People walk across a bridge with a stocks indicator board in the financial district of Shanghai on March 16.HECTOR RETAMAL/AFP/Getty Images
China’s government tried Wednesday to reassure jittery investors after regulatory crackdowns caused stock prices to plunge, by promising support for its struggling real estate industry, internet companies and entrepreneurs who want to raise money abroad.
Regulators should issue market-friendly policies to “invigorate the economy,” officials said at a Cabinet meeting led by Vice Premier Liu He, President Xi Jinping’s top economic adviser, the official Xinhua News Agency said
The announcement appeared aimed at rebuilding business and investor confidence as the ruling Communist Party tries to revive economic growth that slid to 4% i n the final quarter of 2021, compared with the full year’s expansion of 8.1%.
The downturn was triggered by a collapse in construction and housing sales after Beijing launched a crackdown on debt in real estate that officials worry is dangerously high.
That added to private sector anxiety about the status of Chinese industries following anti-monopoly and data-security investigations, multimillion-dollar fines and public criticism of e-commerce and other internet companies – and a spat with Washington about oversight of companies with U.S.-traded shares.
Xi’s government has promised to support entrepreneurs who generate new jobs and wealth. But crackdowns have shaken the private sector since 2020, with no indication when the uncertainty might end.
Wednesday’s announcement gave no sign the debt, anti-monopoly and other regulatory campaigns are finished. But some economists suggested enforcement may have peaked after leaders announced a “policy pivot” in December to focus on the shorter-term goal of shoring up economic growth.
Share prices of companies including e-commerce giant Alibaba Group have fallen by almost half on foreign exchanges, wiping out more than $1 trillion in stock value since the start of last year.
Liu, the vice premier, “spoke to stop the stock market rout,” Larry Hu and Xinyu Ji of Macquarie Group said in a report.
“The tone of the meeting is strong, suggesting that policymakers are deeply concerned about the recent market rout,” they said.
Chinese stock markets rebounded after the announcement. Hong Kong’s Hang Seng index soared 9.1% while the Shanghai Composite index Advanced 3.5%.
Hong Kong-traded shares in Alibaba jumped 25.8%. Tencent Holdings, operator of the popular WeChat message service, surged 23%. Livestreaming site Kuaishou Technology added nearly 34%.
The Hang Seng Tech Index for technology stocks on the Hong Kong exchange ended the day up 22.2%.
“These announcements don’t mean much individually, but collectively, they suggest policymakers won’t sit idle,” Stephen Innes of SPI Asset Management said in a report.
The economy also is encumbered by anti-coronavirus measures that shut down the southern business centre of Shenzhen and other cities, raising the risk of disruptions of manufacturing and trade.
China’s No. 2 leader, Premier Li Keqiang, said last week the government hopes to generate as many as 13 million new job s this year but faces “many difficulties and challenges.” Forecasters say the ruling party is likely to struggle to meet its official 5.5% economic growth target, the lowest since the 1990s.
Abroad, Russia’s attack on Ukraine has pushed up oil and other commodity prices and raised the risk of more snags for trade at a time when economies are recovering from the pandemic.
The meeting of the Cabinet’s financial stability committee promised to “propose supporting measures” for real estate, Xinhua said. It gave no details of possible initiatives.
Housing sales and construction, industries that support millions of jobs, plunged last year. The government has tried to revive demand by telling banks to lend more to home buyers, but economists say Beijing is moving cautiously to avoid igniting a surge in housing costs and debt.
In a separate statement, the agency that regulates Chinese banks and insurers promised to encourage lenders to “support development of the real economy” by maintaining moderate loan growth.
It promised to support “healthy development” of real estate while repeating the official slogan that housing is “for living, not for speculation.”
The agency said China’s state-owned insurers would be encouraged to increase investment in stock markets.
The Cabinet officials promised to co-ordinate more closely on policies that will affect financial markets and to move cautiously on carrying out any that might disrupt them.
The government “will promote the development” of internet industries and improve their competitiveness, Xinhua said, without giving details.
Entrepreneurs and investors also are uneasy about the status of Chinese companies on U.S. and other foreign stock exchanges after Beijing and Washington clashed over how much information American regulators can require those companies to divulge.
Tech companies with shares traded abroad also face heightened scrutiny by regulators of their cross-border data flows.
