04/05/2020
BEIJING (Reuters) – Tang Yue, a 27-year-old teacher from the city of Guilin in southwest China, steam-presses a blue dress and takes dozens of photographs before picking one to clinch her 200th online sale.
For a growing number of Chinese like Tang, hit by job losses, furloughs and salary cuts, the consumer economy has begun to spin in reverse. They are no longer buying – they are selling.
Instead of emerging from the coronavirus epidemic and returning to the shopping habits that helped drive the world’s second-largest economy, many young people are offloading possessions and embracing a new-found ethic for hard times: less is more.
With Tang’s monthly salary of about 7,000 yuan ($988), the self-described shopaholic said she has bought everything from Chanel lipsticks to Apple’s (AAPL.O) latest iPad in the past three years.
But the adrenaline rush that comes with binge-shopping is gone, said Tang, whose wages have been slashed with the suspension of all the classes on tourism management she usually teaches.
“The coronavirus outbreak was a wake-up call,” she said. “When I saw the collapse of so many industries, I realised I had no financial buffer should something unfortunate happen to me.”
There is no guarantee that the nascent minimalist trend will continue once the coronavirus crisis is fully over, but if it does, it could seriously damage China’s consumer sector and hurt thousands of businesses from big retailers to street-corner restaurants, gyms and beauty salons.
To be sure, there are signs that pent-up demand will drive a rush of spending as authorities reopen malls, leisure venues and tourist spots. In South Korea, the first major economy outside of China to be hit by the virus, people thronged malls this weekend to go “revenge shopping” to make up for time lost in lockdown.,
There are some signs that a similar trend will take hold in China, where some upscale malls are starting to get busy, although luxury firm Kering SA (PRTP.PA) – which owns Gucci, Balenciaga and other fashion brands – has said it is hard to predict how or when sales in China might come back.
A recent McKinsey & Co survey showed that between 20% and 30% of respondents in China said they would continue to be cautious, either consuming slightly less or, in a few cases, a lot less.
“The lockdown provided consumers with a lot of time and reasons to reflect and consider what is important to them,” said Mark Tanner, managing director at Shanghai-based research and marketing consultancy China Skinny.
“With much more of their days spent in their homes, consumers also have more time and reasons to sort through things they don’t feel they need – so they’re not living around clutter that is common in many apartments.”
#DITCHYOURSTUFF
Tang made a spreadsheet to keep track of her nearly 200 cosmetic products and hundreds of pieces of clothing. She then marked a few essentials in red that she wanted to keep. In the past two months, she has sold items worth nearly 5,000 yuan on second-hand marketplaces online.
Bargain-hunting online has become a new habit for some Chinese as the stigma that once hung over second-hand goods has begun to fade.
Idle Fish, China’s biggest online site for used goods, hit a record daily transaction volume in March, its parent company Alibaba (BABA.N) told Reuters.
Government researchers predict that transactions for used goods in China may top 1 trillion yuan ($141 billion) this year.
Posts with the hashtag #ditchyourstuff have trended on Chinese social media in recent weeks, garnering more than 140 million views.
Jiang Zhuoyue, 31, who works as an accountant at a traditional Chinese medicine company in Beijing – one of the few industries that may benefit from the health crisis – has also decided to turn to a simpler life.
“I used to shop too much and could be easily lured by discounts,” said Jiang. “One time Sephora offered 20% off for all goods, I then bought a lot of cosmetics because I feel I’m losing money if I don’t.”
Jiang, the mother of a 9-month-old baby, said she recently sold nearly 50 pieces of used clothing as the lockdown gave her the opportunity to clear things out. “It also offered me a chance to rethink what’s essential to me, and the importance of doing financial planning,” she said.
Eleven Li, a 23-year-old flight attendant, said she used to spend her money on all manner of celebrity-endorsed facial masks, snacks, concert tickets and social media activity, but now has no way to fund her spending.
“I just found a new job late last year, then COVID-19 came along, and I haven’t been able to fly once since I joined, and I’ve gotten no salary at all,” said Li, who said she was trying to sell her Kindle.
Some are even selling their pets, as they consider leaving big cities like Beijing and Shanghai where the high cost of living is finally catching up with them.
