China’s central bank, finance ministry hold first joint conference on economy; China’s stocks head for topsy-turvy day: Hang Seng gains while mainland markets plunge
‘I’m Not Going to Wait’: Young Chinese Jump Into Stock Frenzy
Welcome to this issue of The China Brief. Today is October 9, 2024. Here at The China Brief, we bring you the latest news on China's politics, economy, and society from global media sources, along with exclusive expert analysis. If you find our content helpful, please subscribe to our newsletter.
China’s central bank, finance ministry hold first joint conference on economy
South China Morning Post
China’s central bank and finance ministry held their inaugural joint working group meeting focused on treasury bond trading, highlighting increased coordination between monetary and fiscal policies as the country aims for around 5% economic growth. They discussed the development of China’s bond market and committed to creating a supportive environment for government bond trading. In a significant move, the People’s Bank of China began purchasing 100 billion yuan (approximately US$14 billion) in government bonds from the secondary market in August, marking the first such action in nearly 20 years. Further developments are anticipated.
https://www.scmp.com/economy/policy/article/3281656/chinas-central-bank-finance-ministry-hold-joint-conference-economy?utm_source=rss_feed
China’s security agency vows to boost intelligence sharing after deadly attack in Pakistan
South China Morning Post
China's Ministry of State Security (MSS) has vowed to enhance anti-terrorism intelligence cooperation following a deadly attack on Chinese nationals in Pakistan by the Baloch Liberation Army. The MSS emphasized the importance of international collaboration in combating terrorism and pledged support for Pakistan's counterterrorism efforts. In response to the escalating security threats, particularly in Balochistan and Khyber Pakhtunkhwa, China plans to implement stricter measures to protect its citizens and projects. The incident raises concerns about the safety of the China-Pakistan Economic Corridor amid ongoing violence targeting Chinese interests in the region.
https://www.scmp.com/news/china/diplomacy/article/3281667/chinas-security-agency-vows-boost-intelligence-sharing-after-deadly-attack-pakistan?utm_source=rss_feed
‘I’m Not Going to Wait’: Young Chinese Jump Into Stock Frenzy
NY Times
In recent weeks, young people in China have increasingly engaged in stock trading following aggressive government measures to boost economic growth and consumer spending. Many under-30s have opened new accounts on trading apps, with a noticeable uptick in inquiries from first-time investors. University students dedicated their Golden Week holiday to learning about investments, eager to capitalize on the largest market rally in nearly 20 years. However, these new investors are taking significant risks, as the market gains heavily rely on ongoing government support. Despite a recent dip in stock prices after a 10-day rally, the trend signals a shift in mindset for younger generations who previously faced a stagnant economy, now driven by a fear of missing out on investment opportunities.
https://www.nytimes.com/2024/10/09/business/china-stocks-young-investors.html
China’s stocks head for topsy-turvy day: Hang Seng gains while mainland markets plunge
South China Morning Post
China's stock markets are experiencing mixed trading as investors shift between taking profits and seeking bargains, raising concerns about the longevity of the recent rally. The Hang Seng Index in Hong Kong opened with a 1.7% increase, recovering from a significant 9.4% loss the previous day, while the CSI 300 Index in mainland China fell by 2%, marking its first decline in 11 days after a 5.9% gain. The Shanghai Composite Index also retreated by 1.9%. Other Asian markets showed mixed results, with Japan's Nikkei 225 and South Korea's Kospi declining, while Australia's S&P/ASX 200 saw a slight increase.
https://www.scmp.com/business/china-business/article/3281625/chinas-stocks-head-topsy-turvy-day-hang-seng-gains-while-mainland-markets-plunge?utm_source=rss_feed
Hong Kong housing market needs more rate cuts, wealth from stock gains to end slump
South China Morning Post
Hong Kong's residential property market is facing challenges, with home prices dropping 6.2% this year. Experts highlight the need for lower financing costs and stock market gains to boost confidence and recovery. While potential Federal Reserve policy easing may help, analysts caution that underlying weak economic conditions could hinder a significant turnaround. The median household income growth has slowed, and the recent stock market decline raises concerns. Despite developers preparing to sell more units, restoring buyer sentiment and achieving sustained recovery will depend on broader economic revitalization.
https://www.scmp.com/business/article/3281605/hong-kong-housing-market-needs-more-rate-cuts-wealth-stock-gains-end-slump?utm_source=rss_feed
China’s space for fiscal stimulus could be limited amid debt woes: analysts
South China Morning Post
Analysts suggest that China's opportunity for fiscal expansion to aid economic recovery may be limited, as new stimulus requires approval from the National People’s Congress, which meets later this month. The National Development and Reform Commission plans to accelerate government spending and issue long-term treasury bonds but warns against excessive local government fines and inspections. With a GDP growth target of around 5%, analysts predict a significant revenue shortfall due to falling land sales. Some propose fiscal support of 1 to 3 trillion yuan, but concerns over local government debt may restrict extensive stimulus measures. Sustainable growth should focus on structural reforms.
