Everything You Need to Know About China's Economy on Thursday (Oct. 17)
Your Daily & Trustworthy Updates on the Chinese Economy
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Good Thursday! This is TIAN in Beijing.
Welcome to monitor the pulse of China’s economy together with me.
DRIVING THE DAY, Chinese officials announced new measures to cement signs of stabilization in the property sector, after a bundle of pro-housing policies rolled out last month brought about "positive changes in the market."
The government will step up support for urban village and dilapidated housing renovation projects, and China will renovate an additional 1 million such housing units with measures such as providing monetary compensation to residents.
All eligible real estate projects will be included in the "white list" mechanism and their reasonable financing needs will be met through loans.
Under the "white list" mechanism launched in January, local authorities are recommending that financial institutions provide financial support to eligible real estate projects.
It is expected that by the end of this year, the approved loan amount for the "white list" projects will surpass 4 trillion yuan.
To ease the financial burden on homeowners, China's central bank has requested commercial banks lower interest rates for outstanding mortgage loans. The reduction will save borrowers 150 billion yuan, benefiting 50 million households.
ALSO ON THURSDAY, German Chancellor Olaf Scholz expressed his opposition to tariff conflicts while delivering a statement to the press in Brussels.
Scholz stressed that such conflicts lead nowhere and emphasized the importance of using the World Trade Organization to resolve trade disputes.
Speaking on the sidelines of the European Council meeting, Scholz reiterated his stance against escalating tariff tensions with China, a point he also made in a speech to the Bundestag, Germany's lower house of parliament, the previous day.
He noted that major German carmakers, along with 17 EU countries, oppose the imposition of tariffs on China.
While highlighting the need for Germany to boost its competitiveness in the electric vehicle market, Scholz emphasized that this should not be achieved through tariffs.
MEANWHILE, China's Ministry of Commerce (MOC) said Thursday the country is studying increasing tariffs on imported fuel-powered vehicles with large-displacement engines.
A decision will be made prudently after comprehensive consideration of various factors, MOC spokesperson, He Yadong, told a press conference.
When answering a question on negotiations between China and the European Union (EU) on electric vehicle tariffs, the spokesperson stressed that China has demonstrated utmost sincerity and flexibility, and the two sides have made important progress in certain areas.
However, significant differences remain at this stage of the negotiation process, as the EU has failed to actively respond to the core concerns of both Chinese and European industries, He said.
IN TODAY'S FINANCIAL MARKET,
Chinese shares close lower Thursday
Chinese stocks closed lower on Thursday, with the benchmark Shanghai Composite Index down 1.05 percent to 3,169.38 points.
The Shenzhen Component Index closed 0.74 percent lower at 9,891.76 points.
The combined turnover of the Shanghai and Shenzhen bourses reached 1.49 trillion yuan (about 209.4 billion U.S. dollars), up from 1.38 trillion yuan recorded on the previous trading day.
Stocks related to data security led the gains, while those in the real estate sector suffered major losses.
The ChiNext Index, tracking China's Nasdaq-style board of growth enterprises, lost 0.32 percent to close at 2,033.48 points on Thursday.
Chinese yuan weakens to 7.1220 against USD Thursday
The central parity rate of the Chinese currency renminbi, or the yuan, weakened 29 pips to 7.122 against the U.S. dollar Thursday, 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 benchmark interbank gold prices higher Thursday
According to the China Foreign Exchange Trade System, the benchmark price for gold that is 99.95 percent pure or above stood at 605.63 yuan (about 85.04 U.S. dollars) per gram, 4.06 yuan higher than the previous trading day.
The price for gold that is 99.99 percent pure or above went up 6.70 yuan from the previous trading day to 609.96 yuan.
Hong Kong Hang Seng Index closes 1.02 pct lower
Hong Kong stock market ended lower Thursday with the benchmark Hang Seng Index down 1.02 percent to close at 20,079.10 points.
The Hang Seng China Enterprises Index fell 1.22 percent to end at 7,179.44 points, and the Hang Seng Tech Index dropped 1.19 percent to end at 4,349.77 points.
China's central bank conducts reverse repos Thursday
China's central bank conducted 132.6 billion yuan (about 18.62 billion U.S. dollars) of seven-day reverse repos at an interest rate of 1.5 percent Thursday.
The move aims to keep liquidity reasonable and ample in the banking system, the central bank said.
AT THE END OF TODAY'S SHARING, LET'S TAKE A LOOK AT YOUR DAILY FUTURES:
Cotton futures closed lower Thursday in daytime trading on the Zhengzhou Commodity Exchange (ZCE).
The most active cotton contract for January 2025 delivery lost 185 yuan (about 25.98 U.S. dollars) to close at 13,940 yuan per tonne.
On Thursday, the total trading volume for six listed cotton futures contracts on the ZCE was 483,344 lots with a turnover of 33.95 billion yuan.
Sugar futures closed lower Thursday in daytime trading on the Zhengzhou Commodity Exchange.
The most active sugar contract for January 2025 delivery lost 62 yuan (8.71 U.S. dollars) to close at 5,878 yuan per tonne.
On Thursday, the total trading volume for six listed sugar futures contracts on the ZCE was 349,828 lots with a turnover of 20.63 billion yuan.
Iron ore futures closed lower on Thursday in daytime trading at the Dalian Commodity Exchange.
The most active iron ore contract for January 2025 delivery dipped 47.5 yuan (about 6.67 U.S. dollars) to close at 746 yuan per tonne.
On Thursday, the total trading volume of 12 listed iron ore futures contracts on the exchange was 886,243 lots, with a turnover of about 68.38 billion yuan.
No. 1 soybean futures closed lower on Thursday in daytime trading at the Dalian Commodity Exchange.
The most active No. 1 soybean contract for January 2025 delivery dipped 11 yuan (about 1.54 U.S. dollars) to close at 3,950 yuan per tonne.
On Thursday, the total trading volume of six listed No. 1 soybean futures contracts on the exchange was 99,865 lots, with a turnover of about 3.97 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.