Singapore’s primary Chinese language newspaper Lianhe Zaobao recently reported that, during China’s National Day holiday period right after the Chinese stock market recently soared, movie consumption (an important part of the holiday economy) was particularly weak.

According to latest statistics, this year’s China National Day period (October 1st to 7th) box office totals reached RMB 1.82 billion yuan (around US$258 million), including pre-sold tickets. This year’s “Golden Week” number was not only dramatically lower than the RMB 2.734 billion yuan (around US$397 million) for the same period last year, but also less than half of the RMB 5.049 billion yuan (around US$715 million) seen in 2019. Moreover, this year’s box office results were achieved with the help of heavy official subsidies.

In order to attract people to watch movies, many local governments launched programs such as movie-viewing-coupon initiatives. For example, the Beijing Film Bureau issued RMB 10 million yuan (around US$1.42 million) in movie viewing subsidies to more than 250 theaters in the city, while the Shanghai government issued 30 million yuan (around US$4.25 million) in movie consumption vouchers.

In recent years, China’s consumer spending as a share of GDP has declined, rather than increasing. Analysts expressed the belief that the government will have a hard time effectively stimulating consumption unless the financial pressure on ordinary people from the “three big mountains” (housing, education and medical care) is removed.

Source: Lianhe Zaobao, October 6, 2024
https://www.zaobao.com.sg/finance/china/story20241006-4954583

Recent tax-related announcements by Chinese companies have caused anxiety among private businesses in China. Two notable cases involve Weiwei Co., Ltd. being ordered to pay 85 million yuan in back taxes dating back to 1994, and Ningbo Bouquet Chemical facing a 500 million yuan tax bill affecting its profits.

These incidents, along with similar cases involving other companies and the establishment of “police-tax joint operation centers” in over 20 provinces, have led to concerns about aggressive tax collection practices. Rumors spread online about the government conducting “30-year retroactive tax inspections.”

The State Taxation Administration quickly denied organizing any large-scale or industry-wide tax inspections, stating that recent cases were part of routine tax collection efforts.

The government’s actions come amid financial challenges, with tax revenues decreasing by 4.9% in the first four months of 2023, while public expenditures increased by 3.5%. A significant factor is the decline in land sale revenues, which many local governments heavily rely on.

These developments have worried private businesses, particularly those focused on the domestic market with thin profit margins. Some fear that retroactive tax inspections could potentially bankrupt companies, especially if they include penalties for late payments.

While tax regulations typically allow for 3-5 year retroactive inspections, there are exceptions for cases involving tax evasion or fraud.

Source: BBC Chinese, June 24, 2024
https://www.bbc.com/zhongwen/simp/chinese-news-69137259

China’s youth unemployment rate remains high, with August figures showing 18.8% unemployment for 16- to 24-year-olds, a new high for the year. To address this issue, Shanghai has announced measures to ease unemployment by expanding the definition of “recent graduates.”

Shanghai’s Human Resources and Social Security Bureau has issued a notice requiring state-owned enterprises and central enterprises in Shanghai to open campus recruitment positions to university graduates within two years of graduation, regardless of work experience or social security contributions.

This policy change is not unique to Shanghai. Other provinces like Hunan, Shandong, Guizhou, and Guangxi have also adjusted their criteria for recent graduate status, with variations in the time frame (e.g., Hunan extending it to three years post-graduation).

Xiong Bingqi, dean of the 21st Century Education Research Institute, suggests focusing on overall employment rather than emphasizing recent graduate status to reduce job seekers’ anxiety about their status.

China’s youth unemployment rate had previously exceeded 20% for three consecutive months from April to June 2023, peaking at 21.3% in June. The government then suspended publishing age-specific urban unemployment rates until January 2024, when they resumed with adjusted statistical methods excluding in-school students.

These measures reflect China’s ongoing efforts to address high youth unemployment and create more opportunities for recent graduates in a challenging job market.

Source: Central News Agency (Taiwan), October 6, 2024
https://www.cna.com.tw/news/acn/202410060127.aspx