1/17/2022 Financial News In China: Q4 GDP Growth Of 4% Lowest Since Q2 2020; Policy Rates Cut For First Time Since April 2020

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1. Communist China’s Q4 GDP Growth of 4% Lowest Since Q2 2020; December Consumption Growth of 1.7% Lowest in 16 Months

(Reuters) Communist China’s National Bureau of Statistics reported on Monday that gross domestic product (GDP) grew 4% year-on-year in the fourth quarter of 2021, above the Reuters poll median estimate of 3.6% and the lowest since the second quarter of 2020; QoQ growth was 1.6%. For the full year, the economy grew 8.1% year-on-year, better than the Reuters poll median of 8%. Press release showed that fixed asset investment grew 4.9% year-on-year in 2021, slightly above the Reuters poll median estimate of 4.8%; private investment grew 7% year-on-year in the period, while infrastructure and manufacturing investment grew 0.4% and 13.5%, respectively. The value added of industry above the scale rose 4.3% year-on-year in December, above the Reuters poll median estimate of 3.6% and the highest in four months; total retail sales of consumer goods rose 1.7% year-on-year, well below the Reuters poll median estimate of 3.7% and the lowest since August 2020.

2. Communist China Cuts Policy Rates for First Time Since April 2020

The central bank on Monday renewed its medium-term lending facility (MLF) in excess of its current term and lowered the winning rates for both MLF operations and open market reverse repo operations by 10 basis points. The People’s Bank of Communist China (PBOC) said it was lowering the interest rate on 700 billion yuan worth of one-year MLF loans to some financial institutions by 10 basis points to 2.85% from 2.95% in previous operations. The central bank also lowered the borrowing costs of seven-day reverse repurchase agreements, or repos, by the same margin to 2.10% from 2.20%, when it offered another 100 billion yuan worth of reverse repos into the banking system. This is the first time the central bank has cut policy rates since April 2020, just one month after the December 2021 rate cut.

3. Communist China’s Birth Rate Drops to 7.52 ‰ in 2021

(Reuters) China’s National Bureau of Statistics announced on Monday that the total population of 31 provinces, autonomous regions and municipalities on the mainland stood at 1,412.6 million at the end of 2021, up 480,000 from the end of the previous year; 10.62 million people were born in the year, and the birth rate fell further to 7.52 per 1,000. According to “China Statistical Yearbook 2021”, China’s national birth rate in 2020 was 8.52 per 1,000, the first time it fell below 10 per 1,000.

4. Age 60 And Older Account For 18.9% Of The Total Population Of Communist China

On January 17, the National Bureau of Statistics released the 2021 Communist China’s economic data. In terms of age composition, the working-age population aged 16-59 is 882.22 million, accounting for 62.5% of the national population; the population aged 60 and above is 267.36 million, accounting for 18.9% of the national population, including 20.56 million people aged 65 and above, accounting for 14.2% of the national population. From the perspective of urban and rural composition, the resident population in urban areas was 91.425 million, 12.05 million more than the end of the previous year; the resident population in rural areas was 49.835 million, 11.57 million less; the proportion of urban population in the national population was 64.72%, 0.83 percentage points higher than the end of the previous year.

5. To Former and Current Chairman of Anhui Grain Group Under Investigation on the Same Day

On January 15, according to the latest news of Anhui Discipline Inspection and Supervision Network, two chairmen of Anhui Grain Group were investigated at the same time. The details are as follows: Anhui Grain Group Co., Ltd. party secretary, chairman of the board, general manager Zhou Xinkai suspected of serious disciplinary violations, is currently under disciplinary review and supervisory investigation. Anhui Grain Group Co., Ltd. former party secretary, chairman of the board Nie Jun suspected of serious disciplinary violations, is currently under disciplinary review and supervisory investigation.

6. Stainless Steel Market Chaos: Refuse to Fulfill Contracts Due to Price Increases

“The phenomenon of deliberate breach of contract in the stainless steel market is getting worse and worse, mainly in some of the upstream steel mills do not deliver to customers as agreed in the contract, and worse, forcing customers to accept ‘unequal contracts’, many stainless steel industry in the downstream manufacturers suffer.” The person in charge of the Association of Stainless Steel Materials and Products of Guangdong Province said. He said that some steel mills do not fulfill the low-priced futures contracts signed earlier, and even sell the spot at a high price, the contract booked low-priced futures must be paired with some high-priced spot, delayed delivery contracts, changes in agreements, etc. These behaviors seriously affect the production and operation of midstream agents, market traders and some downstream terminal manufacturing enterprises.

7. China and North Korea to Resume Rail Trade on Monday

(Reuters) Chinese traders say they expect regular trade with North Korea to resume as early as Monday after a North Korean train pulled into a Chinese border town on Sunday, the first transit activity since the border was blocked in 2020. “My business partner in North Korea told me on Friday that the land border will be reopened for goods traffic on Jan. 17,” a Chinese goods trader in the border city of Dandong told Reuters. North Korea has not officially reported any new cases of the CCP virus since the outbreak began in early 2020, and it has implemented strict prevention measures, including closing its borders and restricting domestic travel. The Chinese side did not immediately respond to a request for confirmation that the border was reopened. 

8. Another Listed Company Implicated by Evergrande Loses Almost All Market Value in One Year

On January 14, the listed company Wenke Landscape released a performance announcement saying that it expects a loss of 1.3 billion to 1.8 billion yuan in 2021. The main reason is the provision for impairment of Evergrande Group’s receivable items, notes receivable and accounts receivable totaling 1.879 billion yuan. The current market value of Wenke Landscape is 2.09 billion yuan. This means that Wenke Landscape has lost almost all its market value in one year. According to statistics, since 2011, when the operating data of Wenke Landscape was available, the total net profit was 1.485 billion yuan. It has lost all the profits of the past ten years in the last year.

【G Translators- Financial Team】
Author: Rosy Cloud

Disclaimer: This article only represents the author’s view. Gnews is not responsible for any legal risks.

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