CDI holds China’s high-quality development of listed companies forum and launches Shenzhen Listed Companies Development Report
On October 9, the State Council issued a circular, outlining plans to improve the quality of listed companies, in an effort to achieve healthy development of the capital market and perfect the socialist market economic system.
Regarding to the issue, China Development Institute heldChina’s high-quality development of listed companies forum on December 9. Think tank experts, industry and business representative shared views and insights onlisted company governing, sustainable development and investing, to answer the question,how listed companies can achieve high-quality development with the utilization of capital market.
During the forum, CDI research team launched Shenzhen listed companies development report. The report reflets the status quo, characteristics and trends of the development of Shenzhen listed companies by analyzing the current problem of Shenzhen listed companies’ development.
China’s economic outlook amid international challenges
On December 4, China Development Institute and National School of Development at Peking University co-hosted the 149th NSD Policy Talk on China’s economic outlook amid the COVID-19 outbreak and new international challenges. The event was also livestreamed on multiple media outlets.
Prof. Fan Gang, President of CDI, Prof. Yao Yang, Dean of NSD, Prof. Tang Jie, former Deputy Mayor of Shenzhen, Prof. Huang Yiping, Deputy Dean of NSD, and Dr. Zheng Shilin, Research Fellow of NSD shared insights on the economic challenges that China faces in a time of global uncertainty. The panelists suggested that China needs to continue the endeavor in scientific research, technological innovation, reform of state-owned enterprises and finance industry.
CDI holds seminar on China’s financial centers development and launches China’s Financial Centers Index 12
Themed “innovation, opening-up and stability”, China Development Institute held China’s financial centers development seminar in Shenzhen on December 4, 2020. Government, industry and regulatory representatives shared insights on financial regulation, as well as preventing and controlling financial risks in a time of “dual circulation”.
During the seminar, CDI research team launched China’s Financial Centers Index 12. The CDI CFCI 12 is composed of 94 factors separated into four assessment area. These are financial industry performance, financial institution strength, financial market scale and financial ecological environment. Thirty-one financial centers are included in this edition. China’s top 10 financial centers for competitiveness, according to CFCI 12, are Shanghai, Beijing, Shenzhen, Guangzhou, Hangzhou, Chengdu, Tianjin, Chongqing, Nanjing and Wuhan.
RCEP, the largest free-trade agreement deal in history
In October, industrial output rose 6.9% y/y, the same rate as in September, and the highest rate this year, up 2.2 pps from October 2019. The national service production index has been rising since the economic opening in February, and achieved positive growth in May. It rose 7.4% y/y in October, up 2 pps from September, and up 0.8 pps from October 2019. Investment rose 1.8% y/y in October, up 1 pps from September.
Retail sales of social consumption goods recovered further, and were up 4.3% y/y, and up 3.4 pps from Q3. Their real growth was 4.6% y/y, up 5 pps from Q3.Even the pandemic’s hardest-hit restaurant income has avoided a fall, and was up 0.8% y/y.
Price rises tempered amid monetary expansion. In October, CPI growth fell to only 0.5% y/y, mostly pulled down by significant meat price drops. After adjusting for seasonal factors, CPI fell -0.4% m/m. We expect CPI growth to turn from positive to negative next month, and that this will be a trend for the near future. The ex-factory price index of industrial goods fell -2.1% y/y. PPI fell -2.4% y/y. M1 rose 9.1% y/y, up 1 pps from September, and up 5.8 pps from last October, reaching its highest growth rate since February 2018.
In October, exports rose 7.6% y/y, and imports rose 0.9% y/y. Both of their seasonal adjusted growth rates show upward trends. We expect the appreciation of RMB and economic recovery to bring higher import growth.
