November 12th Macroeconomic Index: China Accelerates Policies to Support Private Economy, Registered Private Enterprises Exceed 55 Million

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Domestic News

1. The central government and local governments speed up the implementation of policies to support the private economy

2. The birth rate of the population in various regions in 2023: Three provinces exceeded 10‰, and the birth population in Guangdong exceeded one million

3. The third quarterly report revealed: the capital increase of the six major banks has been steadily promoted

4. The central bank has sufficient reserves of exchange rate stabilization tools, which will help prevent large unilateral fluctuations in the RMB exchange rate

5. The number of registered private enterprises in the country exceeds 55 million

 International News

1. The Federal Reserve cut interest rates by 25 basis points as scheduled, giving up the statement of "more confidence".

2. Venezuela and Russia signed an energy cooperation agreement to jointly develop natural gas fields

3. Putin congratulated Trump on his election as President of the United States, saying that his statement on the conflict in Ukraine is worth paying attention to.

4. The President of Palestine met with the French Foreign Minister and stressed the need for an immediate ceasefire in Gaza

5. Leader of the National Democratic Party of Japan: If U.S. interest rates rise after Trump returns to the White House, the yen may come under pressure

Domestic News

1. The central government and local governments speed up the implementation of policies to support the private economy

From October to early November, in a period of more than a month, the Development and Reform Commissions of Jiangxi, Henan, Guizhou, Zhejiang and other places held forums for private entrepreneurs to listen to the views of entrepreneurs on the current economic situation, especially the difficulties and challenges encountered by private enterprises in the development process, as well as relevant opinions and suggestions. Thanks to the innovative measure of normalized communication and exchange mechanism for private enterprises, since the beginning of this year, more than 600 private enterprises have communicated with the National Development and Reform Commission and the Private Economic Development Bureau. The National Development and Reform Commission and other relevant departments will also accelerate the improvement of the long-term mechanism for private enterprises to participate in the construction of major national projects, promote more private capital to participate in the construction of major infrastructure projects such as railways, energy, and water conservancy, and accelerate the screening and formation of a new batch of national key private investment projects.

2. The birth rate of the population in various regions in 2023: Three provinces exceeded 10‰, and the birth population in Guangdong exceeded one million

Recently, the official website of the National Bureau of Statistics released the "China Statistical Yearbook 2024". Statistics show that the national population was 140967 million at the end of 2023, a decrease of 2.08 million from the end of the previous year. The annual birth population was 9.02 million, and the birth rate was 6.39 per thousand, which means that the average number of births in 1,000 people in China in 2023 was less than 7. The natural population growth rate was -1.48 per thousand, a decrease of 0.88 per thousand from 2022. In terms of provincial data, there were 15 provinces with birth rates higher than the national average in 2023. Tibet's birth rate was as high as 13.72 per thousand, ranking first in the country, and other provinces with a birth rate of more than 10 per thousand included Guizhou and Ningxia. Overall, the birth rate in the western region was higher than that in the eastern region, and the inland region is higher than that in the coastal region.

3. The third quarterly report revealed: the capital increase of the six major banks has been steadily promoted

According to China's Financial Times, a number of large banks recently revealed in their third-quarter performance reports that they have been studying and demonstrating the core Tier 1 capital replenishment plan, which is being implemented in an orderly manner in accordance with the idea of "overall promotion, phased and batched, and customized policy for each bank". Since the announcement on September 24 that "the state plans to increase the core Tier 1 capital of six large commercial banks", the capital replenishment of large state-owned commercial banks has been launched, and the relevant work is being implemented in a steady and orderly manner. The person in charge of the liability department of CCB said that CCB is actively following up and will promote various tasks in an orderly manner according to relevant requirements. The relevant person in charge of the Agricultural Bank of China said that considering that the bank, as a global systemically important bank, needs to meet the requirement of no less than 22% in the second phase of the total loss absorption capacity (TLAC) at the beginning of 2028, capital replenishment needs to be put on the agenda urgently. The relevant person in charge of the payment department of ICBC said that the specific content of the scale and pricing of special treasury bonds has not yet been clarified, and ICBC is preparing relevant plans and actively communicating with regulatory authorities.

4. The President of Palestine met with the French Foreign Minister and stressed the need for an immediate ceasefire in Gaza

According to the CITIC Securities Research Report, looking forward to 2025, after Trump's election, external disturbances may be the biggest risk factor for the RMB exchange rate, and the RMB exchange rate is expected to remain weak if the US dollar is not weak. In the future, it is necessary to focus on whether the stimulus policies related to domestic demand can continue to maintain their intensity, so as to hedge the impact of external risks on the RMB exchange rate to a certain extent. In addition, the PBOC has sufficient reserves of exchange rate stabilization tools, which will help prevent large unilateral fluctuations in the RMB exchange rate.

