China Sees Surging Trade in Q1

According to the United Nations Conference on Trade and Development (UNCTAD), China, India and South Africa fared relatively better than other major economies in trade in Q1, 2021. China’s exports increased not only from its 2020 averages but also from its pre-pandemic levels. Q1, 2021 recorded a growth in the value of global trade in goods and services by about 4 percent quarter on quarter and by about 10 percent year on year. The data shows that the import and export trends of the world’s major trading economies reflect their recovery patterns.

Key Economic Indicators

China’s Consumer Price Index (CPI) jumped by 1.3 percent year on year reaching 101.3 in May 2021. Factors contributing to this increase were higher food prices and non-food prices like airfares, gasoline and diesel prices, likely boosted by China’s Labor Day holidays. China’s Producer Price Index (PPI) leapt by 9 percent year on year, to 109 owing to surging commodity prices including coal, steel, iron ore and copper.

China’s PMI in April

China’s Purchasing Managers Index (PMI) for May 2021 dropped to 51 from 51.1 in April 2021. Some of the reasons for this dip can be attributed to a higher cost of raw materials and the pandemic situation in other countries. Rising commodity price is said to have been caused by recovering demand and easing liquidity across the globe. In addition, increasing shipping costs and the appreciating renminbi will continue to affect producers.

BRICS Foreign Ministers Hold Virtual Meeting

Foreign Ministers from BRICS countries came together virtually on June 1 to discuss post-pandemic world economic recovery. They jointly emphasized the need for a multipolar world and the need to reform multilateral systems, strengthen counter-terrorism cooperation, use digital and technological solutions to achieve Sustainable Development Goals, and enhance people-to-people exchanges. Foreign Minister of China Wang Yi stressed the need to strengthen cooperation among the BRICS countries in the areas of politics and security while the Foreign Minister of South Africa Grace Naledi Mandisa Pandor raised the need to address the global gap of vaccine access. CA

Expanding Non-cash Payments

The non-cash payments handled by Chinese banks maintained steady expansion in the first quarter, with mobile payments sustaining growth momentum, the central bank said on June 2.

Non-cash payments, involving bank cards, online payment vehicles, commercial papers, credit transfer and other settlements, totaled about $167 trillion in the first three months, up 20.65 percent year on year, according to the People’s Bank of China.

Of the total, mobile payments sustained an upward trend to 130.14 trillion yuan (about $20.4 trillion), up 43.3 percent year on year. The bank card transactions hit 254.94 trillion yuan (about $40 trillion) in the first quarter, up 28.46 percent year on year.

6G Commercialization

The world is expected to see the commercialization of 6G around 2030, said a report released on June 7.

The next-generation mobile communication technology will integrate with advanced computing, big data, artificial intelligence (AI) and blockchain, according to a white paper issued by the IMT2030 (6G) Promotion Group that was established under the guidance by the Ministry of Industry and Information Technology.

According to the report, the international organization on telecom technologies 3GPP is expected to initiate the research and development (R&D) of the 6G international technical standard by around 2025 before the expected commercialization around 2030.

China granted 5G licenses for commercial use and started 6G R&D in 2019. The country has proposed making forward-looking layout in 6G technology.

Surging Industrial Output

China’s value-added industrial output, an important economic indicator, went up 8.8 percent year on year in May as production demand continued to recover, data from the National Bureau of Statistics (NBS) showed on June 16.

The figure was up 13.6 percent from the level in 2019, bringing the average growth for the past two years to 6.6 percent, NBS data showed.

In the first five months, industrial output gained 17.8 percent year on year, resulting in an average twoyear growth of 7 percent.

The industrial output is used to measure the activity of designated large enterprises with an annual business turnover of at least 20 million yuan (about $3.12 million).

Investment in BRI Countries

China’s outbound direct investment (ODI) into countries involved in the Belt and Road Initiative (BRI) increased in the first five months, official data showed.

During the period, such investment into BRI countries expanded 13.8 percent year on year to $7.43 billion, accounting for 17.2 percent of the total, according to the Ministry of Commerce.

From January to May, the country’s total ODI rose 2.6 percent to $43.29 billion from the same period in 2020, the ministry said.

Specifically, outbound investment into manufacturing and information transmission sectors continued to grow. The manufacturing sector attracted $7.2 billion in the first five months, up 11.8 percent year on year.

The ODI from China’s local enterprises reached $32.75 billion, up 3.8 percent from a year earlier and accounting for 75.7 percent of the total ODI in the period, according to the ministry.

Boosting Market Vitality

Chinese Premier Li Keqiang on June 3 called for boosting market vitality and social creativity to promote sound economic growth.

Li made the remarks at a teleconference on issues including deepening reforms to streamline administrative approval, delegate power to lower levels, and improve regulations and services.

China’s economy generally sustained a steady recovery this year, but the domestic and external environment remains complicated and grim, Li said.

Macro policies and further reforms should be employed to help market entities achieve further recovery, beef up the driving forces of economic growth, and keep economic operations within a rational range, Li said. CA