Everything You Need to Know About China's Economy on Tuesday (May 27)
Your Daily & Trustworthy Updates on the Chinese Economy
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HOWDY. Tian here in Beijing, welcoming you to your Tuesday edition of Everything You Need to Know About China's Economy.
DRIVING THE DAY, CHINA TO FURTHER CONSOLIDATE ROLE OF ECONOMIC, TECHNOLOGICAL DEVELOPMENT ZONES IN ATTRACTING FOREIGN INVESTMENT.
The role of development zones as a mainstay in stabilizing foreign trade and investment is becoming increasingly prominent, said Ling Ji, vice minister of Ministry of Commerce.
By the end of 2024, the number of such zones reached 232 across the country, generating a combined GDP of 16.9 trillion yuan (about 2.35 trillion U.S. dollars), according to the ministry.
During the same period, foreign trade within these zones totaled 10.7 trillion yuan, accounting for 24.5 percent of China's overall trade. Foreign direct investment (FDI) in the zones in actual use reached 27.2 billion U.S. dollars, representing 23.4 percent of the country's total FDI.
The zones have made significant contributions to building a new open economic system, promoting coordinated regional development and driving high-quality industrial growth, Ling said.
Last week, the ministry released a work plan aimed at deepening reform and innovation in the development zones, with a focus on achieving high-quality growth through high-standard opening-up.
To enhance the quality of foreign investment utilization, the work plan calls for prioritizing foreign-funded projects in sectors such as integrated circuits, biomedicine, and advanced equipment manufacturing within the zones for inclusion in the list of major foreign investment projects.
It also encourages the development zones to deepen engagement with leading global investors and financial institutions by leveraging trade promotion platforms while vowing support for the zones in organizing delegations to go overseas to attract foreign capital.
MEANWHILE, CHINESE INVESTMENT IN EU SURGED 47% YEAR-ON-YEAR TO 10 BILLION EUROS ($11.4 BILLION) IN 2024, MARKING ITS FIRST SIGNIFICANT REBOUND SINCE 2016.
The growth was driven by record-high greenfield investment and a revival of mergers and acquisitions, according to a joint report released recently by the New York-based Rhodium Group and German think tank Mercator Institute for China Studies.
Greenfield investment is a type of foreign direct investment in which a parent company starts a business operation in a foreign country from scratch.
China's greenfield investment in Europe increased for the third year in a row and reached an all-time high of 5.9 billion euros, while merger and acquisition investment more than doubled in 2024 to 4.1 billion euro, according to the report.
Chinese battery giant Contemporary Amperex Technology, or CATL, emerged as the leading investor in 2024, accounting for 16 percent of total investment, mostly from the ongoing construction of its battery plant in Hungary, the report said.
As of the end of 2024, EU enterprises had cumulatively invested more than $150 billion in China, data from the Ministry of Commerce showed.
IN TODAY'S FINANCIAL MARKET,
Chinese stocks closed lower on Tuesday, with the benchmark Shanghai Composite Index down 0.18 percent to 3,340.69 points.
The Shenzhen Component Index closed 0.61 percent lower at 10,029.11 points.
The combined turnover of these two indices stood at about 998.9 billion yuan (about 139 billion U.S. dollars), down from 1.01 trillion yuan on the previous trading day.
Shares related to pesticides and beverages led the gains, while those in the sectors of non-ferrous metals, humanoid robots and consumer electronics were among the biggest losers.
The ChiNext Index, tracking China's Nasdaq-style board of growth enterprises, lost 0.68 percent to close at 1,991.64 points.
Hong Kong stocks close 0.43 pct higher
Hong Kong's stock market ended higher Tuesday with the benchmark Hang Seng Index up 0.43 percent to close 23,381.99 points.
The Hang Seng China Enterprises Index rose 0.38 percent to end at 8,469.97 points, the Hang Seng Tech Index rose 0.48 percent to end at 5,182.6 points.
China's benchmark interbank gold prices lower Tuesday
According to the China Foreign Exchange Trade System, the benchmark price for gold that is 99.95 percent pure or above stood at 767.50 yuan per gram, 2.30 yuan lower from the previous trading day.
The price for gold that is 99.99 percent pure or aboves stood at 773.94 yuan per gram, down 2.46 yuan per gram.
Chinese yuan weakens to 7.1876 against USD Tuesday
The central parity rate of the Chinese currency renminbi, or the yuan, weakened 43 pips to 7.1876 against the U.S. dollar Tuesday, according to the China Foreign Exchange Trade System.
In China's spot foreign exchange market, the yuan is allowed to rise or fall by 2 percent from the central parity rate each trading day.
AT THE END OF TODAY'S SHARING, LET'S TAKE A LOOK AT YOUR DAILY FUTURES:
Cotton futures closed lower Tuesday in daytime trading on the Zhengzhou Commodity Exchange (ZCE).
The most active cotton contract for September 2025 delivery lost 50 yuan (about 6.96 U.S. dollars) to close at 13,330 yuan per tonne.
On Tuesday, the total trading volume for six listed cotton futures contracts on the ZCE was 276,971 lots with a turnover of 18.4 billion yuan.
Sugar futures closed higher Tuesday in daytime trading on the Zhengzhou Commodity Exchange (ZCE).
The most active sugar contract for September 2025 delivery gained 16 yuan (2.23 U.S. dollars) to close at 5,841 yuan per tonne.
On Tuesday, the total trading volume for six listed sugar futures contracts on the ZCE was 190,141 lots with a turnover of 11.08 billion yuan.
Iron ore futures closed lower on Tuesday in daytime trading at the Dalian Commodity Exchange (DCE).
The most active iron ore contract for September 2025 delivery dipped 12.5 yuan (about 1.74 U.S. dollars) to close at 698.5 yuan per tonne.
On Tuesday, the total trading volume of 12 listed iron ore futures contracts on the exchange was 577,430 lots, with a turnover of about 40.27 billion yuan.
No.1 soybean futures closed lower on Tuesday in daytime trading at the Dalian Commodity Exchange.
The most active No.1 soybean contract for July 2025 delivery dipped 15 yuan (about 2.09 U.S. dollars) to close at 4,144 yuan per tonne.
On Tuesday, the total trading volume of six listed No.1 soybean futures contracts on the exchange was 207,213 lots, with a turnover of about 8.55 billion yuan.
About the Newsletter:
Ran by TIAN Dongdong, this newsletter features daily and trustworthy content on China's economy. Having worked in Brussels, London, Cairo, and Tripoli for Chinese media as correspondent for several years, TIAN is now based in Beijing.