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| China Policy Briefing Newsletter |
| October 2023 |
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| China Q3 Economic Roundup: GDP Growth Beats Forecasts
Q1-Q3 quick stats from National Bureau of Statistics:
GDP +5.2% YOY, reached RMB 91.3 trillion
Industry output +4% YOY
Services output +6% YOY
Retail sales + 6.8% YOY to RMB 34.2 trillion (livestreaming e-commerce revenue surged 60.6% to RMB 1.98 trillion)
Property investment -9.1% YOY, private investment - 0.6%, foreign trade -0.2%
Analysis:
GDP so far on track for government’s 2023 growth target of “around 5%”.
Economy seems to show stabilizing sign of potential turning point and approaching “bottomed out”.
Retail consumption (particularly E-commerce) emerged as a bright spot.
Gov’t stimulus - slashing interest rates, easing home purchasing restrictions, relaxing capital control, etc. start to take effect, but more are needed.
High youth unemployment, depressed private & housing sector etc. remain domestic risks to the outlook.
President Xi announced the removal during the 3rd Belt & Road Forum on Oct. 18, underscoring commitment to an opener business climate.
China has in recent years sought to shorten its “Negative List” (which outlines prohibited/restricted sectors for foreign investment) - e.g., in car manufacturing, foreign ownership caps were lifted on new energy vehicle JVs in 2018, then extended to all passenger car ventures in 2022, till now all manufacturing sectors are opened to foreign investments (though not many restrictions remained)
The move aims at attracting and retaining more foreign investment in China, more concrete measures need to be seen to make it substantial than symbolic.
China National Health Commission released the latest population report - 9.56 million new births in 2022, tumbled 10% to hit the lowest figure since records began in 1949.
Nearly 40% of Chinese newborns were the 2nd child, 15% were from families with three or more children, 1st childbirth less than 50%.
High cost of childcare and education, growing job insecurity are the deterring factors that government may need to address to curb the tide. |
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Under existing rules, outbound data transfer needs CAC’s “security assessment”, or record filing with Chinese “standard contractual clauses” or “personal information protection certification”.
The Draft Provisions attempt to provide clarity & exemptions to outbound data flow circumstances:
Data generated in international trade, academic collaboration, multinational manufacturing or marketing activities (excluding personal information or important data)
Personal information (PI) not collected/generated in China, generated in cross-border e-commerce, fund remittance, ticket/hotel booking, visa application, or PI necessary for human resource management etc.
Once finalized and effective, the Provisions may ease cross-border data transfer burden and be positive developments for MNCs in China. Will closely monitor the regulatory developments moving forward. |
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New global product reveals, first stores, flagship stores etc. are vigorously promoted, with incentives support for designated influential brands; campaigns like global product reveal during CIIE are encouraged to attract traffic and attention.
Elevating the influences of national fashion brands, include the creation of Shanghai city-limited and branded products; promoting the new batch of signature “Shanghai Souvenirs” and “Shanghai Gifts” - LEGO Monkie Kid series Dragon of the East Palace enlisted on the “Shanghai Souvenirs” Gold List and will enjoys official promotions on gov’t platforms/channels to boost sales.
Shanghai Municipal Development and Reform Commission issued the Circular on Implementing Temporary Price Interventions During the Sixth China International Import Expo.
As per the Circular, during the sixth CIIE, temporary price intervention measures will be implemented on Shanghai’s hotel room prices, ride-hailing fares, and public parking lots with market-adjusted prices. |
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| published by China GPA team
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