China cuts stamp duty on stocks trade, posts seventh fall in Industrial Profits as Sino-US talks loom
Weekend headlines from China appear mixed as the Dragon Nation tried to bolster economic activity via another stimulus measures but lacked a positive response from the markets amid fears about an economic slowdown. Also, the cautious mood ahead of the US-China talks in Beijing, as US Commerce Secretary Gina Raimondo visits Beijing for four days, prods the optimists.
China cuts stamp duty on stocks trade
China Finance Ministry confirmed the previous expectations of cutting the stamp duty of 0.1% on stocks trading to half "in order to invigorate the capital market and boost investor confidence".
Additionally, the China Securities Regulatory Commission (CSRC) is rolling out measures to shore up market confidence in investing in listed companies. The CSRC signaled a slowing downbeat pace of Initial Public Offerings (IPOs) and regulated major shareholders' share reductions to defend the equities markets from volatility.
China Industrial Profits for July dropped for seventh month
China’s Industrial Profits for July dropped 6.7% YoY and -15.5% for the first seven months of 2023 compared to the same period last year, per the weekend news shared via Reuters. It’s worth noting that the Industrial Profits were -8.3% in June.
Further details of the report state that the profits dived for 28 of 41 major industrial sectors, led by the ferrous metal smelting and rolling processing industry which reported the deepest slump at 90.5%.
US Commerce Secretary Raimondo rejects discussng American national security trade measures
US Commerce Secretary Gina Raimondo landed in Beijing on Sunday for a four-day diplomatic visit.
While departing for China, the policymaker clearly stated in the US, per Reuters, that she would promote discussions on boosting trade and tourism ties with China while crossing out discussions on the American national security trade measures.
"If you wanted to put a tagline to the trip and the mission, it’s protecting what we must and promote where we can," said US Commerce Secretary Raimondo per Reuters.
US Commerce Secretary Raimondo will hold bilateral meetings with Chinese officials on Monday and Tuesday in Beijing before she heads to Shanghai. She will be joined by U.S. Ambassador to China Nicholas Burns reported Reuters.
Even so, the policymaker showed readiness for regular communication to have a stable commercial relationship and avoid conflicts.
China's Xi dislikes Western-style growth measures
Elsewhere, the Wall Street Journal (WSJ) cites people familiar with the decision-making process in China to highlight Chinese Communist Party Chairman Xi Jinping’s deep-rooted philosophical objections to Western-style consumption-driven growth.
The WSJ sources tell Xi’s dislike for the consumption-driven growth as he termed it as wasteful and at odds with his goal of making China a world-leading industrial and technological powerhouse.
The policymakers also cite Xi’s belief that China should stick to fiscal discipline considering the nation’s deep debt.
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