5. The number of registered private enterprises in the country exceeds 55 million

According to the statistics of the State Administration for Market Regulation, as of the end of September 2024, the number of registered private enterprises in the country exceeded 55 million, and the proportion of private enterprises in the total number of enterprises remained stable at 92.3%. In the first three quarters, 6.191 million new private enterprises were established across the country. In the first three quarters, 327,000 new private enterprises were established in the new generation of information technology industry, 148,000 new private enterprises were established in the high-end equipment manufacturing industry, and more than 800,000 new private enterprises were established in the field of artificial intelligence software research and development. In addition, in the fields of civil aviation, quantum information, and humanoid robots, private enterprises have shown abundant vitality.

International News

1. The Federal Reserve cut interest rates by 25 basis points as scheduled, giving up the statement of "more confidence".

On 8 November, the Fed announced a 25bp rate cut to 4.5%-4.75%, in line with market expectations. The decision was unanimously adopted, with the wording of the policy statement largely unchanged, continuing to emphasize the risk of keeping a close eye on the dual target, but removing the phrase "be more confident that inflation is sustainably moving towards target", without sending a clear signal about future rate cuts, and not commenting in any way on the outcome of the US presidential election. The latest indicators show that economic activity continues to expand steadily. Since the beginning of this year, labor market conditions have generally eased, and the unemployment rate has risen but remains low. Inflation is gradually approaching the Committee's 2% target, but remains slightly above target. The committee's goal is to achieve maximum employment and a long-term inflation rate of 2%. The Committee judged that the risks of reaching the employment and inflation targets were broadly balanced. The economic outlook remains uncertain and the Committee is closely monitoring the risks of dual objectives.

2. Venezuela and Russia signed an energy cooperation agreement to jointly develop natural gas fields

On November 7, local time, Venezuelan Vice President Rodríguez said that at the 18th meeting of the Russia-Venezuela High Intergovernmental Committee (CIAN) held in Caracas, the capital of the country, Venezuela and Russia signed an energy cooperation agreement to jointly develop natural gas fields. Rodriguez said Venezuela and Russia have signed 17 bilateral cooperation agreements in the fields of energy, transportation, mining, tourism and education. Through the cooperation, Venezuela is expected to become a natural gas exporter for the first time in a short period of time.

3. Putin congratulated Trump on his election as President of the United States, saying that his statement on the conflict in Ukraine is worth paying attention to.

On November 7, local time, Russian President Vladimir Putin congratulated Trump on his election as President of the United States when attending the plenary session of the 21st annual meeting of the Valdai International Debate Club, a Russian think tank. Putin said he was ready to resume contacts with Western leaders if they showed initiative. At the same time, Putin said that Trump's statements about the conflict in Ukraine during the election campaign are worth paying attention to. Russian presidential press secretary Dmitry Peskov said in the early morning of the 8th that Putin's congratulations on Trump's election can be regarded as official congratulations, and it is unclear when and what agenda the phone call between Putin and Trump will take place.

4. Jordanian king: Israel's actions in Gaza and Lebanon could expand the conflict

On November 7, local time, Palestinian President Abbas met with visiting French Foreign Minister Barrow in the West Bank city of Ramallah, and the two sides discussed the current situation. Abbas stressed that UN Security Council Resolution 2735 should be implemented, an immediate ceasefire should be achieved in the Gaza Strip, humanitarian assistance should be provided to the locality, and at the same time, Israeli troops should fully withdraw from Gaza, and the Palestinian State should assume full responsibilities in the Gaza Strip. Besides, they should provide relief to the Palestinian people, and rebuild the destroyed homeland. After the meeting, French Foreign Minister Barrow said that France called for an immediate ceasefire, the unconditional release of detainees, unhindered humanitarian access to Gaza, and a lasting solution that includes the coexistence of two sides, Palestine and Israel, mutual recognition and mutual security.

5. Leader of the National Democratic Party of Japan: If U.S. interest rates rise after Trump returns to the White House, the yen may come under pressure

Tamaki, the leader of Japan's opposition National Democratic Party, said the U.S. economy could overheat if Trump raises tariffs and cuts taxes after returning to the White House. If the U.S. then tries to curb inflation by raising interest rates, the yen could come under pressure against the dollar. However, the Bank of Japan should not adjust its policy until it sees how much the salary will be raised by small Japanese companies in the wage negotiations next spring.

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