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CNA: China Cancels or Delays Purchase of One Million Tons of Australian Wheat

Taiwanese news agency Central News Agency (CNA) recently reported that China has cancelled or postponed about one million tons of Australian wheat imports and about 500,000 tons of U.S. wheat imports.

Farmers are currently in a cycle of overproduction, and global wheat prices are falling, reaching their lowest point in three and a half years. China, the world’s largest wheat importer, canceled or postponed wheat purchase plans for the end of last year and early this year, anticipating the falling prices.

A Singapore-based commodities trader who sells wheat to Asian countries said that Chinese buyers have canceled some Australian wheat transactions and have delayed shipments from the first quarter to the second and third quarters. Another trader said that trading companies have canceled previously-scheduled shipments at Australian ports that were originally scheduled for transport to China. Since the beginning of this year, the volume for wheat futures on the Chicago Mercantile Exchange has fallen by more than 14 percent, reaching the lowest trading volume since August of 2020.

Australia accounts for 10-15 percent of the global wheat trade of 100 million tons per year. The Australian wheat industry is mainly export-oriented, with 65-75 percent of the country’s total output sold to more than 50 countries around the world. Australia is China’s third largest wheat supplier, following the United States and Canada.

Source: CNA, March 14, 2024
https://www.cna.com.tw/news/acn/202403140293.aspx

Briefings | | |   Economy/Resources Geo-Strategic Trend

China Times: Beijing Pushes Chinese Car Companies to Favor Domestically-Produced Chips

Taiwanese newspaper China Times recently reported that the Chinese government has quietly asked Chinese electric vehicle manufacturers, including BYD and Geely, to significantly increase the use of domestically produced chips. Beijing may be quietly pushing for a chip decoupling “that tends to exclude U.S., Japanese and European parts from the Chinese market. … These changes could be Beijing’s answer to the U.S.-led sanctions and export controls.” Below are some passages from the China Times article:

“China’s Ministry of Industry and Information Technology issued an official notice this year, requiring Chinese electric vehicle companies to expand their procurement of domestic electronic components. The Ministry originally had an informal goal of asking car companies to expand their domestic chip procurement to one-fifth by 2025, but it now feels this progress is not quick enough.”

“In recent bidding for contracts with a well-known Chinese car company, a foreign supplier offered a price that was 30 percent lower than the winning bid, but it still did not get the contract.”

“Share prices of European companies that supply electric vehicle chips to China fell on March 15th.”

“Bloomberg believes that the Ministry’s new instructions are consistent with Beijing’s strategy of ‘mobilizing all forces to compete with the U.S. and other countries over who has the top position in terms of science and technology.’ … The move could lead the United States to tighten its import restrictions on Chinese-made cars.”

Source: China Times, March 16, 2024
https://www.chinatimes.com/cn/realtimenews/20240316000935-260409

Briefings | | |   Information/Technology

China’s Top 100 Real Estate Firms See January and February Sales Cut in Half

Shanghai-based Chinese financial news site East Money recently reported that in February 2024, the top 100 Chinese real estate companies suffered a sales volume decrease of 20.9 percent month-over-month. The year-over-year decrease for February was 60 percent. Single-month performance hit the lowest point seen in recent years.

During the period January through February 2024, total sales of the top 100 real estate companies had a year-over-year decrease of 51.6 percent. Among these companies, only 14 had sales exceeding RMB 10 billion (around US$1.41 billion), a decrease of 12 compared with the same period last year; eight companies had sales exceeding RMB 5 billion (around US$705 million), a decrease of 18 compared with the same period last year.

Both central state-owned real estate enterprises and private enterprises have been facing pressure. 38 of the top 50 real estate companies experienced a year-over-year sales decrease of more than 50 percent in a single month. Only one company achieved year-over-year growth in the month of February, compared with seven companies in January.

Source: East Money, March 1 2024
https://finance.eastmoney.com/a/202403012999671120.html

Briefings | | |   Economy/Resources

Lianhe Zaobao: Netherlands Closes Consulate General in Chongqing

Singapore’s primary Chinese language newspaper Lianhe Zaobao recently reported that, as China faces difficulties in attracting foreign investment, the Netherlands announced the closure of its consulate in the city of Chongqing. According to the Dutch Embassy in China, the Consulate General of the Netherlands in Chongqing was officially closed on March 1. The Dutch Embassy in Beijing will now handle consular matters in Chongqing, Sichuan, Shaanxi, Yunnan and Guizhou.

An unnamed source quoted a Dutch representative at a gathering of foreign businessmen in Chengdu as saying that the consulate was closed due to the limited Dutch business activities in the region. Data released in mid-February by China’s State Administration of Foreign Exchange showed that China’s foreign direct investment (FDI) growth last year was at the lowest level since the early 1990s; China is facing challenges as it seeks more overseas funding to boost a sluggish economy.

Recent changes in trade relations between China and the Netherlands have been significant. The Dutch intelligence agency issued a report last year saying that China “posed the greatest threat” to the economic security of the Netherlands. The Netherlands recently decided to withdraw the license of Dutch photolithography giant ASML for export of certain products to China, citing concerns over Chinese use of advanced chip-making equipment for military purposes.

Source: Lianhe Zaobao, March 4, 2024
https://www.zaobao.com.sg/news/china/story20240304-1472075

Briefings | | |   Geo-Strategic Trend

People’s Daily: Chinese Manufacturing PMI Declined in February

People’s Daily recently reported that, according to data jointly released by the Chinese National Bureau of Statistics and the China Federation of Logistics and Purchasing, China’s February manufacturing purchasing managers index (PMI) was 49.1 percent, down 0.1 percentage points from the previous month.

