Highlights of the November-December Edition
China’s Domestic Economy
- Quarterly Review of China’s Economy: China’s economic growth slowed to 4.9 percent year-on-year in Q3 2021, according to official statistics, as credit tightening, energy shortages, and rising input prices hit producers and slowed momentum in property and infrastructure.
- Property Tax: China’s top legislative body approved a pilot property tax, but fierce opposition illustrates the difficulty Chinese policymakers will have in avoiding a sharp slowdown in the real estate sector.
- China Amplifies Antitrust Efforts: In a continued campaign to rein in domestic tech companies, China elevated its antitrust arm while introducing new antimonopoly rules and issuing penalties for unreported domestic deals.
- Digital Economy and Information Industry: Deepening Chinese government anxieties over the domestic information environment are leading to new investment restrictions and a changing business landscape for the media industry.
China’s Economic Diplomacy
- China’s Diplomacy Efforts: The United States and China issued a joint statement on climate cooperation at the COP26 Climate Change Conference in Glasgow, though China made no new commitments at the conference; separately, President Biden and General Secretary Xi met virtually in their first formal meeting since President Biden took office in January; China’s leaders pledged $40 billion in financial aid to African countries at the eighth Forum on China–Africa Cooperation in November.
- Heightened Scrutiny of U.S.-Listed Chinese Companies: Chinese ride hailing giant DiDi Chuxing announced it would delist from the New York Stock Exchange; heightened regulatory scrutiny of U.S.-listed Chinese companies in both Washington and Beijing raise questions about Chinese companies’ overseas capital-raising activities in the future.
- Disciplinary Investigation into China’s Financial Sector: The Chinese Communist Party is investigating financial authorities and major state-owned financial institutions in a bid to strengthen its oversight of the financial sector.
- Bilateral Goods Trade: The U.S. goods trade deficit with China widened in the third quarter of 2021 as exports to China decreased. In October, by contrast, Chinese imports of U.S. goods increased, driven by purchases of intermediate goods.
- Bilateral Services Trade: In the second quarter of 2021, the U.S. services trade surplus with China reached its lowest point since the first quarter of 2012.