NO RETURN TO OLD WAYS?
As the coronavirus comes under control in China, the government is gradually releasing cities from lockdown, easing transport restrictions and encouraging consumers to venture back into malls and restaurants by giving out billions-worth of cash vouchers, worth between 10 yuan and 100 yuan.
But many people say they are still worried about job security and potential wage cuts because of the struggling economy. Nationwide retail sales have plunged every month so far this year.
Xu Chi, a Shanghai-based senior strategic analyst with Zhongtai Securities, said some Chinese consumers may prove the ‘21 Day Habit Theory,’ a popular scientific proposition that it only takes that long to establish new habits.
“We believe people’s spending patterns follow the well-known theory, which means most people in China, having been cooped-up at home for more than a month and not having binge-shopped, may break the habit and not return to their old ways,” Xu said.
Jiang said she was determined not to return to her free-spending ways and planned to cook more at home.
“I’ll turn to cheaper goods for some luxury brands,” she said. “I’ll choose Huawei’s smartphone, because (Apple’s) iPhone has too much brand premium.”
Tang, who has recently used 100 yuan of shopping coupons to stock up on food, is going to hold the purse strings even tighter.
“I’ve set my monthly budget at 1,000 yuan,” she said. “Including one – and just one – bottle of bubble tea.”
Source: Reuters
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28/04/2020
BEIJING (Reuters) – China’s factory activity likely rose for a second straight month in April as more businesses re-opened from strict lockdowns implemented to contain the coronavirus outbreak, which has now paralysed the global economy.
The official manufacturing Purchasing Manager’s Index (PMI), due for release on Thursday, is forecast to fall to 51 in April, from 52 in March, according to the median forecast of 32 economists polled by Reuters. A reading above the 50-point mark indicates an expansion in activity.
While the forecast PMI would show a slight moderation in China’s factory activity growth, it would be a stark contrast to recent PMIs in other economies, which plummeted to previously unimaginable lows.
That global slump, caused by heavy government-ordered lockdowns, as well as the cautious resumption of business in China, suggests any recovery in the world’s second-largest economy is likely to be some way off.
“The recovery so far has been led by a bounce-back in production, however, the growth bottleneck has decisively shifted to the demand side, as global growth has weakened and consumption recovery has lagged amid continued social distancing,” Morgan Stanley said in a note.
“The expected slump in external demand has likely capped further recovery in industrial production.”
The latest official data showed 84% of mid-sized and small business had reopened as of April 15, compared with 71.7% on March 24.
Hobbled by the coronavirus, China’s economy shrank 6.8% in the first quarter from a year earlier, the first contraction since current quarterly records began.
That has left Chinese manufacturers with reduced export orders and a logistics logjam, as many exporters grapple with rising inventory, high costs and falling profits. Some have let workers go as part of the cost-cutting efforts.
A China-based brokerage Zhongtai Securities estimated that the country’s real unemployment rate, measured using international standards, could exceed 20%, equal to more than 70 million job losses and much higher than March’s official reading of 5.9%.
Sheng Laiyun, deputy head at the statistics bureau, said on Sunday migrant workers and college graduates are facing increasing pressures to secure jobs, while official jobless surveys show nearly 20% of employed workers not working in March.
Chinese authorities have rolled out more support to revive the economy. The People’s Bank of China earlier in April cut the amount of cash banks must hold as reserves and reduced the interest rate on lenders’ excess reserves.
Source: Reuters
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20/04/2020
KATHMANDU, April 19 (Xinhua) — A German scholar has recently found that the right to education for Uygurs and people of other ethnic groups is well protected in China’s Xinjiang region, as young people there enjoy increasingly better opportunities.
Michael Heinrich, who has been teaching German in Minzu University of China for more than five years, said in an article published on Online Khabar news website in March that he has “paid close attention to the development of Chinese education in recent years, especially the education situation in ethnic minority areas.”
Heinrich said he has taught a Xinjiang Uygur student, who often talks with him about the education situation in her hometown and appreciates government policies on education.
The Uygur student has told Heinrich that she lives in a place where she receives Islamic religious education and China’s nine-year compulsory education, and the Uygur students in Xinjiang can enjoy preferential policies, such as extra points in college entrance examination, special policies for college admissions, and employment policy support.