“The manufacturing industry was in the traditional off-season in February. In addition, the easing of COVID-19 controls means that more employees are returning home for the holidays than in previous years. This has greatly affected the production and operation of [Chinese] companies. The overall activity of the manufacturing industry has declined.”

The production sub-index of the PMI was 49.8 percent, down 1.5 percent from the previous month, reflecting a deceleration of corporate production activities; the new orders sub-index was 49.0 percent, remaining the same as in January. The PMI of large enterprises remained above the critical point, at 50.4 percent, the same reading as the previous month. The PMI for medium-sized enterprises was 49.1 percent, an increase of 0.2 points from the previous month. The small business PMI was 46.4 percent, a decrease of 0.8 percentage points from January. The high-tech manufacturing PMI was 50.8 percent, down 0.3 percentage points from January. The PMIs for equipment manufacturing and producers of consumer goods were 49.5 percent and 50.0 percent, respectively, down 0.6 and 0.1 percentage points from the previous month.

Source: People’s Daily, March 2, 2024
http://finance.people.com.cn/n1/2024/0302/c1004-40187337.html

Briefings | | |   Economy/Resources

Sina: US-led “Shared Principles on 6G” Aims to Curb China’s 6G Development

Well-known Chinese news site Sina (NASDQ: SINA) recently published an article commenting on a “Joint Statement Endorsing Principles for 6G” that was jointly released by the United States as well as nine other countries. The article stated that “this US-led effort is obviously aimed at curbing China’s 6G development.”

The Sina article quoted sources saying “this move is intended to compete for dominance of the 6G standard.” The article also stated that “China has an extremely large user base, and Chinese technology companies such as Huawei have their own independent 6G strategies. … China has established a 6G promotion group in 2019 to systematically promote various tasks such as demand, technology, standards and international cooperation. The group also launched 6G technology trials.”

The ten countries party to the statement include the United States, the United Kingdom, Australia, Canada, the Czech Republic, Finland, France, Japan, South Korea and Sweden. A copy of the statement released by the White House on February 26 enumerated six “shared principles” to be fulfilled by 6G networks: “Trusted Technology that is Protective of National Security”, “Secure, Resilient, and Protective of Privacy”, “Global Industry-led and Inclusive Standard Setting & International Collaborations”, “Cooperation to Enable Open and Interoperable Innovation”, “Affordability, Sustainability, and Global Connectivity”, and “Spectrum and Manufacturing.”

Sources:
Sina, February 28, 2024
https://news.sina.com.cn/c/2024-02-28/doc-inakqwnf2276916.shtml

The White House, “Joint Statement Endorsing Principles for 6G: Secure, Open, and Resilient by Design.”
https://www.whitehouse.gov/briefing-room/statements-releases/2024/02/26/joint-statement-endorsing-principles-for-6g-secure-open-and-resilient-by-design/

Briefings | | |   Geo-Strategic Trend Information/Technology

Global Times: South Korea’s EV Subsidy Plan Unfavorable to Chinese Companies

Global Times, a tabloid under the Chinese Communist Party’s flagship People’s Daily newspaper, recently reported that the South Korean Ministry of the Environment has updated its electric vehicle (EV) purchase subsidy plan for 2024. According to the article, certain vehicles will be disadvantaged by the new subsidy plan, including:

  • vehicles equipped with lithium iron phosphate batteries (the main product of Chinese battery companies), and
  • cars built by foreign companies that are not able to set up direct after-sales service centers throughout South Korea.

The new subsidy plan introduces a “battery environmental protection factor” aiming to account for the “waste battery recycling value” in the subsidy. According to this new standard, electric vehicles equipped with lithium iron phosphate batteries will be subsidized less on the grounds that such batteries contain less valuable recyclable metals. Subsidies for Korean consumers purchasing EVs equipped with Chinese batteries will shrink by up to 40 percent.

“Some have said that this move is the South Korean government’s response to the rapid increase in the domestic supply of electric vehicles equipped with Chinese batteries.” One commentator said that “the new policy is to align with foreign policies such as the U.S. Inflation Reduction Act, which is detrimental to Chinese battery companies to a certain extent.” According to Yonhap News Agency, “about 96.4 percent of South Korea’s EV battery imports currently come from China.”

Source: Global Times, February 7, 2024
https://m.huanqiu.com/article/4GUtT6ffRr9

Briefings | | |   Geo-Strategic Trend Information/Technology

Lianhe Zaobao: U.S. Consul General Says Hong Kong Internet Censorship Tightening

Singapore’s primary Chinese-language newspaper Lianhe Zaobao recently reported that Gregory May, the U.S. Consul General in Hong Kong, said Hong Kong’s Internet censorship is “tightening and is becoming more like that in Mainland China.”

Connectivity and data security concerns in Hong Kong have reached a level that prompted some U.S. business executives to use disposable phones and laptops when visiting the city. Gregory May said that Hong Kong “began to go downhill and tried to delete certain content from the Internet or block certain websites.”

He called for Hong Kong to stop restricting freedoms, and he expressed the belief that Hong Kong could effectively improve its reputation by releasing of people facing prison for political speech incidents, e.g. Next Media founder Jimmy Lai. He also said that “Hong Kong still has significant business advantages — as long as the Hong Kong government abides by its commitment in the Sino-British Joint Declaration to maintain a high degree of autonomy and remain unchanged for 50 years, relations between Hong Kong and the United States may improve.”

Source: Lianhe Zaobao, March 1, 2024
https://www.kzaobao.com/bolg/20240301/157420.html

Briefings | | |   Social Stability US-China Relations