2023 Calendar Week 40

Posted on October 2, 2023

1.China’s PMI back to growth in September at 50.2, while profits of large-scale industrial companies still down 11.7%

In September, China’s Manufacturing Purchasing Managers’ Index (PMI) rose to 50.2%, an increase of 0.5 percentage points from the previous month, back on the growth track.

PMI during the last 12 months

When viewed by company size, the PMI for large enterprises was 51.6%, up 0.8 percentage points from the previous month. The PMI for medium-sized enterprises was 49.6%, same as the previous month. The PMI for small enterprises was 48.0%, up 0.3 percentage points from the previous month.

Looking at the sub-indices that comprise the manufacturing PMI, the production index (52.7%) supplier delivery time index (50.8%) and new orders index (50.5%) were above the threshold, while the raw material inventory index (48.5%), and employment index (48.1%) were below the threshold.

In September, the non-manufacturing business activity index was 51.7%, an increase of 0.7 percentage points from the previous month.

Non-manufacturing business activity index during the last 12 months

In September, the Composite PMI output index, which reflects the changes in the output in current period of the entire industry (manufacturing and non-manufacturing industries) was 52.0%, an increase of 0.7 percentage points from the previous month.

the Composite PMI output index during the last 12 months

Until the end of August 2023, large-scale industrial companies (above CNY 20mn revenue) achieved business revenue of CNY 84.33 trillion, down 0.3% year-on-year, profits reached CNY 4.656 trillion, down 11.7%, but sees the drop narrowing.

Revenue (Yellow line) and profits (Blue line) y-o-y change in %

2.2023 China’s Top 500 Enterprises List released

At the 2023 China’s Top 500 Enterprises Summit held in Hefei, the China Enterprise Confederation and China Entrepreneurs Association announced the “China’s Top 500 Enterprises” list for the 22nd consecutive year to the public.

On this year’s ranking, State Grid Corporation, China National Petroleum Corporation, China Petroleum & Chemical Corporation, China Construction Corporation, Industrial and Commercial Bank of China Limited, China Construction Bank Corporation, Agricultural Bank of China Limited, Ping An Insurance (Group) Company of China, China Sinochem Holding Company Limited, and China Railway Engineering Group Corporation made it into the top ten.

Top 3 firms on the list

The scale of the Top 500 Chinese Enterprises in 2023 maintained the growth trend, with a total business revenue of CNY 108.36 trillion – an increase of 5.74% compared to the previous year’s Top 500- and total assets of CNY 399.77 trillion, which increased by 27%. The Top 500 for the current year saw a leap of CNY 24 trillion, equating to a growth of 7.31% compared to the previous year’s results. The entry threshold has been increasing for 21 consecutive years, with the entry threshold for the 2023 Top 500 Chinese Enterprises being raised to CNY 46.998 billion, signifying an increase of CNY 2.373 billion from the previous year.

For the first time, over 50% of the CNY 100 billion businesses made it to the top 500 enterprises of China in 2023, with revenues exceeding CNY 100 billion. This resulted in a net increase of 10 enterprises, bringing the total to 254.

3.Xu Jiayin: Once China’s richest man placed under so-called mandatory measures

On the evening of September 28, China Evergrande reported to the Hong Kong Stock Exchange that it had received notification from the relevant authorities stating that Xu Jiayin (Hui Ka Yan in Cantonese), the company’s executive director and chairman of the board, had been subjected to mandatory measures under suspicion of law violation and criminal charges.

Official announcement by Evergrande Group

The trading of China Evergrande, Evergrande Properties, and Evergrande Motor shares in Hong Kong was briefly halted on the same day. The total market capitalization of the three firms in the Evergrande group fell to HK$16.7 billion from HK$81.4 billion following the recent resumption of trading.

As of the end of 2022, Evergrande’s total liabilities totaled as much as 2.4 trillion yuan, with interest-bearing liabilities amounting to 1.7 trillion yuan. Considering the massive scale of liabilities, it wouldn’t be surprising to see what charges Xu Jiayin is suspected of. Amongst the various possible charges, the most likely appears to be misappropriation of funds.

Among the confirmed allegations is the misappropriation of funds from subsidiaries. China Evergrande, the parent company of Hong Kong-listed Evergrande Properties, misappropriated 13.4 billion yuan of funds in the form of deposit pledges between 2020 and 2021.

