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Chinese September Manufacturing PMI Remains in Contraction Range

Chinese state-run media People’s Daily recently reported that China’s official September 2024 Manufacturing Purchasing Managers Index (PMI) was 49.8 percent, remaining in the contraction range. The PMI numbers were sourced from the Chinese National Bureau of Statistics.

Among the five sub-indices that make up the manufacturing PMI, the production sub-index was higher than the critical point (51.2 percent), and the new order sub-index (49.9 percent), raw material inventory sub-index (47.7 percent), employment sub-index (48.2 percent) and supplier delivery time sub-index (49.5 percent) were all lower than the critical point of 50 percent. The official government manufacturing PMI has now been in contraction territory for five consecutive months.

Meanwhile, the Caixin media group has just released its own Chinese Manufacturing PMI numbers for September. The Caixin PMI is a well-respected economic indicator monitored globally by financial institutions. The September Caixin PMI was 49.3 percent. According to Caixin, the September production sub-index is still in the expansion range. However, the new orders sub-index fell below the critical line, recording its lowest value since October 2022. Employment, raw material and product inventory, procurement and factory prices fell within the contraction zone. Caixin indicated that the problem of insufficient domestic effective demand is prominent, and uncertainty about foreign demand increased at the same time.

Sources:
(1) People’s Daily, September 30, 2024
http://finance.people.com.cn/n1/2024/0930/c1004-40331760.html

(2) Caixin, September 30, 2024
https://pmi.caixin.com/2024-09-30/102241625.html

Briefings | | |   Economy/Resources

Lianhe Zaobao: South Korea Launches Anti-dumping Investigation into Chinese Steel

Singapore’s primary Chinese language newspaper Lianhe Zaobao recently reported that the South Korean government has announced that it will launch an anti-dumping investigation into steel plate products originating from China. Hyundai Steel, a South Korean steel manufacturer, filed an anti-dumping complaint with the Ministry of Industry, saying that Chinese traders were exporting thick plates at extra low prices, causing the company to suffer losses. Thick plates are mainly used for shipbuilding or as construction materials. According to statistics from the Korea Iron and Steel Association, South Korea imported a total of 8.73 million tons of steel from China last year, a year-over-year increase of 29.2 percent. This year’s import volume is also growing rapidly. There was no official Chinese response to South Korea’s announcement as of press time.

Source: Lianhe Zaobao, October 4, 2024
https://www.zaobao.com.sg/news/china/story20241004-4940646

Briefings | | |   Geo-Strategic Trend

Economist on China’s Real Estate Problem

Lu Ting, Chief Economist for China at Japanese Nomura Securities, delivered a speech at the 2024 Tsinghua Wudaokou Chief Economist Forum on September 28. Lu pointed out that the most significant pressure on China’s economy comes from the real estate sector and “ensuring housing delivery” is at the core of resolving the issue.

He explained that in China, real estate operates on a pre-sale system – people buy and pay (including mortgage payments) before the property is built and delivered to them. This is more akin to a futures market than a spot market. Many people propose policies to address extra houses being built but not sold. However, the real issue is not the extra houses being built, but that too many have been sold without being completed.

Using data from real estate builder Country Garden, Lu noted that the company has approximately 36,000 completed but unsold houses, 730,000 houses sold but still under construction, and 350,000 houses currently being built but not sold yet, reflecting a ratio of about “1:20:10.”

Lu estimates that the government needs over 3 trillion yuan (US$ 426 billion) to address the issue of “ensuring housing delivery.”

Source: Net Ease, September 28, 2024
https://www.163.com/dy/article/JD6DHME005568W0A.html

Briefings | | |   @CS Economy/Resources

Malaysian Sultan Thanks China for Its Organ Transplant Diplomacy

On September 20, Ibrahim, the Sultan of Malaysia, visited China and met with Xi Jinping in Beijing. Malaysia’s most influential Chinese-language media, Sin Chew Daily, reported that Ibrahim expressed gratitude to the Chinese Communist Party (CCP) for arranging a liver transplant for his son Tunku Abdul Jalil, the Johor prince, during his visit to China for medical treatment. Ibrahim noted that Beijing had granted special exemptions to his son, who was a foreigner.

According to Malaysian media, Tunku Abdul Jalil was diagnosed with liver cancer in 2014 and successfully received a liver transplant at the First Hospital Affiliated to Sun Yat-sen University in Guangzhou in November of that year. However, he succumbed to cancer recurrence in December 2015, at the age of 25.

Another Malaysian Chinese-language media outlet reported that Ibrahim shed tears while discussing his son.

After the news of Ibrahim’s thanks to the CCP spread on overseas Chinese social media, netizens questioned, “Where did the liver come from?” Comments criticized the CCP’s organ transplant diplomacy, alleging that it takes organs from the poor (resulting in  loss of life) to “gift” foreign dignitaries in exchange for political benefits.

Source: Epoch Times, September 24, 2024
https://www.epochtimes.com/gb/24/9/24/n14337110.htm

Briefings | | |   @CS Geo-Strategic Trend

Homicide Cases Increase in China

Recently more and more homicide cases have occurred in China, with some of them even targeting innocent people. The authorities have been trying to cover up this trend of rising homicides.

