SwedCham China Insights for April 17-April 21

Top news of the week:

China’s State Council discussed the improvement on employment policies and opening-up

April 17, 2023

China will take a series of policy measures to stabilize the job market and help enterprises create more employment opportunities, according to decisions made at the State Council Executive Meeting. Besides, new breakthroughs must be achieved in terms of deepening reforms, expanding high-quality opening-up, nurturing self-reliance in science and technology, and building a modern industrial system to push forward the Chinese path to modernization.

FM: China ready to facilitate resumption of peace talks between Israel, Palestine

April 18, 2023

China encourages both Israel and Palestine to show political courage and take steps to resume peace talks, and China is ready to provide convenience for this, Chinese State Councilor and Foreign Minister Qin Gang said on April 18.

The 20^th Shanghai International Automobile Industry Exhibition kicked off

April 19, 2023

The 20th Shanghai International Automobile Industry Exhibition kicked off on April 18 in Shanghai. The exhibition is the first A-class international auto show held in China since the country adjusted its COVID-19 response. According to the organizer, about 1,000 enterprises from 20 countries and regions participated in the auto show, and around 1,500 vehicles were displayed.

China’s civil aviation transport sees strong recovery in Q1

April 20, 2023

China’s civil aviation transport logged a steady rebound in the first quarter of 2023, according an official with the Civil Aviation Administration of China. More than 129 million air passenger trips were handled in the first three months of this year, surging 68.9 percent year on year, recovering to 80 percent of the level in the same period of 2019. Of the total, international trips accounted for 2.24 million, up 717 percent year on year.

MOFCOM: China’s FDI up 4.9% in Q1, with focus on high-tech

April 21, 2023

China’s foreign direct investment (FDI) in the first quarter of 2023 reached 408.45 billion yuan (USD59.40 billion), up 4.9 percent year-on-year, demonstrating the nation’s high-level opening-up and attractiveness to foreign investment, China’s Ministry of Commerce (MOFCOM) said on April 20. FDI in the high-tech industry surged 18 percent to 156.71 billion yuan, according to MOFCOM.

Insight of the week:

The Chinese economy started off the year with better-than-expected 4.5 percent year-on-year growth in the first quarter, laying a solid foundation for the full-year economic rebound in 2023 while providing stronger impetus for global economic recovery amid a volatile international environment. China’s GDP in the first three months in 2023 reached 28.5 trillion yuan (USD4.15 trillion), up 4.5 percent year-on-year, or an increase of 2.2 percent compared with the previous quarter, according to data released by the National Bureau of Statistics (NBS). NBS spokesman Fu Linghui said that the current Chinese economy does not appear deflation and in the near future deflation is not likely.

China’s accelerating economic recovery has added to foreign investors’ confidence in the world second-largest economy. Multiple international investment banks and financial institutions, including UBS, JPMorgan, and Deutsche Bank, have raised their forecasts for China’s GDP growth in 2023.

UBS said it foresees the growth to be higher at 5.7 percent in 2023, compared with its previous forecast of 5.4 percent. JPMorgan increased the outlook to 6.4 percent, compared with a previous forecast of 6 percent, while Deutsche Bank upgraded its forecast to 6 percent from its previous 4.5 percent.

Professionals from those international companies also offered their analysis for the rapid recovery of the Chinese economy. According to Wang Tao, head of Asia economics and chief China economist at UBS, the growth of total retail sales of consumer goods and the real estate exports was better than expected. The YoY rate of real estate sales turned positive for the first time since mid-2021. The rebound of consumption and real estate deals was the main factor for UBS to upgrade its forecast. JPMorgan attributed the recovery to the rebound of travel-related consumptions, the support of previous macro policies, better-than-expected export performance, and the steady growth of industrial added value. The fact that housing market bottomed out earlier than expected was also a crucial factor for the fast economic growth.