December 12 Macroeconomic Index:New energy vehicles and chip design industries are growing strongly, and global monetary policies are becoming differentiated
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International Crude Price Trend & Exchange Rate of RMB to USD Trend
Domestic News
1. China Automotive Power Battery Industry Innovation Alliance: China's power battery sales increased by 29.7% year-on-year in November
2. Financial Times: There is a solid foundation for the RMB exchange rate to remain basically stable
3. Shanghai issued the "Shanghai Action Plan for Supporting the M&A and Restructuring of Listed Companies (2025-2027)"
4. The domestic chip design industry has returned to the double-digit high-speed development track
5. Bank of Communications International: The penetration rate of new energy vehicles in the mainland was 52.3% in November, and the performance in December is optimistic
International News
1. The second meeting of the Global Foreign Exchange Market Committee in 2024 was successfully held
2. Foreign media: France will propose emergency legislation to avoid a government shutdown
3. US mortgage refinancing demand surged as interest rates fell for the third week in a row
4. Preview of Canada's interest rate decision: 50 basis points of interest rate cuts are expected with further interest rate cuts in the future
5. Japan will propose a tax hike from fiscal 2026 to cover higher defense spending
Domestic News
1. China Automotive Power Battery Industry Innovation Alliance: China's power battery sales increased by 29.7% year-on-year in November
According to the monthly information of power batteries released by the China Automotive Power Battery Industry Innovation Alliance in November 2024, in November, China's power and other battery sales were 118.3GWh, an increase of 7.2% month-on-month and 40.1% year-on-year. Among them, the sales volume of power batteries was 87.8GWh, accounting for 74.2% of the total sales, an increase of 10.9% month-on-month and a year-on-year increase of 29.7%; Other cell sales were 30.5GWh, accounting for 25.8% of total sales, down 2.2% month-on-month and up 82.3% year-on-year. From January to November, the cumulative sales of power and other batteries in China were 914.3GWh, a year-on-year increase of 42.8%. Among them, the cumulative sales of power batteries were 692.3GWh, accounting for 75.7% of the total sales, with a cumulative year-on-year increase of 27.1%; The cumulative sales volume of other cells was 222.0GWh, accounting for 24.3% of the total sales, with a cumulative year-on-year increase of 132.5%.
2. Financial Times: There is a solid foundation for the RMB exchange rate to remain basically stable
The Financial Times, the media in charge of the central bank, published a commentary article saying that recently, the market hyped Trump's deal after the U.S. election, which sharply pushed up the dollar index, breaking through 108 at the highest, and non-dollar currencies were generally under pressure. The two-way fluctuation and flexibility of the RMB exchange rate have been enhanced, the market expectation is relatively stable, the purchase and sale of foreign exchange by enterprises is rational and orderly, and the operation of the foreign exchange market is generally stable. A number of industry experts believe that the current possibility of the US dollar downward is increasing, China's economic development is stable and improving, from the perspective of internal and external conditions, the RMB exchange rate at a reasonable and balanced level to maintain basic stability has a solid foundation, the increase in corporate foreign exchange settlement is likely to stabilize and rise at the end of the year with
3. Shanghai issued the "Shanghai Action Plan for Supporting the M&A and Restructuring of Listed Companies (2025-2027)"
In the field of mergers and acquisitions, we have ushered in heavy policy support! Shanghai issued the "Shanghai Action Plan for Supporting the M&A and Restructuring of Listed Companies (2025-2027)". Among them, it is proposed that by 2027, a number of representative M&A cases in key industries will be implemented, and about 10 internationally competitive listed companies will be cultivated in key industries such as integrated circuits, biomedicine, and new materials, forming a scale of 300 billion yuan in M&A transactions, and activating total assets of more than 2 trillion yuan. Specific measures include promoting high-quality listed companies and industrial groups to increase the integration of resources of enterprises related to the industrial chain; Focusing on the three leading industries of integrated circuits, biomedicine, and artificial intelligence, as well as the industrial chain of key developments such as the new generation of electronic information, intelligent networked vehicles, and new energy vehicles, we will sort out the list of potential key M&A targets in combination with the development needs of enterprises; Make good use of the 10 billion yuan integrated circuit design industry M&A fund, and set up a 10 billion yuan biomedical industry M&A fund. In addition, the plan also mentions that the merger of securities companies will be accelerated to create a first-class investment bank.
4. The domestic chip design industry has returned to the double-digit high-speed development track
At the Shanghai Integrated Circuit 2024 Industry Development Forum, Wei Shaojun, chairman of the Integrated Circuit Design Branch of the China Semiconductor Industry Association, said that the sales of the domestic chip design industry are expected to be 646.04 billion yuan in 2024, an increase of 11.9% compared with 2023, returning to a double-digit high-speed development track, and accounting for the proportion of the global integrated circuit product market is expected to be basically the same as that of the previous year. From the perspective of the distribution of industrial cities, Shanghai, Shenzhen and Beijing continue to occupy the top three cities in the design industry this year, of which the scale of Shanghai's chip design industry has reached 179.5 billion yuan, which is further widened compared with Shenzhen, and the scale of Wuxi's design industry has reached 67.82 billion yuan, ranking fourth above Hangzhou. In 2024, the number of chip design companies with sales of more than 100 million will reach 737.
