The Chinese national flag flies outside the Ministry of Foreign Affairs in Beijing on July 26, 2023.
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Zheng Shanjie, chairman of China’s National Development and Reform Commission, on Tuesday pledged a raft of actions to bolster the country’s economy during a highly-anticipated press conference.
But he stopped short of announcing any new major stimulus plans, underwhelming investors and weakening the rally in the mainland Chinese markets.
China will speed up special purpose bond issuance to local governments to support regional economic growth, the senior NDRC official said.
Zheng said ultra-long special sovereign bonds, totaling 1 trillion yuan, have been fully deployed to fund local projects, and he vowed that China will continue to issue ultra-long special treasury bonds next year.
The central government will release a 100 billion yuan investment plan for next year by the end of this month, ahead of schedule, a senior official added.
Zheng also promised that more measures are coming that aims to support the property market and boost domestic spending.
The NDRC head was speaking at a press briefing with four other key officials of the country’s economic planning agency. The briefing came as markets inmainland China returned from Golden Week, a weeklong holiday that started Sept. 30.
Chinese stocks reopened sharply higher on Tuesday morning, extending the rally before the holiday. Major indexes in mainland China — the Shanghai Composite Index, CSI 300 blue-chip index and SZSE Component Index — surged over 10% in early hour trade.
Shanghai Composite Index
Last month, China’s top leaders had signaled a sense of urgency in confronting a long and painful economic downturn that has thrown into doubt the country’s ability to hit an annual growth target of “around 5%.”
Before the holiday, Chinese authorities had called for strengthening fiscal and monetary policy support at a monthly meeting of top Communist Party officials, and unveiled a flurry of stimulus measures aimed to put an end to the sliding property prices.
The stimulus blitz came as growth in the world’s second largest economy had slowed after a disappointing recovery from Covid-19 lockdowns, weighed down by lackluster domestic demand and a protracted property downturn.
In the first half of the year, China’s economy grew by 5.0% from a year earlier, meeting the central government’s target, while in the April-June quarter, its GDP growth missed expectations and grew by 4.7%, marking its slowest growth since the first quarter in 2023.
China’s latest consumer price index rose by 0.6% year on year in August, missing expectations of 0.7%, while the core-CPI, which strips out food and energy prices, climbed by 0.3%, a slower rise for a second-straight month.
Among a barrage of disappointing economic data, China’s factory activity also contracted for the fifth consecutive month in September, with the official PMI coming in at 49.8 in September. A PMI reading above 50 indicates expansion in activity, while a reading below that level points to contraction.
The Caixin PMI was 49.3 in the same period, the sharpest contraction in 14 months, driven by declining demand and a weakening labor market.
In March, Zheng said at a high-level press conference that China will “continue to strengthen macroeconomic policies.” It would involve coordination of fiscal, monetary, employment, industrial and regional policies, he said, as China continues to step up macro economic policy adjustment.
The NDRC chief also acknowledged that “there are still many difficulties and problems” in the process of achieving the country’s expected growth targets, according to CNBC’s translation of his Mandarin-language remarks.
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Chinese e-commerce company Alibaba has invested heavily in its fast-growing international business as growth slows for its China-focused Taobao and Tmall business.
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BEIJING — Chinese e-commerce giant Alibaba‘s international arm on Wednesday launched an updated version of its artificial intelligence-powered translation tool that, it says, is better than products offered by Google, DeepL and ChatGPT.
Alibaba’s fast-growing international unit released the AI translation product as an update to one unveiled about a year ago, which it says already has 500,000 merchant users. Sellers based in one country can use the translation tool to create product pages in the language of the target market.
The new version is based only on large language models, allowing it to draw on contextual clues such as culture or industry-specific terms, Kaifu Zhang, vice president of Alibaba International Digital Commerce Group and head of the business’ artificial intelligence initiative, told CNBC in an interview Tuesday.
“The idea is that we want this AI tool to help the bottom line of the merchants, because if the merchants are doing well, the platform will be doing well,” he said.
Large language models power artificial intelligence applications such as OpenAI’s ChatGPT, which can also translate text. The models, trained on massive amounts of data, can generate humanlike responses to user prompts.
Alibaba’s translation tool is based on its own model called Qwen. The product supports 15 languages: Arabic, Chinese, Dutch, English, French, German, Italian, Japanese, Korean, Polish, Portuguese, Russian, Spanish, Turkish and Ukrainian.
