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China’s 2023 Crude Oil Imports from Russia Exceeded 100 Million Tons for the First Time

China imported more than 107 million tons of crude oil from Russia in 2023, according to data from China’s General Administration of Customs reported by well-known Chinese news site Sina (NASDQ: SINA). This represents a year-over-year increase of 24 percent in Chinese oil imports from Russia, accounting for approximately 19 percent of China’s total crude oil imports last year and marking the first time in four years that Russia was the biggest source of crude oil supplying China.

In the meantime, Saudi Arabia supplied 85.96 million tons of crude oil to China, a year-over-year decrease of 1.7 percent, ranking second among sources of oil supplying China; Iraq exported 59.26 million tons of crude to China, ranking third; Malaysia and the United Arab Emirates supplied China with 54.79 million tons and 41.82 million tons of crude oil, ranking fourth and fifth, respectively.

Following the outbreak of the Russia-Ukraine conflict in February 2022, Russia has responded to Western sanctions by increasing oil and gas exports to China, India and other Asian countries. In 2023, about 90 percent of Russia’s oil and petroleum exports went to China and India. In the past two years India, has accounted for about 40 percent of Russia’s total crude oil exports, Russia supplied almost no crude oil to India before the Russian invasion of Ukraine.

According to the Sina news article, “China and Russia are continuing to deepen energy cooperation.”

Source: Sina, January 22, 2024
https://finance.sina.cn/2024-01-22/detail-inaeknmk4499156.d.html?from=wap

Lianhe Zaobao: More German Companies Considering Withdrawal from Chinese Market

According to Singapore’s primary Chinese language newspaper Lianhe Zaobao, the latest survey by the German Chamber of Commerce in China found that the number of German companies withdrawing or considering abandoning the Chinese market has doubled in the past four years. The survey’s findings, which come as China’s economy continues to weaken, highlight the challenges facing German companies operating in China. Top concerns cited by German companies include increased competition from local Chinese companies, unfair restrictions on market access, economic headwinds, and geopolitical risks.

The survey was conducted from September 5 to October 6 of 2023, with a total of 566 member companies polled. About two percent of German companies in China said they were selling the Chinese arms of their business, and seven percent said they were considering doing so. In contrast, the same survey conducted in 2020 showed that only four percent of German companies operating in China had exited or were considering an exit from China.

According to the survey, 44 percent of responding German companies have taken specific measures to address the risks of operating in China, including establishment of alternative supply chains that are independent of China. Another 54 percent of responding companies believe that the attractiveness of investment in China is declining.

Source: Lianhe Zaobao, January 25, 2024
https://www.zaobao.com.sg/finance/china/story20240125-1464321

RMB Takes Top Spot on Moscow Currency Exchange for 2023

According to reports from Russian media, in 2023, the trading volume of the Chinese yuan (RMB) on the Moscow Exchange exceeded that of the US dollar, accounting for 42 percent of the total foreign exchange trading volume.

The yuan’s trading volume reached 34.15 trillion rubles, three times the previous year’s volume of 10.25 trillion rubles. The trading volume of the US dollar was about 32.49 trillion rubles, constituting less than 40 percent of the exchange’s total trading volume. The trading volume of the euro was 14.6 trillion rubles, accounting for less than 18 percent and ranking third on the exchange. In 2022, the combined trading share of the US dollar and the euro on the Moscow Exchange was 87%.

Starting on December 4, 2023, the Moscow Exchange introduced three new tools for trading the Chinese yuan against the ruble, aiming to enhance the convenience of market participants in currency exchange transactions and reduce trading risks.

Source: People’s Daily, January 20, 2024
http://world.people.com.cn/n1/2024/0120/c1002-40163076.html

People’s Daily: China’s Great Wall Motors Produces Thailand’s First Electric Vehicle

Thailand’s first locally-produced electric vehicles recently rolled off the production line at the Rayong New Energy Automotive Manufacturing Base, a factory operated by China’s Great Wall Motors.

Great Wall Motors acquired the Rayong factory in November 2020, becoming the first Chinese automotive brand to fully enter the Thai market.

The Thai government aims to increase the country’s electric vehicle output to 30% of its total automotive production by 2030. It aims to become the production hub for electric vehicles and components in the ASEAN region.

Source: People’s Daily, January 15, 2024
http://world.people.com.cn/n1/2024/0115/c1002-40158671.html

People’s Daily: Build an Effective Regulatory System to Prevent Financial Risks

At the opening ceremony of the Special Forum on Promoting the High-Quality Development of Finance for Provincial and Ministerial-Level Leading Cadres, Xi Jinping emphasized the need to “focus on preventing and resolving financial risks, especially systemic risks” and said that the Chinese government should regulate and monitor the financial industry “with teeth and thorns.”

People’s Daily followed up by publishing an article that argued for establishing a “comprehensive and effective financial regulatory system.”

The article said that “safeguarding financial security is a strategic and fundamental matter that concerns the overall development of China’s economy and society.”

“There are still many hidden economic and financial risks in China, such as low efficiency in financial services to support the real economy, irregularities and corruption in the financial industry, and weak financial regulatory and governance capabilities. The 20th National Congress of the Commuinst Party called to ‘strengthen and improve modern financial regulation, enhance the financial stability guarantee system, bring all types of financial activities under supervision, and guard against systemic risks.'”

