Hi everyone. I’m Stephanie LI.
Coming up on today’s program
Yuan gains to reach 7.13 against US dollar today;
Premier Li Qiang will head China's Central Financial Commission.
Here’s what you need to know about China in the past 24 hours
The Chinese yuan continues to strengthen for a second day, appreciating 0.5 percent to 7.1328 against the US dollar, its sixth straight daily gain on Tuesday, as the central bank guided the unit higher and exporters rushed to convert their dollar receipts into local currency.
The offshore renminbi rises above four thresholds of 7.16, 7.15, 7.14 and 7.13 in a row today to reach as high as 7.1299 intraday, up over 300 pips in a day, making the cumulative increase to reach nearly 900 pips over two trading days.
On Tuesday, the central price of the yuan against the greenback was 7.1406, up 206 pips, according to a notice published by the China Foreign Exchange Trade System (CFETS), following a strong fixing on Monday at 7.1612, its highest value since mid-August.
Since November 1, the onshore yuan has appreciated 1.4 percent and offshore yuan has appreciated 1.6 percent, while the US dollar index has weakened by 2.7 percent.
It is believed that the yuan may see further appreciation in December. Weakening of the US dollar is the direct driver of the appreciation of the yuan exchange rate, and the decline of the US Treasury interest rate is the main reason for the weakening of the US dollar, analysts said.
Local stocks have stabilized as China's economic recovery has gained traction and forecasters see an imminent end to the US Federal Reserve's policy tightening drive after US inflation cooled last month.
To support the steady growth of the real economy, Chinese monetary policy will always remain stable and create a sound monetary and financial environment. There is still the possibility of lowering the reserve requirement ratio this year to ease financing costs for the real economy, observers noted.
According to information from China’s central bank on November 13, the scale of social financing and yuan loans saw a year-on-year increase in October.
The bank's foreign exchange settlement reached 1.1516 trillion yuan in October and foreign exchange sales reached 1.2057 trillion yuan, meaning that China's cross-border capital flows are becoming more balanced.
Premier Li Qiang has been named head of the Central Financial Commission (CFC), which was set up by the Communist Party in March this year to supervise and manage the country’s financial system. According to Xinhua, Li has presided a meeting of the commission on Monday to discuss what needs to be done to promote the high-quality development of the financial sector. It agreed on the need to further develop areas such as fintech and green finance, while maintaining the stability of monetary policies. It also highlighted the importance of beefing up the financial regulatory framework to “manage risks at source”. Li's appointment came after Vice Premier He Lifeng was appointed earlier this month as the head of the office of the CFC, which is responsible for running the day-to-day affairs of the new regulator.
China resumed imports of Australian barley in October, with the amount reaching 313,700 tons worth $88.4 million, according to data released by the General Administration of Customs (GAC) on Monday. This is the first batch of imports in more than three years after China imposed anti-dumping and anti-subsidy tariffs on Australian barley and ended the measures on August 5.
South Korea's oyster exports to China amounted to $2.7 million (19.55 million yuan) from January to October this year, an increase of nearly three times year-on-year, as Japan's dumping of nuclear-contaminated wastewater left a market gap. China is the largest export market for South Korean fishery products. In 2022, South Korea's fishery exports to China reached $900 million, which is equivalent to South Korea's total exports to the US and Japan.
Moving on to regional highlights
The first China International Supply Chain Expo (CISCE), set to be held in Beijing from November 28 to December 2, will have 26 percent international exhibitors, with 36 percent of that group coming from Europe and the US, event organizer said on Monday. Global companies from more than 50 countries and regions will participate in the event, with exhibition area expected to exceed 100,000 square meters, providing display spaces for domestic and international enterprises from five major chains - smart cars, green agriculture, clean energy, digital technology, and health and lifestyles.
