Hi everyone. I’m Stephanie LI.
Coming up on today’s program.
The State Council considers extending purchase tax exemption for NEVs to boost sales;
Top meeting calls for strengthened regulation on online payment businesses.
Here’s what you need to know about China in the past 24 hours
China is increasing support to boost car consumption, according to an executive meeting of the State Council, the country's cabinet, on Wednesday.
To further unleash the potential of automobile consumption, the government should invigorate the secondhand auto market, support the consumption of new-energy vehicles (NEVs), improve policies on parallel car imports, and support the construction of parking lots, the meeting said.
The measures are expected to increase vehicle and auto-related consumption by about 200 billion yuan ($29.83 billion) in 2022. The size of China's NEV market is estimated to exceed 5.22 million units this year, up 47.2 percent year-on-year, according to data from global market research firm International Data Corp.
In January, China issued a guideline on further improving charging facilities for electric vehicles, vowing to set up a charging system capable of meeting the needs of more than 20 million such vehicles by the end of 2025.
In May, the State Taxation Administration and the Ministry of Finance announced more support measures for automobile purchases, with taxes on passenger cars with a displacement of two liters or less and a price tag under 300,000 yuan ($45,011) is being halved from June 1 to the year-end.
The stimulus has already had an initial effect. As of last Sunday, 935,000 passenger cars were sold at retail in China's passenger car market in June, increasing 24 percent year-on-year and 43 percent month-on-month, according to the Passenger Car Federation, and 944,000 passenger cars were sold at wholesale in June, increasing 34 percent year on year.
China would include platform companies' payment businesses and other financial activities into the scope of government supervision while pushing large payment and fintech platforms to "return to their basics” and prevent systemic financial risks, according to the 26th meeting of the Central Commission for Comprehensively Deepening Reform on Wednesday. Also, China would strengthen payment regulations and systems and risk prevention mechanisms, intensify whole-chain, all-field supervision, as well as insist that platforms must hold licenses to carry out financial business.
The Ministry of Housing and Urban Rural Development and other eight departments issued a notice on Wednesday to urge the implementation of rents reduction for market entities. The rent for a state-owned house for SMEs in service industry and self-employed businesses, who are in the areas classified as high-risk of COVID-19, should be reduced for 6 months in 2022. Property owners who have cut rents for SMEs, will be able to enjoy tax cut of their property and land use this year, as well as financial supports such as preferential interest rates from state-owned banks, the notice said.
Moving on to regional highlights
Shanghai is expected to surge local government bonds issuance by nearly 50 percent this year, according to data disclosed by a senior Shanghai official on Wednesday. The local government bond quota for Shanghai stood at 179.3 billion yuan for 2022, among which 76.8 billion yuan were new local government bonds, while the rest were local government refinancing bonds.
Wuhan has further eased restrictions on home purchases, allowing residents to buy up to four housing units in central districts of the largest city in central China, as media reported on Wednesday. Though no official document on the matter had been issued as yet, registered residents can buy as many as three apartment units, a buyer said they had been told, while a family with two or more minors or with grandparents living in the city, can buy up to four units.
Official data released by provincial governments of China’s Yangtze River Delta in the past few days show that the region is embracing a momentum of economic recovery. The added value of the manufacturing and mining industries both increased by 4.7 percent in May in Anhui Province. Data of Jiangsu showed that from January to May, the added value of its major industries increased by 1.1 percent year on year, while Zhejiang posted a rise of 3.4 percent in May from the previous month.
Next on industry and company news
Contemporary Amperex Technology (CATL), the world's biggest maker of batteries for electric cars, has kicked off an A-share private placement that could raise about 45 billion yuan according to terms of the deal seen on Wednesday. The Fujian-based company has set a floor price of 339.67 yuan for the placement, the terms showed.
Universal Studios’ theme park in Beijing will reopen to visitors in phases from June 25, after a near two-month closure due to Covid-19 restrictions. Universal Beijing Resort announced the news on its Twitter-like Weibo account on Wednesday, adding that visitors will need to present negative Covid-19 test results taken within 72 hours before entering the resort.
北京环球度假区25日重开: 6月22日下午，北京环球度假区官网发布了题为《即刻出发 再次相聚》的公告，公告称，在充分进行风险管控和排查后，北京环球影城主题公园计划于6月25日正式开放，并将于6月23日凌晨0点开启售票。环球影城大酒店计划于6月24日中午向宾客开放，北京环球城市大道同日开启营业。所有游客进入北京环球度假区需持72小时内核酸检测阴性证明。
Chinese video-sharing platform Bilibili has reportedly launched a pay-per-view service for original videos, opening up a new paid content revenue stream. Users can watch The World’s Top 10 Unsolved Mysteries, a 10-episode series and the first paid video collection on Bilibili, for 30 yuan from June 20.
China’s aviation authority is stepping up the number of international flights, and at the same time several cities have halved the length of quarantine for overseas arrivals, as the country moves to get global travel back on track as reported on Wednesday. China Southern Airlines will start flying once a week to Moscow from Shenzhen and to Istanbul from Wuhan, as well as to Dehli from Guangzhou once every two weeks.
Salaries for chip engineers in China are soaring, with some chip designers offering fresh master’s graduates annual salaries of up to 600,000 yuan, media reported Wednesday. High-end chip engineers will enjoy an average leap in salary of at least 50 percent after changing jobs, as a survey on this job position showed last year as talents in the field are not enough to meet the demand of the some-2,800 chip designing firms in China.
Switching gears to financial news
The Hong Kong SAR government is stepping up purchases of its local dollar to defend the city's currency peg as it faces potential capital outflows due to a widening interest-rate gap with the US dollar. The Hong Kong Monetary Authority (HKMA), the city’s de facto central bank, bought HK$11.2 billion, media reported Wednesday. This marked the 13th intervention by the HKMA since May 13, pushing the total amount to HK$95.7 billion.
Wrapping up with a quick look at the stock market
Chinese stocks closed Thursday on positive territory, as tech firms boosted by hopes China is easing back on its crackdown on the sector. The Shanghai Composite rose 1.62 percent, while the Shenzhen Composite jumped 2.08 percent. In Hong Kong, the Hang Seng Index climbed 1.26 percent as bargain buyers moved in following a hefty sell-off. Hang Seng Tech index rallied 2.28 percent, with Alibaba Group jumping 6.4 percent.
Biz Word of the Day
A currency peg is a policy in which a national government sets a specific fixed exchange rate for its currency with a foreign currency or a basket of currencies. Pegging a currency stabilizes the exchange rate between countries.
Executive Editor: Sonia YU
Editor: LI Yanxia
Host: Stephanie LI
Writer: Stephanie LI, JIA Yuxiao, ZENG Libin, XIE Kaishan
Sound Editor: JIA Yuxiao
Graphic Designer: ZHENG Wenjing, LIAO Yuanni
Produced by 21st Century Business Herald Dept. of Overseas News.
Presented by SFC