Hi everyone. I’m Stephanie LI.
Coming up on today’s program
- China’s central bank surprises markets by leaving medium-term rate unchanged, but adds liquidity;
- Chinese premier arrives in Switzerland for Davos forum.
Here’s what you need to know about China in the past 24 hours
The People’s Bank of China on Monday added 995 billion yuan ($138.84 billion) worth of one-year medium-term lending facility (MLF) loans to some financial institutions, but surprised markets by leaving the interest rate unchanged when rolling over maturing medium-term policy loans.
A total of 995 billion yuan was injected into the market via the MLF, which will mature in one year at an interest rate of 2.5 percent, unchanged compared to the previous operation, according to a statement on the central bank’s website on Monday.
With 779 billion yuan worth of MLF loans set to expire this month, the operation resulted a net 216 billion yuan fresh fund injection into the banking system.
The central bank also injected 89 billion yuan through seven-day reverse repos while keeping borrowing cost unchanged at 1.8 percent, it said in an online statement.
The MLF interest rate has not fallen this month, probably because the policymakers are still waiting to see the effect of the policy tools previously issued to boost the economy, noted Golden Credit Rating International. The policy tools included 350 billion yuan pledged supplementary lending added last month and 1 trillion yuan of national debt issued in the fourth quarter of last year.
The Chinese economy has been continuing its recovery, with financial data staying stable last month, while loan granting jumped reasonably last year, indicating the market interest rates are within a fair range, said Zhou Maohua, a macro analyst at China Everbright Bank’s financial market department. The PBOC hiked the net liquidity injection via the MLF to guide financial institutions to go on increasing support to the real economy, he added.
- Chinese Premier Li Qiang arrived in Zurich, Switzerland on Sunday, and is expected to deliver a special address on Tuesday at the opening of the World Economic Forum Annual Meeting in Davos, which will be held from Monday to Friday. Themed “Rebuilding Trust”, the Davos forum will be attended by more than 2,800 delegates from businesses, governments, international organizations and civil society from around the world, including more than 60 heads of state and government, to discuss the world’s most pressing issues and set priorities for the year ahead.
- China’s foreign trade grew 0.2 percent year-on-year to 41.76 trillion yuan ($5.87 trillion) in 2023, with December data gearing up expansion at a rate of 2.8 percent in yuan-denominated terms, customs data showed on Friday. Exports grew 0.6 percent year-on-year to 23.77 trillion yuan last year, while imports edged down 0.3 percent year-on-year to 17.99 trillion yuan. In particular, total imports and exports for December alone came in at 3.81 trillion yuan, hitting a record high on a monthly basis.
- China’s consumer prices dropped for the third consecutive month in December. Data from the National Bureau of Statistics showed on Friday that the country’s CPI dropped by 0.3 percent year-on-year in December after a 0.5 percent drop in November. For the full year of 2023, the CPI rose by 0.2 percent year-on-year. China’s producer price index, which gauges factory-gate prices, dropped by 2.7 percent year-on-year in December, following a 3 percent fall in November, the NBS said. For the entire year, China’s PPI dipped 3 percent.
Greater Bay Area, Greater future
- Guangzhou, the capital city of south China’s Guangdong Province, is expected to see its GPD exceed 3 trillion yuan in 2023, local authorities said Monday. Both the total retail sales of consumer goods and total value of its imports and exports have exceeded 1 trillion yuan for the third consecutive year. Meanwhile, fixed asset investment surpassed 860 billion yuan. The added value of the core industries in the digital economy accounted for 13 percent of the regional GDP in 2023. The city has also accelerated the development of emerging industries, with the production of new energy vehicles exceeding 650,000 units, which represents growth of 1.08 times that of the previous year. The added value of strategic emerging industries represented over 30 percent of the regional GDP. The city also set its 2024 GDP growth target at more less than 5 percent.
- Shenzhen reported a total cross-border e-commerce foreign trade volume of 326.53 billion yuan in 2023, up 74.4 percent year-on-year, the municipal bureau of commerce said on Saturday. Data show that the number of cross-border e-commerce export enterprises in Shenzhen now exceeds 150,000, accounting for almost half of Chinese sellers on platforms including Alibaba.com, AliExpress, Lazada, and eBay, and one-third of Chinese sellers on Amazon come from Shenzhen.
