CHINA POLICY will be taking a break over the National Day Holiday week. We will be back the week of 6 October.
First on the economy: stimulus has come at last, but not as many hoped. Monetary stimulus measures were announced on 23 September 2024: cuts to the RRR (reserve ratio rate) and the 7-day repo will bring down mortgage and deposit interest rates. PBoC (People’s Bank of China) announced a new re-lending instrument to support stock buybacks, with an additional swap tool for insurers and investment funds to take bad assets off their balance sheets, providing more cushion for capital markets.
Securities regulators pledged that more tweaks were coming; some measures, encouraging long-term funds into markets, dropped on 26 September. The CSI 300 (China Securities Index) rose over 10 percent in its best performance in a decade.
The Politburo followed up, pledging more to come should it be needed. This stimulus fulfils the July Third Plenum call to boost confidence, explains Luo Zhiheng 罗志恒 Yuekai Securities chief economist. Thus, the current malaise is attributed to sentiment, not fundamentals. But will this win the trust of markets?
Strong external demand (and the lower 2023 base) shored up August export growth, which saw the fastest rise in 17 months. Exports rose nearly 9 percent over 2023, beating expectations. Weak domestic demand depressed imports, rising only 0.5 percent y-o-y. The trade surplus widened to US$91 billion.
The State Council listed 20 tasks to bolster services trade. Expect further ‘institutional opening’ and support for digital, intelligent and green development-related services.
Details are awaited on FTZ (free trade zones) upgrades, noted by the Central Committee for Comprehensively Deepening Reform. Issuing its 2024 Foreign Investment Negative List, NDRC deleted two remaining restrictions in the manufacturing sector (printing, and Chinese herbal medicines), as pledged by Xi in 2023.
MofCOM Minister Wang Wentao 王文涛 held closed-door talks in Brussels to avert steep duties on electric vehicles. There were signs of headway: an EU vote on tariffs was postponed. Persisting with carrot-and-stick appeals to EU members, Beijing threatens countermeasures on the one hand, while promising more investment on the other.
Disputes related to green subsidies will proliferate, says Zhang Xiangchen 张向晨 a WTO deputy director-general. He insists these should be addressed through exploration and negotiation, not unilaterally.
September saw new trade retaliation
- tariff exemption for some Taiwan ag imports was suspended
- ‘anti-discrimination probes’: an anti-dumping move against Canadian canola, and a WTO case against its limits on PRC products
- probe into US apparel firm PVH Corp for alleged restrictions against Xinjiang products
A legion of African leaders attended the 2024 FOCAC Summit (Forum on China–Africa Cooperation) on 4–6 September. The Summit adopted a Beijing Declaration and a Beijing Action Plan (2025–27).
The Forum features a donor-recipient dynamic whose agenda is set in Beijing. Ten ‘modernisation’ initiatives were announced by President Xi, covering trade, industry chains, connectivity, development, healthcare, rural revitalisation and welfare, people-to-people exchanges, green development, and common security. Africa was pledged some US$51 bn in loans, FDI, and aid or grants. Going beyond the US$40 bn pledged in 2021, this fell behind commitments of earlier years and moved away from direct funding from Beijing.
On educational cooperation, Beijing pledged three priority initiatives and four cooperation plans for Africa during the China-Africa-UNESCO dialogue in early September. Vocational education, digital education sharing, and enhanced teacher capacity were on the agenda. The plans aim to help African states address youth unemployment and build modern education systems.
The 14th NPC (National People’s Congress) Standing Committee called its 11th meeting, 10-13 September. It amended the National Defence Education Law, setting up school-based national defence education as a bridge to military service. It added new articles to the Statistics Law, deterring officials from coercing subordinates to fake data.
Three new measures were added to the Supervisory Law. Resembling criminal coercive provisions, they are claimed better to protect the human rights of people under investigation.
The NPC Standing Committee also discussed an amended draft Energy Law, the first all-round PRC energy legislation. Key changes: shoring up the constitutional basis of energy governance, shifting from ‘dual control’ (energy consumption and intensity) to targeted carbon emissions control, and defining end-user obligations to prioritise non-fossil sources.
Preparing for the 15th 5-year plan (2026–30), the National Energy Administration is set to raise the share of non-fossil energy by one percentage point p.a., improving grid infrastructure to integrate distributed renewable energy, and supporting energy storage tech.
