April 3rd Macroeconomic Index: China's Manufacturing PMI Reaches 13-Month High, External Demand Boosts Growth

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Domestic News

1. Caixin Global PMI interpretation: the manufacturing industry hit a 13-month high, and external demand led to an improvement in demand

2. Zhejiang promotes the institutional opening up of the pilot free trade zone

3. In 2023, the scale of China's low-altitude economy will exceed 500 billion yuan, and it is expected to exceed one trillion yuan in 2026

4. The traffic volume of the "East Channel" of the China-Europe Railway Express hit a record high in the first quarter

International News

1. European Central Bank Governing Council member Holzmann: Europe may cut interest rates before the Fed

2. South Korea's chip exports witnessed the highest since March 2022

3. Former BOJ official: The next interest rate hike by the Bank of Japan may be in October at the earliest

4. The United Kingdom and Canada have failed to extend the rules of origin, and British car exports will be hit hard

Domestic News

1. Caixin Global PMI interpretation: the manufacturing industry hit a 13-month high, and external demand led to an improvement in demand

Most of the sub-indices of Caixin China's manufacturing PMI rose. In March, the production index, new orders index, new export orders index, raw material inventory index, and production and operation expectation index all rose in the expansion range, of which the new export orders index recorded the highest since March 2023, and the increase and absolute value were higher than the new orders index, indicating that the improvement of external demand led to the accelerated expansion of manufacturing supply and demand, which is expected to boost; the employment index rose in the contraction range, recording a seven-month high; and the supplier delivery time index, which was previously disturbed by the Spring Festival and bad weather, rose from the boom and bust line to the expansion range.

2. Zhejiang promotes the institutional opening up of the pilot free trade zone

According to the official website of the Zhejiang Provincial People's Government, the "Several Opinions on Promoting the Institutional Opening of the Zhejiang Pilot Free Trade Zone" was recently jointly issued by the Zhejiang Provincial Department of Commerce, the Provincial Development and Reform Commission and other 9 departments, and the "Opinions" focused on promoting the innovative development of trade in goods, supporting paperless trade, accelerating the opening up of the digital economy and digital trade, exploring and promoting cross-border data flow, and optimizing the business environment. The Zhejiang Pilot Free Trade Zone includes the Ningbo Area, the Hangzhou Area and the Jinyi Area.

3. In 2023, the scale of China's low-altitude economy will exceed 500 billion yuan, and it is expected to exceed one trillion yuan in 2026

CCID Research Institute of the Ministry of Industry and Information Technology released the "Research Report on China's Low-altitude Economic Development (2024)". According to the report, the scale of China's low-altitude economy reached 505.95 billion yuan in 2023, with a growth rate of 33.8%. It is optimistically expected that by 2026, the scale of the low-altitude economy is expected to exceed one trillion yuan.

4. The traffic volume of the "East Channel" of the China-Europe Railway Express hit a record high in the first quarter

It was learned from China Railway Harbin Bureau Group Co., Ltd. that in the first quarter of this year, a total of 1,443 trains and 151,000 TEUs of goods were transported at the "East Channel" Manzhouli, Suifenhe and Tongjiang railway ports of the China-Europe Railway Express, an increase of 7.6% and 6.9% year-on-year respectively, a new high in the same period in history, and the trains achieved stable growth.

International News

1. European Central Bank Governing Council member Holzmann: Europe may cut interest rates before the Fed

ECB Governing Council member Holzmann told the Austrian newspaper Kronen Zeitung that the ECB may cut its key interest rate before the Fed, noting that European economic growth is much slower than that of the United States. According to Holtzman, the ECB's Governing Council is currently discussing when to cut interest rates.

2. South Korea's chip exports witnessed the highest since March 2022

According to data released by South Korea's trade ministry on Monday, average daily exports rose 9.9% year-on-year. Overall exports without adjusting for working days rose 3.1 percent, while overall imports fell 12.3 percent, with a trade surplus of $4.3 billion. South Korea's chip exports in March were $11.7 billion, up 35.7% year-on-year, the highest in a single month since March 2022, South Korea's trade ministry said. Exports of monitors increased by 16.2 percent, as did exports of computers, which also increased by 24.5 percent.

3. Former BOJ official: The next interest rate hike by the Bank of Japan may be in October at the earliest

A former BOJ official said the BOJ may not be in a hurry to raise interest rates again, and the fastest time to raise rates could be in October. Tsutomu Watanabe, who is now a professor of economics at the University of Tokyo, said, "I don't think the next step will come so soon." "The Bank of Japan may adjust its policy based on the data and will not act irrationally. "With service prices still somewhat subdued and a key inflation data coming out only after the March 18-19 meeting, the BOJ's decision to end the world's last negative interest rate last month does not appear to be an evidence-based policy move.

4. The United Kingdom and Canada have failed to extend the rules of origin, and British car exports will be hit hard

The rules allowing the UK to sell duty-free products containing EU components to Canada will expire on the 1st local time. Previously, the two countries failed to agree on an extension of the agreement. The rules of origin measure affect a number of industries, but in the context of UK and Canadian trade, this is particularly important for the UK's automotive manufacturing industry. Canada was the eighth largest export market for British car companies last year, with exports totaling nearly £700 million ($883 million). According to the Association of British Motor Manufacturers and Traders, exporters who would have enjoyed tariff-free trade under the rules of origin will now be subject to a tariff of 6.1%, or about £3,000 per vehicle.

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