Additionally, it is suspected that Evergrande Wealth engaged in unauthorized fundraising, which may have contributed to Xu Jiayin’s involuntary detainment as per the law. On September 16 2023, the leading executives of Evergrande Wealth were apprehended by the police. Then, ten days later, Xu Jiayin was also taken into custody, indicating a non-coincidental correlation between the two events. Evergrande Wealth attracted a significant amount of social funds to the field that year, using high-interest returns as a lure.

In Evergrande’s debt of up to 2.4 trillion yuan, numerous creditors are eagerly anticipating the recovery of at least some of the debt. If Xu Jiayin secretly transfers his assets during the debt restructuring process, it will add to the burden on the already suffering creditors, which would constitute a significant infringement of their rights and interests. Xu Jiayin has faced legal measures indicating that the parties involved lack confidence and patience in his commitment to implement debt restructuring.

After divorcing with his wife Ding Yumei in 2022 while listing her as a “third party independent” and sought Chapter 15 bankruptcy protection in the US in August, there is a growing belief that Xu Jiayin is planning to transfer assets offshore while leaving unfinished projects and homeowners behind, which crossed the red line.

4.E-Sport is now included as a competition in the Asian Games for the first time

In September 2023, an array of distinguished athletes will convene in the picturesque Hangzhou, near Shanghai, to compete for their respective countries in the 19th Asian Games.

The Asian Games occur every four years and serve as the regional counterpart to the Olympics. Notably, eSport has entered the competition for the first time in history, including 5 PC games and 2 mobile games. Tencent produced or published four out of the seven multiplayer games in the competition.

Chinese national team winning the first gold medel of esports in 2023 Asian Games

China hopes to regain international reputation with a successful event, while Tencent seeks to boost its entertainment business using the same event. E-Sport events have not only become one of the priciest tickets for the Asian Games, but they are also the only events that necessitate a lottery for ticket purchases.

Although the State General Administration of Sports listed eSport as an official sport in 2003, some viewers still question whether sitting and moving one’s fingers qualifies as a sport. What criteria must video games meet to be considered a sport?

A study conducted by the Cologne Sports University in Germany discovered that despite the sedentary nature of their activity, gaming athletes produce cortisol, a stress hormone, at levels comparable to race car drivers and have a pulse rate that can reach up to 160-180 beats per minute. Combined, these effects are equivalent to running a marathon.

Like traditional sports, e-sports demands an exceptional level of skill from its professional players, which includes hand-eye coordination, reaction time, stability, and resilience to pressure. On the road to becoming a professional player, e-sports can be just as unforgiving as traditional sports.

E-Sports competitors must address injuries directly. While not as physically intense as traditional sports, the average of up to 400 movements per minute can strain many parts of the body. Professional eSport athletes experience several times more strain than the average person, and the average retirement age is only 24 years.

In the pursuit of faster, higher, stronger and more united sportsmanship, eSports is not fundamentally different from traditional sports. However, some people argue that since esports do not involve physical exertion and doesn’t keep one fit, it should not be considered a sport. Would you watch esports and do you think it is form of sports?

5.Most Chinese travelled domestically during the busiest National Day Golden Week

Before the 8-day Chinese Golden Week arrives, the railroad, civil aviation, and tourism industries are preparing for a significant test: how will previous predictions of the busiest National Day Golden Week in history become a reality?

The National Railroad Group predicts that the transportation period during the National Day Golden Week will exceed last year’s, with an expected 190 million passengers taking the rail. Civil aviation is also expecting more than 21 million passengers to travel by air during the holiday.

Compared to the earlier boost in domestic tourism, outbound tourism has experienced a significant slowdown in the first half of the year, with some considering it to be at a standstill. The subdued state of the outbound tourism market can be attributed to several factors that have limited the potential of China’s burgeoning tourism industry. During this timeframe, China is no longer the “largest source” of tourists in the Asia-Pacific market, including destinations such as Thailand, Singapore, and Japan. It’s important to note, however, that Chinese tourists remain a key demographic.

While many videos and photos of domestic traffic jams and expensive hotels surface on the internet, will more Chinese choose to travel aboard in the future?


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