A worker in a Chinese factory. Photo: Xinhua

The Chinese economy is facing increasing downward pressure due to different domestic and global factors, said the Standing Committee of the politburo of the Communist Party of China’s (CPC) Central Committee after a meeting on Wednesday.

It was the second meeting, chaired by CPC General Secretary Xi Jinping, this month and was aiming at reviewing the country’s anti-epidemic and economic measures.

The meeting called on party members on different levels and government officials to speed up the establishment of new economic and social orders to suit the needs of epidemic prevention. It said local governments should take the initiative to help companies resume their production and operation in an orderly manner and try to reduce the negative impact of the epidemic on the economy.

The meeting said companies in the provinces with low numbers of infections should fully resume their production and operations. People and goods should be allowed to move freely among the provinces with relatively low risks without being obstructed or isolated for checks. Health certificates issued in these provinces should be recognized nationwide.

Apart from Hubei province and Beijing, provinces with medium epidemic risks should have their production resumed step by step. Local governments should ensure the continuous supply of industrial raw materials and capital. They should also improve their legal services to resolve labor disputes and corporate debt issues.

The meeting said China would strengthen its analysis on global economic trends and launch targeted and timely measures. The country would strike a balance between epidemic control and foreign trade, provide convenience to foreign businesspeople, maintain a smooth international supply chain, use innovative ways to attract foreign investments and exhibit products and continue the usual trade and investment activities.

Suppressed demands

China’s consumption demand, which was suppressed by the epidemic, will be released into the markets soon, Ha Zengyou, an official of the National Development and Reform Commission, said in a news conference on Wednesday. Under new circumstances of the accelerated growth and spread of the epidemic abroad, it is timely and necessary to concentrate on expanding domestic consumption and cultivating a strong domestic market, he said. China will develop a consumption system with a mix of online and offline sales, encourage the use of cars and developing the cultural and tourism industry, he said.

QFII applications

Krane Funds Advisors LLC has submitted an application for the Qualified Foreign Institutional Investor (QFII) qualification, according to a statement published on the website of the China Securities Regulatory Commission on Tuesday. Since the QFII quota limit was lifted six months ago, a total of 14 institutions have applied for relevant qualifications. The other applicants included C.M. Capital Consulting Company, AHL Co Ltd., Haitong International Securities Co Ltd., Cube Research Asset Management Co Ltd. and Sumitomo Mitsui Trust Asset Management Co Ltd.

Stock investments

Financial institutions including JPMorgan Chase, Hillhouse Capital and Rosefinch Fund Management have recently increased their investments in the Hong Kong stock market, according to the latest data released by the Hong Kong stock exchange.

Although there was a net outflow of northbound funds in recent days, some high-quality A-share stocks could still be supported by some capital inflows.

The recent volatility in the A-share markets would be the largest since the global financial crisis in 2008, according to the China International Capital Corporation. A total of 80 billion to 100 billion yuan of northbound funds could have flowed out from mainland China. The net outflow of the northbound funds from Hong Kong to Shanghai and Shenzhen stock markets was about 75 billion yuan, but it could have peaked.

China International Capital Corporation said investors should not be over pessimistic as A-share valuations are low while the country still has room to launch more supportive policies.

Company news

As of March 17, 293 “epidemic prevention and control bonds” have been issued, with a total issuance size of 238.5 billion yuan ($34 billion), according to statistics compiled by the Oriental Wealth Management’s Choice platform. The issuers included more than 10 real estate enterprises.

Tencent Holdings said its revenue in the fourth quarter of last year rose 25% to 105.767 billion yuan from the same period of 2018. It was the first time its single-quarter revenue had exceeded 100 billion yuan. In the fourth quarter, Tencent increased its stake in Vipshop, an e-commerce website, and became its second-largest shareholder. Vipshop is now the third-largest e-commerce platform invested in by Tencent after JD.com and Pinduoduo.

BGI Group, known as Beijing Genomics Institute, said it has launched the EUA declaration of the US Food and Drug Administration (FDA) for its novel coronavirus nucleic acid testing kit products. A pre-EUA procedure has been formally accepted. The company will follow local guidelines to officially commence the commercial sale of its testing kit products in clinical markets in the United States.

The story was written by Xu Jiangshan and Yuan Tianyi and first published at ATimesCN.com.

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