SwedCham China Insights for the Week of 29 July – 2 August, 2024

SwedCham China Insights for 29 July – 2 August

Content Provided by Kreab

Top news of the week:

China owns 378,000 AI patents, rising faster than global average

29 July 2024

The number of effective artificial intelligence (AI) invention patents in China reached 378,000 by the end of 2023, representing a year-on-year growth rate of over 40 percent, according to the data released by the country's top intellectual property regulator.

China takes aim at US-Japan alliance under American nuclear umbrella

30 July 2024

Beijing protests again over security meetings between the US and Japanese foreign and defence ministers on July 28.

China to step up fiscal policy implementation to spur economic recovery: official

31 July 2024

China will intensify the implementation of its fiscal policies to support economic recovery, a finance ministry official said on July 31. The country will issue the ultra-long special treasury bonds in a timely manner and make good use of the funds raised from the bond sales, Lin Zechang, of the Ministry of Finance, told a press conference.

State Council meeting urges efforts to sustain economic recovery momentum

1 August 2024

Premier Li Qiang held an executive meeting of China’s State Council on July 31 that discussed the economic work plan for the second half of the year. The meeting has called for solid work to sustain the country's economic recovery, ensure and improve people's livelihoods, and guarantee that the country's annual economic and social development goals are met.

China to improve market access system: top economic planner

2 August 2024

China will promote the introduction of guidelines on improving the market access system and publish a new version of the market access negative list in the future, Zhao Chenxin, deputy head of the National Development and Reform Commission (NDRC), told a press conference on August 1.

Insight of the week:

A key meeting of the CPC Politburo pledged on July 30 to step up macroeconomic support in the second half of this year, with greater focus on expanding domestic demand, cultivating emerging sectors and widening opening-up in a bid to meet the nation’s annual growth target for 2024.

According to a statement issued after the meeting, the CPC leadership highlighted challenges including mounting negative factors from the external environment, lack of effective demand domestically, lingering risks in key sectors and “growing pains in the transition between old and new growth drivers.” “We must enhance our awareness of risks and worst-case scenarios, come up with proactive responses, maintain strategic resolve, and strengthen our confidence in development,” the statement said.

More effective macroeconomic policies must be consistently carried out, focusing on the issuance and use of special-purpose bonds, improvement of the fiscal expenditure structure and financial support for the real economy, the statement said, adding that the exchange rate of the renminbi should remain generally stable at an adaptive, balanced level.

To boost domestic consumption, the policymakers also said economic policies should focus on increasing the incomes of residents through multiple channels and spurring spending in sectors such as tourism, elderly and child care, housekeeping and other services.

While calling for cultivating more emerging industries and future-oriented industries, they warned against “vicious competition” among peer companies.

The top leadership required removing all market access restrictions for foreign investment in the manufacturing sector and promoting trials and demonstrations for expanding opening-up of the service sector, in order to stabilize the inflow of foreign investment.

Regarding the real estate sector, the meeting called for ensuring the delivery of housing projects and accelerating the formation of “a new model of real estate development” following the Third Plenum.

The world’s second-largest economy witnessed a 5% year-on-year increase in gross domestic product in the first half of the year. But momentum took a hit in the second quarter as year-on-year growth slowed to 4.7%, with quarter-on-quarter growth at 0.7%, official figures showed. Looking to the next half of the year, some analysts consider that the policy focus will be on stabilizing growth, preventing risks and deepening reforms. Measures mapped out by the key meeting will help stimulate market vitality and strengthen the growth momentum for consumption and domestic demand.