December 22nd Macroeconomic Index: China Implements Lower Import Tax Rates for 1010 Commodities, Fed Signals Interest Rate Cuts

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Domestic News

1. The central bank held an expert symposium on the economic and financial situation

2. From January 1, 2024, China will implement a provisional import tax rate lower than the most-favored-nation tax rate for 1010 commodities

3. The National Conference on Housing and Urban-Rural Development was held in Beijing

4. The 2024 National Energy Work Conference will be held in Beijing

International News

1. At present, the Federal Reserve has released a certain signal to cut interest rates, while the European Central Bank and the Bank of England are more cautious, and the Bank of Korea may cut interest rates later under the pressure of weaker economic growth

2. South Korea's fiscal deficit is expected to reach 91.6 trillion KRW by 2024

3. The situation in the Red Sea may lead India to find another route, and international rice prices may rise further

4. The Israeli force has expanded its operations to the center of the Gaza Strip                            

Domestic News

1. The central bank held an expert symposium on the economic and financial situation

The central bank held an expert symposium on the economic and financial situation. Pan Gongsheng, governor of the central bank, said that in the context of increasing external uncertainty, the resilience of China's foreign exchange market has been significantly enhanced, and the RMB exchange rate has remained basically stable at a reasonable and balanced level. The central bank has always adhered to the "two unswerving rules", focused on cultivating new momentum for development, promoted the private economy to become bigger, better and stronger, increased the increment and proportion of loans in the fields of scientific and technological innovation, private small and micro enterprises, advanced manufacturing, and green development, and continuously improved the quality and efficiency of financial services for the real economy. The central bank will fully absorb the opinions and suggestions of experts, maintain reasonable and abundant liquidity, match the scale of social financing and money supply with the expected targets of economic growth and price levels, maintain reasonable credit growth, stable rhythm and structural optimization, and create a good monetary and financial environment for the sustained economic recovery.

2. From January 1, 2024, China will implement a provisional import tax rate lower than the most-favored-nation tax rate for 1010 commodities

The Customs Tariff Commission of the State Council issued an announcement that from January 1, 2024, China will implement provisional import tariffs lower than the most-favored-nation tax rate for 1010 commodities; According to the development of domestic industries and changes in the supply and demand situation, within the scope of China's commitment to join the World Trade Organization, the import tariffs on ethylene, propylene, liquid crystal glass substrates below 6 generations will be increased; and according to the free trade agreements and preferential trade arrangements signed between China and relevant countries or regions, in 2024, the agreed tax rates will be implemented on some commodities originating in 30 countries or regions under 20 agreements; the China-Nicaragua Free Trade Agreement will come into force on January 1, 2024 and the tax reduction will be implemented; in order to promote China's superior products to better participate in the international market competition, in 2024, the domestic sub-items will be appropriately adjusted, and the tariff items such as decorative base paper and high-end steel products will be added, and the total number of tariff items will be 8,957 after adjustment.

3. The National Conference on Housing and Urban-Rural Development was held in Beijing

Ni Hong, Minister of Housing and Urban-Rural Development, stressed at the meeting that next year the Ministry of Housing and Urban-Rural Development will implement policies according to the city situation and “one city and one policy” to achieve a balance between real estate supply and demand; further intensify the implementation of the policy of first and second housing units; implement territorial responsibilities for the work of ensuring the delivery of buildings, strengthen the supervision of pre-sale funds, and speed up the reform of the pre-sale system; and meet the reasonable financing needs of real estate enterprises under different ownership systems without discrimination, and the Ministry of Housing and Urban-Rural Development will work with the State Administration of Financial Supervision to guide real estate financing.

4. The 2024 National Energy Work Conference will be held in Beijing

The 2024 National Energy Work Conference was held in Beijing. The meeting emphasized that in 2024, it is necessary to further promote the energy revolution, accelerate the construction of a new energy system and a new power system, strengthen the construction of an energy production, supply, storage and marketing system, and promote the high-quality development of energy to a new level at a new historical starting point. Focus on the implementation of the "dual carbon" goals and tasks, and continue to optimize and adjust the energy structure.

International News

1. At present, the Federal Reserve has released a certain signal to cut interest rates, while the European Central Bank and the Bank of England are more cautious, and the Bank of Korea may cut interest rates later under the pressure of weaker economic growth

Since December, many central banks around the world have chosen to pause the pace of interest rate hikes, and the market focus has further shifted to the timing of interest rate cuts. The analysis points out that at present, the Federal Reserve has released a certain signal of interest rate cuts, while the European Central Bank and the Bank of England are more cautious, and the Bank of Korea may cut interest rates later under the pressure of weaker economic growth.

2. South Korea's fiscal deficit is expected to reach 91.6 trillion KRW by 2024

South Korea's fiscal deficit is expected to reach 91.6 trillion won ($70.19 billion) by 2024, or 3.9 percent of the country's GDP, 400 billion won less than the government had previously expected, the Ministry of Finance said. South Korea's parliament has passed next year's national budget totaling 656.6 trillion won, about 300 billion won less than the amount originally proposed by the government, and this is the second consecutive year that the parliament has cut the budget amount.

3. The situation in the Red Sea may lead India to find another route, and international rice prices may rise further

If tensions in the Red Sea can not be eased, India may consider opening an alternative route along Africa to transport basmati rice, also known as basmati rice, which could increase its prices by about 15 to 20 percent, according to media reports. It is reported that this route may also affect India's export of basmati rice to Egypt and Europe. Asian rice prices hit a 15-year high on Wednesday again, with Thai white rice, the Asian benchmark with a 5 percent breakage rate, rising to $650 a tonne on Wednesday, the highest level since October 2008.

4. The Israeli force has expanded its operations to the central Gaza Strip

The Israel Defense Forces press service said on 21 December that the IDF had completed operations in the southern part of Gaza City and had expanded the war zone to the central Gaza Strip.

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