SwedCham China Insights for the Week of February 4 - February 8 , 2024

Top news of the week:

China's cabinet mulls measures to further improve business environment

February 4, 2024

China's State Council held an executive meeting on February 2, chaired by Premier Li Qiang, to mull measures to further improve the country's business environment. It was stressed that building a market-oriented, law-based and internationalized business environment was an important measure to cope with the downward pressure on the economy and boost the confidence of business entities.

China releases carbon emissions trading regulations

February 5, 2024

Premier Li Qiang has signed a decree of the State Council, introducing new regulations governing carbon emissions trading. Effective on May 1, 2024, the regulations aim to provide a legal framework for the operation of China's carbon emissions trading market and ensure the effectiveness of related policies.

MOFCOM: China to standardize and promote cross-border data flow

February 6, 2024

China’s Ministry of Commerce told a press conference on February 5 that the Cyberspace Administration of China has formulated a regulation on standardizing and promoting cross-border data flow and is currently studying and improving it in preparation for implementation.

China, US officials meet to discuss economy, trade, production

February 7, 2024

The China-U.S. economic working group held its third meeting in Beijing from February 5 to 6. China and the U.S. discussed topics such as the macroeconomic situation and economic policies of the two countries, the G20 fiscal and financial cooperation, the debt of developing countries and industrial policies, according to a statement from China’s Ministry of Finance.

China ramps up efforts to further boost NEV trade, cooperation

February 8, 2024

China will step up efforts in supporting the healthy development of trade and cooperation involving new energy vehicles, according to a guideline jointly released by the Ministry of Commerce and eight relevant departments. The guideline called for enhancing the capability and level of international management, and strengthening collaboration with relevant overseas enterprises according to local conditions.

Insight of the week:

The A-share market saw a significant dip on February 5, with the benchmark Shanghai Composite Index down 1.02 percent to 2,702.19 points. However, battered Chinese stocks leaped to their largest one-day gain in two years on February 6 and the yuan rose on a slew of signals that authorities are strengthening their resolve to support slumping markets. Shanghai Composite Index closed 3.23 percent higher to 2,789.49 points. The A-share market climbed for two days straight on February 7, with the Shanghai Composite Index up 1.44 percent to 2,829.7 points.

The Chinese securities regulator has issued multiple public statements in recent days aimed at bolstering investor confidence, including announcements of state-backed purchases. On February 4, China Securities Regulatory Commission (CSRC) said it will crack down on ill-intended short selling, attract more investment by long-term capital, and earnestly listen to investors’ voices, thus steadying expectations and confidence, and adamantly warding off abnormal market fluctuations. On February 6, Central Huijin Investment, an equity arm of China’s sovereign wealth fund, announced it would expand its purchases of exchange traded funds. Shortly after the announcement, the CSRC issued a statement saying it “firmly supports” Central Huijin Investment in its plan. The CSI 500, CSI 1000 and CSI 300 indices jumped after the announcement. On February 7, China replaced Yi Huiman as the chairman of its securities watchdog with Wu Qing, a veteran regulator with a reputation for tough action as policymakers struggle to stabilize the country's stock markets. Some analysts hold the point that the appointment of Wu Qing is an “unexpected move”, signaling more stronger measures from Beijing to stabilize the stock market and boost investor confidence. By 2 pm on February 8, the A-share market continued to climb, with the Shanghai Composite Index up 1 percent to 2858.12 points.