Next Week in China: 11-15 November 2024
Major Data Releases:
- 15 November: China to hold press conference on economic situation
- 15 November: China to report October industrial production data
- 15 November: China to report October energy production level
- 15 November: China to report October investments in fixed assets (excluding rural households)
- 15 November: China to report October investments in real estate development
- 15 November: China to report total retail sales of consumer goods for October
- 15 November: China to report commercial housing price index for October
Important data releases are scheduled for release during the second week of November. As of Thursday, 7 November, one of the two major events for this week has concluded with Trump’s victory in the election. The next major event will be the release of details regarding the highly anticipated fiscal measures from China as the Standing Committee of the National People’s Congress concludes its weeklong meeting.
Since October, consumer spending has become increasingly strong, leading to accelerated growth in industrial production. Following the introduction of fresh incentives to assist the real estate sector in late September and the easing of home ownership restrictions in first-tier cities, the domestic real estate market has shown some improvements. Home sales have been particularly strong within first-tier cities.
Regarding total retail sales of consumer goods, we anticipate a year-on-year growth of approximately 3 per cent in October. In September, total retail sales increased by 3.2 per cent from a year ago, driven by the effects of trade-in policies and a recovery in holiday spending during the National Day celebrations. Retail sales of larger firms turned positive with a growth rate of 2.6 per cent. For the services sector, however, the cumulative year-on-year growth rate of retail sales declined as of end-September. Restaurant revenue growth eased to 3.1 per cent due to a higher base effect.
According to high-frequency data, the volume of passenger car sales in October is expected to sustain the growth observed since September. Additionally, government subsidies and the “Double 11” shopping festival are likely to support consumption as current policies are increasingly focused on stimulating demand. Among non-goods sectors, subway travel and flight operations in October have reached seasonal highs with strong resident travel activity, which also stokes domestic spending.
For investments in fixed assets (excluding rural households), we expect the cumulative year-on-year growth rate in October to be approximately 3.5 per cent. In September, profit growth among enterprises dropped significantly, with cumulative year-on-year figures turning negative. However, October saw China’s Purchasing Managers’ Index (PMI) for new orders rise by 0.1 percentage point from the previous month to 50, indicating stable manufacturing sector operations. The index for manufacturing production and operation expectations also increased by 2 percentage points from the previous month to 54. During this period of economic transformation, stimulus policies will boost manufacturing investments. We anticipate that the growth in manufacturing investments will continue to surpass the growth of fixed asset investments at a relatively rapid pace.
Chinese equities rose week-on-week. As of Thursday, the MSCI China Index rose by 3.58 per cent for the week. Meanwhile, the Shanghai Composite Index increased by 6.07 per cent, the Shenzhen Component Index rose by 7.46 per cent, and the ChiNext Index increased by 10.69 per cent. Last week, major indices experienced slight fluctuations with overall trading volume slightly expanding, sector rotation accelerating, and investor sentiment remaining relatively high. Again, it is crucial to closely monitor any news regarding the implementation of new fiscal measures in China.
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.
