IFF Newsletter | China's Non-financial ODI up 11.2% in 11 Months

TIME：2024-12-27

From the Editor

China will implement a more proactive fiscal policy next year, including a rare increase in the fiscal deficit ratio, and higher public expenditure to boost demand and raise living standards, according to the annual agenda-setting financial work conference that ended on December 24.

Japan's Ministry of Health, Labor and Welfare said on December 24 that the country's real wages in October fell 0.4% year-on-year, revised down from the initially reported no change, while nominal wages rose 2.2% to 292,430 yen, revised down from a 2.6% gain.

Newsletter

China News

China's Finance Ministry Vows to Step up Fiscal Spending in 2025

The country will adopt a more proactive fiscal policy next year, and ensure the fiscal policy is continuously forceful and impactful, Finance Minister Lan Fo'an made the remarks during a two-day national fiscal work conference that ended on December 24.

Lan said the country will set a higher deficit-to-GDP ratio in 2025, increase the intensity of fiscal spending, ensure faster deployment of funds, and optimize the structure of fiscal spending, with more focus on improving people's well-being, promoting consumption and sustaining growth momentum.

According to a statement released after the fiscal work conference, the country's key fiscal priorities next year will include boosting domestic demand, building a modernized industrial system, improving people's well-being, supporting urban-rural integrated development, building an ecological civilization, and promoting high-standard opening up.

China to Implement 3-Year Action Plan to Optimize Consumer Environment

Luo Wen, head of State Administration for Market Regulation on December 23 announced that the top market regulator will implement a three-year action plan to optimize the consumer environment beginning next year, as part of broader efforts to boost domestic consumption.

China will also upgrade its complaint and report processing system and address the pain points in the consumer field effectively, he said at a work conference.

The administration aims to foster a significant number of trustworthy brick-and-mortar stores, markets, online stores, restaurants and tourist attractions next year, according to the market regulator.

China Central SOEs Invest 2 Trln Yuan in Emerging Industries in First 11 Months

China's centrally-administered state-owned enterprises (SOEs) completed investment of 2 trillion yuan (about 278.26 billion U.S. dollars) in strategic emerging industries from January to November, a year-on-year increase of 18.7 percent, according to the data released on December 24 by the State-owned Assets Supervision and Administration Commission of the State Council.

Investment in emerging industries accounted for more than 40 percent of central SOEs' total investment for the first time, the official data showed.

During the period, central SOEs achieved an added value of 9.3 trillion yuan. Their annualized labor productivity for all employees increased 3 percent year on year, and the intensity of R&D expenditure was 2.6 percent the commission added.

China’s Securities Watchdog Lifts Hong Kong MRF Mainland Sales Quota to 80%

China Securities Regulatory Commission issued new regulations on December 20 to increase the fundraising limit for Hong Kong-registered mutual recognition funds sold in the Chinese mainland to 80 percent from 50 percent.

The change was one of several to the Hong Kong Mutual Recognition Fund Management Regulations announced by the securities regulator in China. The new version supersedes that dating from May 2015 and will take effect on Jan. 1, it noted.

Hong Kong MRFs can be trusts, mutual funds, and other investment programs set up, operated, and publicly sold in the city under its laws and approved for sale in the mainland by the CSRC.

The move will further grow the scale of northbound MRFs, expand their business development space, and better meet the wealth management needs of mainland investors, according to industry insiders.

China's Non-financial ODI up 11.2 Pct in First 11 Months

China's non-financial outbound direct investment (ODI) increased 11.2 percent year on year to 128.63 billion U.S. dollars in the first 11 months of the year, data from the Ministry of Commerce showed on December 19.

Chinese companies' non-financial ODI in Belt and Road partner countries expanded 5.1 percent from the previous year to total 30.17 billion U.S. dollars for January to November.

During the period, the turnover of overseas projects contracted by Chinese companies amounted to 140.23 billion U.S. dollars, an increase of 3.4 percent, and the value of new contracts climbed 11.9 percent to 198.79 billion U.S. dollars.

Germany's Scholz Urges Swift Deal With China Over EV Dispute

German Chancellor Olaf Scholz on December 19 urged the European Union (EU) to quickly reach a deal with China on the tariff dispute over electric vehicles (EVs).

