Everything You Need to Know About China's Economy on Wednesday (April 10)
Your Daily & Trustworthy Updates on the Chinese Economy
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Good Wednesday! This is TIAN in Beijing.
Welcome to monitor the pulse of China’s economy together with me.
DRIVING THE DAY, China will remove foreign ownership restrictions on some value-added telecom services provided within domestic pilot areas, according to a circular released by the Ministry of Industry and Information Technology.
The value-added telecom services will include internet data centers, content delivery networks and internet service providers, online data processing and transaction processing, information publishing platforms and information delivery services excluding services related to internet news information, online publishing, internet radio and television, internet culture management, and information protection and processing services.
The pilot areas are Beijing's national comprehensive demonstration zone for expanding opening-up in the service sector, Lingang new area of the China (Shanghai) Pilot Free Trade Zone and the pioneer area for socialist modernization in Shanghai, Hainan Free Trade Port, and Shenzhen pilot demonstration area of socialism with Chinese characteristics, according to the circular.
The move is China's latest effort to expand opening-up, align itself with high-standard international economic and trade rules, stimulate market competition and vitality of business entities, serve the building of a new development pattern, and share the development dividends of China's digital economy with the world.
MEANWHILE, China’s passenger vehicle exports jumped 39% year-on-year in March to 406,000 units, setting a monthly record, according to China Passenger Car Association (CPCA) .
Of the exported vehicles, around 120,000 were new-energy vehicles (NEVs), data published by the CPCA showed. NEV exports in March increased 70.9% compared with a year ago, it said.
The month’s top three exporters were BYD Co. Ltd. (002594.SZ -0.11%), Tesla Inc.’s China unit and SAIC Motor Corp. Ltd. (600104.SH -0.13%), according to the CPCA.
ALSO ON WEDNESDAY, Fitch Ratings has revised the Outlook on China's Long-Term Foreign-Currency Issuer Default Rating (IDR) to Negative from Stable, and affirmed the IDR at 'A+'.
In response to media queries after the agency’s decision, China's Ministry of Finance said Wednesday that it is regrettable.
Fitch's rating system has failed to effectively reflect the positive effects of China's fiscal policies on boosting economic growth and stabilizing the macro leverage ratio in a forward-looking manner, the ministry said in a statement.
The ministry said the plan to keep China's deficit-to-GDP ratio at 3 percent in 2024 is generally "moderate and reasonable," which will help stabilize economic growth, control the government debt level, and reserve policy space for potential future risks and challenges.
"In the long run, maintaining a moderate deficit and making good use of the valuable debt funds is conducive to expanding domestic demand, supporting economic growth, and ultimately helping maintain sound sovereign credit," it said.
IN TODAY'S FINANCIAL MARKET,
Shanghai Composite Index Fell 0.7% on Wednesday
China’s benchmark Shanghai Composite Index (000001.SH) lost 0.7% on Wednesday, while the Shenzhen Component Index (399001.SZ) fell 1.6%.
Shanghai’s tech-heavy STAR 50 Index (000688.SH) lost 1.85% for the day, while Shenzhen’s similar ChiNext Index (399006.SZ) fell 2.06%.
China's benchmark interbank gold prices higher Wednesday
According to the China Foreign Exchange Trade System, the benchmark price for gold that is 99.95 percent pure or above stood at 544.50 yuan (about 76.73 U.S. dollars) per gram, down 9.20 yuan from the previous trading day, while the price for gold that is 99.99 percent pure or above gained 1.39 yuan from the previous trading day to 555.50 yuan.
China's central bank adds liquidity via reverse repos
China's central bank conducted 2 billion yuan (about 281.85 million U.S. dollars) of seven-day reverse repos at an interest rate of 1.8 percent Wednesday.
The move aims to keep liquidity in the banking system reasonable and ample, the People's Bank of China said in a statement.
Chinese yuan weakens to 7.0959 against USD Wednesday
The central parity rate of the Chinese currency renminbi, or the yuan, weakened 3 pips to 7.0959 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.
Hong Kong Hang Seng Index closes 1.85 pct higher
Hong Kong's stock market ended higher on Wednesday with the benchmark Hang Seng Index up 1.85 percent to close at 17,139.17 points.
The Hang Seng China Enterprises Index rose 2.06 percent to end at 6,016.83 points, and the Hang Seng Tech Index rose 2.12 percent to close at 3,552.01 points.
BEFORE ENDING TODAY'S SHARING, LET'S TAKE A LOOK AT YOUR DAILY FUTURES,
Cotton futures closed higher Wednesday in daytime trading on the Zhengzhou Commodity Exchange (ZCE).
The most active cotton contract for September 2024 delivery gained 85 yuan (about 11.98 U.S. dollars) to close at 16,485 yuan per tonne.
On Wednesday, the total trading volume for six listed cotton futures contracts on the ZCE was 373,628 lots with a turnover of 30.58 billion yuan.
Sugar futures closed higher Wednesday in daytime trading on the Zhengzhou Commodity Exchange.
The most active sugar contract for September 2024 delivery gained 6 yuan (84.56 U.S. cents) to close at 6,503 yuan per tonne.
On Wednesday, the total trading volume for six listed sugar futures contracts on the ZCE was 482,919 lots with a turnover of 31.45 billion yuan.
Iron ore futures closed higher on Wednesday in daytime trading at the Dalian Commodity Exchange.
The most active iron ore contract for September 2024 delivery gained 11.5 yuan (about 1.62 U.S. dollars) to close at 813.5 yuan per tonne.
On Wednesday, the total trading volume of 11 listed iron ore futures contracts on the exchange was 703,732 lots, with a turnover of about 57.6 billion yuan.
No.1 soybean futures closed lower on Wednesday in daytime trading at the Dalian Commodity Exchange.
The most active No.1 soybean contract for May 2024 delivery dipped 21 yuan (about 2.96 U.S. dollars) to close at 4,783 yuan per tonne.
On Wednesday, the total trading volume of six listed No.1 soybean futures contracts on the exchange was 80,956 lots, with a turnover of about 3.88 billion yuan.
About the Newsletter:
Ran by TIAN Dongdong, this newsletter features daily, trustworthy content on China's economy and regularly updates the insights of Chinese youth on Sino-US relations. Having worked in Brussels, London, Cairo, and Tripoli for Chinese media as correspondent for several years, TIAN is now based in Beijing.