Shanghai Composite Index rises for fourth straight day

China’s Shanghai Composite Index rose for the fourth straight day on Friday to get back above the 2,900-point mark amid the rollout of a series of policies to support the development of the capital market and the macro-economy.

Yang Delong, chief economist at Shenzhen-based First Seafront Fund Management Co, told the Global Times on Friday that the A-share market had been near the bottom level, calling for confidence and patience in the Chinese stock market.

The Central Financial Work Conference called for efforts to accelerate the building of a nation with a strong financial sector. The goal cannot be achieved without a prosperous capital market, which provides support for enterprises’ transformation and upgrading as well as the country’s sci-tech innovations, Yang said, adding that more policies to support the long-term and healthy development of the capital market are expected.

Pan Gongsheng, governor of the People’s Bank of China (PBC), the central bank, said at a press conference on Wednesday that China will cut the reserve requirement ratio (RRR) by 50 basis points from February 5, which is expected to inject 1 trillion yuan in long-term liquidity.

Underscoring the central government’s resolve to bolster the economy, the news boosted investors’ confidence and reversed the stock market’s recent downward trend.

On Friday, the Ministry of Commerce declared 2024 the “year of promoting consumption” and stressed the need to strengthen consumption rebound momentum. The ministry said it would continue to relax restrictions on foreign investment and improve the business environment in order to attract more investment.

Meanwhile, China’s Ministry of Housing and Urban-Rural Development on Friday called on various cities to adjust real estate policies based on their local conditions, and pledged to treat developers equally in terms of financing so as to ensure the healthy and steady development of the real estate sector, China Securities Journal reported.

Investors poured almost $12 billion into Chinese equity funds in the week to Wednesday in the largest inflow seen since 2015 and the second-largest ever, Reuters reported on Friday.

Chinese regulators vow ‘all efforts’ to ensure stable capital market

The China Securities Regulatory Commission (CSRC) on Tuesday vowed to make “all efforts” to maintain the stable operation of the capital market, saying that it would put more emphasis on stability and strive to stabilize the market and investors’ confidence.

An official from the CSRC also said that the country’s top stock market regulators will cultivate long-term and stable investment forces, enrich policy tools to cope with market volatility and guard against risks, according to a media report on Tuesday.

These comments add to growing signals from Chinese officials that they are stepping up efforts to stabilize the capital market amid recent volatility. On Monday, China’s State Council, the cabinet, called for drawing more long-term funds into the capital market to boost its inherent stability.

The signals will offer much-needed reassurance for investors that policy measures are expected to be taken to tackle risks in the capital market and ensure overall stability, which will help lift expectations and boost confidence in the capital market, analysts said on Tuesday.

A meeting of the CSRC on Tuesday stressed that the agency will make all efforts to maintain the stable operation of the capital market. It also vowed to vigorously improve the quality and investment value of listed companies and increase the entry of medium- and long-term funds, according to a statement on the commission’s website.

Zhang Wangjun, a senior official at the CSRC, said that in terms of stabilizing the market and investors’ confidence, the commission will enrich policy tools to cope with market volatility, hedge against risks in a timely manner and firmly hold the bottom line in preventing risks, the Xinhua News Agency reported on Tuesday.

The CSRC will also, along with relevant parties, ensure the continuity and stability of macro policies and industry policies, and avoid introducing policy measures that are not conducive to capital market expectations, in order to stabilize market expectations, according to Zhang.

The remarks from the CSRC come one day after the State Council held an executive meeting to hear reports about the capital market. The meeting stressed that increased medium- and long-term funds should be brought into the country’s capital market and the inherent stability of the market should be enhanced.

The meeting also called for crackdowns on illegal activities and more effective measures to stabilize the capital market and boost investors’ confidence.

Analysts said that these growing signals from government officials could mean concrete policy measures are forthcoming to tackle risks and challenges, boost investor confidence and ultimately maintain stability in the capital market, amid recent volatility.

“The recent declines in the stock market didn’t happen due to major changes in the economic fundamentals, but because of irregular activities that take advantage of pessimistic narratives and market loopholes,” Tian Yun, a Beijing-based economist, told the Global Times on Tuesday.