https://www.scmp.com/economy/policy/article/3281546/chinas-space-fiscal-stimulus-could-be-limited-amid-debt-woes-analysts?utm_source=rss_feed
US tells China hi-tech trade limits are ‘not negotiable’ in meeting of commerce chiefs
South China Morning Post
U.S. President Joe Biden's trade restrictions on high-tech goods with China were discussed in recent meetings between top commerce officials from both countries. U.S. Secretary of Commerce Gina Raimondo emphasized that these national-security measures are "not negotiable," citing concerns about regulatory transparency, non-market practices, and overcapacity in various sectors. The Biden administration has been addressing fears related to China's military expansion and its dominance in industries like electric vehicles. Recent restrictions include a ban on Chinese and Russian hardware and software for connected vehicles. China expressed serious concerns regarding these semiconductor policies and urged the U.S. to clarify national-security boundaries to maintain global supply chain stability. Beijing called for the lifting of sanctions on Chinese companies and improving the business environment for them in the U.S.
https://www.scmp.com/news/china/diplomacy/article/3281621/us-tells-china-hi-tech-trade-limits-are-not-negotiable-meeting-commerce-chiefs?utm_source=rss_feed
Lee Kuan Yew’s daughter Lee Wei Ling dies at 69 in Singapore
South China Morning Post
Dr. Lee Wei Ling, the daughter of Singapore's first Prime Minister Lee Kuan Yew, has passed away at the age of 69 at her home. Her brother, Lee Hsien Yang, announced her death on Facebook. Dr. Lee was recognized for her loyalty to friends, her advocacy for the underprivileged, and her significant academic achievements, including serving as the director of Singapore’s National Neuroscience Institute. She had previously written columns about her life, which were compiled into a book. Dr. Lee had been diagnosed with progressive supranuclear palsy, a brain disease affecting movement and balance. In his tribute, Lee Hsien Loong expressed his sorrow and commitment to her welfare. He also encouraged donations to charities meaningful to Dr. Lee in lieu of flowers. Further details about the funeral arrangements will be shared later.
https://www.scmp.com/news/asia/southeast-asia/article/3281624/lee-kuan-yews-daughter-lee-wei-ling-dies-69-singapore?utm_source=rss_feed
ChatGPT developer OpenAI to open Singapore office
South China Morning Post
OpenAI is establishing a new office in Singapore by the end of the year to meet the rising demand for artificial intelligence tools in the Asia-Pacific region. This office will facilitate collaboration with partners, governments, and customers throughout the area. OpenAI is also collaborating with AI Singapore, a local initiative, to enhance its connections in a region with a rapidly growing online user base. Singapore ranks highly in per-capita usage of ChatGPT, prompting OpenAI's expansion following significant funding that increased its valuation to US$157 billion. Earlier in the year, OpenAI opened its first Asia office in Tokyo. Singapore is becoming a key hub for major US tech firms, including Google and Meta, which are also working on improving internet infrastructure between Singapore and the US. OpenAI's CEO, Sam Altman, expressed enthusiasm about partnering with Singapore's government and AI ecosystem as the company expands in the APAC region.
https://www.scmp.com/news/asia/southeast-asia/article/3281630/chatgpt-developer-openai-open-singapore-office?utm_source=rss_feed
Baidu's robotaxi unit is exploring expansion into global markets in the 'near future'
CNBC
BEIJING — Chinese tech company Baidu 's robotaxi unit, Apollo Go, is in talks with several firms to expand into overseas markets in the "near future," according to a source familiar with the matter.
No details on timing or regions were available.
Baidu is one of the major operators of robotaxis in China. Regulators in parts of Beijing and cities such as Wuhan — Apollo Go's largest operating region — have allowed companies to commercially operate self-driving taxis after years of just permitting internal testing.
Tesla is scheduled to hold its widely anticipated robotaxi event on Thursday.
WeRide, another Chinese robotaxi developer, in late September announced a deal to integrate its cars onto ride-hailing giant Uber 's platform in Abu Dhabi this year. The statement said the companies did not plan on similar partnerships in the U.S. or China.
In July, BYD and Uber announced they would develop "autonomous-capable vehicles" for the ride-hailing company's platform. They did not share details.
Robotaxi rides in China operated by Baidu and companies such as Pony.ai are generally highly subsidized by the companies to encourage their usage. Local regulation sometimes requires a human staff worker to sit inside the car, meaning not all the vehicles are fully autonomous.
Baidu said as of late July, Apollo Go had operated more than 7 million robotaxi rides.
