CiCM 24th July 2023

NEWS IN CHINA

This Saturday marked the fourth anniversary of the STAR market, China’s Nasdaq-style sci-tech innovation board. The STAR market was set up on July 22, 2019 to launch the country's innovation drive and capital market reform. The board was created to promote high-tech companies and strategic emerging sectors as well as facilitate innovative transformation of China’s economy. According to the data from the Shanghai Stock Exchange, 546 firms have been listed on the STAR market and the market’s total value has reached 6.41 trillion yuan. Out of these, 542 companies in strategic emerging and high-tech industries have raised 847.7 billion Yuan (approx. $ 127 billion) through initial public offering. The managing director of the research department at China International Capital Corporation Limited commented that the innovation board has helped the capital market in serving the economy better.

The National Development and Reform Commission (NDRC) issued a document on Monday that focuses on measures to boost private investments and to maintain the share of private investment in fixed asset investment at a reasonable level. According to NDRC, private investment should be allotted into a selected number of industrial segments with market potential such as transport, clean energy, new infrastructure, advanced manufacturing etc. NDRC plans to attract more private capital to support national projects and introduce financial support for private-invested projects. A special fund is expected to be set up from the central government’s budget by the NDRC to support 20 cities with high private investment growth.

In an attempt to land Chinese astronauts on the moon before 2030, China’s rocket scientists and engineers successfully held the multiple-ignition test at an engine facility in Fengxian county in Shanxi province. The test’s results will be helpful in finalising the engine’s design and improving its reliability according to China Aerospace Science and Technology Corporation. The new engine design is said to consume liquid oxygen and kerosene and has a thrust of 130 metric tons. The designers and engineers are further researching on making the new engine powerful as well as reusable to withstand extreme heat, pressure and speed during launch. The China Manned Space Agency has organised research and development to achieve the goal of Chinese astronauts on the moon.

The Political Bureau of the CPC Central Committee held a meeting on 24th July to analyse the current economic situation and accordingly plan the economic tasks of the second half of 2023. The meeting led to release of seven policy signals for economic recovery, expanding domestic demand and consumption, boosting capital market and investor confidence, optimising real estate policies, preventing local debt risks, and stabilising the market of foreign trade and investments. The meeting stressed on increasing the intensity of macro policy regulations and improving the domestic market as consumption is the driving force of economic growth. Reforms are necessary to optimise asset allocation and boost investor confidence through high-quality development of the capital market. The meeting also stated the changes required to adapt into the current situation of supply and demand in China’s real estate market.

China has been facing a rise in the decommissioning of batteries in recent years even after being one of the world’s major producers as well as users of power batteries. China’s Ministry of Industry and Information Technology (MIIT) stated that the country has constructed over 10,000 power battery recycling service outlets. This year, the number of recycled batteries increased than last year as nearly 115,000 tonnes of batteries being recycled. Even after these efforts, the country is lagging behind to meet the market demand. Last year, almost 277,000 tonnes of power batteries were decommissioned. The MIIT and other departments have issued national standards for power batteries to promote the unified coding system.

The Ministry of Water Resources announced on Monday that water levels of rivers in China’s eastern and northeastern regions have surpassed their warning marks. The rivers in Heilongjiang, Jilin, Liaoning and Jiangxi provinces have exceeded the warning levels because of the heavy rainfall. In Sichuan and Fujian provinces, level four emergency response for flood defence have been launched. Currently four teams have been employed in Zhejiang, Chongqing, Sichuan and Liaoning to handle the flood prevention tasks.

SOCIAL MEDIA CHATTER

Couples t-shirt with swear words on Shanghai subway creates outrage: A video of a couple on Shanghai subway wearing t-shirts with swear words in Chinese and English language has gone viral on the social media. In the video, the woman and man can be seen singing and dancing and at one point the man could be seen hanging upside down from an overhead handrail. Many passengers complained about the clothing choices of the couple but the employee of the company operating the subway cannot take action due to a rule stating that passengers are allowed as long as they are neatly dressed and not barefoot or bare-chested. The inappropriate behaviour of hanging from the handrail has been reported to the upper-level authorities. The video generated angry comments on the social media stating that these types of clothes in public places are ‘cultural pollution’ and the inappropriate behaviour of the couple reflect on their low education and poor qualities.

INDIA WATCH

The Indian economy has suffered from sluggish private investments for the past few years due to a variety of reasons such as geopolitical tensions, national policies and the pandemic. Domestic enterprises and domestic consumption have played a vital role in the growth of the Indian economy but the country needs to reform its private investment sector. The political landscape and the economic policies of the government are important in shaping the private investment sector. In the past few years, the Indian government has made several efforts to attract private investments in the country such as production-linked incentive (PLI) schemes, higher capex and tax cuts. In March 2022, the share of retail investors in companies listed on the National Stock Exchange recorded a new high of 7.42 percent. India’s Private Equity (PE)/ Venture Capital (VC) investment environment has also been noticing increasing activity and improvement in benchmarking practices. In September 2022, the PE/VC investments reportedly amounted to $2 billion spread across 73 deals. China’s economy, on the other hand, has grown at a rapid pace due to the increase in capital investment along with new technology and machinery. Increased investment in infrastructure has supported the overall output. The reforms made by the government by introducing profit incentives to rural enterprises, small private businesses and traders have led China to become an economic giant on the current global scene. China’s open-door policy helped a lot in economic transformation. Due to the pandemic, investment from the private sector has been suppressed and hence, policy support has been increased to stimulate the vitality of private investment and stabilise the job market. India needs to focus on capital investment and infrastructure investment to help stabilise the job opportunities as well as attract more foreign investments.

Prepared By

Aanchal Budhwar

Aanchal Budhwar is currently pursuing her Masters degree in International Studies from Symbiosis School of International Studies in Pune with a specialisation in Asia Area Studies. She completed her Bachelors degree in English Honours from MCM DAV College, Chandigarh. She is an avid reader and is passionate about learning new languages. She is keen on learning about Asian culture and geopolitics and deciphering the strategic meaning behind the political, diplomatic, cultural, economic and social developments taking place in China and its impact beyond the borders.