Everything You Need to Know About China's Economy on Wednesday (June 18)
Your Daily & Trustworthy Updates on the Chinese Economy
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HOWDY! This is TIAN in Beijing, welcoming you to your Wednesday edition of Everything You Need to Know About China’s Economy.
DRIVING THE DAY, CHINA TO SET UP INTERNATIONAL OPERATION CENTER FOR DIGITAL RMB
China's central bank governor Pan Gongsheng said on Wednesday that the country will establish an international operation center for the digital RMB.
The center aims to promote the internationalization of the digital currency and the development of financial market services while supporting innovation in digital finance, Pan said at the Lujiazui Forum held in east China's Shanghai.
The initiative is part of a package of eight new measures announced by Pan that will be implemented in Shanghai, China's financial hub.
Pan said a transaction reporting repository for the interbank market will also be established to collect transaction data and analyze activity across sub-markets such as bonds, currencies and derivatives, supporting macroeconomic policymaking and financial market supervision.
A personal credit reporting agency will be established to provide financial institutions with diversified and tailored credit products, further improving the country's social credit system.
A pilot program for offshore trade finance reform will be launched in the Lin-gang Special Area of China (Shanghai) Pilot Free Trade Zone to support the city's offshore trade development through innovative business rules, Pan said.
Other measures include the development of free trade offshore bonds to expand financing channels for companies, and the optimization of the free trade account system to facilitate cross-border trade and investment for enterprises.
In addition, the package includes the rollout of innovative structural monetary policy tools in Shanghai, and joint efforts with the country's securities regulator to advance RMB foreign exchange futures trading, according to Pan.
MEANWHILE, CHINA TO ALLOW QUALIFIED FOREIGN INVESTORS TO TRADE ON-EXCHANGE ETF OPTIONS
China will allow qualified foreign investors to participate in on-exchange exchange-traded fund (ETF) options trading from Oct. 9 this year for hedging purposes only, the country's top securities regulator said on Wednesday.
The move aims to expand the range of investable assets for qualified foreign investors, and to enable foreign institutional investors -- particularly those focused on portfolio allocation -- to access risk-management tools that align with their investment needs, according to the China Securities Regulatory Commission (CSRC).
It is expected to foster more stable investment by foreign institutional investors, and to support their long-term participation in China's A-share market, the regulator said.
Since the beginning of this year, the CSRC has gradually eased restrictions on qualified foreign investors' access to domestic commodity futures, commodity options and ETF options.
Going forward, the regulator said it will roll out further reform measures to improve the qualified foreign investor scheme, and do more to promote the high-standard institutional opening-up of the country's capital market.
ALSO ON WEDNESDAY, CHINA REPORTS RAPID GROWTH IN GREEN ELECTRICITY TRADING
China's green electricity trading volume surpassed 220 billion kilowatt-hours in the first five months of this year, marking a year-on-year increase of nearly 50 percent, according to industry data released at a forum on Wednesday.
According to statistics from the China Electricity Council, with China's new energy capacity and output steadily rising, new-sources power supply is now playing an increasingly active and competitive role in the electricity market.
In 2024, the nationwide market-based trading volume of new energy electricity surpassed 1 trillion kilowatt-hours, accounting for 55 percent of the total new energy production, according to the council.
China's market-oriented electricity trading volume surged from 1.1 trillion kilowatt-hours in 2016 to 6.2 trillion in 2024, with its share in total electricity consumption rising from 17 percent to 63 percent, marking a significant shift in electricity resource allocation toward a market-driven system.
IN TODAY'S FINANCIAL MARKET,
Chinese stocks closed higher on Wednesday, with the benchmark Shanghai Composite Index up 0.04 percent to 3,388.81 points.
The Shenzhen Component Index closed 0.24 percent higher at 10,175.59 points.
The combined turnover of these two indices stood at over 1.19 trillion yuan (about 165.8 billion U.S. dollars), down from 1.21 trillion yuan on the previous trading day.
Shares in the computing power hardware and banking sectors led the gains, while those related to rare earth permanent magnet and the "Guzi economy" were among the biggest losers.
The ChiNext Index, tracking China's Nasdaq-style board of growth enterprises, gained 0.23 percent to close at 2,054.73 points on Wednesday.
Hong Kong's Hang Seng Index closes 1.12 pct lower
Hong Kong's stock market ended lower Wednesday with the benchmark Hang Seng Index down 269.61 points, or 1.12 percent, to close at 23,710.69 points.
The Hang Seng China Enterprises Index slid 100.48 points, or 1.16 percent, to end at 8,594.19 points, while the Hang Seng Tech Index slumped 77.44 points, or 1.46 percent, to 5,214.41 points.
Chinese yuan weakens to 7.1761 against USD Wednesday
The central parity rate of the Chinese currency renminbi, or the yuan, weakened 15 pips to 7.1761 against the U.S. dollar Wednesday, 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.
China's benchmark interbank gold prices lower Wednesday
According to the China Foreign Exchange Trade System, the benchmark price for gold that is 99.95 percent pure or above stood at 783.26 yuan per gram, down 5.22 yuan from the previous trading day.
The price for gold that is 99.99 percent pure or above was down 5.01 yuan from the previous trading day to 783.19 yuan.
AT THE END OF TODAY'S SHARING, LET'S TAKE A LOOK AT YOUR DAILY FUTURES:
No.1 soybean futures closed higher on Wednesday in daytime trading at the Dalian Commodity Exchange (DCE).
The most active No.1 soybean contract for September 2025 delivery gained 22 yuan (about 3.07 U.S. dollars) to close at 4,258 yuan per tonne.
On Wednesday, the total trading volume of six listed No.1 soybean futures contracts on the exchange was 173,087 lots, with a turnover of about 7.34 billion yuan.
Iron ore futures closed lower on Wednesday in daytime trading at the Dalian Commodity Exchange.
The most active iron ore contract for September 2025 delivery dipped 3.5 yuan (about 49 U.S. cents) to close at 695.5 yuan per tonne.
On Wednesday, the total trading volume of 12 listed iron ore futures contracts on the exchange was 578,156 lots, with a turnover of about 40.09 billion yuan.
Cotton futures closed higher Wednesday in daytime trading on the Zhengzhou Commodity Exchange (ZCE).
The most active cotton contract for September 2025 delivery gained 40 yuan (about 5.57 U.S. dollars) to close at 13,540 yuan per tonne.
On Wednesday, the total trading volume for six listed cotton futures contracts on the ZCE was 169,609 lots with a turnover of 11.48 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.