Business
China Bails Out Local Governments that Funded Its Trade War Stimulus
China moved to bail out local governments that provided economic stimulus during the Sino-U.S. trade war by slashing taxes and massively spiking fixed asset investment.
China’s average after-inflation (real) GDP growth was about 15.8 percent in the decade leading up to the 2008 financial crisis, falling to about 6.8 percent over the next decade, and was on the verge of plunging into negative territory in late 2018 as the Sino-U.S. trade war ramped-up.
China bailed out its economy in the first quarter of 2019 with government-sponsored 114.3 percent increase in fixed asset investment and by slashing taxes and fees by nearly $298.3 billion, or about 2 trillion yuan.
The combination of stimulus pushed real GDP growth up to 9.9 percent in the second quarter of 2019, but the central government pushed the spending and lost tax revenue burden down to local governments, according to Enodo Economics.
But with capital flight accelerating from an annual rate of $22 billion in 2018 to $139.2 billion in the first half of 2019, the International Monetary Fund Board of Directors’ annual China financial review issued on July 31 warned: “The Chinese economy is facing external headwinds and an uncertain environment.”
The Epoch Times reported in mid-August that with China’s “Shibor” overnight lending rate—which large state-owned banks charge local banks—doubling, the People’s Bank of China was forced into its first insolvent bank bail-outs in the last two decades.
With local government squeezed by losses of revenue, China’s government spending declined for the first time this year in August. The Shibor lending rate fell back down in September on the central bank bailouts and local government austerity moves.
China’s State Council on Oct. 9 issued a “Five-Five Sharing” order that canceled the scheduled slashing of the local government’s allocation of China’s value-added-tax (VAT) from 50 percent to 25 percent.
As China’s biggest tax source, the over $100 billion transfer from the central government dramatically increased the solvency of local…
Business
BRICS: China Classifies Crypto as Property and Prohibits Business Ownership
China’s Shanghai court ruled cryptocurrencies are property, boosting optimism in the crypto industry while maintaining a ban on business transactions. This may signal a shift in future regulations.
China’s Ruling on Cryptocurrency
In a pivotal decision for the nation and its BRICS alliance, China has officially classified cryptocurrency as property while maintaining prohibitions against business transactions involving digital assets. A notable ruling from the Shanghai Songjiant People’s Court affirmed cryptocurrencies as property, sparking optimism within the crypto industry regarding future regulations.
Implications for the Crypto Industry
As cryptocurrencies gain significance globally, the Chinese ruling is viewed as a potential-positive shift amidst ongoing restrictions. While individuals can hold virtual currency, businesses remain barred from engaging in investment transactions or issuing tokens independently. This decision has generated anticipation for more accommodating regulations in the future.
Future Prospects for Cryptocurrency in China
Experts like Max Keiser believe this ruling indicates China’s growing acknowledgment of Bitcoin’s influence. As BRICS nations explore increased cryptocurrency utilization in trade, this legal shift could enhance market demand and lead to greater acceptance of cryptocurrencies as a legitimate asset class, setting the stage for potential developments in 2025.
Source : BRICS: China Rules Crypto as Property, Bars Business Holdings
Business
Wegovy: The Popular Weight-Loss Drug Now Available in China
Novo Nordisk launched Wegovy in China after approval, competing with Eli Lilly’s upcoming weight-loss drug. The treatment, costing 1,400 yuan, targets obesity but has potential side effects and isn’t covered by healthcare.
Wegovy Launch in China
Novo Nordisk recently launched its weight-loss drug, Wegovy, in China after obtaining approval from local health authorities in June. The introduction of Wegovy is expected to increase competition with Eli Lilly, which has also received approval for its weight-loss treatment, although it has not yet been released in China’s significant pharmaceutical market.
Cost and Accessibility
In China, a set of four Wegovy injections will be priced at 1,400 yuan (approximately $194), significantly lower than the drug’s U.S. price. However, patients will need to pay the full amount out of pocket since Wegovy is not yet covered by the national healthcare insurance plan.
Benefits and Side Effects
Research indicates that Wegovy can help users lose over 10% of their body weight. The drug contains semaglutide, which assists with appetite control and satiety. While Wegovy has been gaining traction globally, it may cause side effects like nausea. Concerns have emerged about its misuse among individuals who are not obese, prompting medical professionals to remain vigilant.
Source : Popular weight-loss drug Wegovy goes on sale in China
Business
China’s Golden Rooster Film Festival Kicks Off in Xiamen – Thailand Business News
The 2024 China Golden Rooster and Hundred Flowers Film Festival began in Xiamen on Nov 13, featuring awards, cultural projects worth 31.63 billion yuan, and fostering international film collaborations.
2024 China Golden Rooster and Hundred Flowers Film Festival Opens
The 2024 China Golden Rooster and Hundred Flowers Film Festival commenced in Xiamen, Fujian province, on November 13. This prestigious event showcases the top film awards in China and spans four days, concluding with the China Golden Rooster Awards ceremony on November 16.
The festival features various film exhibitions, including the Golden Rooster Mainland Film Section and the Golden Rooster International Film Section. These showcases aim to highlight the achievements of Chinese-language films and foster global cultural exchanges within the film industry.
On the festival’s opening day, a significant milestone was reached with the signing of 175 cultural and film projects, valued at 31.63 billion yuan ($4.36 billion). Additionally, the International Film and Television Copyright Service Platform was launched, furthering the globalization of Chinese film and television properties.
Source : China’s Golden Rooster film festival opens in Xiamen – Thailand Business News
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