The share of the yuan in Russia's trade settlements in January further expanded, signaling steady progress for promoting the internationalization of the yuan.

Experts highlighted China's steady economic development and firm support as major advantages contributing to the yuan's global expansion, while outlining lingering challenges going forward.

The yuan accounted for 40.8 percent of Russia's export settlements and 38.5 percent of its import settlements in the first month of 2024. The settlement amounts reached $13.2 billion for exports and $9.1 billion for imports in US dollar terms, data from Russia's central bank showed on Monday.

In December 2023, the yuan accounted 35.8 percent of Russia's export settlement and 37 percent of its import settlement, Sputnik reported.

China's large and continuously growing economy has provided a solid foundation for the yuan's internationalization, and the country's ramped-up policy support for building the financial infrastructure and optimizing the mechanism for cross-border yuan settlements has created a favorable environment for promoting the internationalization of the yuan, Wang Peng, an associate research fellow at the Beijing Academy of Social Sciences, told the Global Times on Tuesday.

Wang noted that the yuan's stability has been further recognized by the international market as its exchange rate remained steady overall despite some fluctuations in recent years. This remains a significant consideration for global investors.

Cross-border yuan settlements have risen since 2009, accounting for nearly half of China's export payments and settlements. The yuan also ranks third in terms of the weight in the IMF's Special Drawing Rights basket, Lian Ping, chief economist and head of the Zhixin Investment Research Institute, told the Global Times on Tuesday.

The yuan is the world's fourth-largest payment currency, third-largest trade finance currency and fifth-largest foreign exchange trading currency, Pan Gongsheng, governor of the People's Bank of China (PBC), the central bank, told a press conference on March 6, adding that boosting the internationalization of the yuan remains the top priority for promoting high-quality financial opening-up.

Pan said that economic entities have increased internal demand for the use of the yuan, and the yuan has formed an initial network effect for international use with its continuously enhanced international monetary functions such as payments and settlements, investment and financing, and international reserves.

In December 2023, the PBC and the National Bank of Serbia signed a memorandum of understanding to establish yuan-clearing arrangements in Serbia, which will help enterprises and financial institutions of the two countries use the yuan for cross-border transactions and further promote bilateral trade and investment facilitation.

Amid the steady progress achieved for the internationalization of the yuan, experts vowed to tackle lingering challenges, which will contribute to deepen China's financial opening-up.

Both Wang and Lian stressed the importance of continuously expanding the yuan's global usage and market share, as it still has a large gap with major global currencies such as the US dollar and the euro.

Wang noted that China's financial market has further space for opening-up to meet global investors' demand, while more optimized regulations should be formulated to protect investors' rights.

Lian noted that measures such as prudently promoting capital account convertibility for the yuan and its internationalization, while maintaining the basic stability of the yuan's exchange rate and an overall surplus in the balance of payments, will be significant for bolstering the financial sector's high-quality opening-up.

China set to formulate law to promote private economy

The US Senate's homeland security committee approved a bill on Wednesday (US time) to prohibit contracts with Chinese biotech providers including BGI Group, MGI and Complete Genomics, in the latest move by Washington to expand its suppression of Chinese companies in this new field of medicine under the guise of national security.

While the bill has a long way to go before becoming law, it reportedly aims to ban US federal agencies and the US government from contracting with these Chinese firms.

"BGI, WuXi AppTec and other highly subsidized companies seek to undercut their way into dominating the US biotech market while aggressively collecting the genetic and other sensitive medical data of tens of millions of Americans and transferring it back to China for malign or unknown purposes," US Senator Bill Hagerty alleged, according to a post on Hagerty's official website on Wednesday.

In a response, BGI Group said it fully supports the bill's premise of protecting Americans' personal data, but driving BGI out of the US, which is what this bill is intended to achieve, is unlikely to accomplish its goal since BGI does not have access to that data.

"The bill will limit competition and strengthen the market monopoly in the important field of human genome sequencing by using the legislative process to pick winners and losers," BGI told the Global Times on Thursday.

In a statement released on Thursday, WuXi AppTec said that it strongly disagrees with the US Senate's "preemptive and unfair" move of designating it as a "biotechnology company of concern" in its draft bill.

"WuXi AppTec has not posed, does not pose, and will not pose a security risk to the US or any other country," the company said.

Wuxi Biologics (Cayman) Inc clarified on Thursday that it is not a subsidiary of Wuxi AppTec Co. The company said it does not have a human genomics business, nor does it collect human genomic data in any of its businesses, while also stressing that it does not pose any national security risk to the US or any other country.

