6/9/2021 Financial News: Communist China’s Grain Imports Increased Year Over Year, PPI Surged In May

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1.Communist China’s Grain Imports Increased 50.6% Year Over Year

Data released by Communist China’s customs on June 7 show its grain imports from January to May reached 66.675 million tons and had a year-over-year increase of 50.6% from 44.259 million tons in the same period last year. Soybean imports in the first five months of this year were 38.234 million tons, up 12.8% from 33.882 million tons in the same period last year. In the past five months, 4.778 million tons of edible vegetable oil was imported, an increase of 44.9% from 3.296 million tons in the same period in 2020.

According to the Food and Agriculture Organization (FAO), food prices have approached their highest levels in the past decade and are continuing to rise. Since the outbreak of the CCP virus, global prices of wheat, corn, rice and soybeans have all reached the highest level in 8 years. Domestic prices of these four major grains have also gone up. The purchase price of corn in May was 45.65% higher than the pre-pandemic price. Efforts should be taken to ensure national food security.

2.Chinese Vice Premier Emphasized Grain Security

(Xinhua) – On June 7, during a meeting at the National Food and Strategic Reserves Administration, Communist China’s Vice Premier Han Zheng emphasized the need to ensure the country’s grain security, an important foundation for national security.

He called for holistic efforts to maintain control over its own food supply by guaranteeing total arable land of no less than 1.8 billion mu (120 million hectares). He also highlighted the need to further improve the infrastructure by building, renovating, and upgrading reserve facilities and strengthening the research on grain- and reserve-related technologies. Both market mechanisms and government regulations should be used effectively, and every effort should be made to increase the reserve capacity and improve its management.

3.Communist China’s May PPI Surged 9% Year Over Year

The National Bureau of Statistics today released the national consumer price index (CPI) and producer price index (PPI) data for May 2021. CPI fell 0.2% from April. Although prices of pork, fresh vegetables, and fruits fell, the price of freshwater fish increased by 9.9%; the price of eggs went up 3.3%. CPI rose by 1.3% from a year earlier.

PPI rose by 1.6% from the previous month. It surged 9.0% from a year earlier in May. The PPI for the domestic oil and natural gas extraction sector went up 99.1%. The PPI for the ferrous metals processing sector increased 38.1%. The PPI for the petroleum, coal and other fuel processing sector was 34.3% higher. The non-ferrous metals processing sector’s PPI rose by 30.4%.

4.Shenzhen Offers Financial Incentives to Stimulate Satellite Development

On June 7, Municipal Development and Reform Commission of Shenzhen announced its financial support for the application of satellites in various contexts such as transportation and logistics, marine economy, and urban safety. To encourage the research and innovation on key components associated with communications, navigation, remote sensing, and satellite developments, Shenzhen government will provide projects with up to 40% of the total cost or as much as 300 million yuan ($46.9 million) per project.

The government will also support the civilian construction of space infrastructure. Enterprises are encouraged to invest in the construction of global high-throughput broadband satellite communication system and regional remote sensing constellation. It will offer up to 200 million yuan ($31.2 million), 50 million ($7.8 million), and 50 million ($7.8 million) for high-orbit satellites, low-orbit satellites, and satellite launch insurance respectively.

5.Hong Kong Explores Retail Central Bank Digital Currencies

The Hong Kong Monetary Authority (HKMA), Hong Kong’s central bank, announced on June 8 its “Fintech 2025” strategy. As part of the strategy, it is exploring the feasibility of issuing digital Hong Kong dollars for retail use. This is the first time that the HKMA has publicly confirmed its study on the retail use of a central bank digital currency (CBDC). CBDCs can be issued for cross-border payment and wholesale payments or for retail payments. Digital yuan that has been piloted in mainland of Communist China is for retail use.

The HKMA has been working with the Bank for International Settlements to research retail CBDCs and investigate its technical feasibility. It was also announced that the HKMA will continue to collaborate with Communist China’s central bank in the technical testing of digital yuan in Hong Kong in order to facilitate cross-boundary payments for both Hong Kong and mainland residents.

6.Tesla’s Sales of Made-in-China Vehicles Jumped 29%

According to the sales data released by the China Passenger Car Association (CPCA) on June 8, Tesla sold 33,463 China-made electric cars in May, including exports, a 29% increase from April. Among them, the domestic retail volume was 21,936, an 88% increase from April. And Its export volume in May reached 11,527. From January to May, the total sales volume of made-in-China Tesla was 124,700.

Such a growth in Tesla’s sales was achieved despite the recent media reports on rumored parts failures. Cui Dongshu, the Secretary General of the CPCA, believes that Tesla’s market performance is relatively stable. “It is expected that the retail volume of its domestic market in June will be higher than that in May,” said Cui.

7.Alibaba Cloud Adds Data Centers in Indonesia and the Philippines

Alibaba Cloud announced it recently added two data centers in Indonesia and the Philippines. Specifically, the third Alibaba Cloud data center in Indonesia became operational at the end of May. Its first data center in the Philippines will be operational by the end of this year.

Earlier, Zhang Jianfeng, President of Alibaba Cloud Intelligence, said in an interview that because of the similarity between the Southeast Asian market and the Chinese market, the focus of Alibaba Cloud’s overseas development is in Southeast Asia. He added that the company plans to further increase investment in cloud computing in Asia especially in Southeast Asia. “In the next three years, we will invest more than 6 billion yuan (approximately US$1 billion) for local support such as infrastructure construction and digital talent training,” said Zhang.

8.Four Banks Fined Over $800,000 for Property Lending Violations

On June 8, Communist China’s banking regulator fined four banks a total of 5.3 million yuan ($828,000) for serious violations of rules involving consumer loans and personal business loans. The fined banks include the Beijing branches of China Guangfa Bank, China Merchants Bank, Postal Savings Bank of China, and Shanghai Pudong Development Bank. They were ordered to take immediate actions to improve their credit business practices and recover loans that violated regulations. Staff members responsible for the violations were fined a total of 350,000 yuan.

Liang Tao, vice chairman of the China Banking and Insurance Regulatory Commission (CBIRC), emphasized that the regulator will continue to conduct the nationwide inspection of business loans for illegal flows of credit into the real estate market and there will be “zero tolerance” for violations.

By【G Translators- Financial Team】
Author: Kate

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