Tian said that this situation isn’t in the interests of investors and will have a significant impact on the overall economy. “This is why regulators must step in to maintain financial stability by using targeted funds and closing loopholes that allow short-selling,” he said.

While China mounted an impressive economic recovery in 2023, with a GDP growth rate of 5.2 percent for the year, foreign media outlets continue to push negative narratives about the Chinese economy that analysts said have had a negative impact on investors’ sentiment, leading to market volatility.

As of Tuesday, the benchmark Shanghai Composite Index had fallen by 6.46 percent so far this year, while the Shenzhen Component Index had lost 8.56 percent.

Amid the downward trend, “restoring investor confidence does require strong policies and large-scale capital inflows to reverse the market’s downtrend, so that investors can regain confidence,” Yang Delong, chief economist at Shenzhen-based First Seafront Fund Management Co, told the Global Times on Tuesday.

The State Council meeting pointed out that it is necessary to enhance the consistency of macro policy, strengthen innovation and coordination of policy tools, consolidate and enhance the positive trend of the economic recovery and promote the stable and healthy development of the capital market.

Zhang also said that the CSRC will strengthen monitoring of the trading behavior of key investors and severely crack down on illegal transactions such as illegal trading and manipulation, according to Xinhua.

GT Voice: Boeing crisis shows danger of US protectionism bubble

The escalating crisis of Boeing is giving rise to mounting frustration and anger within the aviation industry, as repeated safety problems of the American aviation giant, which highlight its poor quality control, along with regulatory failures and narrow-minded US industrial policies, clearly can’t easily be fixed.

Two US airlines have cast doubt on Boeing 737 MAX plane orders. Scott Kirby, CEO of United Airlines, one of the biggest buyers of Boeing jets, said in an interview with CNBC on Tuesday that the MAX 9 groundings are “probably the straw that broke the camel’s back,” signaling to the carrier it should seek “alternative plans” for its aircraft inventory.

In another interview on NBC on Tuesday, Alaska Airlines CEO Ben Minicucci revealed the carrier found “some loose bolts on many” Boeing 737 Max 9 planes. “I’m more than frustrated and disappointed. I am angry,” he said, according to excerpts of the interview.

There is every reason for airlines like United and Alaska to be disappointed. For the aviation industry, safety is the utmost bottom line, as any problem is likely to cause significant damage to life and property. Boeing’s safety problems have posed a great challenge, becoming a major disruptor of the operation of airlines.

Indeed, United Airlines just warned investors that it will report a larger-than-expected loss in the first quarter because of the grounding of all 737 MAX 9 jets after a door plug blew off on an Alaska Air flight on January 5.

If anything, the CEOs’ comments suggest that the safety crisis is not something that Boeing can quickly or easily quell. This is because since the crisis began earlier this month, reports of various safety problems about Boeing aircraft have continued to surface, indicating that its quality controls are facing a serious systemic problem, which cannot be easily fixed by addressing an isolated case.

For instance, a Boeing 757 aircraft lost its nose tire moments before it was supposed to take off from Hartsfield-Jackson Atlanta International Airport on Saturday, Fox Business reported on Tuesday.

Also last week, US Secretary of State Antony Blinken was forced to change planes to return to Washington from Davos after the Boeing 737 aircraft he was supposed to board suffered a critical failure related to an oxygen leak.

There has been a lot of analysis as to why Boeing is plagued by repeated mechanical mishaps, such as its over-reliance on parts outsourcing for the purpose of maximizing profits and negligence of quality control.

But these may just be superficial issues. Fundamentally speaking, Boeing’s management problems that have led to defects in aircraft production are inseparable from regulatory failure and government protection.

Due to limited resources, the Federal Aviation Administration has long outsourced some of its oversight responsibilities to Boeing and other manufacturers for self-certification, according to an NPR report, meaning that Boeing has played a role as “both athlete and referee” when it comes to safety supervision.

The US government has been one of Boeing’s biggest customers and its biggest supporter. It is no secret that Boeing has long been one of the largest beneficiaries of tax breaks, subsidies and loans. 

When it comes to trade disputes, the US government imposed tariffs on Airbus to protect Boeing’s position in the US market. Also, US officials have been pushing other countries to buy Boeing products, sometimes by offering loans.

