Everything You Need to Know About China's Economy on Friday (Dec. 6)
Your Daily & Trustworthy Updates on the Chinese Economy
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HOWDY. It’s Friday! This is TIAN in Beijing.
Welcome to monitor the pulse of China’s economy together with me.
DRIVING THE DAY, products manufactured by foreign-funded companies in China will be eligible for the same price preference for domestic goods in government procurement bids, China's Ministry of Finance (MOF) has said.
A recent MOF notice seeking public comment unveiled a 20-percent price preference in government procurement for goods produced domestically.
The policy will treat domestic and foreign-funded enterprises equally, the ministry said, noting that any company, regardless of its ownership, can benefit from the policy as long as its products meet the criteria.
According to the MOF notice, products eligible for the latest favorable policy must be manufactured within China's customs territory throughout its production stages from raw materials to finished goods.
The notice also specified the required ratios for domestic components of a product, and stipulated that for certain items, the production of key parts and essential processes must take place in China.
These domestic product standards will be established gradually and will primarily apply to goods in the industrial sector, excluding agricultural, forestry, livestock and fishery products, as well as mineral resources.
The policy was drafted after drawing on international experience and considering conditions in China, the ministry said.
The ministry stated that the policy is designed to foster a unified, open and competitive government procurement market, as well as a market-oriented, law-based and internationalized business environment.
The new measures are open for public opinion till Jan. 4, 2025, said the notice.
ALSO ON FRIDAY, the number of 5G base stations in China now exceeds 4.1 million, data from the Ministry of Industry and Information Technology showed.
Currently, 5G technologies have been applied in 80 major sectors of the national economy, and the 5G network is covering more rural areas, according to the ministry.
Action will be taken to promote large-scale application of 5G technologies and to boost technological research and development as well as standard formulation, the ministry said.
Efforts will also be made to foster collaboration among telecom providers, application developers, and the companies across the industrial chain to build a robust 5G ecosystem.
In line with these efforts, an action plan issued last month sets a target to achieve a 5G user penetration rate of more than 85 percent by the end of 2027.
MEANWHILE, China unveils record-breaking 504-qubit superconducting quantum computer.
China has set a new domestic record this week with the launch of the "Tianyan-504" superconducting quantum computer equipped with the 504-qubit "Xiaohong" chip.
The quantum computer was co-developed by the China Telecom Quantum Group (CTQG), the Center for Excellence in Quantum Information and Quantum Physics under the Chinese Academy of Sciences and QuantumCTek Co., Ltd., a leading quantum company based in east China's Anhui Province.
The "Tianyan-504" superconducting quantum computer, equipped with the 504-qubit "Xiaohong" chip, surpasses the 500-qubit chip threshold and also promises to match the performance of international quantum computing platforms like IBM in terms of qubit lifetime, readout fidelity and other key aspects, according to the CTQG.
This quantum computer will be integrated into the "Tianyan" quantum computing cloud platform, making it accessible to users worldwide.
"Tianyan," China Telecom's quantum computing cloud platform launched in November 2023, has received over 12 million visits from more than 50 countries, providing convenient and straightforward quantum computing services to global users.
IN TODAY'S FINANCIAL MARKET,
Chinese stocks closed higher on Friday, with the benchmark Shanghai Composite Index up 1.05 percent to 3,404.08 points.
The Shenzhen Component Index closed 1.47 percent higher at 10,791.34 points.
The combined turnover covered by the two indices stood at 1.79 trillion yuan (about 248.98 billion U.S. dollars), up from 1.5 trillion yuan recorded on the previous trading day.
Shares in the sectors of insurance, media and entertainment led the gains, while those related to non-metallic materials and electrical machinery saw significant declines.
The ChiNext Index, tracking China's Nasdaq-style board of growth enterprises, gained 2.05 percent to close at 2,267.06 points.
China's benchmark interbank gold prices mixed Friday
According to the China Foreign Exchange Trade System, the benchmark price for gold that is 99.95 percent pure or above stood at 615.65 yuan (about 85.69 U.S. dollars) per gram, 0.55 yuan lower than the previous trading day.
The price for gold that is 99.99 percent pure or above went up 0.14 yuan from the previous trading day to 616 yuan.
Chinese yuan strengthens to 7.1848 against USD Friday
The central parity rate of the Chinese currency renminbi, or the yuan, strengthened 31 pips to 7.1848 against the U.S. dollar Friday, 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 central bank conducts reverse repos Friday
China's central bank conducted 190.9 billion yuan (about 26.57 billion U.S. dollars) of seven-day reverse repos at an interest rate of 1.5 percent Friday.
The move aims to keep liquidity in the banking system adequate at a reasonable level in the banking system, the central bank said.
Hong Kong's Hang Seng Index closes 1.56 pct higher
Hong Kong stock market ended higher on Friday with the benchmark Hang Seng Index up 1.56 percent to close at 19,865.85 points.
The Hang Seng China Enterprises Index climbed 1.75 percent to end at 7,136.55 points, and the Hang Seng Tech Index gained 2.16 percent to close at 4,464.65 points.
AT THE END OF TODAY'S SHARING, LET'S TAKE A LOOK AT YOUR DAILY FUTURES:
Iron ore futures closed lower on Friday in daytime trading at the Dalian Commodity Exchange (DCE).
The most active iron ore contract for January 2025 delivery dipped 7.5 yuan (about 1.04 U.S. dollars) to close at 797.5 yuan per tonne.
On Friday, the total trading volume of 12 listed iron ore futures contracts on the exchange was 414,763 lots, with a turnover of about 32.69 billion yuan.
No.1 soybean futures closed higher on Friday in daytime trading at the Dalian Commodity Exchange.
The most active No.1 soybean contract for January 2025 delivery gained 26 yuan (about 3.62 U.S. dollars) to close at 3,866 yuan per tonne.
On Friday, the total trading volume of six listed No.1 soybean futures contracts on the exchange was 105,271 lots, with a turnover of about 4.06 billion yuan.
Cotton futures closed lower Friday in daytime trading on the Zhengzhou Commodity Exchange (ZCE).
The most active cotton contract for May 2025 delivery lost 25 yuan (about 3.48 U.S. dollars) to close at 13,895 yuan per tonne.
On Friday, the total trading volume for six listed cotton futures contracts on the ZCE was 273,907.0 lots with a turnover of 19.05 billion yuan.
Sugar futures closed higher Friday in daytime trading on the Zhengzhou Commodity Exchange.
The most active sugar contract for January 2025 delivery gained 19 yuan (2.64 U.S. dollars) to close at 6,008 yuan per tonne.
On Friday, the total trading volume for six listed sugar futures contracts on the ZCE was 464,832.0 lots with a turnover of 27.62 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.