Source: People’s Daily, January 20, 2024
http://opinion.people.com.cn/n1/2024/0120/c1003-40162853.html

2023 Saw China’s First Net Capital Outflow in Five Years

Amid a slowing economy in 2023, China saw a net outflow of funds from transactions with foreign countries for the first time in five years. Net outflows totaled 68.7 billion yuan. The outflows were driven by shrinking investments by foreign businesses into China as well as by affluent Chinese households’ increased travel and investment overseas.

China saw a net direct investment outflow of 118.5 billion yuan in 2023, the highest figure since 2010. It is unclear whether a bigger portion of this investment outflow resulted from transfers by Chinese firms or by foreign firms operating in China. On the one hand, Chinese companies’ expansion abroad has led to outflows; on the other hand, foreign companies’ downsizing and capital withdrawal from China has certainly contributed. A late-2023 survey of Japanese companies operating in China found that nearly 50% of respondents either reduced or did not expand 2023 investments in China compared with 2022. The number of foreign manufacturing and foreign industrial companies in China fell in November 2023 to its lowest level since November of 2004, dropping 0.4 percent compared with the same period in 2022.

China’s stock market hit new lows in late January 2024, down nearly 20% from the 2023 market highs. Meanwhile, feverish trading in foreign exchange-traded funds (ETFs) linked to the Nikkei and U.S. indices has led to a temporary suspension of those ETFs’ trading within China.

Following the end of Beijing’s zero-COVID policy in January 2023, affluent Chinese households increased their investment and travel overseas. This contributed to 2023’s capital outflows. The trend of capital flight from China persists in 2024.

China’s ability to attract foreign capital has weakened as the economy has slowed. The government faces challenges in restoring confidence and financial inflows. Ebbing confidence in China’s economic progress is reflected in the country’s investment outflows, foreign corporate downsizing, Chinese travel and investment abroad, and ongoing capital flight.

Source: Nikkei, January 25, 2024
https://zh.cn.nikkei.com/china/ceconomy/54665-2024-01-25-09-53-18.html

China Leads in Genetic Modification and Cloning of Monkeys

China is leading the world in terms of research on genetic modification and cloning monkeys, aiming to improve scientific understanding of human evolution and disease. In 2023, Chinese researchers published studies on monkeys whose genomes had been modified by adding human brain genes; these monkeys demonstrated better memory abilities compared to unmodified monkeys. The research could help explain millions of years of human evolution and the separation of humans from other primates. The experiments have raised some ethical concerns in the West.

In recent years, China has invested heavily in primate research at both the national and local levels, to the tune of 600 million euros. The country aims to establish monkey models of human diseases. The number of genetically modified monkeys remains small, however, as creating transgenic animals is a costly procedure. According to Pierre Savatier, a researcher at the French National Institute of Health and Medical Research, such a procedure costs around 1 million euros per animal. Although cloning can save some time, it is still a very expensive procedure with low success rates.

Some Western experts argue that, despite China’s demonstrated technological advances in genetic modification and cloning of primates, the scientific results of such experiments have been limited. Roger Le Grand, who leads the principal non-human primate lab at the French Atomic Energy Commission, noted that initial stages of transgenic mouse research were quote laborious before the associated techniques eventually became routine. Pierre Savatier commented that establishing stable lineages of genetically modified monkeys would take at least a decade.

Realizing pharmaceutical profits resulting from primate models would likely take 20-30 years. Currently, China is the only country devoting infrastructure and resources to support such long-term research. Public opinion in the U.S. and Europe generally opposes animal testing; China’s bets in this area, made “at the highest political levels,” are not being matched in Western countries.

Source: Radio France International, January 24, 2024
https://rfi.my/AHaD

Beijing Pushing Mid-to-Long-Term Investor Funds into Stocks to Support Chinese Stock Market

China’s stock market performed poorly in 2023. To help buoy the stock market, Beijing has increased its efforts to “introduce mid-to-long-term into the market.”

People’s Daily reported that Lin Xiaozheng, Deputy Director of the Department of Supervision of Securities and Fund Institutions at China’s Securities Regulatory Commission (CSRC), stated at a press conference that the CSRC will make greater efforts to introduce more mid-to-long-term funds into the market. Lin mentioned that, in recent years, “the CSRC has vigorously developed equity funds and actively promoted various mid-to-long-term funds’ participation in the capital market, achieving phased results. As of the end of 2023, various professional institutional investors, including social security funds, public funds, insurance funds, and pension funds, collectively held 15.9 trillion yuan of A-shares [in the Chinese stock market], doubling the amount held in early 2019. Their stock ownership ratio increases from 17% to 23%. These institutions have become a significant force in promoting the stable and healthy development of the capital market. Among them, public funds held 5.1 trillion yuan of A-shares, and stock ownership ratio increased from 3.8% to 7.3%, making them the largest professional institutional investor in A-shares.”

Source: People’s Daily, January 13, 2024
http://finance.people.com.cn/n1/2024/0113/c1004-40158192.html