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IFF Newsletter Issue 52

TIME:2022-10-12

From the Editor

China’s factory activity expanded in September, beating expectation. China saw 422 million tourists during the week-long National Day holiday, a drop of 18.2% from last year. Shanghai and Shenzhen stock exchanges will include eligible dual-class shares in the Stock Connect scheme.  
The US announced sweeping measures to further curb chip sales to China on Friday, which will restrict China’s ability to purchase and make high-end chips. And the IMF cut its global growth outlook and warned of global recession risk on Tuesday.
The IFF continues to bring you the latest China news and global development.
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Latest from IFF
 
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IFF attends SWIFT’S annual financial conference  

 
 


 

IFF was invited to attend the annual financial conference in Amsterdam hosted by SWIFT, the global financial transactions system.
Zhu Xian, Vice-President and Secretary General of the IFF will be joining a panel on Wednesday  to discuss the impact of geopolitics on global finance at the SWIFT International Banker’s Operation Seminar (Sibos).
This year’s conference, under the theme of Progressive Finance for a changing world, brought together thought leaders from the financial world to discuss opportunities and challenges the industry faces.      

 
Newsletter
China News 
 
 
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China’s factory activity expands in September  


 

China’s factory activity expanded in September according to data released by the National Bureau of Statistics.
The Purchasing Managers’ Index (PMI) of China’s manufacturing industry reached 50.1 in September, up from August’s 49.4.
The 50-point mark separates contraction from growth.
A PMI above 50 represents an expansion when compared with the previous month. A reading below 50 represents a contraction.
The PMI of large enterprises edged up to 51.1 whereas the readings of medium-sized and small enterprises were 49.7 and 48.3 respectively.

 

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China holiday week tourists down by 18%, local tourism booms  


 

China recorded 422 million trips during the week-long National Day holiday, a drop of 18.2% compared to the same period last year whereas local tourism grew 30% during the holiday.

At 287.2 billion yuan, tourism revenues dropped 26.2% compared to the same period last year and were 44.2% of the same period in 2019.

As people were advised against travelling, local tourism picked up during the holiday. Spending on local tourism grew 30% during the National Day holiday, according to a report by online travel agency Ctrip.  

The average spending per capita in local tourism areas grew nearly 30% from the same period last year as 65% of tours happened locally.

Meanwhile, sales of new homes during China’s week-long National Day holiday fell 37.7% from the same period last year, according to a survey by China Index Academy.

Sales of the average daily floor area of homes in Beijing dropped 64% compared to the same time last year while sales in Shanghai, Shenzhen and Guangzhou fell 47%, 49% and 21% respectively.  

Of the 20 cities surveyed, Hangzhou in eastern China had the sharpest drop of 80% whereas six cities sold more homes compared to the last year’s holiday season.  

 

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China to include eligible dual-class shares in Stock Connect scheme
 
 

 
Dual-listed shares that have converted to primary listings in Hong Kong can be included in the cross-border Stock Connect scheme, Chinese media reported citing announcements by Shanghai and Shenzhen stock exchanges.
In response to media inquiries on video platform Bilibili’s recent primary listing in Hong Kong, the bourses said that the company could be included in the Stock Connect scheme if they meet certain requirements .

 

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China asks SOEs to have tailored carbon peak action plans

 

China’s state-owned enterprises should have tailored action plans to reach carbon emissions peak, the state assets regulator demanded during a virtual meeting, according to Xinhua.
The State-owned Assets Supervision and Administration Commission (SASAC) asked central state-owned enterprises to have specific action plans to reach peak emission.
SASAC also asked central SOEs to quicken industrial transformation and upgrading and optimize energy structure.

 

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China’s banks cut 137.5bln yuan in service fees in H1

 
Chinese banks cut 137.5 billion yuan in service fees in the first half of the year, Chinese media reported citing data from the country’s banking regulator.   
The reduction, up by 9.5% from last year, was made by 21 major Chinese banks.
 
 
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China moves up in global innovation ranking 

 
China is ranked the 11th most innovative country in the world, up by one place, according to Xinhua.
The 2022 Global Innovation Index was published by the World Intellectual Property Organisation.
Switzerland is ranked the most innovative country, followed by the US, Sweden and Britain.
 
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International News 
 
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US issues sweeping curbs on chips sales to China

 
The US announced on Friday sweeping measures to further curb chip sales to China to restrict China’s ability to purchase and make high-end chips.
The Commerce Department said the export controls “will restrict China’s ability to obtain advanced computing chips, develop and maintain supercomputers, and manufacture advanced semiconductors”.
The restrictions also include sales of chips made by foreign firms with US equipment.
Alan Estevez, the US under secretary of Commerce for Industry and Security, said his department was working to prevent China from acquiring sensitive technologies with military applications.
 

 

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IMF to cut global growth outlook, warns of rising recession risk

 
The International Monetary Fund will downgrade its global growth outlook for 2023, the IMF chief said on Thursday, citing rising recession risk.
Kristalina Georgieva, managing director of the IMF, said the outlook for the global economy was darkening, citing Covid-19 pandemic, war in Ukraine and climate disasters, Reuters reported.
The IMF is to release the latest forecast on Tuesday.
“Even when growth is positive, it will feel like a recession because of shrinking real incomes and rising prices,” said Georgieva. 

 

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Global progress in poverty reduction stalls, World Bank

 
The world is unlikely to eradicate extreme poverty by the end of the decade citing the Covid-19 pandemic as the biggest setback for the effort and war in Ukraine could worsen the situation, the World Bank said in a recent study.
The pandemic pushed about 70 million people into extreme poverty in 2020 and left 719 million people living on less than $2.15 a day by the end of 2020, the study estimated.
“Progress in reducing extreme poverty has essentially halted in tandem with subdued global economic growth,” said David Malpass, president of the World Bank.
With 389 million people in extreme poverty, Sub-Saharan Africa accounts for 60% of the world’s total extreme poverty population. 

 

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European leaders gather in Prague for first political community meeting 

 

Leaders from European Union’s 27 member states and 17 other European countries on Thursday gathered in Prague for the inaugural meeting of the European Political Community (EPC).

The EPC was proposed by French president Emmanuel Macron.

The EPC aims to foster political dialogue and cooperation and strengthen the security, stability and prosperity of the European continent.

The next European Political Community meetings will take place in Moldova, Spain and the United Kingdom.

 

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OPEC+ agrees to cut oil production

 
Members of the Organisation of the Petroleum Exporting Countries including Saudi Arabia and Russia said they would slash production by 2 million barrels per day.
The group said the cut was to stabilise oil price which has fallen in recent months as the global economy weakens, according to the BBC.
In response to the decision, the White House said President Biden was disappointed by the “shortsighted decision” by OPEC+. 
 
 

 

 

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