Boeing’s decline in competitiveness is due partly to the excessive support by the US government, which has made the giant lose its sense of urgency about quality controls and other issues affecting its competitive edge. 

It’s clear that American influence has become a more powerful guarantee of market share than production competitiveness. But such protection can backfire.

If Boeing continues to rely on US government influence around the world, rather than really addressing its safety problems, it may become the “spoiled child” of high-end manufacturing in the US and lose its pivotal position in the American manufacturing industry.

Whatever happens to Boeing, the US still leads in some manufacturing areas. As the US tries hard to bring manufacturing jobs back to the country, Boeing’s crisis is worth reflecting on for the American manufacturing industry. If US industrial policy continues to be propped up by protectionism, the competitiveness of US manufacturing is bound to be cast into doubt.

China vows to deepen economic cooperation with Belgium

Chinese Commerce Minister Wang Wentao vowed to promote healthy and stable development of China-Belgium and China-EU cooperation, and urged the EU to relax trade restrictions on high-tech products.

China is willing to expand cooperation with Europe in digital and innovative sectors, and hopes Europe can relax export restrictions on high-tech products, Wang said on Friday during a roundtable for Belgian enterprises amid the Belgian Prime Minister’s visit to China.

Prime Minister of Belgium Alexander De Croo paid an official visit to China on Thursday and Friday last week, marking the first visit to China by a Belgian prime minister since 2016.

The China-Belgium and China-Europe trade structure is a reflection of multiple factors, such as the overall industrial structure, market demand and international trading conditions of the two sides.

China has never pursued a trade surplus and has expanded imports from Belgium and Europe through initiatives such as the China International Import Expo, said Wang.

Wang said that the alleged accusations of “overcapacity” related to China’s new-energy sector by Europe were groundless as China’s new-energy vehicle industry is making a positive contribution to the global green transition.

China firmly opposes the EU’s countervailing probe into China-made electric cars, and noted that excessive government intervention in enterprises’ business will bring uncertainties and risks, Wang noted.

China will actively implement the consensus reached by the leaders of the two countries, and promote cooperation between small and medium-sized enterprises in China and Belgium, said Wang.

The roundtable was the first discussion meeting hosted by China’s Ministry of Commerce (MOFCOM) under the foreign enterprise roundtable mechanism, which indicates China’s close attention to the economic and trade relationship with Europe, said Wang.

Representatives from over 20 Belgian enterprises appreciated China’s response to their feedback on investment and cooperation in sectors such as agricultural products, biomedicine and logistics, and are willing to further facilitate China-Belgium and China-Europe economic trade development, according to MOFCOM.

China, Maldives elevate ties, underscoring mutual support

Chinese President Xi Jinping held talks with President of the Republic of Maldives Mohamed Muizzu in Beijing on Wednesday. Chinese experts said that the elevation of China-Maldives relations will bring more development opportunities to the peoples of two countries as well as to the Indian Ocean region, which is significant to China-proposed Belt and Road Initiative (BRI) and the economic and energy security of China. 

According to the Xinhua News Agency, Xi welcomed Muizzi at a ceremony at the Great Hall of the People in Beijing, before holding a bilateral meeting with Muizzu, who is paying a five-day state visit to China from January 8-12. The two heads of state announced the elevation of bilateral ties to a comprehensive strategic cooperative partnership during the talks. 

China stands ready to exchange governance experience with the Maldives, strengthen the synergy of development strategies, advance high-quality Belt and Road cooperation, and set a new benchmark for the China-Maldives friendship, Xi said. 

He called on the two sides to strengthen cooperation in such areas as the economy, trade and investment, agricultural parks, and the blue, green and digital economies. He also called for expanded cooperation on marine ecological and environmental protection, as well as strengthened people-to-people exchanges. He said China will support more Maldivian students to study in China and promote more direct flights between the two countries. 

Xi noted that the two sides should strengthen multilateral communication and coordination to safeguard genuine multilateralism and the common interests of developing countries, and build a community with a shared future for humanity to make the world more peaceful, secure and prosperous.

Muizzu said he was honored to pay his first state visit to China with a number of important cabinet ministers and become the first foreign head of state that China has hosted this year, fully demonstrating the great importance both sides attach to the development of bilateral relations.

