MNI China Press Digest Nov 3: FDI, Yuan, Gov Bonds, NEV

Highlights from Chinese press reports on Friday:

• China will firm efforts to attract foreign investment including more engagement and help accessing investment opportunities and policy promotions, according to Shu Jueting, spokesperson for the Ministry of Commerce (MOFCOM). Foreign investment in China from January-September was CNY919 y/y, a 8.4% decrease, MOFCOM said. Cui Fan, a professor at the School of International Economics and Trade, believes the uncertainty and complexity within the global economy drove the decrease and China should open further to foreign investment and improve the business environment (Source: 21st Century Business Herald).
• The potential end of the U.S. Federal Reserve's interest rate hikes could bring overseas capital back to the A-share market and support the rebound of the yuan, 21st Century Business Herald reported, citing market insiders. The net inflow of northbound funds into A-shares exceeded CNY4 billion on Thursday. Many Wall Street investment institutions predict the yuan will rebound to 7-7.1 against the U.S. by the end of Q1 2024, as the Fed lowers its benchmark interest rate to 4.5%, which will significantly narrow the China-U.S. interest-rate spread, said an unnamed Wall Street hedge fund manager. Traders see less than 15% chance of Fed raising rates in December, after it held rates at 5.25%-5.5% on Wednesday.
• Local governments issued CNY8.5 trillion of public bonds in the first 10 months of 2023, a new record, according to Yicai news agency. The total volume consisted of CNY4 trillion in refinancing bonds, up 74% y/y. Zhang Yu, chief macro analyst of Huachuang Securities, said the government will continue to exert strong fiscal policy in the near future with newly announced CNY1 trillion treasury bonds and advancing up to CNY2.28 trillion of bonds from 2024. Other analysts said officials are more reliant on debt fuelled fiscal policy this year as a slow recovery and poor land sales have led to falling local government revenue. (Source: Yicai)
• China sold 890,000 new electric vehicles in October, up 32% y/y, according to the Passenger Transport Association. The market showed a strong increase due to low base effects from last year and manufacturers engaging in promotional activity. Buyers have purchased 6.8 million vehicles so far in 2023, a y/y increase of 36%, the association added. China looks set to maintain strong NEV exports in future, the association added. (Source: Yicai)