2023, EU-China high-level visits, inbound travel requirements

This episode covers the recently issued guidelines for establishing national standards in 2023, with comments from Chen Bolei, national chair of the Chamber’s Standards and Conformity Assessment Working Group; high-level visits from the European Union (EU) and several EU Member States to China in 2023; easing of inbound travel requirements; and consumption and urban employment drops in 2022. Join the event on 9th March on legislative developments in China’s export control regime and companies’ compliance management.

Learn how to subscribe here.

Contact:

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

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

Note:

The segment on new guidelines for national standards setting was brought to you by Ester Cañada Amela, senior business manager at the European Chamber.

Read more:

Guidelines for establishing national standards in 2023 (in Chinese)

http://www.gov.cn/zhengce/zhengceku/2023-02/21/content_5742536.htm

Global Times interview with Ambassador Fu Cong:

https://www.globaltimes.cn/page/202302/1286161.shtml

Notice on updated travel regulations:

https://www.chinaqw.com/qwxs/2023/02-28/352801.shtml

2022 national and economic development datRUI:

http://www.stats.gov.cn/tjsj/zxfb/202302/t20230227_1918980.html

Chamber hybrid event: Recent Legislative Developments in China’s Export Control Regime and Enterprise Cross-border Compliance Management

https://www.europeanchamber.com.cn/en/upcoming-events/23563/_Hybrid_Recent_Legislative_Developments_in_China_s_Export_Control_Regime_and_Enterprise_Cross_border_Compliance_Management_Bilingual_

Transcript:

RUI: Hello and welcome to China Shortcuts,

MARIANN: the European Chamber’s weekly catchup about the Chinese business landscape.

(MUSIC)

RUI: China’s Standardisation Administration recently issued guidelines for establishing national standards in 2023, calling for further opening up of the national standards system.

MARIANN: The document outlined that China should actively move towards adopting international standards and improve the compatibility of national and international standards. It advised that when submitting standardisation proposals at the national level, submissions should be done at the international level too, in order to advance the use of Chinese technology worldwide. The guidelines also included requirements aimed at   accelerating the transformation of scientific and technological innovation achievements into standards. The document highlights the role of standards in China’s attempts to achieve scientific and technological self-reliance and urged for the advancement of standardisation for the creation, use, protection and management of intellectual property.

RUI: When asked about the guidelines, Chen Bolei, national chair of the Chamber’s Standards and Conformity Assessment Working Group expressed hope that they will help improve the consistency between Chinese and international standards, as they require a systematic analysis of international standards as a pre-condition for standardisation projects. He highlighted that the Chamber’s Standards and Conformity Working Group has been advocating for further harmonisation between international and domestic standards for several years.

(MUSIC)

RUI: In a recent, exclusive interview with Global Times, Fu Cong, head of the Chinese mission to the EU said that the EU and China are expected to resume frequent high-level mutual visits in the near future.

MARIANN: The ambassador said that preparations are already underway for European Commission President Ursula von der Leyen and European Council President Charles Michel’s visit to China to take place in the first half of 2023. A number of high-level visits from EU members states are also expected to take place in the year ahead. French President Emmanuel Macron said he would visit China in early April, while Italian Prime Minister Giorgia Meloni accepted an invitation for a visit from Chinese President Xi Jinping when they met at the G20 summit last November.

RUI: Resuming face-to-face exchanges at all levels is an important step towards rebuilding trust that was eroded during China’s almost three-year-long isolation. While China is yet to restart issuing tourist visas and further optimising inbound business travel for foreign nationals, recent announcements by some of China’s diplomatic missions overseas provide some scope for optimism.

MARIANN: According to notices released by the Chinese Embassies in a handful of countries, including Hungary and New Zealand, starting from 1st March, passengers travelling to China will no longer be required to present a PCR test result, but instead can use antigen tests to report their health status to China’s customs authorities. The notice also highlighted that airlines will no longer check passengers’ test results for boarding. However, inbound travellers will still be tested upon arrival in China and, if infected, will be subjected to home quarantine or medical treatment depending on their condition.

