Everything You Need to Know About China's Economy on Tuesday (March 26)
Your Daily & Trustworthy Updates on the Chinese Economy
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Good Tuesday! This is TIAN in Beijing.
Welcome to monitor the pulse of China’s economy together with me.
DRIVING THE DAY, China’s Tech Sector May Rival Property as Growth Driver, Bloomberg Economics Says.
China’s high-tech sector is driving an increasing amount of demand for goods and services in the world’s second-biggest economy, and its contribution could rival real estate by 2026, according to Bloomberg Economics.
“The high tech sector has potential to become a much more significant source of growth,” economists Chang Shu and Eric Zhu wrote in a report. It’s estimated to drive demand worth nearly 19% of GDP by 2026, up from 14.3% last year, and almost on par with the property sector now.
Beijing is searching for new sources of growth as it steers a transition away from a property-driven model. Officials are pursuing “high quality development,” which will focus on high-tech manufacturing and innovative factors such as information technology, big data and artificial intelligence.
With the property sector forecast to continue shrinking in the coming years, the fast growth of high tech industries and their increasing economic weight make them a promising growth engine, Bloomberg Economics said.
MEANWHILE, XPeng Aeroht, a subsidiary of Chinese electric carmaker XPeng Inc., said China’s civil aviation regulator has started a certification review for the design of its modular flying car, a key step toward putting the product into commercial use, China's Caixin Media reported.
The Civil Aviation Administration of China (CAAC) has accepted the type certificate application for the electric vertical takeoff and landing (eVTOL) body of the flying car, XPeng Aeroht said. A type certificate is granted by the CAAC after it approves an aircraft’s design, clearing the way for the vehicle to obtain an airworthiness certificate for commercial use.
ALSO ON TUESDAY, TikTok’s parent ByteDance Ltd. doesn’t plan to sell the unit although the U.S. Congress has threatened to ban the popular short-video platform unless it’s divested from its Chinese owner, China's Caixin Media reported.
Zhang Yiming, the founder and a major shareholder of Beijing-based ByteDance, steadfastly opposes a sale, several people close to the company told Caixin.
A bipartisan bill passed on March 13 by the U.S. House of Representatives, pending a vote in the Senate, would give TikTok two options—either be divested in 180 days to a non-Chinese owner, or face a ban from app stores and web-hosting services in the U.S..
IN TODAY'S FINIANCIAL MARKET,
Shanghai Composite Index Rose 0.17% on Tuesday
China’s benchmark Shanghai Composite Index (000001.SH) gained 0.17% on Tuesday, while the Shenzhen Component Index (399001.SZ) rose 0.28%.
Shanghai’s tech-heavy STAR 50 Index (000688.SH) lost 1.22% for the day, while Shenzhen’s similar ChiNext Index (399006.SZ) rose 0.44%.
Chinese yuan strengthens to 7.0943 against USD Tuesday
The central parity rate of the Chinese currency renminbi, or the yuan, strengthened 53 pips to 7.0943 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.
Hong Kong's Hang Seng Index closes 0.88 pct higher
Hong Kong's stock market ended higher on Tuesday with the benchmark Hang Seng Index up 0.88 percent to close at 16,618.32 points.
The Hang Seng China Enterprises Index rose 1.23 percent to end at 5,825.42 points, the Hang Seng Tech Index rose 1 percent to close at 3,471.49 points.
China's central bank adds liquidity via reverse repos
China's central bank conducted 150 billion yuan (about 21.14 billion U.S. dollars) of seven-day reverse repos at an interest rate of 1.8 percent Tuesday.
The move aims to keep liquidity in the banking system reasonable and ample, the People's Bank of China said in a statement.
China's benchmark interbank gold prices mixed Tuesday
China's benchmark prices for spot interbank gold transactions were mixed Tuesday, according to the China Foreign Exchange Trade System.
The benchmark price for gold that is 99.95 percent pure or above stood at 512.05 yuan (about 72.18 U.S. dollars) per gram, up 3.67 yuan from the previous trading day, while the price for gold that is 99.99 percent pure or above fell 0.03 yuan from the previous trading day to 511.13 yuan.
AT THE END OF TODAY'S SHARING, LET'S TAKE A LOOK AT YOUR DAILY FUTURES,
No.1 soybean futures closed higher on Tuesday in daytime trading at the Dalian Commodity Exchange.
The most active No.1 soybean contract for May 2024 delivery gained 32 yuan (about 4.51 U.S. dollars) to close at 4,746 yuan per tonne.
On Tuesday, the total trading volume of six listed No.1 soybean futures contracts on the exchange was 234,174 lots, with a turnover of about 11.14 billion yuan.
Iron ore futures closed lower on Tuesday in daytime trading at the Dalian Commodity Exchange.
The most active iron ore contract for May 2024 delivery dipped 31.5 yuan (about 4.44 U.S. dollars) to close at 814.5 yuan per tonne.
On Tuesday, the total trading volume of 12 listed iron ore futures contracts on the exchange was 743,418 lots, with a turnover of about 60.37 billion yuan.
Cotton futures closed higher Tuesday in daytime trading on the Zhengzhou Commodity Exchange(ZCE).
The most active cotton contract for May 2024 delivery gained 50 yuan (about 7.05 U.S. dollars) to close at 15,945 yuan per tonne.
On Tuesday, the total trading volume for six listed cotton futures contracts on the ZCE was 394,059 lots with a turnover of 31.52 billion yuan.
Sugar futures closed lower Tuesday in daytime trading on the Zhengzhou Commodity Exchange.
The most active sugar contract for May 2024 delivery lost 27 yuan (3.81 U.S. dollars) to close at 6,462 yuan per tonne.
On Tuesday, the total trading volume for six listed sugar futures contracts on the ZCE was 317,292 lots with a turnover of 20.45 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.