Noting that this year marks the 10th anniversary of President Xi’s historic state visit to the Maldives, Muizzu said that China has provided a significant amount of valuable assistance to his country’s economic and social development. He said the Maldivian people have benefited greatly from the BRI, citing the Maldives-China Friendship Bridge as a symbol of the bond between the two peoples. 

After their talks, the two heads of state witnessed the signature of an action plan to establish the China-Maldives comprehensive strategic cooperative partnership, as well as cooperation documents on the construction of the Belt and Road, disaster management, the economy and technology, infrastructure, people’s livelihoods, green development, and the blue and digital economies. 

Strategic significance

Zhao Gancheng, a research fellow at the Shanghai Institute for International Studies, told the Global Times on Wednesday that although Maldives is a small country in terms of land area and population, in terms of geopolitics, it has very high strategic significance.

“The Indian Ocean is far from us, but it’s extremely important to the economic and energy security of our country, as well as the BRI, so China needs to try its best to make friends in the region,” Zhao noted. 

Xi said at the meeting with Muizzu that China respects and supports the Maldives in exploring a development path suited to its national conditions, and supports the Maldives firmly in safeguarding its national sovereignty, independence, territorial integrity and national dignity.

Muizzu said the Maldives pursues the one-China policy firmly. Firm mutual support in safeguarding national sovereignty, independence and territorial integrity is a solid foundation for the sustained and sound development of Maldives-China relations.

The Maldives supports the Global Development Initiative, the Global Security Initiative and the Global Civilization Initiative, all of which were put forward by President Xi, and is willing to communicate and cooperate closely with China on international and regional affairs, Muizzu noted.

Hu Zhiyong, a research fellow at the Institute of International Relations at the Shanghai Academy of Social Sciences, told the Global Times on Wednesday that Muizzu’s visit to China shows that Maldives sincerely wants to develop ties with China and strengthen existing cooperation.

“Muizzu’s pledge to the Maldivian people that there will be ‘no foreign military presence,’ makes India angry, so the newly elected president will surely hope China can help his country deal with the pressure from New Delhi,” Hu said.

China-Maldives relations do not target any third party, but due to India’s aggressive stance against its neighbor, countries in the region will definitely want to diversify their ties to preserve their national dignity and sovereignty via cooperation with other major powers like China, said Chinese experts. 

This is why the normal development of ties between China and Maldives is making some India elites and decision-makers anxious, although it is unnecessary and exposes New Delhi’s intention to suppress its neighbors, said analysts.

Cooperation between China and Maldives, as well as other countries in the Indian Ocean will face challenges and uncertainties from India’s interruption, so China and Maldives need to work together to strengthen their security cooperation to ensure the implementation and operation of other projects, and to jointly oppose foreign intervention, Hu noted. 

According to Indian media, some Indian internet users are launching a boycott campaign against Maldives amid tensions between Maldives and India, and reports claim that Muizzu is trying to attract more Chinese tourists to the Maldives to offset the loss caused by India’s boycott. 

Qian Feng, director of the research department at the National Strategy Institute at Tsinghua University, told the Global Times on Wednesday that Chinese tourists will return to Maldives step by step in the post-pandemic era, because it is a well-known paradise for tourism among Chinese public, so the return of Chinese tourists will not be driven by so-called political reasons or any diplomatic activity. 

China had remained as the largest source of tourist arrivals in the Maldives for years before the outbreak of the COVID-19 pandemic. In 2019, nearly 300,000 Chinese tourists visited the Maldives, accounting for around 17 percent of total tourist arrivals that year, Xinhua reported. 

It would be short-sighted and narrow-minded to understand the development of China-Maldives ties only based on tourism. Hu said that apart from the tourist industry, both sides can explore cooperation in other fields related to tourism, such as protection of coastal and marine ecosystems, and the development of the maritime economy, as well as public health cooperation like promoting traditional Chinese medicine to help local people to get better healthcare.

US spreads China-related spy claims while launching large-scale intelligence activities against China: Chinese FM

In response to some media reports about a US Navy sailor being sentenced to 27 months in jail on Monday on China-related spy charges, Chinese Foreign Ministry spokesperson Mao Ning said she did not know the specific situation, but added that the US is spreading China-related spy claims while launching spying activities against China.

