SwedCham China Insights for the Week of 22 July – 26 July , 2024

SwedCham China Insights for 22 July – 26 July

Content Provided by Kreab

Top news of the week:

China extends tariff exemptions on certain U.S. goods until February 2025

22 July 2024

China will continue to exempt certain U.S. goods from additional tariffs until the end of February 2025, the Customs Tariff Commission of the State Council said Monday.

Chinese vice premier urges all-out rescue efforts after flash floods in southwest China

23 July 2024

Chinese Vice Premier Zhang Guoqing on Sunday urged all-out rescue efforts after rain-triggered flash floods in southwest China's Sichuan Province left over 30 missing.

China to support leading firms in borrowing long-term foreign debt

24 July 2024

China is set to support prominent, creditworthy companies that promote high-quality development within the real economy by allowing them to borrow medium to long-term foreign debt.

The National Development and Reform Commission (NDRC) announced this initiative Tuesday as part of the country's strategy to further open up and enhance cross-border financing facilitation.

Chinese big lenders lower deposit interest rates

25 July 2024

China's major state-owned commercial banks announced reductions in deposit interest rates on Thursday. The one-year fixed-term deposit interest rate was cut by 10 basis points to 1.35 percent, according to the official deposit interest rates released by the country's "big four" commercial banks, namely, the Industrial and Commercial Bank of China, Agricultural Bank of China, Bank of China and China Construction Bank.

China actively promotes international cooperation on cross-border flow of data

26 July 2024

China has recently advanced international cooperation on cross-border data flow, signing a memorandum with Germany and engaging with Singapore, which highlights China's commitment to fostering secure, orderly data exchange, enhancing its business environment, and participating in international rule-making to stimulate global economic growth.

Insight of the week:

China has experienced relentless rainfall and flash flooding this month, resulting in the evacuation of tens of thousands across multiple provinces. The past fortnight has seen deadly floods and landslides that have obstructed highways, demolished homes, and inflicted severe financial damage by devastating crops and livestock. Earlier in the month, Dongting Lake in Hunan province, the nation’s second-largest freshwater lake, suffered a dyke breach, forcing at least 7,000 residents to evacuate. Last week, over a dozen fatalities occurred when a highway bridge in Shaanxi province collapsed due to a flash flood.

The flooding in Henan and neighbouring provinces, compounded by the dual challenges of drought and floods within weeks, has exacerbated an already severe period of extreme weather across China, with forecasts indicating no immediate respite. Torrential rains have battered southern, central, and eastern regions, prompting significant emergency responses as the flood season, which began two months early, reached its peak last week.

China is now in the height of the rainy season, and all seven major river basins, including the Yangtze, Yellow, Huai, Hai, Songhua, and Liao, face a substantial risk of severe flooding. On Thursday, the National Meteorological Centre issued its first red alert of the year as Super Typhoon Gaemi struck the eastern coast after hitting Taiwan and bringing heavy rain to the Philippines.

Acknowledging the gravity of the situation, the government has significantly increased funding for relief efforts: the CPC’s Organisation Department allocated RMB 27 million from centrally managed party funds, the National Development and Reform Commission issued RMB 350 million in central budgetary investments, and the Ministry of Finance, in conjunction with the Ministry of Agriculture and Rural Affairs, disbursed RMB 546 million for agricultural production disaster prevention and relief.

President Xi Jinping chaired a meeting of the Standing Committee of the Political Bureau of the CPC Central Committee to address flood control and disaster relief this past week. The committee emphasised the paramount importance of protecting human lives, urging improvements in disaster monitoring, early warning systems, rapid emergency responses, inspections of vulnerable areas, and pre-emptive evacuations. The meeting stressed the necessity of timely allocation of disaster relief funds, adequate care for affected residents, and ensuring their access to medical services and education, as well as aiding in the resumption of production and reconstruction of homes.

Experts note that while progress has been made in early warnings, weather monitoring, and infrastructure development, more efforts are required to prepare for the increasing frequency of extreme weather events. Hongzhang Xu, an adjunct research fellow at the Australian National University, commented, “While policies and strategies are being developed and implemented, the pace and scale of action often fall short of what is needed to effectively mitigate the risks and impacts of climate change.”