China’s Social Financing Stock Reaches CNY 402.19 Trillion by End of September 2024, Up 8% Y-o-Y

On October 14, the People’s Bank of China (PBOC) reported that the stock of social financing reached CNY 402.19 trillion by the end of September 2024, reflecting an 8% year-on-year increase.

Among the components, the outstanding balance of RMB loans to the real economy stood at CNY 250.87 trillion, up 7.8% year-on-year. The balance of foreign currency loans to the real economy, converted to CNY, was CNY 1.43 trillion, down 18.6% year-on-year. Entrusted loans totaled CNY 11.25 trillion, a decrease of 0.9%, while trust loans amounted to CNY 4.26 trillion, up 11.8%. The balance of undiscounted bankers’ acceptances stood at CNY 2.34 trillion, down 19.6%. Corporate bond balances totaled CNY 32.07 trillion, an increase of 2.2%, while government bond balances surged to CNY 76.97 trillion, up 16.4%. The balance of domestic stocks of non-financial enterprises was CNY 11.6 trillion, up 2.6%.

As of the end of September, RMB loans to the real economy accounted for 62.4% of the total social financing stock, down 0.1 percentage point year-on-year. Foreign currency loans to the real economy, converted to CNY, accounted for 0.4%, also down 0.1 percentage point year-on-year.

In the first three quarters, RMB loans increased by CNY 16.02 trillion, while RMB deposits rose by CNY 16.62 trillion. In September alone, new RMB loans amounted to CNY 1.59 trillion, and new RMB deposits increased by CNY 3.74 trillion. By the end of September, M2 had a balance of CNY 309.48 trillion, up 6.8% year-on-year, while M1 stood at CNY 62.82 trillion, down 7.4% year-on-year, indicating the growth of market confidence.

Data Source: http://www.pbc.gov.cn/goutongjiaoliu/113456/113469/5476838/index.html

Major Chinese Banks Cut Deposit Rates Again Following Central Bank’s Policy Adjustment

On the morning of October 18, several major Chinese banks, including Industrial and Commercial Bank of China (ICBC), China Construction Bank (CCB), Agricultural Bank of China (ABC), and Bank of Communications (BOC), updated their mobile banking platforms with new deposit benchmark rates. The rates for fixed-term deposits of 3 months, 6 months, 1 year, 2 years, 3 years, and 5 years were all reduced by 25 basis points (bps) to 0.80%, 1.00%, 1.10%, 1.20%, 1.50%, and 1.55%, respectively.

This marks the second time in the past three months that major banks have cut deposit rates, following the previous adjustment in July. It is also the sixth time since September 2022 that major banks have proactively lowered deposit rates.

At a press conference held by the State Council Information Office in late September, People’s Bank of China (PBOC) Governor Pan Gongsheng noted that the central bank had reduced its policy rate—the 7-day reverse repo rate—by 0.2 percentage points, lowering it from 1.7% to 1.5%. He also emphasized the importance of guiding both loan prime rates (LPR) and deposit rates downward in tandem, in order to stabilize commercial banks’ net interest margins. Zhaolian Finance Chief Researcher Dong Ximiao predicts that the new LPR rate, scheduled for release on October 21, is likely to be adjusted downward in line with the policy rate.

China Has Announced That It Is Going To Start “Searching For Extraterrestrial Life”.

On October 15, China introduced a national mid- and long-term development program for space science, charting the course for the country’s space missions and research from 2024 to 2050. The program outlines China’s space science development goals, focusing on 17 priority areas across five key scientific themes, alongside a phased roadmap for implementation.

The five key themes include:

1. Extreme Universe: This theme focuses on exploring the origin and evolution of the universe and uncovering the physical laws under extreme cosmic conditions. Priority areas span dark matter, the extreme universe, the origin and evolution of the universe, and the detection of cosmic baryonic matter.
2. Space-Time Ripples: The goal is to detect medium to low-frequency gravitational waves and primordial gravitational waves to reveal the nature of gravity and space-time. The primary focus in this theme is space-based gravitational wave detection.
3. Sun-Earth Panoramic View: This theme emphasizes exploring the Sun, Earth, and heliosphere to better understand the complex interactions within the Sun-Earth system. Priority areas include Earth’s cyclical systems, comprehensive Earth-Moon observations, space weather observation, three-dimensional solar exploration, and heliosphere exploration.
4. Habitable Planet: This area focuses on exploring the habitability of celestial bodies within the solar system and exoplanets, as well as the search for extraterrestrial life. Key areas include sustainable development, the origin and evolution of the solar system, planetary atmosphere characterization, the search for extraterrestrial life, and exoplanet detection.
5. Biological and Physical Sciences in Space: This theme aims to uncover the laws of matter movement and life processes under space conditions, deepening the understanding of fundamental physics such as quantum mechanics and general relativity. Priority areas cover microgravity science, quantum mechanics, general relativity, and space life sciences.

This ambitious program will guide China’s advancements in space science over the next three decades, positioning the country as a leader in exploring the frontiers of the universe.

China’s SAT Reports Over 70% of Individuals Exempt from Paying Income Tax in 2023, Citing Extensive Pre-Tax Deductions

On October 15, China’s State Administration of Taxation (SAT) released data for 2023, revealing that over 70% of individuals receiving comprehensive income in China did not have to pay individual income tax. Among the less than 30% who did pay, more than 60% applied the lowest tax rate of 3%, resulting in a relatively small tax liability. This is largely attributed to China’s extensive system of pre-tax deductions for personal income tax.

China has increased the basic personal income tax deduction threshold from CNY 3,500 to CNY 5,000 per month and established seven additional deductions, including for children’s education, elderly support, and mortgage interest. As a result, individuals earning CNY 100,000 or less annually face minimal personal tax obligations.

In 2023, China further expanded three special tax deductions, including increasing the childcare deduction for infants and children under the age of 3 from CNY 1,000 to CNY 2,000 per month per child, and increasing the elderly support deduction from CNY 2,000 to CNY 3,000 per month. Approximately 67 million individuals benefited from these policies, with total tax reductions exceeding CNY 70 billion and an average per capita tax cut of over CNY 1,000. Deductions for children’s education, elderly support, and childcare under three years of age amounted to CNY 36 billion, CNY 29 billion, and CNY 5 billion, respectively.

These substantial tax deductions have significantly reduced the tax burden for low- and middle-income earners. Taxpayers are eligible for at least two special additional deductions each, which boosts disposable income and enhances consumption capacity, further supporting economic growth.

American Designer Advised to Leave the Forbidden City Due to Dress Code

US designer Rick Owens and his team were recently asked to leave the Forbidden City after security deemed their edgy outfits inappropriate. Security personnel requested that they remove their makeup and change into “normal clothes,” which the group refused. Members of Fecal Matter, friends of Owens and models for his brand, shared on social media that they declined the request, stating that their outfits represent their self-identity.

The incident sparked heated debate among both Chinese and Western netizens. Some supported their “freedom of expression,” while others argued that they should respect local culture and the historical significance of the site.

The museum is currently investigating the incident, noting that while there is no strict dress code, attire “should not be too over-the-top.” A review of the museum’s visitor guidelines advises visitors to “maintain neat attire” and avoid behavior that may be “offensive or harmful to the museum’s image,” with the possibility of being denied entry for inappropriate dress.