China leads creative economy growth
UN report anticipates country’s bigger role as influential exporter, importer
China is poised to expand its global dominance of trade in creative goods and services in such areas as film, television and artificial intelligence, according to a new UN report.
The Geneva-based United Nations Conference on Trade and Development said global trade in creative goods, with export growth rates of more than 7 percent over 13 years, is an expanding and resilient sector.
In the second edition of the Creative Economy Outlook: Trends in International Trade in Creative Industries, released on Monday, UNCTAD examines the global creative industry between 2002 and 2015 and offers profiles of 130 countries, with China’s performance standing out.
The report shows that China is the largest exporter and importer of creative goods and services, with its exports of creative goods growing at double the global average between 2002 and 2015.
“China’s trade in creative goods between 2002 and 2015 has been exponential, with average annual growth rates of 14 percent,” the report said. “In 2002, China’s trade in creative goods was $32 billion. By 2014, this figure had increased more than fivefold, tallying $191.4 billion.”
Creative industries, which include architecture, arts and crafts, marketing and advertising, media and publishing, research and development, software, computer games and other core creative work, are the lifeblood of the creative economy, according to the report.
In noting the creative economy’s contribution to world trade, the report said the value of the global market for creative goods doubled from $208 billion in 2002 to $509 billion in 2015. It also said the creative sector “can make a valuable contribution to the achievement of sustainable development goals”.
Borrowing by manufacturing, industrial companies accelerated last year
Chinese financial institutions issued a record high of 16.17 trillion yuan ($2.39 trillion) in local currency-denominated loans last year to halt the slowdown in economic growth, according to data released by the central bank on Tuesday.
It was most notable annual issuance of new yuan loans since those following the 2008 global financial crisis, when 9.59 trillion in new yuan loans was issued in 2009.
In 2017, 13.53 trillion yuan in new loans was issued.
By the end of last year, the total of outstanding yuan-denominated loans reached 136.35 trillion yuan, a year-on-year increase of 13.5 percent, according to the People’s Bank of China, the central bank.
Credit growth in the corporate sector accelerated last year, especially with manufacturing and industrial firms, Ruan Jianhong, head of the PBOC’s surveys and statistics department, said at a news conference.
The borrowing cost, mainly indicated by money market interest rates, declined after the PBOC injected liquidity into the financial sector. Ten-year treasury bond yields in China dropped to 3.25 percent at the end of 2018, compared with 3.89 percent a year earlier, along with a decline of the average repo rate — borrowing cost to banks — to 2.68 percent, according to the PBOC.
The future monetary policy, Ruan said, will remain prudent and focus on offsetting economic headwinds as the “countercyclical adjustments”.
The earlier financial tightening, including stricter rules regarding asset management products and the improvement of local government debt management, slowed credit expansion to some extent, before the policymakers intensively called for further credit support for the real economy in recent weeks.
“The move to a more growth-supporting policy stance is now gaining momentum,” said Louis Kuijs, head of Asia Economics at Oxford Economics, a British think tank. “As the scale and effectiveness of (monetary) easing are likely to increase, it could support the economic growth ... (to rebound) around the second quarter.”
The broader measure of total social financing, which also included local government special bonds since August, increased by 19.26 trillion yuan last year from 2017, to a total of 200.75 trillion yuan, an annual growth of 9.8 percent, according to the PBOC.
Despite the accelerated credit growth, China’s growth of M2, or money supply, maintained a recordlow rate of 8.1 percent, unchanged from the end of 2017. A proper money growth pace is usually set as the GDP growth plus the inflation level.
Consumer inflation stood at 2.1 percent in 2018, the National Bureau of Statistics reported last week. It flattened to 1.9 percent in December, the lowest level since June, reflecting the economic slowdown. The recent drops in the factory-gate prices also indicated weakness in manufacturing, leaving room for further monetary easing, economists said.
Although China’s monetary policy does not stimulate inflation, as demand is weak, “the central bank has started easing, and we expect more (easing) to come,” said Iris Pang, an economist at ING Group.
In the first week of January, the PBOC announced two cuts in reserve requirement ratios — the proportion of funds banks must keep in reserve — the first of which took effect on Tuesday.
The Central Economic Work Conference, held in December, provided a mandate for a “more substantive and comprehensive” monetary easing to coordinate with a more proactive fiscal policy.