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:
- Continued protests against COVID-19 policy in some parts of China deepened market concerns. Stocks in mainland China and Hong Kong sank in the beginning of the week, with CSI 300 capitalization-weighted stock market index posting its biggest one-day drop since late October. Meanwhile, the onshore yuan also fell to its lowest level in nearly three weeks against the dollar. Analysts have mixed views on the market’s direction. Some believe that China’s official measures to prevent the epidemic must remain consistent, otherwise the market may continue to fluctuate. Others expect the protests to have a positive impact on the market in the medium-term, given that they could prompt the government to abandon its zero covid policy. (The United Morning Post)
- The overall profit of Chinese industrial enterprises fell 3.0% from January to October this year, dragged down by the crisis in the real estate market and the consequences of the pandemic. According to China’s National Bureau of Statistics, 22 of the 41 major industrial sectors saw profits decline in this period. The sector with the largest decline was the ferrous metal smelting and plating industry, with profits falling 92.7 percent. (The United Morning Post)
- Yi Gang, Governor of the People’s Bank of China, took part in a seminar entitled “Central Banking in a Changing Global Landscape” and commented on the current issues of growth and inflation, saying that the growth rate of the Chinese economy is now slightly lower than expected due to the pandemic and other negative factors. In his opinion, the implementation of a prudent monetary policy has been realized in a timely manner. This year most developed economies have tightened monetary policy in response to high inflation, and many central banks have raised interest rates at a significantly faster pace than in previous tightening cycles. China’s current inflation rate is around 2%, thanks, in particular, to a good grain harvest and stable energy prices. China’s natural gas and oil prices are largely in line with international levels, while coal prices are around half the international average, and vigorous development of renewable and clean energy sources have played an important role in keeping China’s electricity prices largely stable since the beginning of the year. Mr Yi Gang said that “China’s inflation is expected to be moderate next year”. (Caixin)