Global Market Dynamics and China's Economic Policy Interpretation: December 6, 2024 Market Review

Global Market Dynamics and China's Economic Policy Interpretation: December 6, 2024 Market ReviewNO.1 Global Market Fluctuations: Mixed Performance in US Stocks, Divergent European Markets, Oil Price DeclineOn December 6, 2024, global financial markets exhibited a volatile pattern

Global Market Dynamics and China's Economic Policy Interpretation: December 6, 2024 Market Review

NO.1 Global Market Fluctuations: Mixed Performance in US Stocks, Divergent European Markets, Oil Price Decline

On December 6, 2024, global financial markets exhibited a volatile pattern. The three major US stock indices showed mixed results: the Dow Jones Industrial Average fell 0.28%, the Nasdaq Composite rose 0.81%, and the S&P 500 increased by 0.25%. Notably, the Nasdaq Composite and S&P 500 both reached new closing highs. For the week, the Dow Jones Industrial Average fell 0.6%, the Nasdaq Composite rose 3.34%, and the S&P 500 gained 0.96%.

The cryptocurrency market performed strongly, with Bitcoin's price returning to above $100,000, boosting cryptocurrency stocks. Canaan Inc.'s stock price surged over 35%, BitDigital rose by more than 9%, and Coinbase jumped over 7%. Tesla's stock price increased by over 5%, while Lululemon's stock price rose nearly 16%, marking its best single-day performance in six years.

The Nasdaq China Golden Dragon Index rose 0.98%, accumulating a 2.15% gain for the week, with most Chinese stocks trading higher. Youdao's stock price surged over 6%, Alibaba and JD.com each rose over 2%, and iQiyi and NetEase each climbed over 1%. However, GOTU Technology's stock price fell over 4%, and New Oriental's stock price dropped over 1%.

US nonfarm payroll employment increased by 227,000 in November, slightly higher than the expected 220,000 but lower than the previous month's 12,000. The US Bureau of Labor Statistics revised the nonfarm payroll additions for September and October; September's employment was revised from 223,000 to 255,000, and October's from 12,000 to 36,000. The revisions resulted in a combined increase of 56,000 for September and October compared to the previous figures.

International oil prices fell across the board. The January 2025 contract for US crude oil declined 1.65%, closing at $67.17 per barrel, with a weekly decline of 1.22%. The February 2025 contract for Brent crude oil fell 1.4%, closing at $71.08 per barrel, a weekly decrease of 1.06%.

Major European stock indices showed mixed results. The German DAX index rose 0.13%, closing at 20,384.61 points, marking a record high for the fifth consecutive day and a 3.86% weekly gain. The French CAC40 index increased by 1.31%, closing at 7,426.88 points, with a weekly increase of 2.65%. The UK FTSE 100 index fell 0.49%, closing at 8,308.61 points, but still showing a 0.26% weekly gain.

NO.2 China's State Council Executive Meeting Focuses on High-Quality Development and Problem Solving

On December 6, 2024, Chinese Premier Li Qiang presided over an executive meeting of the State Council. The meeting reviewed the comprehensive supervisory inspection on promoting high-quality development, discussed relevant work on ecological protection in the Yellow River Basin, and reviewed the draft amendment to the Civil Aviation Law of the People's Republic of China.

The meeting affirmed the achievements of the comprehensive supervisory inspection in identifying and resolving bottlenecks and difficulties in reform and development, as well as urgent issues concerning enterprises and the public. The meeting stressed that the inspection should be used as an opportunity for rectification, treating the problem list as a responsibility list and suggestions as focal points for improvement. Common problems identified should be thoroughly studied and rectified, promoting implementation across the board. Rectifications should be expedited, completing those possible this year and setting clear targets for ongoing issues. This work should be closely integrated with current tasks to better contribute to achieving the year's economic and social development goals. The meeting also emphasized leveraging the supervisory inspection's role in promoting work, commending successful efforts, showcasing positive examples, and promoting best practices to further enhance motivation.

