Next Week in China: 23-27 September 2024

00:00

Major Data Releases:

26 September: Hong Kong to report June wage and payroll data
26 September: Hong Kong to report August external merchandise trade statistics
26 September: Macau to report August external merchandise trade statistics
27 September: Macau to report June-August Employment Survey results
27 September: China to report end-August Profit of Industrial Enterprises Above Designated Size

Following the Mid-Autumn Festival, Mainland China has scheduled the release of only one statistical report for next week.

The “Profit of Industrial Enterprises Above Designated Size” report covers firms with annual revenues from their main businesses exceeding RMB 20 million (USD 2.8 million). According to the National Bureau of Statistics, these enterprises cumulatively realized a total profit of RMB 4.1 trillion (USD 581 billion) during the January to July period, representing a year-on-year increase of 3.6 per cent. Profit growth for July alone was at 4.1 per cent, an increase of 0.5 percentage points from June.

High-tech manufacturing led profits growth with a year-on-year increase of 12.8 per cent, contributing nearly 60 per cent to the total.

Despite this, China’s economic growth has been under continuous pressure since the second quarter. Macroeconomic data for August indicate a downward trend on both the supply and demand sides, with the August manufacturing Purchasing Managers’ Index and demand-related indices falling below the boom-bust line. The proportion of businesses reporting insufficient demand has continued to increase, suggesting sustained demand deficiency issues. Based on latest available data, GDP growth for July-September may be slower than the 4.7 per cent recorded in the second quarter, necessitating stronger policy support moving forward to achieve the Chinese government’s full-year target of 5 per cent expansion for 2024.

The markets were closed on Monday and Tuesday of this week owing to the holiday. As of Thursday, September 19, the MSCI China Index had risen by 3.56 per cent, the Shanghai Composite Index had increased by 1.18 per cent, the Shenzhen Component Index had risen by 1.30 per cent, and the ChiNext Index had increased by 0.74 per cent for the week.

The US Federal Reserve’s interest rate cut worth 50 basis points provided some relief to Chinese stocks this week. Although the indices closed in positive territory across the board on Thursday, total trading volume at RMB 627 billion for the two markets remained low.

This piece has been co-produced with Yiyi Capital Limited in Hong Kong, a China specialist and a part of a global financial services group.