Hi everyone. I'm Stephanie LI.
Coming up on today's program
· China's industrial profits continue to grow in October;
· Central bank issues 25 measures to support private enterprises' financing.
Here's what you need to know about China in the past 24 hours
Profits at China's industrial firms extended gains for a third consecutive month in October, pointing to further signs of a stabilizing economy.
Data from the National Bureau of Statistics showed on Monday that industrial profits increased 2.7 percent year-on-year in October after a notable 11.9 percent rise in September.
Among the 41 major industrial sectors surveyed, 30 saw improvements such as accelerated growth, narrowed profit declines, or year-on-year growth in their profits during the first ten months.
During the January-October period, profits recorded by industrial firms that offer a supply of electricity, heat, gas and water grew by 40 percent year-on-year, up from the 38.7 percent rise in the first nine months.
Meanwhile, profits recorded by mining firms and manufacturing companies shrank by 19.7 percent and 8.5 percent, respectively, in the first ten months, compared to the 19.9 percent decline and 10.1 percent contraction in the first nine months.
Notably, profits of raw materials manufacturing firms surged 22.9 percent in October amid continued recovery in downstream demand.
Profits of consumer goods manufacturing enterprises increased by 2.2 percent in October with policies on expanding demand and boosting consumption taking effect gradually, witnessing profits rise for a third consecutive month.
Yu Weining, a statistician at the NBS, attributed the continued recovery in industrial profits to the steady rebound in industrial production and improved corporate profitability with a series of macro policies taking effect gradually.
For the January-October period, industrial firms' profits fell 7.8 percent year-on-year to 6.12 trillion yuan, narrowing from the 9 percent drop in the first nine months, the bureau said.
· China’s central bank and other seven central government departments on Monday issued a notice on strengthening financial support for the development and growth of the private economy. The 25-measure notice emphasized the need to diversify financing channels for private firms, provide improved financial services, as well as reasonably meet the financial needs of privately-owned real estate developers. Banks and other financial institutions are encouraged to meet the financing needs of private enterprises that encounter temporary difficulties but have marketable products, promising projects, and competitive technology in accordance with market-oriented principles, and should not “blindly halt, withdraw or cut off” their loans. The notice also emphasizes the need to encourage and guide institutional investors to actively and scientifically allocate private firms bond issues to collect more funds. Private enterprises will be supported through securities financing, mergers and acquisitions and reorganization, in order to support investment needs for private enterprises, while expand the scale of equity financing for high-quality private enterprises. In terms of industrial structure improvement, the notice emphasizes the need to intensify support for key technological innovations, green and low-carbon development, and the reconstruction of some industrial bases.
· China has appointed veteran financier Zhu Hexin as the State Administration of Foreign Exchange’s (SAFE) Communist Party group chief, succeeding Pan Gongsheng, the agency announced Friday. Zhu has also been named as a member of the party committee at the People’s Bank of China (PBOC), SAFE said in a statement.
Moving on to regional highlights
· A railway linking the cities of Lijiang and Shangri-la, two well-known tourist destinations in Southwest China's Yunnan Province, opened to traffic on Sunday. As an important part of the Yunnan-Xizang Railway, the new line will slash travel times and drive economic development along the route. With a designed speed of 140 kilometers per hour, the line cuts the travel time between the two cities to 1 hour and 18 minutes from about 4 hours by bus. The 139-km railway also connects Shangri-la, in the Diqing Tibetan Autonomous Prefecture, to the provincial capital Kunming. It will carry people from Kunming to Shangri-La in 4 hours and 30 minutes.
Greater Bay Area, Greater future
· Asia's first-ever Saudi Arabia exchange-traded fund (ETF) which also has the largest assets under management among such ETFs in the world will list in Hong Kong this Wednesday. Financial secretary Paul Chan said on Sunday that investors will be able to trade the constituent stocks of the Saudi stock market directly in the Hong Kong market through the ETF in Hong Kong dollar or renminbi, including oil company Saudi Aramco. Managed by CSOP Asset Management, the ETF tracks the performance of the FTSE Saudi Arabia Index whose constituents' total market cap reached US$276.8 billion as of the end of October.
· Guangdong province will issue 100 million yuan worth of cultural and tourism consumption vouchers to boost consumption confidence in 2023. According to the Measures to Further Boost and Expand Consumption in Guangdong province, the economic powerhouse will also provide more than 1 million discounted tickets to major scenic areas, distribute 1 million discounted air tickets and 10,000 discounted hotel rooms, organize 1,000 cultural performances in major scenic spots to attract tourists and boost consumption. Relevant departments will also organize more than 100 major cultural and tourism festivals and events with typical Lingnan (South China) characteristics to attract tourists, said the measures, which were recently published by the provincial government.