Four of the five major PRC power generators have met their 50 percent share of new energy assets one year ahead of schedule. The market may now shift towards more rigorous project evaluation: new initiatives meet acceptable return thresholds before launch.
Updates to green power trading (GPT) appeared, including revised rules encouraging distributed renewables via aggregation and flexible contract terms.
Expansion of the national carbon market and carbon footprint management were confirmed. The moves support the dual carbon goals of peaking emissions by 2030 and becoming neutral by 2060. The carbon market will expand beyond the power sector to cover cement, steel, and aluminium sectors, bringing market coverage from approximately 40 to 60 percent of total emissions.
The PRC–US Enhanced Climate Action Working Group met in Beijing ahead of COP29 in Baku, Azerbaijan. It focused on energy transition, methane emission, circular economy, and resource efficiency. Liu Zhenmin 刘振民 PRC special climate envoy had proclaimed August's Opinions on green transformation as a rallying call to the nation to embrace a circular economy and low-carbon lifestyles. Meanwhile, NDRC announced a new SOE, China Resources Recycling Group.
Alibaba's Taobao revealed plans on 4 September to allow WeChat Pay on its platform, long monopolised by its own Alipay service. This follows SAMR (State Administration of Market Regulations) wrapping up a three-year antitrust review of Alibaba on 30 August.
The CAC (Cyber Administration of China) calls for comment on new rules for watermarking AI-generated content. Labels may be explicit (flagged to users via text, sound, or images) or implicit (in metadata). Already required by last year's generative AI rules, the new protocols stipulate rollout details.
Venture capital was front and centre in a State Council executive meeting 18 September. Local governments, now the PRC’s largest LPs (limited partners), are to be ‘patient’ and risk-tolerant, easing their routine focus on preserving state capital. A State Council executive meeting three weeks earlier had called on insurance funds to channel more capital to scitech.
The minimum purchase price of wheat (grade three) rose by C¥1 to C¥119 per 50 kg, stabilising grower expectations and warding off volatility. Regulators, meanwhile, reportedly plan to cap total annual grain imports at or below 2023 levels. Authorities are blaming imports for the hardship domestic producers face, yet the primary challenge is weak demand, not least in the feed sector, rather than supply.
MARA (Ministry of Agriculture and Rural Affairs) released a final list of central maximum subsidies for agricultural machinery 2024–26 on 13 September, having called for comment in August. Support for high-horsepower and smart machinery is prominent, and, above all, for tractors, the leading product category.
Central ministries issued ‘guiding opinions on promoting healthy villages’ on 3 September. The point is to blend health concerns into rural revitalisation, improve infrastructure and public health services by 2030, and achieve health service equality by 2035.
Pilots were notified on 7 September, opening the medical sector to foreign investment. Wholly foreign-owned hospitals are permitted in cities like Beijing, Shanghai, and Shenzhen. More medical service options will be provided for PRC citizens, but staffing and payment issues will persist in foreign-invested hospitals. Emphasis on widespread affordable care that coexists with private and foreign-owned hospitals hints at a potential dual-track for PRC hospitals.
Doubling down on TCM (traditional Chinese medicine), SATCM (State Administration of Traditional Chinese Medicine) and other agencies issued Opinions 13 September, urging ‘high-quality development’ of county-level TCM hospitals by 2030.
National Healthcare Security Administration and the Ministry of Finance issued notices on 13 September, boosting cross-province direct settlement for medical insurance. One notice expands the range of outpatient chronic and diseases eligible for direct settlement; pooling areas are on notice to enact this by 2025. Another reinforces cross-province medical services, ensuring the medical insurance fund's consistency, efficiency, and safety.
The other shoe dropped on extending retirement ages on 13 September: the NPC Standing Committee resolved that men’s will rise from 60 to 63 over the next 15 years; women’s will rise from 55 to 58 (for white-collar workers) and from 50 to 55 (for blue-collar).
In a 1 September Qiushi article, Xi Jinping outlined qualities for socialist successors, including ideological education, patriotism, and moral integrity. His book, 'On Education', was released on 8 September. It deals with the role of teachers in developing human capital. In a Teachers’ Day speech, he called for raising teachers’ benefits, status, and professional development.
The first national-level policy for migrant children was introduced on 3 September. It provides for all-around care by 2035. Key measures include regular screening, improved family guidance, and equal access to education and healthcare.