China’s National Development and Reform Commission (NDRC) has shed more light on a series of subtle and indirect economic stimulus efforts being pondered at its monthly press conference on November 15 in Beijing, and China’s steel market has sourced great support from these, as many of them relate to steel consumption.
In October, the Commission approved another eight infrastructure projects inside China valued at a total of Yuan 44.2 billion ($6.3 billion) with the majority being liquefied natural gas transmission projects, NDRC spokesperson Meng Wei shared at the press conference.
Besides, to further promote investment in infrastructure construction, NDRC has announced a cut to the minimum capital requirement for domestic port and waterway construction projects along coastlines and inland rivers to 20% from the previous 25%.
Also, the minimum capital requirement for railway, road, logistics, environmental protection, and city construction projects is to be reduced as well, but to no less than 20% at the most preferential treatment, according to her.
Prior to the latest change, China had adjusted the capital requirement ratio in 2004, 2009 and 2015, according to Meng.
Institutional investors and owners of such projects are also allowed to raise funds via issuing bonds or stake transfers, she added.
China’s fixed asset investment grew 5.2% on the year for January-October or the lowest growth since June 1992 when the country’s National Bureau of Statistics publicly released the data.
Moreover, among the efforts includes Beijing’s intention to stabilise the country’s auto industry via the means such as the possible loosening or complete removal of the limits on auto purchases or promoting trade-ins and recycling in the auto market, with the latter, may also be applied to the electric home appliances and consumers’ electronic products sectors, according to Meng.
In response to the NDRC’s positive signals, China’s domestic steel prices have strengthened, and on November 15, China’s national average benchmark price for HRB 400 20mm dia rebar, for example, surged to its 3.5-month high of Yuan 3,975/tonne including the 13% VAT, and the most-traded rebar January contract on the Shanghai Futures Exchange strengthened by Yuan 133/t on week to Yuan 3,545/t at the end of the day-time trading session of last Friday.
To enhance China’s influence in the global economy, the country has been progressing with its currency internationalization in the “Belt & Road Initiative (BRI)” countries, and by October, China had established currency exchanges arrangements with over 20 BRI countries and signed agreements with seven more on RMB clearance and settlements, Meng said.
By the end of October too, China had signed 197 cooperation pacts with 137 countries and 30 international organisations, and over January-September, China’s foreign trade value with the BRI countries totalled $950 billion, and direct non-financial investments in these countries exceeded $10 billion.
Over this year’s first nine months, China’s foreign trade value totalled Yuan 22.9 trillion ($3.3 trillion), according to the Customs data
At the Press Conference, Meng also highlighted a few positive developments in China’s economy, including that over January-September, the contribution of consumption to economic growth reached 60.5%, that a few B2C e-commerce platforms hit their daily record sales revenues during the November 11 promotion.
Over January-October, power consumption by the tertiary industry and households grew 9.3% and 5.9% on year respectively, both being higher than the 4.4% year-on-year increase for the country’s overall power consumption, she added.
Beijing will continue to promote modern manufacturing and “intelligence + service” consumption models, she added, which will see the country advance further on the path of shifting its economic growth further to consumption.