January 23 Macroeconomic Index:China deepens land reform and improves manufacturing quality, and the world focuses on energy trade and arms export trends

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Domestic News

1. The Central Committee of the Communist Party of China and the State Council: Orderly promote the extension of the second round of land contracts for another 30 years after the expiration of the pilot.

2. In 2024, the qualified rate of product quality in China's manufacturing industry increased to 93.93%.

3. Wang Xiangnan, Chinese Academy of Social Sciences: The new policy is expected to introduce more long-term funds to the capital market and optimize the investor structure of the capital market.

4. CNOOC Limited expects net production to exceed 2 million barrels per day in 2025, and the dividend payout ratio will be raised to 45% in the next three years.

5. 1.16 trillion yuan! The Central Bank has made a big deal to "replenish water", and the expectation of a RRR cut before the Spring Festival still exists.

 International News

1. U.S. LNG exports raise concerns, and European gas prices soared.

2. Germany's arms exports hit a new high in 2024, and the support for Ukraine accounts for the majority.

3. Moody's analysis: It is expected that the price of base cloth oil will be around $79 this year

4. German Finance Minister: It would be more beneficial for the EU to negotiate tariffs with the US rather than counter.

5. Rio Tinto says Trump is on track to give green light to approval for giant copper mine, and it will be the largest copper mine in North America when fully developed.

Domestic News

1. The Central Committee of the Communist Party of China and the State Council: Orderly promote the extension of the second round of land contracts for another 30 years after the expiration of the pilot.

The Central Committee of the Communist Party of China and the State Council issued the "Rural Comprehensive Revitalization Plan (2024-2027)", which mentions that the second round of land contracts will be extended for another 30 years after the expiration of the pilot project in an orderly manner, deepen the reform of the separation of ownership, contracting rights and management rights of contracted land, and develop moderately large-scale agricultural operations. Improve the management system for land contracting contracts, do a good job of orderly connection with the unified registration of real estate, and correct acts such as abandonment of contracted land and destruction of cultivated land production capacity in accordance with law. Consolidate and improve the achievements of the reform of the rural collective property rights system, develop a new type of rural collective economy, build an operating mechanism with clear property rights and reasonable distribution, and give farmers more adequate property rights and interests. Regulate rural collective economic organizations and their operation and management, as well as the circulation and transaction of rural property rights, strengthen the supervision and management of rural collective assets, and strictly control the risks of collective operations and the scale of debts.

2. In 2024, the qualified rate of product quality in China's manufacturing industry increased to 93.93%.

According to the latest statistical monitoring data released by the State Administration for Market Regulation, in 2024, the qualified rate of product quality in China's manufacturing industry reached 93.93%, an increase of 0.28 percentage points over the previous year. The overall level of China's product quality continues to be stable and improving, and the product quality level of key industries and key regions continues to improve. From the perspective of key industries, with the deepening of special actions such as large-scale equipment renewal and trade-in of consumer goods and strong quality chains, the quality level of equipment manufacturing industries such as electrical machinery and equipment manufacturing, computer, communication and other electronic equipment manufacturing, instrument manufacturing, and automobile manufacturing has been further enhanced. Among them, the product quality pass rate of electrical machinery and equipment manufacturing, computer, communication and other electronic equipment manufacturing industry increased by more than 3 percentage points, the product quality pass rate of instrument manufacturing industry increased by more than 1 percentage point, and the product quality pass rate of automobile manufacturing industry increased by 0.1 percentage points.

3. Wang Xiangnan, Chinese Academy of Social Sciences: The new policy is expected to introduce more long-term funds to the capital market and optimize the investor structure of the capital market.

"Implementation Plan for Promoting Medium and Long-term Funds into the Market" was officially released today, Wang Xiangnan, Deputy Director of the Insurance and Economic Development Research Center of the Chinese Academy of Social Sciences, told reporters that this policy is expected to introduce more long-term funds into the capital market, optimize the investor structure of the capital market, and reduce market volatility; At the same time, it will also help insurance institutions with high asset management level to improve the level of investment income and realize a virtuous cycle between the insurance industry and the capital market. Wang Xiangnan said that guiding listed companies to increase share repurchase efforts and implement the policy of multiple dividends a year can improve the capital operation efficiency and shareholder returns of listed companies, and is a long-term mechanism to enhance market confidence. Allowing multiple types of long-term funds to participate in the private placement as strategic investors can help high-quality enterprises increase financing channels and achieve faster development. In terms of new share subscription, private placement and card recognition, giving bank wealth management, insurance asset management and public funds the same treatment can promote the fairness of the rules of the asset management market and promote the construction of a unified market in the financial field.

4. CNOOC Limited expects net production to exceed 2 million barrels per day in 2025, and the dividend payout ratio will be raised to 45% in the next three years.

