IFF Newsletter Issue 65

TIME：2023-03-02

From the Editor

China’s economy shows strong signs of recovery as the country’s factory activity grew at the fastest pace since 2022 in February. China’s Premier Li Keqiang on Wednesday told the International Monetary Fund (IMF) that China is willing to play a constructive role in resolving debt issues under a multilateral framework.

The European Union and the UK have agreed on new trade rules in Northern Ireland on Monday. Japan’s birth rate drops to a new record low and US manufacturing continues to contract in February.

The IFF continues to bring you the latest China news and global development.

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Latest from the IFF

IFF calls for greater financial integration of Greater Bay Area

The International Finance Forum (IFF) called for greater financial integration to boost banking and insurance sector in the Greater Bay Area (GBA) in the latest IFF GBA Seminar on Friday.

In a keynote speech, Zhou Yanli, Vice President of the IFF and former Vice Chairperson of China’s insurance regulator, urged governments in the GBA to promote fintech innovation and digital transformation of the finance sector at the 6th IFF GBA Seminar.

Zhou said authorities should support building financial institutions that aim at bolster collaborations in the area and strengthen cross-border finance cooperation.

Officials from China Banking and Insurance Regulatory Commission Guangdong Office, the Management Committee of Nansha Free Trade Zon and Guangzhou Municipal Local Financial Supervision and Administration Bureau attended the seminar.

Song Min, the Executive Director of the IFF Academic Committee and Dean of the IFF Institute, who joined the discussion, said the banking and insurance sector plays a key role in the opening-up and high-quality development of the GBA.

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China News

China's factory activity tops decade-high in February

China’s factory activity expanded at the fastest pace since April 2012 in February, official data showed on Wednesday.

The official manufacturing purchasing managers’ index (PMI) grew to 52.6 in February, up from 50.1 in January, according to data from the National Bureau of Statistics. The 50-mark separates expansion from contraction.

The non-manufacturing in services and construction sectors also shot up last month. The services index rose 55.6 from January’s 54.0 while the construction index grew to 60.2.

China willing to play constructive role in debt talks

China’s Premier Li Keqiang on Wednesday told the International Monetary Fund (IMF) that China is willing to play a constructive role in resolving debt issues under a multilateral framework, the official Xinhua news agency reported.

In a phone call with the IMF Managing Director Kristalina Georgieva, Li urged all creditors to work together to solve the debt issues of low-income countries in order to assist low-income countries in overcoming economic challenges and achieving sustainable development.

China urban employment drops in 2022

Urban employment in China dropped by 8.4 million to 459.31 million in 2022, the first fall since 196, Reuters reported on Tuesday citing official data.

China added 12.06 million jobs in 2022, 630,000 less than those in 2021, according to the National Bureau of Statistics.

The country’s urban unemployment rate averaged 5.6% in 2022.

China’s economic growth dropped to 3% last year from 8.4% in 2021.

China’s central bank to adopt precise and forceful monetary policy

China’s prudent monetary policy will be precise and forceful this year, said the central bank in its latest policy implementation report.

The policy will strongly support the expansion of domestic demand and the real economy, said the People’s Bank of China (PBOC) in the report.

Monetary policy will help boost consumption, investment and job growth, the report added.

The PBOC will closely monitor inflation and stabilise the prices of food and energy.

US businesses in China pessimistic about prospects, not considering relocating

US businesses in China are slightly more pessimistic about the financial outlook in China compared to previous years, latest report by the American Chamber of Commerce showed on Monday.

However the majority of the businesses are not considering relocating their supply chain.

Half of the companies surveyed by the AmCham China said they were pessimistic about the future of US-China relations in the coming year with three-quarters of the companies reporting their business have been impacted by trade tensions.

China’s insurers maintain adequate solvency

Chinese insurers maintained steady operation and adequate solvency in the last quarter of 2022, Xinhua reported on Sunday.

The average comprehensive solvency ratio of China’s 181 insurers was 196 percent by the end of last year, and their average core solvency ratio was 128.4 percent, said the China Banking and Insurance Regulatory Commission.

The sector's solvency ratio remained within an appropriate range, and the risks were generally controllable, the regulator said.

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International News

EU and UK reaches deal over trade rules in Northern Ireland

The European Union and the UK have agreed on new trade rules in Northern Ireland on Monday.

Britain’s Prime Minister Rishi Sunak said that the new deal, the “Windsor Framework,” will deliver “smooth flowing trade” within the UK, “protects Northern Ireland’s place” in the UK and “safeguards” the sovereignty of Northern Ireland.

European Commission President Ursula von der Leyen said that in order for the two parties to “make the most of our partnership” new solutions were needed.

Italy’s economy expands 3.7% in 2022

Italian economy grew 3.7% last year, official data showed on Wednesday.

The country’s budget deficit far exceeded official forecasts, the National Institute of Statistics reported.

Fiscal gap in 2022 reached 8% of gross domestic product, compared with an official target of 5.6%.

Japan’s birth rate drops to a new record low

The number of births plunged to a new record low last year, official data showed on Tuesday.

The number of newborns fell to 799,728 in 2022, down 5.1% from a year earlier, according to data from Japan’s health ministry. Meanwhile the number of deaths grew 8.9% to 1.58 million last year, outpacing the number of births.

US manufacturing continues to contract in February

U.S. manufacturing shrank for a fourth straight month in February, survey by the Institute for Supply Management (ISM) showed on Wednesday.

The ISM's manufacturing PMI edged up to 47.7 last month from 47.4 in January, the first rise in six months. The 50-mark separates growth from contraction.

Prices of raw materials also increased last month.

UN chief calls for peace on anniversary of conflict in Ukraine

UN Secretary-General Antonio Guterres on Friday called for preventing further escalation of the conflict in Ukraine and giving peace "a chance."

"We must prevent further escalation," he told a Security Council high-level meeting on Ukraine, which was convened on the first anniversary of the conflict between Russia and Ukraine and attended by about 30 foreign ministers and diplomats.

"We must all encourage every meaningful effort to end the bloodshed and, at long last, give peace a chance," said Guterres.