In recent years, the Chinese government has intensified policy support on education in Xinjiang Uygur Autonomous Region, and increased investment in educational resources, especially those on vocational education, the article read.
“Through vocational education, more Uyghur Muslim students can enhance their survival skills and work harder by themselves and improve their living standards with these hands,” it said.
For some time, Xinjiang has been plagued by terrorism, religious extremism and separatism, according to the passage, and carrying out vocational education and training in Xinjiang is an effective measure to promote the rule of law and a practical action to protect the vital interests of people of all ethnic groups there.
It is also a just move in fighting extremism and terrorism to contribute to the stability in Xinjiang, it added.
Some Western media outlets as well as some U.S. politicians often slander the Chinese government under the guise of “human rights,” which does not only disregard the facts but also interferes with China’s sovereignty, Heinrich pointed out.
The situation in Xinjiang that they saw was completely different from the stories told by some Western politicians and media, Heinrich quoted some people who have visited Xinjiang and witnessed its development as saying.
The rights to life and development of people of all ethnic groups in Xinjiang are protected to the largest extent, Heinrich added.
Source: Xinhua
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20/04/2020
BEIJING/SHANGHAI (Reuters) – China expects to import more soybeans and pork this year following the novel coronavirus outbreak and African swine fever, which has decimated its pig herds.
Soybean imports are forecast at 92.48 million tonnes this year, rising to 96.62 million tonnes in 2025 and 99.52 million tonnes in 2029, an official from the agriculture ministry told a video conference on the outlook for agriculture released on Monday.
Pork imports this year are seen rising to 2.8 million tonnes, a 32.7% increase from the previous year.
China is a key buyer and consumer of soybeans and pork globally, and typically imports millions of tonnes of soybeans per year to crush for meal to feed its livestock.
The African swine fever outbreak, however, had slashed China’s pig herd by over 40% last year, reducing supplies in the world’s biggest pork consumer.
Combined with the coronavirus outbreak, which hit the transport of pigs and delayed the restart of slaughtering plants, prices of China’s favourite meat rose to record levels in February.
China has been increasing pork imports in recent months to make up for the drop in domestic supply.
Despite the expected surge in imports, China’s 2020 pork consumption is forecast to fall to 42.06 million tonnes, down 5.6% year-on-year, hit by high prices and a fall in consumer demand due to the coronavirus outbreak, according to the agriculture ministry.
In line with the slowing consumption, China’s slaughtered pig herd this year will fall 7.8% year-on-year to 501.49 million heads. Pork output this year will also decline to 39.34 million tonnes from 2019, but will rebound to around 54 million tonnes in 2022.
In the longer term, however, pork imports are expected to gradually fall, the ministry forecast, while beef and mutton imports are set to increase in the next decade.
Meanwhile, China’s domestic soybean output is seen at 18.81 million tonnes in 2020, a 3.9% gain from the previous year, while crushing volumes were pegged at 85.98 million tonnes.
Soybean consumption will increase steadily and continue to rely mainly on imports in the next 10 years, said a ministry official.
The ministry also said China’s corn acreage and output are both set to increase in 2020, with production forecast to reach over 260 million tonnes this year, while annual rice output is expected to hold steady above 200 million tonnes per year in the next 10 years.
Source: Reuters
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19/04/2020
- Faced with a backlash from the West over its handling of the early stages of the pandemic, Beijing has been quietly gaining ground in Asia
- Teams of experts and donations of medical supplies have been largely welcomed by China’s neighbours
Despite facing some criticism from the West, China’s Asian neighbours have welcomed its medical expertise and vital supplies. Photo: Xinhua
While China’s campaign to mend its international image in the wake of its handling of the
coronavirus health crisis has been met with scepticism and even a backlash from the US and its Western allies, Beijing has been quietly gaining ground in Asia.
Teams of experts have been sent to Cambodia, the Philippines, Myanmar, Pakistan and soon to Malaysia, to share their knowledge from the pandemic’s ground zero in central China.
Beijing has also donated or facilitated shipments of medical masks and ventilators to countries in need. And despite some of the equipment failing to meet Western quality standards, or being downright defective, the supplies have been largely welcomed in Asian countries.
