Nov 01, 2014 / Reports & Publications
Economic Report: China - November 2014
Key Messages
- The bilateral Free Trade Agreement signed between the two countries on 6 July 2013 entered
into force as of 1st July 2014.
- President XI has committed to improving the legal framework and the rule of law during the
Fourth Plenum of the 18th Central Committee of the CPC.
- The third quarter of 2014 confirms the decelerating trend this year with real GDP growth of
7.3%YoY, the lowest since the financial crisis.
- The slowdown of the property activity has accelerated since the beginning of this year.
- China’s headline CPI inflation has been going down since May (2.5%YoY), showing its lowest
value this year in September (1.6%YoY).
- Chinese consumption has so far failed to offset weaker investment. Not only the total retail
sales of consumer goods growth rate slowed, but also real household consumption
decelerated.
- Local governments have planned trillions of yuan worth of investment projects in railways,
energy and water conservancy.
- Easing lending rules for second-home buyers through discount on mortgage rates and down
payment requirement cuts.
- New liquidity was offered to the financial sector by injecting RMB 500 billion to the five biggest
banks in September and another RMB 200 billion in October through open market operations
and a repo rate cut
- On the commercial services imports side, China overtook Germany as the second largest
trader, just right after the US.
- China has become a source of outward direct investments (ODI) reaching a new record of USD
107.84 bn. in 2013. Compared with the previous year, this is an increase of 22.8%. Looking at
this growth rate, ODI is expected to outstrip FDI still in 2014.
- China was Switzerland’s third most important foreign trading partner.
- The Swiss National Bank and the People's Bank of China signed a currency swap agreement,
in July 2014. The swap agreement enables renminbi and Swiss francs to be purchased and
repurchased between the two central banks, up to a limit of 150 billion renminbi, or CHF 21
billion.
- At present, around 600 Swiss firms with over 1000 branches are represented in China,
employing more than 200’000 people.
- Compared to 2013, sales and profits have slightly improved and Swiss companies tend to be
more optimistic than a year ago.
- On July 2nd this year, the Sino-Swiss Zhenjiang Ecological Industry Park (SSZEIP) was
officially inaugurated by the Swiss State Secretary for Economic Affairs.