"It makes no sense to have conflicts about this. Therefore, I appeal to everyone to bring these negotiations to a good result now," said the German chancellor Scholz upon arriving at the European Council summit.

China hopes that the EU will take concrete steps as soon as possible to jointly advance consultations on a price commitment plan for Chinese EVs, the Ministry of Commerce said on December 18.

China always stands for the resolution of trade frictions through dialogue and consultation, and has been doing its utmost in the price commitment talks, said the ministry's spokesperson He Yongqian.

Newsletter

International News

Japan's Real Wages Drop For 3rd Straight Month in October

Japan's real wages fell 0.4 percent in October from a year earlier, revised down from no change as was initially reported, marking the third consecutive month of decline, the data released by the Ministry of Health, Labor and Welfare showed on December 24.

Inflation-adjusted real wages at workplaces with five or more employees, a barometer of consumer purchasing power, remained negative in October, as government subsidies for utility bills failed to offset rising living costs, the Ministry said.

Nominal wages, the average total monthly cash earnings per worker, including base and overtime pay, rose 2.2 percent to 292,430 yen (about 1,860 U.S. dollars), revised down from a 2.6 percent gain.

Canada's GDP Increases 0.3 Pct in October

Canada's real gross domestic product (GDP) increased 0.3 percent in October, following a 0.2 percent increase in September, Statistics Canada said on December 23.

After four consecutive monthly declines, the goods-producing industries rose 0.9 percent, with mining, quarrying, and oil and gas extraction contributing the most to the growth in October, the national statistical agency said.

The services-producing industries edged up 0.1 percent, in large part due to increased activity in the real estate and rental and leasing sector. This was the fifth consecutive month of growth for the services-producing industries, the agency said.

U.S. Consumers Feel Less Confident As Economy Concerns Mount

Confidence among American consumers dropped unexpectedly this month, with expectations growing bleaker for the economic situation in the new year -- an index of sentiment released by research group The Conference Board dropped on December 23 dropped 8.1 points to 104.7, defying hopes for an increase.

The expectations index -- measuring consumers' near-term confidence in income, business and the jobs market -- fell 12.6 points to 81.1, taking it close to the level that often signals recession, The Conference Board said.

Singapore's Inflation Eases in November

Singapore's core inflation, as measured by the consumer price index (CPI), declined to 1.9 percent year-on-year in November from 2.1 percent in October, official data showed on December 23.

The decrease was due to a moderation in food and services inflation, according to the Ministry of Trade and Industry, and the Monetary Authority of Singapore.

On a month-on-month basis, the core CPI remained unchanged. The core CPI excludes private transport and accommodation costs to better reflect household expenses.

UK Economy Shows Zero Growth in Q3

Britain's gross domestic product (GDP) registered no growth in the third quarter of 2024, revised down from the first estimate increase of 0.1 percent, figures released by the Office for National Statistics (ONS) showed on December 23.

According to the Office, the services sector output saw no growth from July to September, while a 0.7 percent increase in construction was offset by a 0.4 percent fall in production.

For the GDP growth in the second quarter, the ONS also revised it to 0.5 percent, down from its first estimate of 0.6 percent growth.

The downward revision of GDP growth comes amid declining public confidence in the economy and increasing pressure on the Labour government, which assumed power in July after 14 years in opposition.

Data for the last quarter of the year do not look promising. Last week, Britain's central bank, the Bank of England, forecast zero GDP growth in the fourth quarter, weaker than the 0.3 percent growth predicted in November.

EU Signals Readiness For Talks With Trump Amid Tariff Threats

The European Union (EU) is open to discussing trade issues, including energy, with U.S. President-elect Donald Trump, a European Commission spokesperson said on December 20.

"We are ready to discuss with President-Elect Trump how we can further strengthen an already strong relationship, including by discussing our common interests in the energy sector," spokesperson Olof Gill told a news conference.

His remarks came after Trump took to the social media platform Truth Social, warning the EU of potential tariffs if the bloc does not increase its purchase of U.S. oil and gas.

The EU appeared to push back, with the spokesperson noting that while the United States runs a goods trade deficit with the bloc, it enjoys a surplus in services.

According to Eurostat data, the United States recorded a 155.8 billion euro (162.51 billion U.S. dollars) trade deficit in goods with the EU last year, alongside a 104 billion euro surplus in services.

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