CiCM 22nd July 2024

NEWS IN CHINA

China Cuts Benchmark Lending Rates to Boost Economic Recovery: China's central bank has implemented significant cuts to key lending rates in a strategic move to stimulate economic growth. On Monday, July 22, 2024, the one-year loan prime rate (LPR) was reduced from 3.45% to 3.35%, while the over-five-year LPR, which influences mortgage rates, was lowered by 10 basis points to 3.85%. Additionally, the interest rate on seven-day reverse repos was cut from 1.8% to 1.7%. These adjustments aim to reduce financing costs for businesses and households, encouraging investment and consumption. The rate cuts align with the outcomes of the recent third plenary session of the 20th Central Committee of the Communist Party of China, which emphasized the importance of achieving this year's economic and social development goals. Experts view these measures as crucial steps towards reaching China's annual GDP growth target of around 5% for 2024. The moves are expected to support various sectors, including the real estate market, and reflect the government's commitment to strengthening the foundation of economic recovery amidst ongoing challenges in the domestic and global economic landscape.
China and Philippines Reach Temporary Agreement on Ren'ai Reef Dispute: China and the Philippines have reached a provisional arrangement regarding the contentious situation at Ren'ai Reef in the South China Sea. The agreement allows for humanitarian resupply of living necessities to Philippine personnel aboard an illegally grounded vessel on the reef, while China maintains its demand for the ship's eventual removal. Under the arrangement, the Philippines must inform China in advance of resupply missions, which will be subject to on-site verification and monitoring by Chinese authorities. China strongly opposes any attempts to build fixed facilities or permanent outposts on the reef. This agreement, resulting from a series of consultations, aims to manage maritime differences and de-escalate tensions in the region. However, China remains cautious due to past disagreements and the complex geopolitical landscape involving the United States. The arrangement represents a delicate balance between addressing humanitarian concerns and upholding territorial claims, highlighting the ongoing challenges in South China Sea diplomacy.
Mainland China Condemns Taiwan Leader's Call for "National Identity": Chinese mainland officials have strongly criticized recent remarks by Taiwan's leader Lai Ching-te advocating for the establishment of a "national identity" for Taiwan. Chen Binhua, spokesman for the Taiwan Affairs Office of the State Council, condemned Lai's statements made at a Democratic Progressive Party (DPP) meeting, where Lai expressed intentions to build Taiwan into a "country" and ensure "national sovereignty." Chen reiterated that Taiwan is an integral part of China, emphasizing that China's sovereignty and territorial integrity have never been and will never be divided. He accused the DPP of disregarding history, facts, and public opinion by adhering to a "Taiwan independence" separatist stance and refusing to accept the one-China principle. Chen argued that this position has led to increased tensions in cross-Strait relations, jeopardizing peace and stability in the Taiwan Strait. The mainland spokesperson called on people on both sides of the Strait to unite against what he termed as "provocative 'Taiwan independence' actions" by the DPP authorities. This incident highlights the ongoing tensions between mainland China and Taiwan, particularly concerning issues of sovereignty and national identity.
China Delivers World's First River-Sea LNG Bunkering Vessel: China has achieved a significant milestone in shipbuilding technology with the delivery of the world's first river-sea liquefied natural gas (LNG) bunkering and transport vessel. Named "Huaihe Nengyuan Qihang," the 14,000-cubic-meter capacity ship was built by Hudong-Zhonghua Shipbuilding, a subsidiary of China State Shipbuilding Corp, and delivered in Shanghai two months ahead of schedule. This innovative vessel boasts a dual-fuel propulsion system, allowing it to navigate both along the Yangtze River and in deep-sea areas. It represents a major technological breakthrough with a localization rate exceeding 85%, the highest among China's LNG storage and transport equipment. The ship incorporates domestically developed components including cooling systems, LNG compressors, dual-fuel power generators, and electric propulsion systems. The vessel's completion is seen as crucial for implementing carbon emissions reduction strategies along the Yangtze River, promoting LNG-powered vessel refueling in the region, and opening inland LNG transport channels. This development aligns with China's "Initiative of E-Yangtze River," aiming to address environmental concerns in the country's major waterway, which accounts for over 60% of China's inland waterway transportation.
China Outlines Flexible Approach to Raising Retirement Age: China's leadership has announced plans to gradually raise the retirement age in a "voluntary and flexible" manner, as outlined in a resolution adopted at the third plenary session of the 20th Communist Party Central Committee. This new approach marks a significant shift from the current mandatory retirement system, which sets retirement ages at 50 or 55 for women and 60 for men. The resolution emphasizes principles of voluntariness and flexibility, allowing individuals to make choices based on their personal circumstances and job requirements. Experts view this as a response to China's rapidly aging population and the need to address structural unemployment. The plan also includes developing the "silver economy" to create diverse jobs for older people and improving community care for the elderly, especially in rural areas. While the move aims to alleviate pressure on the pension system and utilize human resources more effectively, it may face challenges in implementation and public acceptance.

SOCIAL MEDIA CHATTER

Office Workers' "5-Minute Quick-Charge Workout" Trend Goes Viral: A new health trend is sweeping Chinese workplaces, with office workers finding creative ways to incorporate exercise into their busy schedules. Dubbed the "5-minute quick-charge workout," the practice has gained significant traction on social media platforms like Xiaohongshu. Videos and images show employees jogging with laptops, using lunch delivery bags as dumbbells, and even practicing yoga while worshipping the God of Wealth. One viral post featured a woman lifting food delivery bags while waiting for an elevator, sparking admiration for her ingenuity. Another showed an intern bringing a yoga mat to work, combining exercise with spiritual practices. The trend has sparked lively online discussions, with many praising the creativity and multitasking abilities of these office workers. Some users have shared their own quick workout routines, such as sprinting to clock in on time or considering package deliveries as arm training. The popularity of these micro-workouts reflects the challenges faced by overworked professionals in finding time for traditional exercise, as well as a growing awareness of the importance of physical activity in maintaining both physical and mental health in high-pressure work environments.

INDIA WATCH

India's Economic Survey Projects Strong GDP Growth for FY 2024-25: China's news agency Xinhua reports that India's annual Economic Survey, presented to the Lok Sabha by Finance Minister Nirmala Sitharaman, projects a robust GDP growth of 6.5-7% for fiscal year 2024-25. This forecast aligns with India's decade-long average annual growth rate of 6.6% leading up to FY20, signaling sustained economic momentum. The survey highlights that domestic growth drivers supported economic expansion in the previous fiscal year, despite global economic uncertainties. This resilience in the face of international challenges points to the strength of India's internal economic dynamics. Looking ahead, the report expresses optimism about global trade in 2024, anticipating a pickup in merchandise trade volumes after a contraction in 2023. This positive outlook for international trade could potentially benefit India's export-oriented sectors. The Economic Survey serves as a crucial document outlining the state of India's economy and providing insights into future economic policies, setting the stage for the upcoming budget discussions in the Indian parliament.

Prepared By

Vanshika Patel

Vanshika is a recent graduate from Ashoka University with a degree in Economics and a minor in Computer Science. Her interests lie in understanding the global economy and its impact on international communities, policy-making, and the social sector. She is particularly drawn to quantitative analysis and has a keen interest in international economics, aiming to contribute to data-driven decision-making in global economic contexts.