Chinese observers blasted US politicians, who they said were portraying China as an "imagined enemy" and expanding a crackdown on Chinese bio-tech and new-energy vehicle (NEV) companies.They said that American politicians are purposely setting obstacles to impede normal China-US economic and trade ties.

"This is another typical case in which US politicians purposely make China an 'imagined enemy' to step up suppression of Chinese companies for their own political gains, as the US presidential election draws near," Li Yong, a senior research fellow at the China Association of International Trade, told the Global Times on Thursday.

What US politicians are concerned about is that they cannot live in a world led by Chinese companies, and they have come up with every excuse to hinder China's development in a wide range of sectors including telecommunications, NEVs and now bio-technology, Li said.

"While China and the US are expanding their dialogues, what the US is doing has posed impediments to normal China-US trade," he said. He urged the US to correct its wrongdoing.

Recent media reports said that US President Joe Biden will sign an executive order to prevent foreign entities from accessing troves of Americans' personal data.

"The US overstretches the concept of national security, falsely accuses China of purchasing Americans' personal and sensitive data for malicious activities, and prevents the transfer of data to so-called 'countries of concern' including China," Chinese Foreign Ministry spokesperson Mao Ning said at a recent press conference on February 29, 2024.

"The Chinese government takes data privacy and security very seriously. We have never asked and will never ask any company or individual to collect or provide data, information or intelligence located abroad against local laws for the Chinese government," Mao noted.

China still has room to further cut RRR: central bank governor

China's leading digital economy with its large-scale data resources, diverse data types and rich application scenarios have provided advantages for the country's artificial intelligence (AI) sector, Qi Xiangdong, chairman of Qi An Xin Technology Group, who is also a member of the National Committee of the Chinese People's Political Consultative Conference (CPPCC), told the Global Times on Friday.

Qi said that AI depends on data, and China's rapidly developing digital economy provides a large source of data. He added that the total scale of China's digital economy reached 50.2 trillion yuan ($6.97 trillion) in 2022, and the breadth and depth of digital integration in the real economy has expanded.

Qi An Xin launched China's first industrial-grade large-model security AI product - Q-GPT a cybersecurity robot - which has numerous practical applications, Qi said.

Qi noted that he looks forward to the country accelerating the integration of cybersecurity and AI technology, promoting the application of innovative products in the field of "AI + security," and continuously improving China's ability to cope with cybersecurity risks and uncertainties.

China has seen no “exodus” of foreign enterprises. Against the backdrop of the global decline in cross-border investment, foreign investors’ enthusiasm for investing in China has not waned, and they remain largely optimistic about the country’s future growth prospects, Chinese Ambassador to Japan Wu Jianghao said in a recent interview with Japanese media.

China, a market-oriented economy, experiences the normal phenomenon of foreign companies entering and exiting the market, Wu said. Adding that while some foreign companies choose to withdraw from the market, there has not been a large-scale “fleeing” of foreign-invested companies, Wu said, according to a statement the Chinese embassy published on its website on Friday.

In recent years, a variety of factors including the COVID-19 pandemic, the churning geopolitical tensions as well as rising trade protectionism have contributed to a general decline in global cross-border investment, Wu said.

Citing statistics from the United Nations Conference on Trade and Development, Wu said that global cross-border direct investment plunged by 18 percent in 2023. The main destinations for foreign direct investment (FDI) also experienced significant declines, with India’s FDI decreasing by 47 percent and the Association of Southeast Asian Nations (ASEAN) by 16 percent. 

In contrast, China saw the launch of 53,766 new foreign-invested enterprises in 2023, up 39.7 percent year-on-year. The actual use of foreign capital amounted to 1.13 trillion yuan ($158 billion), the third highest year in history after 2021 and 2022. Additionally, China’s investment structure has kept on improving, with the proportion of foreign investment in high-tech industrial sectors reaching 37.4 percent, the ambassador said.

Given China’s ongoing economic transformation and upgrade, the rapid rise of domestic enterprises, and the increasingly competitive market environment, the exit of some foreign enterprises due to their lack of competitiveness is a result of market mechanisms, he said. 

It is also understandable if foreign enterprises adjust their business presence in China based on market rules. In fact, Chinese enterprises are also transferring some of their production capacity overseas. “If foreign enterprises have any feedback on China’s business environment, we are willing to listen carefully and actively address their reasonable concerns,” Wu said.

In 2023, Japanese investors established 888 new enterprises in China, a year-on-year increase of 7.3 percent, making it the third largest source of foreign investment in China, according to Wu.

A survey by the Japan External Trade Organization showed that 90 percent of Japanese companies hope to expand their business in China or maintain their current status. And a survey conducted by the Japan Chamber of Commerce and Industry in China among its 1,700 member companies indicated that 88 percent of Japanese companies still consider China an important market. 