Zhang said he expects “substantial demand” for the tool from Europe and the Americas. He also expects emerging markets to be a significant area of use.
When users of Alibaba.com — a site for suppliers to sell to businesses — are categorized by country, developing countries account for about half of the top 20 active AI tool users, Zhang said.
Chinese companies have increasingly looked abroad for growth opportunities, especially e-commerce merchants. PDD Holdings‘ Temu, fast fashion seller Shein and ByteDance’s TikTok are among the recent global market entrants. Many China-based merchants also sell on Amazon.com.
Zhang declined to share how much the updated version would cost. He said it was included in some service bundles for merchants wanting simple exposure to overseas users.
His thinking is that contextual translation makes it much more likely that consumers decide to buy. He shared an example in which a colloquial Chinese description for a slipper would have turned off English-speaking consumers if it was only translated literally, without getting at the implied meaning.
“The updated translation engine is going to make Double 11 a better experience for consumers because of more authentic expression,” Zhang said, in reference to the Alibaba-led shopping festival that centers on Nov. 11 each year.
Alibaba’s international business includes platforms such as AliExpress and Lazada, which primarily targets Southeast Asia. The international unit reported sales growth of 32% to $4.03 billion in the quarter ended June from a year ago.
That’s in contrast to a 1% year-on-year drop in sales to $15.6 billion for Alibaba’s main Taobao and Tmall e-commerce business, which has focused on China.
Nomura analysts expect that Alibaba’s international revenue slowed slightly to 29% year-on-year growth in the quarter ended September, while operating losses narrowed, according to an Oct. 10 report. Alibaba has yet to announce when it will release quarterly earnings.
Check out the companies making headlines in midday trading: UnitedHealth — Shares plunged 7.2% after the health-care giant lowered its earnings guidance due to ongoing headwinds from a cyberattack earlier in the year. UnitedHealth cut the top end of its full-year earnings forecast, which is now $27.50 to $27.75 per share, compared to previous guidance of $27.50 to $28.00 per share. UnitedHealth still reported a top- and bottom-line beat in the third quarter. Walgreens Boots Alliance — The stock soared 11.9% following the drugstore chain’s fiscal fourth-quarter earnings and revenue beat. Walgreens also plans to close about 1,200 stores over the next three years, which will be “immediately accretive” to its adjusted earnings and cash flow, the company said. ASML — Shares dropped more than 16% after the Dutch semiconductor equipment maker released its earnings report early and offered a weaker-than-expected sales outlook for 2025. The company’s CEO also warned of a “more gradual” recovery ahead. Other chip stocks fell as well, with Nvidia , Advanced Micro Devices and Broadcom last down at least 4% each. Wolfspeed — Shares popped 23% on news that the North Carolina-based chipmaker will obtain up to $750 million in U.S. government grants for its new factories in North Carolina and New York. A group of investors including Apollo and Baupost will provide an additional $750 million in funding for its more than $6 billion plan. Bank of America — The lender saw shares gain 2% after it exceeded analysts’ estimates for third-quarter profit and revenue on better-than-expected trading results. Net interest income, one of the key ways that banks make money, fell 2.9% to $14.1 billion, edging out the $14.06 billion StreetAccount estimate. Enphase Energy — Shares slid 6.8% on the back of a downgrade to sector perform from outperform by RBC Capital Markets. The firm said Enphase should grow at a slower rate than the consensus forecast pencils in. Johnson & Johnson — The health-care conglomerate gained 1.6% after posting quarterly results that exceeded expectations on the back of strong sales of oncology drugs. Johnson & Johnson reported adjusted earnings per share of $2.42 and $22.47 billion in revenue. Meanwhile, analysts surveyed by LSEG had forecast $2.21 in earnings per share on $22.16 billion in revenue. The firm also raised guidance for its 2024 profit and sales. Energy stocks — Energy stocks declined as oil prices dropped about 5% , with the sector last down more than 2%. APA was the biggest laggard, tumbling 6%. Diamondback Energy tanked 4.3%, while Occidental Petroleum , Valero Energy and Halliburton lost more than 3% each. Coty — The CoverGirl parent plunged 11% after trimming its fiscal first-quarter guidance and warning of slower growth trends in the U.S. Citigroup — Shares lost about 4% despite stronger-than-expected third-quarter earnings . The bank posted earnings per share of $1.51 on $20.32 billion in revenue. Analysts polled by LSEG had anticipated earnings of $1.31 per share on revenue of $19.48 billion. Charles Schwab — Shares of the brokerage company rallied more than 8% as third-quarter results topped analysts’ expectations. The company posted earnings of 77 cents, excluding one-time items, on $4.85 billion in revenue. PNC Financial — The Pittsburgh-based regional bank rose more than 3% on a better-than-expected earnings report. Earnings came in at $3.49, topping an LSEG estimate of $3.30 per share. The company reported $5.43 billion in revenue, topping a forecast of $5.39 billion. Boeing — Shares added about 2.1% after the aircraft manufacturer said it could raise up to $25 billion in debt and shares to increase liquidity. — CNBC’s Yun Li, Alex Harring, Hakyung Kim, Michelle Fox, Pia Singh, Sarah Min contributed reporting.
