China Unveils 1 Trillion Yuan Debt Plan
China has decided to issue an additional 1,000 billion yuan of special treasury bonds in the fourth quarter of this year. The issuance was aimed at supporting reconstruction, post-disaster recovery and improving disaster prevention and relief capabilities. It is planned to utilize 500 billion yuan this year and carry over 500 billion yuan to next year. All the additional 1 trillion yuan of treasury bonds issued this time will be arranged for local use through the mechanism of transfer payments. These funds raised will all be classified as central government’s fiscal deficit, which means that the repayment of principal and interest will be borne by the central government.
As soon as the news came out, local governments in many places took action to seize the policy window period. Experts interviewed by Caijing all said that there is still a large safety space for the central government to expand debt and fiscal policies.
U.S. Treasury Yields Hit New Highs
As Treasury yields touched multi-year highs, expectation of large asset management giants for the Federal Reserve’s monetary policy is that the Federal Reserve may stop raising interest rates. These asset management giants have also begun to make corresponding arrangements in advance. This will alleviate external pressure on China’s monetary policy and help keep the RMB exchange rate stable.
The bond market has never done so poorly in U.S. history, but it has also never presented such good entry opportunities. Market demand has also shown overall growth. Across the Atlantic, American families and individuals are pouring into the U.S. Treasury market. As of the end of October, U.S. households had purchased more than 70% of newly issued U.S. Treasury bonds this year, becoming the largest buyers. However, this is just the tip of the icebergt. Generally speaking, changes in the attitude of retail investors are unlikely to have an absolute impact on the market, because the main buyers of Treasury bonds come from other parties: hedge funds, pension funds, insurance companies and various types of overseas buyers.
J&T Express Goes Public in Hong Kong
J&T Express started its business in Indonesia and it is now the largest express delivery company in Southeast Asia. The company entered China in 2020. At that time, competition in China’s express delivery market was already very fierce, with the five largest companies accounting for more than 70% of the market share. But J&T Express ranked fifth in the industry in just three years. In the first half of 2023, J&T Express’s market share reached 11.7%.
But the capital market does not seem to be very optimistic about it. On October 27, J&T was listed on the Hong Kong Stock Exchange, with a market value of more than HK$100 billion.
Mastery of abundant resources and accurate timing have helped J&T occupy the first place in the Southeast Asian market. This company has entered the top five in China’s market as a latecomer. Whether J&T can ensure sufficient scale, control costs, and improve efficiency is the key to its future development.
Junshi Biosciences Announces FDA Approval of Its New Drug
On October 30, 2023, Junshi Biosciences announced that its latest PD-1 drug Toripalimab was approved for marketing in the United States for Nasopharyngeal Carcinoma treatment. This is China’s first PD-1 drug approved for marketing by the FDA. Previously, attempts to market PD-1 developed by Chinese pharmaceutical companies in the United States were unsuccessful.
Nasopharyngeal Carcinoma is relatively rare in the United States, with more than 2,000 new patients diagnosed every year. Previously, it was mainly treated with radiotherapy and chemotherapy, and no drugs have been approved.
According to industry insiders, this is an important reason why the PD-1 drug Toripalimab was approved. According to its U.S. partner Coherus Biosciences, the peak sales of this drug in the United States will be US$200 million. Compared with the limited sales in the United States, what Junshi is more concerned about may be the FDA approval itself.