Next on industry and company news
· Huawei Technologies said on Sunday that it will team up with automaker Changan Automobile to build a new joint company for the research and development, production, sales and service of intelligent automotive systems and component solutions. Changan Auto will take up to 40 percent share of the JV, which "will work with partners to promote innovation and leadership in smart car technology and promote the prosperity and development of the automotive industry," Huawei said in a press release. The equity ratio and amount of capital contributed will be negotiated by the two parties, Chongqing Changan Automobile said in a filing with the Shenzhen Stock Exchange on Sunday. Shares of Changan Auto jumped by their daily trading limit today.
· Alibaba Group Holding co-founder Jack Ma has started a new enterprise that sells pre-packaged food, corporate data shows, in a sign that the billionaire is branching out into the agricultural sector. "Hangzhou Ma's Kitchen Food" was incorporated on Wednesday in Hangzhou with registered capital of 10 million yuan. It deals in pre-packaged food sales, imports and exports, wholesale of agricultural products, wholesale of daily necessities, hotel management and technical services, according to the National Enterprise Credit Information Publicity System.
· ByteDance plans to wind down its Nuverse gaming brand and retreat from mainstream video games, media reported today. ByteDance said it had decided to restructure its gaming business after a review, without giving further details. Sources said the firm will tell employees on Monday to stop working on unreleased games by December, and that it will look for ways to divest from titles already launched.
· China will roll out a one-year visa-free policy to citizens from six countries - France, Germany, Italy, the Netherlands, Spain and Malaysia - starting on December 1, 2023, Chinese Foreign Ministry spokesperson Mao Ning said on Friday. Residents from the six countries holding ordinary passports can enter China without a visa and stay for at most 15 days for business, sightseeing, visiting families and friends, and transit. Inbound air ticket search on online booking site Tongcheng Travel rose 12 percent on Friday from the day prior, with those from Malaysia recorded a three-fold surge and those from the other five European countries more than doubled. Trip.Com's China Travel Guide 2023, a page for foreign tourists intending to visit China, recorded an over 30 percent jump in visits from the previous day.
· China's economic management agency will begin replenishing the country's pork reserves for the third time this year to increase prices, which tumbled last month. The National Development and Reform Commission will join hands with related department agencies to start the latest round of pork collection and storage to boost prices, it announced on Nov. 24. Pork prices dropped over 30 percent last month from a year earlier.
· Centrally administered state-owned enterprises (SOEs) have been asked to prevent and resolve risks in key areas, uphold financial discipline, and display leadership in repaying overdue debts, said China's State-owned Assets Supervision and Administration Commission of the State Council (SASAC) on Saturday. The SASAC held a special meeting attended by top executives from the central SOEs. Central SOEs should lead in repaying debts owed to others, make sure timely wage payment to rural migrant workers, and ensure their winter heating and production safety, the commission said.
Switching gears to financial news
· Sales of panda bonds, yuan-denominated notes sold by foreign issuers in the Chinese mainland, have climbed to a record this year as the low interest rates in China have propelled the Chinese yuan to a funding currency. Seventy-three panda bonds worth more than 126.4 billion yuan had been sold in China as of Oct. 12, up 62 percent from a year earlier, data from Wind Information showed. By comparison, the 52 bonds issued in the whole of last year raised 85.1 billion yuan.
· The monthly turnover of the Shanghai Data Exchange has exceeded 100 million yuan this year and annual turnover is likely to top 1 billion yuan, said Wei Zhilin, the exchange's deputy general manager. China's data trading industry accounted for over 13 percent of the world's total and nearly 67 percent of Asia's total, according to a report released by the SDE at the 2023 Global Data Ecosystem Conference yesterday.
Wrapping up with a quick look at the stock market
· Chinese stocks fell on Monday with the benchmark Shanghai Composite down 0.3 percent and the Shenzhen Component losing 0.6 percent. Hong Kong’s stocks closed mixed as the Hang Seng index edged 0.2 percent lower, while the TECH index added 0.2 percent.
Biz Word of the Day
· Panda bonds, which are Chinese yuan-denominated bonds sold by a non-Chinese issuer on the mainland, are an onshore product, offering international borrowers a way to tap domestic renminbi investors.