The rate of return on investment for foreign investors in China has been around 9 percent in the past five years, while Japanese companies achieved a return of 18 percent in 2022. For Japanese companies, the return on investment in the Chinese market remains higher than other markets, Wu said.

Since the normalization of diplomatic ties of the two countries half a century ago, the economic and trade cooperation between China and Japan has made great leaps in both quantity and quality. Bilateral trade has exceeded $300 billion for several consecutive years, and Japanese enterprises have accumulated investments in China exceeding $130 billion, demonstrating strong resilience and enormous potential, Wu said.

“Meanwhile, it should be noted that both the economic and trade volume and investment growth between China and Japan dropped in 2023, which requires high attention and efforts to address at an early date,” Wu said. He suggested that the two countries adhere to their partnership position, broaden their cooperation fields, and jointly build an open regional and global economy. The two should work together to maintain the stability and smooth operation of the global supply chains and promote continuous recovery and development of the world economy, he said.

Chinese tech giant Baidu Inc on Wednesday reported better-than-expected financial results for the 2023 fiscal year, with a rise in total revenue and non-GAAP (generally accepted accounting principles) net income.

For the 2023 fiscal year, Baidu generated total revenue of 134.6 billion yuan ($18.96 billion), an increase of 9 percent year-on-year, and non-GAAP net income totaled 28.7 billion yuan ($4.04 billion), up 39 percent year-on-year.

Both revenue and non-GAAP net income beat market expectations, according to the Securities Times.

For the final quarter of 2023, Baidu generated revenue of about 35 billion yuan, up 6 percent year-on-year. Non-GAAP net income during the period reached about 7.76 billion yuan, representing a year-on-year increase of 44 percent.

The company said ERNIE, Baidu's generative artificial intelligence (Gen-AI) product, has already started to contribute to Baidu's revenues. In 2024, incremental revenue will increase to billions of yuan, mainly from AI applications and a growing advertising business.

The remarks came after figures showed that AI has become a new growth driver for Baidu. Baidu AI Cloud's total revenue in the fourth quarter was 8.4 billion yuan, and AI large language models brought in approximately 660 million yuan in incremental revenue to the cloud business, Robin Li Yanhong, co-founder and CEO of Baidu, said during a conference call on Wednesday.

According to Li, the company has made great strides in advancing ERNIE and ERNIE Bot, reinventing its products and services, and achieving breakthroughs in monetization. "Meanwhile, our core business has maintained its resilience and realized a healthy growth momentum," he said.

"Looking ahead, our commitment to generative AI and foundation models remains unwavering, paving the way for the gradual creation of a new growth engine," said Li.

Baidu Core also reported another solid quarter, with revenue growing 7 percent year-on-year to 27.5 billion yuan, boosted by the AI cloud business. Online marketing revenue reached 19.2 billion, up 6 percent year-on-year.

After the financial results were released, Morgan Stanley called Baidu the "best AI player in China," saying the company's generative AI will become a mid-term growth driver. China Merchants Bank predicted that the operating margin of its cloud business could continue to expand in 2024.

The allegation of "forced labor" in Northwest China's Xinjiang Uygur Autonomous Region is a huge lie, the Chinese Foreign Ministry said on Tuesday, urging the US to immediately stop smearing China, stop intervening in China's internal affairs, and stop politicizing and weaponizing trade issues.

Chinese Foreign Ministry spokesperson Mao Ning made the remarks at a regular press briefing in Beijing, responding to media reports saying that the US Department of Homeland Security is intensifying scrutiny of supply chains of American solar companies as the Biden administration mulls to tighten a ban on products assembled in Xinjiang.

The Chinese side has repeatedly pointed out that the allegation of "forced labor" in Xinjiang is a huge lie. The US uses the so-called "forced labor" issue, which does not exist in Xinjiang, which often results in "forced unemployment" in Xinjiang, Mao said.

US' move has severely undermined the basic human rights of the people of all ethnic groups in Xinjiang, violated international trade rules and disrupted international industrial and supply chains, the spokesperson said.

Mao said the US must immediately stop smearing China, stop intervening in China's internal affairs under the pretext of human rights, and stop politicizing and weaponizing trade issues.

The consumption made during China's traditional Lantern Festival, which is seen as a conclusion to the two-week celebration of the Chinese Lunar New Year, extended the buying fever seen in the Spring Festival holidays, data from various Chinese platforms showed.

The holiday spending fever together with a stock market rally mark a strong start of the country's economic growth for the year. The robust data is expected to strengthen expectations, boost market confidence, and further support China's economic growth for the year, experts said.