Shanghai’s imports and exports grew faster than the average among the Chinese mainland’s 31 provincial-level regions in the first 10 months of the year despite weakening external demand. Shanghai’s foreign trade rose 1.9 percent to 3.51 trillion yuan in the 10 months ended Oct. 30 from a year earlier, according to statistics released by Shanghai Customs yesterday. The average among Chinese provincial-level regions in the period was 0.03 percent.
A trust issued by an investment company in southwestern Guizhou province, that matured two and a half years ago and is in default, will pay 70 percent of the 450 million yuan principal to investors, to help reduce the province’s invisible debt. The trust, which is managed by Zhongtai Trust, was issued by urban investment platform company Bozhou Investment under the Finance Bureau of Bozhou District, Zunyi city. Some 28 provinces have disclosed their special bond issuance plans in this latest round, amounting to more than 1.3 trillion yuan with Guizhou issuing the most at 214.9 billion yuan.
Next on industry and company news
China's cumulative installed power generation capacity rose to 12.6 percent year-on-year to approximately 2.81 billion kilowatts by the end of October, said China's National Energy Administration on Monday. The installed capacity of solar power generation rose 47 percent to 540 million kilowatts and that of wind power rose 15.6 percent to 400 million kilowatts, it said. China's major power generation companies invested a total of 662.1 billion yuan in power supply projects during the first ten months, a 43.7 percent increase year on year.
China's gross ocean product in the first three quarters grew by 5.8 percent year-on-year, reaching 7.2 trillion yuan, showcasing a steady recovery, data from China's Ministry of Natural Resources showed on Monday. The output of offshore crude oil and natural gas increased by 4.6 percent and 9.7 percent from a year ago, respectively. New orders received by China's shipbuilders for seagoing ships rose 40.2 percent year on year during the period.
China's parcel delivery sector continued to record resilient growth this year, with 105.17 billion items handled from January to October, a year-on-year increase of 17 percent, according to the State Post Bureau of China on Monday. The sector raked in total revenue of 964.38 billion yuan in the January-October period, up 12.3 percent. In October alone, China's courier sector witnessed strong expansion, with 12.06 billion deliveries and 109.83 billion yuan in business revenue.
McDonald's has agreed to buy Carlyle Group's minority stake in McDonald's China, the operator of the US fast food titan's restaurants in the Chinese mainland, Hong Kong and Macao, to simplify its shareholding structure. The deal is subject to regulatory approvals and will likely close in the first quarter of next year, McDonald's announced yesterday, without disclosing further details. McDonald's holding will increase from 20 percent to 48 percent and state-owned conglomerate Citic Consortium will remain the Chinese partnership's controlling shareholder with a 52 percent stake.
Shares of Kweichow Moutai, China's largest liquor maker, gained 1.6 percent today after it announced late Monday that it plans to distribute 24 billion yuan in special cash dividends to shareholders in 2023. The dividend will be paid at 19.106 yuan per share. This will be the top distiller's second dividend plan this year after a 32.55 billion yuan distribution plan in March.
Chinese electric vehicle maker Nio said on Tuesday that it would partner with state-owned Changan Automobile on developing battery-swapping EVs. Nio would also team up with Changan on building and sharing battery-swapping stations and standardizing batteries to promote battery-swapping technology, Nio said in a statement.
Chinese on-demand services giant Meituan published several job recruitment posts for short-video-related talents. Meituan is recruiting for positions including video client-side senior test and development engineer, short-video content cooperation personnel, short-video content recommendation algorithm engineer, and video content business analyst, according to job openings the firm posted on its recruitment website yesterday.
A unit of state-owned China Minmetals Corp. bought a copper mine in Botswana for about $1.9 billion, ending a bidding race that drew interest from at least two other Chinese suitors. MMG Ltd. said it had agreed to purchase Cuprous Capital Ltd., the sole owner of the Khoemacau mine in the Kalahari copper belt, which stretches from northwest Botswana to western Namibia, according to a filing to the Hong Kong Stock Exchange today.
