Economy/Resources - 2. page

Forty-five Chinese steel conglomerates — including China Baowu, Ansteel, HBIS, and Shougang — have jointly issued an initiative through the China Iron and Steel Association (CISA) urging the industry to rein in production and reduce inventories, citing a market plagued by “strong supply, weak demand, low prices, and thin profits.”

According to a report by The Paper, CISA’s initiative outlines three measures: strictly enforcing output controls, maintaining voluntary production restraint to cut stockpiles, and fully utilizing industry price-monitoring personnel. The report notes that all three measures target the same underlying problem — the need for supply-side restraint.

Citing data from Chinese financial data provider Wind, the report states that 26 A-share-listed steel companies posted combined revenue of roughly RMB 555.7 billion (approximately US$78.3 billion) in the first half of the year, yet their combined net profit attributable to parent companies came to less than RMB 7 billion (about US$990 million). Of these, 11 companies posted losses, and seven earned less than RMB 300 million (about US$42 million) each.

CISA’s own figures show that major surveyed steel enterprises recorded total profit of RMB 58.4 billion (about US$8.2 billion) in the first half, down 5.5 percent year-on-year. Profit from core steelmaking operations alone fell 40 percent to just RMB 16.7 billion (about US$2.4 billion), with a sales profit margin of only 0.77 percent.

The initiative states that China’s steel industry has shifted from a growth phase into one of contraction and optimization. It says that since 2026, domestic steel demand has continued weakening while inventories remain elevated, driving prices down and putting significant pressure on producers’ operations.

Source: Central News Agency (Taiwan), September 15, 2026
https://www.cna.com.tw/news/acn/202609150360.aspx

China’s legislature passed the Medical Security Law of the People’s Republic of China on August 28, which will take effect on January 1, 2027. Lou Yu, Director of the Center for Social Law and Social Policy Studies at China University of Political Science and Law, has closely followed the legislation and offered professional analysis and recommendations throughout the legislative process. In a recent interview with Economic Observer, Lou discussed how he believes the law will affect China’s medical insurance system and what reforms may follow.

According to Lou, the law changes the wording on medical insurance participation for several groups. While the Social Insurance Law—a separate law—states that flexible workers “may” participate in employee medical insurance, the new law “encourages” such participation, potentially paving the way for future policy or fiscal incentives. It also stipulates that citizens who are not enrolled in employee medical insurance or covered by other medical security programs “shall” participate in basic medical insurance for urban and rural residents, replacing the previous voluntary approach.

Lou noted that the law also states that citizens have a legal obligation to participate in basic medical insurance. However, it does not specify corresponding penalties for residents who fail to enroll, meaning the provision currently has more of a declaratory than enforceable function. In his view, authorities may eventually introduce measures to increase or require participation. For workers with sufficient income but no stable employment relationship, one possibility would be to calculate insurance contributions based on their income and require enrollment above a certain threshold. For people without sufficient income, government subsidies could continue to support enrollment in resident medical insurance.

Source: Economic Observer, September 4, 2026
https://www.eeo.com.cn/2026/0904/1024337.shtml

China’s latest round of local government debt restructuring, launched in 2024, is centered on replacing high-interest, short-term hidden debt with lower-interest, longer-term local government bonds. In November 2024, Finance Minister Lan Fo’an announced a RMB 6 trillion (US$890 billion) debt ceiling for replacing existing hidden local government debt, to be implemented over three years at RMB 2 trillion annually from 2024 to 2026. A report released by the National People’s Congress Standing Committee on August 25 showed that RMB 5.73 trillion of the bonds had been issued by the end of July 2026, with the program expected to save about RMB 600 billion in cumulative interest expenses.

Local governments previously relied on local government financing vehicles (LGFVs) to fund infrastructure projects because of restrictions on official borrowing quotas. Many LGFVs raised funds through bank loans or bond issuance, using assets such as land as collateral. However, the property market downturn reduced land prices and land-sale revenues, putting pressure on LGFV assets and cash flows and exposing accumulated local government debt risks.

In late August, authorities issued a notice requiring local financing platforms to exit the government financing platform system by the end of June 2027. According to Securities Times, platforms must meet three conditions to exit: eliminate hidden debt, sever government financing functions and become independently operated market entities, and either clear their operating financial debt or obtain approval from creditors holding at least two-thirds of the financial debt.

The transition has accelerated. More than 82 percent of financing platforms had reportedly exited by the end of 2025, while 226 additional LGFVs announced exits in 2026. However, some experts noted that certain platforms had completed only procedural exits through renaming, mergers, or debt swaps, without developing independent market-based businesses or sustainable profitability. After an LGFV exits, its debt becomes local governments’ official debt.

For China’s local governments, an immediate challenge will be how to raise funds for infrastructure and other investments after losing LGFVs as a major financing channel.

Source: Epoch Times, September 6, 2026
https://www.epochtimes.com/gb/26/9/5/n14843523.htm

China’s central bank has rolled out fresh incentives to boost consumer spending, including subsidies on interest for credit card installment payments. Yet newly released data show the number of credit cards in circulation continues to shrink.

According to the People’s Bank of China’s latest payment system report, the combined total of credit and debit cards nationwide stood at 677 million by the end of the second quarter of 2026 — down 10 million from the first quarter. The figure has now declined for 15 consecutive quarters, falling by 130 million cards from its peak of 807 million at the end of the third quarter of 2022.

Mainland media outlet Economic Daily attributes the drop to the rise of mobile payments and online credit. Where consumers once relied almost exclusively on credit cards for small transactions and everyday spending, apps like WeChat Pay and Alipay, along with lightweight credit tools such as Huabei and Baitiao, now integrate seamlessly into online shopping, food delivery, and ride-hailing — requiring no in-person application or approval wait. Analysts say this convenience has outpaced the traditional, paperwork-heavy credit card.

There has also been a cultural shift: overspending and buying on credit, once seen as markers of a better lifestyle, have fallen out of favor as many younger consumers grow wary of taking on debt.

To stimulate spending, Beijing began subsidizing interest on personal consumption loans last September, initially excluding credit cards. In January, credit card installment billing was added to the subsidy program, and its scope was expanded further in August. Under the policy, any credit card installment purchase now qualifies for interest subsidies, capped at 5,000 yuan (approximately US$745) per borrower, per lending institution, per year.

Source: Central News Agency (Taiwan), September 8, 2026
https://www.cna.com.tw/news/acn/202609080100.aspx