Founded in Stockholm, Sweden, in 1970, Kreab is a global strategic communications consultancy with offices in 25 countries, serving over 500 global clients. Kreab advises on communication issues of strategic importance in business, finance, and politics, helping clients solve complex communications challenges and achieve their strategic goals. The Kreab Beijing team is well known for its track record of helping clients manage and strengthen their reputation through services spanning corporate communications, financial communications, public affairs, and social media. Contact Kreab at kchina@kreab.com, follow Kreab on WeChat (ID: KreabChina), or visit Kreab’s website at https://www.kreab.com/beijing.
SwedCham China Insights for week of November 11 – November 15
SwedCham China Insights for November 11 – November 15
Content Provided by Kreab
Top news of the week:
China adopts measures to promote foreign trade, mulls reform of elderly care
11 November 2024
On November 8, Premier Li Qiang presided over a State Council executive meeting that deliberated and adopted a raft of policy measures aimed at promoting the steady growth of foreign trade, and mulled measures on deepening the reform and development of elderly care services in the new era.
China’s top legislature approves first energy law
12 November 2024
On November 8, China’s first energy law was approved at the 12th session of the Standing Committee of National People’s Congress, China’s top legislature, and will come into effect on Jan 1, 2025. It includes nine sections, covering stipulations on energy planning, development and utilization, energy market systems, energy reserves and emergency measures, energy technology innovation, supervision and management, legal responsibilities, supplementary provisions, etc.
President Xi heads to Peru for APEC summit, state visit to Peru
13 November 2024
On November 13, President Xi Jinping left Beijing to attend the 31st APEC Economic Leaders’ Meeting in Lima and pay a state visit to Peru at the invitation of President of the Republic of Peru Dina Ercilia Boluarte Zegarra.
China announces tax relief measures to stabilize real estate sector
14 November 2024
On November 13, China announced a raft of tax policies aimed at boosting the country’s real estate market, including cuts to property deed taxes and VAT. The tax relief measures will be effective from December 1.
Xi applauds China-Peru ties, pledges more efforts to boost cooperation
15 November 2024
President Xi Jinping hailed the long-standing friendship between China and Peru, expressing optimism about further advancing bilateral cooperation in a written speech upon his arrival in Peruvian capital Lima on November 14 local time for the 31st APEC Economic Leaders’ Meeting and a state visit.
Insight of the week:
China announced plans to raise the ceiling on local government debt by 6 trillion yuan and allocate 800 billion yuan annually in local government special bonds over the next five years, according to a statement from the Standing Committee of the National People’s Congress on November 8. The additional debt will refinance the “hidden” debt accumulated by local government financing vehicles, with Beijing also guaranteeing repayment of 2 trillion yuan of hidden debt from shantytown redevelopment. The package shows how the central government is getting more serious about defusing risks that the off-the-books debt poses to the financial system.
Finance Minister Lan Foan said hidden debts stood at 14.3 trillion yuan at the end of 2023, which authorities planned to trim to 2.3 trillion yuan by 2028. Swapping hidden for official debt is expected to save 600 billion yuan in interest for local governments over five years.
Swapping high-risk local debt with government bonds may serve as a strong measure to prevent credit risk events, according to Lu Ting, Nomura’s chief China economist. He noted that this move could lower interest burdens on local governments and help avoid asset liquidations. However, Lu emphasized the need for long-term austerity to enforce stricter budget controls on local governments, warning that this new round of debt swap could lead to an accumulation of additional hidden debt over the coming years.
The Chinese government seeks to reduce risks stemming from the extended property sector downturn by tackling local government debt, largely repaid through land sales, which serve as a key revenue source for local authorities.
About Kreab
Founded in Stockholm, Sweden, in 1970, Kreab is a global strategic communications consultancy with offices in 25 countries, serving over 500 global clients. Kreab advises on communication issues of strategic importance in business, finance, and politics, helping clients solve complex communications challenges and achieve their strategic goals. The Kreab Beijing team is well known for its track record of helping clients manage and strengthen their reputation through services spanning corporate communications, financial communications, public affairs, and social media. Contact Kreab at kchina@kreab.com, follow Kreab on WeChat (ID: KreabChina), or visit Kreab's website at https://www.kreab.com/beijing.
About Kreab