China’s population has experienced negative growth for two consecutive years, making “rescuing the birth rate” a top priority. A population policy document from Quanzhou, Fujian Province, called for its Chinese Communist Party (CCP) members and officials to have three children, raising public concerns about “undercover coercion to have children.” The Quanzhou Health Commission later explained that the document was still in the internal review stage and was mistakenly published due to staff oversight.

Since the implementation of China’s three-child policy in 2021, local measures to support the policy have garnered attention. The leaked document from Quanzhou outlined work arrangements for implementing the policy, including a call for CCP members, government agencies, state-owned enterprises, and public institutions to take the lead in having three children.

The approach echoes a directive given in 1980, when the Communist Party urged members to have only one child, marking the beginning of China’s one-child policy era. The Quanzhou Health Commission clarified that the document was still in draft form and not yet officially released.

Quanzhou, an economically prominent city in Fujian Province, has seen significant growth, with its public budget revenue exceeding 100 billion yuan in 2023.

As China faces population decline, boosting birth rates has become a government priority. The National Healthcare Security Administration reported that four provinces and cities have included assisted reproductive technology in medical insurance coverage since 2023.

Source: Central News Agency (Taiwan), July 21, 2024
https://www.cna.com.tw/news/acn/202407210065.aspx

China’s Ministry of Commerce reported that foreign direct investment (FDI) in China in the first half of 2023 decreased by 29.1% year-on-year, totaling 498.91 billion yuan (US$68.6 billion). However, the number of newly established foreign-invested enterprises increased by 14.2%.

Manufacturing sector FDI accounted for 28.4% of total FDI, up 2.4 percentage points from the previous year. High-tech manufacturing FDI made up 12.8% of the total. Investments from Germany and Singapore increased by 18.1% and 10.5%, respectively.

Despite strict COVID-19 control measures, China’s FDI had been strong in recent years, setting records from 2019 to 2021. However, the country’s economic recovery post-pandemic has been slower than expected, with growth rates of 3% in 2022 and 5.2% in 2023.

Analysts suggest that China’s slowing economic growth leaves less room for large-scale foreign investments. Many U.S. tech companies and investors have withdrawn, citing factors such as increased labor costs, slower growth rates, supply chain risks highlighted by the pandemic, and political risks.

The unpredictability of Chinese government policies is also deterring foreign investment. Recent crackdowns on industries like education, entertainment, and gaming have caused losses for companies in these sectors, making long-term investments less attractive to foreign entities seeking policy stability.

Source: Central News Agency (Taiwan), July 14, 2024
https://www.cna.com.tw/news/acn/202407140082.aspx

On July 16, two new Exchange-Traded Funds (ETFs) linked to the stock price index of the Saudi Stock Exchange (Tadawul) were listed on the Shanghai and Shenzhen stock exchanges in China. This marks the first time Saudi stock ETFs have been listed in mainland China. The move is expected to strengthen financial cooperation between the two countries, aligning with China’s Belt and Road Initiative. For Saudi Arabia, this presents an opportunity to attract Chinese investment.

The two ETFs listed are the “Huatai-PineBridge CSOP Saudi Arabia ETF” and the “China Southern Asset Management CSOP Saudi Arabia ETF.” The total amount raised so far was approximately 1.2 billion yuan (US$ 166 million).

China implements capital controls that generally restrict cross-border securities investments. These two ETFs utilize the Qualified Domestic Institutional Investor (QDII) framework, which allows Chinese domestic investors to invest overseas within certain limits.

Source: Nikkei Chinese, July 16, 2024
https://zh.cn.nikkei.com/china/cfinancial/56153-2024-07-16-15-39-48.html

China is facing severe flooding in its southern regions this year, with heavy rains causing widespread damage. As of July 12, 2023, official reports indicate that 20.76 million people have been affected by floods and heavy rains, with 86 people dead or missing.

According to Xu Xianbiao, an official from Ministry of Emergency Management (MEM), this year’s flood season came earlier and more intensely than usual. The southern regions, especially areas south of the Yangtze River, have experienced significantly more rainfall than in previous years. Fourteen numbered floods have occurred in the Yangtze River, Pearl River, and Taihu Lake basins.

The government has implemented four measures to address the situation: “strengthening deployment and scheduling,” “enhancing early warning and evacuation,” “reinforcing rescue operations,” and “providing support to local authorities.”

MEM has raised the flood response level to Level 3 for four provinces along the middle and lower reaches of the Yangtze River. This action has helped prevent mass casualties in some areas.

To support relief efforts, the Ministry of Finance has allocated 848 million yuan (US$117 million) to 12 provinces, municipalities, and autonomous regions affected by the floods.

The Ministry warns of high flood risks in northeastern, northern, eastern, and central China in July, with potentially severe flooding in major river basins including the Yangtze, Huaihe, Haihe, Songhua, Liaohe, and Taihu Lake.

Source: Central News Agency (Taiwan), July 13, 2024
https://www.cna.com.tw/news/acn/202407130119.aspxs

As China’s economy remains sluggish and consumer spending weakens, more consumers are cautious about spending on luxury goods.

• Swiss brand Richemont Group: In the three months up to June, the sales of its watch brands dropped by 27 percent in the Greater China Region.
• Swiss brand Swatch Group: In the first half of this year, sales in China, without counting its entry-level brands Omega, Blancpain, and Breguet, plummeted by 30 percent.
• American brand Marc Jacobs: Offer discounts of more than 50 percent on handbags, clothing, and footwear on Alibaba’s high-end e-commerce platform Tmall Luxury Pavilion.
• Italian brand Bottega Veneta: Provide a 24-month interest-free loan service for purchasing handbags on Tmall.
• Italian brand Versace: Provide discounts sometimes exceeds 50 percent in China.
• British brand Burberry: Its sales in mainland China is down by 21 percent; also it provides discounts sometimes exceeds 50 percent in China.
• French luxury brand Kering: Issued a profit warning, stating that demand for its high-fashion luxury brand Gucci was declining in China.

Source:
1. Epoch Times, July 16, 2024
https://www.epochtimes.com/gb/24/7/16/n14292022.htm
2. Epoch Times, July 17, 2024
https://www.epochtimes.com/gb/24/7/16/n14292139.htm