Everything You Need to Know About China's Economy on Tuesday (Jan. 14)
Your Daily & Trustworthy Updates on the Chinese Economy
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HOWDY. TIAN here. Welcome to your Tuesday edition of Everything You Need to Know About China's Economy.
DRIVING THE DAY, China's yuan-denominated loans rose by 18.09 trillion yuan (about 2.52 trillion U.S. dollars) in 2024, central bank data showed on Tuesday.
The M2, a broad measure of money supply that covers cash in circulation and all deposits, increased 7.3 percent year on year to 313.53 trillion yuan at the end of December.
The M1, which covers cash in circulation plus demand deposits, stood at 67.1 trillion yuan at the end of December, down 1.4 percent year on year.
The M0, which indicates the amount of cash in circulation, rose by 13 percent year on year to a total of 12.82 trillion yuan at the end of last month, per the data.
Outstanding yuan loans stood at 255.68 trillion yuan at the end of December, an increase of 7.6 percent year on year.
The data also showed that outstanding social financing stood at 408.34 trillion yuan at the end of last month, up 8 percent year on year.
MEANWHILE, as of 2024, BMW Group had delivered over 400,000 new energy vehicles in the Chinese market, the German automaker said on Monday.
In the same year, the company sold more than 714,000 BMW and MINI vehicles in China, with electric vehicle sales rising by 7.7 percent year on year and accounting for 15 percent of total sales.
To capitalize on the vast opportunities in the Chinese market, BMW continues to introduce new models tailored for the country.
Last week, the company announced that the new model BMW X3 has officially entered mass production at its manufacturing facility in Shenyang in northeast China's Liaoning Province. The vehicle is scheduled for its official launch this February.
BMW CEO Oliver Zipse has recently described China as its largest global market of "tremendous importance" and a leading hub for technology and innovation.
The BMW Group is also making significant strides in its green energy strategy. By mid-2024, it had recycled over 2,000 tonnes of raw materials from retired batteries in China, providing a practical solution to the growing challenge of battery disposal.
IN ADDITION, the number of inbound trips made by foreigners to China under the country's visa-free policies in 2024 doubled compared with the previous year.
Border inspection agencies across China handled 64.88 million cross-border trips by foreigners in 2024, up 82.9 percent from a year earlier. Among them, more than 20 million inbound trips by foreigners were made visa-free, a year-on-year increase of 112.3 percent, according to statistics released by the National Immigration Administration (NIA) on Tuesday.
This data showed that China recorded 610 million entries and exits in 2024 -- representing an increase of 43.9 percent from the 2023 figure.
In 2024, about 2.6 million Chinese visas were issued for foreigners, up 52.3 percent year on year, the administration's data revealed. Relevant authorities also provided greater convenience for 72,000 foreign nationals in terms of visa extension, renewal and reissuing in China.
Services for Chinese mainland residents keen to travel overseas have also been streamlined. In 2024, nearly 23.32 million passports were issued to Chinese citizens -- an annual increase of 26.5 percent. In addition, over 94.5 million permits or documents were issued to mainland residents for travel to the Hong Kong Special Administrative Region, Macao Special Administrative Region and Taiwan region last year, marking a jump of 9.8 percent compared to 2023.
Last year, a total of 291 million cross-border trips were made by mainland residents, a year-on-year increase of 41.3 percent.
Meanwhile, mainland ports recorded 254 million cross-border trips made by Hong Kong, Macao and Taiwan residents last year, up 38.8 percent year on year.
Immigration authorities also targeted crimes that sought to undermine border management, handling more than 35,000 cases and capturing over 79,000 suspects, according to the NIA.
IN TODAY'S FINANCIAL MARKET,
China's commercial banks saw a forex settlement deficit of 110.3 billion U.S. dollars in 2024, official data showed Tuesday.
