Welcome to China Business News, NEO’s weekly roundup of top business developments as reported by news outlets in China and the region.
This week’s highlights:
- Major Asian stock markets reacted positively to China’s reopening of its borders, with investor optimism also boosted by a slowdown in the U.S. inflation rate. Experts interviewed by The United Morning Post confirm that the local stock market has started the year well due to the fact that global stock markets have been encouraged by the reopening of Chinese borders. However, the positive impact is only temporary; it will take time to see a significant improvement in the region’s stock markets, with China’s economy still reeling from the effects of the COVID-19 pandemic. (The United Morning Post)
- Data released by China’s National Bureau of Statistics earlier this week showed that the country’s consumer price index (CPI) rose 1.8% year-on-year in December 2022, an increase of 0.2 % from the November rate. The December increase was in line with market expectations. Throughout 2022, the CPI rose 2.0% year-on-year within the established target rates, the Bureau report said. China’s annual government performance report for 2022 set the target CPI increase rate at around 3% year-on-year. (Reference News)
- The yuan has continued its strong comeback since the start of 2023. Earlier this week, the onshore yuan rose above 6.76/USD within the day, an 8.5% appreciation from its low point of 7.3 in early November last year. However, it is still a long way to go for RMB to return to its pre-pandemic exchange rates. In the short-term perspective, the rapid rebound in the RMB exchange rate is supported by China’s cancellation of pandemic-related restrictions in December and January. Consumption rates and travel expenses during the Chinese New Year’s holidays will increase significantly, which in turn will produce have a positive impact on China’s economy and the RMB’s appreciation rate. (Caixin)