Separately, Baidu on Tuesday announced Rong Luo would no longer serve as its CFO, and instead become executive vice president overseeing the company's mobile ecosystem unit. Junjie He, former head of the mobile unit, will become interim CFO, the company said. Baidu described the changes as part of a "management rotation."
https://www.cnbc.com/2024/10/09/baidus-robotaxi-unit-is-exploring-expansion-into-global-markets-in-the-near-future.html
China stocks: small-cap ETFs send danger signals to bulls in world’s biggest market frenzy
South China Morning Post
Many exchange-traded funds (ETFs) tracking China's least valuable stocks have been suspended from trading after their prices significantly exceeded the underlying asset values, raising concerns about the current market rally. At least 15 ETFs linked to the ChiNext benchmark issued warnings to investors as their prices surged, with some trading at premiums of up to 30%. E Fund Management cautioned that high premiums could lead to substantial losses due to liquidity risks and demand-supply dynamics. The surge in small-cap ETFs reflects the aggressive behavior of China's retail investors and institutional funds, as the market has seen a rapid increase of 3 trillion yuan (US$424.8 billion) in just three weeks.
However, the rally's sustainability is in question, with the CSI 300 Index experiencing extreme volatility, swinging between a 7.4% drop and a 10.8% increase. The ChiNext Index recently recorded its largest single-day decline of 10.9% after a substantial surge. Market observers suggest that the implementation of expected fiscal stimulus will be crucial for maintaining the rally.
https://www.scmp.com/business/china-business/article/3281697/china-stocks-small-cap-etfs-send-danger-signals-bulls-worlds-biggest-market-frenzy?utm_source=rss_feed
Chinese tech giants Tencent and Alibaba break digital wall with Taobao, WeChat integration
South China Morning Post
Tencent Holdings has integrated Alibaba's Taobao e-commerce platform into its WeChat app, allowing users to shop directly within the app. This collaboration enables users to open Taobao links, add items to their cart, and complete purchases using Tencent's WeChat Pay. If users opt for other payment methods like Alipay, they will be redirected to the Taobao app. This move follows recent developments where Taobao and Tmall began accepting WeChat Pay and comes after the conclusion of an antitrust review of Alibaba, which had previously limited Tencent's sharing of links to its stores. The integration aligns with the Chinese government's push for tech companies to reduce their "walled gardens" and enhance collaboration. Over recent years, both companies have taken steps to interconnect their services, with Tencent allowing users to share Taobao links and Alibaba incorporating WeChat Pay into its platforms.
https://www.scmp.com/tech/big-tech/article/3281683/chinese-tech-giants-tencent-and-alibaba-break-digital-wall-taobao-wechat-integration?utm_source=rss_feed
China claims Taiwan's Lai is escalating tensions ahead of speech in Taipei
Japan Times
Taiwan President Lai Ching-te is facing heightened tensions with China ahead of a significant speech he plans to deliver in Taipei. China's government accused Lai of having "sinister intentions," particularly after he stated that it is "impossible" for China to be Taiwan's motherland due to Taiwan's older political roots. This statement has drawn ire from Beijing, which views Lai as a "separatist" and claims Taiwan as its own territory, a stance that Lai and his administration reject. The situation has raised concerns about a potential military response from China.
https://www.japantimes.co.jp/news/2024/10/09/asia-pacific/politics/taiwan-president-china-key-speech/
From mass deportations to huge tariff hikes, here's what Trump's economic program would do to the US and Australia
Australian Broadcasting Corporation
The article emphasizes the need to take Donald Trump's presidential campaign seriously, as betting markets predict his victory. Trump's economic promises, including mass deportations, huge tariff hikes, and increased presidential influence over the Federal Reserve, have significant implications for the U.S. economy. A study by the Peterson Institute models these impacts, indicating that Trump's policies could weaken the U.S. economy and harm allied nations like Australia. The analysis contrasts Trump's proposals with those of Kamala Harris, highlighting that only Trump's policies represent a significant shift from the status quo.
https://www.abc.net.au/news/2024-10-09/trumps-economic-program-us-australia-tariff-hikes-deportations/104444884
TikTok faces new lawsuits in the US accusing it of harming children
Al Jazeera
TikTok faces multiple lawsuits from 13 US states, including New York and California, accusing it of harming young users by promoting addictive content and failing to protect their safety. The lawsuits claim TikTok intentionally targets children, exacerbating mental health issues and facilitating sexual exploitation. TikTok has rejected these allegations, emphasizing its safety measures and expressing disappointment over the lawsuits instead of collaboration. The company’s parent, ByteDance, is also challenging proposed legislation that could ban the app in the US, amid concerns about user data access and freedom of speech implications.