In yuan terms, forex purchases by banks reached 16.54 trillion yuan (about 2.3 trillion U.S. dollars), while sales stood at around 17.33 trillion yuan, data from the State Administration of Foreign Exchange (SAFE) showed.
In December alone, these commercial banks saw a net forex settlement deficit of 76.8 billion yuan, according to the administration.
In 2024, the balance of payments maintained a basic equilibrium, Li Bin, deputy head of SAFE, told a press conference.
Looking ahead, Li expressed optimism about the stability of China's balance of payments, highlighting the increasing resilience of the forex market and the favorable conditions for a stable RMB exchange rate.
Chinese stocks closed higher on Tuesday, with the benchmark Shanghai Composite Index up 2.54 percent to 3,240.94 points.
The Shenzhen Component Index closed 3.77 percent higher at 10,165.17 points.
The combined turnover covered by the two indices stood at 1.35 trillion yuan (about 187.92 billion U.S. dollars), up from 966.4 billion yuan on the previous trading day.
Share prices of all sectors rose, with those related to humanoid robots and Sora leading the gains.
Stocks related to Xiaohongshu also surged after the Chinese Instagram-style app rose to the top of the Apple app store chart in the United States, with Foshan Yowant Technology Co., Ltd., Inly Media Co., Ltd., and Shenzhen Ellassay Fashion Co., Ltd. all surging by the daily 10-percent limit.
The ChiNext Index, tracking China's Nasdaq-style board of growth enterprises, gained 4.71 percent to close at 2,075.76 points Tuesday.
China's benchmark interbank gold prices lower Tuesday
According to the China Foreign Exchange Trade System, the benchmark price for gold that is 99.95 percent pure or above stood at 635.79 yuan per gram, up 2.89 yuan per gram.
The price for gold that is 99.99 percent pure or aboves stood at 636.90 yuan per gram, up 3.08 yuan per gram.
China's central bank conducts reverse repos Tuesday
China's central bank conducted 55 billion yuan (about 7.65 billion U.S. dollars) of seven-day reverse repos at an interest rate of 1.5 percent on Tuesday.
The move aims to keep liquidity in the banking system at an adequate level, the central bank said.
Chinese yuan strengthens to 7.1878 against USD Tuesday
The central parity rate of the Chinese currency renminbi, or the yuan, strengthened 7 pips to 7.1878 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 1.83 pct higher
Hong Kong stock market ended higher on Tuesday with the benchmark Hang Seng Index up 1.83 percent to close at 19,219.78 points.
The Hang Seng China Enterprises Index rose 2.1 percent to end at 6,987.36 points, and the Hang Seng Tech Index hiked 3.08 percent to end at 4,352.04 points.
AT THE END OF TODAY'S SHARING, LET'S TAKE A LOOK AT YOUR DAILY FUTURES:
Cotton futures closed higher Tuesday in daytime trading on the Zhengzhou Commodity Exchange (ZCE).
The most active cotton contract for May 2025 delivery gained 125 yuan (about 17.39 U.S. dollars) to close at 13,600 yuan per tonne.
On Tuesday, the total trading volume for six listed cotton futures contracts on the ZCE was 328,318.0 lots with a turnover of 22.28 billion yuan.
Sugar futures closed higher Tuesday in daytime trading on the Zhengzhou Commodity Exchange.
The most active sugar contract for May 2025 delivery gained 24 yuan (3.34 U.S. dollars) to close at 5,926 yuan per tonne.
On Tuesday, the total trading volume for six listed sugar futures contracts on the ZCE was 219,330 lots with a turnover of 12.98 billion yuan.
Iron ore futures closed lower on Tuesday in daytime trading at the Dalian Commodity Exchange (DCE).
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 2025 delivery gained 51 yuan (about 7.1 U.S. dollars) to close at 3,962 yuan per tonne.
On Tuesday, the total trading volume of six listed No.1 soybean futures contracts on the exchange was 195,579 lots, with a turnover of about 7.73 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.