Beijing is trying hard to ward off a slowdown, but data continues to disappoint
China’s Policy Combo Gives Investors Hope for a Market Rally
Welcome to this issue of The China Brief. Today is Decamber 15, 2023. 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 govt land sales revenue falls at slower pace in November
Yahoo US
China's government land sales revenue fell by 1.5% in November compared to the same month last year, according to data from the finance ministry. This is a smaller decline than the 25.4% slump seen in October. However, land sales revenue for the year to date is down 17.9% at CNY4.2tn ($591.57bn). Land sales are a key source of revenue for local governments, and the decline in sales is a result of Beijing's efforts to curb excessive leverage in the property market. China's new home prices fell for the fifth consecutive month in November, and property investment fell 9.4% in the year to November.
China’s Policy Combo Gives Investors Hope for a Market Rally
Yahoo US
China's central bank has handed commercial lenders $112bn of one-year loans, on the same day that Beijing and Shanghai relaxed home buying rules. After a drip-feed of measures failed to shore up the housing market, investors have been looking for more forceful steps.
Chinese, Russians Rank Among Top Condominium Buyers in Thailand as Tourists Return
Bloomberg
Chinese and Russian buyers have emerged as the top foreign buyers of condominiums in Thailand this year, with sales surging in popular tourist destinations like Bangkok, Pattaya, and Phuket. A total of 10,703 units worth $1.5 billion were sold in the nine months through September, a 38% increase from the previous year. Chinese buyers accounted for almost 47% of the total transactions, followed by Russians, Americans, and Taiwanese buyers. The Thai government is counting on tourism to drive economic growth, with the sector accounting for 12% of GDP and nearly a fifth of jobs. The forecast for an increase in tourist arrivals next year is expected to drive demand for Thai condos even higher.
Evergrande to sell downtown Shanghai JV stake to state bank partner
Nikkei Asia
China Evergrande Group has agreed to sell its stake in a prime development project in downtown Shanghai to state-owned lender China Everbright Group. The cash-strapped developer has been disposing of assets in order to raise funds to pay off its massive debts. The joint venture, part of the Shanghai North Bund Project, will be virtually controlled by Everbright Group, as it already owns the remaining 70% stake. Evergrande is facing a liquidity issue and has unpaid debts of CNY301.36bn ($42.5bn).
Beijing is trying hard to ward off a slowdown, but data continues to disappoint
CNN
China's central bank has injected a net $112bn into the banking system in an attempt to support the country's struggling economy. However, despite this intervention, government data released on the same day showed that investment in fixed assets continued to disappoint. Investment in fixed assets such as buildings and roads increased by 2.9% in the first 11 months of this year, compared to the same period in 2022. This was slightly lower than a forecast of 3.0% expansion.
Chinese equities are ready for long march upwards
Reuters BreakingViews
Share prices and valuations in China are near 2016 lows and foreign investors have retreated, but patient investors willing to stomach geopolitical tensions and other risks could earn big rewards. The MSCI China Index is down 15% this year and trades at half the multiple it commanded when it peaked in 2021, while the S&P 500 has risen by a fifth and is close to its all-time high. Overseas investors have fled, with average allocation to Chinese assets standing at 1.75% in September, compared to 2.98% weight assigned to Chinese equities in MSCI's All Country World Index. China's captive pool of domestic capital is one reason shares in big Chinese companies listed on mainland exchanges command a hefty 51% premium to their equivalents in Hong Kong, and why international brokers increasingly recommend trading Chinese equities onshore rather than offshore. If the property market stabilises, domestic investors could return quickly and if the US Federal Reserve lowers interest rates and geopolitical tensions ease, some overseas investors may also return.
Hong Kong police issue new cash bounties for self-exiled activists, including a US citizen
CNN
Hong Kong police have offered HK$1m ($128,000) bounties for five more democracy activists who are living in exile, including US citizen Joey Siu and Frances Hui who has been granted asylum in the US. The police have accused the activists of endangering national security. The US and UK have condemned the move. All of the activists wanted live in the US, Canada, Australia and the UK, which have suspended extradition treaties with Hong Kong due to concerns over its national security law.
China's video games market recovers in 2023, domestic sales surpass $42.6 billion
Yahoo US
China's video games market has returned to growth with domestic revenue rising by 13% to CNY303bn ($42.6bn), according to industry association CGIGC. The sector's revenue in China shrank for the first time last year following a government crackdown on gaming addiction. The number of Chinese gamers rose 0.61% to 668 million, more than the population of North America, the association said. Revenue from Chinese games in foreign markets fell 5.65% to $16.3bn this year, however, amid increased scrutiny by countries such as India on national security grounds.
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