Stocks in Chinese property developer Sunac China soared over 25 percent today after announcing last night that each of the company's restructuring conditions has been satisfied and the debt restructuring plan can now commence. According to the announcement, a total of about $10.23 billion of debt has been converted into new notes, mandatory convertible bonds, convertible bonds and Sunac Services shares. The converted new notes, mandatory convertible bonds and convertible bonds will be listed on the Singapore Exchange today.
Earnings reports express
Trip.com Group, China's leading online travel agency, reported strong results for the third quarter on Tuesday, as domestic and international travel businesses continued to show robust recovery. For the third quarter of 2023, the company reported net revenue of 13.7 billion yuan, surging 99 percent year-on-year, boosted by a substantial recovery of the travel market. Its net profit reached 4.6 billion yuan, which improved significantly from 245 million yuan for the same period in 2022. In the third quarter alone, domestic hotel bookings grew by over 90 percent on a yearly basis and increased by over 70 percent compared with the pre-COVID level. Outbound hotel and flight tickets reservations also recovered to around 80 percent of that in 2019.
Xiaomi swung to a net profit of 4.87 billion yuan in the third quarter as the smartphone maker posted its first revenue gain in almost two years. The latest quarterly profit figure is compared with a net loss of 1.48 billion yuan during the same period last year. Xiaomi's revenue rose 0.6 percent to 70.9 billion yuan for the September quarter - marking the first increase after six quarters. The adjusted profit for the quarter surged 183 percent to 5.99 billion yuan thanks to lower component costs and operating efficiencies across the business.
Switching gears to financial news
The People's Bank of China said on Monday that it had signed a local currency swap agreement with the Saudi Central Bank at a size of 50 billion yuan or 26 billion Saudi riyals, valid for three years. Establishing the bilateral local currency swap will help strengthen financial cooperation between the two economies, expand the use of local currencies in bilateral transactions and facilitate trade and investment, China's central bank said in a statement.
The Shanghai Stock Exchange (SSE) and the Dubai Financial Market (DFM) announced the signing of a Memorandum of Understanding (MoU) on Monday to strengthen cooperation and exchanges between the capital markets. The partnership facilitates the exchange of knowledge, expertise, and information between the two sides and aims to enhance efficiency and transparency in both markets, said the SSE. The two will also jointly explore developing an ESG and sustainability-linked products, as well as facilitate joint product development, such as Index and ETFs.
Foreign direct investment into China's manufacturing industry grew by 1.9 percent year-on-year to 283.44 billion yuan ($39.47 billion) in the first ten months, while that of high-tech manufacturing soared 9.5 percent on a yearly basis, data from the Ministry of Commerce showed. In the meantime, China saw the number of newly established foreign-invested enterprises reach 41,947, a year-on-year increase of 32.1 percent.
Wrapping up with a quick look at the stock market
Chinese stocks retreated on Tuesday as the benchmark Shanghai Composite closed nearly flat and the Shenzhen Component slid 0.3 percent. Hong Kong’s Hang Seng index also inched down 0.3 percent and the TECH index shed 1 percent.
Biz Word of the Day
Battery swapping allows drivers to replace depleted packs quickly with fully charged packs, rather than plugging the vehicle into a charging point. Swapping could help to ease the strain on power grids at peak times when drivers recharge, but industry analysts and executives expect it would only become feasible if batteries become more standardized.
Executive Editor: Sonia YU
Editor: LI Yanxia
Host: Stephanie LI
Writer: Stephanie LI
Sound Editor: Stephanie LI
Graphic Designer: ZHENG Wenjing, LIAO Yuanni
Produced by 21st Century Business Herald Dept. of Overseas News.
Presented by SFC
编委: 于晓娜
策划、编辑：李艳霞
播音：李莹亮
撰稿：李莹亮
音频制作：李莹亮
设计：郑文静、廖苑妮
21世纪经济报道海外部 制作
南方财经全媒体集团 出品