China's Xi and top leaders call for halting real estate decline, responding to public concerns；Beijing’s stimulus action likely to make riskier Chinese assets look better to investors
China vows to save private economy, stabilise real estate market in Politburo meeting
Welcome to this issue of The China Brief. Today is 09 26, 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 Xi and top leaders call for halting real estate decline, responding to public concerns
CNBC
China aims to stop the property slump, top leaders said Thursday in a readout of a high-level meeting published by state media.
Authorities "must work to halt the real estate market decline and spur a stable recovery," the readout said in Chinese, translated by CNBC. It also called for "responding to concerns of the masses."
Chinese President Xi Jinping led Thursday's meeting of the Politburo, the second-highest circle of power in the ruling Chinese Communist Party, state media said.
The readout said leaders called for strengthening fiscal and monetary policy support, and touched on a swath of issues from employment to the aging population. It did not specify the timeframe or scale of any measures.
Stocks in mainland China and Hong Kong extended gains after the news to close sharply higher on Thursday. An index of Chinese property stocks in Hong Kong surged by nearly 12%.
https://www.cnbc.com/2024/09/26/chinas-top-leaders-call-for-halting-real-estate-decline.html
Beijing’s stimulus action likely to make riskier Chinese assets look better to investors
South China Morning Post
Investors are responding positively to Beijing's $114 billion stimulus package, which aims to revive sluggish economic growth and encourages riskier asset purchases. The People's Bank of China (PBOC) introduced new funding tools for stock purchases and is considering a stabilization fund. The CSI 300 Index has surged nearly 7% this week, while the Hang Seng Index is on track for a significant gain. Analysts suggest that Chinese stocks now present value opportunities compared to other global markets. However, long-term recovery will depend on implementing effective fiscal policies to boost domestic demand.
https://www.scmp.com/business/china-business/article/3280026/beijings-stimulus-action-likely-make-riskier-chinese-assets-look-better-investors?utm_source=rss_feed
China vows to save private economy, stabilise real estate market in Politburo meeting
South China Morning Post
China has made a commitment to support its private economy and stabilize the property sector following a recent Politburo meeting led by President Xi Jinping. The meeting emphasized the need to help enterprises overcome challenges and maintain necessary fiscal spending amid a declining economy. Officials were urged to confront difficulties and boost confidence while avoiding complacency in their economic efforts. The meeting's strong messaging aims to prevent further economic downturns, with a focus on achieving an annual growth target of around 5 percent. Financial markets responded positively, with gains in the Hang Seng Index and Shanghai Composite Index following the announcement of stimulus measures, including cuts to mortgage rates and reserve requirements by the central bank.
https://www.scmp.com/economy/article/3280018/china-vows-save-private-economy-stabilise-real-estate-market-politburo-meeting?utm_source=rss_feed
What's behind China's launch of an intercontinental ballistic missile?
Australian Broadcasting Corporation
China recently test-fired an intercontinental ballistic missile (ICBM) into the Pacific Ocean as part of a routine training exercise, a rare occurrence since the last similar test in 1980. The missile, equipped with a dummy warhead, landed in a designated area, signaling China's growing nuclear capabilities and serving as a warning to the U.S. and its allies. The test coincides with rising regional tensions and follows recent military exercises around Taiwan. Experts note that this launch demonstrates China's military modernization and its readiness to deter adversaries while addressing internal issues within its rocket corps.
https://www.abc.net.au/news/2024-09-26/chinas-launch-of-an-intercontinental-ballistic-missile-explained/104401636
China’s mortgage cut still insufficient to move the needle, boost spending by homeowners
South China Morning Post
China's recent mortgage rate cut for existing properties is unlikely to significantly alleviate financial pressures for homeowners like Ivy Cai, who faces monthly repayments of 15,000 yuan. Although the reduction may save her a few hundred yuan, Cai emphasizes that this is minimal in expensive Shanghai. Many homeowners, struggling with stagnant incomes and rising costs, feel the mortgage cut will not spur consumption as intended. The People's Bank of China's measures aimed to boost the economy amid disappointing retail sales and inflation concerns, but experts argue that consumer sentiment remains low and meaningful improvements are needed.
https://www.scmp.com/economy/policy/article/3279945/chinas-mortgage-cut-still-insufficient-move-needle-boost-spending-homeowners?utm_source=rss_feed
‘Education of hatred’: Killing of Japanese boy sparks soul searching in China over rising nationalism
CNN
The fatal stabbing of a 10-year-old Japanese boy in Shenzhen, China, has ignited widespread anger and reflection on rising nationalism and anti-Japan sentiment in the country. The boy, whose parents were Japanese and Chinese, was attacked while walking to school, marking it as the second knife assault on Japanese children in recent months. Many residents and online commentators have called for a reassessment of the nationalistic education that they believe fosters hatred. Critics point to the Chinese government's role in promoting anti-Japanese sentiment, rooted in historical grievances from World War II, and intensified under President Xi Jinping's patriotic education policies. The incident coincided with a significant anniversary of Japan's invasion of China, further fueling speculation about the motivations behind the attack. While the Chinese government denies the existence of "Japan-hating education," there is concern over the impact of online xenophobia on young people. Following the incident, Japanese businesses expressed concerns for their staff's safety, and Japanese officials urged China to address anti-Japan rhetoric and ensure the protection of their citizens. Notably, many Chinese citizens have expressed sympathy and solidarity with the Japanese community, laying flowers at the boy's school.
https://edition.cnn.com/2024/09/25/china/china-nationalism-japanese-boy-killing-intl-hnk/index.html
Russia has secret war drones project in China, intel sources say in Reuters report
CNBC
Russia has established a weapons program in China to develop and produce long-range attack drones for use in the war against Ukraine, according to two sources from a European intelligence agency and documents reviewed by Reuters.