On October 1, during a flag-raising ceremony, a shooting occurred inside the Public Security Bureau of Shaoyang City, Hunan Province. The bureau chief, Li Changyue, was shot at close range by the deputy captain of the SWAT team, Duan Peng. Duan died, and Li’s condition is unknown. The news has been suppressed in mainland China.

On September 30, a mass stabbing occurred at a Walmart supermarket in Songjiang District, Shanghai, resulting in an officially reported 3 dead and 15 injured. Some sources have indicated, however, that as many as 7 people may have died.

On September 29, a severe traffic accident occurred in Zangtun Town, Dacheng County, Langfang City, Hebei Province, involving a collision between a truck and a bus. Local residents reported that the accident was caused by someone who committed suicide by detonating an explosive on the bus. The bus driver then lost control and crashed into a large truck, resulting in multiple fatalities at the scene.

Source: Epoch Times, October 2, 2024
https://www.epochtimes.com/gb/24/10/2/n14342566.htm

Briefings | | |   Social Stability

RFI Chinese: US May Impose Tariffs on Solar Panels from Four Southeast Asian Countries

Radio France Internationale (RFI) Chinese Edition recently reported that the United States may impose new tariffs on solar panels from four Southeast Asian countries. These U.S. domestic manufacturers see competition from cheap imports from Chinese companies operating in Malaysia, Vietnam, Thailand and Cambodia as a threat to the Biden administration’s goal of promoting local production of clean energy technologies needed to combat climate change.

The American Solar Manufacturing Trade Council Alliance (AASMTC) stated in a petition to the U.S. government that Chinese manufacturers operating in the four Southeast Asian countries have received generous subsidies from the governments of these countries, including cheap financing, electricity and land tax exemptions, etc. These Chinese manufacturers also received support through China’s Belt and Road Initiative, according to AASMTC. The U.S. Commerce Department decided to consider the impact of cross-border subsidies for the first time.

The United States has already imposed a series of tariffs on solar imports. Not all U.S. manufacturers want to impose new tariffs on solar imports, as some U.S. companies assemble panels with low-cost solar cells from Southeast Asia.

Source: RFI Chinese, September 30, 2024
https://tinyurl.com/yh2pukn2

Briefings | | |   US-China Relations

China Times: India Reiterates Its Rejection of RCEP

Major Taiwanese newspaper China Times recently reported that, in a media interview, Indian Commerce Minister Piyush Goyal reiterated India’s refusal to join the Regional Comprehensive Economic Partnership (RCEP). He said that it is “not in India’s best interest” to sign an FTA (free trade agreement) with a country lacking economic transparency (like China).

RCEP’s original negotiation members in 2013 included India, and other countries believed that India’s role could be a check and balance to China. However, India has refused to participate in RCEP in 2019, citing unresolved issues regarding “core interests.” Goyal pointed out that, at the, time India had already signed FTAs with ASEAN, Japan and South Korea, and had reached a bilateral trade agreement with New Zealand worth approximately US$300 million. “Joining RCEP was not in the interests of our farmers and small and medium-sized enterprises, and to a certain extent, it is just an FTA with China,” he said. He further explained that, China’s economy is very opaque, “from trade to politics to management methods. No one in India wanted to sign an FTA with an economy with no transparency.”

Goyal also promoted the idea of India becoming a “Taiwan + 1” semiconductor country, aiming to attract business investment from companies that seek to diversify their computer chip supply chain away from just Taiwan.

Source: China Times, September 23, 2024
https://www.chinatimes.com/realtimenews/20240923004101-260410

Briefings | | |   Geo-Strategic Trend

DW Chinese: German EPA Alleges China’s Emissions Reduction Projects Fraudulent, Stole Carbon Credits Worth €1.5 Billion

Deutsche Welle Chinese Edition recently reported that the German Environmental Protection Agency (UBA) suspects 45 of 66 Chinese climate emission reduction projects of fraud involving carbon credits worth approximately 1.5 billion euros. The German government has taken measures to revoke the certification of these projects, but the huge financial losses have been irreparable.

The German authorities conducted an in-depth review of Chinese projects and found defrauding EU emission reduction certificates through false declarations and exaggerated data. The application period for many projects was during the Covid-19 period when travel of relevant certification personnel was severely restricted.

In EU’s carbon emission reduction system, Upstream Emission Reductions (UER) projects can obtain corresponding carbon credits by implementing reduction measures in the upstream industrial supply chain, such as improving equipment energy efficiency. However, lack of necessary independence and transparency in the UER certification process allowed the same people to involve in the creation, validation and certification at the same time. They were very familiar with the UER system and used their professional knowledge and industry loopholes to enable fake projects to pass certification. The German investigation also found that a market for buying and selling UER certifications has formed in China.

So far, Chinese officials have not responded directly to the relevant investigations and fraud accusations launched by Germany.

Source: DW Chinese, September 22, 2024
https://p.dw.com/p/4kucQ

Briefings | | |   Geo-Strategic Trend