Hi everyone. I’m Stephanie LI.
Coming up on today’s program.
Consumer price inflation rose to a 24-month high in July while factory-gate inflation reached new low;
China conducts full audit of at least 20 trust firms.
Here’s what you need to know about China in the past 24 hours
China’s consumer price index (CPI) hit a two-year high of 2.7 percent year-on-year growth in July amid steady food price rises and seasonable factors, the National Bureau of Statistics (NBS) said on Wednesday.
The country’s CPI rose 2.7 percent year-on-year in July, expanding from 2.5 percent in June, the bureau reported. Though lower than most analysts’ forecast of 2.9 percent growth, last month’s figure is the highest since July 2020.
The increase on a year-on-year basis was mainly due to steep food price rises. In July, pork price rose 20.2 percent year-on-year, reversing a drop of 6 percent in June. Prices of fruits and vegetables rose by 16.9 percent and 12.9 percent year-on-year, respectively, according to Dong Lijuan, a statistician from the NBS.
Despite hitting its highest level in two years last month, China’s consumer inflation is unlikely to breach the government’s target of 3 percent, thanks to continuous production resumption and the expected bumper farm harvest, analysts said.
Meanwhile, China's factory-gate inflation cooled in July to the lowest it's been since February 2021. The producer price index (PPI) increased 4.2 percent year-on-year in July, notably down from the 6.1 percent rise from the previous month.
The prices of industrial products are broadly dropping due to a variety of internal and external factors. For example, prices across the coal mining sector rose 20.7 percent year-on-year in July, down 10.7 percentage points from the previous month, while petroleum and natural gas exploration rose 43.9 percent year-on-year, down 10.5 percentage points from June, NBS data revealed.
The carryover effect of last year's price changes contributed around 3.2 percentage points to the PPI growth, while new price increases contributed around 1 percentage point, NBS said.
Moving on to regional highlights
China on Tuesday completed the construction of its first independently-developed trial line using rare earth permanent magnetic levitation technology in Xingguo County, Southeast China’s Jiangxi Province. Dubbed "Rainbow", the 800-metre long maglev line, with a designed maximum speed of 80 kilometres per hour, can serve a two-carriage maglev train with a capacity of 88 people.
Hong Kong’s decision to reduce the number of days arrivals must spend in hotel quarantine triggered an immediate surge in flight bookings to the city, Trip.com said on Tuesday. The number of bookings for flights to the financial hub surged 2.5 times the day the decision was announced. Outbound flight orders also rose 176 percent from the previous day, the data showed.
Update on COVID-19
Azvudine, China's first homegrown oral drug for COVID-19 developed by Genuine Biotech, has been included into the latest version of the diagnosis and treatment playbook for COVID-19 of the National Health Commission (NHC) on Tuesday. The Henan-based Genuine Biotech revealed Tuesday that a bottle of Avzudine is priced at less than 300 yuan, each containing 35 tablets with 1mg apiece. The NHC also instructed the prescription for adults should be 5mg per day for no more than two weeks.
Next on industry and company news
China has the second largest number of nuclear power units in operation or under construction in the world, the National Nuclear Safety Administration said on Tuesday. As of June this year, China had 54 nuclear power units in operation, and 23 were under construction.
China's Small and Medium Enterprises (SMEs) Development Index, based on a survey of 3,000 SMEs, edged down in July, industry data showed Tuesday. The index came in at 88.3 in July, down 0.1 points month on month, said the China Association of Small and Medium Enterprises.
China's machinery industry registered steady expansion in revenue in the first half of the year, according to the China Machinery Industry Federation (CMIF) Tuesday. The operating revenue of firms in the sector totaled 12.95 trillion yuan during the period, up 5.44 percent year on year. The added value of the sector rose 0.7 percent year on year during the period, the data showed.
ByteDance has acquired one of China's largest private hospital chains for 10 billion yuan, deepening a foray into healthcare sector, media reported on Wednesday. It is taking full ownership of Amcare Healthcare, which runs women's and children's hospitals in cities from Beijing to Shenzhen.
Global video game software developer Unity said on Tuesday that it will join hands with Alibaba Group Holdings, China Mobile, miHoYo, TikTok and others to set up a Chinese joint venture, valued at $1 billion. Unity China will build local versions of the company’s core products for game developers, including a Chinese version of its flagship product.
The Beijing Consumer Association said in a statement on Tuesday that it recently summoned Missfresh for regulatory talks, asking the cash-strapped Chinese fresh food e-retailer to deal with consumers’ complaints about the failed refunds. Beijing-based Missfresh received 269 complaints over the past 30 days on complaints platform Black Cat, and the firm also defaulted on 250 million yuan payments to its suppliers.
Earnings reports express
Hong Kong’s Cathay Pacific Airways has announced on Wednesday a loss of HK$5 billion in the first half of 2022, 33.9 percent down from the same period last year amid a strong rebound in passenger flights. The city's flagship carrier also reported a 17 percent increase in revenue to HK$18.55 billion. Cathay’s passenger flights business increased by 177 percent to HK$2.06 billion in the first half, while revenue from freight flights was up 9.3 percent compared with the same period last year.
Switching gears to financial news
China's top auditor is conducting a review of the 20 trillion yuan trust sector, media reported on Wednesday. In an unscheduled move, the National Audit Office has for the past month been inspecting the books of at least 20 trust firms including the top five to gauge the risks they pose to financial stability. The firms are being asked to report on their risky loans to developers and on any plans to dispose of them. The audit office is expected to submit its conclusions to policymakers in Beijing.
Wrapping up with a quick look at the stock market
Chinese stocks fell on Wednesday led by a broad slump of tech shares. By the close, the benchmark Shanghai Composite retreated 0.54 percent and the Shenzhen Component closed 0.87 percent lower. Hong Kong stocks declined sharply as the Hang Seng Index lost 1.96 percent and the TECH Index dropped 2.83 percent, with mainland developers and electric vehicle makers being the worst performers.
Biz Word of the Day
Magnetic levitation (maglev) is a method by which an object is suspended with no support other than magnetic fields. Magnetic force is used to counteract the effects of the gravitational force and any other forces.
Executive Editor: Sonia YU
Editor: LI Yanxia
Host: Stephanie LI
Writer: Stephanie LI, ZENG Libin, HUANG Ziqing
Sound Editor: HUANG Ziqing
Graphic Designer: ZHENG Wenjing, LIAO Yuanni
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