Chinese deflation persists in December; vehicle production and sales breach 30 million units for the first time

China's top economic and financial news stories as of Thursday, 12 January, 2024

A round-up of the top economic and financial headlines in the Chinese press as of Thursday, 12 January, 2024.

December CPI posts 0.3% YoY decline, PPI down 2.7% (National Bureau of Statistics) 

In December 2023, national consumer prices fell 0.3% in year-on-year (YoY) terms. Urban prices fell 0.3% and rural prices fell 0.5%; food prices fell 3.7% and non-food prices increased 0.5%, while consumer goods prices dropped 1.1% and service prices increased by 1.0%.

National consumer prices increased 0.1% in month-on-month (MoM) terms in Decmember. Urban prices rose 0.1% and rural prices increased 0.1%; food prices increased 0.9% and non-food prices fell 0.1%. Consumer goods prices increased 0.1% and service prices increased 0.1%.

In December 2023, national producer prices declined 2.7% YoY and 0.3% MoM. The purchasing prices of industrial producers fell 3.8% YoY and 0.2% MoM. 

For full-year 2023, the ex-factory price for industrial producers fell 3.0% compared with the previous year, and the purchasing price for industrial producers fell by 3.6%.

China's trade in goods rises 0.2% in 2023 (CCTV) 

According to figures from the General Administration of Customs, in 2023 the total value of China's imports and exports of goods was 41.76 trillion yuan, for a year-on-year (YoY) increase of 0.2%. 

This figure was better than expected, achieving the goals of promoting stability and improving quality.

Exports were 23.77 trillion yuan, for an increase of 0.6%, while imports were 17.99 trillion yuan, for a decrease of 0.3%.

Customs data further indicates that in 2023, imports and exports to countries participating the Belt and Road Initiative were 19.47 trillion yuan, for an increase of 2.8%. They accounted for 46.6% of the total import and export value, for an increase of 1.2 percentage points. 

Imports and exports to Latin America and Africa were 3.44 trillion yuan and 1.98 trillion yuan respectively, up 6.8% and 7.1%.

Imports and exports to the EU and the United States picked up in the fourth quarter, bringing the full year figures to 5.51 trillion yuan and 4.67 trillion yuan respectively, accounting for 13.2% and 11.2% of the total.

Ministry of Commerce responds to US intervention in exports of lithographic machines to China (Xinhua) 

In response to the matter of the United States directly intervening in the export of lithographic machines by Dutch companies to China, Ministry of Commerce spokesperson Shu Jueting issued remarks at a regular press conference held on 11 January.

"The United States has instrumentalized and weaponized export control issues and even interfered in regular trade between companies in other countries. China is firmly opposed to this. We urge the Dutch side to respect the spirit of the contract, support enterprises in conducting compliant trade, and maintain a free, open, fair and non-discriminatory international trade environment. 

"China will pay close attention to the trends and impacts of the situation and adopt necessary measures to resolutely safeguard the legitimate rights and interests of Chinese enterprises."

A-share companies seek to shore up market confidence with buybacks (Sina Caijing) 

The wave of share buybacks by listed companies has continued since the start of the year. As distinct from share buybacks in the past, an increase in "cancellation repurchases" has gradually emerged as the new trend.

Data from Choice shows that from 1 to 11 January, 37 A-share listed companies have issued repurchase plans or proposal, of which a total of 14 listed companies repurchased shares for cancellation, accounting for nearly 40%.

Industry insiders said that unlike repurchasing shares for employee stock ownership plans or equity incentives, "cancellation repurchases" not only reduce the company's share capital circulating in the secondary market, but can also help the company raise earnings per share while net assets remain unchanged. This can better signal the confidence of listed companies to the broader market. 

Chinese vehicle production and sales breach 30 million units for the first time (People's Daily)

According to figures from the China Association of Automobile Manufacturers, in 2023 China's total automobile production and sales figures reached 30.161 million and 30.094 million units respectively, for year-on-year (YoY) increases of 11.6% and 12% . 

Both production and sales exceeded 30 million vehicles for the first time, while China has remained in first place globally for 15 consecutive years. 

China exported 4.91 million cars in 2023, for a year-on-year increase of 57.9%, which is expected to make China the world's largest vehicle exporter.

The production and sales of new energy vehicles maintained rapid growth. In 2023, China's new energy vehicle production and sales reached 9.587 million and 9.495 million respectively, for YoY increases of 35.8% and 37.9%.

New energy vehicles exports reached 1.203 million units, for a YoY increase of 77.6%, emerging as a new growth point for exports.

Data from the National Bureau of Statistics shows that from January to November 2023, the industrial added value of the automobile manufacturing industry increased by 12.3% YoY. Operating income was 9.06635 trillion yuan, for a YoY increase of 11.2%, while profits were 448.98 billion yuan, for a YoY increase of 2.9%.

Ministry of Finance wants to strengthen regulation of digital assets (Xinhua) 

In order to thoroughly implement the decisions and arrangements of the Party Central Committee, standardize and strengthen data asset management, and better promote the development of the digital economy, the Ministry of Finance (MOF) recently formulated and issued the "Guiding Opinions on Strengthening Data Asset Management" (关于加强数据资产管理的指导意见), according to statements made by MOF on 11 Janaury. 

A senior MOF official said that in response to the current problems with digital asset management, the Opinions have the goal of promoting the sharing of digital economic dividends by the whole population and fully unleashing the value of digital assets. 

"We will advance data assetization in an orderly manner, strengthen the entire management process for digital assets, and better leverage the value of digital assets."

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