In December, China’s dominant ride-hailing service, Didi Global Inc., announced it was leaving the New York Stock Exchange and shifting its share-trading to Hong Kong. That followed a data-security investigation of Didi launched by Chinese regulators shortly after its June 30 stock market debut.
Wednesday’s announcement sounded a positive note about Chinese companies and foreign stock exchanges, though it was vague, saying only that Beijing will “continue to support overseas share listings.”
It said Chinese and U.S. regulators are having a “good dialogue” about stock markets and working on a plan for co-operation following disputes over audit requirements that led to a threat to kick some Chinese companies off American exchanges.
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OTTAWA – The federal government is expected to boost the minimum hourly wage that must be paid to temporary foreign workers in the high-wage stream as a way to encourage employers to hire more Canadian staff.
Under the current program’s high-wage labour market impact assessment (LMIA) stream, an employer must pay at least the median income in their province to qualify for a permit. A government official, who The Canadian Press is not naming because they are not authorized to speak publicly about the change, said Employment Minister Randy Boissonnault will announce Tuesday that the threshold will increase to 20 per cent above the provincial median hourly wage.
The change is scheduled to come into force on Nov. 8.
As with previous changes to the Temporary Foreign Worker program, the government’s goal is to encourage employers to hire more Canadian workers. The Liberal government has faced criticism for increasing the number of temporary residents allowed into Canada, which many have linked to housing shortages and a higher cost of living.
The program has also come under fire for allegations of mistreatment of workers.
A LMIA is required for an employer to hire a temporary foreign worker, and is used to demonstrate there aren’t enough Canadian workers to fill the positions they are filling.
In Ontario, the median hourly wage is $28.39 for the high-wage bracket, so once the change takes effect an employer will need to pay at least $34.07 per hour.
The government official estimates this change will affect up to 34,000 workers under the LMIA high-wage stream. Existing work permits will not be affected, but the official said the planned change will affect their renewals.
According to public data from Immigration, Refugees and Citizenship Canada, 183,820 temporary foreign worker permits became effective in 2023. That was up from 98,025 in 2019 — an 88 per cent increase.
The upcoming change is the latest in a series of moves to tighten eligibility rules in order to limit temporary residents, including international students and foreign workers. Those changes include imposing caps on the percentage of low-wage foreign workers in some sectors and ending permits in metropolitan areas with high unemployment rates.
Temporary foreign workers in the agriculture sector are not affected by past rule changes.
This report by The Canadian Press was first published Oct. 21, 2024.
OTTAWA – The parliamentary budget officer says the federal government likely failed to keep its deficit below its promised $40 billion cap in the last fiscal year.
However the PBO also projects in its latest economic and fiscal outlook today that weak economic growth this year will begin to rebound in 2025.
The budget watchdog estimates in its report that the federal government posted a $46.8 billion deficit for the 2023-24 fiscal year.
Finance Minister Chrystia Freeland pledged a year ago to keep the deficit capped at $40 billion and in her spring budget said the deficit for 2023-24 stayed in line with that promise.
The final tally of the last year’s deficit will be confirmed when the government publishes its annual public accounts report this fall.
The PBO says economic growth will remain tepid this year but will rebound in 2025 as the Bank of Canada’s interest rate cuts stimulate spending and business investment.
This report by The Canadian Press was first published Oct. 17, 2024.
OTTAWA – Statistics Canada says the level of food insecurity increased in 2022 as inflation hit peak levels.
In a report using data from the Canadian community health survey, the agency says 15.6 per cent of households experienced some level of food insecurity in 2022 after being relatively stable from 2017 to 2021.
The reading was up from 9.6 per cent in 2017 and 11.6 per cent in 2018.
Statistics Canada says the prevalence of household food insecurity was slightly lower and stable during the pandemic years as it fell to 8.5 per cent in the fall of 2020 and 9.1 per cent in 2021.
In addition to an increase in the prevalence of food insecurity in 2022, the agency says there was an increase in the severity as more households reported moderate or severe food insecurity.
It also noted an increase in the number of Canadians living in moderately or severely food insecure households was also seen in the Canadian income survey data collected in the first half of 2023.
This report by The Canadian Press was first published Oct 16, 2024.
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