Everything You Need to Know About China's Economy on Wednesday (March 27)
Your Daily & Trustworthy Updates on the Chinese Economy
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Good Wednesday! This is TIAN in Beijing.
Before beginning today's sharing, I would like to thank @Łukasz Kobierski, President of the Institute of New Europe, for pointing out a mistake in yesterday's update. I inadvertently pasted the link to “ByteDance Holds Firm Against Selling TikTok Despite U.S. Ban Threat” under “XPeng Flying Car One Step Closer to Commercial Takeoff”. The link has been corrected on my sustack website for your review.
Feel free to message me if you have any suggestions or feedback on the newsletter. I appreciate it greatly.
Now welcome to monitor the pulse of China’s economy together:
DRIVING THE DAY, Chinese President Xi Jinping met in Beijing Evan Greenberg, chairman of the National Committee on U.S.-China Relations, Stephen Schwarzman, chairman and CEO of the Blackstone Group, Cristiano Amon, president and CEO of Qualcomm, Graham Allison, founding dean of Harvard's John F. Kennedy School of Government, and Craig Allen, president of the U.S.-China Business Council.
Here are some take aways from the meeting (Full Text Here):
Xi said "The success of China and the United States is each other's opportunity. As long as both sides treat each other as partners with mutual respect, peaceful coexistence and win-win cooperation, China-U.S. relations will get better".
China-U.S. relationship is one of the most important bilateral relationships in the world. Whether China and the United States have a cooperative or confrontational relationship bears on the well-being of the Chinese and American peoples and the future of humanity.
China is planning and implementing a series of major measures to comprehensively deepen reform, foster a world-class business environment that is market-oriented, law-based and internationalized, and provide broader development space for international businesses including U.S. companies.
The U.S. representatives said: China's exceptional economic growth and transformation over the past decades speak to its strong resilience and vitality.
The U.S. business, strategic and academic communities support the United States and China in bolstering exchanges and communication at all levels, enhancing mutual understanding, trust and cooperation, joining hands to address global challenges, and fostering a stable, sustainable and productive U.S.-China relationship, the representatives said.
ALSO ON WEDNESDAY, data from the National Bureau of Statistics (NBS) showed that profits of China's major industrial firms increased 10.2 percent year on year in the first two months of the year.
The figure reversed a 2.3 percent decline registered in 2023, the NBS said.
Industrial firms with an annual main business revenue of at least 20 million yuan (about 2.82 million U.S. dollars) saw their combined profits reach 914.06 billion yuan during the period.
Among the 41 industrial categories monitored by the bureau, 29 recorded profit growth.
The profits of the equipment manufacturing sector continued to increase rapidly in the January-February period.
The combined profits of the sector gained 28.9 percent year on year, 24.8 percentage points higher than the growth rate registered in the previous year.
The surge contributed 6.7 percentage points to the country's overall growth in industrial profits, making equipment manufacturing sector the largest contributor, said the NBS.
Profits for the consumer goods manufacturing industry recorded relatively fast growth in the first two months of the year, marked by an increase in demand from both home and abroad.
During the period, the industry's profits increased 12.9 percent year on year, reversing the 1.1 percent decrease registered last year.
The combined operating revenue of major industrial enterprises increased by 4.5 percent year on year, 3.4 percentage points higher than the annual revenue growth of the previous year, said the NBS.
IN TODAY'S FINANCIAL MARKET,
Shanghai Composite Index Fell 1.26% on Wednesday
China’s benchmark Shanghai Composite Index (000001.SH) lost 1.26% on Wednesday, while the Shenzhen Component Index (399001.SZ) fell 2.4%.
Shanghai’s tech-heavy STAR 50 Index (000688.SH) lost 2.5% for the day, while Shenzhen’s similar ChiNext Index (399006.SZ) fell 2.81%.
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 512.98 yuan (about 72.31 U.S. dollars) per gram, up 0.93 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 512.52 yuan.
China's central bank adds liquidity via reverse repos
China's central bank conducted 250 billion yuan (about 35.24 billion 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 stable at the end of the quarter, the People's Bank of China said in a statement.
Chinese yuan weakens to 7.0946 against USD Wednesday
The central parity rate of the Chinese currency renminbi, or the yuan, weakened 3 pips to 7.0946 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 1.36 pct lower
Hong Kong stock market ended lower on Wednesday with the benchmark Hang Seng Index down 1.36 percent to close at 16,392.84 points.
The Hang Seng China Enterprises Index dropped 1.67 percent to end at 5,728.13 points, and the Hang Seng Tech Index lost 2.25 percent to close at 3,393.43 points.
BEFORE ENDING TODAY'S SHARING, LET'S TAKE A LOOK AT YOUR DAILY FUTURES,
Cotton futures closed lower Wednesday in daytime trading on the Zhengzhou Commodity Exchange (ZCE).
The most active cotton contract for May 2024 delivery lost 50 yuan (about 7.05 U.S. dollars) to close at 15,895 yuan per tonne.
On Wednesday, the total trading volume for six listed cotton futures contracts on the ZCE was 305,773.0 lots with a turnover of 24.45 billion yuan.
Sugar futures closed higher Wednesday in daytime trading on the Zhengzhou Commodity Exchange.
The most active sugar contract for May 2024 delivery gained 12 yuan (1.69 U.S. dollars) to close at 6,483 yuan per tonne.
On Wednesday, the total trading volume for six listed sugar futures contracts on the ZCE was 468,334.0 lots with a turnover of 30.26 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 2024 delivery dipped 34 yuan (about 4.79 U.S. dollars) to close at 758 yuan per tonne.
On Wednesday, the total trading volume of 12 listed iron ore futures contracts on the exchange was 912,110 lots, with a turnover of about 71.42 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 33 yuan (about 4.65 U.S. dollars) to close at 4,731 yuan per tonne.
On Wednesday, the total trading volume of six listed No.1 soybean futures contracts on the exchange was 124,521 lots, with a turnover of about 5.89 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.