A former US sailor was sentenced to 27 months in jail on Monday for accepting nearly $15,000 in bribes from a Chinese intelligence officer in exchange for photos of unclassified private US military information, Reuters reported on Tuesday.

“I don’t know the specific situation, but I have noticed that senior US intelligence officials have publicly disclosed that progress has been made in rebuilding the US intelligence network in China,” Chinese Foreign Ministry spokesperson Mao Ning said on Tuesday during a press briefing when asked about the spy charges.

While the US is spreading information claiming that Chinese spies are involved in the case, it is publicly orchestrating plans to launch large-scale intelligence activities against China. This approach itself is very revealing. China will take all necessary measures to resolutely safeguard national security, Mao said.

CIA director William Burns revealed in 2023 that his agency has “made progress” in rebuilding its spy networks in China. China has unveiled some US-led espionage cases against China in 2023, for example, China’s national security authority cracked a US Central Intelligence Agency (CIA) espionage case involving a Chinese government employee who had been managed by the Japan branch of the US intelligence agency.

Foreign geographic information software collects sensitive data, posing threat to national security: ministry

China’s national security agencies have discovered that foreign geographic information system software used in important industries in China has been collecting and transmitting geographic information data with some of the information collected involving state secrets, posing a serious threat to national security, China’s Ministry of State Security said on Monday, noting that national security agencies will establish and improve a collaborative mechanism for data security protection to safeguard the protection of important national data.

Geographic information data are not only an important strategic data resource, but also a new production factor that can be widely applied in various industries, however, some organizations and individuals with ulterior motives have attempted to steal sensitive geographic information data using geographic information system software, according to an article released on the ministry’s WeChat public account on Monday. 

Geographic information system software is professional software that has functions such as geographic information data collection, storage, analysis, management, and sharing. Such software has powerful functions and can annotate various types of geographic information collected on maps, and analyze and display them in various formats. Coordinate accuracy can even reach the centimeter level. 

However, some foreign organizations, institutions, and individuals have set their sights on the geographic information data, attempting to conduct intelligence espionage activities using geographic information system software, according to the WeChat article.

The methods of these foreign organizations and individuals include automatically connecting to foreign servers during software usage to collect user data without restrictions, and pre-installing backdoors in the software to facilitate network attacks and data theft.

Moreover,a small number of users have limited awareness of data security and mark high-precision geographic coordinates of urban pipelines, military targets, and sensitive units on maps, creating serious risks of leakage and potential irreparable losses, according to the article. 

It also noted that geographic data are a high-value intelligence resource and are a key target for foreign intelligence agencies’ espionage activities. 

“By stealing high-precision geographic information data from our country, they can reconstruct three-dimensional topographic maps of specific areas in important fields such as transportation, energy, and military, providing crucial support for reconnaissance, surveillance, and military operations, posing a serious threat to our military security,” the ministry said. 

Recently, national security agencies have discovered that foreign geographic information system software used in important domestic industries has been collecting and transmitting geographic information data, and some of the data are important and sensitive, even involving state secrets, posing a serious threat to our national security. 

In response, national security agencies, together with relevant departments, are conducting special investigations and governance of geographic information data security risks, guiding and assisting relevant units in conducting inspections and rectifications, and promptly eliminating major security risks such as data theft and leakage.

China’s data security law stipulates that data processing activities should be carried out in accordance with the provisions of laws and regulations, establish and improve a comprehensive data security management system, organize data security education and training, adopt corresponding technical measures and other necessary measures to ensure data security.

When units and individuals engage in geographic information data collection and processing activities, they should choose secure and reliable geographic information system software, set strict access permissions based on the importance of the data, and ensure no sensitive information is available on the internet.

National security agencies will establish and improve a collaborative mechanism for data security protection in cooperation with relevant departments to jointly safeguard the protection of important national data, the Ministry of State Security said in the article. 

The ministry also warned that the theft, espionage, bribery, or illegal provision of data that arerelated to national security and interests by foreign organizations, institutions, individuals, or collusion with domestic organizations, institutions, individuals constitute espionage under Chinese law. 

Citizens who discover such behaviors can report them by calling the 12339 tip-off hotline, logging on to the www.12339.gov.cn , or reporting to the national security agencies through the official WeChat account, the article instructed.