November 13th Macroeconomic Index: China's Electricity Consumption Surges, Digital Transformation Accelerates

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Domestic News

1. In September, the electricity consumption of the whole society increased by 9.9% year-on-year

2. Officials from the Ministry of Industry and Information Technology: China has built over 2500 digital workshops and intelligent factories

3. The newly added social finance in September significantly exceeded market expectations, and the probability of short-term economic stabilization is increasing

4. Shanghai Securities News: The adjustment and optimization of the securities lending system is expected to promote the stability and recovery of the capital market

International News

1. IIF: Foreign capital withdrew $13.8 billion from emerging market portfolios in September

2. ECB policymakers plan to push for a higher minimum reserve ratio and lower interest expense next spring

3. The warmer weather has suspended the rise of natural gas in Europe

4. This round of Palestinian-Israeli conflict has resulted in over 4200 deaths on both sides

Domestic News

1. In September, the electricity consumption of the whole society increased by 9.9% year-on-year

National Energy Administration: In September, the electricity consumption of the whole society was 781.1 billion kw/h, a year-on-year increase of 9.9%. From the perspective of industry, the electricity consumption of the primary industry was 11.7 billion kw/h, a year-on-year increase of 8.6%; electricity consumption in the secondary industry was 519.2 billion kw/h, a year-on-year increase of 8.7%; electricity consumption in the tertiary industry was 146.7 billion kw/h, a year-on-year increase of 16.9%; The electricity consumption of urban and rural residents was 103.5 billion kw/h, a year-on-year increase of 6.6%. During the period of January to September, the total electricity consumption of the whole society was 6863.7 billion kw/h, a year-on-year increase of 5.6%.

2. Officials from the Ministry of Industry and Information Technology: China has built over 2500 digital workshops and intelligent factories

The Artificial Intelligence Conference opened in Taiyuan, Shanxi Province on the 15th. Ren Aiguang, deputy director of the Department of Science and Technology of the Ministry of Industry and Information Technology of China, introduced in his speech that in recent years, China’s AI industry has developed vigorously, with the scale of core industries reaching 500 billion yuan and over 4,400 enterprises, and innovative achievements continue to emerge. The deep integration of artificial intelligence and manufacturing has effectively promoted the digital, intelligent and green transformation of the real economy, and more than 2,500 digital workshops and intelligent factories have been built, and R&D and production efficiency have been significantly improved after completion.

3. The newly added social finance in September significantly exceeded market expectations, and the probability of short-term economic stabilization is increasing

CICC Research Report pointed out that 4.1 trillion yuan of new social finance was added in September, which greatly exceeded market expectations. In terms of sectors, the financing of government departments expanded as scheduled, the financing of the residential sector picked up, and the financing of the enterprise sector remained flat, but the growth rate of infrastructure loans and manufacturing loans began to slow down, and it was difficult to increase year-on-year in the fourth quarter. Although the uncertainty of endogenous recovery of social finance is still high, the improvement in financing conditions for two consecutive months means that the probability of short-term economic stabilization is increasing.

4. Shanghai Securities News: The adjustment and optimization of the securities lending system is expected to promote the stability and recovery of the capital market

The China Securities Regulatory Commission (CSRC) adjusted and optimized the relevant system of securities lending on Friday. Industry insiders believe that the adjustment and optimization of the relevant system of securities lending aims to strengthen the counter-cyclical adjustment of securities lending business, which is conducive to boosting investor confidence and is expected to promote the stability and recovery of the capital market. CITIC Securities Research Department deems that the optimization and adjustment of securities lending business is of positive significance for improving the market long and short structure, restraining improper arbitrage behavior, and promoting the rebalancing of the interests of various types of investors in the market. The quantitative changes brought about by policy reform have promoted qualitative changes, and the capital market is expected to stabilize and recover, driving a significant improvement in the fundamentals of the securities industry.

International News

1. IIF: Foreign capital withdrew $13.8 billion from emerging market portfolios in September

The monthly report of the International Institute of Finance (IIF) shows that the prospect of developed countries maintaining higher interest rates for a longer period of time continues to put pressure on global emerging market assets. Non-residents withdrew $13.8 billion from their emerging market investment portfolios in September, marking the first consecutive outflow of capital from emerging markets since July 2022 for five consecutive months of capital outflow. The bond portfolio experienced its first monthly outflow of funds since March, with an outflow of $1.8 billion, while the stock portfolio experienced an outflow of $12 billion.

2. ECB policymakers plan to push for a higher minimum reserve ratio and lower interest expense next spring

ECB policymakers are planning to push for cuts in interest payments to commercial banks in the spring, partly because of the purpose to recoup some of the costs of a decade of stimulus measures, people who familiar with the discussions said. Some policymakers are also pushing for higher minimum reserve requirements for banks, which now amount to roughly 1 percent of total deposits.

3. The warmer weather has suspended the rise of natural gas in Europe

European gas prices went down after rising more than 40 percent last week, and traders considered the effect of warmer weather and international efforts to contain the escalation of conflict in the Middle East. European benchmark natural gas futures are down as much as 6.5% at one point. Weather forecasting firm Maxar Technologies said temperatures in France, Germany and some other parts of the region are expected to return to normal or above average in the coming days after the current cold snap. This, combined with the resumption of gas supplies from Norway, Europe's largest fuel supplier, has helped mitigate supply risks that have recently plagued the gas market. In addition, efforts by the United States and its allies to prevent the Israeli-Hamas conflict from sweeping a wider region have dampened concerns that gas flows will be affected. However, traders are still closely monitoring the global supply situation as the market remains fragile, and any changes in fuel supplies are extremely sensitive.

4. This round of Palestinian-Israeli conflict has resulted in over 4200 deaths on both sides

The Palestinian health department said on the 16th local time that up to now, the current round of Palestinian-Israeli conflict has caused 2,808 deaths and more than 10,950 injuries on the Palestinian side. Of these, 2,750 were killed and more than 9,700 injured in the Gaza Strip; The death toll in the west bank of the Jordan River was 58, with more than 1,250 injured. According to the Israeli media "i24News" TV station on the evening of the 15th local time, this round of Palestinian-Israeli conflict has caused at least 1,400 deaths in Israel. In addition, the Times of Israel quoted the message from the Israeli Ministry of Health as reporting that as of the evening of the 15th, the current round of Palestinian-Israeli conflict has injured 3,842 people in Israel, of which 369 are still receiving treatment in hospitals.

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