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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

Survey: German Companies in China Face Stiff Competition, Geopolitical Risks, and Economic Headwinds

A survey by the German Chamber of Commerce Abroad found that 46% of German companies operating in China believe that their Chinese competitors will become leaders in their respective industries within the next 5 years. Some 37% of surveyed companies feel that innovativeness in the Chinese market makes doing business in China increasingly attractive, and 11% of German automotive companies in China view their Chinese competitors as already being the innovation leaders in their industry.

About 83% of German companies surveyed believe that China’s economy is declining, though 64% anticipate this downward trend being just a temporary 2-3 year slowdown. Some 42% of respondents expect positive developments in Chinese industry this year.

The investment outlook among surveyed companies was mixed – 54% think that China’s investment appeal is falling, while a similar percentage plan to increase investment in China over the next 2 years. Risks are top of mind, with about 37% of respondents reportedly taking action to mitigate geopolitical risks and some 20% taking action to mitigate risks related to China’s economy.

Source: German Chamber of Commerce in China, January 24, 2024
https://china.ahk.de/market-info/economic-data-surveys/business-confidence-survey-1

Briefings | | |   Economy/Resources

Beijing Office Vacancies Hit 13-Year High as Demand Falls in Slowing Economy

Demand for office space in Beijing has fallen a;s China’s economy weakens and companies are becoming more conservative about expansion. According to Caixin.com, the vacancy rate for Beijing office space has hit a 13-year high of 20.4%. This is the first time in recent years that the rate has topped 20%.

The shrinking technology industry in Beijing, coupled with conservative growth strategies and cost-cutting measures adopted by companies facing stiff economic headwinds, have combined to dampen office rental demand. According to the Caixin report, the high office vacancy rate in Beijing is mainly attributable to the following factors:

  • companies relocating their headquarters out of Beijing over the past year,
  • downsizing and taking less rental space, and
  • an overall lack of new demand to replace surrendered office space.

The market will likely face further challenges until broader economic growth rebounds. Not only are vacancy rates high, but rents have also fallen. Beijing’s office real estate market is highly dependent on state-owned enterprises, whose long-term tenancy have played an important role in stabilizing the local office rental market.

Source: Radio Free Asia, January 26, 2024
https://www.rfa.org/mandarin/Xinwen/5-01262024134758.html

Briefings | | |   Economy/Resources

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

Briefings | | |   Economy/Resources Geo-Strategic Trend

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

Briefings | | |   Economy/Resources Geo-Strategic Trend

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

Briefings | | |   @CS Economy/Resources Geo-Strategic Trend

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

Briefings | | |   Economy/Resources Geo-Strategic Trend

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

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