5. Bank of Communications International: The penetration rate of new energy vehicles in the mainland was 52.3% in November, and the performance in December is optimistic
BOCOM International publishes a research report to give the Mainland automotive industry a leading rating. According to the report, the retail sales of passenger cars in November increased by 16.5% year-on-year; The retail penetration rate of new energy vehicles was 52.3%, exceeding 50% for the fifth consecutive month, and the retail sales of new energy vehicles increased by 50.5% year-on-year. Export growth slowed in November, with the share of new energy vehicles falling to 20%. The bank pointed out that considering that the Spring Festival in 2025 is earlier than that in 2024, resulting in the completion of some car purchases before the Spring Festival by the end of 2024, and the subsidy policy for trade-ins entering the final stage in December, and some car companies are also sprinting sales through promotional activities, the bank expects that the passenger car market in December is expected to maintain the current momentum of continuous year-on-year retail growth. However, after the sales sprint in December, the auto market has entered the off-season of consumption, and it is necessary to be cautious that the stock price performance of the auto sector may fluctuate.
International News
1. The second meeting of the Global Foreign Exchange Market Committee in 2024 was successfully held
From December 5 to December 6, 2024, the second meeting of the Global Foreign Exchange Committee (GFXC) in 2024 was held online. The meeting discussed the promotion and implementation of the global standards, the second round of three-year review of the global standards, the operation of the foreign exchange market and related market hot issues. Representatives of the China Foreign Exchange Market Steering Committee (CFXC) attended the meeting. The final outcome of the second triennial review of the Global Guidelines was discussed. The FX Settlement Risk Working Group and the FX Data Working Group respectively presented the proposed final revisions to the relevant provisions of the Global Code, and how the Working Group has been continuously improved based on feedback from local FX market committees and the public consultation conducted in October 2024. GFXC members strongly support the revised Global Standard, which aims to strengthen the principles governing the management of foreign exchange settlement risk and to increase transparency in the use of client-generated data on certain types of foreign exchange transactions and electronic trading platforms.
2. Foreign media: France will propose emergency legislation to avoid a government shutdown
According to foreign media reports, the caretaker government in France would submit an emergency finance bill to parliament on Wednesday to avoid a shutdown after the government and its 2025 budget bill lost a vote of no confidence last week. This stopgap legislation has never been tested in its current form, adding uncertainty about its impact on already stretched public finances and a faltering economy. The bill applies the same taxes as in 2024 and provides only minimal payouts. France will not be able to submit another full budget only after the appointment of a new government. President Emmanuel Macron intends to nominate Barnier's successor by Thursday evening, but the new prime minister still needs to pick a cabinet, and it usually takes months to prepare a comprehensive fiscal bill and get it passed by parliament. It is reported that the so-called "special bill" tabled on Wednesday contains only a few provisions that allow the country to roll over the same tax levied in 2024 and continue to issue bonds. This law must be enacted a few days before the end of the year in order to issue a decree approving the minimum expenditure necessary to maintain the country's operations in January.
3. US mortgage refinancing demand surged as interest rates fell for the third week in a row
U.S. mortgage rates fell again last week, and while the drop was modest but enough to spur existing homeowners to seek some savings. The Mortgage Bankers Association's (MBA) seasonally adjusted index showed a 5.4% increase in total mortgage demand, backed by a surge in refinancing. Home loan refinancing applications surged 27% from the previous week and 42% higher than the same period last year. Joel Kan, an MBA economist, said, "Purchase applications remain relatively strong, with year-over-year growth over the last three months except for one week. In addition to lower interest rates, homebuying activity continues to be supported by ongoing housing demand and inventory, which continues to grow gradually in many markets. ”
4. Preview of Canada's interest rate decision: 50 basis points of interest rate cuts are expected with further interest rate cuts in the future
The Royal Bank of Canada expects the Bank of Canada to cut rates tonight by another 50 basis points on top of the 50 basis points it cut in October, for a total of 125 basis points since June. Canada's economic backdrop has not collapsed enough to cause panic in the Bank of Canada, but it is clear that interest rates are already above what is needed to maintain inflation at its 2% target. Overall GDP growth in the second half of the year was lower than the Bank of Canada's October forecast, and GDP per capita fell for the sixth consecutive quarter in the third quarter. The unemployment rate is up a full percentage point from a year ago, and the growth in the consumer price index is essentially equal to or below the Bank of Canada's 2% inflation target for the full year of 2024. The bank still expects the Bank of Canada to need further rate cuts in the coming year, which will eventually be lower than the Bank of Canada's estimate of a neutral range of 2% in mid-2025.
5. Japan will propose a tax hike from fiscal 2026 to cover higher defense spending
The Japanese government is planning to propose a corporate tax hike from April 2026 to cover higher defense spending, with the goal of doubling the defense budget to 2% of GDP by 2027. The government also proposed a tobacco tax increase in April 2026 and an income tax increase in January 2027. The corporate tax will be increased by a surcharge of 4% and the income tax will be increased by a surcharge of 1%. The coalition government agreed in 2022 to raise the main tax rate to increase the defense budget, but strong opposition from MPs delayed the implementation of this unpopular measure. The latest plan is likely to be resisted within the ruling coalition and from the main opposition party, the National Democratic Party, whose cooperation is essential for the coalition to remain in power. Japan is struggling to secure funding for a defense spending plan of 43 trillion yen ($283 billion) over five years to 2027, which could complicate its goal of achieving a balanced budget in fiscal 2025. (Kyodo News Agency)
Domestic Macro Economy Index