IEMZ Kupol, a subsidiary of Russian state-owned arms company Almaz-Antey, has developed and flight-tested a new drone model called Garpiya-3 in China with the help of local specialists, according to one of the documents, a report that Kupol sent to the Russian defense ministry earlier this year outlining its work.
The White House National Security Council said it was deeply concerned by the Reuters report of the drones program, which it said appeared to be an instance of a Chinese company providing lethal assistance to a U.S.-sanctioned Russian firm.
The White House has not seen anything to suggest the Chinese government was aware of the transactions involved, but China has a responsibility to ensure companies aren't providing lethal aid to Russia for use by its military, a spokesperson added.
https://www.cnbc.com/2024/09/26/russia-has-secret-war-drones-project-in-china-intel-sources-say-in-reuters-report.html
China’s EV makers pull out all the stops to beat Tesla in autonomous driving race
South China Morning Post
A competitive race for autonomous driving technology is intensifying in China's electric vehicle (EV) market, threatening Tesla's dominance. Major Chinese EV makers like BYD and Li Auto are rapidly developing advanced driver assistance systems (ADAS) to attract buyers. While consultancy Counterpoint Research predicts that around 1 million EVs in China will meet Level 3 (L3) standards by 2026, regulatory approval for such systems remains pending. Chinese manufacturers are striving to enhance their technologies, but they still lag behind Tesla's Full Self-Driving software. The growing demand for autonomous features among consumers is shaping the future of the industry.
https://www.scmp.com/business/china-evs/article/3279957/chinas-ev-makers-pull-out-all-stops-beat-tesla-autonomous-driving-race?utm_source=rss_feed
China’s spy agency accuses New Zealand of ‘harassment, intimidation’ of Chinese citizens
South China Morning Post
China's Ministry of State Security (MSS) has condemned New Zealand for "harassment and intimidation" of Chinese nationals following Wellington's security report labeling China as a "complex intelligence concern." The MSS accused New Zealand of ideological bias and undermining bilateral relations, citing unfounded claims about a Chinese intelligence threat. The Chinese embassy in New Zealand dismissed the report as baseless and harmful to the Chinese community. As New Zealand strengthens ties with US-led allies amid concerns about China, the MSS urged New Zealand to create a fair environment for Chinese nationals and avoid actions detrimental to their relations.
https://www.scmp.com/news/china/diplomacy/article/3280050/chinas-spy-agency-accuses-new-zealand-harassment-intimidation-chinese-citizens?utm_source=rss_feed
Biden’s High-Wire Balancing Act on Chinese Tech
Foreign Policy
The Biden administration has proposed a new regulation that would ban the use of Chinese and Russian connectivity and automation technology in cars sold in the United States, citing national security concerns. Officials argue that while connected vehicles offer many advantages, they also pose significant cybersecurity risks due to potential vulnerabilities in software and hardware sourced from these countries. The regulation aims to prevent scenarios where compromised vehicles could disrupt transportation infrastructure, specifically through automated systems that could be exploited for malicious purposes.
The draft rule, which is currently in a 30-day comment period before finalization, would effectively shut out most Chinese electric vehicles (EVs) from the U.S. market, as it would block any vehicle containing technology from China or Russia. While companies could apply for exemptions if they demonstrate mitigation of national security risks, experts warn that this could hinder competition and innovation within the U.S. auto industry. The rule operates under a broader executive order aimed at limiting technology flows between the U.S. and China, reflecting an ongoing trend of increased restrictions since the Trump administration.
Critics of the regulation argue that it could slow down the decarbonization efforts in the U.S. and limit consumer access to affordable, high-quality EVs from Chinese manufacturers. With tariffs already in place and set to increase, the new regulation may further isolate U.S. automakers from competitive pressures, potentially stalling their transition to electric vehicles. Experts suggest that a more nuanced approach is necessary to balance national security with economic innovation and climate goals, noting that cooperating with international competitors might foster a healthier innovation ecosystem.
https://foreignpolicy.com/2024/09/25/china-biden-connected-cars-commerce-ban/
Shanghai unveils 500-million-yuan voucher plan to boost consumption after stimulus package
South China Morning Post
Shanghai is launching a massive 500 million yuan (US$71.2 million) consumption voucher program to stimulate spending in the wake of recent economic challenges. This initiative, the largest of its kind in the city, aims to boost sectors like dining, hospitality, and entertainment, following significant retail sales declines. Vouchers will be distributed in two phases, focusing on dining and movies during the National Day holiday and later on accommodations and sports activities. This move aligns with China's broader stimulus efforts to revive economic growth and support struggling industries, especially in light of a 6.8% year-on-year drop in retail sales.
https://www.scmp.com/economy/economic-indicators/article/3279947/shanghai-unveils-500-million-yuan-voucher-plan-boost-consumption-after-stimulus-package?utm_source=rss_feed
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