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January Sales of TOP100 Chinese Real Estate Companies Decreased 33% Year-Over-Year

The China Index Academy recently published its January report “Sales Performance Ranking of Chinese Real Estate Enterprises.” Shanghai-based Chinese financial news site East Money wrote about the data from the report, commenting that in January this year the total sales of the TOP100 Chinese real estate companies suffered a year-over-year decrease of 33.3 percent. The decline was 1.6 percent worse than the same period last year.

The China Index Academy report mentioned that January of 2023 saw the relaxation of China’s strict Zero-COVID policy, leading to a surge in demand and relatively high sales during that period. Thus, the baseline for January 2024’s year-over-year change in sales was relatively high. Meanwhile, the real-estate market is currently quite sluggish, the sector as a whole in recession, and Chinese real-estate giant Evergrande is facing liquidation.

According to statistics from the Academy’s report, the transaction area of new homes in 100 key cities fell by about 33 percent month-over-month. Overall market sentiment remains weak. In terms of second-hand housing, transaction volume in key cities increased slightly month-over-month, and the market remains active. The area of new homes approved for sale in 50 key cities fell by about 50 percent month-over-month and more than 15 percent year-over-year. The overall scale of supply is at a low level.

Source: East Money, February 1, 2024
https://finance.eastmoney.com/a/202402012979670451.html

Briefings | | |   Economy/Resources

China Identifies Strategic Emerging Industries for Investment

“Strategic emerging industries and future industries are the new battlefield for competition,” according to Zhuang Shuxin, Secretary-General and spokesperson for the State-owned Assets Supervision and Administration Commission of China’s State Council.

A recent People’s Daily article stated that the Chinese government plans to “promote a number of major projects,” select “hundreds of projects” in strategic emerging industries, construct “clusters of strategic emerging industries,” implement special actions such as “AI+,” and accelerate the formation of landmark achievements in key areas such as biotechnology, new materials, and new energy vehicles. The government will also expedite industrial development supported by technological breakthroughs; foster pioneering enterprises, leading enterprises, and unicorn enterprises; and create landmark products in areas such as neuromorphic intelligence, quantum information, deep earth and sea exploration, and laser manufacturing.

Source: People’s Daily, January 30, 2024
http://finance.people.com.cn/n1/2024/0130/c1004-40169330.html

Briefings | | |   Economy/Resources Government/Politics

The New Social Currency in China’s Financial Industry: Guandan + Maotai

The Chinese card game “Guandan” has rapidly gained popularity nationwide since last year, posing a threat to golf and Texas Hold’em poker as the new “social currency” of China’s financial industry. Such scenes have emerged as financial securities firms giving “Guandan gift boxes” to clients, fund companies organizing Guandan tournaments, private equity and venture capital firms studying Guandan books and skill guides, and industry leaders playing Guandan games at gatherings.

In the past, China’s financial industry was closely intertwined with the US dollar, and social activities largely revolved around western activities such as golf or playing Texas Hold’em poker and drinking red wine. Nowadays, however, foreign sources of funding have largely dried up, and availability of domestic private capital is decreasing too. Financial professionals in China are therefore forced to turn to the government for funding. Since Chinese government officials enjoy playing the game “Guandan,” mastering this game has become critical for Chinese financial professionals.

With the industry drifting towards a “Guandan + Maotai liquor” model, Shanghai has even established a Guandan Sports Association. Originating from Huai’an, Jiangsu Province, “Guandan” is a four-player card game played with two decks of cards, where players form teams of two and must use higher-ranking card combinations to suppress opponents, with the winner being the first to deplete their hand of cards, followed by scoring and ranking up.

Source: Epoch Times, January 29, 2024
https://www.epochtimes.com/gb/24/1/29/n14168608.htm

Briefings | | |   @CS Economy/Resources Government/Politics

Nikkei Shimbun: China’s 2023 GDP Growth Was Actually Negative

Japan’s Nikkei Shimbun ran an article saying that China’s 2023 GDP numbers reported by the communist regime are likely fake. Given suspicions of data tampering by both local and central party apparatuses in China, Nikkei Shimbun put together a rough alternative estimate using three data points that have a significant impact on GDP: real estate investment, net exports, and household consumption.

  • Real estate investment accounts for about 10 percent of GDP. Adding in Chinese consumer spending on electrical products, the sum accounts for about 30 percent of GDP. In 2023, China’s real estate investment decreased by 16.7 percent compared to 2022, which could lead to a decrease of 5 percent in GDP.
  • China’s net exports (i.e. the difference between imports and exports) historically accounts for about 3 percent of China’s GDP. However, from January to November 2023, net exports decreased by 32.3 percent compared to the same period in 2022, resulting in an estimated reduction in 2023 GDP of about 1 percent.
  • Chinese officials have not publicly disclosed household consumption data, which accounts for about 40 percent of China’s GDP. Nikkei estimated this data using total retail sales to consumers, a figure which increased by 7.2 percent in 2023 compared to 2022, impacting GDP positively by about 2.8 percent.

Adding these three numbers together, the resulting estimated true change in GDP is negative 3.2 percent. Even accounting for the impact of inflation, the change in GDP should be at least negative 2 percent, significantly below the positive 5.2 percent change in GDP published by the Chinese government.

