IFF Newsletter | China's GDP Expands 4.8% in First Three Quarters

TIME：2024-10-25

From the Editor

China's gross domestic product (GDP) grew 4.8 percent year-on-year in the first three quarters of 2024, reflecting a generally stable economic performance despite challenges.

The European Central Bank decided to lower three key interest rates by 25 basis points, its third rate cut this year, claiming that dis-inflationary process is "well on track."

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【IFF Live】The real estate market is experiencing differentiation

From October 14th to 18th, the IFF live broadcast room held three live sessions themed around "Economic Pulse: Analyzing Recent Economic and Financial Hotspots," "Food Security for All: Sustainable Agriculture and Food Safety," and "From Farm to Table: The Full Chain Protection of Food Safety in China."

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China News

China's GDP Expands 4.8% in First Three Quarters

China's gross domestic product (GDP) grew 4.8 percent year-on-year in the first three quarters of 2024, as showed by data from the National Bureau of Statistics (NBS) on October 18.

In a breakdown, industrial output climbed 5.8 percent compared with a year earlier in the first nine months, while the service sector reported continued recovery with a 4.7-percent increase in added value.

Retail sales of consumer goods grew up 3.3 percent from a year ago during the period. And fixed-asset investment rose 3.4 percent.The surveyed urban unemployment rate on average stood at 5.1 percent in the first three quarters, down from 5.3 percent a year ago, as the nominal growth of urban and rural residents' incomes came in at 5.2 percent.

China Cuts Market-based Benchmark Lending Rates

China cut its market-based benchmark lending rates on October 21, with the one-year loan prime rate (LPR) down to 3.1 percent from the previous reading of 3.35 percent.

The over-five-year LPR, on which many lenders base their mortgage rates, was lowered to 3.6 percent from 3.85 percent, according to the National Interbank Funding Center.

The move, or the third cut this year, is expected to reduce financing costs, support the recovery of credit demand, and further fuel consumption and investment growth.

China's Central Bank Conducts First SFISF Operation

The People's Bank of China (PBOC) has conducted the first operation of the Securities, Funds and Insurance companies Swap Facility (SFISF), aiming to leverage the role of financial institutions better in stabilizing China's capital market, according to the central bank on October 21.

The scale of the operation was 50 billion yuan (aboutUS$ 7.04 billion).

The tool will allow eligible securities, funds and insurance companies to use their assets -- including bonds, stock exchange-traded funds and constituent stocks of the CSI 300 Index -- as collateral in exchange for highly liquid assets such as treasury bonds and central bank bills, according to the PBOC.

Foreign Holdings of RMB Bonds Reach Historic High

The yield on renminbi bonds has been good since the start of the year, attracting foreign investors to increase their holdings, an official with the State Administration of Foreign Exchanges said on October 22.

Up till now, foreign holdings of domestic renminbi bonds have exceeded 640 billion U.S. dollars, reaching a historic high, Li Hongyan, deputy head of the administration, told a press conference.

Hong Kong's Private Equity Fund Management Capital Ranks 2nd in Asia

Christopher Hui, secretary for financial services and the treasury of the Hong Kong Special Administrative Region (HKSAR) government, said on October 21 that Hong Kong ranked second in Asia in terms of private equity funds under management.

Hui said that Hong Kong's asset and wealth management industry has achieved remarkable results in recent years. As of the first half of this year, the capital under management by private equity funds in Hong Kong exceeded 233.9 billion U.S. dollars, ranking second in Asia. Hong Kong is also Asia's largest hedge fund center and cross-border wealth management center.

Over 20 Chinese Listed Companies Become First Batch to Receive Loans For Share Buybacks, Increasing Stakes

More than 20 Chinese listed companies on October 20 announced that they had signed agreements with financial institutions or obtained commitment letters to secure loans for share buybacks and increasing shareholdings.

The initial re-lending scale is 300 billion yuan (aboutUS$42.09 billion) at an interest rate of 1.75 percent. The facility can be applied to various types of companies regardless of their ownership, according to the central bank.