- Hong Kong welcomed 34 million visitors in 2023, with the Chinese mainland remaining its largest source market and accounting for 79 percent of the total figure amid the region’s tourism rebound, according to the Hong Kong Tourism Board on Saturday. Some 27 million travelers from the Chinese mainland made trips to Hong Kong last year, which accounted for 79 percent of the region’s total visitors.
Next on industry and company news
- China has maintained its top position in the global shipbuilding market in 2023, with strong growth in both output and new orders. The country’s shipbuilding output climbed 11.8 percent year on year to 42.32 million deadweight tons (dwt) in 2023, accounting for 50.2 percent of the world’s total, according to data from the Ministry of Industry and Information Technology on Monday. New orders surged 56.4 percent year on year to 71.2 million dwt, taking up 66.6 percent of the world’s total during the period.
- A new air cargo route was launched on Saturday morning linking Ezhou Huahu Airport in central China’s Hubei Province with Lahore in Pakistan, said SF Airlines, China’s largest air cargo carrier in fleet size. The Ezhou-Lahore cargo route with three weekly round-trip flights is the first international air cargo route launched by SF Airlines this year, which will bring a total of around 300 tons of air express capacity per week, according to the airline.
- Tencent Holdings’ Honor of Kings, the most popular mobile game in China, said on Saturday that it will be available for livestreaming on China’s biggest livestreaming platform Douyin from Jan. 21, as its monthly active users have fallen to around 150 million from a peak of 200 million.
- Hepalink Pharmaceutical Group’s shares fell after the world’s largest supplier of heparin raw materials said its subsidiary Techdow Pharma Italy recently lost EUR11.7 million to a telecom fraud. The incident was an isolated event, with Techdow Pharma operating as normal, its parent firm announced yesterday, adding that the incident has been reported to the police.
- UK pharmaceutical giant AstraZeneca plans to invest 190 million yuan to build a new production line at its Taizhou base in China to make a new diabetes drug approved for marketing in the country last year.
- China’s internet giants Alibaba, Tencent and Baidu, or BAT, have slashed external investments by nearly 40 percent to 102 in 2023, according to data compiled by Chinese consultancy ITJuzi. Tencent saw the largest reduction in deals, striking 39 investment contracts with 37 companies last year, a sharp decline from the 95 and 299 deals it made in 2022 and 2021. Alibaba and Baidu each participated in 39 and 24 investment deals last year, down from 91 and 52 in 2021, respectively.
Switching gears to financial news
- The corporate and enterprise bond market of the Beijing Stock Exchange (BSE) started trading on Monday, marking a key step in the bourse’s high-quality development. Three enterprise bonds worth 2.48 billion yuan in total have been issued on the first day of trading, according to the BSE.
- Cash dividends of Chinese listed firms hit a record high of 2.13 trillion yuan in 2023, said the country’s securities watchdog. So far, a total of 3,361 firms listed on the Shanghai and Shenzhen bourses have disclosed their 2023 plans for dividend payouts, accounting for 65.9 percent of the total listed firms, according to the China Securities Regulatory Commission (CSRC).
Wrapping up with a quick look at the stock market
- Chinese stocks ended mixed on Monday with the benchmark Shanghai Composite inching up 0.2 percent, while the Shenzhen Component slid 0.4 percent. Hong Kong’s Hang Seng index fell 0.2 percent and the TECH index dropped 1.9 percent.
Biz Word of the Day
- The corporate bond market is a section of the bond market where investors buy and sell debt securities issued by corporations. Corporate bonds offer higher yields than government bonds, but also carry more risk of default. The corporate bond market is the second largest segment of the global bond market, after government bonds.
Executive Editor: Sonia YU
Editor: LI Yanxia
Host: Stephanie LI
Writer: Stephanie LI
Sound Editor: Stephanie LI
Graphic Designer: ZHENG Wenjing, LIAO Yuanni
Produced by 21st Century Business Herald Dept. of Overseas News.
Presented by SFC
编委: 于晓娜
策划、编辑：李艳霞
播音：李莹亮
撰稿：李莹亮
音频制作：李莹亮
设计：郑文静、廖苑妮
21世纪经济报道海外部 制作
南方财经全媒体集团 出品