Finance
China state planner lays out further actions to boost economy but no new plans for major stimulus
The Chinese national flag flies outside the Ministry of Foreign Affairs in Beijing on July 26, 2023.
Greg Baker | Afp | Getty Images
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 in mainland 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.
Nurphoto | Nurphoto | Getty Images
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.
That’s based on an assessment of Alibaba International’s new model, Marco MT, by translation benchmark framework Flores, the Chinese company said.
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.
Contextual clues
Since Alibaba launched the first version of its AI translation tool last fall, the company said merchants have used it for more than 100 million product listings. Similar to other AI-based services, the basic pricing charges merchants by the amount of translated text.
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.
The Taobao app is also popular with consumers in Singapore. In September, the app launched an AI-powered English version for users in the country.
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.
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