CNOOC (00883.HK) announced its 2025 business strategy and development plan, and the company's net production in 2025 will exceed 2 million barrels of oil equivalent per day, continuing to consolidate its profitability foundation. It is worth noting that CNOOC Limited continues its active dividend policy, with a dividend payout ratio of no less than 45% from 2025 to 2027. Previously, the dividend payout ratio for 2022-2024 announced at the end of March 2022 was not less than 40%.

5. 1.16 trillion yuan! The Central Bank has made a big deal to "replenish water", and the expectation of a RRR cut before the Spring Festival still exists.

On January 22, the People's Bank of China announced that in order to hedge the impact of factors such as the maturity of reverse repurchase in the open market and cash injection, and maintain sufficient liquidity before the Spring Festival, it launched a reverse repurchase operation of 1,157.5 billion yuan in the form of fixed interest rate and quantity bidding. This is the largest single-day reverse repo operation of the central bank in the past five years. Market participants pointed out that the interbank market funds are still on the convergence side in recent days, and the price of funds is expensive, and the central bank may continue to increase liquidity to stabilize the market funds before the Spring Festival. However, the recovery of the overall liquidity "water level" of the banking system still needs to wait for the central bank to further inject medium and long-term liquidity.

International News

1. U.S. LNG exports raise concerns, and European gas prices soared.

European natural gas prices recovered to 50 euros per megawatt hour, the highest level since the first trading day of the year, as freezing weather in Texas threatened US LNG exports. ING analysts said, "The catalyst for the move appears to be a blackout at the U.S. Freeport LNG export terminal." "At the same time, cold weather in Europe has exacerbated supply concerns. "Europe needs to import more LNG this winter as Russian gas pipelines through Ukraine are disrupted and demand strengthens," the analysts said. "The EU's gas reserves are now down to 59% and the region needs to work to ensure it stays above the European Commission's 50% target by 1 February."

2. Germany's arms exports hit a new high in 2024, and the support for Ukraine accounts for the majority.

According to data released by the German government, Germany approved a record number of arms exports in 2024, exceeding $13 billion, of which military aid to Ukraine accounts for the biggest share. The German Press Agency reported on the 21st, citing data from the German Ministry of Economy, that the German government approved the export of weapons and equipment worth 13.33 billion euros (about 13.8 billion US dollars) last year, of which 8.15 billion euros were exported to Ukraine. Other exports of weapons and equipment were mainly to Singapore, Algeria, the United States and Turkey amounted to about 1.21 billion euros, 560 million euros, 320 million euros and 230 million euros, respectively.

3. Moody's analysis: It is expected that the price of base cloth oil will be around $79 this year

Moody's Analytics expects Brent Crude prices to hover around $79 per barrel by the end of 2025. Its chief economist for Asia Pacific, Steve Cochrane, said that the weakness in oil prices will continue into 2026 and early 2027, and it is expected to fall to a low of just under $70 in early to mid-2027. After all the current volatility and uncertainty, the global economy may begin to accelerate, demand will accelerate with it, and oil prices will return to the long-term trend of $70-75 per barrel by the end of the decade. However, one risk to this outlook is that the supply may decline more than expected. Given the new sanctions on a growing number of ships transporting oil from Russia, this could reduce supply, pushing prices up slightly.

4. German Finance Minister: It would be more beneficial for the EU to negotiate tariffs with the US rather than counter.

German Finance Minister Joerg Kukies said the EU could be in a better position if it negotiated with the US on potential trade tariffs, rather than taking immediate countermeasures. Speaking at the World Economic Forum in Davos on Wednesday, Kukies said: "Let's talk about it before we think about retaliation." If there's nothing to retaliate against, I don't want to talk about retaliation. Trump has repeatedly called for the EU to buy more American oil and gas if it wants to avoid tariffs. European Commission President Ursula von der Leyen suggested last year that imports of LNG from the United States could replace consumption of Russian LNG. "Germany already imports a lot of oil and gas from the United States, and it is extremely important for us to have security of supply for transition energy," Kukies said. Regardless of how policy is  formed, it is always in our interest to maintain close relations with our greatest allies and strengthen the transatlantic relationship. ”

5. Rio Tinto says Trump is on track to give green light to approval for giant copper mine, and it will be the largest copper mine in North America when fully developed.

Mining company Rio Tinto is betting that Trump will finally give the green light to its giant copper mine in Arizona, after a 12-year battle for approval. Speaking to the Financial Times, CEO Jakob Stausholm said: "I do think we have a great opportunity to move forward with this project now. We have come a long way. "The Resolution mine first submitted a mining plan to the U.S. Forest Service in 2013 and once fully developed, it will be the largest copper mine in North America. The project, which is 55% owned by Rio Tinto and 45% owned by BHP Billiton Australia, is a deep underground mine that can produce up to 1 billion pounds of copper per year to meet 25% of U.S. demand. Trump announced last year that he would expedite regulatory approval for any company that invests more than $1 billion in the United States. For now, the fate of the mine depends on the US Supreme Court, which will rule in the coming days on the lawsuit filed by the San Carlos Apache tribe, which opposes the development.

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