Everything You Need to Know About China's Economy on Wednesday (Jan. 8)
Your Daily & Trustworthy Updates on the Chinese Economy
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HOWDY! This is TIAN in Beijing. Welcome to your Wednesday edition of Everything You Need to Know About China’s Economy.
WHILE YOU WERE SLEEPING, the China Geological Survey under the Ministry of Natural Resources said Wednesday that the country's lithium reserves have increased from 6 percent to 16.5 percent of the global total, propelling it from sixth to second place in the world rankings.
A world-class spodumene-type lithium belt spanning 2,800 kilometers in west China has been discovered. The lithium resources found in the Qinghai-Xizang Plateau's salt lakes have also seen substantial growth, positioning China as the third-largest salt lake lithium resource base globally.
Moreover, Chinese researchers have overcome significant technical challenges in extracting lithium from lepidolite, a mineral with high lithium content that has been difficult and costly to process.
Lithium is a critical element for a wide range of emerging industries, including electric vehicles, energy storage systems, mobile communications, medical treatments, and nuclear reactor fuel.
ALSO ON WEDNESDAY, China announced a raft of measures to expand the scope of the consumer goods trade-in program.
China will expand the number of home appliance categories eligible for government subsidies from eight in 2024 to 12 in 2025, Zhao Chenxin, deputy head of the National Development and Reform Commission (NDRC), told a press conference.
Microwaves, water purifiers, dishwashers and rice cookers will be added to the trade-in list for home appliances, according to a guideline unveiled by the NDRC and the Ministry of Finance Wednesday.
In response to actual needs, the number of air conditioners eligible for subsidies per consumer will be increased from one to three, Zhao said.
Consumers will be able to enjoy subsidies of up to 500 yuan (about 70 U.S. dollars) apiece when purchasing digital products such as mobile phones. A broader range of passenger vehicles will also be added to the trade-in program, according to the guideline.
MEANWHILE, China is strongly dissatisfied with and firmly opposes the U.S. Department of Defense's move to list certain Chinese firms as "military companies," the Ministry of Commerce said in a statement on Wednesday.
Earlier this week, the U.S. Department of Defense released a list of companies it labeled as "Chinese military companies," including Chinese tech powerhouse Tencent and leading battery maker CATL. Both companies have dismissed the designations as a "mistake."
The U.S. move has seriously disrupted the international economic and trade order and undermined the stability of global industrial and supply chains, the statement noted.
China urges the U.S. to respect the facts and rules, immediately stop its wrong practices, and provide Chinese firms with fair, just and non-discriminatory treatment.
The statement added that China would closely monitor the situation's development and take all necessary measures to safeguard the legitimate rights and interests of Chinese companies.
IN TODAY'S FINANCIAL MARKET,
Chinese stocks closed mixed on Wednesday, with the benchmark Shanghai Composite Index up 0.02 percent to 3,230.17 points.
The Shenzhen Component Index closed 0.54 percent lower at 9,944.64 points.
The combined turnover covered by these two indices stood at 1.26 trillion yuan (about 175.27 billion U.S. dollars) -- up from 1.09 trillion yuan on the previous trading day.
Retail and home appliance consumer stocks strengthened and semiconductor chip stocks rebounded. Robotics-related stocks surged in the afternoon session. On the downside, agricultural stocks weakened.
The ChiNext Index, tracking China's Nasdaq-style board of growth enterprises, dropped by 0.98 percent to close at 2,008.44 points on Wednesday.
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 624.51 yuan (about 85.18 U.S. dollars) per gram, 1.74 yuan lower than the previous trading day.
The price for gold that is 99.99 percent pure or above went down 0.68 yuan from the previous trading day to 625.00 yuan
.
Chinese yuan weakens to 7.1887 against USD Wednesday
The central parity rate of the Chinese currency renminbi, or the yuan, weakened 8 pips to 7.1887 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 central bank conducts reverse repos Wednesday
China's central bank conducted 1.1 billion yuan (about 153 million U.S. dollars) of seven-day reverse repos at an interest rate of 1.5 percent on Wednesday.
The move aims to keep liquidity in the banking system at an adequate level, the central bank said.
Hong Kong's Hang Seng Index closes 0.86 pct lower
Hong Kong's stock market ended lower on Monday with the benchmark Hang Seng Index down 0.86 percent to close at 19,279.84 points.
The Hang Seng China Enterprises Index edged down 0.84 percent to end at 6,990.65 points, and the Hang Seng Tech Index fell 1.09 percent to close at 4,307.40 points.
AT THE END OF 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 May 2025 delivery gained 15 yuan (about 2.09 U.S. dollars) to close at 13,445 yuan per tonne.
On Wednesday, the total trading volume for six listed cotton futures contracts on the ZCE was 215,952 lots with a turnover of 14.5 billion yuan.
Sugar futures closed lower Wednesday in daytime trading on the Zhengzhou Commodity Exchange.
The most active sugar contract for May 2025 delivery lost 9 yuan (1.25 U.S. dollars) to close at 5,926 yuan per tonne.
On Wednesday, the total trading volume for six listed sugar futures contracts on the ZCE was 225,972 lots with a turnover of 13.39 billion yuan.
Iron ore futures closed lower on Wednesday in daytime trading at the Dalian Commodity Exchange (DCE).
The most active iron ore contract for May 2025 delivery dipped 5.5 yuan (about 77 U.S. cents) to close at 747.5 yuan per tonne.
On Wednesday, the total trading volume of 12 listed iron ore futures contracts on the exchange was 361,764 lots, with a turnover of about 27.11 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 2025 delivery dipped 24 yuan (about 3.34 U.S. dollars) to close at 3,837 yuan per tonne.
On Wednesday, the total trading volume of six listed No.1 soybean futures contracts on the exchange was 110,478 lots, with a turnover of about 4.24 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.