Check out the companies making headlines before the bell. Bank of America — Shares moved 1% higher after third-quarter earnings and revenue topped Wall Street analysts’ estimates. Earnings came in at 81 cents, beating the 77 cents expected from analysts polled by LSEG. Revenue was $25.5 billion, versus the $25.3 billion consensus estimate. Johnson & Johnson – The healthcare conglomerate saw shares rising slightly premarket after quarterly results exceeded expectations on the back of strong sales of oncology drugs. J & J also raised forward financial guidance for full-year 2024 profit and sales. Goldman Sachs — Shares of the investment bank jumped more than 2% on better-than-expected quarterly earnings. Goldman Sachs posted earnings per share of $8.40 on $12.70 billion in revenue. Analysts surveyed by LSEG had forecast $6.89 earnings per share on $11.80 billion in revenue. Goldman’s trading and investment banking segments boosted results. UnitedHealth Group — The healthcare stock declined 3.2% despite posting a top and bottom-line beat in the third quarter. The company lowered its earnings guidance due to ongoing headwinds from a cyberattack earlier in the year. UnitedHealth cut the top end of its full-year earnings forecast, now $27.50 to $27.75 per share versus $27.50 to $28 previously. Walgreens Boots Alliance — The retail drugstore chain jumped 5% after fiscal fourth-quarter sales and profit exceeded analysts’ expectations. Walgreens also said it plans to close roughly 1,200 stores over the next three years, which it said should increase adjusted earnings and free cash flow and help cut costs. Citigroup — Shares of the Jane Fraser-led bank added 1.7% after third-quarter earnings and revenue were better than consensus estimates. Citigroup posted earnings per share of $1.51 on $20.32 billion in revenue, while analysts surveyed by LSEG had expected earnings per share of $1.31 on revenue of $19.48 billion. PNC Financial — The Pittsburgh-based regional bank added 0.8% premarket. PNC reported earnings per share of $3.49, topping estimates of $3.30 per share, according to analysts polled by LSEG. Revenue of $5.43 billion also beat forecasts of $5.39 billion. Etsy — Shares tumbled more than 5% after Goldman Sachs downgraded the online marketplace to sell from neutral. The investment bank highlighted the risk of compressed profit margins and continued market share losses. Coty – Shares fell 4% after the beauty company warned of a slower U.S. market in preliminary fiscal first-quarter results. Coty now expects comparable revenue to rise between 4% and 5%, down from prior guidance of 6% growth. Charles Schwab — The brokerage company surged more than 7% after third quarter results beat analysts’ estimates. Charles Schwab reported 77 cents in earnings per share excluding one-time items, on $4.85 billion in revenue. Analysts had estimated 75 cents earnings per share and revenue of $4.78 billion, per LSEG. Revenue grew 5% from the prior quarter on sustained investor engagement. The company’s wealth advisory division reported record year-to-date inflows. Enphase Energy — Shares fell 1.8% after RBC Capital Markets downgraded the maker of solar micro-inverters and EV charging stations to sector perform from outperform, expecting a “slower pace of growth next year not reflected in current consensus estimates.” Enphase, which also makes battery storage units, is down more than 20% this year. — CNBC’s Yun Li, Michelle Fox, Samantha Subin, Sarah Min and Pia Singh contributed reporting