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SwedCham China Insights for the Week of October 30 - November 3 , 2023
Top news of the week:
Three takeaways from Wang Yi’s U.S. visit
October 30, 2023
China’s top diplomat Wang Yi had a meeting with U.S. President Joe Biden, two rounds of talks with U.S. Secretary of State Antony Blinken across two days, strategic communication with U.S. National Security Advisor Jake Sullivan, and separate sit-downs with members of the U.S. strategic and business communities. Wang’s visit has proceeded towards a San Francisco meeting, reiterated the need to restart dialogue, and facilitated people-to-people exchanges.
China releases plan on establishing Xinjiang Pilot Free Trade Zone
October 31, 2023
China’s State Council has issued a general plan for establishing the Xinjiang Pilot Free Trade Zone (FTZ) as a significant strategic move for promoting reform and opening-up in the new era.
SAFE: attract long term foreign capital
November 1, 2023
Authorities will take measures to attract more foreign financial institutions to invest long-term capital in China, according to a spokesperson at the State Administration of Foreign Exchange. Measures include supporting sci-tech innovation and micro, small and medium-sized enterprises, elevating cross-border trade, investment and financing facilitation, and optimizing exchange rate risk management services for enterprises, etc.
China’s property sector loans contract for first time on record
November 2, 2023
China’s outstanding property loans fell on a yearly basis for the first time on record. The outstanding value of China’s yuan-denominated real estate loans edged down 0.2 percent year-on-year to 53.19 trillion yuan ($7.26 trillion) by the end of the third quarter this year, according to a statement from the People’s Bank of China.
Chinese premier to attend CIIE opening ceremony, deliver speech
November 3, 2023
Premier Li Qiang will attend the opening ceremony of the sixth China International Import Expo (CIIE) and the Hongqiao International Economic Forum in Shanghai on November 5 and deliver a keynote speech, a Ministry of Commerce spokesperson said.
Insight of the week:
The central financial work conference was held in Beijing from October 30 to 31, at which Xi Jinping delivered an important speech. Li Qiang, Zhao Leji, Wang Huning, Cai Qi, Ding Xuexiang and Li Xi, members of the Standing Committee of the Political Bureau of the CPC Central Committee, attended the meeting. The two-day conference, usually convened once every five years, is closely watched as it sets the direction for China’s financial policymaking for the following years.
Noting that finance is the lifeblood of the national economy and an important part of the country’s core competitiveness, the meeting urged greater efforts to comprehensively step up financial supervision, optimize financial services, prevent and resolve risks to promote high-quality development of China’s financial sector. China signalled support for property developers and resolving local government debt problems in this high-level financial meeting. China will also uphold the centralised and unified leadership of the Communist Party on financial work. According to President Xi Jinping, “[China must] comprehensively strengthen financial supervision and bring all financial activities under control in accordance with the law.” The gathering said China would set up a mechanism for resolving local debt risks and managing local government debt. It will also help with reasonable financing demands for all types of property enterprises and pursue policies that aim to meet housing demand. China will “persist in taking risk prevention and control as the eternal theme of financial work,” it was quoted as saying. At the same time, China also needs to strengthen the quality of its financial services to support key areas such as technology, advanced manufacturing, the green economy and small and medium-sized enterprises, which are crucial to job creation.
The analyst believes that Chinese leaders are trying to revive the economy and fend off potential financial risks from a property slump and hazardous local government debt, including debt of local government financing vehicles.