On November 15th, 2020, 15 countries — members of the Association of Southeast Asian Nations (ASEAN), and Australia, China, Japan, South Korea and New Zealand signed the Regional Comprehensive Economic Partnership (RCEP), arguably the largest free trade agreement in history. This is the first time China has signed up to a regional multilateral trade pact. This is an example of China’s commitment to the greater openness repeatedly advocated by President Xi Jinping. While the trade deal certainly will boost these countries’ economies in the short term, in the long term it is "a victory of multilateralism and free trade," as Prime Minister Keqiang Li put it, in contrast to U.S. President Donald Trump’s trade policy.
Technology cooperation between China and UK Webinar
Information
As two major economies in Asia and Europe, the cooperation between China and the UK in the field of scientific and technological innovation has maintained stable development. On October 21st, the China Development Institute and the Z/Yen jointly held a webinar. Think tank experts, government and business representatives from China and the UK have discussed strengthening exchanges and cooperation in economic, technological and other fields between the two countries in the current complex and volatile international situation.
Date:October 21, 2020
Host: CDI, Z/Yen
Theme: Technology cooperation between China and UK
Pan-Beibu Gulf Think Tank Summit 2020
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As COVID-19 injects uncertainty into the world economy, how can the Pan-Beibu Gulf countries advance regional industry chain and further promote economic cooperation under the Regional Comprehensive Economic Partnership (RCEP) framework, while accelerating economic recovery? The Pan-Beibu Gulf Think Tank Summit 2020 aims to provide insights of the RCEP agreement and deliver practical recommendations for business and public policy leaders.
On Oct 15, 2020, the Pan-Beibu Gulf Think Tank Summit, themed “Regional Connectivity for Shared Prosperity”, was held in Nanning, China, with international speakers attending via online conferencing system. Although global economy was impacted by the pandemic, panellists agreed that China-RCEP trade and economic cooperation uptrend is expected to continue with the integration and maximization of different modes of transportation, while boosting economic recovery and employment. Bilateral trade and investment activity will be further supported by the RCEP free trade agreement, while assuring a stable and safe local and regional supply chain. In addition, emerging industries like digital economy, maritime economy and big data could become the new drive for regional economic cooperation.
Since 2006, PBG Economic Cooperation Forum has been successfully held for 11 editions with the support of international think tanks and research institutes. Over the years, the forum has contributed significantly to China-ASEAN relation. As the parallel conclave of the PBG Economic Cooperation Forum, this year’s PBG Think Tank Summit provided a platform for sharing ideas and views among state leaders, senior government officials, business leaders and renowned scholars from China and the ASEAN countries in its 6th edition.
Consul General of Israel visits CDI
On November 24, Mr.Peleg Lewi, Consul General of Israel to South China, visited CDI and exchanged ideas on the economic development of Guangdong-Hong Kong-Macau Greater Bay Area, as well as Sino-Israeli economic and academic cooperation with CDI researchers. Dr. Guo Wanda, executive vice president of CDI, shared insights on GBA’s overall framework, economic structure and its unique competitive strengths, which is the steadily growing inflow of young talents and the integration of a rich and long industry chain.
Global Financial Centres Index 28 Launch
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The Global Financial Centres Index(GFCI) was first developed in 2005 and has been published every six months since 2007.Starting in 2016, Z/Yen and China Development Institute joined parentship and have been working closely in the production of GFCI.
On September 25, 2020, GFCI 28 was simultaneously launched in Seoul, South Korea and Shenzhen, China, with the latter being held at China Development Institute.In this edition, 111 financial centres were rated, with the top ten centres as followed, New York, London, Shanghai, Tokyo, Hong Kong, Singapore, Beijing, San Francisco, Shenzhen, Zurich. While financial centres across the globe have inevitably been impacted by the Covid-19 pandemic, the top ten centres appear to perform better than their peers.During the launch, panelists also commented on the challenges and opportunities faced by Guangdong-Hong Kong-Macao Greater Bay Area financial centres, considering the mixed performance across the leading financial centres, as well as Asia/Pacific centres.