China has also held a series of online “special meetings” with its Asian neighbours, most recently on Tuesday when Premier Li Keqiang discussed his country’s experiences in combating the disease and rebooting a stalled economy with the leaders of the Association of Southeast Asian Nations (Asean), Japan and South Korea.
Chinese Prime Minister Li Keqiang speaks to Asean Plus Three leaders during a virtual summit on Tuesday. Photo: AP
Many Western politicians have publicly questioned Beijing’s role and its subsequent handling of the crisis but Asian leaders – including Philippine President Rodrigo Duterte and Japanese Prime Minister Shinzo Abe – have been reluctant to blame the Chinese government, while also facing criticism at home for not closing their borders with China soon enough to prevent the spread of the virus.
An official from one Asian country said attention had shifted from the early stages of the outbreak – when disgruntled voices among the public were at their loudest – as people watched the virus continue its deadly spread through their homes and across the world.
“Now everybody just wants to get past the quarantine,” he said. “China has been very helpful to us. It’s also closer to us so it’s easier to get shipments from them. The [medical] supplies keep coming, which is what we need right now.”
The official said also that while the teams of experts sent by Beijing were mainly there to observe and offer advice, the gesture was still appreciated.
Another Asian official said the tardy response by Western governments in handling the outbreak had given China an advantage, despite its initial lack of transparency over the outbreak.
“The West is not doing a better job on this,” he said, adding that his government had taken cues from Beijing on the use of propaganda in shaping public opinion and boosting patriotic sentiment in a time of crisis.
“Because it happened in China first, it has given us time to observe what works in China and adopt [these measures] for our country,” the official said.
Experts in the region said that Beijing’s intensifying campaign of “mask diplomacy” to reverse the damage to its reputation had met with less resistance in Asia.
Why China’s ‘mask diplomacy’ is raising concern in the West
“Over the past two months or so, China, after getting the Covid-19 outbreak under control, has been using a very concerted effort to reshape the narrative, to pre-empt the narrative that China is liable for this global pandemic, that China has to compensate other countries,” said Richard Heydarian, a Manila-based academic and former policy adviser to the Philippine government.
“It doesn’t help that the US is in lockdown with its domestic crisis and that we have someone like President Trump who is more interested in playing the blame game rather than acting like a global leader,” he said.
Shahriman Lockman, a senior analyst with the foreign policy and security studies programme at Malaysia’s Institute of Strategic and International Studies, said that as the US had withdrawn into its own affairs as it struggled to contain the pandemic, China had found Southeast Asia a fertile ground for cultivating an image of itself as a provider.
China’s first-quarter GDP shrinks for the first time since 1976 as coronavirus cripples economy
Beijing’s highly publicised delegations tasking medical equipment and supplies had burnished that reputation, he said, adding that the Chinese government had also “quite successfully shaped general Southeast Asian perceptions of its handling of the pandemic, despite growing evidence that it could have acted more swiftly at the early stages of the outbreak in Wuhan”.
“Its capacity and will to build hospitals from scratch and put hundreds of millions of people on lockdown are being compared to the more indecisive and chaotic responses seen in the West, especially in Britain and the United States,” he said.
Coronavirus droplets may travel further than personal distancing guidelines
Lockman said Southeast Asian countries had also been careful to avoid getting caught in the middle of the deteriorating relationship between Beijing and Washington as the two powers pointed fingers at each other over the origins of the new coronavirus.
“The squabble between China and the United States about the pandemic is precisely what Asean governments would go to great lengths to avoid because it is seen as an expression of Sino-US rivalry,” he said.
“Furthermore, the immense Chinese market is seen as providing an irreplaceable route towards Southeast Asia’s post-pandemic economic recovery.”
Aaron Connelly, a research fellow in Southeast Asian political change and foreign policy with the International Institute for Strategic Studies in Singapore, said Asian countries’ dependence on China had made them slow to blame China for the pandemic.
“Anecdotally, it seems to me that most Southeast Asian political and business elites have given Beijing a pass on the initial cover-up of Covid-19, and high marks for the domestic lockdown that followed,” he said.
“This may be motivated reasoning, because these elites are so dependent on Chinese trade and investment, and see little benefit in criticising China.”
