Everything You Need to Know About China's Economy on Tuesday (Aug. 5)
Your Daily & Trustworthy Updates on the Chinese Economy
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HOWDY. Tian here in Beijing, welcoming you to your Tuesday edition of Everything You Need to Know About China's Economy.
DRIVING THE DAY, CHINA'S SERVICE TRADE GROWS 8% IN FIRST HALF OF 2025.
China's service trade maintained steady growth in the first half of this year, with total imports and exports reaching 3.89 trillion yuan ($544.9 billion), up 8 percent year-on-year, the Ministry of Commerce said.
Specifically, service exports rose 15 percent to 1.69 trillion yuan, while imports increased 3.2 percent to 2.2 trillion yuan, according to the ministry's data. The service trade deficit narrowed by 152.2 billion yuan compared to the same period last year.
Knowledge-intensive services saw continued growth in trade, with imports and exports totaling 1.5 trillion yuan, up 6 percent year-on-year.
Travel service was the largest service trade category during the first half, with total trade volume reaching 1.08 trillion yuan, up 12.3 percent from a year earlier.
Notably, the exports of travel services surged 68.7 percent during the period, according to the data.
MEANWHILE, CHINA UNVEILS PLAN TO PROMOTE DIGITAL TRANSFORMATION OF MACHINERY INDUSTRY.
The document, published by eight government agencies including the Ministry of Industry and Information Technology (MIIT) and the Ministry of Human Resources and Social Security, sets out a roadmap to upgrade the machinery sector through digital technology.
By 2027, there will be widespread integration of smart technologies across key areas -- from product design and manufacturing to enterprise management and maintenance, according to the official blueprint.
Looking ahead, major machinery enterprises are aiming to essentially complete one round of digital transformation by 2030. By then, a well-structured and secure product and service supply system, featuring 500 new excellence-level smart factories, is expected to take shape.
The government has classified smart factories into four tiers based on technological maturity and integration depth, including the basic-level, the advanced-level, the excellence-level and the pioneer-level.
An MIIT official emphasized the sector's foundational role in economic development, saying that accelerating the digital transformation of the machinery industry is essential for supporting the digitalization of the broader economy and advancing new industrialization.
To achieve these goals, the plan outlines 12 key tasks, including advancing foundational industrial capabilities, accelerating the development of industrial software, promoting capacity-sharing by leading enterprises, and pushing forward the establishment of a standards-setting system.
ALSO ON TUESDAY, XIZANG'S REGIONAL GDP EXPECTED TO EXCEED 300 BILLION YUAN THIS YEAR.
Regional gross domestic product (GDP) of Southwest China's Xizang Autonomous Region is projected to surpass 300 billion yuan (about 42 billion U.S. dollars) this year, according to a press conference held on Tuesday.
The region's GDP reached 276.5 billion yuan in 2024, 155 times that of 1965 -- when the autonomous region was established -- reaching an average annual growth rate of 8.9 percent, official data showed.
While it took the region 50 years to achieve its first 100 billion yuan in GDP, the second 100 billion yuan milestone was reached in just six years, according to the press conference.
IN TODAY'S FINANCIAL MARKET,
Chinese stocks closed higher on Tuesday, with the benchmark Shanghai Composite Index up 0.96 percent to 3,617.6 points.
The Shenzhen Component Index closed 0.59 percent higher at 11,106.96 points.
The combined turnover of these two indices stood at about 1.6 trillion yuan (roughly 224.2 billion U.S. dollars) -- up from 1.5 trillion yuan on the previous trading day.
Sectors such as shipbuilding and textiles led the gains, while stocks related to bio-medicines and aircraft manufacturing suffered major losses.
The ChiNext Index, tracking China's Nasdaq-style board of growth enterprises, gained 0.39 percent to close at 2,343.38 points on Tuesday.
China's benchmark interbank gold prices higher Tuesday
According to the China Foreign Exchange Trade System, the benchmark price for gold that is 99.95 percent pure or above stood at 777.58 yuan per gram, 10.06 yuan higher from the previous trading day.
The price for gold that is 99.99 percent pure or aboves stood at 776.01 yuan per gram, up 8.72 yuan per gram.
Hong Kong stocks close 0.68 pct higher
Hong Kong's stock market ended higher Tuesday with the benchmark Hang Seng Index up 0.68 percent to close at 24,902.53 points.
The Hang Seng China Enterprises Index rose 0.65 percent to end at 8,951.07 points, the Hang Seng Tech Index rose 0.73 percent to end at 5,521.07 points.
Chinese yuan strengthens to 7.1366 against USD Tuesday
The central parity rate of the Chinese currency renminbi, or the yuan, strengthened 29 pips to 7.1366 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.
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 September 2025 delivery gained 15 yuan (about 2.10 U.S. dollars) to close at 13,655 yuan per tonne.
On Tuesday, the total trading volume for six listed cotton futures contracts on the ZCE was 225,469.0 lots with a turnover of 15.48 billion yuan.
Sugar futures closed lower Tuesday in daytime trading on the Zhengzhou Commodity Exchange.
The most active sugar contract for September 2025 delivery lost 24 yuan (3.36 U.S. dollars) to close at 5,697 yuan per tonne.
On Tuesday, the total trading volume for six listed sugar futures contracts on the ZCE was 246,655.0 lots with a turnover of 14.0 billion yuan.
Iron ore futures closed higher on Tuesday in daytime trading at the Dalian Commodity Exchange (DCE).
The most active iron ore contract for September 2025 delivery gained 9.5 yuan (about 1.33 U.S. dollars) to close at 798.5 yuan per tonne.
On Tuesday, the total trading volume of 12 listed iron ore futures contracts on the exchange was 391,610 lots, with a turnover of about 30.73 billion yuan.
No.1 soybean futures closed lower on Tuesday in daytime trading at the Dalian Commodity Exchange.
The most active No.1 soybean contract for September 2025 delivery dipped 10 yuan (about 1.4 U.S. dollars) to close at 4,116 yuan per tonne.
On Tuesday, the total trading volume of six listed No.1 soybean futures contracts on the exchange was 119,569 lots, with a turnover of about 4.92 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.