Chinese professionals work "terrifying" hours: state-owned media
Beijing drafts law to boost private economy. Innovation the number one mission for China's state-owned enterprises.
Our briefing on critical economic and financial developments in China as of Friday, 2 August, 2024:
China’s planning agency is drafting a new law to boost the country’s private economy.
State-owned media says Chinese workers put in a “terrifying” number of hours on average, as working hours rise steadily since the Covid pandemic.
Communist Party’s Politburo declares domestic consumption to be the focal point for economic work in the second half.
IMF economist says Chinese consumption on track to grow further on the back of policy support.
The Ministry of Industry and Information Technology launches a new online network to support private small businesses.
Science and tech innovation should be the number one mission of China’s state-owned enterprises, according to the country’s administrator of state-owned assets.
Industrial profits saw accelerated growth in June, as economic policymakers step up focus on hi-tech manufacturing and the adoption of smart technology becomes more widespread.
China’s securities regulator appoints a new senior official, as effort to clean up and boost the role of the capital market continue.
China works on new legislation to boost private economy
The National Development and Reform Commission (NDRC) is working on a new law to expedite the development of private enterprise in China.
At a State Council press conference held on 1 August, Zhao Chenxin (赵辰昕), NDRC deputy-chair, said that the authority was currently working with several other departments on the drafting of the "Private Economy Expediting Law" (民营经济促进法).
"These measures will drive the even more equal usage of factors of production and the fair participation in market competition of enterprises under different types of ownership systems,” Zhao said.
"They will enjoy equal legal protections, expediting the different types of ownership systems to complement each others’ advantages and engage in common development."
The law will also seek to protect the rights and interests of private enterprises and entrepreneurs, and improve mechanisms for their participation in key national strategies.
Zhao said one of the chief goals of the law would be to "drive the formation of even more world-class enterprises."
Chinese professionals work a “terrifying” number of hours each day on average
State-owned media has expressed concern about the continuous rise in the average number of hours clocked in by Chinese workers, amidst efforts to boost domestic consumption and fertility levels.
China's 737 million-strong labour force put in an average of nearly 49 hours a week in 2023, equivalent to roughly 9.8 hours a day, according to a report from Market Inquirer.
"This may even have broken the limits of the Labour Law," the report said.
"For society as a whole, the annual increase in working hours is a terrifying figure."
Over the past six years, the average number of weekly working hours has continually rise, from 46.1 hours in September 2018 to 48.8 in September 2023.
The increase has arrived despite the disruptions cause by the Covid pandemic.
The trend has also continued into 2024, with figures from China's National Bureau of Statistics indicating that in the first half the average number of weekly working hours was 48.6, roughly on par with 2023.
Communist Party’s politburo declares domestic consumption the focal point for economic work in second half
At a meeting on economic policy arrangements for the second half of 2024 convened by Xi Jiping on 30 July, the Politburo of China's Communist Party expressed concern at “current changes in the external environment that are bringing an increasing number of adverse influences; inadequte levels of effective domestic demand...and numerous risks and hidden perils in key areas."
In order to deal with these concerns, the Politburo announced that key policy themes for the second half will include:
Effectively implementing active fiscal policy and stable monetary policy, and strengthening counter-cyclical adjustments. This will include accelerating the schedule for the issuance and usage of special bonds, and making effective use of ultra-long special treasures.
Expanding domestic demand by focusing on the invigoration of consumption. "The economic policy focus must shift more towards benefiting living standards, driving consumption and using multiple channels to increase household incomes," the Politburo said. "[We will] strengthen the ability and willingness of low and medium-income groups to consume, and make the expansion and upgrade of services consumption the key point."
Continued prevention and dissolution of risk in key areas, chief amongst them the real estate sector.
Other key focal areas will include:
Using reform as a driver for expediting stable growth, making structural adjustments and preventing risk.
Cultivating and strengthening emerging industries and industries of the future.
Vigorously driving a high-level of scientific and technological independence and self-strengthening.
Driving high-level opening, and further operating a first-tier international commercial environment based upon the market and the rule of law.
IMF economist says Chinese consumption on track for strong growth
Zhu Min, the former deputy managing director of the International Monetary Fund, expects China's domestic consumption to "pick up and grow strongly" in future.
In an interview with China Daily, Zhuhai said Chinese consumption will receive a boost from policies designed to raise household incomes, as China shifts to a growth model focused more on domestic demand.
Zhu also highlighted "huge room for developing services consumption" as a key driver of future growth.
Ministry of Industry and Information Technology launches support network for small private enterprise
The China Small and Medium-Enterprise Support Network (中国中小企业服务网) officially came on line on 30 July.
The network is an initiative of China's Ministry of Industry and Information Technology (MIIT), and has the goal of providing a "nation-wide, 24-hour one-stop services platform" to small private businesses.
A key function of the initiative is facilitating financial access for Chinese SMEs.
"At present, the platform already features over 200 financial products," said a MIIT official.
The Communist Party's official newspaper hailed the initiative as providing support to SMEs that are "a critical force for driving innovation, expediting employment, and improving living standards."
Scientific and technological innovation is the number one mission for China's state-owned enterprises: SASAC official
Wang Hongzhi (王宏志), the deputy-chair of China's State-owned Assets Supervision and Administration Commission (SASAC), has stressed the role of state-owned enterprises in driving Chinese scientific and technological innovation.
"[We will] pragmatically make scientific and technological innovation the number one mission," Wang said at a press conference on 26 July.
"State-owned enterprises (SOEs) are key vessels for liberating and developing productive forces, and must act when it comes to accelerating the formation of new quality productive forces.
"Since last year, central state-owned enterprises have strengthened their scientific and technological innovation and industrial innovation to an unprecedented degree, achieving positive results."
According to figures from SASAC, over 80% of the state-owned capital operating budget for this year has been used to support technological and scientific breakthrough efforts and industry upgrades.
SASAC also provides share dividend incentives for roughly 250,000 key SOE personnel and scientific researchers.
Wang said the next step will be for SASC to "drive central SOEs to employ their vanguard role in the development of new quality productive forces."
China's industrial giants see profit growth accelerate in June
The total profits of China's national industrial enterprises above designated size rose 3.6% in year-on-year (YoY) terms for the month of June, accelerating 2.9 percentage points compared to May, according to figures released by the National Bureau of Statistics (NBS) on 27 July.
Total profits for the first half were 3.51103 trillion yuan, for YoY growth of 3.5%, and an acceleration of 0.1 percentage points compared to January - May.
Yu Weining (于卫宁), NBS industrial statistician, said the profit increase was the result of the widespread adoption of smart technologies by Chinese industry, as well as its shift towards high-end manufacturing.
State Council appoints new top securities official amidst capital markets crackdown
The State Council has appointed Li Ming (李明) to the position of deputy-chair of the China Securities Regulatory Commission (CSRC), amidst efforts to reform the Chinese capital market and crack down on stock market malfeasance.
56 year-old Li Ming has a PhD in law, and previously served as the head of China's Small and Medium-sized Enterprise Stock Transfer System, as well as the party secretary and head of CSRC's Jiangsu branch, the head of CSRC's IPO department, and its chief investigations official.
At a press conference previously held by CSRC, Li called for "heavy attacks on listed companies that engage in bad behaviour, including the abuse of accounting rules to manipulate profits."
"CSRC will adopt full procedures for regulation and law enforcement to ensure the integrity and responsibility of market participants," Li said.