https://www.aljazeera.com/news/2024/10/8/tiktok-faces-new-lawsuits-in-the-us-accusing-it-of-harming-children
China’s commitment to economy not undermined, analysts say in absence of large stimulus
South China Morning Post
China's economic planner has reaffirmed the government's commitment to achieving a 5% growth target, emphasizing systematic and precise policy measures despite no major new stimulus. Analysts believe more initiatives will emerge as authorities prioritize economic revival amidst challenges like weak employment and a property crisis. The National Development and Reform Commission (NDRC) announced plans to implement existing policies effectively and boost consumption. Expectations of fiscal support ranging from 1 trillion to 3 trillion yuan and urbanization investments are anticipated to enhance economic stability. Overall, the focus remains on gradual adjustments rather than immediate large-scale spending.
https://www.scmp.com/economy/policy/article/3281588/chinas-commitment-economy-not-undermined-analysts-say-absence-large-stimulus?utm_source=rss_feed
China targets EU brandy with tariffs in tit-for-tat over Chinese EVs
Yahoo US
The automotive sector in Europe is currently facing a crisis, particularly in the electric vehicle (EV) market, which is stagnating and threatening the EU's goal to end sales of new diesel and petrol cars by 2035. In response to the EU's recent decision to impose tariffs on Chinese electric vehicles, China has announced provisional tariffs on certain European brandy imports, effective Friday. This move is part of escalating trade tensions between the EU and China, with Beijing criticizing the EU's actions as protectionist and a violation of WTO rules. The EU plans to challenge China's brandy tariffs at the WTO, asserting that they are unfounded. EU Economy Commissioner Paolo Gentiloni defended the EU's tariffs on Chinese EVs, stating they are a result of a serious investigation into overproduction risks.
https://finance.yahoo.com/news/china-targets-eu-brandy-tariffs-143337294.html
More traffic out of Hong Kong than into city over ‘golden week’ holiday
South China Morning Post
During the recent "golden week" holiday, Hong Kong residents took fewer trips out of the city compared to 2023, with 1.78 million trips recorded this year versus 1.83 million last year. In contrast, mainland Chinese visitors made approximately 1.2 million trips to Hong Kong, an increase from 1 million last year. The tourism industry remains optimistic, anticipating continued growth into the Christmas season, supported by a rebound in the stock market. However, economist Gary Ng cautions against overconfidence, suggesting that the shorter holiday may have limited Hongkongers’ outbound travel, and there might be lingering fatigue from previous years' travel trends. He notes that while Hong Kong remains an attractive destination for mainland visitors, challenges such as lower spending patterns persist.
https://www.scmp.com/news/hong-kong/hong-kong-economy/article/3281579/more-traffic-out-hong-kong-city-over-golden-week-holiday?utm_source=rss_feed
Chinese tech giants from ByteDance to Meituan see surge in ‘golden week’ consumer spending
South China Morning Post
During China's "golden week" National Day holiday (October 1-7), consumer spending on dining and travel surged on platforms like Meituan and Douyin. In-restaurant dining bookings via Meituan rose 41.2%, while Fliggy reported over 50% growth in outbound travel bookings. Douyin saw hotel reservations triple and short-distance cruise trips increase by 123%. This rebound in consumer behavior follows recent economic stimulus measures announced by Beijing. Additionally, Alipay reported a 120% increase in spending by foreign travelers, reflecting a boost in inbound tourism due to new visa-free policies.
https://www.scmp.com/tech/big-tech/article/3281591/chinese-tech-giants-bytedance-meituan-see-surge-golden-week-consumer-spending?utm_source=rss_feed
China sets upbeat tone at high-profile meetings despite lack of supercharged stimulus
South China Morning Post
At a recent press conference, China’s top economic planner conveyed a pro-growth message, highlighting the importance of stabilizing the economy amid disappointing capital market reactions due to a lack of specific stimulus measures. National Development and Reform Commission (NDRC) chairman Zheng Shanjie emphasized incremental funding and support for strategic infrastructure projects, aiming to meet the country’s growth target of around 5% for 2024. Premier Li Qiang also stressed the need for stabilizing growth and solicited input from economic experts and entrepreneurs. Analysts noted potential for more policy easing, as the NDRC pledged to adopt a countercyclical macroeconomic policy and support private enterprises, while preventing further declines in the property market. Despite initial market volatility, with significant fluctuations in indexes, experts expressed cautious optimism regarding the government’s stimulus package. The NDRC detailed plans for urban renewal projects, urging support for local authorities and the renovation of critical infrastructure. Additionally, the government plans to enhance fiscal support and address urbanization challenges, especially for rural migrant workers. Overall, the government aims to balance growth with sustainable development, indicating potential for substantial fiscal measures in the near future.
https://www.scmp.com/economy/china-economy/article/3281586/china-sets-upbeat-tone-high-profile-meetings-despite-lack-supercharged-stimulus?utm_source=rss_feed
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