The announcements came after China's central bank launched a special re-lending facility aimed at guiding banks to provide loans to listed companies and their major shareholders for buybacks and increasing shareholdings on October 18.

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International News

ECB Cuts Rates by 25 Basis Points as Inflation Fades

The European Central Bank (ECB) decided on October 17 to lower three key interest rates by 25 basis points, its third rates cut this year, saying that dis-inflationary process is "well on track."

The interest rates on the deposit facility, the main refinancing operations and the marginal lending facility will be decreased to 3.25 percent, 3.4 percent and 3.65 percent respectively, with effect from Oct. 23.

The ECB does not expect recession in the eurozone despite economic difficulties in some states, the bank's President Christine Lagarde said at a press conference after the ECB Governing Council meeting in Slovenia.

IMF Maintains 2024 Global Growth Forecast at 3.2%

The International Monetary Fund (IMF) on October22 maintained its global growth forecast in 2024 at 3.2 percent, consistent with its projection in July, according to its newly released World Economic Outlook (WEO).

The level of uncertainty surrounding the global economic outlook is high, the report noted.

These uncertainties includes the possibility that newly elected governments around the world could introduce significant shifts in trade and fiscal policy; A further intensification of geopolitical rifts could weigh on trade, investment and the free flow of ideas and create difficult trade-offs for central banks of various countries; the return of financial market volatility over the summer has stirred old fears about hidden vulnerabilities., especially in countries where inflation is persists and signs of economic slowdown are emerging.

Germany Aims to Lead Europe in AI, Pledging to Foster Favorable Conditions

The German government is striving to position itself as a leader in artificial intelligence (AI) within Europe by fostering favorable conditions for the sector, according to the goverment's Digital Summit 2024 kicked off on October 21.

"We want to make Germany the leading AI country in Europe," said Volker Wissing, Germany's federal minister for digital and transport, at the digital summit in Frankfurt.

To achieve this goal, he emphasized the need for business-friendly implementation of the European Union's new AI regulations and greater access to data for innovative start-ups. He also announced plans to provide companies with additional support through nationwide AI centers, offering both practical and legal assistance.

Calls For Broad-based High Tariffs Misguided, Says U.S. Treasury Secretary Yellen

U.S. Treasury Secretary Janet Yellen said on October 18 that the calls for walling America off with high tariffs on friends and competitors or treating even its closest allies as transactional partners are deeply misguided.

Speaking at a dialogue hosted by the non-partisan think tank Council on Foreign Relations, Yellen criticized the idea of introducing broad-based tariffs and stressed the benefits of international trade and investment.

"Sweeping untargeted tariffs would raise prices for American families and make our businesses less competitive, and we cannot even hope to advance our economic and security interests," said Yellen, who served as chair of the Federal Reserve from 2014 to 2018.

Tokyo Area's Condo Price Logs Record High in H1 of FY2024

The average unit price of new condominiums in Tokyo and three neighboring prefectures has hit a new high of 79.53 million yen (US$ 527,000) in the first half of fiscal year 2024, the Real Estate Economic Institute said on October 21.

The average price in the Tokyo metropolitan area, which includes the capital and its neighboring prefectures of Saitama, Kanagawa and Chiba, rose 1.5 percent from a year earlier due to high construction expenses on rising material and labor costs, according to the research institute.

Meanwhile, the number of new condominiums listed for sale in the metropolitan area dived 29.7 percent to 8,238.

S. Korea's Corporate Revenue Turns Downward in 2023

Revenue for non-financial for-profit corporations in South Korea turned downward in 2023 due to lower global demand for locally-made products, the data released by the Bank of Korea (BOK) showed on October 23.

Revenue for 183,670 manufacturers and 751,927 non-manufacturers, excluding financial companies, shed 1.5 percent in 2023 from a year earlier after expanding 15.1 percent in the previous year, according to the central bank.