Major Taiwanese news network Liberty Times Network (LTN) recently reported that CICC (China International Capital Corporation), the leading firm in China’s securities industry, is cutting the base salary of investment banking employees by up to 25 percent. This move is expected to affect more than 2,000 employees. In addition, CICC is also considering cutting headcount in Hong Kong’s offshore investment banking department. The market believes this reflects a weak IPO market in China and Hong Kong, with investment banking operations under tremendous pressure.

CICC is China’s largest investment bank. Last year, it cut employee bonuses by as much as 40 percent in response to Beijing’s call for “common prosperity.” Now, only a year later, CICC is cutting salaries by another quarter. CICC’s largest Chinese competitor, CITIC Securities, has also reportedly lowered the salary of its investment banking department, cutting base salaries by 15 percent, with some employees seeing cuts of up to 20 percent. According to London Stock Exchange Group (LSEG), funds raised by Chinese companies through initial public offerings (IPOs) fell sharply by 80 percent year-over-year in the first quarter of this year.

Source: LTN, April 29, 2024
https://ec.ltn.com.tw/article/breakingnews/4656258

Recently, Chinese media have frequently talked about the new “low-altitude sector” becoming a new growth engine for China’s economy. The term “low altitude” refers to low-altitude flight technology, including drones and electric vertical take-off and landing vehicles (eVTOLs). The following is a combined summary of two reports, by Xinhua and People’s Daily, respectively.

The low-altitude economy is a typical representative of new productive forces [within the Chinese economy]. This year, the “low-altitude economy” was mentioned in the central government’s work report. It will definitely reach a trillion-yuan-level (US $140 billion) industrial scale.

The low-altitude economy can use drones in many applications. These include “dropping take-out food from the sky,” sowing and fertilizing farmland, and delivering goods to the mountains. Electric Take-off and Landing (eVTOL) aircraft is one of the hottest fields. A 5-seat eVTOL recently conducted a flight from Shenzhen to Zhuhai crossing over both land and sea … reducing travel time [between the two cities] from 2 hours on the ground to 20 minutes in the air.

Many Chinese cities are building up their low-altitude economies. In April of this year Harbin City officially began construction of its large-scale industrial park for production of unmanned helicopters. The city will build a large-scale unmanned helicopter research institute, a “conversion base” for transforming manned aircraft into unmanned aircraft, and an unmanned aircraft production base. The city’s new facilities are expected to achieve an annual output value of 1 billion yuan, with the surrounding ecosystem producing 5 billion yuan of output value.

Since the beginning of this year, Suzhou, Jiangsu Province, has seen 251 new low-altitude economic projects started, with a total planned investment of over 73 billion yuan. Hefei, Anhui Province, has proposed to build an eVTOL integrated manufacturing plant. Anhui Province will build a low-altitude Flight Service Platform that integrates functions such as flight monitoring, airspace management, flight planning, navigation information, meteorological information, data management, and statistical analysis. Nanjing, Jiangsu Province, has 30 drone-related companies, covering parts of the industrial chain such as R&D, manufacturing, training, examination, operation service, and industry applications. Shenzhen, Guangdong Province, is host to several well-known domestic eVTOL manufacturers.

According to data released by the Civil Aviation Administration, as of the end of 2023, China had more than 1.26 million drones, a 32 percent increase from the previous year. In 2023, civilian drones accumulated more than 23 million flight hours. The “China Low-altitude Economy Development White Paper (2024),” recently released by the Smart Equipment Industry Research Center of CCID Consulting, shows that China’s civilian drone industry reached 117.43 billion yuan in 2023, a year-on-year increase of 32 percent. According to the paper, the eVTOL industry will see its first cycle of breakthrough commercialization in 2024, with the industry reaching a scale of 9.5 billion yuan by 2026 [in sales].

Sources:
1. Xinhua, April 28, 2024
http://www.news.cn/20240428/2323db6402404ec2b408888a74b17ea8/c.html
2. People’s Daily, May 5, 2025
http://finance.people.com.cn/n1/2024/0505/c1004-40229081.html

China is building and promoting a domestically-manufactured commercial airplane, the C919.

On April 29, 2024, China Southern Airlines signed a purchase agreement with Commercial Aircraft Corporation of China (COMAC) to buy 100 C919 aircraft, with deliveries scheduled from 2024 to 2031. Air China signed an agreement on April 26, 2024 for 100 C919 aircraft, with deliveries also scheduled from 2024 to 2031. China Eastern Airlines was the first airline to order C919 planes. It placed an order for 5 aircraft in 2021 and another order for 100 aircraft in September 2023.

Source: Xinhua, May 1, 2024
http://www.news.cn/20240501/94f7e635c5ef4f2eadd721536911f9e2/c.html