(MUSIC)

RUI: On 28th February, the National Bureau of Statistics released a report about national and economic development in 2022. The data showed unusual drops in consumption and urban employment.

MARIANN: As strict COVID-control measures brought grave challenges to business operations for the most part of 2022, China’s cities shed more than 8 million jobs from the previous year. At the same time, the annual growth of per capita disposable income slowed significantly from 2021. As unpredictable pandemic controls created uncertainty about financial security in China’s households, per capita spending also shrank in 2022, with retail sales of consumer goods and catering revenue both declining compared to the previous year, according to the official dataset.

(MUSIC)

RUI: On 30th December 2022, the Ministry of Commerce, the Ministry of Science and Technology, and several other relevant authorities jointly announced a series of amendments to the Catalogue of China’s Prohibited and Restricted Technology Export.

MARIANN: These amendments proposed that certain raw materials or technologies—namely rare earths, integrated circuits, photovoltaic silicon wafers, electronic devices and laser radar—be included in the scope of export prohibition or restriction.

MARIANN: Join us on 9th March to find out what new regulations can be expected as a result, and what adjustments companies will need to make to ensure compliance.

RUI: Thanks for listening. Tune in again next week.

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

Episode 21: EU Tour and the Future of EU-China Relations

EU Tour and the Future of EU-China Relations

After an enforced break of nearly three years, the European Chamber’s European Tour took place in-person from 9th to 13th January, to present the Chamber’s messaging to key European stakeholders, including officials from the European Commission and the European Parliament, and representatives from industry associations and think tanks. The Chamber delegation participated in a total of 48 meetings and events in Brussels, 26 of which were with high-level officials, with smaller delegations holding additional meetings in Paris, Berlin and Copenhagen afterwards.

In this episode, our host Ester Cañada Amela, advocacy manager for the EU SME Centre and senior business manager for European affairs at the European Chamber, sat down with three delegates of the tour – Joerg Wuttke, president of the European Chamber, and vice presidents Jens Eskelund, Massimo Bagnasco and Carlo D’Andrea. They discussed their experiences and some of the key outcomes of the tour, as well as their expectations on the future of EU-China relations.

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22nd Feb. 2023: SME activities in January, phasing out of travel restrictions from China to the EU, FDI in January

This episode covers a survey on the performance of small and medium-sized enterprises (SMEs) in January, with comments from Liam Jia, team lead at the EU SME Centre; the phasing out of restrictions on travellers from China to European Union Member States; and foreign direct investment in January. Join the event on 28th February on the protection of women’s rights in the workplace.

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15th Feb. 2023: social insurance, producer and consumer prices, Guangzhou’s incentives for investment

This episode covers social insurance compliance issues faced by some European companies, with comments from Jeanette Yu, chair of the Chamber’s Human Resources Working Group; the China Pathfinder 2022 report; producer and consumer prices in January; and the Guangzhou government’s economic support measures. Join the event on China’s Transition through COVID and its Economic Recovery on 20th January in Beijing or online.

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8th Feb. 2023: easing of travel from HK, China’s private sector, renewable power, five-year growth projection

This episode covers the easing of travel to the mainland from Hong Kong and Macao; the share of China’s private sector in the country’s top 100 largest listed firms; projected growth of China’s renewable power installations; and China’s five-year growth projection. From the Chamber side, the fifth edition of the Shanghai Position Paper will launch on 14th February.

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1st Feb. 2023: FDI in 2022, increasing consumption, economic activity in January, IMF’s forcasts

This episode covers data on foreign direct investment in China in 2022, the State Council’s emphasis on expanding consumption in 2023, China’s manufacturing and services activity in January, and the International Monetary Fund’s global economic growth forecasts. On the Chamber side, the Business Confidence Survey 2023 opened on 30th January for members to give their input on China’s business sentiment.

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