Date: September25, 2020
Host: CDI
Theme: Global Financial Centres Index 28 Launch and Guangdong-Hong Kong-Macao Greater Bay Area financial centres outlook
GDP growth hits 4.9% in Q3,with surging exports
GDP was up 4.9% y/y in Q3, a rise of 1.7 pps from Q2, but still 1.1 pps lower than in Q3 2019. Industrial output was up 5.8% y/y in Q3, up 1.4 pps from Q2, and up 0.8 pps from Q3 2019.
Investment was up 8.8% y/y, up 5 pps from Q2, and up 4.1 pps from Q3 2019, with investment in manufacturing rising fastest, by 9% y/y, up 10 pps from Q2. Retail sales of social consumption goods were up 0.9% y/y, and up 4.8 pps from Q2 -- and their real growth rate was -0.4% y/y.
CPI was up 2.3% y/y in Q3, down 0.4 pps from Q2. In particular, CPI rose only 1.7% y/y in September, an accelerated decrease. Producer prices fell less. The ex-factor price index of industrial goods fell -2.2% y/y, up 0.9 pps from Q2. PPI rose 1.2% m/m. It fell -2.7% y/y, up 1.7 pps from Q2.
The societal financing scale increased 46% y/y, driven by booming government bond issuance. The main financial indicators have stable or slightly increasing growth rates. At the end of Q3, M2 was up 10.9% y/y, down 0.3 pps from June. Household savings rose 13.9% y/y, down 0.4 pps from June. M1 was up 8.1% y/y, up 1.7 pps from June.
Despite the global pandemic, and the still ongoing U.S.-China trade war, exports are surging, and rose 10.2% y/y, up 5.7 pps from Q2, and up 6.3 pps from Q3 2019. The Chinese share of world exports also climbed, to 20%, from 13.1% in 2019, and 12.8% in 2018. Specifically, exports to the United States rose 19.2% y/y. Imports increased 4.3% y/y, up 10.1 pps from Q2.
The RMB has been appreciating against the dollar since June. On October 26th, the RMB had appreciated 6.7% compared to its value at the end of May. However, the magnitude is still too small to have sizable impacts on trade.
The export surge can be attributed to China’s good pandemic control, and its economy’s high resilience. Based on these two factors, we expect exports will remain in good shape in the near future.
Recovery reaches pre-pandemic level
Industrial output was up 5.6% y/y, up 0.8 pps from July, reaching the average growth rate of 2019. We expect growth might slightly exceed the pre-pandemic level for the rest of the year. Investment fell -0.3% y/y January-August, up 1.3 pps from previous months. The driving force is switching from state to private investment, reconfirming the return to pre-pandemic economic recovery.
Consumption was up 0.5% y/y, the first turn to positive growth this year, and up 1.6 pps from July. Exports were up 11.6% y/y, above 10% y/y for two consecutive months. Despite the U.S.-China conflict, exports to the United States grew faster than 20% y/y. Imports fell -0.5% y/y.
CPI growth turned downward in August, and was up 2.4% y/y, falling to the pre-pandemic level. For the next three months, based on the high base numbers of 2019, CPI is expected to fall further. Producer prices continued to rebound. The ex-factory price index of industrial goods fell -2% y/y, and PPI fell -2.5% y/y, up 0.4 and 0.8 pps from July, respectively. But both are still -1.6% and -2.2% y/y lower than in 2019.
The main financial indicators displayed differing patterns in August. M2 was up 10.4% y/y, falling for two consecutive months, and down 0.7 pps from June. M1 rose 8% y/y, up 1.1 pps from July, maintaining its upward trend. The societal financing scale rose 63.1% y/y, mainly driven by large government bond issuance.
The Chinese RMB has strengthened by 2.5% against the dollar in the last four weeks. Cross-border RMB receipts and payments totaled 12.67 trillion yuan, up 36.33% y/y. We expect the RMB will further strengthen in the rest of the year, given the Chinese economy’s much better comeback compared to the United States, the large interest rate differential between the United States and China, and the U.S. dollar flooding into the market. Even though the RMB cannot overtake the dollar in the international market in the near future, the outlook for the RMB is promising.