The Nikkei report urged Japanese investors in China to withdraw their funds as soon as possible.

Source: New Talk (Taiwan), January 31, 2024
https://newtalk.tw/news/view/2024-01-31/907283

Briefings | | |   @CS Economy/Resources Government/Politics

Chinese Stock Investors Vent Frustration in Comments on US Embassy Weibo Posts

The Chinese stock market has been continuously declining since mid-2023, reaching new lows as the Shanghai Composite Index fell below 2,700 points on February 2nd. Many investors who suffered heavy losses flooded the comments section on the official Weibo account of the U.S. Embassy in China, venting their frustration or imploring the United States to take over the Chinese stock market. (Weibo is a Chinese social media platform)

A large number of pleas from Chinese stock investors flooded a U.S. Embassy post titled “Science and Technology Help Researchers Protect Giraffes by Increasing Awareness”:

  • “Do you want to protect me? Giraffes are life forms, but so am I.”
  • “Anyway, (the Chinese officials) eventually will take our money (from the stock market) away and immigrate to your country. How about we give you the money directly? Otherwise they will charge us processing fee (in addition).”
  • “We know they are lying, and they know they are lying. They know we know they are lying, and we know they know we know they are lying. But they still keep lying. Can you tell me which ‘glorious era’ this description refers to?”

On the same day, a post by the U.S. embassy titled “Joint Statement on the Third Anniversary of the Military Coup in Myanmar” was flooded with messages from Chinese stock investors asking for help from the U.S.:

  • “America, please come and rescue the hundreds of millions of A-share investors in deep trouble.”
  • “Save the poor Chinese stock investors. I love America.”
  • “I beg the United States to save A-shares.”
  • “America, the Earth needs you! It desperately needs you! God bless America.”
  • “Whoever treats us well, we will love them.”
  • “I love the United States of America.”
  • “The official media doesn’t let us speak. I come here to request rescue.”
  • “Before trading stocks, I was very patriotic.”
  • “Trading stocks has brought hatred to our country. It’s also tragic.”
  • “Get rid of the China Securities Regulatory Commission!”

Source: Epoch Times, February 3, 2024
https://www.epochtimes.com/gb/24/2/3/n14172430.htm

Briefings | | |   @CS Economy/Resources Social Stability

Lianhe Zaobao: Profits of Chinese Industrial Companies Fell Last Year

Singapore’s primary Chinese language newspaper Lianhe Zaobao recently reported that, according to the official data released by the Chinese National Bureau of Statistics, China’s industrial enterprises above a designated size achieved a total profit of RMB 7.6858 trillion yuan (around US$1.08 trillion) last year, a year-over-year decrease of 2.3 percent. This decrease reflects how lower prices and weak domestic and foreign demand have continued to weigh down profit growth for industrial companies. Among these industrial enterprises, there was a significant drop of 6.7 percent year-over-year in total profits for foreign-owned enterprises and Hong Kong, Macao and Taiwan-owned enterprises. The profits of state-controlled enterprises fell by 3.4 percent year-over-year. The profits of joint-stock enterprises fell by 1.2 percent year-over-year. The total profits of private enterprises had a growth of 2.0 percent year-over-year. However, many companies are nearing the end of an inventory destocking cycle.

Source: Lianhe Zaobao, January 27, 2024
https://www.zaobao.com.sg/news/china/story20240127-1464777

Briefings | | |   Economy/Resources

Artistically Shaping China’s Image Based on Three Principles

The China Social Science website posted a theoretical article, suggesting that “a beautiful and artistic image of China, organically integrated with profound Chinese wisdom, can better fulfill Beijing’s mission to be a great nation.” The article listed three “cultural principles” by which to craft an artistic image of China:

  • Values: “The image of Chinese people should be trustworthy and sincere.” This image not only comes from the traditional Chinese culture, but also from “the communist revolutionary cultural values and advanced socialist cultural values.”
  • Ethics: “China has developed an ethical concept that ‘family and home country are integrated as one.'” “Patriotism becomes the fundamental political and ethical spirit, giving rise to the individual ideal that one should ‘cultivate oneself, harmonize the family, govern the country, and settle the world.'”
  • History: “Chinese culture is diversified because the vast Chinese territory comprises multiple geographical units, leading to diverse economic forms and nurturing different cultures.”

Source: China Social Science, January 19, 2024
https://www.cssn.cn/skgz/bwyc/202401/t20240119_5729627.shtml

Briefings | | |   Economy/Resources Government/Politics

Xinhua: China Unveils “Thousand Groups Going Abroad” Initiative, Aiming to Boost Overseas Trade

As China’s exports continue to decline, the China Council for the Promotion of International Trade (CCPIT) announced a new initiative this year called “Thousand Groups Going Abroad.” The plan is to organize over 1,000 batches of business delegations to participate in overseas exhibitions, inspections, and negotiations, aiming to secure export orders and expand China’s overseas markets. The initiative will target China’s key export markets such as the Europe Union, the U.S., Japan, South Korea, ASEAN, and Latin America.

China organized approximately 900 overseas exhibitions in 2023.

Source: Xinhua, January 15, 2024
https://app.xinhuanet.com/news/article.html?articleId=a2b554b08f23afaff0f499798e1b9f74

Briefings | | |   @CS Economy/Resources Government/Politics