NO.3 The National Financial Regulatory Administration Releases Action Plan for High-Quality Development of the Property and Casualty Insurance Industry

On December 6, 2024, the Office of the National Financial Regulatory Administration issued the "Action Plan for Strengthening Regulation, Preventing Risks, Promoting Reform, and Driving High-Quality Development of the Property and Casualty Insurance Industry". The plan states that, over the next five years, the property and casualty insurance industry should maintain steady growth, gradually enhancing its risk prevention capabilities, coverage breadth and depth, and overall strength, and ultimately forming a well-structured, well-governed, and orderly competitive market system. The plan emphasizes tiered and classified supervision, improving the rating, evaluation, and classified supervision system for property and casualty insurance, and perfecting the relevant rules for the use of rating and evaluation results to promote excellence and curb inferiority. The plan will focus on tiered supervision, strengthening the continuous supervision of systemically important property and casualty insurance companies and imposing stringent supervision on companies with significant risks, while researching upgraded supervision procedures. Furthermore, the plan will explore differentiated supervision based on business scope, developing differentiated regulatory measures concerning corporate governance, institution establishment, and business operations.

NO.4 Xinhua Commentary: China's Central Government Still Has Significant Debt Capacity and Room for Increased Deficit

Xinhua News Agency published an article on the evening of December 6 titled "How to View the 12 Trillion Yuan Local Government Debt 'Combination Punch' Current Questions about the Chinese Economy Part Four". The article points out that, looking ahead to 2025, the 14th Five-Year Plan will reach its conclusion. The article analyzes China's government debt-to-GDP ratio and fiscal deficit ratio, comparing them to other G20 and G7 countries. It concludes that, in terms of the debt-to-GDP ratio, China's government debt is significantly lower than that of other major economies; and regarding the fiscal deficit, China has historically maintained a cautious approach, keeping it below 3% in most years, significantly lower than other major global economies. Furthermore, the article notes that China's local government debt has generated a large amount of effective assets that are generating continuous returns, providing strong support for high-quality economic development and serving as a crucial source of debt repayment funds. Therefore, the article concludes that China's government leverage ratio is significantly lower than that of major economies and emerging markets, leaving considerable room for the central government to increase debt and the fiscal deficit.

NO.5 National Health Commission: 32 Child-Appropriate Drugs Approved for Listing

On December 6, 2024, the National Health Commission held a press conference to introduce the latest developments in medical science and technology innovation. Wang Xuetao, deputy director of the Drug Administration Department of the National Health Commission, introduced that, to meet the clinical needs of pediatric drugs, the National Health Commission, together with relevant departments, formulated and issued five batches of a total of 144 drugs included in the "Encouraged Research and Application List of Pediatric Drugs". Currently, 32 drugs suitable for children have been approved for marketing, 16 of which are rare disease drugs, such as clobazam tablets used to treat rare and intractable epilepsy in children.

NO.6 Chinese Coast Guard Patrols in Diaoyu Island Waters

On December 6, 2024, the Chinese Coast Guard ship 1303 fleet conducted a patrol within the territorial waters of Diaoyu Island. This is a routine rights protection patrol conducted by the Chinese Coast Guard in accordance with the law.

NO.7 Guangzhou Issues Management Measures for Allocation-Based Affordable Housing

On December 6, 2024, the Guangzhou Municipal People's Government Office issued the "Management Measures for Allocation-Based Affordable Housing (Trial)". The measures indicate that allocation-based affordable housing can be created by utilizing existing housing stock. Existing housing that meets conditions such as clear ownership, suitable location, and appropriate size can be converted into allocation-based affordable housing. The building area of newly constructed allocation-based affordable housing projects should generally not exceed 90 square meters per unit.

NO.8 Beijing Stock Exchange Releases Three Bond Business Guidelines

On December 6, 2024, the Beijing Stock Exchange (BSE) released three guidelines: "Beijing Stock Exchange Corporate Bond Issuance and Listing Review Business Guide No. 4 - Financing Business Consultation," "Beijing Stock Exchange Corporate Bond Issuance and Listing Review Business Guide No. 5 - Concise Information Disclosure," and "Beijing Stock Exchange Corporate Bond Continuing Period Business Guide No. 3 - Key Matters of Concern for Funds Raised (Trial)". These rules came into effect upon release.

NO.9 Ministry of Finance and Ministry of Emergency Management Allocate 5.272 Billion Yuan in Disaster Relief Funds

Recently, the Ministry of Finance and the Ministry