China and Vietnam ‘likely to clash again’ as they build maritime militias
The cooperation with its neighbours as they grapple with the coronavirus had not slowed China’s military and research activities in the disputed areas of the
South China Sea – a point of contention that would continue to cloud relations in the region, experts said.
Earlier this month an encounter in the South China Sea with a Chinese coastguard vessel led to the sinking of a fishing boat from Vietnam, which this year assumed chairmanship of Asean.
And in a move that could spark fresh regional concerns, shipping data on Thursday showed a controversial Chinese government survey ship, the Haiyang Dizhi 8, had moved closer to Malaysia’s exclusive economic zone.
The survey ship was embroiled in a months-long stand-off last year with Vietnamese vessels within Hanoi’s exclusive economic zone and was spotted again on Tuesday 158km (98 miles) off the Vietnamese coast.
Source: SCMP
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18/04/2020
- China’s Skyrizon Aircraft Holdings bought a majority stake in Motor Sich, but the shares were frozen in 2017 pending an investigation by Ukraine’s security service
- Washington and Beijing have competed for influence in Ukraine since its relations with Moscow soured when Russia annexed the Crimea peninsula in 2014
Chnia’s Skyrizon says it will appeal a Kiev court’s decision to block its purchase of Ukrainian aircraft engine maker Motor Sich. Photo: Getty Images
A court in Kiev has rejected an appeal by Chinese investors to unfreeze the shares of a Ukrainian aircraft engine maker, a setback for the Chinese company that sought to buy the Ukrainian firm in a deal opposed by the United States.
China’s Skyrizon Aircraft Holdings bought a majority stake in Motor Sich, but the shares were frozen in 2017 pending an investigation by Ukraine’s security service (SBU). Washington wants the deal scrapped.
The US and China have competed for influence in Ukraine since its relations with Moscow soured when Russia annexed the Crimea peninsula in 2014.
In its ruling, the court kept the shares frozen, citing the SBU investigation into whether selling Motor Sich sabotages national security by allowing sensitive technology into foreign hands. The ruling was dated March 13, shared with the parties this week.
Skyrizon plans further appeals, said a lawyer involved in the case, speaking anonymously due to the political sensitivity of the case. Zelensky’s office, the US embassy and the Chinese embassy did not respond to requests for comment. Motor Sich and the SBU declined to comment.
Motor Sich severed ties with Russia after the annexation of Crimea. Photo: Wikipedia
Motor Sich severed ties with Russia, its biggest client, after the annexation of Crimea. The wrangle over its future has held up efforts to find new markets, and supporters of a quick resolution say it is now operating at less than half capacity.
“Motor Sich has become a hostage to the geopolitical situation,” former prime minister Anatoliy Kinakh, chairman of an industrial union which has called for the government to resolve the dispute quickly, said.
The state’s anti-monopoly committee has launched its own investigation and says it is waiting to receive more documents before deciding whether to sanction the sale.
President Volodymyr Zelensky’s administration has had to balance strengthening ties to Beijing with keeping the United States, its biggest military aid donor, onside. In recent weeks, Beijing and Washington have both offered aid to Ukraine to fight the
coronavirus.
At the moment it is a very difficult task when we have the biggest powers in the world and their interests are in conflict in Ukraine,” Oleksandr Danylyuk, a former top security official under Zelensky, said.
Source: SCMP
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14/04/2020
PARIS/BEIJING (Reuters) – French automaker Renault SA (RENA.PA) is ditching its main passenger car business in China following poor sales at the loss-making venture with Dongfeng Motor Group (0489.HK).
A slowdown in Chinese automotive sales, which is expected to worsen this year due to the coronavirus crisis, has heaped pressure on carmakers that were already struggling to establish a big presence in China, the world’s biggest vehicle market.
Renault, which entered the Dongfeng joint venture in 2013 and began producing gas-powered cars under the tie-up in Wuhan three years later, is one of the few global carmakers to exit a major project in China in recent years, however.
The carmaker, which will retain a presence in China with other ventures, including in electric vehicles, is trying more broadly to find cost savings and pull out of businesses where it is struggling to make its mark and turn a profit.