Consumption fever

The Lantern Festival which falls on Saturday this year saw people from all over the country enthusiastically engaged in attending lantern fairs, enjoying night tours, having short-distance travel, continuing the strong consumption momentum that has been seen during the Chinese New Year holidays.

As of Friday, the booking volume of hotels nationwide during the Lantern Festival period has increased by 2.6 times compared to 2023, and the sales volume of tickets for national scenic spots also increased by 90 percent, according to domestic travel platform Qunar.com.

Data on Trip.com showed that over the weekend the booking for domestic travel increased by over 140 percent compared to last year, with bookings for nearby trips seeing growth of over 200 percent.

The search for yuanxiao, a festive sweet-favored glutinous rice ball to celebrate the Lantern Festival, has soared more than 425.6 percent from a year ago, according to online retail platform Meituan. Innovative items such as chocolate-filled yuanxiao and coffee-flavored yuanxiao are particularly trendy this year.

Apart from yuanxiao, the search for lantern fairs has grown by 720 percent compared to a year ago, according to Meituan.

The rising cultural and tourism consumption and demand for innovative products showed an increasing trend in China's consumption market, Cong Yi, a professor at the Tianjin University of Finance and Economics, told the Global Times on Sunday.

It is expected that this trend will lead to an increase in China's consumption volume and quality in 2024, Cong said.

The spending fever during the Lantern Festival extended the momentum of the Chinese New Year holidays which saw record travel data and holiday spending.

During the eight-day Chinese Lunar New Year holidays, 474 million domestic trips were made, up 34.3 percent year-on-year, and total domestic tourism spending jumped by 47.3 percent year-on-year to about 632.69 billion yuan ($87.95 billion), according to data released by the Ministry of Culture and Tourism.

The spokesperson for China's Ministry of Commerce (MOFCOM) He Yadong said at a regular press conference held on Thursday that China has seen a boom in consumption during the Spring Festival holidays, making a good start to 2024.

During this year's Spring Festival holidays, the sales of key retail and catering enterprises nationwide increased by 8.5 percent year-on-year on a comparable basis. It is expected that the consumption market will maintain a stable growth trend in the first quarter, He said.

The consumption boom during the Spring Festival period showcases the vitality unleashed by the Chinese economy and also serves as a rebuttal to some foreign media's negative portrayal of the Chinese economy, experts said.

The surge in consumer spending during Chinese New Year holidays and the Lantern Festival signifies a growing optimism among consumers about the future economy, leading to an increase in their willingness to spend, Wang Peng, an associate researcher at the Beijing Academy of Social Sciences, told the Global Times on Sunday.

China's stock market also witnessed a strong rally during the period, boosted by warming consumption and regulatory measures aimed at reviving the market.

The Shanghai Composite Index rose for eight consecutive days as of Friday closing, recovering all losses in the year 2024 and surpassing the 3000-point mark. Around 300 stocks saw gains of over 30 percent last week, the Securities Times reported.

"The sustained upward trend in the stock market will attract more capital inflows, which will support corporate financing and facilitate expansion of production capacities, further stimulating economic growth in the coming months,'' Wang said.

Bright outlook

The surge in consumption during the Spring Festival is expected to have a significant impact on China's GDP growth in the first quarter of 2024, setting the stage for a strong economic recovery throughout the year and beyond.

The consumption is expected to grow by 6 percent in the first quarter, leading the nation's GDP to grow at above 5 percent in the first quarter, Tian Yun, a veteran economist based in Beijing, told the Global Times.

In order to further spur economic growth, Chinese officials have convened meetings and rolled out various pro-growth measures days after the Spring Festival, with the focus on issues such as boosting market confidence and improving efficiency.

Right after the Chinese New Year holidays, China's central bank on Tuesday cut its five-year-plus loan prime rate by 25 basis points, the largest one-time rate reduction in years, adding fuel to the hot consumer spending during the holiday and injecting sustainable momentum into the consumer market.

Chinese Premier Li Qiang on Friday chaired a State Council executive meeting and called for greater efforts to attract and utilize foreign investment.

On the same day, the MOFCOM said that in January, foreign investors set up 4,588 new foreign-funded enterprises, a year-on-year increase of 74.4 percent against the backdrop of last year's sustained growth.

More measures to stabilize economic growth, including increasing infrastructure investment, creating jobs, improving the business environment, and promoting industrial innovation could be expected, Wang said.

While a national GDP growth target will not be released until the national two sessions scheduled to be held in early March, major provincial-level economic powerhouses, including Shanghai and South China's Guangdong, eye a growth rate of about 5 percent or higher.