This is part of Renault’s efforts to make the most of its alliance with Japanese partner Nissan (7201.T), and the two are due provide a strategy update by mid-May.
Dongfeng had been anticipating Renault’s potential exit from the Chinese joint venture as long as a year ago, a banking source familiar with the matter said. Sales were under pressure long before the coronavirus crisis walloped demand further, another source with knowledge of the situation said.
The venture sold only 18,607 cars in 2019, far below its annual capacity of 110,000 and reported an operating loss of more than 1.5 billion yuan ($212 million).
Dongfeng, which will take on Renault’s 50% stake in their venture, plans to revamp and upgrade the business’s existing car plants, which will no longer make Renault-branded cars, a spokeswoman for the Chinese automaker said on Tuesday.
Dongfeng will arrange positions for staff at the venture within its wider group operations, she added.
Financial terms of the transaction were not disclosed.
‘NEW CHAPTER’
Renault said it would focus on its light commercial vehicle business with Brilliance China Automotive Holdings (1114.HK). That venture plans to roll out five new models before 2023 and is planning export cars to other markets.
Another focus is electric vehicles, which will be built by its venture with Jiangling Motors Corporation Group.
Renault and Dongfeng also said they would continue to cooperate on “connected vehicles” and work with common partner Nissan Motor Co Ltd (7201.T) on new generation engines.
“We are opening a new chapter in China. We will concentrate on electric vehicles and light commercial vehicles, the two main drivers for future clean mobility and more efficiently leverage our relationship with Nissan,” Francois Provost, chairman of the China region for Renault, said in a statement.
That could include relying on Nissan dealers rather than Renault ones in the longer term, a source familiar with the matter said.
Renault and Nissan, which both reported losses for 2019 even before the global pandemic hit, are looking to rebalance a relationship strained by the 2018 arrest and subsequent flight of former alliance supremo Carlos Ghosn.
The ex-boss-turned-fugitive, accused of financial misconduct, denies any wrongdoing.
Other international carmakers have struggled in China too.
In 2018, Japanese automaker Suzuki Motor Corp (7269.T) sold its stake in a venture with Changan Automobile (000625.SZ).
Renault’s French rival PSA (PEUP.PA), meanwhile, is exiting a small joint venture with China’s Chongqing Changan Automobile (000625.SZ) and said in February it had suffered 700 million euros in losses last year in the country.
Source: Reuters
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11/04/2020
BEIJING (Reuters) – China reported on Saturday a rise in new coronavirus cases, as authorities try to head off a second wave of infections, particularly from imported and asymptomatic cases, as curbs on cities and travel are lifted.
The National Health Commission said 46 new cases were reported on Friday, including 42 involving travellers from abroad, up from 42 cases a day earlier.
In its statement the commission added that 34 new asymptomatic cases were reported, down from 47 the previous day.
Mainland China’s tally of infections now stands at 81,953. The death toll rose by three to 3,339.
Tough curbs imposed since January helped rein in infections sharply from the height of the pandemic in February. But policymakers fear a second wave triggered by arrivals from overseas or asymptomatic patients.
Northeastern Heilongjiang recently reported a spike in new cases because of Chinese nationals entering the province from Russia, which has seen a surge of cases.
Provincial health officials said it had 22 new imported cases on Friday, all Chinese nationals coming from Russia, and one new local case, in its capital of Harbin.
Inner Mongolia had a daily tally of 27 new imported cases by Saturday morning, all from Russia, the region’s health authority said.
The central province of Hubei, where the virus emerged late last year, reported no new cases for a seventh successive day.
A rise in virus infections has prompted authorities in Guangzhou to step up scrutiny of foreigners, ordering bars and restaurants not to serve clients who appear to be of African origin, the U.S. consulate in the southern city said.
Anyone with “African contacts” faces mandatory virus tests followed by quarantine, regardless of recent travel history or previous isolation, it said in a statement.
It advised African-Americans or those who feel they might be suspected of contact with nationals of African origin to avoid the city.
Since the epidemic broke out in the provincial capital of Wuhan, it has spread around the world, infecting 1.6 million people and killing more than 100,000.
Source: Reuters
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CHINDIA ALERT: You'll be living in their world, very soon 